Hello again and welcome back to Happy Hour. Now, on with the show.Hello everyone, welcome back to America under the Microscope advanced level, Hi Lulu.Hi, James.So we're gonna continue our talk about housing, and specifically we're gonna move on into buying a home.Great. We finally moved on from renting to buying. going up in the world.Sure.First of all, let me ask you a question. I'm always very curious because housing is such a huge topic in China. People can't stop discussing talking about it. What is the average age first-time homeowners?Probably in their early thirties.Early thirties.Yeah, so usually married couples before they have kids when they still have money can afford to buy a home.I think that's probably older than in China. I think twenty-year-old, especially late twenties in China then you already feel the pressure to buy.Well in America there's much less pressure because Americans move more freely to different places to work and owning a place is annoying to sell if you're gonna move from this city, then two years move to another city, then move to another city. Renting is just much more convenient and there's no benefits of owning a home cuz your kids can go to the local school as long as you live in area.So there' re not so many restrictions. I think we talked about school district.Yes we did talk about this before.So either buying or renting, it is the same, the same in this. All right, last time we were talking about houses and apartments and would you say the vast majority of Americans live in a house rather than apartments?Yes, because the vast majority of Americans live in small towns or suburbs of cities and they, if they buy a place it's a house, or even if they live in rent, it's a house.But houses are different. Let me try to ask you some questions that always kind of confused me. Comparing the UK, British English and American English. So, in the UK you have detached house which is a house standing on its own.America we just call that a house.Oh, okay. And what about semi-detached, which is two houses sharing one wall?We call that a duplex.Duplex. What about terrace, terraced house?We call those town houses.Townhouses. So, it's a line, a row of houses. So these are the houses, then apartments. I often hear one specific term in a lot of American TV shows, it’s condo.Condominium or condo for short.What's the difference between condos and apartments?Well, honestly, if you just look at them, you probably won't see any difference. In America, apartments for rent are going to be in a building that was specifically built for rental purposes. So, they're only going to be for renting.Oh, so apartments you cannot buy, condos you can buy.Condos you can buy. So, if I build a condominium building, it will look like an apartment building. But the individual units are for sale.I see. But can apartment building turns into a condo?Yes. But there's paperwork that the owner will have to do to redo the zoning and there's legal paperwork they have to deal with. So, apartments for rent are just for that and you cannot buy them. Condos are for sale. After you buy a condo, however you could personally rent it out to another person.I see, but condos, condominiums, they are usually better quality, better decorated and everything than the apartments.Usually higher quality cuz they are purchased-place, people will live in these for a long time. They're also tend to be a nicer area. So, you'll find these places, you know, lakefronts, waterfronts, golf courses, though they're gonna be in a modern area.Fancier. Condos are definitely fancier than normal apartments.That can be more expensive than a house.Wow. Well I guess some high-end condos, once you decide you want to buy or you find a place, a house or a condo that you want to buy and then first of all, you go to the bank, right? You try to apply for a mortgage.You should shop around here because there are multiple banks, they might give you different deals with different interest rates. But yeah that's the next step, you need to go check with the banks to see how much money you can borrow or if you're rich and have enough money to buy straight out, you can just go to buy.But the normal people...Normal people they're gonna need to check with the banks.The banks will check your credit history as well.The banks are gonna check your credit history. They're gonna check your savings. They wanna know your income. They're gonna wanna know all the basic information whether you'd be a suitable candidate for a mortgage.Yeah. One thing in this is, so in some previous episode about university, we talked about university debt, all these student loan debt. Will that affect your credit history, if you have outstanding student loan?Sure.So, you have to pay that back before you apply for mortgage.You don’t have to pay them back, you have to have a good payment history. So, if you've been paying back your student loans on time with the proper payment amounts, this is a sign of good credit history. So, you know, so this shows that you can pay things over time on time and right amounts. So, this is how you build credit. So, if you have outstanding debt and you're not paying that back, that's gonna hurt your credit score. And that's going to really affect whether you can get a mortgage or not.But even if you get a mortgage, probably the interest rate will be sky high.That’s entirely possible.So, when you buy, in the previous episode, we said that if you rent, you just go to the leasing office, but when you buy, you will need an agent. Right? Otherwise why do we need agents?You can rarely, occasionally you can buy directly from a person. But the vast majority you're going to go to a real estate in here and there will be several of them around a town. You can go into their office, meet a realtor and then you can start the process of looking for a home.By the way, what is the idea of the open house?Uh, so lots of real estate agents they will have an open house which, usually this will be a new house that's gone on the market and so they'll open it to anybody. So, you don't need an appointment to see this house. Anybody can come in to get people interested in it, and the agent will have refreshments like cookies, juice, tea, coffee. Then they'll have flyers. So, you can you know, see what all the thing is like size, like all the key features. You can walk around and then the agent will be you know, rubbing elbows with everyone to try to get a sale.So if a few potential buyers are interested, then you also have to, basically try to make a better offer than other people.So if you meet with the agent, you look at a lot of different houses, you decide there's the house you like, what you're gonna do is make an offer.Make an offer.So, there will be a price. So, let's say, let's say this house is, the ticket, the sticker is two hundred thousand. You obviously aren’t gonna try to spend two hundred thousand. You're trying to lower the price. So, let's say you will make an offer of a hundred and eighty-five thousand dollars.Oh, I never knew that. I thought the sticker price is, uh in terms of housing, I thought it's the basic, it's where you start. It's not like an auction where that's the base price. No?No no, so for two hundred thousand. You make them an offer, so I can say a hundred and eighty-five thousand. Then the real estate agent will ask the owner. The owner can reject or accept. So, if the owner accepts it, then you pay a hundred and eighty-five thousand dollars. If they reject it, you can offer more money.Like any other negotiation.This is very much negotiation.So, after you negotiate the price, you are happy with the price and then you'll have to inspect the house.Yeah. You need to inspect the house before you close the deal because you need to make sure that there are no serious problems and you really need to find an independent inspector to make sure that the foundation is safe, that everything works. Because you don't wanna buy a house it's going to fall apart on you in a year.Um, especially things like a lot of the structural things that you cannot really see like within the wall, like mold or termites, things like that.You can get those fixed and if they're not fixable or you're not willing to pay for it or the owners not willing to pay for it, you need to walk away and look at some place else.Exactly. So, what are the fees apart from the house price, the agent fee?There's also closing costs. So, this is basically the cost of the paperwork.Ah, like a processing cost?Basically. Yes! Then they'll be your mortgage fees which will be through the bank which that's mostly your interests and all that kind of straightforward things. And then now that it's your property, you need to pay the property tax.Oh yes, we talked about property tax and in the tax episode. So, it's calculated based on the total value of the house and it changes every year.They value the property because when you buy the house, you're buying the whole property, you’ll own everything. So you own all of that. So it's based on everything. So, this changes yearly and it can be affected by lots of things like if your neighbors improve their home or improve the yard, it will increase the overall value of the neighborhood. If the school gets a better quality, this can improve the value of the neighborhood. So, this can raise the property taxes.But I guess it's a good thing. I mean, higher property tax also means that the property will be worth more.True. The downside is if your income doesn't go up...Yeah, true true. If you don't sell, then all you're looking at is increasing expenses. And when you rent, if you rent properties, you don't really need to pay property tax. But if you own...If you own it, you have to pay it. If you rent, well the owners just gonna include the property tax on it.Still kind of paying for it.So you don't directly pay for it.Are there any restrictions in America as in where you can buy, where you cannot buy? As you know in China we have a lot of restrictions. You have to be registered in certain, uh for example in Beijing.Have money, can buy.You can buy anywhere.As long as you can afford it.And it doesn't matter if you're American citizen or not.Doesn't. Do note that being a foreigner in buying a house in America does not give you any rights. Yes you can be a foreigner and own property in America. It isn't going to help you get Visa.Ah so it's not linked with them in Visa application. You just own and then, but you can make money from it.You can and they can tax you on it. So, there's one other thing you have to worry about buying a home is some areas have what's called a homeowners’ association or HOA. If you buy a home in this neighborhood, you have to join this organization.What, to protect you, protect your rights as a landowner?Well that's uh probably the original purpose, but what they are now is mostly an authoritarian organization that try to get everyone in the community, to be the same, to follow the same rules and so they'll have all these arbitrary rules about how tall your grass can be, what color your house can be and things like this. And if you break these rules, they can issue you fines.Wait a minute. So, in United States where you know everything is quite based on individualism. You have organizations that will dictate whether your house is blue or green?Yes in some neighborhoods and they are not popular.Oh, that's why that's why in some of the suburban areas, you see all the houses like exactly the same. Sometimes I wonder why do they look exactly the same.Because it's the HOA and it's the requirements of that HOA. So, break the rules will have to pay fines.So, if I wanna paint my house pink, perhaps I need to buy in a place where there are no HOAs.That's what I would recommend. Yes.Alright lots of things that we've learned from this episode. Hopefully you got some interesting information as well. Compare that with your real-life experience in China or other places in the world. So, feel free to share with us any of your experiences in the comment section. We'll see you next time.Bye.Bye.
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