Buy Smarter: Slow Down, Structure the Deal, Build Wealth

Everyone wants to sprint to showings. Pros slow it down. Your job isn’t to open doors—it’s to protect clients from bad decisions and engineer the best long-term outcome.

In this episode we hammer five buyer truths:

• Pump the brakes: read the room (especially couples). If one partner’s “meh,” keep looking. No settling just to end the search.
• Dollars Off vs. Dollars Back: $10K off price saves ~$70–80/mo. A seller credit can fund closing costs, a rate buydown (2-1 or permanent), or even knock out PMI—often a bigger win.
• Cash Planning, not Cash Draining: split funds into three buckets—down payment, closing costs, improvements/move—then use seller credits to keep more cash in your pocket day one.
• Right offer structure beats “deal fever”: full price + big credits can be smarter than a lower price with no credits, especially if it transforms the monthly payment.
• Stop waiting for a giant down payment: renters—get in the game. Use zero/low-down options, buy a starter, stack equity, then move up. That’s how you reach the dream home without wrecking your cash flow.
  
  

Agents: coach this process with confidence.
Buyers: structure the deal to serve your payment, your runway, your future equity.

Listen. Take notes. Execute the plan.

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Transcript

Mike Novak:

[0:33] All right today we're talking about the top five mistakes that buyers are making right now we're

shooting this uh in q4 of 2025 for context and some of these mistakes are mistakes that people

make in any market and some of them are very very specific to what's happening right here right

now in this very dynamic and unique market that we have both locally and nationally you know

we're in conversation with agents nationwide through our real brokerage network and also through

coaching and everything else we do. And what we're experiencing in our market seems to be kind

of the norm in most areas, which is kind of just to sum it up quickly, is a drastic increase in

inventory, like very, very quick increase in inventory and some price softening and homes taking

longer to sell just to kind of sum it up.

Rachael Novak:

[1:20] Yeah. And it as we've I don't know if we've talked about it specifically in the podcast before,

but what we experience on the West Coast typically tends to be kind of the start of the ripple effect.

And we're now seeing, you know, our friends who run teams in the Midwest and even the East

Coast start to experience the same kind of market that we've been experiencing for a couple of

months. So we always tend to get kind of the beginning of whatever new market we're walking into,

we kind of see that first here on the West coast.

Mike Novak:

[1:46] Yeah. And it kind of starts in California and then it tends to go to Vegas and then it ends up

here in the Northwest and then it goes to the East coast usually. So the, the, you know, obviously

like one of my best friends, Mike Rowland lives in Vegas. And so I'm talking to him every day and

he said the market has drastically picked up in the last couple of weeks out there, which is

awesome to see. So that could be heading our direction as well. But right now we have a lethargic

market, you know, like it just kind of feels stagnant. you know, overall. So anyway, so let's jump

right into it. The first mistake is misunderstanding the market. I think that this is a mistake that

buyers make and sellers make as well, regardless of what's happening in the market. They just

don't understand what's happening. And oftentimes their source of information is the problem. And

the source of information is frequently what they see in the news. So a national level, and then it's

also what they hear around the water cooler. Right and and neither one of those unfortunately are a

very reliable source with which to make a decision to sell what's probably or buy the most valuable

thing you're going to you know a lot of our clients their home is the most valuable asset they haveand you need to go off of like real facts and data and really understand how to interpret that data to

make the best decision versus relying on third-party information that's not valid exactly or credited

for that matter I.

Rachael Novak:

[3:02] Also think that like kind of wrapped up with like the misunderstanding of the market is the

getting the housing market and the stock market confused. So I had a couple of clients, you know,

even this year, who are making pricing decisions or, or, you know, on the sell side or the buy side,

they're making pricing decisions based on what the stock market is doing. And these, while there

may be parallels in particular times of year or years, they are not the same. They're not even close.

The way that the stock market reacts to the economy versus how the housing market reacts to the

economy are very, very different. So I think that it's a big mistake to think that the stock market and

the housing market should be reflective of each other.

Mike Novak:

[3:43] Yeah, no, that's an interesting point, you know? Yeah. So as far as like misunderstanding the

market goes, like we have our audience, which is kind of a mix of real estate agents and buyers

and sellers. And so going to just kind of give you some information on what you could look at to

better either explain the market if you're an agent or understand the market if you're a buyer or a

seller. The data that I share with our clients every single month is the following. It's the average

price, right? What does it look like right now versus the same time last year? Not necessarily

versus last month. That matters. But what matters most is how does September of 2025 compare

to September of 2024.

Rachael Novak:

[4:23] Right?

Mike Novak:

[4:24] Has that price gone up or has it gone down? And we have to remember that average price is

kind of a lagging indicator of where the market's at, right? Because that's a closed transaction. It's

kind of the rear view mirror of where it's already been. So more important than average price is

days on market and it's months of inventory supply. The months of inventory supply is the crystal

ball that everyone wants to know about on where the market's going, right? It's not the average

price. It's months of inventory because when inventory goes up, what happens?

Rachael Novak:

[4:51] Prices flatten.

Mike Novak:

[4:52] Prices flatten or they start to go down. So if you need to know what that number is in your

market as a buyer or a seller, because that really tells you where things are going versus simply

where they've been.

Rachael Novak:

[5:04] Yeah, I think one other thing to think about, especially if you're a buyer or a seller, future or

current, if you're getting some of your information from the water cooler, so to speak, so people youknow, people who are in the market who are experiencing things, please remember that that has to

be taken in the context with which they're experiencing it. Because the market, for instance, in a

particular zip code in northern Snohomish County above 1 million is a very different market than in

south Snohomish County under 500,000, right? Very different markets. So one could very well be

experiencing multiple offers and a frenzy of activity, while one, it's very normal for it to be 60 days

on market and have five showings within that time. So very contextual when it comes to the

information that you're getting. Just remember to take it with a grain of salt and really think about,

am I going to be in that same kind of market as this person, or is that their personal experience?

Mike Novak:

[5:59] Yeah, it's a great point. You beat me to it. I was going to bring that up. But what I call the sub-

market components to this equation, right? Just for instance, like our county, Snohomish County,

it's always fun listening to people try to pronounce that from out of our area.

Rachael Novak:

[6:09] Snohomish.

Mike Novak:

[6:10] Yeah. There's 19 cities, and each one of those cities have wildly different markets. There's

some similarities, but the, the variables of price and city and location really do change the story and

the expectation and what's going on in that market. So as an agent, you got to know what's

happening in that sub market that you're coaching a client through. And if you're a buyer or seller,

you need to understand like what's happening, not only in the County, but also at a micro market

level of your actual zip code and your city.

Rachael Novak:

[6:37] Exactly. Right. Yep.

Mike Novak:

[6:38] So number two, uh, waiting for rates to drop. And we've been having these conversations for

three years now. We've also been waiting for rates to drop, just so you know, as agents.

Rachael Novak:

[6:49] Still waiting.

Mike Novak:

[6:50] And agents have thought for three years that rates are going to go down, and they have gone

down. Thankfully, they had gone up. You know, close to 8% or above 8%. And they're back down to

like six and a quarter right now. I think when I talked to our lender partner a couple of days ago, he

even told me FHA is, you know, in the fives now, which is great. So yeah, pretty crazy. But why is

waiting for rates to drop a really bad idea? Like, and we've, God, we've had these conversations so

many times.

Rachael Novak:

[7:14] I know. Look, like, stop trying to time the market. Like we have clients who we met with in

2019, 2020, who are like, oh, this is just craziness. I'm not going to get in this market. Like, I'm justgoing to wait because eventually it'll all even out and things will come down. We are at like, what,

70 or 80% appreciation in our market in the last five and a half years. The people who waited for

the rates or waited for inventory or waited for whatever five years ago.

Mike Novak:

[7:44] They were waiting for prices to go down, right?

Rachael Novak:

[7:46] Yeah.

Mike Novak:

[7:46] It was price, wait, and then now it's rate.

Rachael Novak:

[7:48] Wait. Now it's rate, wait, yes. So, like, everybody who's waiting for the rates to go down, you

are literally right now missing out on all of the appreciation that's going to be happening over the

next five years. So, yeah, okay, I don't want to pay 7% either. Like, I don't. However, if this house

works for me right now and if I get into it at a number, monthly number, that makes sense for me

and my family, not only are you then going to be able to experience the lifestyle that you're hoping

for in this new property, But as the market goes on, especially if you're planning on living there for

five to 10 years, you're going to build wealth and going to build equity in that property over that

time, no matter what your rate is.

Mike Novak:

[8:27] Right. As real estate agents, we have a tendency to say really dumb, cliche things.

Rachael Novak:

[8:33] Yes.

Mike Novak:

[8:33] Date the rate and marry the house. I freaking hate that, but it does make some sense, right?

Like the rate you can change later, right? Like you always have the ability to refinance the rate

when rates do come down. You don't have the ability to refinance the price.

Rachael Novak:

[8:49] Right?

Mike Novak:

[8:50] And what people don't understand is that when rates go down, prices go up.

Rachael Novak:

[8:55] Exactly.

Mike Novak:

[8:56] Like it's literally a wash in most cases. So the smartest buyers right now, they are out buying

as inventory is higher and they're negotiating hard, right? They're getting deals they couldn't have

got a couple of years ago. And they're taking advantage of this window that's there right now to getthe best concessions or the best dollars off, which we're going to talk about here in just a minute.

And they're getting a fantastic deal, knowing later on they can always refinance when those rates

actually, in fact, go down.

Rachael Novak:

[9:21] Exactly. And like, by the time that you go maybe to refinance, maybe it's two years until rates

go down far enough or it makes sense and it justifies you actually refinancing into a lower rate.

Guess what? Like, your equity is going to be more, your home is going to likely be worth more.

So... It's very possible that you'd also be able to drop PMI. It's very possible that your loan to value

ratio is going to be significantly lower. So you're going to be at a great position financially.

Mike Novak:

[9:46] Right. And what I believe, you know, is that when rates are in the mid to high fives for

everyone, not just FHA, I think that the floodgates of buyers are going to reenter the market. And all

of that stagnant inventory that's sitting there is going to be gone very quickly. And then all of a

sudden it's going to be a fight for houses again. And so that's why waiting is just not a good idea. In

fact, it's going to cost you a shitload of money.

Rachael Novak:

[10:08] Yeah. I mean, every single one of our sellers right now that we're working with, we're

coaching them in that it's OK and it's normal to be giving even minimal amounts of credit to buyers

to get things under contract and to sell it. That's a very normal market. So buyers right now, say

maybe you pay full price or you have to buy up the number a little bit, but then you get money back

to buy down your rate. Boom. Now you are in this home for a very reasonable number. You didn't

even have to pay to get the rate down and you're set. So those who are out there holding off on

their search, waiting for rates to go down or waiting for the spring, like you might be doing yourself

a disservice by waiting.

Mike Novak:

[10:45] Yeah, spring is... I mean, in our market, it's the time of the most appreciation realized every

single year. So it's the most expensive time to buy.

Rachael Novak:

[10:53] Right?

Mike Novak:

[10:53] Good time for sellers. All right. Number three, not taking the time to develop a strategic plan

to buy. So many buyers make this mistake where they think the process of buying a home is to

start looking at houses. Why is that not the process?

Rachael Novak:

[11:06] Look, you do not want to find the home first and then have to backtrack through all the

financials. And does this make sense? And am I qualified? Like you're setting yourself up for

complete heartbreak by doing it this way.Mike Novak:

[11:18] Not only that, but you're like, again, you're probably making the largest investment of your

life and you're shooting from the hip on how you're going to do it and possibly even slowing down

enough to think about what you really want. Oftentimes when I do a buyer consultation with a

husband or wife, I ask them, I'm like, what are the must haves, the non-negotiable features you

have to have in this home that you're going to buy? And they look at each other like they haven't

even had this conversation. Like, all right, well, that's why we're here. Let's have this conversation.

Like, let's go between the wife. Let's go to the husband. What matters to you guys? And where are

the crossovers? And what are the things that maybe don't matter as much? But let's put some

strategic thinking into what we really need in this house so that when you buy this home, you're not

calling me two years later and saying, I bought the wrong house.

Rachael Novak:

[11:58] Yeah, exactly. And such a good point. Because say, you know, the wife is looking like the

kitchen is all that matters to her. Like just stereotypes, let's say. So the wife is just looking for

houses with like a gorgeous kitchen. But what's really important to the husband is actually having

like a nice bedroom and a nice master suite so that he actually has space and room to get ready,

whatever. Well, if he doesn't know that a kitchen is really important to her or she doesn't know that

a master is really important to him, they could be searching for a house... Like you said, without

actually sitting down and strategizing on what they both want, what's most important to both of

them, they could be shopping and you as an agent could be shopping with them for weeks or

months and not ever deduce why none of these houses are working. Like it's a waste of your time.

It's a waste of your time as a buyer to not sit down and have a strategic plan.

Mike Novak:

[12:44] Right. So like what does a strategic plan involve? It involves an understanding of the

process from start to finish. It involves a planning session of transitioning from where you're at to

where you're going to go. like whether you're renting or selling. There's a lot of planning that needs

to go into that to make that work very smoothly. And then it's getting total clarity on what's

happening in the market and what you're actually looking for in a home. Like that takes some time

to flesh out. And if you're an agent, you don't do buyer consultations, you know, shame on you. Like

you have a responsibility as the professional to slow down with buyers and explain this all to them.

If you're a buyer and your agent's not doing this for you, you should go find a different agent.

Rachael Novak:

[13:20] Right?

Mike Novak:

[13:20] This is a huge mistake. And when we got into real estate, like most agents were not doing

buyer consultations. Why do you think that was?

Rachael Novak:

[13:27] Well, everybody gets so excited about somebody wanting to buy that they want to jump right

into shopping.Mike Novak:

[13:31] Right. They just want to go see the house.

Rachael Novak:

[13:32] Yeah.

Mike Novak:

[13:33] Right. And we don't slow down enough to like put some thinking into this.

Rachael Novak:

[13:36] Well, and that's what it comes down to what you said. Like as professionals, we have to slow

down the process. Like we have to protect sometimes our clients from themselves to make sure

that they are thinking through the things that make sense for them. How many times have we

talked clients out of buying a home because they were just tired of looking and And like, okay, this

one will do. And we're like, no, this does not check the boxes that you told me are important to you.

Mike Novak:

[13:59] Like, I can usually see it. And like, when I see it happen, it's like, the the cut it's usually a

couple and one of them loves it and one of them is not loving it and they're just kind of wanting the

other person to be happy and they're kind of wanting this process to be over and i'm like what do

you guys both think about this home and the first person's super excited the second person's like

it's good you know i'm like what what do you really think you know what i mean and then like kind

of extracting that information out of them and challenging them to keep going to actually find that

house that gives them both that just joy and that they love.

Rachael Novak:

[14:28] Yeah. I mean, part of our job is not just, you know, removing emotion from some of this and

slowing down the process, but also infusing energy and life into the process to make sure that we

have their backs. We're not going to get them into something that they don't like or that they're, you

know, going to look back two years and say, I made the wrong decision. I want to sell my house.

Right.

Mike Novak:

[14:45] So number four, prioritizing dollars off of a house versus dollars back for a buy down.

Rachael Novak:

[14:51] Exactly. My gosh. Okay. So I totally understand buyers and the mentality of thinking, okay,

well, this house is listed for round numbers $600,000. Well, if I get it at $575,000, I just got a deal.

Totally get it. Understood completely. However, the power in being able to say, I'm going to spend,

I'm going to offer $600,000, but then ask for $25,000 in credits. Now you're able to cover out-of-

pocket expenses for the closing table. You're able to buy down your rate. You're possibly even able

to buy off your private mortgage insurance, which would bring your monthly payment down several

hundred dollars. There's so much more that you can do by prioritizing dollars back off of, you know,

like credit in that purchase price, as opposed to just taking dollars off of the property and getting a

better deal.Mike Novak:

[15:39] Right. Yeah. I mean, if you get $10,000 off of a home, it saves you about $70, $80 a month,

right? But what's the impact of taking that money and doing a right buy down or potentially looking

into like a two, one buy down where you get a 2% lower interest rate the first year, and then a 1%

lower interest rate the next year, like it could be a big difference in money, or it can be just helpful to

have that money in your pocket to update the home the way you want to do or whatever else. So

dollars off the house are sometimes it's sometimes it's the right solution, but most often not unless

the buyer is extremely financially strong.

Rachael Novak:

[16:11] And do you want to explain because I think that this is one that people might be a little bit

confused with sometimes. Say I have a $40,000 that I've been saving for years and years and

years for a down payment and closing costs and I go to purchase this property and, Now, you've

walked me through kind of the buying process. I understand that, okay, my closing costs are going

to be like one and a half to 2% just for the loan and just for, you know, the points of things that I

need to buy. Well, I also like, I'm probably going to need to put carpets in this. I'm probably going to

need to paint it. So like, how could I best use that $40,000 to go into this property, utilizing this

strategy of getting money back as opposed to money off?

Mike Novak:

[16:48] Yeah. I mean, I call that like the cash planning of purchasing, like what's the best use of the

money that you have available. And usually there's three kind of buckets to think about. There's the

down payment, there's the closing costs, and there's enhancements or improvements or the

moving costs, right? Because the last thing you want people to do is spend all their money on the

down payment. And then they have nothing to actually, like, they can't hire movers. They're like flat

broke at that point. They have no like savings whatsoever. So if an emergency comes up, they're in

a really, really bad place just to buy this house. So that's not the best planning, right? A better way

to do is probably to reduce your down payment a little bit and then try to get that seller to give you a

credit for one and a half or 2% on the closing cost and then hold on to the rest of your money.

Rachael Novak:

[17:27] That's exactly right. Because what that does, it allows you to keep that money in your

pocket, utilize some of the credit that the seller has given you that your agent's been able to

negotiate in that contract for the loan costs and for the rate buy down per se, and then reduce the

down payment a little bit so that your payment can stay about the same utilizing that rate buy-

down.

Mike Novak:

[17:46] Yeah, exactly. The last one, number five, waiting to save up for a big down payment before

you buy. And I'm really talking to renters right now, less so sellers that are going to purchase a

home because most sellers, if they bought in the last five years, they have a huge amount of equity

in their home and they're going to be 20% down buyers all day long. But the renter that is stuck in

the rat race of paying rents that has continual rental increases going on, that's moving around from

apartment to apartment to apartment or house to house to house, and that has that disruption to

their lifestyle every year and all that lack of predictability, that's the person I'm talking to. Like,you're always going to be better off using a zero down loan program and getting out of renting as

fast as possible. It's just going to build wealth for you over time, right? And I've got plenty of clients

that have added three, $400,000 or $500,000 to their net worth that had a zero net worth when we

started just from owning a house.

Rachael Novak:

[18:40] That's exactly right. And I really want to challenge you, like if you're renting, if you're looking

in the market for a rental, you have a particular budget that you're looking in, right? And so you're

kind of like, okay, well, what's the best option that I can get in the location that I want for my price

range? And you always settle on something as a renter, always, like you have to, that's your only

option. But then when we go into the market as a buyer, why does the threshold change and you're

like well I can't get what I want for my number like let's think about that for a second and say well if

this is what I'm qualified for it with the zero down loan and this is the general area that I want to be

and this is what I can get right now take it like go get it of course it's not going to be the perfect

dream home yeah it's going to be something that gets you in to the market where you have a

complete steady payment every month and you're building equity over time.

Mike Novak:

[19:28] Yeah. I think that's been lost on a lot of buyers in the last five years is that concept of the

starter house and the move up house. Like everyone wants the dream house on their first home

purchase. And there's just not really the way that it works because here's kind of the progression

that happens. Most people own four to five homes during their life, right? Because life changes, but

typically historically speaking, people would buy like a starter house, which would be like the least

expensive home in the market. Like if our average home price is 900, it'd be like your $450,000 to

$500,000 home. Needs work, not great condition, really small, right? That's a starter house. And

that gets you in the door. You now live in that house for five, six, seven years. That house

appreciates like $150,000 or however much it's going to go up. You then sell it and you move on to

the next one. Maybe that next one is now $700,000. And you do that exact same thing. So it really

actually takes people usually 15 to 20 years of home ownership to have the dream home. Like if

you're, and that's how you buy a dream home without like a 3% down payment. You end up putting

20, 30, 40% down, which gets your payment to be super reasonable, but it's a progression. It's not

going in for that kill shot on the first house. That's just not the goal of transitioning from renting to

home ownership. The goal is to start building wealth, like just get out of the rat race and then have

stability. If you can do those two things, it's a huge win.

Rachael Novak:

[20:42] Exactly. I saw a statistic a couple, like two weeks ago, that said the average 40 year old who

has been renting their entire adult life has spent about $400,000 on rent. So just put that in your

arsenal when it comes to thinking about homeownership. If you're in your 20s or you're in your 30s

and you've never owned before, the longer you rent, the more you're just continuing to pay

somebody else's mortgage. Again, one of those cliche things I think that real estate agents say. But

again, if you can humble yourself and say, I just want to get into a starter home. What can I afford

right now? Get into it. Sacrifice those couple of years. it's not going to be fun it's not going to beglamorous, like you said, you're then going to build into now you've got a bigger down payment for

a home that you may really want years later.

Mike Novak:

[21:28] Yeah, exactly. So that's what we've got for you. There's plenty of other mistakes that buyers

make. Trust me. We've seen all of them at some point, but these are ones that we see repeated

constantly right now. Again, if you're an agent, I think this gives you an opportunity to coach your

clients better and set better expectations. If you're a buyer or seller, just give you some insights into

maybe some pitfalls to avoid along the way. So if you're buying or selling in Snohomish County,

please reach out to us, meetthenovacs.com is the place to connect or on Instagram at

therealmikenovac or at Rachel Novak. And of course, if you're an agent nationwide and you're

following us and you're curious about Real Brokerage, reach out to us. We'd love to mentor you

and explain to you why we moved our business to Real Brokerage back in 2021 and it's been one

of the best business decisions we've ever made.

Rachael Novak:

[22:11] Exactly right. See you next time, guys.

Mike Novak:

[22:12] See you next week.