With the change of the calendar to 2020, millions of Americans will be making New Year’s resolutions and setting their goals for the coming year. For a good portion of them, home ownership is circled in red at the top of that list.

In fact, at least 34% of U.S. adults who currently rent say they plan on buying a home or would like to in the near future. And with historically-low mortgage rates and a strong economy, the time to buy is NOW!

But hold on – didn’t we have that same resolution last year, and New Year’s goals go unfulfilled so often it’s almost a rite of passage?

Not this year, as we’re going to help you get on the fast track to owning your first home, not just with a checklist of action items, motivation, and plenty of help – but by breaking down the behavioral science and psychology behind achieving goals. Get excited because reading THIS article is your first step to holding the keys to your family’s first home in 2020!

What holds us back?
The vast majority of renters would love to own a home, and with the cost of renting surpassing the cost of a mortgage in most metropolitan markets, the financial reality is within their reach. So why is that goal never realized?

At this point, you may think it might be a lack of motivation, desire, hard work, willingness to sacrifice, etc. that keeps us from achieving our goals. But in reality, scientific research proves it is something far different that is the single most important step in achieving our goals – one that has nothing to do with our character or even abilities.

The #1 most important step to achieve your goals:
In fact, the #1 most important aspect of goal setting and achievement is something so simple: commit to a specific goal and then write it down.

While this may seem so basic it’s worth passing over to the next step, research shows that is EXACTLY the problem. In fact, setting goals and committing them to writing seems so simple that people often fail to do it. Let’s examine the evidence on this:

The science of achieving our goals:
A landmark study at Harvard found some shocking evidence that goal setting correlates with massive success. Of course Harvard business school is the top institution of its kind, and students and professionals who are selected for their MBA program are already the brightest and best in the country. But there were pronounced differences within the Harvard class that made the study on goal setting remarkable.

In 1979, Harvard MBA graduates were surveyed with the question: “Have you set clear, written goals for your future and made plans to accomplish them?”

Of the Harvard business school graduates interviewed, this is what they found:

84% had no specific goals at all.
13% had goals but they were not committed to paper.
3% had clear, written goals and plans to accomplish them.

The same graduates were then tracked down for a follow-up interview in 1989 to gauge how successful they’d become and if that at all correlated to their goal setting 10 years earlier. The researchers were shocked what they found.

Of the same Harvard students originally surveyed:

The 13% of the class who had goals were earning, on average, twice as much as the 84% who had no goals at all.

Even more staggering, the 3% who had clear, written goals were earning, on average, 10 times as much as the other 97%…put together! Similar results were later confirmed by several different studies.

The formula to goal setting success:
But the most comprehensive study into goal setting and achievement took place in 2011, when a mega-analysis combined the findings of 38 smaller studies that took place before. The conclusions of these studies and countless other research into the field of human achievement prove there is a simple formula to successfully achieving your goals, no matter who you are or what your goals:

1) Design specific goals.
Goals that are concrete and laser-focused end up with higher success rates. Interestingly enough, goals that are bigger and more ambitious result in higher performance and success, not less.

2) Write them down.
Committing your goals to writing achieves a lot more than just having a visual reminder. Once they are spelled out on paper (or a computer screen), our minds perceive them as tangible, real-life experiences, not just wishes or dreams, and start acting accordingly.

3) Plan action steps.
It’s critical to plant a flag as the outcome or goal you ultimately want to reach, but it’s also important to map out your strategy to get there. By breaking your goal into smaller steps and planning how you’ll implement them, you’ll have a solid track to run the train of your efforts.

4) Share those with a friend or accountability partner.
One of the most underrated aspects of goal setting is the psychology of group or external support. Having someone to give you feedback and hold you accountable makes a huge difference in goal achievement.

5) Monitor progress with a weekly report.
On the journey to any goal there are plenty of ups and downs, landmarks and setbacks. Research has demonstrated that measuring and documenting progress along the way, whether daily, weekly, or whatever increment is relevant, helps keeps people on track and pushing forward to reaching their finish line.

Follow the path of goal setting to home ownership:
So if your goal is to become a homeowner in 2020, what might that process look like in light of this goal setting process?

Specific Goal: To buy a home in 2020:

Action Steps:

1. Gain knowledge.
Read every book, blog, and article you can find about home ownership, especially that aimed at first time homebuyers. You’ll find what seems like an intimidating and overwhelming process is actually very realistic.

2. Check your credit Score.
Now it’s time for the fun part, jumping in a Realtor’s car to go looking at homes, right? Not quite yet. Instead, a huge part of the home buying process is getting approved for a mortgage loan, and there is no better way to ensure that you’ll get approved for a low-rate loan than maintaining a great credit score. You should check in with Blue Water Credit or a mortgage lander six to twelve months ahead of your planned home purchase (so in 2020, that means NOW!)

We’ll be able to go over your credit report line by line and make professional recommendations on exactly what you need to do to increase your score to an ideal level for taking out a mortgage. If you score is in need of repair – like eradicating old or negative items or opening certain new tradelines – we’ll help build your score to the point where any loan officer will be excited to work with you.

3. Savings.
To buy a home, you’ll need two things: a down payment and money for the transaction and closing costs. The great news is that working with a Realtor comes at no cost to the buyer, but you will typically need 2-3% of the purchase price for loan fees, title and escrow costs, a home inspection, earnest money deposit, etc.

Depending on what kind of loan you get approved for, you’ll either put down 20% of the purchase price (or more), a lesser amount like 5-10% or perhaps 3% or even less for specialized government backed loans like FHA and VA.

Does that sound impossible? Not at all. By starting now and a little planning and sacrifice, you’ll have that money put aside before you know it. In fact, we can even offer some creative suggestions on how to save a down payment. Just email us and we’d love to share that with you.

4. Choose a loan officer.
It’s all about the loan long before it’s about the home, so after your credit is in tip top shape, sit down with a great loan officer or mortgage professional and go over your strategy. They’ll ask for paperwork so they can prequalify you for the loan, which will allow you to know exactly how much home you can afford, what you need to put down as a deposit, what approximate closing costs will be, etc. There are a lot of great loan officers out there, but we’re happy to recommend a few good ones if you need suggestions.

5. It’s Realtor Time!

Finally, you get to work with a real estate agent and go look at houses! Armed with the proper knowledge and the peace of mind that you’re prequalified for a loan, what you can afford, what your costs will be, etc., you’ll be an empowered and educated homebuyer, ready to make great choices and find the ideal first home.

6. House hunting, offers, loan approval, and escrow.
But don’t forget that house hunting and writing offers is hard work, and even with all of your smarts and planning, there is always a little bit of nerves and stress involved. But don’t worry – that’s a completely normal part of the process, and you’ll have trusted advisors like your loan officer and real estate agent to guide you every step of the way, from making offers to the escrow process to loan approval.

7. Get your keys and move in!
Once the loan is approved, the real estate transaction closes, and you sign your paperwork, it’s only a matter of days (or hours!) until you are officially a homeowner and get your keys – a historic moment for any family, young couple, or buyer.

Pat yourself on the back and reflect on how far you came – and that it all came to be because you committed to buying a home, put that goal in writing, and started planning and executing action steps to lead you to your front door.

So are you ready to get started? Give us a call or send us an email to share the great news…and start pursuing your admirable goal of becoming a homeowner in 2020!