How Much House Can I Afford with Kaajal Shahani

In a dynamic real estate market, it’s important to have a clear understanding of how much house you can afford and the features you truly want. Kaajal Shahani shares her expertise and experience into those questions, and how to have a positive home buying experience!

Dec 8, 2021 | Podcast

About the Episode

LifeBlood: We talked about answering the question “how much house can I afford,” how to overcome FOMO in the home buying process, and the importance of not letting a house break your heart with Kaajal Shahani, award winning Realtor whose been featured on HGTV, Top Agent Magazine and Newsweek.  

Listen to learn why you should find a Realtor who you can have a great relationship with!

For the Difference Making Tip, scan ahead to 18:04!

You can learn more about Kaajal at, Facebook, Instagram and LinkedIn.  

Thanks, as always for listening!  If you got some value and enjoyed the show, please leave us a review wherever you listen and subscribe as well. 

You can learn more about us at, Twitter, LinkedIn, Instagram, Pinterest, YouTube and Facebook or you’d like to be a guest on the show, contact George at

George Grombacher

George Grombacher

Lifeblood Host

Kaajal Shahani

Kaajal Shahani


Episode Transcript

Come on. Live with Rei and welcome our guests strong and powerful college Alicia honey kodjoe is an award winning realtor has been featured on HGTV as well as top agent magazine and Newsweek. Welcome cargile

Kaajal Shahani 0:27
thank you so much

george grombacher 0:29
excited to have you on kegel, tell us a little bit about your personal life some more about your work and why you do what you do.

Kaajal Shahani 0:37
Absolutely. So I am a California based realtor, Silicon Valley to be specific area lies. Fun times right now, of course. I’ve been a realtor for about 18 years. here in California. I married with three kids and a dog. And yeah, I love what I do. It’s it’s fun stuff right now.

george grombacher 1:01
Thanks. appreciate all that. So when you say fun times, right now, what? What are you referring to?

Kaajal Shahani 1:12
So post COVID living and graduated, we are still in COVID. But the real estate market has absolutely just been on fire. I feel like realtors in California, we went back to work, I want to say may 4 2020. So we were shut down just for a very brief period. And everybody kind of thought, you know the market there’s, there’s something going to be going on with the market, it’s either going to slow down or, you know, people will be too scared to be you know, leaving their house etc. Things went completely the opposite. So since May 2022. Now there’s been double digit appreciation. And nearly in the Bay Area, but I see us live too. I have a lot of clients that buy outside state. I know there’s been a huge migration from California to Texas, California, Utah, California to Florida and most states have been exploding just as California has to the job market, low interest rates, I think all of that is fueling it. So I joke around sometimes I feel like may 2022 today has just been like one long day in our world.

george grombacher 2:27
How funny. And it’s certainly been been been odd at every level and looking at Real Estate has been. It’s fascinating. It’s obviously people are going through COVID and, and everything that you talked about how people can work remotely. And so there’s different opportunities and interest rates have have remained low. So you work in working in Silicon Valley, it’s it’s always been unique. And now it’s even more unique because home values are are so high. How do you? How do you think about that? Or perhaps you don’t think about that? Because you’re like inside the jar, right? Like this is just my reality. I was having a conversation with some folks who I would just deem to be regular folks. How do you talk to folks? Just how do you think about working in an environment where home values are so high and going up?

Kaajal Shahani 3:30
Oh, absolutely. It’s it’s always a fun conversation. So I find that most people that jump into the market are very well aware of what’s been happening, right? like spending time online looking at property value is kind of how first time homebuyers start. And then they’ll start reaching out to their realtor, etc. But if I take on a first time homebuyer, I think deep diving into the market with the buyer console is so crucial because What I don’t like is let’s say this. I mean, this happens all the time where somebody will call and say, Oh, I loved this palace, but a day later, it’s pending online. I totally missed out and it’s like no, no that FOMO people have FOMO. And it’s like no, no, first of all step back. You don’t know if that home even landed in your price point because the list price is just the starting point. I call it the teaser price. And from there based on demand based on multiple offers, I mean it’s in the higher end like luxury market, I would say minimum 10% over list price is what we’re looking at when we’re when we’re offering which is crazy. The luxury market 3 million costs. So jumping into the market, you have to I think for my buyers who are just starting they have to realize that’s what they’re going to be up against. I’ve had a few in the past 12 months, who just got burned out and I don’t I don’t All blame them because it is it’s taxing, you know, it’s, it becomes very obsessive. And, you know, if they if they don’t get something after three, four or five times, they’re said, Well, you know, it’s not meant to be etc. But I would take the emotion out of it and try to kind of keep them grounded and say, hey, it’s just the way the market is the inventory super tight. You have to be able to go all in, you have to love the home to be able to all in. But emotionally, if you’re just not ready for all of that, then I would, you know, I would tell them take a step back or we could table this until the market comes down. And then obviously that trickles into when is the market getting copped out?

george grombacher 5:43
Right. Yeah, it’s fascinating. Is it possible to remove emotion out of this is because homes are such a such an emotional thing?

Kaajal Shahani 5:55
Yeah, it’s so well, so that’s the thing. I mean, I think it’s so personality types, right to each their own, there’s some people who jump in with me, and they look at it as a pure transaction, you know, like, just, Hey, I, I want to live in this location, I want to spend this amount of money. And if I don’t get it, they don’t get it. And if I do get it, great, I’m going to be super thrilled. Whereas I have other buyers who are just like, I tell people, especially right now, when people are buying, don’t get emotionally attached to the house, don’t let the house break your heart. I have to, I have to reiterate that statement multiple times, you have to go in, you have to kind of go in as a buyer right now. Like really having a talk with yourself. So funny. Going back to podcasting, I tell my clients to a lot of my clients, I’m like, no, it’s an emotional roller coaster, you have to stay on a straight line with the emotions when it comes to these houses. And it’s so difficult, especially the ones who have very specific requirements, that gets very challenging, because inventory is so tight, they may find one every three, four or five months, you know, and if they don’t get that one, it gets very challenging. So I think keeping emotions out of it is is huge, but obviously not losing sight of why you’re buying the house. So for a first time homebuyer, it’s you know how to start a family to start, you know, kind of a new place, a lot of my clients have either just gotten married or just having a first kid, it’s all very emotional. You know. By second time homebuyers, their kids are getting older, I’ve had a ton of clients whose past 12 months, where they said, we’re just, we knew we were busting at the seams with our current home. But obviously COVID living took us to a point where we confirmed that now we want our kids who potentially are middle school high school, we want their last four or 5678 years at home to have this beautiful backyard with this pool and all this stuff, which is kind of what’s drives drove the luxury market crazy in our area. So very emotional decisions. It’s very difficult to keep the emotions out of the purchase, but but it’s me constantly telling them like don’t let this house break your heart. Let’s just do the best we can. And I think the biggest thing is when we’re offering on a home, there’s a threshold for everybody, right? I mean, sometimes buyers go rogue and like, throw money at whatever, it doesn’t make sense with comparables and all that stuff. We can’t control those buyers. A, B, people that are getting loans sometimes can’t compete against all cash offers. So there’s certain things you just have no control over, but you got to do the best you can. So I usually tell my clients, here’s my offer guidance. If you don’t get it at this price, I don’t want you to be sad. So pick a price where you’re not going to be sad that you lost it for each price bucket. That’s a different threshold. The luxury market again 10 15% over asking very normal, very standard. first time homebuyer price point like per say between 1.2 and 1.8. Totally different conversations. But in each in each bucket of buyers, you know everybody has their thresholds. And if somebody goes beyond your threshold, you just let it be you know, it just wasn’t meant to be it’s one of those things, but keeping emotions out of it. super challenging, but so important.

george grombacher 9:36
Yeah. Yeah, that certainly does make sense. I appreciate the the the conversation around price buckets and having different thresholds. And you were talking about how I and I also love the language of Don’t Don’t let this house break your heart and we’re going to do the best that we can and how difficult it is with inventory being the way that it is just there’s not that many homes that are on the market. And so people that are trying to buy a house, it gets really competitive. And so if you do have very specific requirements, I can see where that would be very, very challenging. And this could take a really long time. Yeah. The flip side of that coin, just from the outside looking, and I would say, Okay, if I’m trying to manage my emotions, and be realistic, is there sort of you talked about the price buckets? Is there also a sort of a desire, like, like, okay, here are the things I have to have in house. But here are things that are nice to have in here are things how, how do you kind of coach people through for lack of a better term parameters?

Kaajal Shahani 10:47
Yeah, absolutely. So I would say with any of these buyers, first, second, third investment property buyers, there’s, there’s never going to be a home that has 100% of what you want, ever. I mean, I’d be shocked if I thought right. I usually tell my buyers in this market, if the house has 70% of what you’re looking for. And the remainder 30% does not have anything to do with a location law, then it’s worth going all in. So don’t compromise a location because we all know the location, location, location, right, really don’t compromise on the location. But I in my opinion, everything else is compromisable except perhaps, something going on with the floor plan. That’s not changeable, which is kind of hard to find. I actually came across the house the other day, you know, I thought it was perfect for my client. Perfect. 70% perfect. Granted, there were certain things I was like, I could probably change that. And lo and behold, my client said, Oh, I love the house, I hate the staircase, it’s in the middle of the house. And I’m like, whew, in 18 years, I don’t think I’ve ever heard someone complain about a staircase. So you just kind of, you just kind of don’t know what’s gonna take your buyer for your day, you know, but generally speaking, I would say 70%, if a house has 70% of what you’re looking for, in today’s market, where inventory is super tight, you should take it seriously. Now when inventory is not tight, I would say you could probably get pretty close to 80 90% even because then you have multiple homes to choose from. The other day, I spoke to a new buyer who’s debating jumping into the market. And I said, hey, let’s pencil it. And sometimes, you know, the Sunday only like about an hour and he’s like, oh, only an hour I have to explain is going to be maybe one house that we’re going to take a look at the super shops. But but that’s that’s the reality of it. So if that one house, checks off 70% of your needs list, you go for it, you know, obviously it’s the feelings, right? And all that fun stuff. I do have a lot of clients who are directionally dependent. So a lot of clients will not buy certain spacing houses, for example, for religious beliefs for natural light, and all that fun stuff. So the house may check out, like 80 90%, and then the direction is wrong. And it’s like, oh, okay, so that’s kind of a bummer. So it becomes very, the staycations make it even harder. But But generally, I would say, keep it at 70% in a tight inventory market, and you can probably get something that you can work with.

george grombacher 13:42
I love it. Perfect. So for folks who who money is is an object for folks who it’s not an infinite resource, so probably probably the first time homebuyer and they’re there. They are getting frustrated by this, but you talked about them and you sir, you talk to them. He said, here’s what we’re looking for, and we understand what our budget is. And you know, from a financial standpoint, the last thing that we want to see people do is to buy way too much house because then they won’t have any money to do other stuff. How do you talk people through that?

Kaajal Shahani 14:25
Yeah, so a lot of my clients actually have, they do consult a financial planner, which is really helpful by the way. I’m sure you can agree with that. And so they usually run it by their financial planner, along with getting a very, very underwritten proper pre approval letter has so much to do with this comment as well. But, but what I’m finding is, I have a lot of first time homebuyers, which is a little bit more prevalent with with finances. So with first time homebuyers, they get their pre approval. They may or may Do not have a financial adviser. And when they get their pre approval, they’re pretty conservative, which, which is good. So, so let’s say for example, one of my buyers is pre approved up to 1.5, they’ll kind of share that their comfort level is more like 1213. But they’re pre approved up to one, five. So that’s been mostly the trend here. But then what gets kind of gray area is the overbidding. So you can’t get much Well, I’ll take that back, you can get much for 1213 just depends on location and type of property. But let’s say something’s at one, two, it has the potential if it has a good location as the right product, it has the potential to get over bid to one side. So this is where this kind of market gets challenging because a lot of people will jump their comfort zones, quote, unquote, and go to their pre approval amount, and then work through, you know, work through their lender work through their financial advisor and say, what does this extra $300,000 look like? And then they’ll equate it back to X amount of dollars and mortgage, X amount of dollars and downpayment, etc. And I think most has exceeded that. Because that’s how much overfitting there is. So if in most cases I would say they do exceed their comfort level, but still their debt to income ratios are so low right now, I’d say like 30 to 40%. So they’re still okay, it’s not like they’re maxing themselves out. But just comfort level a lot of these guys are really young, they they’re just starting their families. So there’s a lot of unknowns, right and then there’s a lot of like, hey, I want to travel I still want to do this, I still want to live I don’t want to be house poor. So it’s a thought out decision. The challenge I would say in today’s market is things move so quickly, that they have to be very well prepared on for example, what one two to one five looks like on the back end before even offering because the decision making is so fast to get if you’re not a quick decision making person it’s going to be a very challenging uphill battle to purchase in today’s market. So you have to kind of know your numbers before you before you even jump into the market or before you’ve an offer on a property

george grombacher 17:22
Yeah, I think that’s really well said. So knowing what those numbers are and understanding what your pre approval is and if if if the amount that I was planning on on spending was 1.2 million or was was x and all of a sudden it looks like I need to go up $100,000 potentially how that will impact the overall plan and will I am I willing to do that on the front end and really know those numbers that’s essentially positions you for success

Kaajal Shahani 17:56

george grombacher 17:58
Well gel the people are ready for your difference making tip. What do you have for them?

Kaajal Shahani 18:03
Oh, good, right. So you know with I would say for my kind of business, treat your realtor and I would love to treat my clients back this way too. I’m in it with you for the journey of buying and selling your real estate journey it’s not a transaction for me it’s a life it’s it’s a life relationship. And I’m at the point 18 years later as bought and sold I think my my greatest one has like probably bought and sold six times with me at this point. And it’s amazing to see Yeah, where they start and where they are and then and that’s not it I’ll probably hope they’ll end up selling them a retirement home as well. But for me it’s not a transaction of the journey.

george grombacher 18:48
Well I think that that is great stuff that definitely gets a Come on. Come on. Gotcha. Thank you so much for coming on. Where can people learn more about you? How can they engage with you?

Kaajal Shahani 18:59
Yeah, absolutely follow me are conscious johani real estate on Facebook and Instagram. Feel free to DM me and my website is cognition honey that calm.

george grombacher 19:08
Perfect. Well, if you enjoyed this as much as I did Chicago your appreciation and share today share with a friend who also appreciates good ideas. Go to cargile shahana. com that’s find her on Facebook and Instagram. I will list all those in the notes of the show. Thanks, good cordial. Thank you Take care. And until next time, keep fighting the good fight. We’re all in this together.

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