The Smart Homebuying Podcast with Laura Moreno

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Introduction

Amy Slotnick is a SVP, Branch Manager, and Senior Mortgage Advisor in Newton, MA. She is a 40-year veteran of the mortgage industry and she is passionate about educating buyers through the home financing process. In her free time, she enjoys visiting her daughter, son-in-law, and new grandson in Washington, D.C.

Get In Touch With Our Guest, Amy Slotnick

If you'd like to get in touch with our guest today, click on the link below and I will send you a warm introduction: Get In Touch With Our Podcast Guest Today

Find The Perfect Real Estate Agent Near You

If you'd like to find a great real estate agent near you, just go to this link: Real Estate Agent Near Me

Podcast Sponsors

Find an Agent with HomeFlow: The key to having a calm and successful home buying experience starts with having the best real estate agent. This is why you need to interview a few. To get the process started just go to Tryhomeflow.com

Dovly: 10 million of Americans have errors in their credit reports that lower their credit score. To fix those error try Dovly.com

MyFico: 90% of top lenders use FICO® Scores—do you know yours? Check your FICO Score at MyFico.com

The Smart Home Buyer Calculator: Use our 4-in-1 super-smart calculator to make sure you know your numbers before buying your first home. Get it now at The Smart Home Buyer Calculator

Rate The Podcast

Click on this link to Rate and Review "The First Time Home Buyer Podcast" on iTunes. You can also subscribe to the podcast there. I will really appreciate it, thanks so much in advance!

Listen To A Podcast Guest In Your Area

If you'd like to find podcast guests for your specific location or profession just click on the link below to search for them: Podcast Guest Search

Awesome Resources For First-Time Home Buyers

If you'd like to access other great resources for first-time home buyers just click on this link: First-Time Home Buyer Resources

Let's Talk

I'd love to talk to podcast listeners and get to know you all better! I can also help you answer any questions you have about buying your first home! So if you'd like to talk about that let's jump a quick call! Just schedule a time that works for you here: Schedule A Call With Laura Moreno

Feedback

I love receiving feedback so please, if you'd like to tell me how you'd improve the podcast, send me an email or schedule a call with me for that works for you here: Schedule A Call With Laura Moreno

Share The Love

If you know someone looking to buy their first home and you think this information would help them, just share it with them. They will really appreciate it.

Subscribe To The Podcast

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Connect On Social Media

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Do you want to start your own podcast?

Then enroll in The Free Podcast Course today, which is the course that I followed to create this podcast!

Transcript

This is an automatic transcription (sorry for the typos in advance! 😅)

Introduction

Mike La Stella is a realtor in Bergen County, New Jersey. He loves working with home buyers to guide them through the process of buying their first home. He is also a husband and father of two. When he is not working, he loves traveling with his wife and cannot wait to start taking their kids with them!

Get In Touch With Our Guest, Michael La Stella

If you'd like to get in touch with our guest today, click on the link below and I will send you a warm introduction: Get In Touch With Our Podcast Guest Today

Find The Perfect Real Estate Agent Near You

If you'd like to find a great real estate agent near you, just go to this link: Real Estate Agent Near Me

Podcast Sponsors

Find an Agent with HomeFlow: The key to having a calm and successful home buying experience starts with having the best real estate agent. This is why you need to interview a few. To get the process started just go to Tryhomeflow.com

Dovly: 10 million of Americans have errors in their credit reports that lower their credit score. To fix those error try Dovly.com

MyFico: 90% of top lenders use FICO® Scores—do you know yours? Check your FICO Score at MyFico.com

The Smart Home Buyer Calculator: Use our 4-in-1 super-smart calculator to make sure you know your numbers before buying your first home. Get it now at The Smart Home Buyer Calculator

Rate The Podcast

Click on this link to Rate and Review "The First Time Home Buyer Podcast" on iTunes. You can also subscribe to the podcast there. I will really appreciate it, thanks so much in advance!

Listen To A Podcast Guest In Your Area

If you'd like to find podcast guests for your specific location or profession just click on the link below to search for them: Podcast Guest Search

Awesome Resources For First-Time Home Buyers

If you'd like to access other great resources for first-time home buyers just click on this link: First-Time Home Buyer Resources

Let's Talk

I'd love to talk to podcast listeners and get to know you all better! I can also help you answer any questions you have about buying your first home! So if you'd like to talk about that let's jump a quick call! Just schedule a time that works for you here: Schedule A Call With Laura Moreno

Feedback

I love receiving feedback so please, if you'd like to tell me how you'd improve the podcast, send me an email or schedule a call with me for that works for you here: Schedule A Call With Laura Moreno

Share The Love

If you know someone looking to buy their first home and you think this information would help them, just share it with them. They will really appreciate it.

Subscribe To The Podcast

Apple | Google | Spotify | Stitcher | iHeart

Connect On Social Media

YouTube | Instagram | Facebook | Twitter | LinkedIn

Do you want to start your own podcast?

Then enroll in The Free Podcast Course today, which is the course that I followed to create this podcast!

Introduction

Michael Conrad is a building scientist and a serial entrepreneur that runs a company called, DILIGENT, a home inspection company based in Nashville, TN with over 1,000 5-Star Reviews. DILIGENT is the ultimate One-Stop Shop for inspection services in the mid-Tennessee area. You might have also seen Michael on his YouTube channel as "The Diligent Inspector".

Get In Touch With Our Guest, Michael Conrad

If you'd like to get in touch with our guest today, click on the link below and I will send you a warm introduction: Get In Touch With Our Podcast Guest Today

Find The Perfect Real Estate Agent Near You

If you'd like to find a great real estate agent near you, just go to this link: Real Estate Agent Near Me

Podcast Sponsors

Find an Agent with HomeFlow: The key to having a calm and successful home buying experience starts with having the best real estate agent. This is why you need to interview a few. To get the process started just go to Tryhomeflow.com

Dovly: 10 million of Americans have errors in their credit reports that lower their credit score. To fix those error try Dovly.com

MyFico: 90% of top lenders use FICO® Scores—do you know yours? Check your FICO Score at MyFico.com

The Smart Home Buyer Calculator: Use our 4-in-1 super-smart calculator to make sure you know your numbers before buying your first home. Get it now at The Smart Home Buyer Calculator

Rate The Podcast

Click on this link to Rate and Review "The First Time Home Buyer Podcast" on iTunes. You can also subscribe to the podcast there. I will really appreciate it, thanks so much in advance!

Listen To A Podcast Guest In Your Area

If you'd like to find podcast guests for your specific location or profession just click on the link below to search for them: Podcast Guest Search

Awesome Resources For First-Time Home Buyers

If you'd like to access other great resources for first-time home buyers just click on this link: First-Time Home Buyer Resources

Let's Talk

I'd love to talk to podcast listeners and get to know you all better! I can also help you answer any questions you have about buying your first home! So if you'd like to talk about that let's jump a quick call! Just schedule a time that works for you here: Schedule A Call With Laura Moreno

Feedback

I love receiving feedback so please, if you'd like to tell me how you'd improve the podcast, send me an email or schedule a call with me for that works for you here: Schedule A Call With Laura Moreno

Share The Love

If you know someone looking to buy their first home and you think this information would help them, just share it with them. They will really appreciate it.

Subscribe To The Podcast

Apple | Google | Spotify | Stitcher | iHeart

Connect On Social Media

YouTube | Instagram | Facebook | Twitter | LinkedIn

Do you want to start your own podcast?

Then enroll in The Free Podcast Course today, which is the course that I followed to create this podcast!

Transcript

This is an automatic transcription (sorry for the typos in advance! 😅)

Laura Moreno: [00:00:00] First Time Home Buyer Nation, I am Laura Moreno and I am super excited to bring you our fantastic guest today, Michael Conrad.

Michael is a building scientist and a serial entrepreneur that runs a company called Diligent, a home inspection company based in Nashville, Tennessee, with over 1000 fivestar reviews. Diligent is the ultimate one stop shop for inspection services in the mid Tennessee. You might have also seen Michael on his YouTube channel as the diligent inspector.

Michael, are you ready to flow?

Michael Conrad: Yeah, let's do it.

Laura Moreno: Great. So you and our community, just a little insight. Please share more about you personally and then expand upon your

Michael Conrad: business. Yeah, I, I got into this business, uh, sort of accidentally. I mean, I'm not sure exactly who gets in on purpose, but I had someone tell me that they, uh, thought I might be good at it because of two things.

I loved to help people. I loved [00:01:00] construction. And I love talking. And ultimately, home inspection is the segue, uh, or the intersection between all those things where we understand the construction science world and we help break that down into bitesize pieces for home buyers of all sorts. So I got in it because I came from construction, but mostly because I love people.

That's

Laura Moreno: awesome. I mean, tell me more about your company and also want to know about your YouTube channel as well.

Michael Conrad: Yeah, so I, when I started being a home inspector, I realized, you know, if I. Not very good and I can't grow a company. I kind of still love everything about this job, but I had an idea from the beginning that it might be cool to try and help more people than what just one man can do.

And so I had a vision for the future that involved many people all working on, um, a buyer's transaction. Many hands make light work, and quite honestly, it can make a more quality experience. And so, yeah, I, I [00:02:00] started out small just like everyone does. I was sweeping the floors and, um, doing everything, but ultimately I tried to create a division of duties by bringing in people that were smarter than me or more skilled than me in various areas and empower.

To be helpful as a home inspector, as someone who's handling logistics or scheduling as someone who's making new relationships. And so we've built an exciting company over the last 11 years that we get to employ and feed about 18 families in this company, which is a really exciting thing that I'm proud about.

That's

Laura Moreno: really, really awesome. I mean, you started as a home inspector yourself, and then you expanded the.

Michael Conrad: That's right. Yeah. I, I, I get a lot of calls from folks who've seen me on our, my YouTube channel, the diligent inspector, and they say, Hey, I wanna do what you did. I want to grow a company. I want to be my own boss.

And I always say, Do you, because it's a lot of work, you know, you classically hear, ah, you trade [00:03:00] in the nine to five, 40 hour a week job working for the man so that you can work for yourself and work about 80 to a hundred hours a week. You know, So it's maybe not all it's cracked. Video all the time. But it does have its challenges, which personally I love.

I love to solve a problem. I love a puzzle, and really every day in business is about solving a puzzle. Maybe someone needs to learn something and you gotta figure out how to explain it to them. Maybe someone's not very happy and you gotta figure out how to find a way to meet each other. Maybe there's a house that has a complicated issue and you gotta figure out what's going on.

Every day is a.

Laura Moreno: Totally. Totally. That's amazing. So let's talk about a home inspection in a house. Uh, let's talk about Nashville, which kind of properties you have in that area, and do you know, what are the particularities of those properties? Are they more difficult to inspect or home buyers should be?

Were aware of like specific problems in those

Michael Conrad: houses. . Yeah, great question. Okay, so for any of your listeners here that are living in [00:04:00] maybe the lower southern part of the United States, maybe over here in kind of the deep south where we have a lot of humidity, a lot of rainfall, and a lot of groundwater, you're gonna need to be wary of the big number one enemy of the house, and that's.

Now up in different parts of the country, the north, the west, the planes, the Southwest, each of them has their own experience dealing with trying to keep water out of a home. But gosh darn it, Mother Nature is really giving us a run for our money. Down here in the south. We are constantly having to make sure that we're building houses that can survive the test of time.

Houses really don't have to be built nearly as well in other parts of the country because, Uh, moisture is not really trying to get in quite as intensely. And so for anyone listening that's buying in the south, one of the things that you wanna be wary of going into any home buying process is the enemy of moisture.

And that's gonna be probably the number one thing that your. Home inspector is gonna [00:05:00] be looking for sure they're doing a roof inspection or an exterior or a crawlspace inspection. But what they're really looking for is how is water trying to get in and what materials maybe got damaged along the way?

Laura Moreno: Wow. Number one enemy is water. That's, that's crazy. So what are the biggest damages that water can make in a.

Michael Conrad: Right. So in this part of the country, we don't have overly, particularly old housing stock. Really old homes to us are barely a hundred years old at the oldest when a lot of our friends maybe up in the northeast might be dealing homes that are hundreds and hundreds of years old.

And so when it comes down to the homes we deal with and the water intrusion we see we're dealing with mostly newer homes and newer homes. Building materials that are sometimes made more by man than they were a tree. You have particle boards and OSB and things that are very vulnerable to water. And so one of the [00:06:00] things you've gotta be mindful of is the newer the home, the more buttoned up it really has to be.

Or Mother Nature's gonna take her toll.

Laura Moreno: Wow. Okay. That's, that's, that's amazing. I mean, tell me more about diligence. So if someone is looking to schedule an inspection, how does the process work and, uh, how do they get in touch with you or with a home inspector, and how should they choose the best home inspector

Michael Conrad: as well?

Right. There's a reason why so many articles online are written about these basic ideas of how do you choose a home inspector, because it's so important at this portion of the process. Really, I want to be an encourager to all the home buyers listening here, that they need to be treating the home inspection process as an investment in inform.

Because that's really what it comes down to. A home inspection might help you understand the information of a home and help you avoid it all together if it's a big problem. Or better yet, if it's a home you still, like after the home inspection, [00:07:00] it gives you a great roadmap of what to do next. Now, when I first started out and really as much as maybe 20 plus or, or early or many years ago, Hmm.

Calling up a home inspector was just that you called someone on the phone and he was the guy. He might have been in a crawlspace or on a roof, but you were almost always guaranteed to get the man himself. And that still happens today a little bit, but more and more what you might encounter is speaking to a staff member who works for a home inspection company, not just a single owner operator home.

I. And so you're gonna find us online with our website or our social media and all the usual digital places that you might, You might book an inspection and never speak to a warm body. You might even send a text message because now texting is a big part of all of business practice. Either way, someone's gonna probably call you back and say, Hey, thanks for reaching out.

We love to get you scheduled. Can I make sure that you're. Of all that goes in to the home buying [00:08:00] process, did you know that there's other little bits of education that you can learn? Would you like to add those on and kind of simplify, but also create a greater depth of information so that you're most armed?

Cuz there's never any better time to know that in right now during the due diligence phase of your transaction, what's really going.

Laura Moreno: Wow. Yeah, I mean, we think about education in terms of buying a home, finding an agent, you know, coming up with the finances, talking to a lender. But we, I, I think like hardly we think about education when it comes to the home inspection.

Like with the home inspection, we are like, the home inspection will come and he will tell me if I should run away or not. , hopefully. But what are the patient Yeah, go.

Michael Conrad: It's actually more complex than that because what we all do, and I'm not immune from it any more than you are, we go into a home that we might like to buy, and we make these assumptions in our mind that this home is in [00:09:00] good shape because why would they be putting it on the market otherwise, and that the price that they're listing at is likely somewhere close to the right price, But in reality, The home inspector comes in and kind of upsets the balance.

He changes the balance of those scales. And no, the quality of the home and the price are not usually on balance. And so the home inspection isn't just about running away, it's about understanding am I getting a home that's actually worth the $300,000 that it's listed at, or am I getting a home that has $20,000 of repairs?

So it's really kind of like I'm buying a home that's 280. And what do I do about that? Now, your real estate agent might help you negotiate for repairs or negotiate for price change or maybe money at closing. There's many different options in

in which to reset those scales, but that's the role of the home inspector is to make sure that the buyer is fully [00:10:00] aware of the balance between the quality of the construction and the price.

Laura Moreno: Got it. Got it. So as a first time home buyer, I go to a home. We've imagined we've been putting offers for five house houses, and finally this one, the offer is accepted.

This one is the one. So now I have to schedule a home inspection. I go to the property, and now this is just the last check mark in my list. So my hopes are up. I don't think nothing wrong is going to happen because I've been fighting for three, six months to try to get a home. And now my home inspection tells me like something that I didn't want to hear.

I mean, how do we manage our emotions the correct way? Like how do we go to see that property with the right expectations?

Michael Conrad: Yeah. This is a tough case for anyone buying in 2022. I wanna be an encourager to say. I get it. I understand that it's an emotionally fraught process, but we find ourselves in a place where [00:11:00] we are negotiating for the first round for an overall price, but then we end up expecting to negotiate again.

It can lead to an emotional rollercoaster. So the best thing, the best advice I can give, You know, hold your breath a little bit before you get that inspection, but go in knowing that every home has issues. Let me say that again. For the people in the back, every home has issues, even the new ones. And because of that, you've got to go in expecting Some things might be fixed by the seller, but some things are gonna be my responsibility.

I don't know a lot of. Today that really know this, but I keep shouting from the rooftops. There is responsibility required in home ownership and we have to have our buyers mentally and emotionally equipped to go in knowing, yes, I might get some price reduction or I might get some things repaired, but I'm going into a home that's likely gonna have a need for [00:12:00] maintenance and I have to be a full participant in that kind of maintenance.

Laura Moreno: Yeah, that's something like many people take by surprise. You know, suddenly they have to fix a boiler. Like it happened to me, we had to fix a boiler. And then you come up with a bill that is like $20,000 and it's like, Oh my God, where do we get into? And you have to come with expectation that things are going to break.

That a house is a living being a living thing that is going to be evolving. And I actually love what you said about, um, every home has issues because we go with the mentality. I hope nothing's broken. I hope it doesn't have any issues, and there's going to be an issue. There's going to be something . So just like go with the right mindset.

Michael Conrad: Yes, and honestly to think that you can walk into a maintenance free home. It just doesn't represent reality for almost anyone. And anyone who has bought a home can probably safely say that that's true. But you know, there's a lot of first time home buyers these [00:13:00] days. They're probably listening to this podcast, and I hope that they can have a takeaway here that if you're not going in ready to be a full maintainer of a home, maybe it might be time to second guess home ownership for a second.

Laura Moreno: Tell me more about maintenance. So what happens if we buy a home and then we kind of like don't do the maintenance things break and we just let it be? Um, does that impact a lot, the house? Like what should we do regarding maintenance? When we own a property,

Michael Conrad: we have to start thinking about maintenance of a property, kind of like changing the oil on our car.

You can avoid changing the oil and go for a long time, and you're kind of rolling the dice, whether that car is gonna crap out on you, but we all know the stories. If you keep good records and actually do the maintenance and the oil change every three to 5,000 miles, you're gonna extend the life of that [00:14:00] car.

And so a house is the same way. There was a study a while back that said we should be spending about 1% of the value of our home every year. To maintain it, you means if you have a $300,000 home, you probably should be spending around $300,000, or at least budgeting for it and storing that money away in an envelope somewhere ready to spend it because maybe year one you don't have to spend it.

Maybe year two you don't. But year three, you gotta replace your H V A C and it's $8,000, but you are a good little boy or girl and you put that money in an envelope. If we're not doing that, we end up with big bills that are surprises and a lot of sellers, these. Feel surprised. I'm putting air quotes around that because they get a home inspection report served up to them by some unwitting buyer, and the buyer says, You need to do all this maintenance and repairs.

And the seller says, Well, I've never had any issues. But in reality, if they've done little bits along the way, they wouldn't [00:15:00] feel the pain of those large repair bills right then and there. And honestly, it doesn't feel fair to stick that with the. Unless the buyer is getting an absolutely fantastic price.

Laura Moreno: I hear that. So one other question for you is you have over 1005 star reviews, which is out of this world. I mean, what are you doing differently that other inspectors are not doing? I mean, why ? And I suppose, I hope other inspectors are not listening to this, but what are you doing better than anyone else and how are you creating such an amazing experie.

Michael Conrad: Sh don't tell the other inspectors. But I will tell you here, reviews recom, um, represent your level of human involvement and customer service. And don't really represent the quality of your product. Now, I'm not saying we have a bad quality product. In fact, I think we have a great quality product. But my secret at Diligent over the [00:16:00] last 11 years, how we've gotten to a thousand reviews and kind of blown away the competition a lot of ways, it really comes down to we know how to take care of.

We know how to do the basics. Answer our phone. Say, Yes, sir. No sir. Be kind to everyone around us. Show up when we're supposed to leave, when we're supposed to. The basics. Ultimately, we know that our review reputation online reflects our business practice, not necessarily our product.

Laura Moreno: Oh, that's amazing. So you are taking people like humans, you're treating them well with respect show.

Were you were saying like showing up, showing up to appointments, picking up the phone, ? Or were you saying all those basics that everyone should be doing? You are systematically doing

Michael Conrad: them? Yeah. Unfortunately in business today, common sense isn't super common and some of those old school ways, Acting in business can be surprisingly beneficial, uh, and help your business make steps forward.[00:17:00]

Oh, that's, that's great.

Laura Moreno: And last question for you, Mike. Um. as a first time home buyer, you know, 70% of home buyers we see they're having some regrets on their first time home purchase, which is kind of crazy for me. So seven out of 10 people that buy a home will have some regrets. So what are some ways that home buyers can avoid mistakes?

Um, do, can you tell us like the mosco mistakes that you see and how could home buyers avoid making that particular. ,

Michael Conrad: I would say there's a couple key things that they can start thinking about right now as they're prepping for their first time purchase. We've already talked about one of 'em, and that is go in with a good managed expectation that you're going to have to spend money to own a home.

Nobody gets a chance to live maintenance free or cost free in home. So number one, good personal managed expectations of what your level of financial participation is. [00:18:00] Number two, go in knowing that it's going to have a lot of sort of, Different steps in the process. Some of them might be a little bit emotional, and so I would say people who get into houses that are maybe a little too big for them because it feels exciting to have a big house might end up in a home that's maybe too much to maintain.

And so having more modest expectations of where you can live can also be another way to kind of avoid that regret. And then I would say the third and biggest thing to avoid. Is make sure that you are sparing no expense on investing in that information during the home inspection process. It's not just a fun step that you're checking a box for.

In fact, the home inspection fee may not even be the entire amount of money you pay out during the home inspection process. Your home inspector might recommend. [00:19:00] Another professional to do some further evaluation and my recommendation is to avoid that future regret, take every single one of those extra recommendations to heart.

Laura Moreno: I agree. And what do you think about the people that did avoid having a home inspection during the, during the past years? I mean, would you ever recommend someone to skip the home inspection? .

Michael Conrad: Unfortunately, there has been a trend of people wanting the home more than they wanted to run the processes, and they are facing now the difficulty of not ever really knowing what the roadmap was for maintaining and understanding their home.

They're flying blind without a guide, and so no, definitely not, and not in a self-serving way. This is about education, and honestly, we all need education because education empowers us. We all fear what we do not understand, and many folks in today's day and age just don't really understand homes all that [00:20:00] well, to be honest.

Homes are very complicated these days full of all sorts of technology and engineered materials. And so we have to make sure that we are bringing a guide along with us in this transaction who is equipping us with as much information as possible, or referring us into the right hands of another professional.

And so regret always comes from, uh, a lack of managed expectations and an inability to see the, the things that are coming ahead. And so it's best to bring along someone who will help you become educated and help you project.

Laura Moreno: Well that, that's a great advice and you've shared with us Michael, amazing information.

How can we get in touch with you?

Michael Conrad: Definitely look us up on all the traditional social media places that'll be linked here in the podcast description, and you can always find me if you're curious about some of my rantings and ravings, you can find me as the diligent inspector on YouTube. That's

Laura Moreno: amazing.

Well, thank [00:21:00] you so, so much for being in the first time Home Buyer podcast. I really appreciate it.

Michael Conrad: Yeah, great to talk with you. Thanks!

Introduction

Lee Barroll is a loan originator in Nashville, TN. He has 26 years of experience and enjoys helping all types of homebuyers accomplish their goals. When not working, he loves hanging out with his 2 dogs, Charlie and Bernie.

Get In Touch With Our Guest, Lee Barroll

If you'd like to get in touch with our guest today, click on the link below and I will send you a warm introduction: Get In Touch With Our Podcast Guest Today

Find The Perfect Real Estate Agent Near You

If you'd like to find a great real estate agent near you, just go to this link: Real Estate Agent Near Me

Podcast Sponsors

Find an Agent with HomeFlow: The key to having a calm and successful home buying experience starts with having the best real estate agent. This is why you need to interview a few. To get the process started just go to Tryhomeflow.com

Dovly: 10 million of Americans have errors in their credit reports that lower their credit score. To fix those error try Dovly.com

MyFico: 90% of top lenders use FICO® Scores—do you know yours? Check your FICO Score at MyFico.com

The Smart Home Buyer Calculator: Use our 4-in-1 super-smart calculator to make sure you know your numbers before buying your first home. Get it now at The Smart Home Buyer Calculator

Rate The Podcast

Click on this link to Rate and Review "The First Time Home Buyer Podcast" on iTunes. You can also subscribe to the podcast there. I will really appreciate it, thanks so much in advance!

Listen To A Podcast Guest In Your Area

If you'd like to find podcast guests for your specific location or profession just click on the link below to search for them: Podcast Guest Search

Awesome Resources For First-Time Home Buyers

If you'd like to access other great resources for first-time home buyers just click on this link: First-Time Home Buyer Resources

Let's Talk

I'd love to talk to podcast listeners and get to know you all better! I can also help you answer any questions you have about buying your first home! So if you'd like to talk about that let's jump a quick call! Just schedule a time that works for you here: Schedule A Call With Laura Moreno

Feedback

I love receiving feedback so please, if you'd like to tell me how you'd improve the podcast, send me an email or schedule a call with me for that works for you here: Schedule A Call With Laura Moreno

Share The Love

If you know someone looking to buy their first home and you think this information would help them, just share it with them. They will really appreciate it.

Subscribe To The Podcast

Apple | Google | Spotify | Stitcher | iHeart

Connect On Social Media

YouTube | Instagram | Facebook | Twitter | LinkedIn

Do you want to start your own podcast?

Then enroll in The Free Podcast Course today, which is the course that I followed to create this podcast!

Transcript

This is an automatic transcription (sorry for the typos in advance! 😅)

Laura Moreno: [00:00:00] First Time Home Buyers Nation, I am Laura Moreno and I am super excited to bring you our fantastic guest today, Lee Bar Lee is a lone originator in Nashville, Tennessee.

He has 26 years of experience and enjoys helping all types of home buyers accomplish their goals when not working. He loves hanging out with his two dogs. Charlie and Bernie Lee, are you ready to.

Lee Barroll: Yes, I am. Thank you very much. Great.

Laura Moreno: So I've given our community just a little insight. Please share more about you personally and then expand upon your business.

Lee Barroll: I'm sorry, what was the question? Oh,

Laura Moreno: sure. , I would say share more about you personally and then expand upon your business.

Lee Barroll: Sorry. Um, oh, well my name is Lee Bell and I've been doing this since 1997. So I have a little bit of experience. Um, I've worked for, uh, in a variety of positions to include management.

I most prefer working with people, um, at the end of the line. Um, about me personally, I served in the military [00:01:00] for 14 years. Um, part of that time I was a recruiter and I can thank the army for giving my fabulous sales training. Um, and the probably the most important thing about this job is listening to people and, uh, putting myself in a position to help them because the more I can help somebody else, essentially, as Zig Ziglar says, the more I'll get.

Laura Moreno: Wow. Observ me. What, what do you mean You were in the military and that taught you how to sell ?

Lee Barroll: Well, um, what, what I'm most proud of is I was airborne infantry, a paratrooper for the first four years, and then I was mechanized infantry for the second three years. In the last, um, seven years, I was a US Army recruiter.

So it's a sales position and, uh, typically you're, you're presenting your product, which is enlistment in the United States Army to a 17 year old and their parents in a living room. So it's, it's challenging and rapport is probably one of the most important parts because as we know, people work with people they like, you know, and people will accomplish a goal if they're working with someone they like.

So, um, having that [00:02:00] experience, I was able to parlay that into my current job. And I think that one of my. Solid skill sets is that ability to establish rapport on the front end of the um, transaction, because the more we can communicate effectively from the beginning, the easier it is at the end. You know, I want my goal, essentially, If we're gonna have problems, let's have problems now and get it outta the way.

I don't wanna, you know, go through this whole process with you and then we go to closing and for some reason, um, you feel that questions weren't asked or answered correctly. Um, I just want everything, I want you to be mad at me up front, not at the end. I dunno if that makes

Laura Moreno: sense or not. Why would anyone be mad at Julie?

I mean, tell me more about that. Like what, what are the potential conflicts that show up when you buy a home and what could go wrong that you can solve at the.

Lee Barroll: Um, okay. So the biggest thing is communication and communicating effectively and making sure that the client understands the transaction up front.

Understands the numbers. What is my [00:03:00] purchase price? What am I borrowing? What is my payment gonna be? How much cash do I have to bring to closing? Now, yes, of course. I mean, this transaction could be anywhere from 15 to 45, 60 days. So you have good solid estimates up front, and they need to understand the mechanics of loan, what kind of loan they're.

Typically people are going with a 30 year fixed, especially a first time home buyer. But it's like if we're gonna have. Basically challenging understanding the transaction up front. I want it to be in the beginning because I don't want them to show up at closing and how, why you didn't, if you never told me my payment was gonna be that high, you never told me I needed this much money.

And that stuff happens, Laura. I mean it, and, and it's really a failure on the loan officer part to effectively communicate the information that's most important upfront at the beginning of the transac.

Laura Moreno: So how do you do that? Because one thing is to pass on information. Like you may say, you know, Laura, your payment is going to be $3,000 a month.

But the other thing is for the other person, for me to assimilate that, like how can you [00:04:00] make sure I assimilate that data? Because one thing is listen to it and the other one is really understand and record that

Lee Barroll: information. Well, it, it's, um, several steps to it. Um, but at the beginning there's the establishing rapport.

Um, that's important because I need to be, feel comfortable with them and they need to feel comfortable with me. And then secondly, depending upon their level of experience, like if somebody's never bought a house before, we're gonna start from scratch. We're gonna talk about we're getting pre-qualified now.

This is what we're looking to do. You're gonna work with a realtor, you're gonna go out, you're gonna. Find a house that you like, you're gonna make an offer. I mean, I take it from the very beginning, all the way to the end, simply the mechanics of it. So they have a fundamental understanding of what's gonna happen.

And then based upon the information we've developed in the beginning, we talk about a price point. And then from a price point we establish what a, what are their abilities? I mean, how much can they afford and how much do they have to put into the transaction? And then [00:05:00] B, what it looks like. Um, and if you do it correctly, you're gonna be close.

There are some things you can't control. You can't totally control the payment, um, until you lock the interest rate. And you can't lock a rate until you have a contract. But you can definitely show somebody what the transaction looks like and then being available to answer their questions. And it usually was somebody who's brand new to the process.

It's usually. Two, if not three conversations about the transaction. Because if you try and do that all in one conversation, what'll happen is the person's eyeballs will roll in the back of their head and they will stop listening. So I like to, um, give them a general overview, then present the information to 'em, a a worksheet or a proposal to them, and then we review that.

And along the way I answer their questions. Um, and then we'll have a follow up call to that to see what questions they have. Cause I mean, It's the unanswered question that creates the problem, and I make it clear to my borrowers, especially my first time home buyers, [00:06:00] that it doesn't matter if we talked about it last week.

I, if you have a question about it, please ask it. Don't leave that question unasked because I don't know if you don't tell me what you need to know. I don't know. and that's what I need to do in order to properly give you the information so that you can make a decision, probably the most important financial decision that you're gonna take part of in your entire life.

So, um, I'm a passionate believer in that communication from the beginning. .

Laura Moreno: I, I agree with that and I agree with that so, so much. And what are your, So, you know, millennials, we are gens now, we are so used to doing, finding everything online, and that includes a preapproval letter, prequalification, preapproval lenders.

Uh, what ends up happening is that you request pre-approval online, , you fill in your information within two minutes, everything is filled in, you send it, and then they give you a mortgage. So my, my question to you is like, why would anyone need two, three [00:07:00] conversations to get the same outcome? A mortgage?

And I'm like already answering it in my head, but I want to take your point, your point of view on that.

Lee Barroll: Well, again, it depends upon the experience level of the borrower. Um, I have a client I'm working on now. They're buying an $800,000 house. They're putting 20% down. It's like the fifth house they bought.

You know, communication is minimal. He wants to know what's going on. That's it. I ask him for something, he sends it right away. But with a, with somebody who's not, and it doesn't necessarily have to be their first time, but for somebody who's not as experienced with that, you just, I mean, I feel a responsibility.

To take time with them to make sure that they have the opportunity to ask their questions, and most importantly, not to make them feel like it's something they should already know. Because why should they, You know, I'm the one that's been doing this job since 1997, not you. How can I expect you to understand it?

For me, this stuff is, and I [00:08:00] hesitate to use the word easy, but it's like a puzzle and there are pieces to it, and I. 26, 27 years of putting that puzzle together. So it's pretty easy for me, but for somebody who's never done it before, they look at those pieces and they're like, uh, what goes where? And so, um, you can make it sound very simple, but I just need to make sure that myself and my borrower are communicating effectively so that they understand what they.

Because they'll tell you. They understand and they don't. You can always tell, and not everybody, not everybody, but I, I mean, I've gotten plenty of compliments. I'll toot my own horn from people that said, I've taken a, a complex procedure and explained it in a very simple fashion. Um, but there's steps to it and you have to stop and check.

I know. I don't know. Um, it's just the really important part of, it's probably the most important part of the process, in my opinion, for both myself as a loan officer and my client as the.

Laura Moreno: Got it. Got it. So tell [00:09:00] me more about Nashville, uh, what's going on in the market And I want to talk about the property prices.

And you are closing loans here and there all the time. So you know so much about the market. And also I want to know about, you said now you think it's a great time to buy a home and we all know interest rates are way up. So if you could talk me through your thought process. Why is now a great time to buy a home and how is the market

Lee Barroll: where you.

Uh, okay. So the why it's a great time to buy a home because if somebody was in the, is in the mindset to buy a home. Yes. Interest rates are higher today than they were two years ago. Okay. Or a year ago, or even six months ago. That's a fact. But the fact, and I'm just using a number, I'm not quoting anything, but let's say the rate we're talking about is 7%.

Oh my God. It shouldn't be. But the 7%, if you buy now and rates go up, you're happy because you have a lower interest rate. If you buy now and rates go down, you're happy because you get to refinance to a lower rate and get a lower payment. So not buying the [00:10:00] home that is going to suit your needs for you and your family because of interest rate, is probably not the wisest decision, in my opinion.

Now, if you wanna be a renter, that's fine, and I can respect that. If buying a home is not. One of the options that you're considering, No harm, no foul, but if things have come to pass in your life and you're ready to buy a home, interest rates should not be the reason why you don't buy. What if, What if

Laura Moreno: now the interest rate is telling me that my monthly payment, I'm not going to be, I'm going to be house poor, it's going to put me in trouble to have that house payment.

What? What would you say to that?

Lee Barroll: I say, don't do. I mean, you know, um, I mean, I don't tell people how to live their life. They have to make their own decision. There are certain things in place that won't allow you to get too far, but a person knows their budget and they know that if that payment is too much for them, well okay, But the reality of it is, is that you can still buy more today.

For the same payment you can rent and what you'll get for today for that rental [00:11:00] payment. It's a lot better than what you can rent. And more often than not, we're seeing people actually look, they're paying 3000, $3,500 a month for rent, you know, and they're making the, they're, you know, Yeah. That it seems like it's a very large payment, and it is, but it's already in their budget, so they have a lot to work with.

That being said, if somebody's been living with their parents and maybe kicking in $400 a month and is looking at a $1,700 a month payment, that's some shock. You know, it might not be the right time for make that move, but without knowing the facts about what you're trying to do, that's where you set yourself up for not being able to make the right decision.

Laura Moreno: I see. I see. And what, what are you seeing in the market today in Nashville? I mean, are prices same? Is it a lot of demand? Like what's going on with the sellers? I mean, you know, what do you know in the market about now what's happening?

Lee Barroll: It's shifting. Okay. Six months ago and probably for the previous 18 months, it [00:12:00] was crazy.

I mean, it, it was, you know, But it's not anymore. So what's happened is rates have gone up. Cash is backed out of the market to a certain extent. So houses need to be priced correctly. They need to be priced at the fair market value. You just can't throw a price out there. Otherwise it's gonna sit and, um, It's shifting from a seller's market where they were in charge of everything till now.

We see that buyers are getting back in the game as far as being able to negotiate concessions, negotiating seller paid title. Um, not quite, You're not seeing 25 offers on a house that went on the market Friday by Sunday. Um, so there's a lot more room. That being said in this area, if it is priced right and it looks good, it's going to.

So a buyer still needs to be of a mind to negotiate. Cuz if you walk into that, that house and it fits 90% of your goals, you still don't have three days to talk to Aunt Sally [00:13:00] about it. You need to be, you know, ready to make an an offer and then, um, move forward with that. So it's kind of, it's a lot better than it was from the buyer's perspective.

From a recent standpoint. You still have to be in the position to buy if you wanna.

Laura Moreno: I hear you. I hear you. But, um, going back to the rates, I mean, if you are in a position that you want to buy, uh, but still the rates are like a little bit of a, you are like, you cannot really handle the rates. Like is there any creative ways of, um, reducing that interest rate?

Like if someone says, Listen, I want to buy Lee, but I don't want a 7% interest rate, what options do they have? Is there anything they can. .

Lee Barroll: Yes. Um, there are several options that they do have. One is gonna depend upon the quality of realtor they're working with and the realtor's negotiation skills and understanding the market because, and, and, and well, I mean, yes, you can look [00:14:00] at, um, using discount points, lower the interest rate, which will lower your.

It's gonna have a much higher impact on the larger loan amount than it is on a smaller loan amount. Um, and there's also a product out there called a two one buy down where you can put money in escrow to lower the rate for the first 12 months, lower for the second 12 months, and then it would be the rate for the rest of life of the loan.

Um, so two, it's called a two one interest rate buyout. Um, it's not that complex, but let's say that the start rate is seven. The first 12 months, the interest rate would be 5%. The second 12 months, the interest rate would be 6%, and then the third, 12 months through the third, through the third, uh, through the third year, through the 30th year, it would be 7%.

And so what they do is they take in that they take that interest between seven and 5%, and they put it in escrow and an escrow account, and every month they contribute outta that escrow account to make the payment whole at seven. [00:15:00] So if you can negotiate funds from the seller to pay that, then you're way ahead of the game.

Um, and depending upon your goals and your plans, um, it still makes a lot of sense to do that if it's gonna put the payment in the range that is affordable to you. And I don't mean just from a numbers perspective, I mean from a comfort perspective as well. Um, and I don. I don't wanna get too far off the path trying to explain it.

It's just that there are options, but the key is determining how much money you have to work with. So just to put it in perspective, um, this is a loan that we have in the pipeline right now. It was a $530,000 purchase price. The realtor and the buyer negotiated $15,000 in seller concessions from, from the seller.

And then they decided to take that, um, entire $15,000 and. Into discount points to lower the interest rate. And they took the interest rate from [00:16:00] 7.375 down to 6.125, and on the loan amount that they had, that, that was almost a $350 difference a month. So yes, there are creative ways, but everybody has to understand what they're they're looking at.

And that's why it's so important to get with your loan officer in the beginning so you understand the numbers and you understand the TRA transaction and what your options. because then when you get into that home buying process, you have a much better feel for what it's gonna look like. And, um, you're not gonna be unpleasantly surprised.

Laura Moreno: That's, uh, great news for home buyers because every, everyone is thinking about the interest rates. Everyone is like, Oh my God, what to do. Um, do you also recommend those arm mortgages, those like adjustable rate mortgages to lower the interest rate or That's a little bit. , I'm

Lee Barroll: not saying it's not tricky.

It depends upon the, the experience level of the buyer. Number one, what their plans are, number two, and what the benefit is. And right now, now, so I'm a loan officer for, uh, what's called a secondary lender. And the loans that we're talking about currently, [00:17:00] not the, um, are being sold on the secondary market to Fannie.

and Ginny. So that's, uh, Fannie Mae, Freddie Mac and G Mae, Jenny Mae does the government. There's not a real flavor on the secondary market for adjustable rate mortgages. So you're not seeing a big difference on a conventional loan by going with an arm, if that makes an sense. And you mean

Laura Moreno: interest rates?

Like interest rates are not Okay. Okay. No, they would be,

Lee Barroll: No, they could be the same. Or close an eighth 0.125%. It's not enough to move anything. Um, and so until that, until that changes, you're really not gonna see a lot of benefit to doing an arm. But to answer your question, it depends on the person. Let's say that I'm, um, senior level executive with Nissan.

They've transferred her to, uh, Nashville to take care of this job. I know that in three years I'm gonna be transferring back to San Francisco. Okay? I already know that Well, If it was beneficial financially, it would make great sense for me to look at a [00:18:00] five one R, you know, because I know how my life is going.

But if I don't think that the risk warrants, um, the reward currently for especially a first time home buyer, just because there's too much unknown going forward.

Laura Moreno: And a five one is you fixed their interest rate for five years, right?

Lee Barroll: I'm sorry, yes. five one is that the interest rate is fixed for the first five years and then in the 61st month it will adjust based upon, um, what the margin does, what the index does.

Excuse me. Um, so is just, Yeah, based upon, there hasn't really been a flavor for arms since 2008 when we had the great recession. Experienced buyers, especially in the higher price point, will look at arms because they have a different, This might put, Inspective was a basketball coach, s e c, um, bought a $2 million house, knew he was only gonna be there two [00:19:00] years, so he looked at a, a three, one arm.

It made perfect sense for what he was doing. Um, but for the most part, and those are big numbers and I don't know if that really answers the question or not. For the most part, a 30 year fixed. It's gonna give you the opportunity to know what your costs for living are going to be through the term of that loan, and that's something that you can use to make a good quality decision about your finances going forward.

Laura Moreno: That makes sense. That makes sense. And that's why it's important to have that consultation with you, like were you saying like a few different conversations Because what I'm, what I'm seeing is a lot of people going online, getting those mortgages online without even having a conversation. And that to me sounds a little bit scary because everyone is different and you may be missing into lots of really good products and insights because you're just not having the, the conversation.

Uh, what are your thoughts?

Lee Barroll: I, Well, one of the things that I really like about my job is my, [00:20:00] uh, opportunity to interact with people on a pretty personal level. Um, I get a lot of information about them that people don't generally get. I mean, it's numbers and it's specific to their, to their finances, but it gives us the opportunity to have a deeper conversation, and that's the part of the job I really, really enjoy.

It's. The mechanics of it, cuz the mechanics are pretty much the same every time. Does this fit yes or no? I have to make this fit, but my opportunity to get to know you on a deeper level is just, that's, that's the fun part of the job. You can't do that through the internet. You can't do that through text.

I respond to my clients the way they wanna respond. If they wanna talk through text, we'll talk through text. We are gonna talk on the phone at some point during that transaction because we have to, There's. , but most people like to be talked to, especially about this. And then we have Zoom too, where we can put a face to a name.

But, um, that's, I mean, I don't know if that answers your question or not, but that's what I really enjoy about the job. That's awesome.

Laura Moreno: Now I wanted to know, uh, [00:21:00] talk more about your practice, uh, your company and how you do loans. I mean, if I'm a first time home buyer looking to buy a home in Nashville, I get in touch with you.

What are you going to ask me? Like, what is the mortgage process for you? And the second question to that is like, why working with you is better to working with someone else? Like what are you, what are you the best at? Could be, maybe loans are fasters, faster rates are better, communication is the best.

Like I just want to understand how to work with you and why would I go with

Lee Barroll: you? Okay, so the process is this. My business is essentially referral based in my past client database. And so I will get a call, or I'll be given the name and telephone number to reach out to someone and we'll initially contact each other.

Now just look to, to open the conversation. So, um, this is great. What is it I can do to help you today? I mean, they're calling me about a mortgage, but I'm asking 'em, how can I help you [00:22:00] today? Right. Um, and then we'll talk a little bit about, and they usually tell me about what they're looking to do or who referred on.

My mom told me that you were great and we're really ready to move out of our apartment. And, uh, we were actually looking to see if we could find some place. It generally speaking. Then there dogs barking in the background. I'll say, Oh, so you have a dog, And then we'll start talking about their dog. Make them comfortable, Right.

Um, ,

Laura Moreno: because you also have dogs,

Lee Barroll: right? So, um, the objective is to get some simple information about what they, what, what they would like to see. Okay, we're looking to buy a house. We think we, we wanna spend $400,000. We have about $45,000 saved and my mom's gonna gimme another 15. So I think we have maybe $60,000 to put in the transaction.

Well, that's great. I think that we have some opportunity there to talk to you a bit, and then I'll have 'em fill out a secure application online. Um, I can either send them the link in a text or an email, and once they fill out that application, it'll come directly to me. And then based upon. I have their initial conversation and because the biggest [00:23:00] thing in the beginning is pulling credit.

Mm-hmm. . Cause that credit has such an impact on what you can do with a mortgage loan. Um, doesn't mean that if you credit is not superb, you can't get a mortgage loan. You can, but you just need to have that information. Um, and then I'll put together the proposal based upon what we've discussed, and then we start the convers.

So then we have the conversation. I review the proposal with them. I ask any questions that they have at that time. I send 'em the worksheet and then we set a follow up call so that I can go through the worksheet with them. I'm looking at it on my side. They're looking it on their side. And I can answer their questions about what the numbers mean.

But what's this for? What's that for? Um, and make sure cuz, because really what I want to focus in on is that as they go through the process, there's, it's gonna come down to two things. The first thing is, what is my total monthly housing expense? How much am I gonna write my check? Okay. And the second thing is, what is my cash to close?

How much do I have to bring to closing? So I wanna make sure that they understand how we're getting there and what that means, so that when they call me up on a Saturday afternoon and [00:24:00] said, I just went to look at 1 23 Smith Street. We wanna make an offer at $600,000. What does that mean? Oh, well, that means that your payment's gonna be 32 23 16, and it looks like your cash to close is estimated at, uh, 83 7 80 3,600.

You know, and they know what that means. They know that's what I'm gonna write my check for and that's what I come to closing. So, um, we focus on getting to that fundamental understanding of what it means with those numbers going forward. So then they, we go under contract, then we have another call. We go over what the current interest rate is, locks through their closing.

Um, during this time we've collected supporting documentation as far as their income and their assets. Uh, the income to validate the debt to income ratio, which is the for affordability of the loan and their assets to validate where the cash to close is coming from. Uh, Once it goes under contract and we've locked the rate, then I hand it off to my staff.

I have a, I have a loan partner that I've been working with since [00:25:00] 2013. Her name is Laura, and what she does is she takes over the loan file at that point in time and she works directly with the client to make sure that we have all of the supporting documentation that we need, current that we've collected for the appraisal.

We're ready to order the appraisal and order the title work. Once she has all that together, then we'll hand it off to our process. Our processor's, the one that works directly with the underwriter to get loan approval. Um, typically at the beginning we're looking for a conditional approval, and then once we have all the documentation, any questions that the underwriter might have, the appraisal and title work, we go for a final approval and then we can schedule the closing.

Um, with the company I'm with now, Cardinal Financial, they have fantastic technology and literally we can close alone in as little as 14. As long as people are paying attention and that can come into play. If the seller is looking for a quick close, um, that becomes very important. Uh, there was another thing I wanted to say about that whole process and [00:26:00] left my mind and um, Okay.

Sorry about that.

Laura Moreno: No worries, No worries. Kon.

Lee Barroll: Yeah. Yeah. Um, there was a second part to the question, the process, and you asked. Why would they should work with me? I don't know that they should. Okay. I'm a good loan officer. Um, I've been at, in the top 1% of originators in the country based upon the information they can track from the nmls Wow.

Which is the National Loan Mortgage Registry. Um, but that doesn't mean they, they said they have to work with me. They may not like. , You know, I may not like them. I want people to work with me, but I want them to want to work with me. Why? They should work with me. Um, I'm gonna tell 'em the good and the bad from the beginning.

Uh,

Laura Moreno: who works the bad? I'm curious. I mean, you seem, you seem really, really good. I'm like, what's the bad? I mean, ,

Lee Barroll: um, it's not gonna work out the way we talked about because this showed up, but we can do this. There's this expression that bad news doesn't get better. All right. [00:27:00] And that's one of the reasons why my realtors like me, is because if we have a problem, they're gonna find out about it as soon as I do, because then we have a chance to fix it.

And the same is true with the borrower. If there's an issue, let's see what we can do to fix it. Let's not just hold onto 'em. So that's what I mean by the good and the bad. Um, and, uh, I mean, I think I'm a great loan officer. I think I'm a great guy, right? But not everybody does. So, I know that there's a lot of really good loan officers out there, and people do have a really, uh, they have the chance to choose, but they need to take some time to investigate the person they're working with.

Are they getting a personal referral from, from other they trust? Like if it's your, if it's your dad and he's worked with me on three 10 s, he's telling you I'm the greatest guy in the world. You should probably listen to him. You know, that would be great. Um, but there's also other resources. There's the.

You can type my name in the internet and there's all kinds of stuff that's gonna come up about me. Most of it's good, [00:28:00] okay? So I'm not really afraid of somebody doing that . But no, do your due diligence. Find out what you can about this guy. Same with your realtor. Cause this is important stuff. Um, you need to know the, to, to the extent you can.

You need to know the person that you're working with. You need to feel comfortable with them. If at any point in the transaction, you don't have to use anybody, you're the consumer. It's your right to choose. And if at any point in the transaction you feel uncomfortable, you need to call it. Number one, and if you feel you need to move to somebody else, move to somebody else.

But I still think you like me best .

Laura Moreno: I I'm sure you will. I mean, I love that you're so personable and you're so funny, . That's, that's a lot of fun. One quick question. The last question before we go Lee, is what have you seen are the top mistakes that home buyers make and how can they avoid them? I mean, what have you seen are the craziest things that you've seen that you're like, Oh no, why would they.

Lee Barroll: Listening to a non-real estate professional is probably the number one thing. Okay,

Laura Moreno: give me an example. I'm curious. ,

Lee Barroll: Aunt S. Okay, so [00:29:00] when you go to buy a house, everybody, it's this aura, this reciprocity that goes out. Everybody all of a sudden finds out you wanna buy a house, and then they want to give you advice and they mean well, but they don't know what they're talking about.

And my example is Aunt Sally, she bought a house back in 1993. And now she's gonna sit you down and she's gonna tell you exactly what you need to know about buying a house. Well, Aunt Sally's not a mortgage professional. She doesn't know what's going on. So listening to somebody who's not involved in the transaction, that's not a professional in that industry is number one.

Number two is not talking to your loan officer. There's an expression, it's called, you can't put the toothpaste back in the tube once it's out. So , I've never, Yeah, well, it's, it, it, you know, um, I can give you an example in just a second. One of the things that I tell my borrowers up front is, Look, I'm your advocate.

I work for you. Me and Laura, we work for you. We're on your side. So if something's going down, you need to tell me what it is because there's always an easy [00:30:00] way to do something and a hard way to do something. And if we have to do something, we wanna do it the easy way. So that's the toothpaste outta of the tube, for example.

Um, mom wants to help 'em out, so mom gives 'em $5,000 in. Well, no, because we can't use that because you cannot source and season cash. And the thing that you have to show is that there's no unsecured borrowed funds being used as part of the transaction. And if it's cash, you can't do that. Whereas if they said, Hey, mom wants to gimme, um, uh, a gift to help and, and she's wants to gimme cash, I'll say, No.

Mom needs to put it in her. And we need to get a gift letter and then she can just wire it directly to title company and then there's no questions about it. We're not trying to fix something that's really hard to fix, even though it's the same thing. Mom is still giving them the money to help with the closing costs, but there's an easy way to do it and a hard way to do it.

So that's, that's a big deal. It's not being, cuz you know people are smart and they think they're smarter than every. [00:31:00] And so that's very frustrating and, and it causes problems. And then, um, probably the other thing is the spending money or buying stuff in the middle of the transaction or changing jobs.

It's not that you can't spend money, It's not that you can't buy, do, um, stuff. It's not that you can't change jobs, it's that you need to talk to your loan officer before you do anything to make sure it's not gonna have a negative impact on your transaction. So it's really all about communication.

Laura Moreno: So it's basically you are.

I wanna say my priest because, um, I was born . I was like Catholic student. Like you are my, I'm thinking about confession priest. You, you, you are my confessor. I have to go to you and say, I'm going to do this. Is this okay? For the three months that the transaction takes, the two, three months, whatever it takes.

I'm thinking about doing this. Should I do it? Lee ?

Lee Barroll: Yeah. Well, I mean, if you wanna buy the house, I mean, it's all about the whole, The whole goal is to show up on X day, sign the paperwork, and pick up the keys. [00:32:00] You know, that's what we're trying to do. A person like me has done this for quite some time. We're pretty good at it.

We know what to do. Someone specifically as first time home buyer doesn't really, they need to be guided, but they also need to be guided by somebody that they like and trust. There's no reason to go through this with somebody you don't like and trust. Cause there's too many to choose from. That's, That's my opinion.

That's my take on

Laura Moreno: it. I like that. I like that so much. Well, Lee, you've shared with us amazing information today. What can we do for you? How can we help?

Lee Barroll: Well, I know that you're gonna post my contact information out there and I just want you to know that if you have any questions, um, if you have any questions about the mortgage loan process or what you need to do to put yourself in a position to buy a home, either in the near future or the long term, I would like to be your resource.

I would like the opportunity to get to know you and see what we can do to help you achieve your goals as it relates to home.

Laura Moreno: Awesome. Well, Lee, thank you so much for being the first Time Home podcast. Before we go, how can [00:33:00] we get in touch with you, share with us spoken because many people are listening to the podcast, Share with us how we can get in touch with you.

Lee Barroll: Well, you can call me or text me at 6 1 5 2 4 3 1 3 0. Which is my cell phone number. It'll always be my cell phone number unless I hit the power ball, in which case you'll get, you know, disconnect numbers. ,

Laura Moreno: always talk to my husband. He's so disappointed he didn't win the two. Oh, I know. Power balls. He's so disappointed.

I'm like, come on, .

Lee Barroll: Alright. And I'll get back to it, but lemme just get over that, that, yeah. Anyway, so, um, caller text or, um, you can reach me through my. Which is www.team t e a m barrel, B as in boy, A r r o l l.com. And that'll take you to a site where you can reach out to me, you can set an inquiry, you can file loan application.

Um, but I would love to, uh, I would love to be your [00:34:00] resource. Really. That's my goal. Well,

Laura Moreno: thank you so, so much for Lee for being the first time home by podcast. You are awesome. Thank you

Introduction

Mike Sposato is the Owner and Managing Broker of Carolina Realty Advisors in Charlotte, North Carolina. He has been a Realtor for over 20 years and works with buyers and sellers all over the Greater Charlotte area. When not working Mike loves to travel, go to his beach house, and be on his boat. He is also an avid sports fan.

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Transcript

This is an automatic transcription (sorry for the typos in advance! 😅)

Mike Sposato

Laura Moreno: [00:00:00] First Time Home Buyers Nation I'm Laura Mereno, and I am super excited to bring you our fantastic guest today, Mike ESP Zao.

Mike is the owner and managing broker of Carolina Realty Advisors in Charlotte, North Carolina. He has been a realtor for over 20 years and works with buyers and sellers, all of the greater Charlotte area. When not working, Mike loves to travel, go to his beach house and be on his boat. Mike, are you ready to.

Yeah, let's do it. Great. So you, our community. Just a little insight, Please share more about you personally and then expand upon your business.

Mike Sposato: Um, okay. So I guess if you want to just start out why I became a realtor in the first place. I think it's an interesting story specifically for first time buyers.

Um, When I bought my first couple of properties, actually, um, there was no such thing really as a, a buyer agent at that point in time. And, um, [00:01:00] unfortunately for me, when I went to buy my very first property, I met with a realtor. And after spending time with this realtor, you know, I like the person and began to trust him.

And unfortunately, I told that person. Too many, uh, confidential details about my interest in property, um, my credit, my financial ability to buy, things like that. And, um, what I found out later is after I closed on my property and I moved into it, uh, a couple of months after I moved in, I had a neighbor who had the exact same floor plan.

It was in a town home complex, same floor. Same finishes, same everything. And I said, Hey, do you mind if I ask, how much did you end up paying for your property? Just outta curiosity. And he had paid 185,000 back then. And I was like, What? He's like, Well, how much did you pay? And I said, I paid 203,000. And he said, Well, didn't you have an agent?

And I said, I thought I did. And then h [00:02:00] I didn't, What I had was somebody who instead, Telling me the truth up front about who they represented. They wanted to make a quick sale and they were representing the seller the whole time, and so that's, A big reason why I got into the real estate business and I call our company Carolina Realty Advisors, is because when you're a first time buyer, it's you, You know?

I mean, you can do a lot of research on the internet and listen to podcasts like this, but each state's different. And unless you have somebody working with you and explaining to you who they represent and what their duties are, You know, things could go badly. And in my case, you know, I, I ended up overpaying for a property.

It's worked out now cause that was over 20 years ago. But it, it just left such a bad taste in my mouth that, you know, when I first meet with a, a first time buyer, what I like to do is have a buyer consultation appointment. Sit 'em down, welcome through everything that's involved with, you know, the steps involved in buying a [00:03:00] property, Explain what things cost and make sure that they understand, you know, the role of a buyer agent and what their responsibilities are as well, so that we could formulate a really good working team together.

Laura Moreno: That makes sense. I mean that, How long was that go? How long ago?

Mike Sposato: Oh, I guess it was 1998. So at this point it's almost 25 years. Obviously

Laura Moreno: your property has gone up in value and that's not an issue anymore, but you still are like, Oh my God, why? Like, how do you feel at that point? I mean, where, where were

Mike Sposato: you feeling then?

Well, of course I felt like I was lied to and I, back then, you know, it was, that was a lot of money that that difference, you know, was what, almost $20,000 in what I paid versus what my neighbor paid. And so, um, It's just not a good feeling. It left a bad taste in my mouth about real estate agents and, um, I, I still had a, you know, a corporate job and continued to buy additional [00:04:00] properties, but I was a little bit more careful each time I bought more and more property.

But just generally speaking, we have a hard time as realtors because there are people in our industry who may not go about doing this business the right way. Um, and, and that does, You know, clearly, um, I guess turn off some buyers when they have a, a realtor that's maybe not as honest or maybe a little pushy with 'em, or just trying to make a sale versus trying to represent their best interest about the entire, you know, transaction.

For

Laura Moreno: sure. I mean, That sounds like a really challenging situation, and I really like this disappointing situation because when you're closing a home, you should be the most excited, like you did it. And then you talk to this neighbor and they just disclose the news and you're like, Why was I that person?

Like, you feel like a victim. Like why did they lie to me? And so what are the steps that you take from that moment on to become a realtor? [00:05:00] Because obviously I'm sure you are very angry, upset. Do you call that realtor? Like how do you find out that he was the list in realtor and what do you

Mike Sposato: do from. Well, I mean, I really, I didn't do anything cuz I didn't know that I could do anything, so I just kept on moving forward.

Um, you know, I kept my, I just had my other job and like I said, I started to buy additional property and then once I accumulated a small rental portfolio, I decided that, you know, maybe it was time for me to leave corporate America and to get into real estate. And, you know, my whole angle was, You know, representing the client the best that I could, either on the buy side or the selling side, and, you know, trying to offer exclusive representation versus dual dual agency, um, in order to make sure that all of my clients had a great experience and they felt very strongly that I did the best I could to make sure they got the best price and terms and the [00:06:00] deal worked out as best as it possibly could.

Laura Moreno: And for anyone that is not familiar with that dual agency concept, what is that? How will you explain that to a five year old ? Okay. Because that's how we, that's how we understand things very clearly. .

Mike Sposato: Okay. Yeah. I just explained this yesterday to somebody who's actually taken their North Carolina real estate test.

They were a little bit confused about it. So basically, dual agency, how it normally begins is a buyer. Um, oftentimes it could be a first time buyer that might not know how this works. They may go to like an open house, or they may be driving by a property like and call the for sale sign. And so when they do that, they don't realize up front that that seller or the listing agent, excuse me, or the agent that they've talked to is representing the seller.

And so they come and they look at the property and they're interested in making an offer, but the buyer does not have their own. [00:07:00] And so the agent says, Well, listen, if you're okay with it, I can, you know, help you with the paperwork and help you, you know, buy the property. And in our company, I don't let my agents do dual agency as a side note, because there's too much of a perceived conflict of interest because when that buyer goes to make an offer on that home from the open house or a home that they saw for sale, sign, and scheduled an appointment.

That person who's in the middle is a dual agent, they're representing the seller and they're also representing the buyer at the same time. And you know, there's a right way to do it and there's a lot of wrong ways to do it. And in order to avoid any problems, it's always best to go get your own agent because the commission.

That's being paid out to the real [00:08:00] estate agents has already been negotiated with the seller way in advance. And so people think they might get a deal if they only have one agent involved, and that's just not normally the case.

Laura Moreno: That makes sense. So just everyone, get your own agent, get your own representation because it and, and because you need that.

And actually it's always very, It's always very misleading. Like consumers, we don't know that we don't like a first time home buyer. We have no idea about buying a home. We have rented, which was very straightforward. You sign a contract, very straightforward, and we think buying a home could be something similar, but what you're saying about, you see the, the sign, the for sale sign, and you call, that's the most logical step to take.

You wanna call, you want to ask about the price and what you are not, not, not noticing is that you are enter. A relationship with that agent? Like are you, like, I know in some states this could be a problem, but in your state, do you [00:09:00] have any, If you call an agent directly, at least an agent directly, do you have any kind of like legal relationship now with

Mike Sposato: them?

No, no. In North Carolina, verbal doesn't really mean anything. Everything has to be in writing. So, but you know, if you start talking to that person and they ask a lot of questions and the person and the buyer just unknowingly giving or divulging information about, you know, their motivation or you know, their timeframe, credit score money, they have to do this and all that, then they could.

Putting themselves in a bad position when it comes to negotiations.

Laura Moreno: So yes, go and find yourself, your agent, everyone listening. Go and find yourself a real estate agent that can't present you. So tell me more about your brokerage. Um, how many agents are in your team and how do you work with first time home buyers?

And actually, my favorite question is how do you take care of them after they have closed on a home? Do you break [00:10:00] up or you are still in communication and adding value to their.

Mike Sposato: So, Alright. Um, my team is at this point, I think there's 12 of us, and I'm actually in the hiring process. I usually hire late in the year to do training and make sure everybody's ready for the spring market.

Um, and we also have a, uh, You know, we have a transaction manager who takes care of all of our backend paperwork and files as well as a marketing director. And, um, I'm in the process of hiring a full-time assistant for me just because of my deal volume is so high. Um, in terms of answering the question, like as far as how do we take care of first time buyers, so, um, what.

Done. And I built a really proprietary approach to how we bring on new business. And we of course, get a ton of different leads that come in from places like Zillow and realtor.com and a bunch of other places. And [00:11:00] when these leads come in, oftentimes they are first time buyers because first time buyers tend to use the internet quite a bit for their searches.

And so I would say of all the buy side deals we do in the. Probably at least half are people that are buying the very first property. Um, so what we always do is we do a brief phone interview first in order to check and see, you know, if they're really in the market or not. Um, If they're serious or not.

If they have an agent already, then we can't help 'em. Um, but if we find out enough and it sounds like there might be a good fit for us to continue the conversation, then we invite 'em into the office for a face to face via consultation appointment. Um, and the great thing about these appointments, um, my, in my personal experience, when the meeting ends, And they've already agreed to work with me.

Next time, the buyer agency agreement, nine times out of [00:12:00] 10, the people will say, You know what, Mike? I, I'm really looking forward to this. I trust you. Thank you for taking the time to explain all this to me, because nobody else has everybody else. Wow. Like, . Yeah, Everybody, when I went to realtor.com, they just wanted to run me out to the house and kind of try to pressure me into buying a house, which is like a high pressure sales pitch.

And I, and I just didn't like it. And the way you're doing it just makes so much sense. And so I really, I do appreciate it and, you know, I'm looking forward to this and I, I know we're gonna have a good experience. And so, you know, I, I, I've kind of set it up that way. You know, really, because I think that's the right way to do it.

It's to talk about how this is all gonna work first, so we have a game plan, and then we can start the home shopping phase. The right way. So that's, that's how we do it here. Um, and we've had a lot of luck with it. In fact, the way we do it, um, 95% of the people that come in for the consultation appointments end up agreeing to work with our firm and they end up signing an agreement [00:13:00] that says that they want us to represent them and vice versa.

That, you know, they're gonna get all the, the benefit of all of our knowledge and experience in the market to help 'em through the process.

Laura Moreno: That's amazing. And that really, You have to do things the right way. I, I remember when I was buying a home. No one didn't go through that process. I didn't go through that consultation and what ended up happening is like my husband and as I were, were very stressed the whole way and we didn't know what was coming next.

We didn't know anything and it was a very stressful situation. Compared to what you're talking about where you kind of like, were you saying you're setting up. The game plan, you're maybe introducing to the team. You're telling them, you're telling buyers, How do you work? How is this going to work out? Um, it's a very different experience and maybe if I would have gone to you, uh, the podcast wouldn't exist because I would have been like, everything work out really, really well.

the problem, like I think the problem is. , a big majority of real [00:14:00] estate agents, I don't want to say everyone obviously, because you know, a big majority of real estate agents are there for, uh, the check selling, selling to the property, and moving on, and that creates a not so good home buying experience.

Would you agree with that or?

Mike Sposato: Well, yeah, and, and statistically what's interesting to me is I, I'm in Charlotte, North Carolina. When, you know, when I look at recruiting new agents or trying to hire agents, I look at the numbers and most agents in our market and our, we have a fairly good size city and it's always been one of the top five or 10 places to move to in the country.

Um, so there should be a lot of business. And what I find is that the average agent in our market only does four and a half sales a year. Now that. Brand new agents to people that have been doing it for 30 years, full-time, part-time, et cetera. But where I'm going with this is if you're a first time buyer [00:15:00] and you happen to run into somebody who only does four transactions a year or maybe one every three months, they're hungry, they need to make a sale.

They are gonna do a lot of times what they need to do in order. get the money. Um, and that's risky for a buyer. So, you know, for everybody listening to this podcast, I'd highly recommend that when you start to talk with a realtor, you want to kind of ask questions up front about, you know, how many transactions do you normally do, and how long you've been in the business, and some questions like that.

Because, um, you know, in my situation, you know, I, it's not unusual for me personally to. You know, 50 to 70 transactions in a year. And that's not my team. That's just me. But when you do it, Wow. That many times, Yeah. Over and over and over again. You kind of know the, the steps and the dance, so to speak, and you know what to expect and you can guide people and kind of advise 'em the right way versus.

Somebody [00:16:00] only does it every three months. And in addition to that, I mean, I don't need anybody's business. Mm. I like to help people. Um, and I think it comes across that way that, you know, when you're working with me or someone on my team, you know, it's a, it's gotta be a 50 50. We're gonna help you in, in exchange for that, you're gonna work with us and we're gonna do these great things together and it's gotta be a good collaboration or just not.

Laura Moreno: I, I love that. Like, why you don't need to work. You shouldn't work with someone that needs your business, that needs that paycheck to be able to feed their family because they're going to do things that may not be your best interest. Uh, and, and, but tell me more, Mike, you also invested in properties, right?

Like, could you tell us more about how come you became a real estate investor or like a, how many properties you have are that you renting them out, and how has that helped your own profession? You know, real

Mike Sposato: estate. Um, so yeah, I guess when, [00:17:00] um, when I was a little bit younger, I started watching some of these real estate investing shows before I got my license, and it became clear to me that one of the best ways to accumulate wealth is to become a property owner and have somebody else basically pay the mortgage.

Mm-hmm. ,

Laura Moreno: so our listeners are paying your mortgages, .

Mike Sposato: Yeah. I mean, and I get it. If, if it's, you know, a year or two until you get ready financially, that's, that's just the way it is. But to rent, I mean, I have some clients I talk to that are, you know, they're in their fifties and still are buying their first house, which is just like, Wow.

But to go back and answer your question, I have five properties and. You know, at this point they all cash flow and it's all part of, you know, the, the big, um, wealth plan for, you know, long term for retirement to have, you know, wake up like on January 1st and have all those rental checks come in [00:18:00] and, you know, there you go.

It's, it's my monthly income, so to speak. And so, um, how it's helped me in my career is it's helped me. I don't work with investors. I wanna say that up front. And the reason I don't is because not all investors end. Closing the deal, they may change their mind and wanna invest in gold or silver or stock market or bonds or whatever.

So I stay away from investors unless it's like a really unique situation. That said, um, it's helped me a lot learning everything from, you know, uh, pricing, property for rent, working with the right kinds of tenants, um, being a good landlord because a. Tenants end up using me when it comes time to buy a house because I'm, I'm good to 'em and you know, kind of teach 'em stuff and help 'em out along the way.

So it's, I mean, I don't get a ton of my business that way, but I do from time to time, get a couple of deals a year from previous tenants and that kind of thing too.

Laura Moreno: That's really great. I mean, [00:19:00] that, that talks to your value and how you help them because I, I suppose you go talk to them, it's like, Hey, what, when are you thinking about buying a home?

I mean, uh, it's a win-win situation. I mean, it's what you're saying. You're stay in a property for a few years renting that property, and then usually the next logical step is to buy. Uh, so, but quick question, Mike. How is the market where you are and. Is, is it a good time, for example, home? I used to buy a home right there now, or should they Wait, what are you, what are you seeing in

Mike Sposato: Charlotte?

Okay, so, um, you know, I referenced this earlier that Charlotte's always been one of the best places to move to, and it's still that way. Um, I haven't looked at the stats lately, but if I had to guess, I'd say we're definitely within the top 10 cities that, um, people move to because we have a great economy.

And there's a lot of big universities that are within, you know, 50 to a hundred or 150 miles away from Charlotte. And a lot of the [00:20:00] college grads will move to Charlotte. And it's put a lot of pressure on our, um, supply and demand. And so we're still in a situation where, you know, you get the, if you think.

The recent college grads move in, they move into these expensive rental, like high rise or mid-rise apartments. They're paying, you know, anywhere from, you know, 13, $1,400 a month for a one bedroom all the way up to, you know, three or 4,000 a month for a one bedroom, um, apartment. And then of course, the two bedrooms are a little bit more expensive, but they're paying so much.

It's, it's painful, you know, no one wants to waste their money like that. And even though interest rates are a little bit higher right now, I mean, you can always get an adjustable rate mortgage and get a lower interest rate. And then once the rates drop down, you can refinance it. So our market's still strong.

Um, it's thankfully always has been. Even when [00:21:00] the recession hit, we were one of the last. Go into recession and we were one of the very first to come out of the recession healthy. And again, it has a lot to do with our local economy. Um, you know, we, it's, it's also a great location to the beaches, you know, up and down north and South Carolina coast as well as we have the mountains out in Asheville, like two hours to the.

Great weather, you know, lots of things to do. Big, you know, sports teams and just that there's so much going on here. It's a very vibrant city and people wanna be here and because of that, they need a house. So it's, it's, it's been a, it's been a really good run.

Laura Moreno: Well, that's, that's amazing. Well, um, thank you so much for coming to the, to the podcast and sharing your knowledge.

But one last question I have for you is like, were you able to work again with that agent? Now you've been a real estate agent. Do you see that real estate agent that sold you the property again? And what happened? . . [00:22:00]

Mike Sposato: Um, I have not, Anytime recently, I, I'm not sure she's in the business anymore, but, um, years ago I came across her a couple of different times, and once I got inside the industry and I gained knowledge and some level of expertise, I realized that she just honestly just wasn't a very good agent.

You know, just, you know, it, it was. It was a situation where I, I happened to be advised to go look for property in this area of town. I went there, I called the, the phone number on the sign and she was the one that came out to show me the property. Um, and I just didn't know any better. So I was like, Okay, she seems nice enough and started to tell her all the stuff I mentioned earlier.

And then she showed me a couple other places and we went back to the one I called about initially. And so, you know, I, I don't know. I'm not gonna say anything bad about this person, but let's just say that there's many, many, many better [00:23:00] realtors in our area than her .

Laura Moreno: It was just like, out of curiosity.

Well, Mike, um, you've shared amazing information with us today. What can we do for you? .

Mike Sposato: Um, well, I mean, if there's anybody that's in the Greater Charlotte area that's listening to this podcast, that'd be great. If they have any questions, they can give me a call. They can email me. Um, do you want me to give you the contact information or would you put Okay.

Yeah, that would be great. So, um, the name of my company is Carolina Realty Advisors. My direct line is 7 0 4 6 1. Seven. Um, my email is Mike Carolina. Realty advisors.com. We work a, uh, eight county area all around Charlotte and down into the northern part of South Carolina, like Fort Mill, Rock Hill, um, Newark County.

So there's a big geographic area we work [00:24:00] in. We love helping first time buyers and you know, we're happy to answer any questions and see if it might be a fit for you to join us for buyer consultation and have us help you through the process. Fantastic.

Laura Moreno: Well, thank you Mike, so much for being in the first time Home Buyer podcast.

I really

Mike Sposato: appreciate you. Yeah, you got it. You're welcome. Thank you. Thanks for having me.

Introduction

Libby Arnold is an Associate Broker at Realty Austin in Austin, TX. She specializes in residential real estate and loves helping first-time homebuyers understand the buying process and the market's nuances.

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Transcript

Laura Moreno: [00:00:00] First, the Home Buyers nation. I am loud ano, and I am super excited to bring you our fantastic guest today, Libby Arnold Libby is an associate broker at Realty Austin in Austin, Texas. She specializes in residential real estate and loves helping first the home buyers understand the buying process and the market's nuances.

Libby, are you ready to flow?

Libby Arnold: Let's flow. Laura, I'm. Great

Laura Moreno: of you and our community. Just a little insight. Please share more about you personally and then expand about the.

Libby Arnold: Of course, of course. So I am located in Austin, Texas. I actually live in Cedar Park, which is a suburb that's directly northwest of Austin.

Um, I have been here since about 2010. I lived in the Dallas Fort Worth area prior to. Um, actually when I came to Austin originally, I expected it would be a very [00:01:00] temporary stay and here I am over 12 years later, it stuck and I just fell in love with it. Um, my background personally, I know I spoke a little bit about this last time, but quick refresher, um, a lot of my background is in the.

Logical sciences and then grad school, um, I did kinesiology and so it's been an interesting, interesting journey from biology and exercise science and all of that to kind of get to real estate. But I started helping my husband, Alfredo, who is a local broker here as well. He's also at Realty Austin. We have a team.

Um, he has been in the industry since 1990. And so met him after moving here and kinda got started around 2014, helping him out as a transaction coordinator, and then decided to get licensed, and then I got my broker's license and [00:02:00] things just kind of took off. And here we are. Sounds

Laura Moreno: amazing. I mean, I, I love your story and I love that you're actually, your background is on sciences, on science, and you do a lot of data.

You do a lot of analysis Yes. On the properties. Um, so I wanna go jump right in. What's going on with the market in a Texas and it like, it's like, it's been crazy. Like suddenly everyone was looking to buy a home. Well, Covid happened that no one was, was buying homes for. Two days and then suddenly everyone was like, Oh my God, I need to buy

Then everyone was like, I need to buy. And for two years it's been like this crazy amount of people looking to buy properties. The prices have gone up. Interest rates score low, low. What is happening now in Austin, Texas? .

Libby Arnold: So, Whew. It's, it's interesting. I was thinking back to when you and I last spoke, and I think it's been about 18 months, give or take.

I was thinking about this on my run [00:03:00] this morning actually, and the things we talked about then and how much. Just, it has changed certainly in the last 18 months, and then in the last six months it's really changed a lot. And so Austin is definitely reflecting a lot of what we're seeing nationally, which is the net effect of everything going on is.

Market has certainly slowed a bit, but it's, there's a lot more to it than that. And you mentioned C, that was a huge disruptor, and I know we're all tired of hearing the word unprecedented when talking about C and all of these factors that are driving the economy, but it really was, and at the very beginning when Covid happened, like you said, people stopped buying houses.

Two days, days. We were really worried for that. Two days and the first week or two of the lockdowns, you know, [00:04:00] my brokerage real Austin did a really excellent job of hosting town halls for us and really collating some of that data. Cause I'm, I'm a data person. I love my numbers and my math and so they did a really good job and I remember us all being, Kind of worried about the market, and then as you said it, it literally felt like two days.

I think it may have been two or three weeks , that things kind of shut down here and then it just took off. And 2021 was. A year, unlike one that many of us have seen in the real estate market nationally, certainly, but even more so in Austin, we have so many large tech companies that are either relocating here or they're building additional offices here, moving corporate headquarters here and.

Bringing a lot of those employees with them, and a lot of that kind of coalesced around Austin. [00:05:00] At the same time, we had these historically low interest rates, and all of these other drivers were really pumping a lot of money into the economy, and so we had an absolute record year in 2021. But a lot of what we saw was these poor buyers, and especially first time home buyers that two or three years prior to that, we had all these amazing down payment assistance programs and builder incentives and all of these ways to really help make that dream of home ownership a reality for them became a really difficult.

In 2020 and 2021 because they simply couldn't compete with these other buyers that were coming in that were, We had houses selling two and $300,000 over asking, and in some cases more, And these buyers are very cash heavy. They're waiving appraisals. They're waiving option periods, they're waiving things that we would just.[00:06:00]

And good conscience actually recommend a buyer wave, especially a first time home buyer that's not sitting on hundreds of thousands of dollars of extra cash that they can just kind of throw at this. And so that's where we were. Where we're at now, not so much anymore, and I really wanted to, to kind of focus a little bit on the way things were because it's easy to forget.

We hear a lot of doom and gloom, and we hear a lot of fear about interest rates, which are higher, and it's a non-trivial amount. They're significantly higher than they were at the beginning of the year, but. The good news that we're seeing here is these, Give me

Laura Moreno: the good news. I want the good news. , I have good news.

It's like, give me, give, give us the good news for us. ,

Libby Arnold: I have good news. We're not seeing a hundred thousand dollars of. Anymore. We're seeing houses are staying on the market longer, and so if we [00:07:00] go out with that first time home buyer, maybe we go out on Friday and we see a home that they really like A year ago, we would have to say to them, Okay, offer deadline is Sunday at 5:00 PM You've got 36 hours to think about that.

This, here's what the listing agent will tell me about the offers there are. Now, you know, we need to do this and this and this and offer this much over list, and we're not having to do that anymore. We're able to say, We're so glad you liked this house. Why don't you go sleep on it. Let's reconnect tomorrow or in a few days and see how you're feeling.

Let's talk to the lender. Let's run some really detailed numbers. Let's take a more detailed look at this property. Let's see if there's anything we might wanna ask the sellers to fix. Let's talk to the lender about your closing costs. Let's see if we can maybe structure this contract in such a way that the sellers are.

Able to because they're [00:08:00] willing to do this now, right? Able to contribute some money to help you buy the interest rate down. And that definitely could be something we talk about too, because there are a lot of ways to kind of manipulate that contract, manipulate seller contributions, manipulate, um, types of loan programs that we're using to where we can get that interest rate down to something that.

It doesn't start with a seven hopefully. Right. .

Laura Moreno: That's really good. So what you're saying basically is like before we, buyers had to make a decision straight away, really fast, Uh mm-hmm. and you know, and when you're talking about people like waving inspections and waving contingencies, I have to say that.

Some realtors were recommending that, but actually the market was dictating that because I even remember talking to a friend of mine. She just put a home and she told me without even blinking, that she had put $200,000 more [00:09:00] on, on the home that she had paid the, the, the realtor's fees, $60,000 and that she hadn't put any contingency.

And I was like, Wait, what? And she was, she was like, I really wanted the house. I was like, mm-hmm. Okay. Like you, you know what I mean? It's like the market was dictating these things. . So now you're saying that people can go back home, sleep on a property, which is kind of crazy. Sleep on it, sleep on it, and then run the numbers with your lender.

And again, people think about this, like I read yesterday, an article that said 70% of first time home buyers have some regrets. About buying a home, and most of the regrets were because of the numbers, because they didn't expect the costs to be so high. They miscalculated the mortgage. So I love that you're saying that now you can go back to your lender, run the numbers, understand what are going to be your upcoming costs, monthly costs to make sure you're not.

Making a mistake. And what I love most about it is now you can go back to [00:10:00] the seller and say, Hey, hey, hey, hey, hey, you beautiful seller. This is not 2021 anymore. I'm sorry for you. Right. What are you willing to contribute to my, to my closing costs? Like Right. I love that. I love all that. So we basically have the power.

Yeah, we have the power.

Libby Arnold: Yes. Buyers have some power back. It's. It's really nice to see, um, because we work with just a large portion of our business. As buyers, and we certainly work with sellers, we work with investors as well, but a large portion of our business has always been first time home buyers, and that's what we're very passionate about.

And so it's, it's so refreshing for us to be able to get out there and really go to the bat for them again, because for so long it was the best that I can really do is work hard to structure this contract in such a way that we're minimizing your risk. If you wanna buy a house in this, in this insanity, that was 2021, [00:11:00] and now we're really able to step in and say, Okay, you know what?

You may not have to move three suburbs away from Austin anymore. Maybe you can live right on the outskirts exactly where you wanted to live because the prices are lower. And again, sellers are willing to. Come to the negotiating table. Things have kind of been different for long enough now. Um, this really, I'll backtrack a little bit.

This really started for us in Austin in April when our new tax assessments came out. So one thing about Texas is our property taxes are a little bit higher than pretty much anywhere else in these contiguous United States. And it's not specifically market driven. We. Entities within our governments that do something like an appraisal every year.

And so every year our property values with respect to property [00:12:00] taxes change. And so for a very long time, those property tax values here were. Kind of artificially depressed and the tax valuation was running about half of what market value was. In a lot of cases. I'm going somewhere with this, um, . And so what we saw, we had another little, um, Incident that I won't get into, but our, in Travis County, which is where Austin is, our tax appraisal folks got into a little bit of trouble for using some data they weren't supposed to use for valuations.

And so in 2020 they could not do any new appraisals for the purpose of property taxes. So then what happens? 2021 is eventually these new values come out. Well, we all know what happened in 2020 and 2021, and the first part of 2022 is we had zip codes [00:13:00] here that saw a hundred percent growth in a property value over that period.

Literally doubled. And so all these factors come together. And very long story short, we get the new values. New estimates come out around April of this year, and they're just, Insane. And people's property taxes are doubling. Um, I had a client whose appraised value went from 280 something thousand dollars to about 1.5 million.

Laura Moreno: Whoa, whoa, whoa, whoa. That means that you have to pay taxes on 1.5 million. Correct. Whoa, that's, that's. That's like seven times or whatever it is. Seven times your tax bill.

Libby Arnold: Yes, yes. It went up, I did the math. It went up 486%, and that's a really extreme example, but we saw a lot of cases where it went up a hundred percent, 200%.

And so not only at that time were we [00:14:00] in this environment where interest rates are starting to rise. These taxes are starting to go up as well. And so Austin really quickly just started to become incredibly unaffordable for almost anyone because of that combination. So you're paying 50, 80, a hundred percent more for the house.

The taxes are now a hundred percent more. Whoa, your monthly payments significantly higher. And then on top of that, were not, Dealing with 2.75% interest rates anymore either. And so the combination of those three things really started to affect the market. And then on the heels of that, sellers, you know, people are generally pretty intelligent, especially when it comes to large investments like real estate.

They start to see the writing on the wall. Everyone lists their house, right? We have a lot of [00:15:00] investors in Austin. A lot of people invest here, and when those taxes start to go up, then they have to raise the rent. Some of those folks have also decided to sell, and so we saw really about 170% increase in inventory year over year in a pretty short period.

Two. Combined with the previous three factors. And so all of that has really slowed demand down and it has caused prices to start dropping. Um, and so that when interest rates are higher, that's something that. Is really, really helpful. And so we're starting to see, you know, we've kind of crested the wave and we're really starting to see things come down.

The trouble that we're kind of left with now are those interest rates, and that's where we start going to. The sellers. Um, and there I can definitely talk about there are [00:16:00] some different programs. So

Laura Moreno: let me, let me give a little bit of a quick summary of what you've said to make sure I understood it right and we all understand it very well.

So there's been actually lots of contributing factors, uh, like the, the taxes, you know, to taxes, uh, people putting the houses on the market. Um, so lots of contribution factors that are making now Sellers want to put houses on the market now more than before. Mm-hmm. , right. And at the same time, those investors are also raising rent.

So that might mean that those people renting are saying, Hey, hey, hey, you know, my rent is more than my, what my mortgage could be. So let me look at the market now. Those renters may be looking at the market now and saying, Well, my market is going to be very high because it's at 7% now. So now let's go into how do you solve for that market interest rate?

And this is where [00:17:00] everyone is like, how, How do I solve for that 7%? That's a lot of money. .

Libby Arnold: Yes, because it's very easy to sit here and say, prices have come down and they have upwards of 20% in some cases. And I, I hesitate to say, Publicly, I would not be shocked if we see another 10 or 15%. Um, Maybe a little more, even depending on how things play out.

And that's great. And buyers have more leverage and that's great. Ladies,

Laura Moreno: guys, sorry Libby, sorry to interrupt you again, but this is great. This is great. 20% down, 30% and 40% down. You buy the price low, you log the interest rate at 7%. But remember, remember you can refinance. I did it one year after buying, when the, when the winters rate drop, 2, 3, 5 years on the line, you've refinanced.

Sorry. Continue, Libby. But this is a great opportunity.

Libby Arnold: It is. It is. And there's a window right now. And so we're left with, Right. There are all of these great things and all of these really good [00:18:00] reasons to get into the market right now and never mind that. But November 9th at the moment, and so the next six to eight weeks, things are really.

Pretty shut down for the holidays. There aren't a whole lot of buyers. The houses that are listed right now, they're listed because these folks need to sell and move. They're motivated. So again, there's a long list of all of these great reasons to buy. And then, oh, but we've got these interest rates over here that are frankly quiet high.

So how do we deal with that? Yes. So couple of things, right? Couple of things we can do. Um, one, In the realm of new construction, I'll look at new construction and then I'll kind of look at resales as well. Um, a lot of our first time buyers really gravitate toward new construction because there's less maintenance.

It's a brand new house, no one's ever lived in it, et cetera. Um, with new builds, they're seeing a lot of [00:19:00] what we're seeing in the resale market. Right now, they're dealing with roughly a 30% cancellation rate on a lot of their contract.

Laura Moreno: Filters. Don't wanna, I like that. They don't wanna, You were talking, I'm thinking about like some, Yeah, I'm thinking about some buyers.

I'm going to send this episode too. Like guys, guys, guys. Okay. So they are facing cancellations, 20% cancellations.

Libby Arnold: So they're facing 20, 30% in some cases for a lot of reasons, which is probably a whole nother podcast. We could ask , but they're offering quite a few incentives. Some of them are putting 15, $30,000.

Closing costs toward helping buyers buy that interest rate down. Meaning the buyer can prepay the lender for points, and depending on how much you pay, that can bring down a fixed interest rate. So that's something. In other cases, the builders are actually buying the rate down for you, um, and [00:20:00] they're advertising, you know, instead.

Seven or seven and a half percent. They're offering five. They're offering five and a half. Um, and that is something that if you can tolerate that for a couple of years, right? Five and a half is still a pretty decent interest rate. Actually. It's, it's not terribly high. Um, you know, and we've gotten really used to, because of the need to stimulate the economy previously, we've gotten really used to artificially low.

I had somebody close that I think two and a quarter was the lowest I saw, which is, oh my God, not even free money. They're almost paying them to buy at that point.

Laura Moreno: I'm not that, You know, two, you always want lower , , ,

Libby Arnold: but it's artificially lowered and so five and a half is really much more in line. Historical averages. It's not, um, not [00:21:00] something crazy. And so, and if you look at monthly payments, At five and a half percent. It looks a whole lot nicer than it does at seven and a half, and five and a half is something that I can probably wrap my head around for the next year or two, and then I can re refinance later when inevitably rates come back down, which they ultimately will.

There are a lot of people trying to forecast when ultimately they will. Um, the bottom line on the new build side is that a lot of these builders don't wanna lose a contract. Right. They're willing to negotiate. Um, and they're negotiating on price too. I have, um, some very sweet first time home buyers that are under contract with a local builder right now and completely unsolicited.

Um, they've been under contract for about six months. We got an entirely unsolicited email from the builder that said, Hey, we're lowering the price of your house, 55,000. Really

Laura Moreno: what's wrong [00:22:00] with house? You guys just go and check the house. What's wrong with the house? ? No, nothing. That's like a little bit concerning.

Libby Arnold: Wait, what? What is happening is that, again, back in 2021 and early this year, um, builders were essentially having auctions, much like on the resale. And the new builds. The to be built houses had multiple offers, and so we had to go in and offer and bid a certain amount over whatever their starting bid was.

Well, the market is no longer supporting the builders having bidding wars. Things have changed as we've discussed, and so that has caused prices to decrease there. And then what happens is when those start to close at lower prices, now we're gonna run into an issue where the other houses that are currently under contract are probably not going to appraise.

Because the most recent comparable closings are at a lower price. And so there's some of it, they're, they're [00:23:00] protecting themselves in there as well and trying to avoid dealing with an appraisal issue. But again, they also really don't want this cancellations right now. Um, and it's not necessarily a unique story.

I hear about other agents and other brokers at our brokerage where things like that are happening, um, all the time. And so, Anybody. We have just anybody in the country. Honestly right now that's under contract with a builder. It does not hurt to have your agent go back and talk to the builder and just say, Hey, is there anything else that you can do for me?

Odds are there's something. That's

Laura Moreno: amazing. I mean, I was going to say like, oh, that's so kind from builders. You know, they're , but they're protecting themselves because if the house doesn't praise you may not be able to close. They don't want those cancellations. They see it coming and they're like, Wait, wait.

Let me send a nice email. Let me, They must be in a peak hole. They must be like, Oh no. Aren't you really happy as a realtor [00:24:00] to representing buyers to be now in the strong position and say, Hey, listing agent, this is really nice. But because before the listing agents were the kings of the world and the queens of the world, right?

Yes.

Now you have the crown.

Libby Arnold: It's not quite as much fun when we're listing a house now, , but with the buyers. No, it really is because for so long this has been what my husband and I are really passionate about. Home ownership and first time home buyers. And particularly in a market like Austin, that's just candidly gotten quite expensive.

It's not a secret. Um, it's something we're really passionate about and it's something that's been really increasingly difficult. And so it's, it's a pleasure to see that. And it's a pleasure to be able to go in and negotiate the free washer and dryer and fridge and. And

Laura Moreno: everything. Why give me everything that you have.

You go to the shop and you're like, This, this, this, this. All of that for zero . [00:25:00]

Libby Arnold: Yeah. Yes. Exactly. Exactly. And that's, So

Laura Moreno: tell me how it is for now. Tell me how it is for resales now. So you touch upon construction, Is it similar for resales or We already talked about that.

Libby Arnold: No, no, it's, it's, I got distracted with all the other things the builders are doing and

Um, we are seeing, it is similar, the contracts here are set up differently for a resale, but we are seeing a lot of, we're able to make offers below asking price. Or, and even just being able to make a list price offer , it's such a nice change. But in addition to that, we're able to go in and ask the seller for contributions to closing costs, which can help.

And again, similar to the new build side, that money can be used to buy down the interest rate. Um, there is a program floating around that's increasingly popular around here called a two [00:26:00] one Buy. Ooh, what is that? And what that is, is essentially the interest rate is bought down for a period of about two years.

And because of the way that it's structured, the seller actually has to pay for that. And so we are seeing some cases where we can make an offer at list or a little bit below list, and then we can ask the seller in a separate area of the contract to actually pay for that interest rate buy down. Um, in some cases, I mean, that costs 17 $20,000 sometimes more, and sellers are willing to do.

And then the benefit to the buyer is I get a significantly lower interest rate for two years, and then with the hope that within two years I'm able to refinance into something else, which most likely you will be. But it also gives those buyers a chance to kind of adjust to having the mortgage, making that payment, um, starting [00:27:00] to budget for that.

And then the interest rate can adjust a little bit later. So, Something that can be done. And then of course those closing cost monies can just be used toward a straight interest rate, buy down on a fixed rate as well. That

Laura Moreno: sounds great to me. So you are saying there's properties coming to the market.

Those properties are likely not going to sell so many of them in the next six, eight weeks. Sellers may be desperate to sell, they're willing to give concessions, they're willing to do things for you. Property prices are declining, so you could go shopping now, see a property that is lower in price, and then even negotiate a little bit farther, negotiate those interest rates.

I think it's a, I mean, taking into account, yes, there's, we all know the interest rates are high, but apart from that, it seems like the fantastic time to buy. I mean, if you can handle those high interest rates for a couple of years. Mm-hmm. It is a great time to buy [00:28:00] now. Like it is a fantastic time and I love the idea that you have with new builds, with builders coming there and saying, Hey, what can you do for me?

Mr. Builder? Yeah. What can you do for me? You know, I'm now, you are now home buyers. We are now in a strong position. Now we have to manage the interest rate and we have to understand that it may be hard for a couple of years, is going to be high for a couple of years. But if you do that, you can buy something really nice now like, and be in a very good situation a few years down the line when your property may have gone up in price, you know, all the other purpose are going down.

You know, it's like a very good time to buy.

Libby Arnold: It really is, and it's just, it's so refreshing to be able to say these things. And so it's again, about, it's kind of the same, using this creativity to structure it in such a way that we can make that interest rate manageable. And it's very similar to how it was in 2020 and 2021.

It's just kind of, [00:29:00] The script has been flipped a little bit and back then it was much more about, okay, we have to pay over ask and we have to waive all of these things. How can we creatively find some sort of out in this contract for you? How can we set this up to where there's some hidden way we can get you out of this and kind of protect you?

That was our creativity then and now it's, there is just a list of 20 reasons that it's an amazing time to buy. But we need to get creative on how we manage this interest rate and how we get that to a level that is something that you're comfortable dealing with. And a lot of it too is there's just sticker shock at first because we're used to seeing that.

2.25. And I remember when my first buyer that had something approaching four, and we all thought, Oh, that's so high. We love four now. Take it. But take the

Laura Moreno: four. Take the four . I wish we could have a way of going back [00:30:00] to the past and say, Take it.

Libby Arnold: Yes, do it now. Do it now. When interest rates grow up, we tend to see prices come down.

And you know, we talked about a lot of these other factors influencing Austin outside of, you know, we've got the geopolitical things that are going on. It's an election year. Things always get a little strange in the housing market during an election year and, So we've got these larger forces and then kind of these local things happening as well that have really created kind of the perfect storm.

And again, if we can just creatively deal with the interest rate issue, everything else that was making it so difficult to buy has kind of just gone away. And so it's, it's really fun to be able to actually negotiate a little bit again and, and stand up for our.

Laura Moreno: More Levy, you've shared amazing information today and a very different perspective.

What can we do for you?

Libby Arnold: Oh goodness. Well, thank you so much for letting me [00:31:00] come back. Like I said, I was thinking about this this morning and thought, Man, it's, it's such a different message than last time, and that's such a nice thing for me. I'm so happy about it. Um, well, if anyone is interested in following along with a couple of things, the Austin Real Estate Market, um, my Instagram is Libby.

arnold.realtor, you can follow me there. Um, FairWarning, I do, I run. Um, and so you'll get Austin real estate market stuff and you'll get some of our listings and you'll get a bunch of my running posts too. So have any interest in running or real estate. Um, that's a really good place to connect with me and we try to post a lot of good, um, content and a lot of data and those pieces about the market as.

Well, Libby,

Laura Moreno: thank you so much for being in the first Time Home podcast again.

Libby Arnold: Oh, thank you for having me. Thank you so much. It's been so nice to chat with you again.[00:32:00]

Introduction

Frank Pietrzak (Peter-Zak) is a property tax foreclosure Auctioneer in New York State with over 20 years of experience. Frank and the professional team at NYSAuctions.com have returned over 40,000 properties to the tax-paying rolls and he mentions this could be a great option for 1st-time buyers who have access to funds.

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Transcript

This is an automatic transcription (sorry for the typos in advance! 😅)

Frank Pietrzak

Laura Moreno: [00:00:00] First Time Home Buyer Nation, I am Laura Moreno and I am super excited to bring you our fantastic guest today, Frank Peter Sack. Frank is a property tax for foreclosure auctioneer in New York State with over 20 years of. Frank and the professional [email protected] have returned over 40,000 properties to the tax paying roles.

This could be a great option for first time home buyers as well, who have access to some funds in his free time. He loves to watch professional hockey and soccer and ride motorcycles. Frank, are

Frank Pietrzak: you ready to flow? I am ready to flow. Let's.

Laura Moreno: Great. So I've given our community just a little insight. Please share more about you personally and then expand upon your

Frank Pietrzak: business.

Sure. Thanks a lot. First of all, thank you for reaching out and having me here today. I really love speaking about real estate, especially auction, which I specialize in, and first time home buyers and auction. Uh, definitely we see them [00:01:00] and, and I'm happy to be able to be here and help educate them. Uh, my background briefly.

Public school teacher, high junior, high school teacher for over a dozen years. Um, I was looking for something to do in the summertime, so I used to go to auctions with my uncle, my dad. We went to antique auctions when I was a young, uh, young guy. And I just fell in love with that part of the business watching.

And then the opportunity presented itself for me to become an auctioneer. And, um, I went to auction school, started working for a company here in the mid Hudson. 22 years ago and, um, started selling real estate at auction. Um, only that method. I'd never done the traditional MLS style. Um, so I've, I've learned about auction right from the get go.

It's been exciting and a lot of fun at times, a lot of work. Uh, I do a lot of mileage on my car. I travel from every edge of, uh, New York [00:02:00] state, from Buffalo to pot stand to Plattsburgh, and almost down to New York City as we work in Westchester. So I put a lot of mileage on the car. The state is beautiful.

I encourage everybody just to drive around and go take a good look. Um, but this is a lot of fun. I really enjoy it and, um, I've been doing it full time now for quite a.

Laura Moreno: I have so many questions. I mean, you are the first person that we bring to the podcast that is in auctions, like in property auctions.

And I have to say, when I was looking to buy my first apartment here in New York, I was like, an auction. I'm going to get a deal, I'm going to get a good price. It's going to be like I wanted to get a deal in an auction. But, um, tell me more about auctions. I mean, how does it work and the first time home buyers that you've seen, how do they do?

Frank Pietrzak: Sure. Well, the first time home buyer needs to be educated, so they need to do homework and understand that everything you buy at auction is really [00:03:00] the buyer re uh, relying on their own information. So we're very different than the traditional real estate marketplace where you ask your agent a million questions and they go and find the answers for you.

At auction, we provide the publicly available information and then you go and do the rest of the homework and figure out whether or not you wanna make a purchase. So it's kind of 180 degrees different in that regard. The other thing that's very different is when you go to a traditional style broker, there's a price.

And that price is usually advertised at auction. We don't have a price. We let the buyers construct the price by bidding against one another. So we really never have a starting bid. Um, we work in 16 counties. I have one county that does have a starting bit, but the other counties all allowed the buyers to.

At the [00:04:00] price. So based on your homework, based on your evaluation of that asset, of that home, of that piece of land, the two family, the commercial, you decide what it's worth, and then you bid in a live format today, online, sometimes in person or both, and you determine what the price is.

Laura Moreno: What was the lowest price that you've seen?

I know I want to get into this, like what has been the lowest price? Has it been anything like a $1 property or or, It's always been like normal prices, .

Frank Pietrzak: Sure. Well, the $1 property, if that happens, um, and we don't go down to a dollar, but, um, if you have a very low value, let's say you find a piece of vacant land for a hundred dollars, there's typically a reason.

And a good explanation on hundred dollars land is it's a swamp. It's just wet property next to a neighbor, and the neighbor wants to as a buffer against anybody else. Or if it's an improvement, [00:05:00] um, typically a, you know, a thousand dollars house needs a tremendous amount of work. Half of it might be burned away.

The roof might be missing. Um, there are a variety of reasons and you would say, Well, gee, why would you ever buy something like that? Um, it's a lot easier to rebuild a home that already is existing and or has existed and had permission to be there in many cases than it is to start from scratch with vacant land and seek.

Sometimes that's very challenging, depending on the municipality and what you wanna build and what their zoning laws are in that area. So, um, sometimes the rehabilitation is, uh, the better route to go.

Laura Moreno: Got it. So, so you're saying if it's too good to be true, it's too good to be true, like there's a catch

Frank Pietrzak: Absolutely.

Condition is always, um, uh, reflected in the value. You know, we were a subcontractor for United States Government auctions on the [00:06:00] East coast. Yes, I sold the Jeeps that you could buy for $10, but those Jeeps were halfway around the. In the middle of the desert and they had no engines or tires. So for $10 you bought a Jeep, but you know, it's 8,000 miles from here.

There's always a reason behind the price. It's always an explanation. So how does

Laura Moreno: it work? So, so, I, I am curious about the profession. So you're an auctioneer, you go to Auctioner school, which actually make, made me juggle. I was like, Ooh, auctioner. Cool. That sounds really, really cool. So you work with the school, and then how do you get paid or how do you, how does it work for you?

Like you put a price of the properties, you go and see properties. Tell me more about the process of starting the career and the process of finding.

Frank Pietrzak: Sure. So, you know, in New York State, we don't have a licensed law to be an auctioneer. Everyone walking around can be an auctioneer. However, to sell [00:07:00] real estate at auction, you need to be licensed with a department of state as a licensed real estate agent or a broker.

Anyone that collects a commission or a fee in real estate needs to be licensed. So we're licensed in that regard. But the auction profession in New York State doesn't require a license. Now, um, if you work down in the five boroughs, you might need a special day license or a DCA license in New York City.

But for the most part, throughout New York State, there's no specific licensing. Um, I decided. Train as a professional auctioneer because I want them to understand a few different things. One, how did the business work in general? Uh, because it's a different business model than having a retail center where you have prices and, and the auction.

We'd all have prices, but I also needed to work on my voice and my inflection and my understand. You know, if you're just a very high speed [00:08:00] auctioneer and no one understands you, you're not a, you're not effective. Um, so much in the same way as a professional singer, you have to train to use your diaphragm to, you know, use your throat properly.

In practice, before auction school, I actually tour a muscle inside my throat and I couldn't speak for a couple of weeks because I wasn't breathing the right way. I was straining in my. So I had to learn and train as a singer in order to become an auctioneer. And today, after a lot of practice, I can auction for hours and hours at a time if need be.

It's tiring, but it's not exhausting. You kind of get into a trance of what you're doing and somehow your body magically allows you to do it. Just a lot of practice.

Laura Moreno: Could you practice it out here? Like can you give me.

Frank Pietrzak: something. Sure. Yeah, of course. Everybody loves to hear the auctioneer. Chance. Yeah. , uh, we use a, um, we [00:09:00] use what we call a country style auction where we ask a higher amount.

We ask them for a lesser amount and lesser until somebody raises their hand a bit. So, uh, I may start out who give be 500,000 for this home? Would he get 500? Would he get 200,000? Who do he give? 200 hundred. Thank you. Now a hundred, 1 25. 1 25, 1 50. One 50 bid. 75 1. Five and now 200,000. I'm at 200. Gonna get two and a quarter and a quarter and a half and a half and get two 50.

Two 50. I got 2 35. Thank you. Now 2 40, 2 40, now 2 45 and 50, but got two 50,000 and that's what we do. Oh

Laura Moreno: my God. That's amazing. . It's uh, it's definitely, How do you get to do it like so fast?

Frank Pietrzak: Just a lot of practice, hours and hours of practice. When I first returned home from auction school, I would just practice driving in the car, uh, imagining that I'm selling the telephone poles or the cars around me, and it was just a lot of practice and eventually you get there.

That's,

Laura Moreno: that's awesome. Okay. Going back [00:10:00] to first I'm home buyers. I hope you are all having a laugh and having a good time listening to this podcast because I am, I mean, Frank, you are so good. Um, so going back to first I'm home buyer. Let's go back to Yes. Being like focus on them. So you also say that those transactions are non-contingent.

I mean they Correct. You cannot add contingencies to that. Tell me what is that and how does that impact home?

Frank Pietrzak: Right, Right. So, you know, thinking back to when I bought my first home and I was young, had limited money, um, really unaware of the process, I really relied on the real estate agents and the attorney to kind of guide us through that whole process.

And, um, by the way, my wife wanted to back. Of that first home purchase we made in our twenties, um, like an hour before the closing because now the house was empty. You could see all the ugly, all the walls outlined in smoke where people had been smoking and she just didn't want the [00:11:00] house. And she said, You know, what's the worst thing that can happen to me?

You know, we lose our small down payment. I think we had a key deposit of $500 at auction. You're putting down a more substantial down payment, uh, typically 20% of whatever your purchase amount is. So if you're buying a home for a hundred thousand, you would need $20,000 as a down payment. So do

Laura Moreno: you give that at the auction?

Do you give, do we give it to you?

Frank Pietrzak: Right in a check or Yeah, at the auction. It typically has to happen right at the auction. So when we do these large volume municipal tax foreclosure auctions, um, and those are either done online or in a ballroom or sometimes simultaneously, uh, you would bring a bank check with you to the auction.

Payable to the municipality in an amount that you think you're going to need. Now, some people need a couple of [00:12:00] checks. You know, you don't wanna bring maybe all your money in one check, but maybe split it into two or three. Cashier's checks or bank checks? Nobody ever takes a personal check. Um, we don't take personal checks.

We don't take any lines of credit, any of those things that are stoppable instruments we can't accept. We need either cash, uh, green cash or cash equivalent, which would be a bank check, like a teller check. Um, and we have information and, and. Actually a little calculator on our website to let people figure out how much those dollar amounts should be.

But when you ask about no contingency, what that means is the purchase, the buyer is making an offer to buy without any additional, um, any conditional requirements on finishing the transac. So typically at auction, again, in these municipal tax foreclosure auctions, you have a closing period of 30 days you would [00:13:00] bid.

Today, you're the high bidder, put down your down payment sign, a purchased and sale contract. And then you have 30 days to finish paying and there's no excuse for not paying. There's no mortgage contingency, there's no chance for you to go and, um, you know, do more inspections. Any of those things.

Everything you need to do to learn about the property needs to be done in advance of bidding. Because on auction day, you're the contracted high bidder or the high buyer. The only thing left to do is for the municipality to approve or accept your bid. And what does that mean? It means. Means that first they're gonna go and take a look at all the buyers at the auction, and we could have 200 properties a day going through the auction.

They're gonna look at that list of buyers to make sure you don't owe that municipality [00:14:00] tax money. They're not gonna sell you more property if you are a delinquent property owner. But typically within a few days, um, they have a special meeting. They would look through the entire list. They approve all the sales.

It doesn't matter how much bidding is and um, you're ready to close in 30 days or less, and you get a quick claim deed to the property. And the important thing is if everything is done properly, you'll get it free and clear of any lie. You're not responsible for the prior taxes. You're not responsible for that former owner's mortgage or any other lanes against the property.

It's really a. A very strong process in New York State. It's part of the Real Property tax code. Um, and I, I don't need to get too detailed on it. I have different seminars and webinars on how to, how to do that research or how to understand that law, but the law is written for municipalities to be able to get properties [00:15:00] back on the tax roll, because right now they're, they're not being paid.

So for a first time home buyer, you know, why would you come to something like that? Well, first of all, it's not for everyone. Everyone will not come and, and be interested in this type of purchase, nor are they really able to do the purchase. Because of that liquidity requirement. You need to have your money ready to go, but if you are ready to go, the real value here is you're paying the price you wanna pay.

Right. You're not paying some other price that the seller wants. And number two, because the properties typically need work, they need either great cleaning or they need physical work or mechanical work. If you're willing and able to do work, that sweat equity that people talk about building into the property.

Then you're able to compete and buy properties. You know, let's face it, if you are what I call the retail buyer, the end user, the person [00:16:00] that's gonna live in that home, you can afford to pay a little bit more than the. Professional buyer who's looking to either flip the property with no work or pay to have work done and then flip the property or possibly rent it.

If you're able to do some of the work yourself, you're the ideal candidate because you can often outbid the flipper. The investor and you'll end up with a home that you'll create instanty and as you begin working in it. So it's really a, a great opportunity for first time home buyers. Um, but they just have to know where to go find these things and, and understand what the bidding process is.

Laura Moreno: That's great information. So going back to where, where can you find these properties? And I suppose my question is, is there a on database that is nationwide database or you have to go to each specific, um, state or county?

Frank Pietrzak: Sure. Well first of all, I would say you don't have to pay to find [00:17:00] out. There are plenty of people out there trying to sell you lists of information.

You don't need to pay for that. Um, in New York State, which is really what I'm dealing with, um, you know, in my daily work, every county. Or finance commissioner, they're the same people. It's just a different name. Every county treasurer is responsible for their annual property tax auction. So if you wanna know about Orange County, Duchess County, any of the 62 counties, you would just contact that treasurer's office.

You can call them to easy Google search to find out who they are, call the office and say, When do you have your property? And they'll say we either just had it, you know, right now, in November, we're not having that many more, as the weather gets colder and snow is ready to fly upstate. But typically May through October is when everyone around the state is [00:18:00] conducting their real property auctions, and they do 'em once a year.

So you'd have to get on their, either on their mailing list or they'll direct you to somebody like us, a service provider. Who conducts the auction for them? It's free information.

Laura Moreno: How do you, so you are a service provider, so how does it, So I suppose they get in touch with you and you prepare the auction, but how do you get paid, for example?

Frank Pietrzak: Sure. So auctioneers by and large work on a buyer's premium. That's the commission that the buyer pays on top of their bid. All right. Okay. So the, so just like going to an antique auction, you pay a hundred dollars for the item, you're gonna pay a buyer's premium on top of that, and that's a negotiable range.

There's no set fee. Um, you know, it could be as low as three or 4% if you're just bidding online, like on some, uh, auction platforms. It could be upwards of 18% or more if you use, [00:19:00] um, you know, if you're in a more metropolitan. Our auctions are advertised at 11% with a 1% discount for cash or bank check.

And what do I mean by that? We do accept credit cards, Visa, MasterCard, and Discover, um, as a good credit card. And that would be at 11%. If you're using a bank check, you get a 1% discount, then you use 10%.

Laura Moreno: So then say for example, I'm at an auction in New York and I love this property, and I bid on the property, I win the property.

And then what I, what do I do next? I suppose I give you that 20%. Um, does that happen like right after you bid or it happens at the end of the.

Frank Pietrzak: Sure it happens immediately. Soon as you're the high bidder. We have you get outta your seat and go right to the cashiering and contract table, so, It's very important at these municipal tax [00:20:00] auctions, especially that they start collecting a good buyer's money immediately, right?

The reason why we're here is because someone didn't pay tax for two years or more, so they're very concerned that the buyer now is a real buyer. Willing and capable of closing. So you immediately get up head to the cashiering area and you're gonna make a down payment, and you'll also sign the purchase and sale contract.

And with our company, you're actually gonna sign all the closing documents because we do everything, uh, through automation. So, uh, the only thing left to do after you leave the auction is to get your final money. Wait for the announcement on the website that your bid is approved and send in your final money, and then you'll get a copy of the deed in the mail.

It's very, and when

Laura Moreno: do I pay your fees? That 10%, 11% at the, at that table .

Frank Pietrzak: So we mentioned [00:21:00] 20%. So half of that goes to the municipality. Half of that is our commission. That also goes to the municipality. They escrow all monies until. Closing. So the auction company doesn't actually go home with any money.

It all goes to the municipality. They hold it, and then once the transactions close, then they send us a check for our commission percentage.

Laura Moreno: Got it. So it's not on top of that, 12 per is not on top of that 20%. It's included in that 20%. Wow. This is fascinating. I mean, um, I, I feel like I want to do it, like if you are a first time home buyer, what you have to do.

Go and see some auctions, I suppose, and prepare your checks. Like would you go with a real estate agent or real estate agents or really get involved in, in this?

Frank Pietrzak: So, uh, both, both things work. So definitely you could go on your own. Um, it doesn't cost you anything to watch. I mean, you could always watch, you could watch the online broadcast.

There's no [00:22:00] charge, there's no signup fee. Anybody can just click in and watch. Um, if it's in person, obviously you go to the hotel or the ballroom and have a seat and watch. Again, no charge to do anything. Um, whether you need a realtor with you, that's up. Whether you want to, uh, bring a realtor to help you understand maybe pricing or maybe the zoning.

Could you build a house on that land? Is it big enough or not? So we see realtors bring buyers to the auction because they're providing value to that buyer. With knowledge and typically that realtor and that, uh, that buyer work out their own commission structure. There's no shared commission in the auction, so I've seen realtors get paid a fee to provide basic information and then maybe get an additional compensation if the buyer wins that property at.

And then occasionally, uh, you know, that [00:23:00] realtor also helps them go through the approval process to get the building site approved for building and that kind of thing. Um, there's a lot to learn and know in real estate as you've been educating first time home buyers, um, with your work that you do that they need to understand a lot about.

What it is they're either buying or they wanna do, and they should understand that before they put money into the process. You know, upstate, there are areas where you need five acres of land to build a house. Obviously five acres of land in Queens, um, or Brooklyn, or lower Westchester. You could build, you know, an apartment complex or maybe even a small.

So if you went upstate and bought three and a half acres and think you could build a house there, you might not be able to, might not be big enough land. So you would need information, you'd need help maybe understanding that and, um, a realtor can help you do that. Uh, uh,

Laura Moreno: that, that's great information. One quick, like, maybe a silly question is like, how do [00:24:00] properties land in.

So these properties, the 1 0 1, 1 0 1 question. .

Frank Pietrzak: Yeah, I mean there's a couple of different ways. Um, you know, we list property for individuals. You know, I could sell the house or the apartment, um, or the condominium maybe you're sitting in right now. We could sell that for you individually if you wanted to.

A lot of my work in the volume that we do, which is why we have hundreds and hundreds of properties every year at auction, is municipal tax fore. So that's where the biggest volume comes from. Um, you know, and there's just an awful lot of that property available again, once a year. And that

Laura Moreno: means that those owners are not paying taxes and then the municipality is taking those properties.

Frank Pietrzak: Is that what it is? Right. So I mentioned before the real property tax law in New York State. Um, it's a two year window of delinquency. If you don't pay your county real estate tax for two consecutive [00:25:00] years, um, then the county can foreclose. Take title and then the title must be sold at public auction.

That's how the law, um, addresses those properties. So it's a very niche business, niche part of the law. Now, can a county allow you to have longer period of time? Yes. Some counties like you become delinquent three or four years. Um, but my experience is the longer they let you become delinquent, the more.

Disrepair there is on those properties, especially the improved properties upstate where there's a tremendous amount of snow. Um, a small, you know, hole in a roof becomes gigantic after four years. So property tax foreclosure is a minimum two years. Um, I should say three years on agricultural, if it's an agricultural property, the minimum is three, but most of you are not gonna buy a farm.

So any single family home, vacant land, commercial property, the [00:26:00] minimum, uh, window is two years delinquent. And I wonder,

Laura Moreno: you know, because we hear all the time, like people not paying mortgages, you know, but, but you know, if you think about the cost of a mortgage against taxes, taxes is like much less than usually your mortgage usually.

So I, This is why I'm wondering like, how many of these properties are there where owners are not paying taxes? Because that seems like one of the lower expenses when owning a.

Frank Pietrzak: Sure, sure. Well, there's enough. I mean, um, you know, there's a repeat work in this because every year people stop paying tax for a variety of reason.

Um, sometimes, you know, the mortgage and the tax and everything is just overwhelming based on their financial situation. Um, if the bank is escrowing tax payment, Then the bank will pay the tax. If it's an older style [00:27:00] mortgage where you didn't have to escrow your taxes, you kind of pay that on your own. Um, you might be paying the mortgage, but maybe you're not paying the tax.

You know, you figure, well, I can kind of skate with the government, but the bank I have to pay, or vice versa. Every year we sell hundreds of homes that we see in the title. Have a mortgage, uh, but yet it's being tax foreclosed because either they're delinquent on the mortgage or they're delinquent on the tax, but the tax is superior, so the county will foreclose and sell that property.

Wow.

Laura Moreno: And do you see the volume going up with the, with the current situation at the market?

Frank Pietrzak: You know, the pandemic has definitely provided a, um, a bump in the volume of property, but it hasn't been, um, double or triple. It's about a 20 to 30% bump in normal. So if we had a hundred properties every year in a given county, this year we have [00:28:00] 120 to 130.

Um, it, it's not like we have now 300 or 400, but the volume is. But also the marketplace of buyers is bigger. The competition is still everywhere. The relocation out of the lower part of New York state to upstate is still happening. Um, you know, I see by the registrations of people looking at property. I'm talking seriously upstate Canadian border, Plattsburgh area, Clinton County, uh, Malone, out near Buffalo.

Registrations are reading Queens, Brooklyn, Lower Westchester, Northern New Jersey. Um, I mean, it's definitely a lifestyle change because you don't have 24 7 pizza delivery, um, like you're used to. Um, but yet people are saying, you know, I, I wanna relocate. So they are, and therefore it's still competi. . Cool.

Laura Moreno: And the last question, Frank, [00:29:00] before I let you go, uh, although your interview is like so cool, , what have you seen are the top mistakes that people in auctions make and how can they avoid them?

Frank Pietrzak: Well, here's my school teacher days. Do your homework. I can't tell you how many buyers just go and bid and do no homework, and I'm talking not just first time buyers where you kind of may expect that, but I'm talking about professional real estate investors who we're just too busy.

Figured their partner looked and then they bought something that is, uh, not as usable as they thought it would be. Um, the good news is we could always resell it for them at auction once they take title, uh, but there's really no way to back out that down payment money that I talked about earlier. That's a financial commitment that you're at risk for if you fail to close.

And, um, the county will, uh, take your funds, they'll keep it, and you won't be able to buy any [00:30:00] additional property in that municipality. So if you raise your hand a bid, make sure you're serious about closing and taking title. If not, just sit and watch. It's a lot of fun to watch.

Laura Moreno: Wow, that's amazing. So if you don't end up buying it, you are not only, you're going to lose that 20%, but also they're going to ban you from those auctions.

Frank Pietrzak: Very typical. We don't have a banning list, but I know the counties, um, some of the counties sit and look through the list of registrants and say, uh, nope, not that person. They, last year they defaulted. So it's Wow. Yeah, it's serious business. I mean, it's an adult sport to buy real estate. Um, but at auction you really need to be an adult and, you know, be responsible for what you're, what you're.

Laura Moreno: What are most of the, Most of the users are professional investors, or not users, I mean, attendees.

Frank Pietrzak: Yeah, I, I would say the, the smaller groups are first time and professional. The biggest group is people from [00:31:00] that community that know those properties best, and many times they're a neighbor. Mm-hmm. . So a neighbor typically wants to add land to their own property.

Um, or they know of someone that wants to live in their community, like a relative, moving back to the area, that type of thing. So, you know, we see a lot of property going to people within that local municipal region. Um, so that's important. Um, and that's typically how it goes. So, uh, you know, the mix of assets.

Also, I should address this too, if we have a hundred properties, probably 30 or improve. Maybe 35. The other 65 to 70 properties are land. So they're primarily land skewed, um, in the offering. But, um, you know, there are plenty of choices of homes to, uh, to purchase. Well,

Laura Moreno: Frank, you've shared amazing information with us today.

What can we do? ,

Frank Pietrzak: I [00:32:00] appreciate you, uh, having me here. And, um, I offer myself for follow up if people wanna reach out to me. I mean, you're able to contact me if you wanna, uh, you know, either find me on our website, aa or auctions.com, or n y y s auctions.com. You could find me there. Um, I love to go on. I'm still posting photos at Auctioneer Frank.

Um, I don't do any sales pitch there. I may not be using it the right way, but I love to show you photos of what I see around the state and, uh, New York state's gorgeous. If you get outta your car and get off the highway and look around, it's really fantastic. So I think you would like at auctioneer, uh, Frank, either on, uh, Twitter or on Instagram.

Lots of great things to. And I appreciate being here with you, Laura. You have a great service for first time home buyers.

Laura Moreno: Well, Frank, thank you so, so, so much for being the first time Home Buyer podcast.

Frank Pietrzak: Thank you very much. You have a great day.

Introduction

John Leon Gonzalez is a Certified Professional Inspector® in Seattle, Washington that has been licensed as a realtor since 2007 both H.I. and WDIR (Pest). He is also certified by the International Association of Certified Home Inspectors® (InterNACHI®) and today he comes to tell us everything about how to have a great inspection in Seattle, Washington.

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Transcript

This is an automatic transcription (sorry for the typos in advance! 😅)

Laura Moreno:First Time Home Buyers Nation. I am Laura Moreno, and I am super excited to bring you our fantastic guest today. John Leon. Go. John Leon Go is a certified professional inspector in Seattle, Washington. He's also certified by the International Association of Inspectors InterNACHI, and today he comes to tell us everything about how, how to have a great inspection in Seattle when he's not working. He loves to be with his family and to trouble. John, are you ready to flow?

John Leon Gonzalez: Yes, I am. Laura, how are you? Good morning. Good afternoon. Over there in New York, .

Laura Moreno: So I've given a call community, just a little insight now.

Please share more about you personally and then expand upon your business.

John Leon Gonzalez: Yeah. I, uh, I was born in California, just born there, 1956, and my parents, uh, moved up here 65 years ago. So before the end of 56 I was up here in, in, in, uh, in [00:01:00] Seattle. So I've pretty much been grown and raised over here in the Seattle area all over.

And, uh, it's, it's diversified. I love it, you know. Like one day I was a black, One day I was Italian. One day I was Chinese. So you had a, you had a Super bowl of all kinds of, all kinds of traditions and cultures and I love it.

Laura Moreno: So. Wow. And you tell me more about your professional life. You were telling me before, you were in insurance before and then you transition to home inspections.

Tell me more about what you've been working in your life and what do you like about being a home?

John Leon Gonzalez: Yeah, I did. I did insurance for many years and, and I got tired of wearing a suit and a tie. Now I tell people I wear my zoo suit, which is my Tyvek with my hood when I get under a crawlspace. And, uh, I, I've been doing this going on 16 years now.

Uh, as a home inspector. I'm licensed as a home inspector, building inspector, uh, separate past inspector license cuz I also do VAs FHAs whenever they. What they call a W D I R report for W dos. Um, and uh, so I do a lot of it. I also do municipal inspections for the city of Seattle. Other municipalities are now doing that throughout the Puget Sound area here.

Uh, tequila eight years, Seattle eight years. Then we have, can we have, uh, Lakewood, Tacoma, uh, Renton, Bur. Uh, so we have all those, and I've been doing those for several years. Some of these just got on like three years ago with period. Lakewood. I was our first safety inspector out there. So I'm pretty busy and, and, and I love working, but I, I love to, uh, see when people are buying a house, they're buying a lot of, a lot of, uh, they have a lot of money invested in this.

So for me, giving. [00:03:00] Uh, everything that I can from, from the attic, the roof of the crawlspace, the appliances, you know, not so much the appliance, but the mechanical components like the electrical system, your HVAC system, your plumbing system. You wanna make sure those are working in. And, and, and a lot of times people usually don't go underneath their crawlspace, but I have to.

It is because of a lady that way. I got my license, I followed her, and I didn't really wanna get into a crawlspace, but because part of. Part of your business. So down there, you know, I see sometimes broken pipes, you know, uh, leaking pipes. I see, uh, 90% of the time I wanna see roads, you know, So that's not really a wdo.

Uh, but it can, uh, you wanna know if there's a lot of it down there. Either way, 90% of the time I might see that. So I'll let 'em know, Hey, you might wanna have some pest control remediation. So, uh, they don't get inside sometimes. You can't, uh, stop that [00:04:00] because there's Norwegian rats that go up through the ground up and, uh, then the world are hose like moles or whatever to get in there.

And sometimes it's a very nasty place. You know, you got sewage, you got open sewage, you got, uh, you have, uh, a lot of molds. It depends. Seattle's a very wet place, so it just depends. It could be a newer home, it could be an older home. So it just depends. Uh, where I'm at, you know, you can walk across the street and you might have three inches of, of water on the, on the ground.

In, in the house that I'm at might not have any, you know, so there's always moisture if you load there, cause water comes up, moisture comes up. So that's why you have the vapor barrier. And sometimes that's, that's missing. So, uh, either way, I love what I do because I, I, I, I not only bring out the problems, but accentuate the positive.

Cause people are usually looking at their, Because they, uh, they like it, you know, So I try not to be a, a deal killer, but sometimes [00:05:00] people will back up and they either, you know, gonna get, uh, some kind of a, uh, reduction and, and, and the price of the house, uh, or, or maybe these things are gonna be rectified, you know, or they back up altogether.

And usually that's not the case. They, they're looking at the house because they like, and every house you can, you can. Cure those problems, you know, rectifying them and making them, repairing them or whatever has to be done. So what I like about what I don't care about rain is being out there getting. Uh, right now I'm making my own fence, and that's not fun.

But what, when the rain comes, that's where you can find out if you got any problems, especially in the roof, in, in the attic. You know, you can't always tell from the outside. You know, you could tell if a roof is coming apart, your granules are falling off. You've got fiberglass are looking and some of 'em are missing.

You know, it's about time to get that replaced. Sometimes I see that from the, from the attic, you see a wet spot and that's the best time to see, uh, [00:06:00] moisture problems, or you'll see a. Uh, spot, uh, moisture has been there before, man. Maybe it's already been resolved, I don't know. But the best time looking, uh, looking inside an attic is when it's raining, cuz you can actually see, uh, you can see, uh, the problems there.

Laura Moreno: So not every house. So if you, if your home inspection that day is raining, it's not like, Oh no, it's raining. Why? It's like, Oh no. Yes. Now I'm going to able to find out everything in. .

John Leon Gonzalez: Exactly. The only, the only problem is you gotta be careful cuz some of these newer houses, they're, they're 20 feet up, you know, 17 feet up and, and you gotta be very careful.

Uh, I'm crazy. I still get up on these roofs, you know, and, and it, and if they're too slippery, which you don't wanna really climb on, you know, I have a, I have a camera pole that goes up 24 feet and I'm able to look down my Samsung, Samsung watch and take the photos from there, and the rest, you know, have an idea how old the house is.

When's the last time that roof was done? If it's getting to the end of its life expectancy, that'll be on the [00:07:00] report, you know? But, um, yeah. And then the other things are the mechanical items, like the hvac, you know, I, I I take out, off that cover on, on your furnace, whether it's a gas furnace, uh, electro furnace.

Uh, gas furnaces are more, uh, are more, uh, of a situation where you have to do a service maintenance every two years and usually, I'll see a tag on there by a professional that's either on there or it's not, or it's past the two years and it's time to get that, uh, service maintenance again cuz of, uh, safety habits, you know, uh, gas leaks or whatever.

And I'm also looking for that cause I got my gas analyzer and all that. Uh, looking at the, the heat exchangers and making sure that, uh, it's running improperly, you know. So, uh, I turn on all these systems and then we come down to the plumbing. Again, you know, we're looking at the hot water tank and hot water tanks.

The warranties are [00:08:00] usually five years. Ge I see. Does 15 years, you know, anything after that, you might think about having that replaced because, uh, uh, some of 'em can go out the last minute and, uh, uh, usually I look at the warranty on them. Usually they're from 5, 6, 7, up to 12 years. Reams and the other ones, and GE again has a 15 year one, but they get way past that.

It might be trying to change 'em, and I've seen some of that last 40 years, but that's not, you know, that's not the rule of thumb. You call 'em out if, if they're expired already. As far as the warranties, uh, you don't want. So

Laura Moreno: John, um, talking about Seattle specifically, which type of homes do you see there?

And as a first time home buyer in Seattle, When they go to a home, what they really need to pay attention to, because obviously the weather and everywhere in the country's very different. The types of homes are very different. Like what a buyer from first time home buyer from Seattle should pay special attention to in a [00:09:00] house or in

John Leon Gonzalez: their apartment.

The exterior, remember I said it rains a lot here in and I love it, and, and, and a lot of times, uh, they're building too fast or, or something, you know? And there's a. That, Uh, and I've seen that developments where 20, 30 houses were built the same time, but some of 'em are missing the flashing. And I learned from a lot of my, my, my, my professional people that do a lot of, uh, homes and their specialists in either roofing.

uh, electrical or whatever. So I learned a little bit of that over the years. Um, building material. Well, I went to school for this about, you know, 40 years ago, the U Dub, Structural Engineering. You know, I didn't graduate. I was a professional student for six or seven years, but, uh, I love what I did, you know, architectural structure for drafting.

Uh, what I see with the new, with the new, uh, materials that come. Uh, the last 45 years maybe, uh, you [00:10:00] have what they call stranded wood, which is wood. Uh, that's not totally whole wood like you find in the older homes. This new wood is, is stranded wood hardy board, uh, osb, uh, that kind of wood. Uh, if you get, if it gets wet, it's a big problem because then that over time starts breaking up.

And this is mostly 90% of all the houses that. Uh, are, are done with this, uh, new, uh, uh, what they call a, uh, what is that? Wood? Anyway, I do this all day long. I forgot what the name is. Uh, Engineering wood. Uh, but that's a problem where it's wet. And, and in Texas, maybe Florida, the south where it doesn't rain as much as here, that might not be a problem.

But here in Seattle you gotta be very careful. So you're looking for openings, uh, missing. Barriers, you know, missing, flashing, uh, all those things could be a big problem if the sign is hitting the ground. It [00:11:00] acts like a sponge when the water comes down. And in time I've been at houses, uh, where you can put, literally put your hand right through the outside of the band, Jos in the back of the yard, and it goes all the way through the crawlspace.

You know, here we have a lot of crawlspace where the house is built up and it sits on a foundation, uh, but you got a crawlspace below. And, and, and that sometimes if it's, if it the drainage is, is not proper or whatever, it could be a problem, especially for newer homes. Is

Laura Moreno: it because it's, um, it's raining a lot and this is why they have like those crawl spaces, like just to avoid the humidity.

John Leon Gonzalez: Yeah. But that's where all your mechanical stuff is underneath the structure, you know, and I've been in San Antonio recently and all over there, the majority of houses. In Northwest, I told you anyway. They sit on rock, it's all slab, which is nice. You don't have a crawlspace, sahu, um, you don't have a crawlspace.

But, but here where it ranged, it just depends on where you're at. [00:12:00] I've seen houses that are a hundred years old and the house that I show was my uncles on my website. Uh, that house is built in 1905. When I did, that was my first inspection by the way. Boy, it was just beautiful. Still had not been too wiring, which.

there wasn't a problem with that, you know, But I too, sometimes it's, it's a problem if, if you don't have, uh, grounded, uh, circuits, especially in, in, in their kitchen bathroom areas, you want those GFCs there, new construction, you want it pretty much all over the place. Um, but the, the, the problems that I see with, with, uh, the rain is, is exactly what what I mentioned is if the clash is not right and you gotta open cracks, The rains that, the rain that the water's gonna get through and you're gonna have moisture problems.

Laura Moreno: Um, Got it. So what happens? Uh, tell me more about, um, your association. Interna, chy, I think. Is it interna or internationally? It's

John Leon Gonzalez: chy. I've been with Chy, I think, God, [00:13:00] I wanna say maybe 10, 12 years past. But I've also was with the other ones. Ash, she is a, a big one out there. Uh, and there was. One that's, um, um, Aii, uh, the, the problem there is Inchi, why go all over the place, but Inchy, they do everything.

I got specified as commercial, but I was doing commercial, small commercial stuff before, uh, I found out about Nazi having a, a commercial. Side of it. And, and I love it. So I did my schooling there and, and I gotta get more, uh, profound in my, my commercial stuff. The bigger buildings that I do, sometimes there are strip malls, you know, with big circuits, you know, and I bring some of my, my, uh, electrician buddy friends or whatever, so I know what I'm talking about.

Uh, and I learn as, as I go through the years, you know, I don't know any inspector that says he knows at all. Uh, but, uh, I can tell you this, I learn all. [00:14:00] New things, which is a blessing.

Laura Moreno: Uh, so, um, I know, I know, sorry to interrupt you, but I know like international is very powerful for first time home buyers and they offer some kind of like warranties because.

Uh, the last thing you want is a, first I'm home buyer is to buy something. And then soon after something happens and, and you know, the roof is broken and someone didn't catch something, and then you end up with a, with house. That is not completely what you thought it was going to be. So, uh, can you tell us more about what they offer and what are the things that you can offer because you belong to that association that other people

John Leon Gonzalez: can't?

Yeah, I, I was using that, but there wasn't a big response for that for me, myself. Uh, but I love . Uh, what I do use is, is, uh, and they work I think in association with another one. I, when I do a home inspection where somebody's buying or they're selling, cuz I do both half and half. Um, there's a hundred day warranty and I, some inspectors think [00:15:00] that's, that's not real stuff, but for me it works.

Uh, I have the, the service warranty on there. It covers 'em for a hundred days. Like insurance. I mainly do it, uh, so I don't get, uh, abused by the buyer or the seller later on. John, you didn't tell me there was a leak or you can't see everything. This warranty actually covers a roof leak, so. Hm. They're gonna go out there and, and without any deductible or whatever, they're gonna fix that re they're gonna repair that part of the roof.

They're not gonna replace the whole roof. But still an awesome program. Not only that covers all your appliances, it covers all your, uh, components, plumbing, hvac, electrical, or whatever. So, and it is, it is been used a few times and people are happy with it. So I like to say I have happy costume. Uh, because, and then you're gonna get a call from, from, from the, [00:16:00] from the warranty company because they're, they might wanna upsell more or whatever, and it's up to the buyer at that point.

But I'm covering you for a hundred days. and, and, and that makes me feel good. And it gives peace of mind to the, uh, buyer or the seller. So,

Laura Moreno: because of course you only have like a couple of hours, two, three hours to see a house. Like obviously it is a very, it's a very tough job. The job of the home inspector.

You need to analyze a whole body, a whole home in like two, three hours. , you know, and give your a report. And I don't think it's enough time, uh, to, to analyze everything. So you are always a little bit of at risk,

John Leon Gonzalez: right? That's right. That's right. And, and, and I've been up against those things, you know, where, uh, you know that you got so much time, you know, you gotta get out there in two hours.

You try to do the best you can. And, and some things I just put on a report, I couldn't observe it, you know, I furniture or, or some big shelf loaded with items is still blocking the electric. Right. I have to let 'em know on the report I wasn't [00:17:00] able to inspect the, the panel. The problematic ones that I'm looking at usually are, are ZinCo, Federal Pacific.

They're older. Uh, they're older, uh, panels and, and they have, uh, they have uh, tendency to go back. Circuits, find work. They might have aluminum wiring. It was a problem when I did insurance. Insurance, didn't want to really touch that. So you have to go to a high risk place cause the probability. Possibly having a fire or something not working is, is a serious matter.

So, um, but uh, yeah, so I love my business. I love to do it. So I'm also now a, uh, an FHA 2 0 3 K certified consultant for Washington. What is, So that's when, uh, a person's getting a loan and, and, and they need to, instead of having two separate loans, you buy the house and then you want to get another. Uh, for, uh, renovating the house, uh, [00:18:00] the 2 0 3 consultant is there to do it all.

The Aha. A hud, it's a FHA HUD program. It's there to, uh, uh, it's there to, uh, make it all in one in one loan, so a lower payment. So you gotta qualify for this. The house has to be, several things have to be. For you to be, but

Laura Moreno: you are a, you're a home inspector. But were you saying, if I'm an FHA buyer and I'm looking to buy something that needs some work, uh, but it's an FHA loan, then I will get in touch with you and you will tell me what to do.

Is that what it,

John Leon Gonzalez: what it is that usually you wanna find a lender though? That, that's, uh, that's, uh, FHA 2 0 3 K, uh, I think they have to be certified too, or work the programs. Then they call out people like me, uh, as a consultant to go out there and they get the loan. Then I have to go out there several times to do, do estimates maybe, and [00:19:00] to follow up on the work progress, you know, maybe two, three times, you know, Uh, and then the contractor gets his money, uh, a third or whatever the process is, you know, so they can go on to refinish, renovate the project.

So it's got it. But I just got that certification just like a few months ago from another nice source out there. And there were, she was in New York, but she's in Florida now, and I can't think of the name right now. I got so many things happening.

Laura Moreno: But anyway, . Um, a quick, quick question on that, like, um, if you, if you could help us even farther, so for example, what is your biggest piece of the advice you can give to a person trying to buy their first home in Seattle?

John Leon Gonzalez: The biggest advice is just, uh, make sure you, you've got, uh, you got the house that you really want and, uh, whether it's a fixer upper, you're gonna know you're gonna have to do these [00:20:00] items. You don't have to be fixed. But I can tell you right now, there's some people that waive those inspectors. I never recommend that.

Hmm. Um, because, you know, I can come up with, from. It's barely any time that I don't see any problems, whether it's a small problem either way, I'm gonna put it on a sum, you know, Uh, what I find is things that have to be fixed, you know, uh, things that are missing. New houses. Sometimes I'll do those. The builders are working so fast that they finish the house, but you got your, your, you got vents missing in the bathroom and you don't want that stuff to go, especially on your new building material.

Into the attic area, cuz that starts, uh, being a big mess from mold to staining and it's just not going anywhere. It should be going outside. Uh,

Laura Moreno: so you recommended done some inspections both, uh, in new builds and also in like resale both of them. Yeah.

John Leon Gonzalez: Yep. And, and I got one coming up here, uh, which [00:21:00] the first day warranties, you know, uh, uh, homes here have, usually the new homes, they have a.

A one, uh, one year warranty that you can reinspect and follow up to make sure it's still working. You know, cuz sometimes you'll have, uh, you'll have the seating, the, the, the, the drywall screws are coming off, you know, I forgot the term. I've been doing this for so long, I forget the term. And, uh, you, you go in the attic and, and it was never inspected the first time and you, maybe it was, but you'll see missing vents there, you know, that needed to be done.

Properly, you know, it could be a lot of different things. So, uh, I do those also what they call one year warranties on, on, on a new construction, cuz you got on, on construction here. I think there's a, there's a, it used to be seven years, but I think you got a 10 year warranty on the structure itself in Washington state.

Laura Moreno: That's good. That's good. How, what have you seen are the craziest, um, inspections ever? [00:22:00] Like, without any, any, uh, nastiest stuff? .

John Leon Gonzalez: Oh, the craziest inspections, I, I could tell you right now are the ones where, uh, I turn around and, and a crawlspace and I, and I, Whoa, what the heck is that? And there's a, what used to be a cat, it's a skeleton, you know, It's, it's a, it's.

It's a, it's akel skeleton of a, it was a female cat cause the color's pink or whatever. So I, I asked the neighbors out there, Hey, is anybody missing a cat? Yeah. The owner or the neighbor across the street was missing a cat two years ago. And I said, Well, if the crawl space is open, sometimes they're working down there and the cat will sneak in and they'll stay there.

So, but I've seen all kinds of stuff, you know, I've seen, I've seen houses where. Where the, the, the, the garage is shifting downward. It's, it, it's, it's, uh, it's go, it's, what do you call that word? It's . It's, it is going down, sinking. Oh, no. And [00:23:00] I'll, and I'll get that, and it's separating from the house while I get under there and, and, and, and everything is broken up.

So it's a, it's a serious problem. And there's a hill in back of it. Hills are usually not good if you have, And so it was part of that. But what I found out from the city of Des Moines is there was an, actually, an underground creek that was running there. So at that time, at that point, it's, it's, uh, you can't build on it.

You have to wow, have certain things, big time, uh, engineering done to that if you're gonna build a house. So it gets condemn.

Laura Moreno: And John, what have you seen are the biggest, uh, items that you need to fix in a house? So if someone tells us, you know, this is what we need to fix, like, what are the red. The alert items that you need to fix?

John Leon Gonzalez: Yeah. Well, it, it could be anything. I mean, like, again, it could be, uh, from an appliance not working, uh, end of expectancy on the, on, on, on the water tank, but the bigger items could be, the whole roof [00:24:00] is, it's at the end of his life right now. It needs to be, it needs to be, uh, re-roofed, uh, structural problems.

Sometimes I'll see that, you know, Where you have, uh, water damage and, and it's tearing up the siding or whatever. So everything could be, there could be different things. Sometimes I have a combination of all these things happening on a fixer op, you know, And, and the people know that they're buying, cuz I do in specials for investors too.

And, uh, they know what they, they have an idea how much money they have to spend on this, uh, but they wanna know how much it's gonna cost, how much they need to put out, if they're gonna. So, but it could be a number of items. It could be something as simple as an appliance going out, you know, not working the gas, you know, stoves, the gas furnaces, you know, uh, fireplaces, uh uh, it could be a whole, selling is the word I was thinking about a minute ago, but sometimes I see settle.[00:25:00]

Severe and the ground's breaking up, you know, uh, that needs, uh, that needs to be called a foundation specialist. And I have names for all those, uh, people that I use, that I, that I, that I send out to tell the buyer to get three, these three quotes, you know, three uh, quotes. So they don't just sell on one name that I give them.

Uh, and I do that if, if some of those things are needed so they, they can get the, the best possible price.

Laura Moreno: So that's really great. That's like going above and beyond because usually would, you would just like, um, say you need, you need an structural engineer and go and figure to the buyer, but on, on top of that, you're like, No, let me, I have some people, let me get in touch with them and give you some quotes.

That's actually really, really nice.

John Leon Gonzalez: Yeah. And structural engineers, architects, you know, I use 'em both. Foundation specialists, they knew their stuff, you know, con. A lot of 'em know their stuff, so it doesn't have to be necessarily a structural engineer, but I'll use them also. And there's [00:26:00] been some people that I've done some houses with that I've been with another geologist thought there wasn't, this was on Merc Island, thought that there was not a, a crawlspace in the house.

I said, There must be cuz I see the heater ducts right there. Or the, the heater, uh, the registers right there for the heat, so it's gotta. Uh, crawl space zone. Uh, but this house had a bigger problem. It was right at the end of a green on top of Mercer Island, uh, which is a nice little community. Uh, and it was actually the, if I remember right, it was separating the, it was by like an inch horizontally, and that's a big problem.

So, uh, because of the ravine, I think what. Was the big deck that was outside with big, in this case, they're not just columns or poses or kons, you know, big that go in the ground, maybe, I don't know, 20, 30 feet. So, um, [00:27:00] those that needed to be rectified and, well, the geologists didn't think there was a crawlspace, but I found there was, and, and I could see the problem a lot was not only the, the house was at a, at, at a little bit of a hill, but behind it, the ravine was all.

And it was pretty scary. And I thought, Wow. But it was there for 55 years. I think it's still there. The man that bought it, you know, realized there was gonna be $40,000 of work having to be done there. So, but what, what I saw in the crawlspace was big roots of trees that were cracking a lot of the foundation areas.

So I put that on the report just so he gets a, a good idea of what's happening with the s. So, yeah, you hear about structures falling off or cliffs or whatever and, and you know, I love to have a house on a, a cliff, but not in Seattle, you know, unless it's concrete or, or slab. I wouldn't mind that. But, uh, you wanna be careful where your house is [00:28:00] and, and, uh, but with engineering, the, the nice things about engineering is all that can be rectified too.

So, yeah. So it just depends on where you.

Where are you?

Laura Moreno: Yeah, no, sorry about that. Um, that's okay. So the last question they had was, as a first I home bi as, um, first I home buyer. What have you seen are the top mistakes that they make and how can they fix them?

John Leon Gonzalez: Hello,

Let's, [00:29:00] All right,

Laura Moreno: don't you, us sofa, help me nopa. Don't me.

John Leon Gonzalez: I'm here. Hi,

Laura Moreno: I, Oh, I, What's going on? Yes. Okay. I can hear you now. Can you hear me? Yes. Oh, it was frozen for a second. I don't know what happened now. I was trying to talk and then it was frozen, but we good because we had a, I can edit this out, so don't worry. . So I would say John, um, what have you seen are the top mistakes that first time home buyers make and how can they fix them?

John Leon Gonzalez: Uh, when, when I see a house, sometimes I see a house that's been maybe done different times at different intervals. Like a 50 year old house maybe had three or four different owners, and I'll see an addition here of a bedroom, a garage van converted into a, [00:30:00] uh, a living area. , but the permits are not there.

So at that point then I, I, I put on a report, if it looks really bad, I'll put on a report, Hey, this should be looked at by a further, uh, specialized professional, like an electrician. If, if there's no, uh, extra circuit there, uh, if they're using that, it is a bedroom or whatever. Uh, it just depends. So, uh, and then I see people doing, Different additions throughout the house and they're sitting on, on, on blocks, you know, and it looks like a porch.

It's a bedroom, but it's sitting on concrete pyramid posts or, or, or pyramid blocks that are usually for decks. That's too much weight for a, for a bigger structure. So I know they didn't get a permit there. Uh, but I call all these problems out as I see [00:31:00] 'em, uh, cuz you wanna make. You're buying a house in its best, in its best quality possible because, and if it's not, I'm still gonna report on it and do the best I can to, to make sure that it's, it's known person's gonna buy this house knowing that those, those, uh, things are, are happening and they're gonna be able to fix 'em later on or at the time or before.

Uh, but, uh, there are things that I'm looking for that are problematic areas of.

Laura Moreno: Does it happen a lot with, uh, no permits? Like people doing works without the

John Leon Gonzalez: permits? No, It, it does, it doesn't, and sometimes it's so professional that, you know, there's probably professionals that did it, you know, but I, I see 'em from time to day.

I'm not, not looking for permits, you know, but if it looks nasty, it's homegrown. Like it's, its, it's somebody that, uh, I've seen good quality handyman do good jobs, uh, and they'll do it with permits or without permits, and I see the bad stuff. , [00:32:00] literally the homeowner that didn't have, shouldn't have been there doing any kind of modification or remodeling.

So it just depends. Oh,

Laura Moreno: quick question for you. So, um, how was your first time home buying experience? I mean, when you bought your first home, did you have a home inspector? Were you nervous? I mean, how was that process for you? Yes, .

John Leon Gonzalez: Yeah, I could tell you right now, I bought the house that I'm at, right. I took care of mom.

It was a duplex. I made it to one house after she passed, but, uh, the inspector probably paid, I understand he's still around, but, uh, this is 26, 27 years ago. He probably spent no more than 30 minutes here. And I didn't realize, cause I was busy working my insurance company. There was a lot of problems with this house.

And, uh, I didn't know at one time I had a septic tank. Uh, and. It's still there, but it was never decommissioned, but I fixed that. Um, [00:33:00] the other thing is, uh, the flashing, what I told you about, uh, the flashing, I didn't pay attention. And all these coop, all this caulking on the window, it's an older, this is an older home, structurally a sound, but it had single paint windows and water was actually going through, uh, of a pipe that actually existed at one time.

And it did a lot of, So my brother being a contractor, I had, I had him do the, uh, front wall, the south wall, redo it, and brand, it's brand new. But that was the inspector's problem. That first inspector that took a look at my house. And, and that's why I like to say that I do my job good. I'm not flying by this house just to make the real estate agent happy.

The loan processor or, or the buyer, you know, will regret it later on and I'll regret it. Uh, John, you told me this was okay. You know, so I do my due diligence when it comes to the inspection. So, uh, [00:34:00] yeah, uh, this, this inspector that did my house, I don't know who he is and I don't care to know because he didn't do the right job.

And I'm not trying to be pompous. I just like to do my job as well as I know it.

Laura Moreno: Wow. No, that's, that makes a lot of sense and it's such a shame. I mean, maybe because of that you became a home inspector maybe cuz of that you're like, Exactly. I need to fix.

John Leon Gonzalez: Yep. Yep, yep. Well, a little bit of construction that I have, but a lot of the schooling that I had and then didn't doing insurance, I was working kind of home writing, uh, what do you call that?

Um, uh, doing my own underwriting in a house before they were going to the, to the company because I wanted to make sure the roof, I was gonna get a claim. The loss ratios go against you, and I was pretty good at that. When I sold my book of business, uh, of course the last house when I was selling my book of business burnt down.

It was a rental. And, and I look for this when I do a home inspection. The house, uh, that burnt down was a rental. And, and, [00:35:00] and the dryer bank got full of glint, if you know, Oh. Then boy Scouts used to start a five and it got, they were out of the house and the whole, the whole house burned down because the,

Laura Moreno: because of the dryer.

Because of

John Leon Gonzalez: the lin. The lin, the vent was, It was kink or something, but the link collected in there was total loss. So I make sure I look at that. Also, when I'm looking at your dryers, that the, the, uh, that the vents are nice and open, you know, that you don't have any kinks where you can clog up and you have that disaster happen.

You know, I mean, that measures here. With those little things, little hiders,

Laura Moreno: The lin, I mean, is so small. I mean, it doesn't do, it's going to do any damage. You know, when they tell you, take it off the every time, take it off the dryer and I never do it. I'm going to start doing

John Leon Gonzalez: it now. Yeah. Don't know.

Estimate, estimate of people. They don't, They don't know about it but you, I'll let you know right now, you don't want that stuff clogging your, uh, Your, uh, uh, fence [00:36:00] because that's a fire hazard to be happy.

Laura Moreno: Wow. You always learn something new. I tell you. Well, John, you share with us amazing information today.

What can we do for

John Leon Gonzalez: you? Well, if, if you ever need a pre inspection or an inspection, let me know. I'm available. You know, every day is a different day and, and, and my inspections are from one day to the. Right now is a little slow the last couple of weeks, which is nice cuz I'm building a fence outta. At my house and it's taken me this time.

I did a fence 20 years ago, a picket fence, and I had to tear it down cuz I got Siberian Husky. Now that, to jump over that this time I'm making it more of a tres so it doesn't go too . So ,

Laura Moreno: is it, is it a little bit slower because of the market? Is there less people buying homes today? Yeah. Seattle.

John Leon Gonzalez: The market.

But you know what, Yeah, it's because of the market in general. That's all over the states. But, uh, I'm always optimistic and it's gonna get better and it will, cuz I've been through this, you know, 20 years ago the rates were high [00:37:00] as far as home buying, it was 15, 18%. You know, I remember that. Of course, that's, that's, uh, the same thing we're having right now.

So, but I'm optimistic that things are gonna get better, so I have no problem. I keep busy with all the other inspections or the safety inspections of the all inspections. They're constant for me. So, and, and again, the va, uh, W D I R inspections that I need to do from time to time.

Laura Moreno: That's really cool. Well, how can we, how can we get in touch with you, with you, John?

What's your

John Leon Gonzalez: number? Email, Well, going directly, I, I, if you're out of, if you're out of the state and coming in, I got a toll free number two. That's 8 6 6 24 7 365. Anyway, that's, that's the toll free number. My other number, uh, my cell phone option number is (206) 999-1234. You also see it on my website, uh, and you can text me there also.

Um, my [00:38:00] website is www dot home and inspectors, uh, and then my email. How Hi, at home inspect Ws. I also speak Spanish, so have my client tell, has a lot of it's Spanish speaking, so

Laura Moreno: I

John Leon Gonzalez: like that , somebody that can speak Spanish and relate these problematic. I also accentuate positive in a house, so it's again, uh, people are looking at that house because they.

And usually it's very little that a house, they walk away because it's in terrible shape or whatever. They know they're gonna have to do modifications or whatever. But yeah, I love my business and, and it's great. So. Well,

Laura Moreno: thank you so, so, so much for coming to the first time home by podcast. We really appreciate it.

John Leon Gonzalez: You got it. Thank you very much and you have a great weekend.

Introduction

Bryan Mize is an excellent home inspector and founder of Optimized Inspection Services, a home inspection company in Seattle. He is passionate about sharing his knowledge and helping others to succeed in RE too. When he's not working he loves hiking, motorcycling, and enjoying live music/theatre.

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Transcript

Automatic transcript (sorry for the typos in advance! 😅)

Laura Moreno: First Time Home Buyer Nation, I am Laura Moreno and I am super excited to bring you our fantastic guest today, Bryan Mize

Bryan is a real estate agent and home inspector in Seattle.

He is passionate about sharing his knowledge and helping others succeed in real estate too. When he's not working. He loves hiking, motorcycle cycling, and enjoying life, music and theater. Brian, are you

Bryan Mize: ready to flow? Yes, I am. Let's go. Great.

Laura Moreno: So I've given our community just a little insight. Please share more about you personally and then expand upon your.

Bryan Mize: Yeah, well, um, I, I've grew up the son of a landlord and I personally have invested in real estate for well over 25 years. I'm the father of two kids, and so they've grown up with that as well. Uh, and it's just, if it has to do with real estate, I really thoroughly enjoy it in my. I've been a licensed managing broker for the longest period of time.

I was a loan officer for eight [00:01:00] years. I started a home inspection business. I've subdivided property, I've rehabbed homes. Uh, I just, if it has to do with real estate, I enjoy it. I

Laura Moreno: love that. I mean, you've done everything and you're doing everything. You've been a lender. You are now a home inspector and an agent, so you're like three in one unicorn power.

Bryan Mize: Yeah. Yeah. I, You know, I can't, because of all the multiple licenses necessary, I can't do mortgages anymore, but I can Sure help you figure out whether or not yours is in, cuz I used to do that for a very long time. Absolutely.

Laura Moreno: That's amazing. I mean, first of all, I love that you're a son of a landlord. Um, I, How, how has that benefit you in the, in the past and in your life, like being in the real estate business for so long and your family owning properties for so long?

Bryan Mize: Well, so I, I think it benefited me because of my perspective and my point of view when I was [00:02:00] getting into it. Um, I've always viewed your home as being an. As well. Um, and it's, if you buy it right, it's going to do well by you, and if you buy it wrong, it's gonna put you in the poor house. And so I learned from the mistakes and, and the good choices that my parents made, um, and I learned from that.

So when I did it, I did it differently.

There's really nine different, 90 different ways to do it. So I can't say it's the best way, but it's been good for me. Good

Laura Moreno: for you. I mean, can you share some numbers? How many properties have you bought and sold personally in your life? Like, do you mind sharing that?

Bryan Mize: Uh, I, I don't, I don't know. I don't keep track of the past.

Um, there's so many What I, my cur? Yeah. I, I currently own five properties. I have a fourplex, a duplex, and three houses. Um, [00:03:00] so I, I, I'm control eight rental doors, uh, which isn't bad for a small landlord. Um, I, I got my parents up to 11 properties before they started downsizing for retirement. Um, so within the family business at one point we had over 20 doors that we were managing.

Laura Moreno: Wow. Are you managing them? Were you managing well? Are you now managing them yourself or with someone else? Yes,

Bryan Mize: I manage them myself, which is. I'm a bit of a control freak, so it's not the right thing for everybody to manage your own properties. Um, but if you, if you like to learn the laws and stay up, tore on, on being fair, equitable, and getting all the right paperwork, then it helps you, you know, it, it, it helps me to manage my properties because I, I build relationships with my tenants and I get less turnover.

So it's, it's becomes a win-win. They get a better place to live, They're more [00:04:00] happy, they stay longer. I have less turnover.

Laura Moreno: Wow. That's great. And do you ever get clients from your tenants, like someone saying, Hey, I'm looking to, I'm looking to buy my new home now, and you're like, Oh, I'm your landlord, but I'm also a realtor and a home inspector, and I used to be a lender, so welcome to the cloud.

Bryan Mize: Yeah, . Yeah, it's, it's funny you would think that, but. Uh, half the people in the, in this country don't wanna own a home. They would rather call somebody when something breaks. They don't want to own their own. Uh, but you know, half of 'em do. So, um, some of my tenants have been there 13 years. I, and, and they know, and I have it written into my lease that if they want to, to, if they want to terminate their lease to buy a home, happy to do it.

No problem. Just let me help. Happy to do. Why

Laura Moreno: do you think some people don't want, For the most part? Yeah. Sorry. How do, why do you think some people don't want to buy a home? Because for me [00:05:00] it's like such a, such a good step to take for your financial future. But why do you think some people don't want to own.

Bryan Mize: Yeah. Well, some people don't believe in real estate as an investment. Uh, they're worried about, uh, the maintenance of it, eating them alive. They don't know how to maintain a home. They would rather take that money that they would put into real estate and invest it in the market or something else. Um, and, and other people, they just, they don't want the headache, they don't want the overhead.

So they're happy to pay their rent. Knowing, knowing that if anything goes wrong, if the roof needs replacing, I'm gonna pay for it. They. Right, and I did have to put a roof on one of my houses last year it was $13,000. So that's why, you know, some people don't wanna rent cuz that's, I mean, don't wanna buy because they don't want that expense.

Laura Moreno: That's okay. I mean, everyone is allowed to do whatever they want, you know, No one is forcing anyone to do anything.

Bryan Mize: and I look at it in the same [00:06:00] eyes as you do. That said that real estate is an excellent investment. Any investment requires you to put time, money, and effort into it, right? So whether it's in the stock market, whether it's in your job, whether it's, whether it's classic cars or whatever you wish to invest in, you're going to have to put time and money and effort into it.

So I just choose real estate and that way I could provide a service to people, um, and that helps me out with my investment.

Laura Moreno: So you are in a, actually, in an, an excellent position to, to consider the market from many angles. Uh, what is the market like in Seattle? And as a first, if you were a first time home buyer today, what would you do?

Taking into account that maybe home prices are down, but interest rates are up, no one, there's a lot of uncertainty. What, what would you do as a first time home?

Bryan Mize: Yeah, it's really challenging because home prices aren't down as much as you would think in relation to how high interest rates went so quickly.

[00:07:00] Um, sellers are reluctant to lower their pricing, um, because they think the interest rate fluctuations are temporary, uh, or maybe. They bought too high, uh, which, so prices were spiking when rates were still very low and it was frantic out here. Um, there was a house in my neighborhood right behind me that listed for 710,000 and sold for 950,000.

Uh, and so they're trying to, Again, but they can't. Right. They paid too much money for it with, at this interest rate, it's, it's gonna be back down around seven 50 and so, It's like, it's challenging if you're buying a home right now, although it is more on the buyer's side right now, there is more negotiation taking place there.

If you are more people are doing home inspections and you get to ask the seller for some concessions, um, mostly those concessions would [00:08:00] come in an interest rate buy down, which makes the home more affordable in your payment. , How, how

Laura Moreno: does that work? I mean, an interest rate buy down, because for so many of our listeners, that could be a really good idea, but how do you even ask about that?

Who should ask that? And what, what is the benefit exactly? Oh.

Bryan Mize: Well, you need to have a conversation with your lender to determine if that's even a loan program that they offer. Some banks don't, mostly brokers will be, have access to a program like that. Um, but banks typically do more traditional lending, 30 or fixed adjustable rates, 15 years, those type of things.

But a three to one buy down an interest rate buy down allows you to, in essence, prepay some of the interest to the bank. As part of your closing costs up front, and that lowers your payment for the first year, the second year, and the third year. Right? So the, the payment is lower in the first year. It bumps up a little bit in the second.

It bumps up a little bit more in the third year, and then it [00:09:00] stabilizes in the fourth year. But by making it part of your closing costs, you can get a seller to pay that. You can get seller concessions to pay your closing costs to the seller, it's the same thing as taking a lower. Because they're spending the money, but to the buyer, it's a more affordable payment.

So in this market, sellers already want too much. You have to convince them it's not gonna sell for that money because it won't, it, it typically won't sell for that money. And then you have to negotiate that, that reduction in price, but use it as a buy down in your mortgage. There's a lot like creative ways to finance.

Yeah. Yeah.

Laura Moreno: And I wanted to go, No, I'm talking about creative ways of financing out of doing many things. I mean, you are the first professional that I interviewed that is both a real estate agent and a home inspector, and that you pro can provide both services. And even before starting the, to record the podcast, we were talking a little bit about that, but I, I want to know the.[00:10:00]

potential conflicts of interest, which you told me there's not many, and also the advantages of working with someone

Bryan Mize: like you. So, From the real estate perspective, if you're working with me as your buyer's agent, when we're touring homes and you're looking at the house and the finishes and the neighborhood and the location, while you're getting excited about the property, I'm looking at it skeptically because that's just how I'm trained.

That's how I look at houses. So I'll be telling you by the time we leave there, before we've ever written an offer, I'll be telling you the major things that I've noticed and and so that you've got a concept of what this home might cost you over the ownership period. Because it's just like with a car.

You gotta, the, the purchase price is not the only thing you pay for the car. There's maintenance and different makes and models have different maintenance schedules and they have different costs of maintenance. The true ownership cost of a home is more than just what you pay for it. It's what is it going to take in order to make it last [00:11:00] and be a good home and, and sometimes that's improvements other.

It's deferred maintenance. You need to know what you're looking at because there might be some big checks up front. So as your real estate broker, I'm ideally suited and specifically trained and very experienced in seeing every home through that critical lens. So before we ever get to the point of writing an offer, you've got an a general idea of what we're gonna find.

Plus there's different time periods, have different types of construction techniques and materials. The age of the home and what, what materials were used in its construction holds a lot of secrets as well, and I can tell you about those as we're going through it too. So all of that becomes part of the negotiation before we ever even write the offer.

Having that knowledge and then we can use it in presenting the offer in discussions with the seller, and then also do a real full inspection. Make sure that we get into the parts that we didn't see, because when we're walking through looking at houses, we don't go into the attic. We don't [00:12:00] go into the crawlspace.

We don't, we don't go poking around in the insulation to determine what the plumbing is or pull the cover off the electrical panel. We do those things. During the home inspection process.

Laura Moreno: I, I love that because you have such a great advantage ever against anyone else that is looking at the house. Well, first of all, while everyone is getting excited about the house and looking at the beautiful finishes, you are there, like inspecting and looking , I can imagine looking behind the, the frames.

Yeah. Is there any hole in the wall? . And the other thing is, So many people are sending offers, um, and then they have to do the home inspection. And in the home inspection, they might find things that are really big while if you already go with them and you can see those things before, before even getting to the whole contract and the whole, um, inspection period, uh, you, you give them such a big advantage.

Bryan Mize: Yeah. And, and it's better too because they go into the offer knowing some of the things they're [00:13:00] likely to find on inspection. So there's, there's not that disappointment. If you do find it, you're like, Oh, okay, we kind of expected that. We knew that that might be there. Right. Instead of writing the offer, getting all excited that your offer got accepted and then you find out that, oh, there's asbestos here, or failed LP siding, or, you know, things that could be very expensive.

If, you know when you write your offer that you might have some expensive issues and you know that going into the inspection, then when it does turn up, you're like, Okay, it's just more information and we can deal with that

Laura Moreno: and let's talk about that information because you were saying, uh, it's never a good idea to buy real estate without consider.

All of the information available to you? What do you mean by that?

Bryan Mize: Well, so I, I

Laura Moreno: consider myself, Do you have also any inspector, do you also have any example that will, um, any example that will illustrate that?

Bryan Mize: Well, yeah. Uh, it's, I consider my role as a home inspector to be like CSI for houses. [00:14:00] Right. So we determine whether or not the house has been abused or taken care of.

Did it grow up in a rough neighborhood or was it nurtured, right? How many additions has it had and were they done professionally? Things of that nature. So that's what I mean by knowing all of the information. How many owners has it had in its lifetime? We can, as a real estate broker, I can dig that out.

What did, what did the tax records say at square footage was five years ago versus what its square footage is today? If the tax records are showing a difference in square footage, then the listing, then that usually means the addition wasn't permitted. The the city doesn't know about. or they would be charging you for that extra square footage.

So there's just all kinds of red flags that need that, that aren't visible to everyone that you know. You don't want showing up after you buy the house. You want to know it in as part of the process of purchasing the [00:15:00] home. Oh my God, we

Laura Moreno: love working with you. We love to be just going through a house and you bring up your magnifier and you're the like checking everything out and they're like, Oh, it's so beautiful, this mirror.

And you're like, Sure, sure, sure Laura, but let me check these things out. I mean, you bring such a great advantage for home buyers. It's like you guys look at the beautiful staff. I'm going to try to find everything that is wrong. Do you, do you mind killing the deal if, if you find something that is not good?

Like, because yeah, so many agents really depend on that commission check and they are scared of killing the deal. But I can imagine you're like, Yeah, okay, let's go to another one. .

Bryan Mize: Yeah. I, I, I, of course I don't do it for free, so the, the, the commission is how I get paid, but it's gotta be the right house or I don't.

I don't want the commission. I don't wanna put people into a home that's going to hurt them and harm them. And that's different for everybody. That's not my decision. I don't kill deals. The clients decide whether or [00:16:00] not it's okay for them once they have all the information, right? So people ask me all the time, Hey, would you buy this house?

And I'm like, That's an unfair question because I buy crappy houses. I fix 'em. , do you know how to fix up a house? It doesn't matter whether or not I would buy it, right? And then there's sometimes where I'm like, Yeah, there's nothing here that would stop me from buying this house. I'll buy it. If you don't buy it, I will.

I've actually said that to people because some houses are just in such great shape. and it's, it's just a good location, solid house that if they don't want it, I'll buy it. But they have first choice cuz they're my client . But I like to collect houses. So, you know,

Laura Moreno: they, they, Has it ever happened to you or they were like, No, no, you can go ahead

Yeah,

Bryan Mize: that, that, that did happen once. It was about 17 years ago. They're like, Yeah, we're gonna pass out and it's just not the one we want. And I'm like, Okay, great. And I went and I bought the. , [00:17:00]

Laura Moreno: Did they get any bad feeling about that? I don't think so. I mean, if they did, if they didn't want it, No,

Bryan Mize: no, no. They bought a different house.

Yeah, absolutely. And, and that's what the house will speak to you, right? So as the client, as the buyer, the right house will speak to you. But as we all know, sometimes they don't say everything. It's my job to make sure that you hear everything in the conversation when the house is speaking to you, so you don't get blinded by, by like a flip house.

Right. The, the ones that look all very shiny and new, but they didn't really do it right. Right. You've seen the, the HGTV shows where they flip this house and often. , they're just putting lipstick on a pig. They're not fixing what's broken underneath. They're just making it real pretty houses like that. I, I wanna protect you from that.

That's, that's, I love picking those

Laura Moreno: apart. I, I actually love those stories and I actually, it's interested in that. You have to be very careful about those [00:18:00] houses that looked really good and that have been fixed because sometimes people avoid spending all the costs or they are just, uh, fixing them and they are doing it themselves.

Or you have to be very, very careful. .

Bryan Mize: Yeah. The, the, I often run into, uh, DIY repairs, do it yourself repairs. And I'm just like, What were they thinking? ? So sometimes Hmm. Sometimes they weren't thinking, they thought they knew what they were doing, but they really didn't.

Laura Moreno: Yeah, totally. So one thing you were say is one of your most impressive accomplishments is on a regular basis you help buyers avoid properties that will cause them a lot of distress.

Do you have any example of.

Bryan Mize: Yeah. And, and it goes back to what I was just saying with the flippers uncovering the hidden, the hidden. and defects in a home. Um, and it's true too also that stagers will strategically place things to make you think that there are features in the home that [00:19:00] aren't there. Like, uh, Like what?

Like they'll, they'll plug in, Well, they'll plug, they'll put a bed against the wall and they'll plug in lamps behind it. But the lamps are not connected. They're connected to an extension cord. There's no outlet back there, . But they want you. I think there's an outlet back there. Or they'll hang the big picture over the fireplace and, and they're hiding all the damage in the wall from the previous television installation, things like that.

Uh, but then there's also, you know, You get up into places as an inspector, you get up into places that people don't look at until inspection time, like the attic or the crawlspace. And you can find mold issues. You can find rat and rodent issues. You can find insulation problems or plumbing leaks, and it's just, you know, things that people aren't prepared for.

Uh, a a lot of, a lot of people don't really know how a house operates. They don't know how to fix it, especially if you're in a field that has nothing to do with construction. Like, say you write software for a [00:20:00] living Mo, a lot of, we have a lot of those clients out here in the northwest that, that they write software and they don't know a thing about houses, so they can't fix it themselves.

They're gonna have to pay somebody. And that's the distress I try to save people from. Right. If they can't work, if you're not, can't work on it yourself, then that's gonna be an expensive house. And if you're prepared for that and you want, you're okay with that, that's fine. But I want, But you tell them, but I want you to know.

Yeah.

Laura Moreno: Wow, that's, uh, that's, uh, tell me. That's really, really awesome. But tell me more about the reputation in the industry because, uh, from by the way you speak, I, I completely understand that you're an excellent realtor, an excellent inspector, and you tell things, clients how, how they are, you know, you tell everything to the face.

But, um, I've also heard that it's very important to have a great repetition with. Realtors and other lenders in the market. So tell me more about your reputation. Like how are you considered in the market?

Bryan Mize: Oh, well, [00:21:00] um, I'm, I'm actually a, a 10 time winner of the Five Star Service Award for Real Estate .

Laura Moreno: Wait, what?

You just didn't make that?

Bryan Mize: No. No, it, it, it's, it's, it's one of those, there's a, there's a rating agency that's national that goes into major metropolitan areas and they, they conduct phone interviews with people and they, they, they select about it. I think it's about 2% of, of agents in each market that, that fall into this five star category.

Um, I, I've won it 10 times, so I ,

Laura Moreno: and if you're, if you're not watching this interview, his face is like the most innocent face in the world. It's like, I just won it 10 times. You know, .

Bryan Mize: Well, I, I, I never asked for it. I don't know who nominated me. I don't know how I got in there, but, Yeah, that they, I keep, I keep, they keep, they go out and they do, [00:22:00] they do polls and I keep winning.

So I guess I've got a pretty good reputation. Um, it's a lot. So to you it's a, it's a. Lot easier for me to track my home inspector reputation because people do go online and they leave reviews for me. Cuz that's more of a transactional service. And I've got a lot of reviews on Zillow too, for past clients, for, for real estate.

Um, so yeah, if you, I just, I, I average about 4.9 stars, so

Laura Moreno: I'm That's awesome. That's, that's awesome. Now, uh, let's go into our lighting round where we, where I'm going to ask you a series of short questions to help our clients even farther. Okay. Sure. Sure. Let's

Bryan Mize: let us go.

Laura Moreno: Okay, let's do it. What is your biggest piece of advice you can give to someone trying to buy their first home in Seattle now?

Bryan Mize: Uh, don't get sticker shock mar, mar markets fluctuate. Uh, but the, the values will go up and down. It's, it's outside your [00:23:00] control. You're already spending a housing expense, so just don't over buy. Right? Don't stretch yourself too thin. Uh, that, that would be my biggest advice.

Laura Moreno: Have you seen what it takes to get anyone?

Have you seen anyone ever stretching themselves? I mean, have you suffered that yourself or like anyone that you know?

Bryan Mize: Oh, okay. Well that's, that's kind of a personal question, but I'm happy to answer that. Uh, yeah. When the market turned in 2008, I owned seven properties. Um, and all of my income was in real estate and all of my assets were in real estate and everything went.

My income went down, my assets went down. They changed all the lending programs and it was a very tumultuous time for everybody. I, uh, I came, I came out of it still hanging onto three houses, but it took me fighting for four years to hang onto those three. Um, and that, that's, and they were just single family homes.[00:24:00]

And since then, that's when I've had, I've increased my portfolio, but, uh, Good for you. I mean, yeah. If, if it, it. We don't know what the future is going to hold. Right. I don't see, I don't see a housing bubble like we had in 2008. Back then, I was, I was a lender, I was a real estate broker and a mortgage broker.

I hadn't started the home inspection business yet, and I could, I, I didn't see it coming on the mortgage side of things, but that's because I was, In it and everything seemed normal. Now that I'm not in the lending side of things, they've tightened that up a bunch, but they're still, they're still doing some of the things that led up to that, just not as bad.

So I don't, I don't see that happening again in real estate. I do see that that might happen in like, uh, business lending right now. There's a, there's a, a bubble growing in business lending and auto lending, things of that nature, but not in real estate lending. So, But, but everything [00:25:00] has a ripple effect.

And with the interest rates spiking, it's, it is making a little more challenging. And, and people get, people get a fomo, a fear of missing out, which makes them want to, you know, just go that extra mile. Well, you just gotta be cautious of that. And make sure that, make sure that you're still going within your means.

Laura Moreno: Hmm. Have you ever told anyone, Hey, I think you're getting over overly excited and you may get yourself into trouble. Like, you know, I know what you mean with this, like beating wars. Uh, you get so excited. I'm passionate that buyers may lose their logic and become more emotional than logical and getting to trouble.

Have you ever played that role of calming someone down and being their logical. .

Bryan Mize: Well, so my, my role. My role as a real estate broker is not to, to tell people whether or not it's a good idea, but what I do is I remind people of, of what they told me of why they're doing it. [00:26:00] So I remind people and keep them because what people will, they'll settle.

They'll start getting frustrated and they'll be like, Oh, well I can't do this, so I'm gonna go a little bit more. I'm gonna go a little bit more. And then I'm like, Now remember you said this is why you were doing it and this is what, you know. So I remind, try to try to help keep them grounded in what they were saying was their motivation in the first place.

And, and, but, but at the end of the day, if somebody wants to make a decision, uh, I can't stop them. I'm not going to, I.

Laura Moreno: Yeah. Totally. Totally. Yeah. Uh, and the last question for you is, what have you seen are the top mistakes that home buyers make and how can they avoid them? And I suppose this could be the same, , any other mistakes that you see people make?

Bryan Mize: Well, it's around here. Over the last couple of years, the top mistake was. That people didn't get their inspections. They were waving, inspection, they were waving this money. Um, I, I had a lot of people calling me up saying, Hey, [00:27:00] um, I close on Tuesday. Can you come on Wednesday and tell me what I bought? And it wasn't always good news, right?

I just didn't

Laura Moreno: up like the craziest call ever. Like, isn't that like the, like what are you talking about? Like, come on. No. Like, isn't that like, Yeah. What if I have to tell you about news? ,

Bryan Mize: but, but that's what it was taking for people to get homes during that, that crazy time. Um, they would had to not have a home inspection.

So I was to, I, I have a service where I offer a pre-offer consultation where I'll walk through the home with you for an hour and cover all the, all the big ticket items, right? The roof, the attic, the crawl space, the electrical, the plumbing, all that stuff. Tell you what I'm saying before you ever write the offer.

So there those are available. You just have to find the time to do it and make sure you get that information before you write the offer. Um, so, but

Laura Moreno: yeah, the biggest, But what happened with some of those calls [00:28:00] then? You went after the after the deal had closed and what, what do you say? I mean, do you go with a straight face?

Like whatever you, But I cannot do anything about it, like,

Bryan Mize: Yeah. Well, no, I, I, again, my job is just for information, so it's like, okay, here's what you have. This is, there's no such thing as good news or bad news. It's just news. And once you have the news, then create a plan on how you're gonna deal with it.

But yeah, there's, there's, there's people who bought in June and then December comes around and their basement's flooding, and there was that. They didn't know. Whereas there's always symptoms. That's the number one thing we look for here in the northwest. The number one thing we look for is water moisture.

It's because that's the biggest enemy for our homes. Um, there's always, always symptoms.

Laura Moreno: Wow. I mean, wow. I'm very happy that the market is changing because now, you know, home buyers [00:29:00] can get their, That's the thing is like you'd, if you buy your home and you don't do a good job and you end up in debt and you end up with a flooded basement and no savings in your account because you just put a home, you are in the hole, I mean, mm-hmm.

you are not going. Hopefully you don't lose your house and you're going to think it very, very well before buying a new home. Or you know, it's like this is not a positive experience for you. Now, you may not want to do it again. You may tell your children not to do it again, like your first time home buying experience has to be really, really good.

What would you suggest is the best way to have a good home buying experience?

Bryan Mize: Realistic expectations. Um, so education up front knowing, you know, having the conversation with a professional who's been through it multiple times too, right? So, friends, family, your real estate broker have these conversations up front of like, Okay, these are my goals, these are my dreams, this is what I wanna do.

What do you think? What am I not [00:30:00] thinking of? Right? Because first time home buyers, sometimes they don't know the questions. They don't know which questions to ask. So to ask the question that says, Hey, what am I not thinking of? What, what? What can you tell me that I haven't brought up? Right? That's always a good question for a first time home buyer to ask somebody experiences.

It's also really important to find out when, when you're interviewing agents, because you should just like you interview anybody, you would interview a doctor, a lawyer, or an auto mechanic. You interview anybody. You should be interviewing your agents, and you should be finding out what their history is.

How long have they been in business? How many transactions have they done? Do they own their own home? You would be shocked to find out how many real estate brokers don't even own a home. They don't own their own home. Now wait a minute. How many, if you do own a home, how many homes do you own? How long have you had home?

Right? Go ahead and ask these questions. You're going to be spending a lot of time with this individual handling the [00:31:00] single largest transaction of most people's lives. It's gonna get personal. Just start out getting personal. Ask them. It's gonna get personal.

Laura Moreno: Going back to not owning a home, I know there's many people say that they don't mind if their agent doesn't own a home, but I always.

They have to own a home, they have to have gone through the process, through the motions. Mm-hmm. , no, I did very, very well. And ideally they have bought a few homes. They have investment properties, so they are not really depending on your commission to make a living. You know, they have more flexibility, more breathing room to make sure they give you like a, a good advice, good thoughtful advice.

Someone like you, and that's someone like you.

Bryan Mize: and, And actually that's exactly why I started the home inspection business because back when I was losing everything, the people were still buying and selling homes. Just nobody I knew. And I could, I couldn't do mortgages, I couldn't do real estate. So I was like, Well, how do [00:32:00] I get involved in the rest of the transaction?

Right? How do I get involved in that? And prior to 2010 in Washington State, there was no licensing law for home inspectors. Anyone could be one. And so I didn't want to become a home inspector cuz there was a lot of idiots out there being home inspectors. And it didn't have such a great, it didn't have a real great reputation.

Too much competition. When they passed the law, only 400 people who were calling themselves home inspectors actually got license. And I says, Okay.

I can go do that. I'm licensed number seven of the year to pass the law. Yeah.

Laura Moreno: Nice, Nice. Awesome. Well, Brian, you've shared with us amazing information today. What can we do for you?

Bryan Mize: I. Well, uh, just take, take some of this knowledge. I, I just hope that your, your listeners in, in any area of the country, take this knowledge and interview , interview your [00:33:00] agents, make sure you're getting some that can provide you more than just one side of the transaction, right?

More than just writing a contract, let them give you some advice. Just, just take the advice. The questions and get somebody to help you because if you do it right, it'll take care of you the rest of your life and on into your retirement. But if you do it wrong, it can be a really tough road to hope.

Laura Moreno: I agree.

And how can we get in touch with you?

Bryan Mize: Well, I mean, uh, if you're gonna put my name there, uh, on the, on the podcast, just google my name cuz I'm all over the internet. I've got, there's, you know, I've got over 500 reviews on Google and I'm everywhere. Uh, but you can also call me at my phone number two zero six three four nine.

Zero, seven, three, three. You can call or text anytime. I'm happy to answer questions when I'm available. I answer the phone always, unless I'm in front of a customer [00:34:00] or in a crawlspace.

Laura Moreno: Awesome. And by the way, thinking about going to crawling space, I just don't know how you guys do it is in my nightmares, like finding the snakes, the spiders, I don't even know what's in a crawl space.

It's like freaky. Yeah. How do you do it? You have a peel, You have some shot before getting into a crawl.

Bryan Mize: Uh, I wear my personal protective gear. I've got a full body suit. I look like I'm in breaking the bed. I've got a face mask or respirator. Yeah, I've got, I'm covered up when I go down there. But yeah, I've seen some really ugly, nasty ones.

And then, then I've also seen some really nice clean ones. So you just, you don't know until you go. It's a lot source scopes. I don't. Yeah. Yeah. But I'm, I'm telling you, you gotta check it out. You gotta go. Uh, same thing with sewer scopes. You don't know until you put a camera down there. People are like, Well, the house is new.

I don't need a sewer scope. But there have been problems found in brand new sewers. Like they didn't connect them right. Or the pipes [00:35:00] crushed. You know, you just, you don't know until you look at it.

Laura Moreno: You just need to have a great home inspection. Just have a great agent, great lender, great home inspector, and everything would be.

You can breathe. Yeah, you can sleep at night.

Bryan Mize: Well, Brian, it does matter that the team you put around you does matter. Yeah, it

Laura Moreno: does. Well, Brian, thank you so, so, so much for being the first time home by a podcast.

Bryan Mize: Well, thank you for having me. Take care.

Introduction

Chris Sayre is a Mortgage Lender in Kirkland, WA. He's always had the heart to help others and Mortgages are just an extension of his desire to make a difference. When he's not working, he enjoys spending time with his family at their cabin in Eastern, WA.

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Transcription

Laura Moreno: [00:00:00] First Time Home Buyer Nation I am Laura Moreno and I am super excited to bring you our fantastic guest today, Chris Sayer. Chris Sayer is a mortgage lender in Kirkland, Washington. He has always had the heart to help others, and mortgages are just an extension of his desire to make a difference when he's not working.

He enjoys spending time with his family and dog AB there cabin in Washington. Chris, are you ready to flow?

Chris Sayre: Let's do it. I'm happy to do it. Yes.

Laura Moreno: Great. So I've given our community just a little insight. Please share more about you personally and then expand upon your business,

Chris Sayre: you know, um, I, you know, I have a big extended family.

Um, you know, my wife and I have five kids and she came from eight kids, and those eight kids all have five plus kids, so it's a big extended family. Um, my mother and father-in-law were just, they're from Belarus and they're just the most beautiful people, you know, that salt to the earth kind of folks.

They both passed away this past year. [00:01:00] So, you know, I think you're learn in life. You know, you really. What matters, what is, what really matters. And I have, you know, such a heart for people and such a heart to help out. And, you know, it's one of the reasons why I wanted to come on your show is because it's, it's where my desire is.

You know, I, I have it at heart to, to give. And I think doing mortgages is my way of, of trying to give back. Yeah.

Laura Moreno: Wow. Tell me, tell me more about that desire to help others, because you were telling me you participate in so many programs that really help others. They help the community, they help veterans.

Where does that come from? I mean, how did, how did it all get started?

Chris Sayre: I, I think it's an awesome question. I would say it really just got started, you know, as you live life, you know, you'll learn that, um, it's not very fulfilling if you're just living for yourself. Uh, I think that my goal for myself and for my wife is to do as much as we can to help others.

Um, you know, we don't make a dollar to keep a dollar, have a dollar more in the bank. We make a dollar to share it with [00:02:00] others. I think if you're blessed, you're supposed to bless others. So we, we look at the world this way and we're. One heart, one mind for this. And I think some of my most joyful times in my life are when we've helped other folks out.

Um, so I mean, just personally. And then honestly, when, uh, I've done a mortgage, uh, for somebody, I, I have such beautiful and kind clients. I don't know. I just, you know, I feel really blessed in that respect too. People calling me up years later, you know, asking me for help or, you know, all of my reviews on Zillow are all five stars and, you know, like they're, you know, they just are great people and it fills my heart to help.

Laura Moreno: Wow, that's, um, I don't know. Beautiful. Yeah, no, it's so, it's such an order to have guests like you that are with heart of giving, giving to others, you know, not only taking, or not only like is a, is a paycheck, it's a commission, whatever it is. It's more like giving, empowering others to buy homes. Like, do you remember one of those stories that really move.

Chris Sayre: Um, you know, honestly, [00:03:00] I, I probably would have, you know, quite a few, you know, you know, I've had people, you know, that I've helped out that, you know, they have families like ours or, uh, large families. Uh, usually, uh, it's people. Since I live in the Seattle era, we have people from so many different cultures over here, and oftentimes these other cultures they believe in, um, like having parents come live with them and helping out.

And, you know, you know, for me, my stories would. You know, uh, people trying to get into their first home, I can think of this one couple in particular. And they were trying to also do it so they could bring their parents over from overseas to live with them and, you know, Yeah, it's not, Sometimes it's not always easy.

Sometimes it is. But I remember this particular case, you know, there was a little challenge getting 'em approved. Uh, we ended up doing it, and when we closed it was just, it was such an important moment for them to, to be able to get this home because it wasn't just for them. It was to be able to bring their family over and for them, even if they would've lived here and rented, they.

Just fine, but [00:04:00] it would've been this emptiness that they had because with a home, like a home is for family, right? So you can't, it's hard to rent and bring people over and have it feel the same when it's your place, your yard, your, your home, everything is that. And so, uh, they were able to bring their parents over and they were just so excited and so happy.

And so for me, honestly, it just that that's kind of what you do this for you. Like I said, to bless people and I was so thrilled and so happy for them. And this is a normal thing. This isn't just like one time occurrence. This happens on a regular basis that people out there are trying to help family out and they really need a home because their family is kind of too tight in the space they're in.

I

Laura Moreno: love that so much and I see it all the time actually. I am an, I am an immigrant and I work very often with immigrants and, and I see it all the time. We immigrants want to help others bring others to the country. And even with your own savings, I mean, I see it even with my nanny. She's amazing. I have a one year old and she's always giving back to her community.

She's always bringing people over, always [00:05:00] lending them the money, always empowering, empowering them to live a good life. And it blows my mind how much generosity, generosity she's putting out there. It's. Really mind blowing and you remind me of her. It's, it's so beautiful. It's really beautiful to see

Chris Sayre: Well, you know, my, my wife and her whole family are immigrants also, so it's probably another reason why I have this heart for people who come from other countries. Cuz my wife came here, no English, no money, you know, And from that they just worked. You know, that's all they knew. Uh, just hard work and on top of being smart, of course, and just being, you know, really great people.

And I saw them come from zero to, not that they have a lot, but they have a home. Right. And that, that was the goal. And, um, and it inspires me. Uh, uh, to have family like that and, you know, I was born in this country, so for me, I feel, you know, very fortunate and I want to do all I can to help other people who come over here and need help [00:06:00] and, and do my part and do what I can.

So

Laura Moreno: tell me more about House for Heroes and how do you help that community of veterans? And tell me more about that. Um, uh, that part of your business.

Chris Sayre: Yeah, so there's a, uh, organization called Homeless for Heroes that came outta really the 9 1 1, uh, time frame. Um, but you know, it, it certainly, uh, helps, you know, military active reserves, veterans, uh, firefighters, ems, uh, law enforcement, healthcare professionals and teachers.

So basically anybody who's helping the local. You know, and they want to give back to them. So this program is just designed so it it with us in particular, uh, you know, like we waive our, our lender fee when we work with them, the real estate agents that work with them that are part of this program, they give part of their commission back.

Mm. So I personally, uh, recently talked with, uh, a really terrific realtor who, um, Uh, uh, uh, is part of this program and she had this awesome line and she said, You know, can you imagine being one of these [00:07:00] tiros and you just move into a house and the first piece of mail you get is a check from the Homes for Heroes program.

and, you know, so for her it just thrilled her to know when to do that. And it's, and it's not just a small check, It can be thousands of dollars that these people get. The first piece of mail they get is a check from the Homes for Heroes Program. So I think it's, for me, again, uh, I, I was super excited to be a part of it and I'm, I'm, I'm happy to be able to help people that are serving our local communities.

Laura Moreno: Wow. Yeah, totally. I, I, I love that so much. So, um, tell me more about where you are now, the market, What are you seeing in, in Seattle? In Washington area? Yeah,

Chris Sayre: Yeah, it's a, another good question. So, I, I, I would say that right now what we see is, is, um, you know, prices dipping just a little bit. So kind of our expectation right now, uh, in this area at least, is that you're, See, as we head into this recession, we're gonna see some pressure for money to no longer go into the stock market, but instead that money's gonna go [00:08:00] into bonds, which is gonna push rates down.

So anyway, big picture is we see rates coming down somewhere in the next six, 12 months, something like that. So anybody that has a loan right now, they're gonna be refinancing out of it. So the main thing is, so our line we're using is marry the home date, the rate, right? Because what's gonna happen is that you're only gonna do it short term.

Our expectations, you may see rates drop as much as 2%, maybe even a little bit more, and you'll be refinancing out of it. So the the good, it's actually, even though rates are a little higher right now, it's a perfect time to buy. It's a perfect time to buy because values are down and there's less competition.

If you wait until a little bit later on when rates are lower, then what's gonna happen is values are gonna be going up and there's gonna be more competition. So it's much better to buy right now while the values are down and you can refinance out of it a little bit later. And so that's what we've been telling all of our clients and all of the realtors that we work with, is that this right now is a perfect storm, perfect time to purchase a home, knowing that you're not gonna have that loan very long.

Laura Moreno: Got it. A [00:09:00] and that's a great line. I love this. Um, marry the house. Date, date rate, marry the house. . Yep.

Chris Sayre: That's a, that's a marry the house date, the rate that's right. . The only

Laura Moreno: thing sometimes people think about is like, well, but getting that mortgage is costing me money, refinancing is going to cost me money.

And, and to that, I will say that when we refinance our home here, we bought it at 4% interest rate, which was good. We refinanced at 3.2 and within a few months we had already paid. Fee that the cost to refinance. So, So it makes total sense. And I love that the values are a little bit down because that's what we wanna first ask first, First time home buyers.

Yep. Do you see sellers making more concessions as well, like being able to pay, like give us some help to first and home

Chris Sayre: buyers? Absolutely. Positive. Yeah. You are. Again, spot on. The answer is absolutely yes. I, I think sellers are also, they don't want to be sitting on the market for an extended period of time, cuz if they are, that means their price is probably gonna be coming down or they'll have to take the home off the market.

Got it. So the many, many transactions where [00:10:00] sellers now are, are offering incentives to the buyers. Could be a builder, it could be just an individual, you know, like you and me, who are maybe trying to sell a home that are doing what they can to help buyers, uh, purchase a home by giving them some type of credit.

We see this on almost in every loan right now.

Laura Moreno: Yeah. And we love that. So if you're a first time home buyer and you're, listen, Just get in touch with Chris. You know, get pre-approved and go start, start shopping for homes because values are down. Don't be as scared about that interest rate because you can refinance and like someone told me, Chris Buffet is like buying now the most of, he is fortunate.

He's making it right now because he's buying low and then's, right? You will sell high. So just getting that home. So Chris, tell me about your first time home buying experience. How was it? How were you feeling? And what did I do to your life to own a. .

Chris Sayre: Yeah. So , back when I bought my home, I remember that my rate was 10 and a quarter.

That was the going market rate. I hope you refinanced that. I felt . [00:11:00] I did. I did. But it was funny is I thought I was so smart and so slick because I talked 'em down from 10.375 to 10.25, you know? So I thought, wow, I did such a good job, you know? Cause I knew nothing about nothing. But you know, that's what rates were when I bought my house.

And then when I got into the business rates were actually at 7%. So they were still like right where they are right now. But I, you know, I felt, you know, thrilled. You know, I bought my house at a great price. Um, I think back then I bought it for like $134,000 and, you know, that house right now was probably gone up by six times.

So I, again, I would say real estate's a great investment and, and just, you know, when I had bought my house, it was expense. So it wasn't like it was a deal. Um, so the market continues to do that. So all we have to do is like, look at our grocery store and say like, what was the price I milk before? And what is an hour?

What's the price of gas? And what's the price Now prices go up. So whatever you buy at, you know, my wife has a great line about this. Stretch yourself. Stretch yourself because that value is gonna increase and you're [00:12:00] gonna be happy that you did. So as best you can, stretch yourself. Doesn't mean like put yourself in risk, but don't be afraid if a house is, you know, let's say 300.

Don't be afraid to go to three 10. Don't be afraid. Afraid to go to three 15. You know, get, get the better home for you and your family. Get what you really want. Get what you are really gonna, you know, be happy with. And it's better to go a little bit above than to suffer yourself, because in the long run, your income and everything else will catch up and pass it up and it'll be an easy payment for you.

Laura Moreno: It, It's so interesting you mention, I mean, we bought four or five years ago and, and the, the mortgage rate was a stretch. We were like, this is a little bit too much. Like, yes, we can pay for it, but you know, it's a stretch. And now with this crisis, I mean, rent prices have gone to the roof where we live.

Yeah. And we are both so happy because her rent. 30% less than the, the rent price in this area. And we're like, Thank God we bought, because everyone else that we know is trying to struggle getting rent in a [00:13:00] nice place. So buy if you can, It's, it's, as you were saying, you may have struggled for a little bit, but it's going to be so much better for you and.

And talking about communities and immigrants. I think it's so, so important to empower people that may not have their first language be English, or maybe the first generation buyers, because those are the ones that need it the most. Like what you were saying, you need that home. You want to bring people over.

You need to create that space. Ethnic cultural space. Yeah. Like at my home, we speak Spanish like you . Mm-hmm. . You need to create that space. And if you are always, um, thinking that your rent is always going to be there, you know, you, you, you will have to move, uh, at some point and find a new place. Yeah. Yeah.

Yeah. So,

Chris Sayre: yeah. I, Can I give you a quick example of something, if you don't mind? Mm-hmm. , of course. So we have, again, I told you, five kids. So we helped, uh, three of our sons purchase a home, uh, one on his own and the other two together. And, you [00:14:00] know, they were all really scared and nervous because the payment was like $3,500 a month for the, you know, principal interest, taxes, and insurance.

It was, And they never had such a bill. And so they, they've been out in their house for about a. And now they have friends who are looking to rent. So the friends rent for a two bedroom place in near their work is 3,800 a month. So kind of to your point, you know, rents are escalating. I mean, I've never in my life paid $3,800 for rent.

But now they see that that rental payment that their friends are paying is more than their mortgage payment on their home. And they actually have.

Laura Moreno: Yes, for sure. And if they want, they can rent their rooms out to their. Yep. Be like, Don't worry, I'll be a good friend.

Chris Sayre: They're doing that actually already, so you'd say, You're right.

Laura Moreno: That's good. Pay my mortgage. I mean, just people, if you're listening to us, jump on the side of the ownership because it is not, it is not going to get easier. [00:15:00] You know, it's just not going to get easier. And I feel like more and more corporations are going to be owning properties, and it's the time for you to become your, the protector of your money, you know, your own landlord instead of paying someone else's mortgage.

So now let's go, let's, let's, um, go to our lighting round, which is, I'm going to ask you a series of short questions to help our audience even further are. ,

Chris Sayre: I'll do my best. ? Yes,

Laura Moreno: I may. Great. , please share with us your biggest piece of advice you can give to TR to someone trying to buy a home in Washington now.

Chris Sayre: Uh, so the biggest piece of advice I would say is, uh, get in front of somebody. Could be myself, could be anybody that you think is appropriate for you, but get in front of somebody who can help you determine how much you can qualify for. And if you can't qualify, what steps do you need to take? So what I would normally wanna do is I would wanna look at somebody's income.

I wanna look at their assets, and I wanna look at their credit. And I wanna, cuz usually people wanna know, like, I make money, I have no idea [00:16:00] what I can afford. I have some money for a down payment, or maybe I can get a gift. What can I afford? So they need to know what they can afford. And then normally what I would recommend is if they're within 90 days of trying to purchase a home that they need to have all of their information given to an underwriters, we can get them underwritten ahead of time so that they literally are gonna be, you know, final loan approved before they ever find a house.

So I would recommend get good information. Up front when you're within 90 days of trying to buy a home. If you're beyond that, then I think just giving a, a phone call or meeting with somebody like myself so we could just pencil out kind of a plan and then they could work towards that plan of hopefully getting home ownership.

That's

Laura Moreno: great. And two questions out of that. The first one is, uh, commenting on getting that, sorry. Coming, getting that, uh, pre, not, it's not even a pre-approval, it's going farther away. One step farther, Right.

Chris Sayre: Yeah, so, So the ones that, Yeah, go ahead. What are the

Laura Moreno: advantages of doing that?

Chris Sayre: Yeah, so, [00:17:00] so a pre-approval, I can literally do the same day.

So I can send somebody a link, I can fill out an online application, I can ask them to send me some income and asset information, and I can send them a letter. and the letter's gonna say, Hey, you're preapproved for this amount, and it's gonna be a perfectly valid letter. It's what we do in our industry.

The next level above that is for an underwriter to physically review all of the information. And so what we can do is we actually can collect all the documentation, give it to an underwriter, and it probably takes, I don't know, 5, 6, 7 business days for the underwriter cuz the underwriter may have additional questions once you give inform.

But then it's gonna be all signed off, final loan approved. All you need to do is find a house. So the difference is now you can, now you can close like literally in 12 days or 13 days, you know, um, on, on your mortgage, and hopefully by closing quicker like that, it makes it so, if there is competition, if there are other buyers who are trying to purchase a home, the fact that you can, you're [00:18:00] already.

Done. You're already, your loan's already underwritten completely and you can close really quick, push you in a better position to actually get the home. So I would highly encourage taking that step. I think it's just a much, much stronger position to be in when you're negotiating with a seller.

Laura Moreno: And that's interesting because not all lenders do that from the beginning, right?

Like you are one of the very few lenders that will. ,

Chris Sayre: you're a hundred percent correct. Yeah, most lenders do the pre-approval, which again, like I said, it's, it's, it's a, it's perfectly fine to do that. But the next level above that is what I'm talking about. And you're correct, uh, almost nobody does that. Got it.

Laura Moreno: And. How will you find a great lender? So if you are not in your area, in Seattle, listen is looking for a great lender. First of all, is it number one, to find a lender or find an agent? And second question is like, how will you decide on which lender to choose? Because sometimes we try to call and say, Hey, what's your rate for today?

And we try to choose the lowest rate lender. But is that the right? To do that.

Chris Sayre: [00:19:00] Yeah. So I, you know, again, of course rates are important. I care about rates for, for myself and my family, but it, it's, it's not the right way to do it. Um, it's not the right way because loans are much more than, you know, just quoting a rate over the phone.

Rates are determined by people's circumstances. By, what's your down payment? What type of property are you buying? What's your credit score? And ultimately, you want the home. And like I said before, whatever home you purchase, you're not gonna have that loan very long. There's usually not a big disparity on rates, but I would be more concerned about having it be a stress fee, stress-free, low drama transaction.

Then having a rate that's an A through a quarter point difference. You know, the main thing is to get the home. Then your family can kind of breathe aside, relief, move into the home, and then you can regroup and when it's appropriate you can look it to refinance. Got it. So I apologize. I know you asked another question, was another question I could answer for you.

Laura Moreno: I think that was the main one. So the main one was, No, those were the two of [00:20:00] them. And the other question I have is like, so in order to find a lender, oh, you know, we have all these online lenders and we have also like, um, local lenders and those online lenders like better.com, Rocket Mortgage. I don't want to give out many names because Yeah.

Well I don't want to give names, but, um, they count with a, Exposure online. Yeah. So we Google, I want to do a preapproval, and within one minute you have a preapproval from that bank online. Mm-hmm. . I mean, what are your thoughts about them? How do you differentiate and what is actually the best for first time home buyers?

An online lender or a local lender?

Chris Sayre: Uh, you know, I'm a, I think it really just goes by experience. So if, if I were looking for a lender, I probably would go online to like Zillow. Redfin and they have, you'll see reviews for people. So it's like when we go to our restaurant and we tend to go to our restaurant that has good reviews, or if we're gonna stay at a hotel on vacation, we look up to see what the reviews are.

I probably would look at reviews for people, [00:21:00] you know, because I think I, I like knowing that other people, uh, have kind of, um, Yeah, you have given good opinions about something and it, it makes me feel a little bit more comfortable. And of course, a referral is always the best. So if you have somebody that you know, that you respect and you admire that has a home and they use somebody, I probably would ask them, you know, because I think referral probably is my number one way.

And then probably online would be my second way to. Reviews online for people. Like for me, you type in my name and read my reviews, right? So you can do that. But you know, I think either one of those two ways reviews online or a referral from somebody you trust and know. and

Laura Moreno: between having a local lender and a, or an online lender that could be not in the same town, what, what are your Cho mm-hmm.

your, your, what are your options? What would you say?

Chris Sayre: Um, um, I'm, I'm not so sure that, cuz we're a virtual world right now. I mean, I'm in Seattle and I think, Are you in New York? Cuz I, Yeah. Yeah. We're. We're like the other side of the world, but [00:22:00] it's like, you know, we're right with each other. I don't think it really matters.

Like I can do a Zoom call with anybody. Uh, anybody else could do the same thing. I think it's more this, this trust factor, this integrity factor that we're talking about. I think that's what really matters. Local or far away? You know, I, I haven't really sat with a client and almost three years. Um, I do everything online so they could.

Somewhere else, like in any state where they could be, you know, my neighbor next door and I still don't see them, you know, because we do calls like this. So I, I think that it's the person and the company and the integrity of the individual that matters more than their location.

Laura Moreno: What, what is the process with you?

Like, if I'm interested in buying a home in Seattle and I'm looking to get a mortgage, uh mm-hmm. , what is the process, uh, specifically for you? Like, what would you tell me? .

Chris Sayre: Yeah. So normally what we would do is we do a call like this out there on my cell phone, or we would do a Zoom call. Okay. And [00:23:00] before I do anything, I try to, I'm a big picture kind of person, so at first I just wanna understand what they're thinking, you know?

So I don't know if they're looking to buy like an. 12 months or two days. Um, so then I, I tried to understand, uh, their timing on things, um, their income. They're asked all of these things and kind of review and kind of talk us through and come up with a plan. And I, I normally say the same line that I said earlier is that I think once they're within a 90 day window, That's when it's time to start pulling credit and do things like that when they think that within 90 days of point or purchasing a home.

But if they're just trying to understand, Cause a lot of people just wanna know, like, I just don't get it. Like, I don't understand, you know, what can I even afford? What should I even do? So that's where I just, I just give them some counsel and I, and I basically will email them. You know, like my contact information, I'll send them a list of what we're gonna need, um, when they're ready.

So like, people have to gather things cuz we'd all all have pay stubs and W2 s maybe that are, you know, easy access so they can start gathering that together. And then I coach most, so like, don't make big purchases, you [00:24:00] know, don't make sure you're not late on anything. Don't co-sign for anybody else.

Don't move money around between accounts and make, you'll make it more difficult on yourself later on. So what I try to do is to guide them to kind of put the brakes on everything. Let's get this plan for you to purchase a home and make sure now you start doing things the way a lender's gonna review things to make it so it's simpler and easier for you once it's time.

Laura Moreno: And what have you seen? The last question, I think it's a little bit related to this. What have you seen are the biggest, biggest mistakes that home buyers make and how can they avoid them? .

Chris Sayre: Yeah. So some of the, the biggest mistakes they make is when they're trying to prepare to purchase a home, a lot of times they will close an account cause outta a windy debt, right?

They're afraid of it. But the way credit works is that if, let's assume you have like an account at a bank and that it's a credit card and that credit card you've had forever, but you really don't use anymore. The truth is that credit card, because it's your oldest liability, actually improves your credit score the most.

And when you cancel that [00:25:00] card, you run the risk of your score dropping like a rock. So I would say . So normally my normal line is. Stop, freeze. Don't do anything. Talk to somebody, get some advice. Let them coach you what to do and then do it. But, you know, sometimes people come to you and they've already kind of done all of this and you just, it is, it's what it is and you just deal with it.

Um, but I, you know, we try to tell them, don't move money around in accounts. Let it be, you know, don't make any large deposits, don't make any large purchases, Don't do anything like that. Get the house first, then do the other stuff. So I think some of the mistakes I, I've seen, like I said, are, are, are this where they cancel accounts or move money around too?

A chin, you know, don't change jobs in the middle of a loan or when you're trying to buy a home. You know, things that you would think that everybody understands, but they don't really, cuz it's not what they do for a living. You don't

Laura Moreno: really, I mean, it's so funny because you, we don't know, we don't live in, I mean, I live in this world, but usually home buyers, we don't live in this, We don't know that we kind of go and buy furniture before closing on credit or open Macy's credit card.

Just, we don't know about that. It's like, it's very, And that's the [00:26:00] other thing is like what you were saying, Closing an account because you want to make your accounts clean, you want to make them look nice for the lender, and suddenly your score drops like 50 points. Yeah. And you're like, What happened?

It's so counterintuitive. .

Chris Sayre: Yep. Yeah. Honestly, completely. Right. Uh, people tend to go to Home Depot, you know, and they buy a bunch of stuff, you know, because they're planning for their home. Like this is a really common thing. So we, I try to upfront to tell them, like I said, just before you do, Just give me a call and then I'll let you know.

Kind of my advice would be to wait or to go ahead to go forward with it. You know, I've told people to hold up on my own cars or furniture, you know, because there's a, somebody's offering zero down on a car or zero down on furniture, and, you know, if they really wanna buy it, then we'll just deal with it.

But if not better to wait.

Laura Moreno: Better to just wait to buy the big things. Well, Chris, you've shared with us amazing information today. Uh, what can we do?

Chris Sayre: Um, you know, I would love to help more people, you know, that's what I do for a living. [00:27:00] So I would love for anybody that has questions. I'm always happy to ask questions.

It's not always just about business, you know, of course I do this for, to help my family and to help other folks out, but you know, I, I know that if you do it right in life, good things happen. So if people wanted to reach out to me, they're welcome to do that. If I can help them with a mortgage, I would love to do that.

Laura Moreno: That's beautiful. And how can we get in touch with,

Chris Sayre: Uh, my cell phone I've had forever. I have a son who's learned my phone number since he was two. Um, but my number is 4 2 5 4 4 4 7 3 7 3, so 4, 2, 5. Beautiful. 4 4 4 7 3 7 3.

Laura Moreno: Yeah. Well, Chris, thank you so, so, so much for sharing your mission and your attitude to life and your well good faith and thank you so much for being on the first time Home Buyer Podcast.

You are.

Chris Sayre: Oh, Laura, thank you. You're just a beautiful person. I really appreciate it. Thank you.