Real Estate Happy Hour Show - Episode 42
Watch the Real Estate Happy Hour Show - Episode 42
A New Year is Here and so is The Real Estate Happy Hour Show - 2019 Edition! On today’s show Collier Swecker and David Arnette are going to be talking about the Difference between getting Pre-Qualified for a Mortgage and Pre-Approved for a Mortgage, The Importance if Keeping Your Termite Bonds Up to Date and 5 Reasons That You Should Not Sell Your Home By Owner. Plus the guys give their final College Football Pick of the Season! Join us every Thursday at 4pm for the live show on Facebook Live or watch or listen to the Real Estate Happy Hour on replay or podcast.
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Collier: All right! It’s 4 o’clock on Thursday! It’s time for the Real Estate Happy Hour!
David: Everybody loves this, you know what? It’s 2019, happy new year!
Collier: Happy New Year! A little party in the USA!
David: It is a party in the USA!
Collier: It’s always a party on the Happy Hour!
David: And I didn’t even know it!
Collier: And in fact, guess what we brought back?
David: Today we’ve got a little, a little second sell from Atlanta Tropical, Guava sour citrusy refresh, tropical, tropical Guava sour huh?
Collier: I mean sounds like you let my 9-year-old pick out the flavor.
David: I know!
Collier: Sour! Everything’s sour now, even beer you know?
David: Well I let Miley pick it out.
Collier: Hum! Nothing like a good sour beer right? From Atlanta, you said right?
David: Yeah, pretty good.
Collier: A little, little, hey good stuff right?
David: It’s pretty good and I tell ya it’s one of the leftovers from.
David: From the last couple of weeks going to Piggly Wiggly, I’m telling ya Piggly Wiggly is stocked!
Collier: Hey it is! Piggly Wiggly’s making you know, they’re big downtown I know and.
David: Well we’ve got one.
Collier: what? Mountainburg was this?
David: Right there next to Mount Laurel off of area, off of Highway 41.
David: And they have a lot of crafted beers now, they have, they’ve always had a bunch, a huge selection and I’m thinking it’s amazing that they’re so many crafted beer companies and how are they all making this much money.
David: Is the economy doing that well?
Collier: I think they’re hoping.
David: Is there so much beer?
Collier: I think they’re hoping.
David: It’s crazy.
Collier: You know I read that article in the Wall Street Journal a few weeks ago, talking about the crafted beer and they’re saying we’re hitting a plateau, where some are gonna make it and some aren’t and that’s why they were saying by Annheiser Bush stock because.
Collier: If this market turns real bad, people love to drink when they’re sad.
Collier: And they go cheap.
David: And a lot of stuff looking at you know, research for the show today right before we came on.
Collier: Oh yeah.
David: A lot of people talking about recession looking at Apple’s numbers today, the market’s taking, taking a dip definitely.
Collier: It took a bath, it didn’t take a dip!
David: Yeah, it took, it took a bath so.
Collier: Apple did!
David: So one thing that’s gonna be cut out in a slow economy is gonna be craft beer huh?
Collier: Well craft beer, I mean nothing Tropical guava sour but yeah and you know, it’s kinda like ice cream, ice cream will do well by stocking brewsters if they sell it, I don’t think they’re gonna do that it’ll probably help but anyway let’s hey, we’re gonna have some good stuff on the show today aren’t we?
David: Look as a happy new year, so this is our second year!
Collier: Second year!
Collier: The Happy Hour!
David: We started last year, I mean it doesn’t take much to you know first show into the new year you’re.
Collier: Two years!
David: Yeah established 2018.
Collier: Yeah well hey, woo! We’re a big deal.
David: A long time ago.
Collier: Big deal!
David: Long time ago, today we’ve got, we’re gonna talk about rates, we’ve got a difference in pre-clause versus pre-approval.
Collier: That’s right.
David: Five reasons you should not sell your home by owner, that’s a big deal so.
Collier: There’s a lot of reasons but we narrowed down to five!
David: Five! (in unison with Collier), a lot of good information.
David: Then we’re gonna hit on some stocks, we’ve got one more college football game left so let’s do it!
Collier: Hey, I think you know where I’m headed on that pick but we’ll leave at that, with Alabama and Clemson but hey, let me tell you this how was your new year’s? Good?
David: Oh very good, very uneventful, probably in bed by 9 pm, so
pretty boring so.
David: I apologize if that’s not exciting, but whatever.
Collier: Well, we had a, we had an adventuresome, we had a great time with some friend’s house and just had a fantastic time doing that, and then got home that night and that leads us to our next subject what happened that night? You know, I’m one of these people that I, when I’m bored I clean right? And you know with a 9- year-old is so tough to clean when she’s around because it’s like, I’ll put 2 things in and one’s coming right back out.
Collier: And I was cleaning after we got home from our friend’s house at midnight, 1 o’clock somewhere around that range and I started noticing on the wall of our basement, I said you know there’s something wrong with that sheet rock, so I played with it a little bit and I looked down and sure enough I found what appeared to be termite dust or the shavings of termite, so of course by the time my wife wakes up the next morning I have taken all the sheet rock down on one whole wall myself removed it, ain’t that crazy? I mean pretty
good huh? It’s easy to remove
David: Yeah, it’s easy to take down.
Collier: So anyway so, take all this sheet rock down, I look down there and you know apparently the person before me, there was an act of termites by any means but they just covered up the problem and never fixed it right?
David: Right, right.
Collier: So now I’m fixing it, so if you’re my future buyer and you’re watching this house.
David: Then, then.
Collier: I might be taking these out.
David: So you can, and then you can say that’s crazy!
Collier: But, but the key there was, I started thinking how is my termite bond? ‘Cause we’re so used to being on autopilot with everything.
Collier: That we switch that center comm system and did I, when I switched to the center comm system, did I get an auto payment or did I not? I’m telling you, there’s no worst feeling than New year’s day when no one’s open.
David: Yeah and I know it.
Collier: Yep, yeah, but the, the great folks at Knox Pest Control, being in this industry I called the guy at home on New year’s day saying just leave me and my concerns, luckily I had it in there but it was, food for thought I wanna mention today is, this is a great time to go back through all of your, I don’t wanna say subscription based services.
Collier: But renewal based services.
David: Yeah, yeah.
Collier: Make sure they’re in play.
David: Home warranties, termites.
Collier: Absolutely, pest control.
David: Alarm companies.
David: They won’t let you forget right?
Collier: (Laughter), no, no, no.
Collier: ‘Cause that’s not necessary, but the thing is these termites I mean, imagine if the damage had been active and all that.
Collier: Well, I would’ve been out a lot.
Collier: And luckily we weren’t so, we’re gonna be good there but.
David: Well, Donna Gamen happy new year, thank you for tuning in we’re excited about another year of the Real Estate Happy Hour, so next thing up is what? Rates?
Collier: Well we’ve got some rates to talk about, how are we?
David: Man so, we’re, we’re not moving I mean, we’re improving a little bit ok? All of the negativity in the stock market is, is you know, money is gonna lead the stock market going to bonds, just gonna help rates ok? Because the more demand price goes up, the yield is inverse, inversely related.
David: So, the yield is probably gong down.
Collier: The yield spreads right?
David: Ok? So, when you’ve got money pumping in then that means rates are improving, right now you know we’re not much difference over last week, but 4.5 on a 33.9.
Collier: Not bad, a little bit better.
David: Yeah a little bit, so back in the 3’s on a 15-year.
Collier: And I know everybody is watching, but we’re almost a full point from the time you were on the cruise ship.
David: Yeah, yeah, it’s crazy!
Collier: It’s almost 5%.
David: Crazy to think about December ’17 right? We were at 4%, we touched 4.75, we touched 5% last year, now they’re, now we’re about 4 and a half or so and looking at another maybe 5.5 next year?
David: 5.3 or this year I’m sorry, so it’ll be interesting to see how much rates move and hoping they don’t move much, it’s just a lot of talk about the Fed, they’re tightening their policy, what they’re saying are they moving to quick? So, I’m, I’m hoping that’s gonna calm down in the next Fed meeting and we’re gonna you know, live (inaudible), but I’ve been saying that for, for a few weeks.
Collier: Or, or refinance is just completely out of the picture at this point?
David: Refinances are, are you know, they’re (very short pause) not a whole lot of ‘em, let’s say it’s definitely possible to find some benefit on refinance still just depends on your situation, but they’re not nearly as much business.
Collier: You know one thing, that I wanted to ask you in this segment
here is about our good friends over at the you know, the Rocket Ship.
Collier: Up in Detroit, they you know, I had a, I had, a buyer client asked me this week about it and you know, they, they play a lot of marketing games with their product, there’s no question about that. And they have a new product, well they’re advertising that they’re locked in for 90 days!
David: Yes, they will.
Collier: So, talk to us a little bit about that and kinda what the pitfalls are of that.
David: I’m telling you, the devil is always in the details right?
David: Now, this product has been out for about 6 months at least that I know of, and when I first saw it, did some research, did some digging, went online, I answered all the questions till I got to the end and the interest rates were comparable.
Collier: It’s slightly higher though right?
David: Yeah, they were actually.
Collier: That’s how they’re paying for it.
David: The interest rates were a little bit higher, but they had 2 points on some of these programs, they had 3 points on arms, but they had 2 points on a 30 year, so if you’re locking in for 90 days, you’re paying 2 points up front for a rate that’s not that great.
Collier: Oh so, you’re paying 2 points to get the 90 days.
Collier: So, so, I think the big takeaway here is that 90 days is not a free 90 days.
David: Yeah, oh yeah, absolutely! So, the deal is only as much as you know about it.
Collier: So, you break even now on that loan.
David: Well yeah.
Collier: Is it way out there now?
David: It, it depends, but I mean most people don’t assume those fees ok? So, they hear that your, your rates’ locked and your rates’ secure and you’re gonna be fine to go shop for your house, but you don’t know everything that you’re paying for, you don’t know what you’re agreeing to up front.
Collier: You don’t know!
Collier: That’s some shock with them, I know you know, Mark Carlyle just said he expects mortgage assumptions, people assuming other people’s mortgage will become more popular, what is.
Collier: What are your thoughts there? ‘Cause there are, it’s, it’s very limited in what you can do though, you can’t just go into an FHA and assume somebody’s FHA loan.
David: Right, you would have to go in and assume the loan basically, there’s, there are some if anybody doesn’t know, there are some loans that are assumable typically you’re find them on the Government loans, but you’re gonna have to make up the difference between the price you pay and the loan balance.
David: Which is gonna be the tricky part, ‘cause a lot of times these loans are a low down payment.
Collier: Ok yeah, great, right, right.
David: So, if you’re looking at that loan then you actually have a low down payment, now if you’re buying a house is, you gotta make up the difference between that assumable loan and the purchase price
Collier: Oh yeah.
David: That means you’re putting a good bit of money down.
Collier: Right yeah, so, so it will be, it will be in limited situations where, where the spread between, we, we can’t have paid down a lot of equity for that to happen.
David: Right so, if you’re coming into it you not only have the mortgage insurance associated with it, but you also got that larger down payment than you would normally be on a regular FHA loan let’s say, so I would think maybe get a little more popular once the spread gets a little larger, so let’s say once we get up in that 5 and a half, 6, then you would.
Collier: Start seeing it.
David: And then we still got some loans at 4, then maybe it’s a little more popular.
Collier: Right, gotcha, gotcha, all right well.
David: But, but we’ll see.
Collier: Yeah well let’s talk about the difference between a you know, so often you get the pre-approval letter and you get a pre- qualification letter and the words are change you know, changeable in common parlants, but in reality there is a difference that is.
David: Certainly, certainly, there’s a lot of people that have this question on, on are we pre-qualified, are we pre-approved, now free qualification is basically just a phone call, I say free qual’s a phone call right? We’ve got a credit score but we are just talking about, you have given me numbers so, you tell me that you make 70 thousand dollars a year let’s say, you tell that you’ve got you know 20 thousand dollars in a savings account, so I’ve run that through, it all checks out, it all looks good on my end, we’re pre-qualified because I haven’t
looked at your paid stuff.
Collier: It’s the first step.
David: Right but I haven’t verified anything, at a pre-approval that means I’ve verified all right, I’ve looked at the bank statements, there’s no, nothing weird there that we need to dig into and figure out you know, where did this you know 10 thousand dollar cash deposit come from? Or, or your paid stuffs, ok so you actually paid commission.
David: And you’ve only been there for 6 months, ok that’s different, then you may be on schedule to make 70 thousand.
Collier: Oh, 170!
David: But the, the way, the way that you paid could create more questions.
David: So, the pre-approval is after we’ve actually dug in to all those things, we’ve dug into income, we’ve dug into your assets and we verified that information and now we’re pre-approved. Now you know, I’ve been in the business for a long time, so I’ll issue pre-approvals.
Collier: He’s old.
David: On what I see ok? Now, a lot of companies are moving toward, they’ll take the whole file into underwriting and we, we can certainly do that, I don’t employ that very often because I typically just issue an.
Collier: You’ve got some of the best underwriters in the business, that’s for sure.
David: Yeah so, so, we can do that too, we can run the whole file through underwriting before you even write a contract, but so there’s the big difference between pre-qual and pre-approval, pre-qual is more of a, more of a casual conversation.
David: We’re pulling credit, so we know.
Collier: It’s what we’re doing on the weekends right, right?
Collier: You just go ahead and make me look at this person.
David: Oh yeah, that sounds like, that sounds like it’d be fine.
Collier: I can do it!
David: Yeah but then, we dive in, we, we get tax returns, bank statements, paced offs, W2’s, we get everything from you in a blood sample
Collier: Urine sample.
David: First born child, all that stuff and once we have all that, then we can.
David: See if you’re pre-approved.
Collier: What about you know, sellers often wanna have a definitive answer to this and they say, look I’ve never met 1 lender that’s willing to say with a hum, ‘cause we hear sellers say I want a hundred percent certainty that they’re gonna qualify, you can never provide that 100% certainty right?
Collier: Because there’s.
Collier: There’s intervening forces that come into question.
David: Certainly! There’s something that could happen and something.
David: That has happened you know, it, it’s kinda like you know, we have all these documents that we have to sign in and you know, some of ‘em are silly.
David: Was it just that somebody did something stupid one day, and didn’t know we had a form for it but anyway so, there, there could be certainly a perfect situation where the buyer goes and does something silly at the last minute, and now their loan is.
Collier: Right, right, right.
David: Not good enough.
Collier: Well and silly means buying and getting a truck, going to rooms to go and getting you know, here’s one that I saw last year you know, they’ll go to rooms to go and apply for credit, they didn’t buy anything and so, they come to the mortgage loan officer and they say But I didn’t buy anything! But you just blew your ability to buy the house because you now have a line of credit, that’s extended to you.
David: Yes but I would say though that we can, we can all the documents, get it through underwriting and do that whole process.
David: And that’s a little bit more certain, ‘cause an underwriter has looked at it, so that makes people feel a little bit better, we can give a guaranteed pre-approval, where we’ll put our neck out there and say yes, we have had everything looked at certainly.
Collier: And you’ll guarantee the mortgage for 1 year.
David: Yeah now and certainly, there are situations where people can do silly stuff and mess that up, but.
Collier: People doing silly stuff, I don’t see it.
David: For the most part no, but that is really the first step, it’s getting that pre-qualification, getting the pre-approval, before you get out with a real estate agent, looking at houses as doing that whole thing.
Collier: You’re not doing yourself a favor by the way, you, you know, we see a lot of people say I’m just gonna go look and I’ll get with someone when I’m serious, the problem is, you need to make sure you’re with the right lender right? Because if you’re just banking on going to the Rocket Ship mortgage company.
Collier: You’re making a mistake because you haven’t had the opportunity yet, I’m saying even go through the pre-qual with him because guess what’s gonna happen when you do that? Is you’re gonna find, what he talked about is you’ll be finally able to see the fine print and see how bad of a deal it is right? Because if you wait till you’re out of contract and you’re emotionally connected to a house, you’re gonna be in a position where you may make an emotional
David: Yeah and you know speaking of that, and another thing I’ve seen are pre-approval letters that will have the terms and the interest rate, but not the fees associated.
David: So I always thought that was interesting, how can you disclose that I’m approved for this loan without telling me what I’m gonna pay for?
Collier: Well you, it’s the same with car dealers right?
Collier: I mean really but you, you guys the other thing too is that what I love is you’ve never sugarcoated a lot of lenders in the industry, we’ll sugarcoat and low-ball things like taxes and insurance that are different by every property right? So, they’ll just put a Low number on there! So that, when they go comparison shop.
Collier: Guess who’s lower?
David: ‘Cause it affects your, your monthly payment and your closing cost right?
David: It affects your cash and your monthly payment so, If I change the taxes and insurance that makes my payment look lower.
David: Right? So, so this deal’s better.
Collier: Absolutely! It’s so much better!
David: And then I can come back on the backslide and say well those are taxes, we don’t control that, I mean you shop for your insurance and taxes are what they are, I mean I was just estimating, I was just guessing,
Collier: I mean that it goes on all the time.
David: Yeah, it does.
Collier: And it drives me bananas and the good thing with someone like David, is that you’re an engineering minded person and you hate when numbers are off anyway.
David: And I hate the smoke and mirrors, I love auctions, I love.
David: Providing the options, I hate the.
Collier: Oh, you like stock options.
David: Oh yeah.
Collier: Oh, he loves ‘em!
David: But you know, I just love providing people the information, giving ‘em options and you know, not hiding things like how much does this cost or you know, what is, what are the points associated with this interest rate or you know, are my taxes really gonna be a lot more than that?
Collier: Right, right.
David: So, any time anybody’s surprised in the process is not comfortable.
Collier: You know taking about surprises, one thing I wanna bring up in, in, in that area is I don’t know if you knew this but, January 1 st all the hospitals now except Medicare and medicated patients. I believe, have to be transparent on their pricing, so you can shop technically for your gallbladder transplant, I, I, I don’t know now.
David: And who’s gonna do that right?
Collier: No, yeah that, and can you imagine, do you really think that they’re gonna make it easy?
David: Who’s gonna stop and say this is killing me, but let me.
David: Let me shop it.
Collier: I, I’m looking.
David: I’m going shopping.
Collier: And these guys are not gonna make it easy.
Collier: ‘Cause it’s gonna be, well if this, if that.
David: Yeah and seeing that’s in that you know, so they’re gonna put in roadblocks.
Collier: Oh, tote question.
David: To make it more difficult.
Collier: We’re working fine.
David: Yeah, yeah.
Collier: But anyway, moving on! To Five reasons that you should never sell your house by owner! Fisbo as we say, so here’s used the word Fisbo that means for sale by owner.
David: Man and I will tell you just before we get started, you know I have this happen to me every now and then, where they would come to me and say they don’t wanna use real estate agents, so who ends up playing the part of the real estate agent?
David: I do!
Collier: Yeah, you do! We’re the lawyers, you know I talked to Ryan Sparks a local attorney here in Birmingham and you know, one thing he can’t stand is he’s there for settlement purposes only, he’s not getting paid to guide you from start to finish.
Collier: And he’s certainly representing ya.
Collier: Right? We, he, here’s the thing, people forget the enormous amount of money that real estate professionals, y’all have ‘em, we have ‘em, it’s called errors and omissions policies that protect us right? So, that we can work that we’re, we’re willing to take risks so that we can protect you.
David: Because there’s a lot of things in the paperwork, I know we’re gonna get to ‘em, but there’s a lot of details into the process.
David: And every step of the process could get missed and that’s where.
Collier: That’s right.
David: The errors and omissions come in right?
Collier: Right, I mean it’s a.
David: For mistakes and things that are missed.
Collier: So if you’re going to a professional, David does not have a license to practice real estate so, why would you go to him to write your contract?
Collier: And why would you go to me to get your mortgage?
David: That makes sense right?
Collier: I, I approve everybody!
Collier: It’s, it’s all good!
Collier: It’s all Ben’s money!
David: Send it in!
Collier: (Laughter), Yeah that’s right, that’s right anyway, but you know number 1 is exposure to prospective buyers, this is a big one! And it’s bigger than you think, it’s really the, the real estate community at large right?
Collier: And they’re very protective, now I’m not ever gonna go on here and say that, that realtors don’t show Fisbo houses right?
David: But they don’t.
Collier: But they don’t!
David: Look it’s, it’s true, they don’t do it! You are cutting down the number of buyers, the number of eyeballs that are on your property right?
Collier: Absolutely, you certainly are! And, and 95% of all home buyers according to the National Association of Realtors were looking online when they bought a home in 2018.
David: And you know, some people think it might not be fair, you know ‘cause realtors aren’t showing it, but the truth of it is, is you’re trying to avoid paying them the commission to do their job.
Collier: That’s right.
David: To sell the house right?
Collier: And, and to be honest with you, it took for our team who, who, we’re, we’re very well exposed in our area but that didn’t happen overnight.
Collier: I mean you remember when I, I mean I didn’t know anybody!
Collier: And now, it took thousands and thousands of dollars, it took a thousand clients, I mean it took a long time so and that’s what you’re getting, especially if you get a team that’s experienced down the road, you’re getting all the, the, they’ve, they’ve messed, they’ve messed things up and all that in the past.
Collier: They’ve learned from things and you’re getting experience!
Collier: That really does matter! And people say how much does it really matter? Well from a marketing standpoint, it matters greatly because it’s, it’s one thing ok sure you can have showing, but are you showing it to the right people?
David: Well I think, I think the marketing standpoint, I think negotiating wise, I think when you run into a problem.
David: Ok? Whenever you run into a problem you want somebody to help you out, you do not wanna be on your own.
Collier: Well look, going back look what happened with the termite issue right? The relationship that I had within the industry, allowed me to get somebody on the phone on a day, on New Year’s Day that otherwise was not gonna answer their phone.
Collier: It was a relationship driven issue, imagine if I had a real problem right? A good experienced agent will be able to get you.
Collier: Answers on the weekend, I called you one time you weren’t answering your phone, but you answered mine and you’re sitting in Maui with your butt in the sand.
Collier: Right? So it matters, number 2 results come from the Internet you do not, if you’re not in the industry you do not, it is hard enough for us in our business to fight Zillow, Trulia, Realtor.com, all these guys right? A lot of us spends thousands of dollars to establish a presence out there and also hire people like you know, from Mia Tally and Julie that help me stay out there with these listings and not only make sure we’re there, but that we’re in the right place as where buyers are.
David: Yeah and I mean (very short pause), buyers want to do almost everything on the Internet nowadays right? I mean they wanna look, look at the house, they want I mean, if they could walk through it virtually they would, if they can get a touch and feel for the whole space, special range of the whole place they would. So, they do it so much on the Internet your house has to have good representation on the Internet and you know, other agents seeing that out there as well.
Collier: Well you know, it’s kinda like you know, I remember growing up and I hit my head on a dock one time and my uncle said don’t take him to the, to the doctor I’ll stitch it up, I know what I’m doing I did it in Vietnam I got ya! Give me some you know fishing wire and some other stuff, I mean the fact is he could do it!
Collier: There’s no question!
Collier: I don’t.
David: I mean he could do it.
Collier: I don’t want him to do it.
Collier: But the idea is he could do it and maybe it turns out OK.
Collier: But I would’ve saved money.
David: Yeah, you would’ve saved some money but you need (inaudible).
Collier: One thing I thought in here is we see a lot of times, you know these red yard signs that say for sale by owner? That’s all they do.
Collier: Only 7% of homebuyers bought their home from a yard sign.
David: And there will always that one person that says you know what? I could do it on my own, I’ve got traffic on the street.
Collier: You probably can.
David: And that’s true you can, you can.
David: And you’re gonna be in that 7%, congratulations!
Collier: Absolutely, and just pray that it sells right? All right number 3, there too many people to negotiate with.
David: Too many people to negotiate with and anytime that you’ve got a disagreement, it’s gonna be you versus them I mean the real estate agent, yes they are an interested party right?
Collier: But aren’t we all in our jobs?
David: They do this everyday though, you’re negotiating (very short pause) like one of your largest purchases, you’re in love with this thing or you’re selling something that you love right?
Collier: Oh absolutely!
David: So you’ve got these emotional ties to it, the, the real estate agent is not gonna be as emotional and they’re going to be able to negotiate with experience about whatever the problem that you have right?
Collier: Absolutely! So true and you know, just think about you know you’re a home seller and you’re selling it, the buyer is gonna be, buyers are crazy all right? I’m crazy as a buyer because I want, want, want, want, want right?
David: Yeah you wanna a deal.
Collier: That’s a normal deal of a buyer.
David: You want every repair fixed.
Collier: I want everything!
David: You want allowances for the carpet.
Collier: Everything! And there need to be a buffer gap in there and quite frankly, I need it, you need it, we all need it when we’re buying.
Collier: I need somebody to tell me the truth.
David: Can I get the lawn mower?
Collier: Can I have the lawn mower.
David: All of it!
Collier: Have, can I have the TV?
David: That’s staying right?
Collier: Look, what about the home inspection? What drives me nuts with realtors though too, and this and I’m about to tell you is don’t get, a lot of these realtors will hand him a list as home inspections go, pick one they’re all good! Now that’s not true, it couldn’t be numbers wise right? But I, I, I think we hire realtors to narrow it down and say who served us well?
Collier: Right? And that’s, if your realtor’s not willing to do it you have the wrong one because they have relationships again, and look you might say hey he has a relationship business wise, but that’s how business is done! Right?
David: Yep and so, and so what happens with that home inspection report, the buyer’s gonna take it, they’re gonna see all the stuff, they’re gonna ask for the world, if they have an agent to represent ‘em right? They can probably pick and choose what is smart to ask for, what is recommended and then as the seller they’re coming at you with all these requests.
David: Where as your real estate agent can step in and negotiate with the other realtor and say hey, here’s, here’s what really needs to be done, these are big items.
Collier: We can show empathy where you can’t because you’re too emotionally involved.
Collier: I need to be able to hear that person.
David: Let’s, let’s do these things and let’s you know, leave these things alone and, and get the deal done right?
Collier: Hey you know, I’m always say you’re going back to relationships matter with, when you hire a professional is that you know, we’ve had a, I’ve always had since we’ve been in real estate for nearly 12 years now, a I guess is 12 yeah, is you would, if you ever screw my client over I promise you will never. Now, David’s been with me since the very beginning and the main reason is, on top of being really great at his job, the reason he’s still here is he hasn’t played the monkey games to screw a client over and it, and, and that just doesn’t happen ‘cause a lot of people would just take the money, you and I know that.
Collier: You’ve had opportunities to get into relationships with people that pay a lot of money, it’s not worth it because what matters is the fact is that I can trust that person, to get the deal across the finish line in an, an ethical manner.
David: Yeah and you wanna take care people, you don’t wanna take advantage of people, you wanna make sure that they’re getting the best deal so, so you gotta remember that even though you know the real estate agent you know, people have this perception they are doing their job, but they’re also really trying to take care of you and help you and manage this purchase.
Collier: Why wouldn’t they? Why wouldn’t they right?
David: And if you don’t feel like they are, then you probably have the wrong person.
Collier: (Laughter), yeah well, the number of, of Fisbo folks has dropped from 19 to 7% over the last 20 years, now that leads us to the number 4 area, which is Fisboing has become more and more difficult, which we don’t have to labor on this point but it’s everything we just talked about, it’s So much more paperwork.
David: Yeah I mean, it is a lot of paperwork, I mean just going to the contract alone it, it’s a lot of stuff to read, a lot of stuff that you may not understand just reading the contract.
Collier: Have you broken, have you broken federal law? You have a little house in Homewood and you’ve not issued the lead base paint addendum, by the way when you don’t have it signed on a house built before 1978, you’re violating the law.
Collier: Right? And I, I think it’s a little silly the, the whole lead base painting.
Collier: But it doesn’t, it’s still breaking the Law and now you’re not going to prison but.
David: Well I think yeah, I think, I think everything we talked about is n that point. Number 5 is a big one for me, the people think that they ere gonna make more money not using an agent. They you know hat, they’re gonna make more money selling it by their selves and he funny thing is, 9 times out of 10 the buyer that sees that for saleby owner sign on the yard, they wanna a deal too.
David: So, buyer and seller can’t both get the deal.
Collier: Ha! No, no, that’s the problem, buy, sellers go ahead and price the discount into it and then buyers go I want more.
David: Yeah, I want the discount too.
Collier: Absolutely and then you know, one of the biggest stories you can take home from all this and I don’t know the exact website so forsalebyowner.com, one of the big force of ownership, New York city couldn’t sell this place, went for sale by owner for a year and a half right? And lo and behold, he finally gives in, gets with the realtor and sells it for like I don’t know the number, like 5 hundred thousand now we’re in a different market by the way, that’s like 20 thousand here, but 5 hundred thousand more than he was getting, think because even though it’s unethical and stuff for people to blacklist listings. The reality is if you’re not enticed as much, they’re just not gonna go, now we took a different approach for that growth in building our business, that we would embrace these people because guess what? As you saw 7%, only 7% were on Fisbo and most of those, a lot of those don’t even sell so, I wanna be there when they decide to list.
David: They decide to list (in unison with Collier), yeah.
Collier: And who, let me just say this, anybody is nuts if they don’t wanna save money, if your realtor can’t show their value or their agent can’t show their value, don’t use ‘em! Right? But that’ll show value! They can’t just go out there and they need to be, I don’t know consulting with you, being an advisor to you in the process.
Collier: Which you’re really good at!
David: They need to be helping you with, with the transaction, they need to be helping you understand the contract, helping you understand the home inspection, helping you understand the mortgage process even the seller I mean, you don’t understand why the mortgage takes so long, the appraisal part of it, when that comes back or you know, if their lender required repairs I mean. There’s just so many things that you know, again there could be plenty of deals that go that.
Collier: There are so many that!
David: You sell on your own and, and don’t have a hitch but.
Collier: Well, you talked about the lender required repairs, what happens when that happens? Guess what happens? Many, I’ve had many a Fisbo call me (laughter), and go hey man I know we didn’t use ya, but the appraiser’s saying that they won’t appraise , can you get me some cops? Right?
David: We’ve got one right now.
Collier: That’s rude!
David: In the office, no agents involved and we’re having trouble with the value and so, who’s gonna step in?
Collier: Yeah Mr. Arnett good to see ya.
David: Yes sir!
Collier: He’s the old man.
David: There he is, hey buddy! So, I think, I think that’s, that’s great information definitely things to think about when, when you’re selling a home and you’re trying to do it on your own, it’s, it’s difficult, so moving on!
David: We’ve got the.
Collier: The fun stuff.
David: Is the stock market and I tell you what, so 2019 we havestarted off roughly about 23 thousand.
David: I think about 20.
Collier: At least we made it back.
David: We’ve got 25 hundred on the S&P now, today lost 660 points.
Collier: For reference point, this is January 3 rd , 2019 so.
David: Yeah, it lost 660 points you know, the, the crazy to me, one of the things that stands out to me is that these huge losses, 7, 6, 7, thousand point moves.
Collier: We never saw these swings in these numbers.
David: Right, right, so this is, this is, this is something new and Apple today.
David: Revenues are down.
Collier: They’re blaming China.
David: Revenue’s down because of sales in China, well apparently the economy in China is weaker, a lot weaker than ours is right now.
David: A lot of people talking about the, the Fed tightening and how that’s gonna affect our economy, that they are, are basically you know choking things out, so a lot of speculation out there you know. I think the stock market, I think it’s gonna go lower there were some numbers, the 23.50 on the S&P was a scary number, that Art Cashin of, of UBS securities was talking about.
Collier: Oh, Art Cashin, good guy!
David: Yeah, yeah.
Collier: I know Art!
David: So 23.50.
Collier: I don’t know Art.
David: They didn’t pick up the number that they threw out for the DOW, but.
Collier: How much?
David: 23.50 was the number for S&P, if it goes below that beware so I would that there’s definitely some, some fear out there right?
Collier: There is, there’s a lot of fear out there and that’s one of the problems you know, I, I, I heard some pundits that were talking about Trump you know, he’s gotta you know, who got the credit, they got the credit on the way up while he took credit.
Collier: And rightfully so ‘cause one thing to remember, is we are stillway up.
Collier: From where we were when he took office.
David: Yeah and I gotta you know, and I gotta tell ya look I’ve talked to a couple of people about this and you have not lost any money until you sell your sition, you haven’t gained or lost any money so if you have 10 shares of Microsoft.
Collier: That’s right.
David: And you haven’t sold ‘em, then you haven’t gained or lost any money.
Collier: And we talked about it last week.
Collier: If you’re in, if you’re in solid businesses.
David: Hang on.
Collier: Hang on, we talked about it before the show about Cellagen right? The pharmaceutical.
David: Yeah, Cellgene
Collier: Cellgene, right.
David: They killed me last year.
Collier: Cellgene, it killed you last year but the problem is in the long run, they’re a good solid company with decent leadership right? In that they have real products that help real people, they solve problems for humanity I mean, I mean loosely.
David: Right, right.
Collier: But they’re not a speculative company, so had you hold on, had you held on to it.
David: Yeah, they were options.
Collier: They were options and bye you know.
David: Hey what’s on your listing? (laughter).
Collier: That’s right, sorry Miss Coronette.
David: So, but yeah, so I mean I, I would think right now you just hang tight, I think if you’re you know, we said this for a couple of months if you’re planning on investing more, maybe hang on to that and you know.
David: You’re not sure you’ll have a better chance.
Collier: Discover Bank Marcus, which is one of the online banks that is affiliated with what is a big bank that deals with all the IPO’s? Not Mortgage Stan but the other one, but anyway Marcus is affiliated with them, but then you got Capital 1360, the problem with Capital 1360 is that they tend to have higher, to get that highest rate you must be, have 10, 15 thousand dollars in ‘em so, I, I like the ones like discover Bank that have nothing than giving you 2% off the top. The other thing I would encourage everybody to do is, start tracking everything, track your, so you see where your money’s going, like there’s an app called Personal capital, I’ll see if I can put a link down below, track your, your net worth and those type of things, now you don’t have to have a net worth right? I mean a big one to track it, ‘cause you need to see, keep core once in a while not just praying, ‘cause this is a good time to take note of it because.
Collier: Things are moving down and we need to know where we are, so we know how to improve.
David: Yeah and you know if, if you know what’s going in the game then it shouldn’t bother you, I mean.
Collier: I mean if you’re broke, you know you’re broke because.
David: Our, our.
Collier: You’re not drinking this beer and now either am I, he bought it so you know, you’re drinking Natty Light like Trista said earlier right?
David: Yea, yeah, but I mean you, you gotta know to score the game and right now we’re not in a bull market stocks, we’re not raging so don’t be upset when your accounts go down, just hold on to ‘em.
Collier: I, I you know I mean at the same time, you know you get into a good fund, a Vanguard, Fidelity, Schwab, the three, here’s the one with the three big guys that are low cost folks. I like Schwab and Fidelity a little bit better and Vanguard’s having some customer service issues as of late, but any of those good funds it’ll.
David: Yeah and that does remind me, don’t make any investing decisions based on what we’re saying at all
Collier: Yes, well especially him.
David: Yeah, especially me so.
Collier: Especially on the options.
David: Yeah, yeah.
Collier: (Laughter), yeah hey but the good thing is, you were gonna be rich had they hit.
David: But if you had an option in Alabama!
Collier: (Laughter), yeah you would be really, really rich!
David: You’d be paying on big time! Which brings us to Monday night, Natty speaking of Natty lights.
Collier: Natty lights!
David: The Natty championship game, Alabama minus 6 versus Clemson.
Collier: (Short sigh), boy oh boy, look, look, look.
David: Freshman quarterback.
Collier: Look, look.
David: The Fresh, the Frosh.
Collier: The kid’s good.
David: His height’s like 6’6’.
Collier: Yeah he’s good, he really is, we’re talking about Clemson’s.
David: Now he, you know what to be honest with you, he has not jumped off the page impressive for me, but he is 6’6’
Collier: And he wins.
David: He does win football.
Collier: He gets that first down.
David: He’s not gonna win Monday, but.
Collier: But he will not win Monday, Alabama is going to steamroll in the, get to the 4 th quarter and win by 3 touchdowns.
David: You know I think that.
Collier: I think!
David: I think Alabama was more excited.
Collier: Not 3 touchdowns, let me go 18 points.
David: In the first half against Oklahoma, now Graina Day let off and they did what they needed to do to win the game, but they were ready to kill Oklahoma.
Collier: I agree.
David: They did in the 1 st quarter.
Collier: And I’m not so sure that Clemson can score, let me say this Oklahoma can score fast against anybody.
David: It’ll be a good match-up and Clemson will come out and fight back.
Collier: They will fight back, but the problem is it’s gonna end badly for Clemson and they lose bad, more than 18.
David: More than 18?
Collier: This line is wrong, wrong, wrong.
David: And Nick Saban, who’s, who’s, who’s the quarterback in the 4th quarter?
Collier: It will be Jalen Hurts maybe.
David: Which quarterback wins the game?
Collier: Jalen well, we know Tua’s gonna be there.
Collier: Tua’s gonna be on the field.
Collier: But not at the end, Jalen Hurts is gonna be in mop-up duty and they’re gonna, ‘cause it’s gonna be the Swan song and all that jazz, la-ra, la-ra, la. I’m sick and tired of it as an Auburn guy, by hearing about Jalen Hurts.
David: Doesn’t he have another year?
Collier: Well, he has such a great story!
David: He’s got another year I think no?
Collier: He does and he’s saying you know what? He’s learning from Nick Saban on how to lie to the public, I’m not leaving I promise you I’m not leaving, like he did with the Dolphins you know when he getting down there.
David: Yeah, yeah, now quit talking about Saving line to the public, that’s rude.
Collier: Yes that’s exactly right, it’ll save it oh.
David: It’s rude.
Collier: Can he just quit already?
David: No, I don’t think he’s going to.
Collier: All right hey, everybody remember we’re a big deal right? We’re kind of a big deal.
David: Kind of, yeah.
Collier: Kinda big deal.
David: We’re working on it, in 2019 I think we’re gonna become a bigger deal we’re hoping.
Collier: Don’t forget to check out the podcast edition of the show, wherever good pod’s found, Apple podcast, Google podcast, Stitcher, Spotify, we’re everywhere! We’re on YouTube just hey, get over to our Facebook page and search for the Real Estate Happy Hour, you’ll find it, punch that like button!
David: And here’s to a great year, Happy New Year everybody out there!
Collier: Go Tigers! Happy New Year, we’ll see you next week.
David: See you guys.