The Real Estate Happy Hour Show - Episode 57
Watch the Real Estate Happy Hour Show - Episode 57
The Easter Bunny is reporting for duty and so is The Real Estate Happy Hour Happy Hour Show. On today’s show Collier Swecker & David Arnette are talking about VA loans, why pet-friendly homes are in high demand, stock market y’all and a Birmingham Market Update! 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 listen to the podcast that can be found on Apple Podcasts, Google Podcasts, Stitcher, Spotify, and Tunein Radio.
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Collier: All right is four o’clock on Thursday! It’s time for the Real Estate Happy Hour!
David: We’re here again and you knew we would be, because we’re the biggest thing going on right?
Collier: The biggest thing on Thursday and Thursday at four o’clock!
David: Money, money, money and that’s what we’re landing here, Mortgage Bank.
Collier: The OJ’s.
David: The OJ’s, that’s true I didn’t know who (inaudible).
Collier: How did you not know, hey, I love the OJ’s I don’t know any of their songs.
David: Except for this one.
Collier: Yeah, absolutely man.
David: For the love of money.
Collier: Hey, just like last weekend, I have called you like eight times this week and every time I called you, have been busy.
David: Man, it is busy right now, which is a beautiful thing right?
Collier: Absolutely, yeah I love your organizational skills on your desk, ‘cause he has all the loan files stacked up in this particular word and earlier this year you know, he was always busy but it was like, you know you had four, five, you know time, whatever might be, and today woke up and you had like a (inaudible) I mean they were everywhere, It was like, fish in the sea, it was beyond it, I mean it was tons of it.
David: Today I was, I was catching up with a lot of people and you know trying to revisit some folks and you know just have some time, but yeah there’s a lot going on right now, the spring season is definitively (inaudible), it is spring break, seems things, seem like really been busy which is awesome.
Collier: They have an (inaudible), the Mortgage is gonna pick up after Easter I mean, I think women, who obviously drive our market to a large degree. I think that they wanna get past Easter usually Spring break, with Easter being so late this year, think that pass has played a little role here in Canada while it’s busy to slow the start of getting inventory out there.
David: Absolutely, absolutely, I think it’s awesome, hey Tammy how you doing? Good to see you and you know it’s been busy, it’s been busy since Spring break so you know we’re still a little low on inventory but Rates are gonna stay low, that’s gonna be awesome, we’re gonna be talking a little bit about that coming up, but man this past weekend where the, whether you love him or hate him Tiger Woods made a tremendous comeback speaking of comebacks, we are on a roll of comebacks in the sport tracks Virginia Chevaliers.
Collier: Man, let’s don’t talk about that.
David: And then you got Tiger last weekend which, look man, I think it’s been 11 years since you went to make your golf tournament.
Collier: Yeah, yeah, what a deal, I was hash-tagged anybody but Tiger, but you can’t I mean, I say the back surgery that he had, for most people, he should not be playing at this elite level, it’s amazing!
David: It’s amazing obviously, you know I’ve seen a lot of tweets, lot of messages this week about people loving a comeback, obviously, you know it’s gonna be hard that, some people had found a hard time obviously written for him, for what he went on, we do love a comeback.
Collier: And the good news is that you’re using your (inaudible), your inspiration to make this single tour cause you, you know.
David: Yeah I still got a few years to brush up on my game before the senior tour starts so (inaudible), another comeback is Game of Thrones Sunday, which told you I don’t care about it.
Collier: I don’t know.
David: I just got around and finally watch it last night all right? So obviously (inaudible).
Collier: So hold on, hold on, you’re making this a segment in the Happy Hour ‘cause, you watched it yesterday and you decided for the momentum, here’s the Game of Thrones.
David: Ok, that was a little slow, I’m not gonna lie to you, the little love fest on the dragons and stuff like that whatever, I don’t know man, we’ll see how it goes, I think they only got another eight episodes so.
Collier: So this is, this is, they’re gonna end this whole thing.
David: Yeah, they’re gonna end the whole thing, Peter Dinklage is gonna go off in the Game of Thrones hall of fame.
Collier: Man, I’m so excited, by the way, I save this for the show ‘cause I’m kinda crazy (inaudible), I didn’t’ get much sleep two nights ago ‘cause I had a war and Tammy she’s still on (inaudible) we’re gonna our car, our car is our (inaudible).
Collier: And I had a damn mouse living in my car.
David: Wait a minute.
Collier: Yeah! Yeah, started on, I noticed maybe Monday night.
David: A mouse!
Collier: A mouse or rat really, so I had a mouse and I started seeing like occasionally you know when a nine year old drops stuff, I found droppings, poop, right? And I’m determined that I’m gonna find this sucker and I thought I got him the first time, I just thought he was coming in and out (inaudible), then I saw more, so then I was determined, this damn rat is gonna be out of my car (inaudible), ‘cause the car started to smell like something is probably, I don’t know what it was, so anyway be not the mechanic I am, I’m gonna dismantle part of the front, from the engine compartment, you know the area where the air comes in the air intake, like I was just unscrewing crap ‘cause I was this determined, Tammy knows that we lived there, in that car.
David: This is hilarious.
Collier: So I was determined, I figured he was living in the air, like anything with air ‘cause I see him chew up the cabinet filter (inaudible), so what I did, I bought any kind of trap, the snap trap, the stick traps, I mean I had it everywhere in the car.
David: Everywhere, maybe you just needed the snap trap with peanut butter that’s it.
Collier: Yeah, but I couldn’t take that chance so I had the sticky, I had that and I had the one that goes in, what really pissed me off was I tried the one where they come to eat the poison, this son of a gun was eating the poison and backing himself out, so the trap didn’t work so anyway, so I blow all that air.
David: This is a, this is a Marvel’s Avengers superhero mouse.
Collier: And 11 at night and I’m out here and I’m blowing, I take a shot at that and then I blow the air in reverse so goes out.
David: Look, we could have more viewers if we could show this video footage than our regular show every Thursday.
Collier: Absolutely, alright, yeah I thought about (inaudible), but it gets good, now I’m taking everything apart that’s the story later on, I blow air all over, I mean is like a blower.
Collier: Through the whole Vac system and I figured out that son of a is going to run the other way, right? Naturally, so that I do and I am, I am so mad that apparently it didn’t work. So anyway, I opened my car door and I noticed one of the sticky traps (inaudible).
Collier: Anyway, I notice one of the sticky traps was upside down and you know all this time, that’s another story, all this time.
David: Ray, Ray is asking how much it cost to put your car back together.
Collier: I’m getting to that.
David: That’s awesome.
Collier: But I had mine, I had, I see the sticky trap and why in the world a sticky trap had moved from the back of the car to the front of the car and upside down. So, all this time I’m chasing this thing, I haven’t been ready for the moment that we see eye to eye for the first time, I flipped this thing over and my God, I woke the neighbors up, I woke everybody up, I screamed like a little girl right? I dropped him on the ground, right? He ate the poison.
David: But he’s, he is on the trap and how long have you been.
Collier: I’ve been blowing neon for, you know, blowing the mouse that was terrible, (inaudible).
David: That’s a wrap! We’ll see you guys next week.
Collier: So, so I tell you what I take him over he met his demise, ‘cause I know he was taking the poison anyway, so yes, Ray is correct, of course everything I took of the car didn’t go back the exact same way it should.
David: So, so, let’s go back here (inaudible), with the car for a while, while he was sitting there on your flip board.
Collier: Well I blew the air, I think that chased him out yes, but I keep that going cause I’m determined I’m going to every hole of this damn thing, so anyway, kill him or whatever but then I’m determined that I’m gonna prove to my wife what kind of man I am and put the car back together. It didn’t work, I end up thinking, (inaudible) if you know somebody got a mechanic late at night that was a client or friend and he said “look man be at my shop at seven in the morning and we’ll help you out, anyway, so I go there, I took like an hour, two hours, I mean I haven’t even destroyed my windshield’s wipers well they would no longer even move.
David: That’s a classic.
Collier: But one dead rat, and yeah so it costed about three hundred dollars plus a broken windshield ‘cause.
David: Plus a broken windshield?
Collier: Well I’m not gonna say a thing but when they were, when the guys were helping me fix everything, they put a (inaudible), against the broken thing and I just want to had it replaced, I go why not, but it beats a rat being in my car.
David: A three hundred dollar mouse, I’m loving that, well ok, that was a great start to the show this week, listen, on the tail into that we’re talking about, pet friendly homes, now this is funny ok, and I’m, I’m just kinda political like this, ‘cause look, I hate it when, when headlines bring you in and the article doesn’t hardly give you anything related to the headline, now this headline is why pet friendly homes are in high demand, ok I’ll agree with you this story talks about people loving pets.
Collier: Yeah and what are you gonna do about it right? I mean.
David: Yeah but how much, how much of the article really deals with the pet friendly home.
David: All right, there is like three things.
Collier: Retractable gates.
David: Right, ok so now, this thing goes on to talk about your love, your pet and they would rather, about 68% of the American households have pets.
Collier: Yeah, and the crazy things is that American spent seventy two billion dollars on their pets last year.
David: Seventy two billion dollars just to bring facts here, about 89% of pet owners said that they would not give up their pets due to housing restrictions obviously, 81% said their pets play roles on their housing situation, but here is what I loved, ok? Here’s just a few things that are related to pet friendly homes, builders now are actually installing retractable pet gates, retractable pet gates in the walls.
Collier: In the wall, so the say right across.
David: Yeah, so you can close on.
Collier: It would have been nice when the baby was there, I mean Tammy’s got a little one, wouldn’t that be cool right?
David: Yeah absolutely, and then a full fence extended backyard ok, that’s definitely pet friendly. Everything else is talking about location, location dog ports, proximity to veterinarians and.
Collier: They’re everywhere.
David: But anyway, you know very interesting.
Collier: But I do think it’s important on the pet stuff that people think about (inaudible), if you’re gonna be a landlord.
David: Yeah, Reynolds have always been tough with pets.
Collier: Right? So, at least here in Alabama you got to be able to offer a pet in the home or you eliminate what we said, you know.
David: Sixty eight percent.
Collier: Yeah (inaudible), she wants to say, she wants to build the wall.
David: Retractable (inaudible), gates that’s perfect, that’s exactly what we need.
Collier: What was, was slick in the other sec, cause they’ll climb over.
David: Yes, yes, that, there’s another story, we can just make it like a little obstacle course, if it was slick then it falls down.
David: To entertain themselves first, huge, great, we’re gonna change the whole Birmingham (inaudible).
Collier: Well one thing, I wanted to ask you about, that I’ve been asking me for weeks, is about, we, we are getting more and more questions about the B.A. loan because there is, well everybody understands what the B.A. loan loosely is. There’s a lot of misconceptions at it’s a bad loan, I think a lot of realtors don’t thinks it’s a good loan, now they understand it’s a hundred percent financing but don’t like the idea that it costs so much, this type of things, and they take out more than the value of the home essentially in a loan.
David: Yeah well, you know, ok, so some of the things I’ve heard is the trouble getting them done, I think the biggest problem that we’ve ever had, it’s typically communication with the appraisers and the appraisals turn times, you know we order the appraisals through the B.A. and those orders get send out and then it’s just not a whole, it’s just not as much accountability in (inaudible), to the appraiser.
Collier: Is that done locally? If the B.A. has a wrap in Alabama?
David: Yeah, yeah, they do have local appraisers to get the orders, that’s, then (inaudible), I think real estate agents don’t like them maybe because it haven’t done them enough or things like that because the B.A. loans, are great loans they’re 100% financing, you know we do have some stats on that, you know I think it’s funny because it says no mortgage insurance required. Ok we’re not calling it mortgage insurance but there is a funding fee.
Collier: Ha! That’s the government.
David: From 2.5% to 3.3, depending if you have used it before now if you have a B.A. disability before you received any money for a B.A. disability then there is no funding fee, the funding fee is weight and that’s a really good deal, but I would say it’s a great loan, it’s easy to get done, we handle the underwriting here, the mortgage bank we handle our own underwriting for these loans.
Collier: To the B.A.
David: We don’t see any hang-ups, any delays or any extra time on a B.A. (inaudible).
Collier: Does the lender? This bank’s question it’s interesting ‘cause the lender sell to the open market the B.A. loan like they do, well because they own the B.A that they’re buying (inaudible).
David: Yeah, the B.A.
Collier: They actually own the Loan for you guys.
David: Yeah, they guarantee you and then typically you have another servicer.
Collier: So you, tell me about the credit scores with the B.A.
David: Yeah, the B.A. it’s very linear with credit scores, I think usually it’s in an overlay from the lender as the wealth they’ll take, usually I think they will take down at least six hundred, and I think it’s possible, I’m not sure on getting through below that, but B.A. it’s very linear on all aspects of the loan really. The one thing they’ll stick on its residual Income.
Collier: What do you mean by that?
David: I mean that after you have taken out all of your debts and your mortgage payment everything else they do factor it like utilities and other expenses, costs of living, (inaudible).
Collier: The other one, the other one you did (inaudible).
David: They want to look at that on any other lines and then they caught the residual income and that number is typically we don’t deal with that very much (inaudible), lower incomes in where we get into that and we don’t deal with that a whole lot, but you know they’re very flexible on the debt income, I mean I’ve seen a proof of 59 percent.
Collier: Yeah, for reference purposes 45 percent it’s normal.
David: Yeah, forty five percent is pretty high for a conventional loan and I’ve seen them approve B.A. 59 percent.
David: So, that’s 59 percent gross income that is coming towards your debts.
Collier: And what about a seller ‘cause everybody’s (inaudible), brother is asking for a seller to pay part of their closing calls.
David: You know what I love about this is, this is the one part of B.A. loans that is completely misunderstood, I bet there’s lenders that will watch this and don’t even know the details on your seller conceptions. The B.A. is only allowed 4 percent seller conceptions, even the sheet the caller send me for today says 6 percent, the max is 4 percent, but the funny part is the B.A. does not consider the buyer’s closing costs as part of that number.
David: Ok, so the seller can pay the B.A. funding fee, prepayment of the taxes and the insurance, gifts such as televisions sets and microwave ovens.
Collier: Television sets, haven’t heard that in a while.
David: Look, you can even pay off credit card balances in collections.
Collier: That’s like in the good old days.
David: That is part of the seller.
Collier: Hold on but go back, what you are saying is what about their other closing calls, what about their closing calls?
David: The seller’s concessions do not include, let me say this (inaudible), they do not include payment of the buyer’s closing calls, or payment of points as appropriate to the market.
Collier: So, can we pay them though, can a seller pay them?
David: Yes, they can pay all of that plus 4 percent.
Collier: Pretty fascinating, there is a lot of agents, I know that Tammy knows this, but a lot of agents after don’t know that.
David: Oh, I’m sure a lot of lenders don’t know that, it’s just one of the most misunderstood things, you know paying off loans, in association with.
Collier: Circuit City you can pay your Circuit City card.
David: You can pay collections from Circuit City judgement even if you have one from Circuit City, that’d be beautiful, so that’s a big deal on the B.A. loans, the rates are typically lower and yet you don’t get hit to the rate for your credit scores like you do on a conventional loan.
Collier: Talk about one of the biggest things we face with the B.A. appraisers, why are they different.
David: You know what? That’s a great question, I don’t really know exactly why they operate differently now, B.A. just recently shorten the term time from 10 days down to 5 days.
Collier: ‘Cause last I checked, what do we have? Four in the area? Some like it, where we are hundreds of normal.
David: Yeah I think is just the licensing and stuff like that from B.A.’s to appraisers, but I just don’t see that they’re a whole lot different from the appraisal we actually get and the link to which they go (inaudible).
Collier: It’s a lot of the small repairs that drive sellers nutsa and ask your agent, ask your lender, there’s easy guidelines to follow.
David: I’ve heard some people complain that there’s fees that the seller has to take, which is really just the attorney fee really.
Collier: In the (inaudible).
David: Yeah, yeah and the (inaudible), the attorney is the better that cannot pay those fees other than that, it is a great loan.
Collier: Well and we keep going here right.
David: The process is real simple.
Collier: What about rates? Are they lower with the B.A.?
David: Yeah, yeah, they’re typically, right now three point seven five on a B.A. loan.
Collier: And you said, you might’ve already said this, but I can get a fifteen-year loan if I want to.
David: Yeah, yeah, we can get a 15 as well.
Collier: Can you do the 20 and all loans that you like?
David: I think is just 15 and thirty, you know I guess we’ll just see if there’s anything else out of the 30 very often on the B.A., we don’t see 15’s or 20’s in general, but especially when the B.A. really see the 30.
Collier: You know, what’s interesting was the I always wondered, you know, who is actually eligible right? ‘Cause I mean, my God, I have USNA and you know how much time I could have spent in the military, you and I wouldn’t be in the military, I could have made it to basic training right? But I am qualified you know cause I (inaudible), in Vietnam (inaudible) but hey, you know, I love the commercial It took me, I’m slow with these commercials, It took me, I don’t know like a year to figure out what this people were talking about iron mining world war II you would be an 8 year old, but it would be who they got it. So anyway, wanted to be eligible for B.A. loan here or the conditions, that you have to meet, you’ll have to be one of these, you have to serve 90 consecutive days on service during war time, I assume that means, I don’t think that’s what it means in (inaudible), I wouldn’t think you have served 181 days during peace time so over 6 months, you have 6 years or more the National Guard on resorts, we have a ton there of National guards here in Birmingham.
David: We do.
Collier: You are spouse of a service member who died in the line of duty as a result of service-related disability, lot of that disability right?
David: Yeah, yeah.
Collier: You see that.
David: Yeah, so I mean, just on top of your service to the country which we are all so grateful for, you know we love doing this B.A. loans, they’re really a great loan and we love serving veterans we have a whole program through fairway, we have a national program, American warrior Initiative, where they go around city to city and they’ll find local veterans we did one here in Birmingham we found local veterans and (inaudible), and we gave him a car.
Collier: Close enough, with a mouse in it?
David: Didn’t have a mouse in it, we’ve given, we’ve given checks and service dogs and we’ve given you know all kinds of things to veterans around the country and one of our loan officers Lewis Taxton in Louisiana, that she is up the go all year long, doing this all across the country (inaudible).
Collier: By the way, one of our super fans, Michael Brunner, he’s not here, man I was, I said hello, and you know he had a hot plate in his office? I didn’t know people had that anymore.
David: It’s Bruno’s Café.
Collier: So is he like, woke it up or something there.
David: Oh yeah, 3 times a week.
Collier: Man! I didn’t know people do that anymore. It’s amazing (inaudible) with the (inaudible) holding on with the hot plate
Collier: I remember the apartment she couldn’t have those but anyway, Birmingham mark it up, hey hey, they mark it, we sound like a broken record it’s still a sellers’ market barely we got almost four months of inventory right? And when we talk about that, what we mean by four months they mean if not one more listing hits the market it would take four months with the current buyer load to evaporate those properties.
David: To sell them all.
Collier: To sell them all but, that doesn’t happens because everybody keeps moving, now, one of the biggest issues we have.
David: That we need to get above the six to be at buyers’ market right?
Collier: Correct and then.
David: ‘Cause I, I talked to another real estate agent and they had a buyer who knew we would be in the buyers’ market in May.
Collier: In May! Yeah, it takes only one month to ship.
David: it’s amazing, you know you spend all this time in the business, but we don’t know.
Collier: But to me the market is like moving in the oasis of the seas right? One of the biggest cruise ships of the world. It doesn’t just turn up on a dime it has to navigate it. One of the biggest things is we’re on a low inventory and still seat in the high 4 thousands. Again prospective 5, 6 years ago, we were deep close to 10 thousand listings so we lost almost have of our inventory, now prices continue to rise and that’s inflationary and is also very hyper local. In other words there’s some areas of town where they’re gonna keep going, up town like (inaudible), had more room to run so it’s continuing to run a number of single family homes compare to last year, and the market is a hole up to five percent year over year from march of last year to march of this year so up above five thousand average again, the average sale prices up eight percent year over year, what’s really interesting, condos and townhomes, another one up twenty percent on price, that’s said, down on inventory by five percent year over year so, inventory is not getting any better and at some point we really need the inventory. If you think about selling now is the time to do it because the buyers are there and price increasing, at some point that lead is gonna be put on these prices. And inter trades are so good you’re gonna get a good deal and.
David: So now, so right now sales are up, inventories down and that is not the recipe we are looking for, we need inventory to outpaced sales in this market right now, right?
Collier: Absolutely and I’m ok with a price sell increase growth, I’m ok in the top line (inaudible) retard that growth a little bit on price because more people get into the market and eventually it’ll drive the price (inaudible), grown up. I think on the back side. But anyway. Meaning days on the market fourteen days, that’s the dead metal, that’s from the time they went on the market to win the win on the contract.
David: Excellent, excellent, and you know this week has been, super busy, so have not been looking at a lot of stocks, haven’t been watching that this week so will have to catch up and get us a Market Recap update on some of our favorite names next week.
Collier: Yeah, a Cruise stocks got hit (inaudible).
Collier: Carnival! They big (inaudible).
David: Five hundred thousand gallons of swish got dumping, they’re on probation already.
Collier: And the stock took a hit today.
Collier: They’re not listening, they do not care.
David: Obviously they not.
Collier: And we’re not just talking Carnival, the actual ships got caught at least initially were (inaudible), so under that line, you have princess hall in America in Carnival so what in Australia, Carnival, like fun ship if you would and but the good thing we are all craving (inaudible) to hit today, the other thing on stocks is some of, I will tell you, some of our favorites, see I’m just watching, I just had to take a look, snapchat got down credit today but thank god is the first time I’ve seen it downgrade not otherwise and the market really did good on it and went down a little bit but.
David: I think we had recently some earnings on snapchat.
Collier: It’s coming.
David: They’re coming (inaudible)
Collier: What gets me about earnings and you talk about this just a for a second, on earnings, when, what drives me nuts is everything is already priced in the market, good or bad and you’ll see like roll (inaudible) last time, I do not understand conceptually why we’re killing the market, we’re making profit hand over fifth, but yet the sellers are out of course and goes down only because forth guide them has been lowering a little bit, but yeah a little profitable, I don’t wanna (inaudible).
David: Right but that’s change, obviously change cause you don’t wanna change guidance, you don’t wanna say that the companies do worse the future, that’s basically the saying when you, when you have negative things on forth guidance, and so, basically there are problems or there is some problems in there that were downgrading our sales, with revenue numbers going forward.
Collier: Based on our estimates so, that’s, that’s nothing.
David: Yeah, you know we will make profit now, you know we’re out.
Collier: And for sure we will make it.
David: (Inaudible), we thought we would have.
Collier: One, one persons does watch the happy hour asked me this question, I thought I was going (inaudible) the question is, does a company, you know you buy a stock, does that come, are you actually giving your money to Saint Row Caribbean, they actually have you now, and actually that question is “no” if you heard of what is called IPO right? They send out to the market a certain number of shares, is because they’re buying back, they don’t ever see them again, they make that initial wave of cash and then you’re trading on this markets outside of the company so, your money never goes, I find it interesting cause I haven’t thought about it, your money actually never goes to row Caribbean, it stays outside the market moving, amongst traders, just I thinks this a misconception that you are buying into the actual company but that company on the IPO sold all that company was gonna have.
David: Yeah, but they sold those shares, you still own, you’re just trading the ownership of that share so basically if the company, you know liquidated and bought everything back the next it would be worth something.
Collier: That’s why a buy back does effect on the market right? Because the company is now getting involved in those shares ‘cause you know conceptually a long time our concept is going, why would they have it back, they already have our money, but they really do have my money.
Collier: They have the initial dollar, so when it rises in price, cause the other question was from the person, asking why the CEO care? Oh, he cares, he wants to keep his job, right? ‘Cause now, David owns 20 percent of the company, that might mean David can get rid of him if that outside market, doesn’t increase the value of the shares, so anyway, just thought that, anyway, don’t forget the podcast of the Real Estate Happy Hour anywhere you can find great.
Collier: That’s right, Google podcast, Apple podcast, Stitcher, Spotify all these great things.
David: Make it up.
Collier: We’ll do it, absolutely we’ll see you next week, he’s got to go to a tailor to fix his pants.
David: Yeah, but probably just buy some new ones.
Collier: Yeah, now he can’t stand up, anyway I had to do it, we’ll see you next Thursday.
David: See you guys have a beautiful weekend and a happy Easter.
Collier: Happy Easter, bye bye!