Prepare to unravel the complexities of the housing market with the unparalleled guidance of real estate broker Austin Pantuso. In a landscape where new builds and pre-owned homes dance a delicate tango of supply and demand, we navigate these nuances to arm you with the essentials for your next real estate venture. With Austin steering the conversation, we venture beyond surface-level statistics, diving deep into the vital indicators that spell out the future for buyers bracing for shortages and sellers riding the wave of fleeting trends.
The tug-of-war between home affordability and buyer expectations takes center stage in this candid discussion. Ever wondered what really happens when sales prices adjust, or how sellers are acclimating to buyer demands even amidst a sea of competitive offers? We dissect these phenomena, comparing the current waves of the market to the turbulent waters of the past. As we break down the long-term investment benefits of real estate, we offer a telescope to those on the fence, peering into the horizon of ownership versus renting.
Touching down in the heart of Texas, the beacon of real estate stability, we illuminate the path for investors drawn to the allure of San Antonio's growth. From the gritty reality of property management to the ballet of flipping houses in a market peppered with giant investment firms, Austin Pantuso's insights serve as your guide through the thicket. We wrap our journey with a personal reflection on the intertwining of social media and relationship-building, sharing lessons from my own voyage through the riveting world of real estate finance. Join us in this episode for an audio expedition that's as enlightening as it is indispensable.
Key Factors Podcast is Powered by ReviewMyMortgage.com
Host: Mark Jones | Sr. Loan Officer | NMLS# 513437
If you would like to work with Mark on your next home purchase or as a partner visit iThink Mortgage.
Prepare to unravel the complexities of the housing market with the unparalleled guidance of real estate broker Austin Pantuso. In a landscape where new builds and pre-owned homes dance a delicate tango of supply and demand, we navigate these nuances to arm you with the essentials for your next real estate venture. With Austin steering the conversation, we venture beyond surface-level statistics, diving deep into the vital indicators that spell out the future for buyers bracing for shortages and sellers riding the wave of fleeting trends.
The tug-of-war between home affordability and buyer expectations takes center stage in this candid discussion. Ever wondered what really happens when sales prices adjust, or how sellers are acclimating to buyer demands even amidst a sea of competitive offers? We dissect these phenomena, comparing the current waves of the market to the turbulent waters of the past. As we break down the long-term investment benefits of real estate, we offer a telescope to those on the fence, peering into the horizon of ownership versus renting.
Touching down in the heart of Texas, the beacon of real estate stability, we illuminate the path for investors drawn to the allure of San Antonio's growth. From the gritty reality of property management to the ballet of flipping houses in a market peppered with giant investment firms, Austin Pantuso's insights serve as your guide through the thicket. We wrap our journey with a personal reflection on the intertwining of social media and relationship-building, sharing lessons from my own voyage through the riveting world of real estate finance. Join us in this episode for an audio expedition that's as enlightening as it is indispensable.
Key Factors Podcast is Powered by ReviewMyMortgage.com
Host: Mark Jones | Sr. Loan Officer | NMLS# 513437
If you would like to work with Mark on your next home purchase or as a partner visit iThink Mortgage.
Welcome to Key Factor's podcast, where knowledge meets ambition in the fast paced world of real estate and mortgage. I'm your host, mark Jones, bringing you the latest insight, trends and expert advice to navigate this dynamic property market. In each episode, we dive deep into the heart of the industry, dissecting market movement, exploring investment strategies and unlocking the secret to real estate success. Whether you're a seasoned professional, an aspiring investor or simply looking to stay ahead of the curve, this is the ultimate guide to making informed decisions in the world of property and real estate. So grab a seat and let's uncover the key factors that make all the difference. Welcome to Key Factor's podcast. Welcome back everybody.
Speaker 1:I'm Mark Jones, your host of Key Factor's podcast, and we're sponsored by ReviewMyMortgagecom, the largest index of mortgage programs in the nation, and just recently had an awesome episode discussion with one of my great friends from back in the day, still crushing the game, and we ran out of time. So today we're going to be bringing you part two with Austin Pantuso the life of a real estate broker. Austin, welcome back. Thanks for having me back. Absolutely, man. I'm living the dream today. So you're drinking out of your Superman mug today, one of those days. Huh, today I have to be Superman. There you go, just like every day.
Speaker 2:It's one of those days. You do have to be Superman every day. Absolutely You're going to wake up and be that.
Speaker 1:Yeah.
Speaker 2:That's exactly right. So what do you want to talk about? What do you want to start?
Speaker 1:off with Well. So last episode, last discussion, part one, we talked about how awesome it is that you were selected to be a part of American Dream Show so people can be on the lookout for that and March is and March Very good Probably early.
Speaker 2:March.
Speaker 1:Very good. We talked about you becoming a broker from being a realtor your path, your journey. We talked about the NAR ruling and got your thoughts on that. That was great conversation. We talked about new construction. The incentives that they're going may not always be the best for your customer, but right now it's pretty good. But it's pretty good, darn deal. And then we've got a slew of things that we didn't get to. So today I want to open it up on the first topic, which is going to be home affordability.
Speaker 2:Can we go back to new construction versus?
Speaker 1:real quick.
Speaker 2:Yeah, this is your time, brother. Well, I want to clarify some things that I said, because I was incorrect on some things. I was saying January, I meant December stats, but remember I was referencing Sabre Market Sets which is huge for anyone. It's public info, so you can go.
Speaker 1:Well then, let's show these folks what it is.
Speaker 2:So can you, so can you, yeah, I want you to pull this up and I want to show you and kind of show you what happened from December to January. Because it's crazy, tell me where to go on here. So go to San Antonio Area Market Report. Okay, there you go, and then go down. I want to go down and this is. Anyone can look at this. If you're a realtor, you should be looking at this all the time. If this is your geographical area, that you mainly do your business in.
Speaker 1:Why not look at this? Oh, I agree.
Speaker 2:What's going on, so check this out. Go to.
Speaker 1:December. Okay, let's pop open. So you're gonna have to January also.
Speaker 2:Yeah, so open that December PDF and let's look at this, and then let's look at January and kind of compare this.
Speaker 1:So here is December. I'm gonna throw this up on the screen here.
Speaker 2:Okay, almost, let's see here, take your time, there we go. Okay, so can we zoom in a little bit.
Speaker 1:We sure can. I've got all the keys to the kingdom today, okay.
Speaker 2:So what you know? You can always look at current month, right, and you can see month. I don't like looking at that.
Speaker 2:I like looking at year over year and if you go down, you'll see that. So go down a little bit farther and see that's current month, go down, go down, go down and then look at year today. There you go, there you go as of December 2023. Yep, so a couple of things we wanna pay attention to, and I don't have the mouse, but you're gonna have to do it. So not all new and existing, because that bunches it together, right? Right, and we were talking about new versus pre-owned, correct and the stats, right, so check this out, looking single family, look at your dollar volume and your close listings year over year negative 23% from December. That's insane right Wow.
Speaker 2:That's a huge decrease. Absolutely Now go check out single family new construction. Look at the increase New construction.
Speaker 1:So now we're cruising down. For those of you that are listening, if you wanna head over to YouTube and see what we're watching or what we're referencing, we are pulling up the report for December of 2023 from SABOR's website. Again, like Austin mentioned, this is public information that every realtor being that your income is derived from selling properties should be paying attention to this stuff.
Speaker 2:So look at new construction 39% increase. Wow, I mean that is insane. We're talking about what a 62% disparity between the two right yeah, over year. That is crazy.
Speaker 1:I mean one shrank tremendously and the other grew tremendously.
Speaker 2:Tremendously.
Speaker 1:And it goes hand in hand and you could throw it off JC it goes hand in hand with the concept of home affordability, simply because if there isn't enough pre-owned inventory, you are at the mercy of the builder, and where they build, price points that they build, et cetera. Matter of fact, there was a podcast that I was listening to not too long ago where they basically broke down the concept of we are going to have another huge, massive property shortage again in the next five years, simply because obviously we keep procreating, generations continue and we're already seeing a shortage. And what happens is builders don't start building homes until they have the people lined up to pretty much sell them, which it's smart on their part. So they're not carrying inventory, that's just sitting, but at the same time, they're behind the curve by hundreds of thousands of homes. I mean.
Speaker 2:Sometimes depending, right, I mean yes, sometimes they are, and I think it depends on the product, the price point and their target market. Some they do sit there for a while, but it depends that what is our most affordable range in our area.
Speaker 1:In our area. I believe matter of fact.
Speaker 2:JC, if you want to throw this up on the screen, I pulled that up. Yeah, where most people buy three to 400K.
Speaker 1:So right here, well, right now, Texas home values, the median is 296, 582, so that you're pretty much on the money that's three to 400K, yeah, and I'm talking really San Antonio Metro, and this will give us a little bit more of the statistics of that in itself. But I think this is all of Texas, whereas we want to look at just San Antonio. Maybe it'll let us. Here we go, let's go San Antonio.
Speaker 2:Texas.
Speaker 1:Okay, so, and another thing I have to tell you there we go. So you're San Antonio at 253, which makes sense, actually has increased. And are these sold or is this listed?
Speaker 2:Let's stop here for a second. Okay, let's stop, all right. I don't like using Zillow right Any website for statistics, because it's horrible for providing stats, and why that is is because Texas is a nondisclosure state right, which means that they don't get the sold, even though they do.
Speaker 1:They do from MLS.
Speaker 2:They do, but you're really not supposed to be publishing it publicly, the sort of information that's through MLS. But they don't get it through MLS. They get it through, if an agent puts it on there. Core logic, core logic. And they also own showing time.
Speaker 1:Sure Things like that.
Speaker 2:So they're getting information that way. I believe they still own it. They bought it out. Right. So anyways, it's still really poor and that's why when you go to those estimates Correct, it'll show what star rating per city that the accuracy is for a zestimate. And if you go to that, just if you type in Google, you can type in Zillow's Estimate Rating and you'll see most Texas cities are like no stars at all. Because it's a nondisclosure, you know because they don't really know.
Speaker 1:They don't know, they're just taking a guess. So how accurate.
Speaker 2:But you actually actually go down down Zillow's Zestimate Rating.
Speaker 1:This one right here.
Speaker 2:Lower Down one more. Right there, that one.
Speaker 1:See Zillow website.
Speaker 2:There you go, boom Okay.
Speaker 1:So this is going to say says the Zestimate home value valuation model in Zillow estimate estimate of home value market values. The Zestimate incorporates public MLS and user submitted data into Zillow's.
Speaker 2:But our MLS doesn't do it, so go down Accuracy of listing per state. Here you go, so check out Austin.
Speaker 1:See the accuracy, austin Okay.
Speaker 2:So it says median for error, but they used to have a star rating.
Speaker 1:Okay, got you.
Speaker 2:Within 20% of sales price 98.6%. They used to have a star rating when they did this.
Speaker 1:Okay, I see why they switched to this. Go to states.
Speaker 2:Let's go to Texas. Let's see what state says now.
Speaker 1:So go to Texas and see, I would guarantee, most agents don't even know that this exists.
Speaker 2:So this is see they have and look within 5% of sales price 78.98%. I mean that's a pretty big disparity.
Speaker 1:Yes, even there.
Speaker 2:For sure. So we're at least 20% Right? Yeah, I mean, that's not that great, no it's not.
Speaker 1:I wouldn't use this for data. We go back to.
Speaker 2:Austin. But now go back to Sabre Market stats.
Speaker 1:Okay.
Speaker 2:When you can. I hate to have you keep pulling up the screen?
Speaker 1:No, no.
Speaker 2:This is what it's here for. Go back to. December. Go back to December. And this is not all of Texas, but you can pull it up per board, right. So now go down, Okay, go down down down to the very bottom, very, very bottom. There you go, okay, oh, there you go. Now look at the sales per price point. Look at three to 400. That's our sweet spot. So look how many sales compared to everything else. So is Zillow right.
Speaker 1:Good point, Good point, ladies and gentlemen, Look at the look 610. Yeah.
Speaker 2:Compared to where Zillow is saying 250, 425 to 299. Right, you know what I'm saying.
Speaker 1:So that but I will go as far as to say that data it's all in the way that you calculate whatever it is that you have. So I mean technically, if they total these up, there's 24, 10 in purchases by all of them, and then the lowest and the highest. That's how they get the averages.
Speaker 2:The average you can see 25.3%, and they show on weekly stats with the medium and the average sales prices.
Speaker 1:No, that makes sense. So you can see, that's good stuff.
Speaker 2:So look at months of inventory. You're saying low supply. It's there, where that's.
Speaker 1:Per price point Inventory To the very right Days on market months of inventory Gotcha. Well now, okay, correct me if I'm wrong, but your post or above million dollar price point has always been higher than all the others. Matter of fact, it used to be at almost two years worth of inventory there. It's gone down and when we look at let's call it our sweet spot of inventory, it's still at 4.3 months, which it's going to take a lot of inventory to increase that month.
Speaker 2:It has been increasing though it has. We hope so Definitely. We need it. I follow it every month almost. It has been increasing. It actually went down a little bit, like the past couple months, but it was increasing for the majority of the year because rates were so high. So what's a healthy supply that people say?
Speaker 1:I would say about a healthy is around four months.
Speaker 2:They say six months.
Speaker 1:Six months is actually when the tipping point of it becoming a seller's market versus a buyer's market.
Speaker 2:If it can stay right around the five, six mark.
Speaker 1:That's supposed to be a fair market. It's not horrible.
Speaker 2:No, not at all. Not at all, Not like some other markets where they have them. I'll let you explain. How does it consider a healthy supply? When they say four months or five months? What does that mean?
Speaker 1:What that means is, if there were no new listings coming to market whatsoever, it would take this amount of months, if we had that type of buyer, to get rid of these homes. Essentially, that's exactly right and, that being the case, I mean I love that we're talking about this stuff because it almost brings light to the conundrum of what is being plastered everywhere that there's no affordable housing, and I call BS on that. I think it's almost our mindset as a buyer as to what we want in our wish list, because it is still based off of the concept of 2020, 2021 prices and rates and values and everything else.
Speaker 2:So let's talk about that right now. Yeah, because people are still and this is my opinion of why the premium market hasn't taken off as fast as it should because people are still in that 2020 to 2022 mindset of my home is worth gold and now they're kind of getting brought back down to reality. That it's not that they're still homes, right, they're still going down to kind of where we were. So if you look at the stats up there and I hate to pull them up again, but close to original list price, that's huge. Look at that.
Speaker 1:Where do you see that one? Right here.
Speaker 2:So that's what they're listed at and what they're closing for. The highest one is 94%, so people are taking 6% cuts and that's not even showing closing costs and other factors.
Speaker 1:This actually is including closing costs, because closing cost is one of the things that goes into the appraisal, the value, all of those things.
Speaker 2:I don't know if SABOR includes closing costs in this.
Speaker 1:Yeah, like for example, in appraiser same concept they use the MLS which they explain that they use MLS in part of this. So they've got to calculate that into it.
Speaker 2:That's something I don't know if they are actually using that. If they are great, that would be huge.
Speaker 1:Another good point that you raise here is when people say values are going to drop. I don't agree. I have to correct them and say sales prices will drop. Why? Because you went too high and you're out of the range for most or you're still expecting too much for your home. I mean me and my situation.
Speaker 1:I would love to sell my house right now. Honestly, every three years we changed houses. We've been doing it since back in the day and we've made a good chunk of change doing that. But right now what we're faced with is, if we sell, how the heck are we going to find another home like we have, or even close to it, that compares, on a monthly payment concept, to what we have now?
Speaker 1:It's like we would have to go backwards to a certain extent, which I'm perfectly fine with. I mean, honestly, I'm like, hey, babe, kristen, let's go backwards, find another fixer upper, fix it up, live in it three years, sell it again, make the chunk of change. But once you have that lifestyle, it's hard to go back. Now I think that folks out there are willing to not necessarily drop their price, because we're seeing every contract that I've had for the last goodness at least two months is coming with closing costs, even in multiple offer situations. So it's like all of the multiple offers they received, they were asking for closing cost also. So it's almost one of those typical standard what's going on in the market right now. Listing agents are informing their buyers If you want to sell this, you got to give up money.
Speaker 2:on the backside, it doesn't have to be on the price it can be with the builder, correct, correct.
Speaker 1:So yeah, I mean, that's good stuff. So basically, I guess let me ask the question again is there an affordability issue or is there a expectations issue?
Speaker 2:I think you got to dive deeper into it and go back to these stats here, and a lot of people don't understand that 6% is a lot.
Speaker 2:That's $300,000 home. That's $18,000 that people are having to give up just to sell the $300,000 home. And I just tell when I have a listing I tell my clients, unless you're home, is the cream of the crop, sharpest tool in the shed, probably just kind of in the box. I used to be able to say it's probably going to sell in this amount of time. It's average, just amount of time. Now I have to tell people it's either going to be on the market for a week or it could take six months.
Speaker 1:Unless you're willing to drop your price to what somebody's willing to pay, and prices are being reduced and they are taking less money.
Speaker 2:If the stats don't lie, they are right. They really are. And then, on top of that, they're on the market for longer than they were. When you look at your average GOM, you're hitting 90 days on some of these, where months back it was 30 days.
Speaker 1:How far back does SABOR go? Because I would love to pull this same data up for 2008, 2009, 2010. I don't think you'd have to go too far. It would be totally flipped.
Speaker 2:It would be huge to go back that far. But when you're looking at these stats you're saying is there an affordability issue? I think one of the bigger problems is, if you bought in the last three years, you might be upside down. There's a very good chance where you could be upside down because if you're having to take 6% and reduce it 6% and then you have potentially 6% in realtor fees and another 1.5% in closing costs, you're looking at somewhere upwards of like 13% to 14%.
Speaker 1:Would you go as far as to say as anybody that buys and then tries to sell within a three-year period is going to lose money regardless other than the past 2020 through 2020?
Speaker 1:And simply because we have to look back and go all right. Texas typically has about a 5% to 6% increase year over year of our value. Historically, over the last three years, it was 30%. So if you take each of the years, total it up, it's about 30% increase. That's a substantial amount of equity in three years that you gained. Now that's not normal by any means. So for someone to go into the idea of purchasing a home and thinking that they can flip it or sell it within three years and make money, that's just the wrong way to look at it. They're not an investor and I think that first time buyers feel as though they can invest the system if that makes sense. Like I want to flip this house. No, no, no, no, no, no. You need to acquire, hold the house. I think it's not. Yes, number one. It's important when you buy the house and how much you buy it for, but it's also important how long you hold the property.
Speaker 2:And we used to tell people when we first got into business, you got to own a home for three to five years just to bring it Minimum that's right. And then, when you go, sell it. But then we had the boom time and you could make a lot of money, that's right. In 2023, you didn't see that 5% increase. So unfortunately, 2023 is a pretty flat year when you look at stats. You didn't gain a lot of equity. Some people did lose money in their home from 2021 to 2022, especially in new builds.
Speaker 1:Well see now we're talking a different language. Okay, because with pre-owned and that is a rebuttal that I have for any customer that says we may sell within the next two to five years okay, great. Then let's stop talking about new construction, because if you realistically want to save money and you're so interested in what interest rates you get and all that stuff hear me out on this If you go to sell in two years, three years, five years, and that builder is still building out their community, who are you competing with? The builder and stuff. It's really tough. So we are talking in apples to oranges. I don't think anybody in San Antonio lost money in equity year over year in 2023 on a pre-owned home. All you had to do is.
Speaker 2:look at the taxes. Probably not too much. I think they stayed pretty flat in all the pre-owned. I would even say they still went up, gained a little bit Now.
Speaker 1:The stats are there. Who's control? They're there, you can look and see.
Speaker 2:Go to this. Does it show that If you go back to the main page like I hate that we're having to navigate?
Speaker 1:over.
Speaker 2:Doing this, you got to go to the main page. Go back to Sabre Markets. Can you go to that, yep.
Speaker 1:Boom, we're over here.
Speaker 2:So let's do this Go down, sorry, go back one more time and then go to Weaken Sales.
Speaker 1:Okay, weaken Sales, weaken.
Speaker 2:Sales. How far back can we go on that?
Speaker 1:How far back there you go, what are we at there?
Speaker 2:That's July. There you go, so July of 23. So look at the medium and the average sales price and then go to now. Okay, 327. 327. Sales price. You said it Sales price Average sales price Okay, and medium sales price Average and medium. Now go up top. Look you see the values they're going down and then it kind of goes up a little bit and then look 3.05. Yeah.
Speaker 1:I don't think that that quite dictates a home value drop because it's still home sales.
Speaker 1:So it's whatever you have on the market that goes into that number. Whatever bracket the home buyers are buying in goes into that number, not the home owners. You know what. Let's just do this as well. For the last little, just check Now. Thank goodness for Congress and our Senator and everybody else, because it doesn't matter what property you put into this county appraisal, we all got a discount on our taxes, Substantial 100 grand off of the school tax portion of it. Let's use my old 8426 stone chase. I like using this one because it pains me every time knowing that I sold it too soon. So if we go to the value roll of this property, we've got, I mean small increase right there, Justin, I mean you're not incorrect, but not also, but fully correct. Now go back to us, JC. I will say and let's see if you agree with me on this new home construction determines more of the actual market than people think.
Speaker 2:In regard to explain, explain.
Speaker 1:So if we are low in existing home, preexisting homes, the only market we have to turn to is new construction. Well, comps are based on a radius around that actual property that's being sold. So if they're using that as their marker, the only comps are the new construction homes within that community and maybe right outside of it. What it does is it either helps or hurts the preexisting homes that are around there. But the good news for consumers is preowned homes have gone through the ebbs and flows of the market, so they're pretty stable. In regards to that, it's always the new construction that's taking the risk in that new area or territory that they open up in hopes that they sell it for X price. Gosh, I remember we were looking out in what is that? Marloma Mira, Mira, Posa 46 and it's I-10 and 46.
Speaker 1:Marloma, marloma, dude. They built some million dollar homes in that neighborhood that sat for years and that happens, that happens. They picked the wrong spot type concept. But I do think that the needle being moved has a lot to do with new home sales, which I'm all for them, keeping the prices up and doing what they're doing on the back end, because then it doesn't hurt the person that just bought recently.
Speaker 2:Well, and you look at appraisals all the time but we both know appraisers don't like to compare preowned to new.
Speaker 1:Oh correct. Or vice versa. They only use their own, You're right.
Speaker 2:Yeah, so it doesn't affect it as much as you would think, but I mean, I've seen them where they have to sometimes and that's rare they don't like to.
Speaker 1:So, using your reference here and I just thought of it, jc, go back to reference Right. Okay, no Great, going to use this reference here. Uh, where.
Speaker 2:Go down, you're going year over year. Is that what you're looking at? Yep, yep.
Speaker 1:Where'd it go? Right there, there. Okay, good, so we're looking at a drop in 23%. Oh, sorry, same thing Single family, 23%, compete at 39% and an increase of 39%, and tell me that they're not the ones that are driving the market. Okay, they are Now.
Speaker 2:Now we're not going to have a tangent too much on this and we focus too much time on this. Let's look at one other thing. Pull up the next sheet and I want to show you what happened in January.
Speaker 1:Oh, the next month yeah.
Speaker 2:So this is the first time I saw this is in January, compared to all of 2023. Look what happened.
Speaker 1:Okay, so we come over here. I hit the back button, you already downloaded it.
Speaker 2:Remember it's. Oh smart man, Smart man.
Speaker 1:Gosh. Ladies and gentlemen, I love a smart man, see here I'm going to let it pull that out. Okay, so this should be the correct one, yeah.
Speaker 2:So check out January and go down and look at your year over year for January.
Speaker 1:There is our year to date. Is this the same as the year? Okay, perfect. Now look at the difference. Okay, it's coming back, but still a large disparity. But we're talking negative 23. That's a positive 4. A huge difference.
Speaker 2:Like I noticed a massive boost in pre-owned sales in January and look, you got your new construction going down yeah.
Speaker 1:So you have 23 to 4% and people would go oh, that's not, no, that's a substantial difference.
Speaker 2:If I look back, I think this is the first month and all from all of 2023 that it's in the positive.
Speaker 1:Oh wow.
Speaker 2:So year over year, Wow First month Okay, so that's a huge thing that I wanted to make clear to everyone. That's the first time I saw that in a year.
Speaker 1:And I think this is a great point, that we should not be so hung up in monthly, weekly statistics. We've got to continue to take a bird's eye view when you're looking at things like this, because a home is not a short-term asset unless you're flipping properties. But even in this market, it'll take you a couple of months to get that thing flipped.
Speaker 2:Sure no well that flip began easy. That's my side here in San Antonio. There you go.
Speaker 1:So home affordability.
Speaker 2:final thoughts I think that we're still not where we need to be.
Speaker 1:So, as far as In regards to Affordability, and do you think it's an inventory issue or a price issue? It's a rate issue, okay.
Speaker 2:I can't disagree with that. It's a combination of a price and rate issue. Yeah, we know our prices aren't going to go down though. Well, let's talk about the big thing that everyone says right.
Speaker 1:Okay.
Speaker 2:And this is just my opinion.
Speaker 1:Oh, don't say it Mary, the rate date, no, no.
Speaker 2:That everyone says. Well, back in the 80s interest rates were 18%. You guys don't know how good you have it at 6.5%, 7%.
Speaker 1:Yeah, tell me when the last time you bought a $20,000 house, exactly. So that's key.
Speaker 2:And that's how we ended up in our issue with. Our big problem today is that prices increased to 300% in such a short period of time, and then the rates went up more than double of what they were, and that was the perfect storm to create unaffordability.
Speaker 1:You're exactly correct.
Speaker 2:That is the whole issue. So it really doesn't matter what rates were in the 80s. Yes, they were way, way higher in Europe, paying a ton of interest, but homes were so much cheaper, yeah, so that's why it's more expensive now and the rates just even, like I said, doubled.
Speaker 1:Right.
Speaker 2:It creates a huge disparity in affordability where people they just can't afford it, they just can't.
Speaker 1:I think the last thing that I want people to know with this part of the discussion is I don't care what state you go to. If you type in home values over time we don't need the reference Over time and you zoom out on the map, it's always like this yeah, it is. So it's going to eventually come up. So what is that saying? Where it's basically anytime you buy real estate, you win as long as you can hold it long enough.
Speaker 2:It's not, it's not it's there's a saying it's true, it's true as long as you can hold it, but sometimes you have to hold it a while, right, right, especially from 2008. Yeah, I remember helping people because we, you know, I got in right before the whole mortgage crisis and housing bubble burst, and I remember helping people that bought in 2004, 2005, like right at the peak, yeah, right, and they still were upside down at like 2012, 2013.
Speaker 1:Now let's also add into there what added to them being upside down.
Speaker 2:Well, they were mainly VA and they had zero equity going in and then they had funding fee on top of that right which was rolled in. So you're on the money there.
Speaker 1:So now what was happening also that was massively is people were doing 80, 20 loans and no money down. So if you go in with no equity, what's your return on that? Matter of fact, there was a presentation that we gave this last week at a title company and it was a concept that I really hadn't thought about in a while or, for some odd reason, didn't think about it, but we were talking about return on investment and consumers, realtors we're all typically trained to think OK, if I buy a house for 200,000 and I sell it a year later for 220,000, I only made 10% on my money. Well, no, how much did you put in it to buy? Well, it was 100% financing. Well then you actually made like 300,000% on your money because you didn't buy the house cash, so you were only out your down payment. If you paid closing costs, no problem. But that return is based on what you put in. It's return on investment. So if you didn't invest anything into it, your actual return is massive, and nobody thinks to about that concept in itself.
Speaker 2:Well, I think you can look at it that way when you're comparing renting to buying right.
Speaker 1:Sure.
Speaker 2:Because if you put the money to rent, you're never getting it back.
Speaker 1:That's right.
Speaker 2:I tell people it's like playing basketball without ever taking a shot. So when you buy a home, at least you're in the game and you have the chance to make a shot, yeah, but when you rent, there's no way you're getting your money back and buying is not for everyone.
Speaker 2:It ties you down. You're more committed, right. You can't just up and leave, and when something breaks you've got to fix it right. That's right. Unless it's like a new home. There's some negatives to buying overrunning. But I agree with what you said. If you finance the whole thing and then you make money, yes, you're making more right and that comes into play. But there's also other factors and what I tell even all of our agents real estate is just math. It's math. If you know the math and you know how to do the math, then you can really figure out. Did I really make money?
Speaker 1:And I think that that's what we, as professionals, should be bringing to like to our customers, because the journey of purchasing a home tends to bring a lot of emotion into it. My forever home everybody thinks that this home is their forever home. You make a lot of memories there, et cetera, et cetera. But we need to make sure that we sit our customers down and go over the math, the numbers. The numbers need to number, the math needs to math. Well, let's break it down real quick.
Speaker 2:Yeah, okay, let's do it real fast. Let's say you, let's make it really easy. You bought a home for 100K, okay, okay, you sell it. Let's say, five years later, for 120. That would be really good. Okay, how much did you put down? Okay, let's say that let's actually let's make it 110. You sell for 110. Okay, okay, so you make 10%. Five years later, okay, let's say you put down. Let's say you put down okay, you think that. Okay, keep going. Yeah, let's say you put down 5%. Okay, okay, so you put down 5 grand. You put down 5K, okay, so you got 5K. So you really 95K. On your note, right, correct. But then there's other factors like closing costs, right, lender fees, things like that that you do have to consider.
Speaker 1:You could still calculate that into that concept. Let's say you paid all of your closing costs.
Speaker 2:Sure, let's say you paid all of them. So let's say, let's say 3.5%, or make it. You want to make it simple? Yeah, make it simple.
Speaker 1:We'll say we'll say you put 5% down and the closing costs were 5. Which would be high 10K total, 10k, right, okay. So you bought it for 100 grand. You put in 100 grand, I'm sorry. You put in 10 grand, okay, and you sold it for 110.
Speaker 2:Sold it for 110. Okay, but then you have to pay you made it Six and a half percent to sell it right, with another 1.5% on average of closing costs, okay. So 7.5% to sell it right, yeah, okay. So you broke even with the first scenario, but then with the fees to sell the home, you actually lost money. Okay, that doesn't include principle that you put down right Over the time you paid over five years, the principle that was reducing the home.
Speaker 1:We're using an example that's not logical, because you probably recommend them not to sell.
Speaker 2:Hey, let's look at you would recommend them, right, but that is a big misconception that people-.
Speaker 1:I understand that they put 10 grand in. If they can sell it for 110, they made 100% on their money. How do you figure 100%? I've only put 10 grand in. If you're going to give me 20,000 back, you're saying they made 10. So if they bought for 100, put five in. Okay, take closing costs.
Speaker 2:I understand what you're saying. They made 100% over But-.
Speaker 1:They made 100% of their investment.
Speaker 2:But when you break down the math, they didn't, they didn't, and that's the truth. They didn't. Okay.
Speaker 1:Every scenario is going to be different, ladies and gentlemen. Every scenario. Now, I would hope that anybody in that situation that needs to sell got some great memories out of the property. Exactly, right.
Speaker 2:I mean well and again that's another thing you got to use it the way that you wanted. You didn't have to contact the landlord if you wanted to paint the walls. You had a yard, maybe, where you went, with an apartment right For your dog to run in, or whatever you got all the other and 6% man Another discussion.
Speaker 1:Or realtors making too much? I'm kidding, Maybe they are. No, that's good stuff. They did go over that over the first one.
Speaker 2:How much they really come out with Correct. So I mean it's not as much as you would think, guys. Yes, you have to break it down.
Speaker 1:So home affordability, we can scratch that off the table. Texas versus the other states that are out there. I mean, obviously we can only speak to what happens in Texas, matter of fact, we can only speak to what happens almost just in San Antonio and surrounding. But from a conceptual standpoint, real estate is always about location. It is very dependent upon where you're doing the data digging, what location you're actually looking into. And what I don't like seeing on the media is it being painted as an overall picture of everything. Example I did a discussion with JJ and Andy about commercial real estate. Whereas the whole United States is about to crumble with commercial Meanwhile, here in San Antonio they're doing great Affordability. The vacancy rate isn't as high as it is all over the United States. Companies are moving here, whether it's political reasons, tax rate whatever, but they're busy, whereas everybody else is not.
Speaker 2:And they're more experts in that field.
Speaker 1:Sure.
Speaker 2:So see, I didn't know that and that's. I mean, that's good to know that.
Speaker 1:I didn't either. That's why I had them, because it was like dude, treat me like I'm an infant, I know nothing about commercials, lay it on me. So it was a good discussion.
Speaker 2:I mean that's good. I mean San Antonio has grown right. It has businesses coming here, it has people wanting to up business and contribute to the market here and the overall culture, which is good. I mean look at us, we're doing the same thing right, it's true, we're running a space. I mean I don't know enough about other states. I do know other states are doing better than us here very few.
Speaker 2:Texas does really well in general, even during the housing bubble burst, and I have to attribute a lot of that to affordability, because it is more affordable than a lot of states. You know we have maybe less strict laws when it comes to taxes, so we got tax shelters where people want to come over. And then the other big thing is especially San Antonio. We're a military city, usa. We have a huge influx of people coming in and out. We have five bases, not that there's actually people in all five bases, but there's a big influx of people PCSing in and out all the time. So you have a good, steady influx and outflow of people that want to buy and sell and own and be part of the American dream and own their house. So that's a big thing that keeps our market steady here and in general Texas overall. You know people come, we got a lot of bases in Texas.
Speaker 1:I think there's a lot of factors, kind of how you put it. There's a lot of factors that make Texas, san Antonio surrounding I don't want to say a safe, but a very secure bet when it comes to real estate, because there's just so much that we benefit from on the real estate opportunity, affordability bases, you're going to have steady inflow. I mean, there's just so many factors that you can use to help someone understand that real estate in Texas is pretty safe. I mean, as far as investment, as far as tucking your money away, or at least I could say throwing money at something and hoping you get something back, I would have to agree.
Speaker 2:I would have to agree. I think one of the biggest factors to that is that Texas is so big, and what really helps keep the market steady is really what real estate is, which is land land acquisition and we have so much of it that that's right Still undeveloped.
Speaker 2:It's not like states where there is no more land, so they have to tear something down to put something new up and that's why the land is so expensive in those states. And we did see a huge increase in land value over the past five. I mean big increase in land value. I remember showing someone like 10 acres like seven years ago and you could get 10 acres for like 50K and now you're lucky to get it for like 150. You know that's crazy 10 years or seven years difference and that increase, that's insane. So it has gone up. I mean, of course, extreme rural. It's still fairly you can get acres so fairly cheap. But if you want to be close to a major metro and have convenience, you're going to pay more money. So land, yes, that is huge. That's another reason why we're, in my opinion, more affordable and more secure with values.
Speaker 1:I would agree 100% with that. Actually, let me see real quick Three, 30, denly, let's keep going. Okay, so now if we were to talk investor I've invested in real estate, you've invested in real estate what would be your thoughts from a perspective of first time investor getting into the market opportunities that there are in our market for investing? And the reason why I prompt this is half of the deals that I'm doing right now and for the last three months have been folks that already own a home and are wanting to buy another one and, in many cases, are not really inclined to sell the current because of the terms that they have on it maybe it's a lower rate, etc. Etc. So they want to become first time investors. Time to flip that property to an investment property and buy my next home.
Speaker 2:I think it depends on what they're going to do with the property, because there's so many different ways to invest in real estate and by no means am I an expert.
Speaker 2:Yes, I've invested, but I'm not an expert in it. Here's what I tell people, especially if they want to keep their existing home and become a landlord. I tell them that not everyone is cut out to be a landlord. And here are the main reasons why Because when things go wrong or you have vacancies or a tenant dips out on you or you have repairs, you got to be ready to drop and be able to drop potentially thousands on the drop of a dime on that home that is your rental. And then most people don't know how to property manage it themselves, so they have to hire a property management company, which is also going to be more fees. And unless you have a good cushion, more than likely you're going to be in a bad spot when those things happen. So you've got to be prepared for when those things go south if you're planning to do a long-term buy and hold. So it's different if you flip and there can be a lot of money made in the flipped market and in the rehab market.
Speaker 2:Here I still say it's not as easy as other locations in America or across the US. I agree. Yeah, I would still say it's not as easy because the margins just aren't there and there's a lot of other factors that go into play. But the really good investors and I've been to some of their seminars they have all these incredible tools to figure out. Hey, is this going to be? You really have to do your research, like is this going to be profitable for me to be able to put this money in and get the money that I want out of it? And I will tell you. I think that is key. If you're planning to do a flip, you have to have access to those tools.
Speaker 1:Oh 100%.
Speaker 2:If you don't have access to those tools, you're going to be behind the curve from all those guys that do, and they have some incredible algorithms.
Speaker 1:Accuraries yeah, absolutely.
Speaker 2:Data websites, I mean where they know what's coming up before it even comes up and they can go get it before other investors do. The investor market it is insane.
Speaker 1:Yeah, it is flooded right now. The reason I bring that up is because you've got home buyers that are we'll call it complaining about affordability. Meanwhile, you've got massive companies that are not batting a single eye in buying up multiple properties so that they can turn them into investment properties, and you know what you don't want to buy rent from me. Yeah, Does that make sense?
Speaker 2:Yeah, I mean not even just buying up the property, they'll loan you the money, right, right, I mean every aspect of investing, even in notes. They'll loan you the money to make interest. Oh yeah, so I don't know. To me it has to be risk versus reward, especially on a flip, is pretty high, depending on what you're doing right. So you really got to be prepared, like you're taking a big risk with a lot of money, to maybe not get as much of a return, and as long as you know what you're doing, then usually you're good to go. It's true, it is true.
Speaker 1:No, well, that's good for that one, but actually two more questions, so you tell me which one you want to talk about first. We're either going to talk briefly about relationship, business versus marketing on social media, and I'll expand on that, or we'll talk about the fact that there are more single ladies in the United States that own real estate than single men. Let's do that one last.
Speaker 2:Do that one last. Okay, good deal. I want you to start this one out and tell me what you think.
Speaker 1:Which one Relationship.
Speaker 1:Yeah, business versus marketing on social media. So I think that they can be parlayed, because there's two schools of thought. Okay, there's probably many, but my opinion there's two schools of thought where I've got people that say no, it's a relationship business. I don't do social media. I meet people, I go out in the community, I go to church, all of those things. I don't disagree with you on that part. But the idea of you not having a social media presence is Stone Age. You are behind the curve.
Speaker 1:Now I believe that you can utilize social media to leverage the relationship piece to it, meaning you don't your customer that you've never met before, because we know if we all did business with our friends only, we'd all be broke. So we've got to meet new people constantly. But when we meet those people, I don't want to say infiltrate their lives, but become part of what they do, become a staple in their everyday lives, that they don't forget who you are, because you're the guy that they go to to get recommendations for handyman, recommendations for AC. Hey, I got this bill in the mail. Can you tell me what this is? Be that person if that makes sense.
Speaker 1:So here all I can do is tell you what's worked for me, because I don't know what to do the reason why I ask you this is you aren't as present on social media as others would be, but are still very successful.
Speaker 2:Okay, so again, I'll tell you what's worked for me and it's exactly what you said. So on social media I am present, like I post my closings, right, and, of course, happy clients and then some of my listings and things like that.
Speaker 1:I do.
Speaker 2:And I'm not out there all the time filming homes from builders and posting. I mean, you can only look at a home so many times that are like. I've seen that you know it's a house right. So you got to be a little more unique than that, and that's what you see a lot of younger agents doing right now, and there's nothing wrong with that. They're just trying to get their start up on, but you know you want to make it somewhat creative and somewhat engaging. Like what did they say? You got 20 seconds.
Speaker 1:That's right. If you can add, it's like six seconds, right so?
Speaker 2:that shows like Coco Melon that kids are watching, where it's flipping the scene every two seconds right. So right, that's what they've drilled in you. It has to change fast. So what's worked for me is that I'm extremely blessed to have clients that trust me and because I take really good care of them, and they're all amazing, incredible people.
Speaker 2:I'm so thankful for them that I've learned that if you learn to build a referral business, you don't have to market near as much, right, because you just take really good care of the people who trust in you to take care of them, and then they in turn want to send you their friends, their family, their co-worker because you took really good care of them, right. So if you can learn how to do that, you don't have to market a bunch. But if you do both, that's even better, even better, right, it's even better. But again, I think we talked about being confident and cocky or arrogant, right.
Speaker 2:So it depends on how you want to come across, and I don't want to come across as that, because I'm not that and I'm here to help if you want my help. And again, I just have to reiterate, not just my clients, my business partners, like you, and everyone else. I'm so incredibly thankful for people like you and them that they trust me with, like we said, the biggest decision that they're making, financial decision that they're making in their whole entire life ever, ever, ever, ever. It's such a big deal that, like I said, most rules don't realize that. Like it is such a blessing and an opportunity for you anytime someone comes to you and asks for your help. It's huge. I mean, they're putting so much faith in you as an individual that if you have that mentality, then you'll be fine, you'll be okay. So that is what's worked for me, and I do need to up my social media presence and you'll see that more.
Speaker 2:It's coming right Because we have the new brokerage opening, so I have to do that. So it's coming, but again, I just don't want to come across as that guy that just shoves up down your throat.
Speaker 1:Sure.
Speaker 2:And you'll notice like they do all kinds of studies on these big YouTubers and stuff.
Speaker 1:Yeah, sometimes the guys that are in the gals that are most successful are the ones who just produce really good content and they dish it out every now and then, but it's really good, it's good stuff instead of just pumping out a bunch of stuff at once, and I have to agree with you, like all the videos of houses, and think yes, we know, homes are sexy, that's what sells at the end of the day, but what value did you bring to them? Because that home that you just showed guarantee you it's not even for sale anymore. No, not for sale, or it's not even your listing, or they can't buy it.
Speaker 2:It's not your listing. You have no affiliation with it whatsoever right. I mean, so what value? And yeah, they might call you because they saw the home and that does work. Sure, it does work. They'll call you because they saw the home work and like I want to buy this house, you know, and then you can pick them up as a client, but then you have to know what to do with them after, correct. So, and if you don't know what to do with them after, then what value are you? Yeah, I like that.
Speaker 1:Yeah, okay, so we've got last on the docket and then you can talk about whatever you want. Talk about you. Oh lordy, here we go. So we've got to. Let's see if I can find this article.
Speaker 2:Wait, say what's the, what's the subject line and then tell, tell everyone what I said to you when you, when you said ladies own more real estate than single men.
Speaker 1:I typed that in. All right, here we go. And this article is like everywhere.
Speaker 2:And when I read this topic I was like, wow, I didn't know that. And then what did I say to you? It's probably because of divorce. It's probably because they're the ones who ended up with the home after the divorce. So, but that's just a joke.
Speaker 1:It is a joke, you guys. Yeah, we believe women are powerful, and wouldn't God, we wouldn't be here without them to be honest and there's literal fact.
Speaker 2:There are a lot of extremely successful single women.
Speaker 1:So let's talk about a homeowner gender gap. Single women own more homes than single men, it says. Women typically lag behind men in pay. According to the US Bureau of Labor and Statistics, women's median weekly earnings are only 83% of a man's, while research generally indicates women are less well off financially than men. One key area in which women are likely to fare better men in home ownership Lending tree, yada yada, yada all of 57 out of 47 out of 50 states are. Study also finds that single women own 2.71 million more homes than single men. That is a big number, and I think they actually have. Yeah, I mean 2.71. That's quite a bit Okay. Back to us. What are your thoughts on that? I can tell you my thought. This is a touchy subject.
Speaker 1:It really is.
Speaker 2:You've got to be careful how you talk about this. But from what I've experienced in from everyone I've helped, which you two which is like thousands of people it seems like a lot of times, and I don't want to say all the time, but especially when it's emergent, at least at the start or even after. Women a lot of times they handle the finances and they know how to be financially sound and savvy.
Speaker 1:I wouldn't even go as far as to say a little bit more responsible too, A little more responsible.
Speaker 2:Yeah, I would have to agree. They are Especially single women with children.
Speaker 1:Yeah, they have a gift of multitasking like nobody's business.
Speaker 2:I tell them all the time like y'all are incredible superwomen, super moms, like I don't know how you do it. You know, knowing having children myself, how you do it and then still work and then own a home and have kids. It is just so much to juggle the fact that they can do that and it's proven women are better multitasking than they are it's true.
Speaker 1:So you, out of 10 credit reports that I pull that there's a man and a woman on it, the ladies credit score is always better, better, I mean, and you see those all the time.
Speaker 2:I see it all the time.
Speaker 1:You see them all the time, so I would say I always make a joke about it, but I mean it is true, just like this statistic here that we're looking at. That's true as well. I mean, what? What would you say to men out there? I know what I'd say. I'd say, men, step it up, yeah, step up again, and at the end of the day, step it up. I'm not saying we need to be better than women, anything like that. That's not what I'm doing here. I believe that I'll agree. We had a head start, a big head start, and it's almost one of those things where you go gentlemen, take notes please from the ladies and get your stuff together.
Speaker 2:So this is this is one thing I could say Think about if you have your stuff together credit wise, financially, owning a home as a man and then you find a woman that also has that power powerhouse, that's right.
Speaker 2:Power couple. If you can do that too, and then you find a woman that also can do that, that's huge, not just for you but for her. So instead of having her carry you or vice versa, you know it's it just really helps a good symbiotic relationship and then also helps you progress with your finances and everything.
Speaker 1:Absolutely.
Speaker 2:If you can do both, right, so get you one that can do both and you're good to go.
Speaker 1:Yeah, man, you got it made the shape. Well, that's all the questions that I have, austin, what do you want to talk about now? We got, we got about.
Speaker 2:I don't know 15 minutes Talk about you. So we talked. We talked a lot about me, but I want you to tell, so we know that you are where you might work. Was I your very first deal?
Speaker 1:Yeah, man, very first one, Very first deal. Matter of fact, marty's daughter was the. The first was the first year.
Speaker 2:Yeah, Speaking of.
Speaker 1:Martha Flores.
Speaker 2:Speaking of women who have their exactly single lady owns her home.
Speaker 1:Her daughter owns a home, works several jobs, has a degree. You're right, martha is. Shout out lady.
Speaker 2:Yeah, shout out to you, keep crushing it Superwoman incredible lady that has her stuff together and really took initiative to be the amazing person that she is. So we were each other right. So, as I was the first realtor for your first loan transaction and you came out of banking yes, I came out of years of banking, tired of getting paid a salary and giving away great advice, great logic.
Speaker 1:Seen all the different people coming into the bank, shaking and moving and here I am, managing bank account, checking accounts, stuff like that. Moved into the business banking side, started learning annuities and still there was very little commission. I worked for Chase so I mean you were getting commission on things like connect their online banking. I'm like, come on, guys, I want some real needle. You wanted the sky to be the limit.
Speaker 2:That's right. You wanted the sky to be the limit.
Speaker 1:You did that for a little while and then moved over to the finance side, was finance manager and then I wanted more. I mean honestly, I that opened my eyes to 100% commission, so you get paid for your efforts, clearly. And I went and took all my real estate classes and before it was time to take the test I went. This isn't for me. Let me see what the finance side looks like. My mom introduced me to Craig Jennings over at Academy. We hit it off. That day I left his office with the understanding that if I pass this test he'll hire me. And I did, and he did, and I never look back.
Speaker 2:And you excelled right off the get go right, I mean you did and you were like top LO in that office, right.
Speaker 1:Yeah, I was shit, still top 1%. But I mean, at the end of the day, yes, I utilize social media, I utilize the relationships. I was honest with customers day one. I would tell them I don't know the answer to that but I will find out and I will get back to you. And I did.
Speaker 2:And you did. You taught me a lot of things, a whole lot. We taught each other stuff, but you taught me more than I taught you. So why lending over real estate?
Speaker 1:It's a good question. Why was real estate not for?
Speaker 2:you. But being an LO was it's okay Back then, hate on realtors? No, no, no. I don't want to open doors, I don't want to drive around all the time. What was it?
Speaker 1:I thought that after I had gone through the real estate classes and talked with Ernie Guerrero, again shout out Ernie.
Speaker 2:Oh wait, I have to say something. Ernie was my teacher when I first got into real estate at Sable. He was my favorite teacher out of all of them and taught me a huge majority. He is the best.
Speaker 1:So Ernie Guerrero is my uncle, previous owner, or still owner, of Alamo Real Estate Brokers, and Michael Guerrero has kind of ran the day-to-day operation, but he would allow me to go in there and give presentations to the new, to the business realtors. I mean, it was just, I don't know, going through that, I knew that I could leverage more of my time and my previous experiences because I had already, at 19, opened a credit repair company with a buddy. I had dealt with finance, second chance people when I worked at the bank inside of Walmart it was always banking. So when I saw the concept of 3% commission, of course I was attracted to it. But then flipping it over to the lending side, it was like has nothing to do with going out and showing houses. I just felt like I could help more people with finance numbers, making logic make sense. And here's another thing that I don't talk about often I do to my loan officers, but when loan officers turn in files these days they turn them in very shittily.
Speaker 2:Half ass sloppy correct.
Speaker 1:When there are guidelines for every single program, every single little, everything. That's a processor job to make them look good. It's not, though. You're right, you're exactly right, I'm kidding. So when I got into the business, and even right before I got in the business, my mom handed me a massive file. We were doing paper files back then. She was like this is one file, what are your thoughts on this? And my words were man, this feels like I would be like an attorney. Awesome, that's what I was thinking. I'm like man, I get to go reference guidelines and if I get the right answer, I can actually use it to my advantage to win my case. So that point moving forward, I had like the cleanest files anybody would turn in, because I went through everything. Mr ADD, adhd, that was something that I could focus on. And then the processor lunges you yeah, absolutely Matter of fact, my processor has become my underwriter in-house for, I think, mortgage Share a blum, absolutely.
Speaker 2:Yeah, that's awesome, I mean, and you make it easy for them Correct. It's like you're handing it to them on a silver platter. I mean they don't have to do work, but it's awesome.
Speaker 1:No, they still got to put in work, but you are correct, and I think that that is something that is shortchanged these days, because the loan officer is seen as the salesperson, but they also need to be the person that knows how to do loans. I mean, do you know how to put together a?
Speaker 2:loan. So let's talk about well. And I want to say one other thing when we got, when you were in, that's when people still didn't realize how important credit was right. So people didn't have great credit because right before 2008 and frankly, they didn't care. So you helped so many of my clients, individuals and families that would have never been able to buy a home, get a home because you helped fix their credit Right. Right, I mean like it was amazing and you were doing all of it for free, yeah.
Speaker 2:Like that's incredible, yeah, so what a huge asset and tool for a loan officer to be able to do that, because there's a lot of lenders that are like, oh no, we don't do that.
Speaker 1:We don't do that. I mean, when I got into the business, they showed me the tools and I saw the tool as holy cow. I can use this because of the previous life, that I know how to work with credit, what collections are, had the credit repair company back in the day with the buddy that taught us, okay, you can dispute these things, but that's still a hope and a prayer. This system shows me if I move this or remove this or do that, it'll be on the money. So when I meet with the customer and back then I would meet with them in person and I would emphasize it so much like this is actually what can happen if you do this, this and this. But if you short change this, it won't turn out the right way. And I wanted to make sure that they saw actually what was, because we're all visual people. So if you see it, it feels obtainable, achievable.
Speaker 2:Do you remember what I used to tell them? I used to say I've never seen Mark tell me that he can fix your credit and if you do this and that, it not work ever. So if you just do what he says, it will work. It's not one time as it not work. And then it did. Yeah, it still does.
Speaker 1:And I still have those conversations with customers and I'm very direct because this is not something faint of heart, this is not something that is on a whim. If you want the house, this is what you need to do. If you skew from this, I can't help you because you're not being honest with me and I think that's why I'm able to build relationships fast with people. I can relate to people because I've had bad credit in the past and we fixed that and you move forward and you level up, etc, etc Kind of like your concept. I remember the first time you bought a car you were like I don't know what the hell I'm doing. I probably bought everything cash. That's right.
Speaker 2:And I just hit it to boost my credit. And I don't know if you remember, I went in and I was like I went to the finance person and they were like, oh, we can get you a great rate and get you 3.99. And I'm like I have over a 700 credit score. I'm putting a lot of money down. I said either you're going to get me a 1.99 or I'm going to walk out of here and you're not going to make any money off of me.
Speaker 1:She got me that 1.99 real fast.
Speaker 2:So again, when you have good credit and you know how to leverage what you have, then you can get lower rates and save you a lot of money. And I remember the interest that I paid on that car in my five years of owning it before I paid it off. Literally, inflation was more than that.
Speaker 1:It was insane. I actually made money because I put it into a property.
Speaker 2:So it's just crazy. So if you know how to utilize that stuff and obviously you got an expert over here, mark, that can teach you that then you can really come out ahead. So another thing I want to ask if we were to explain to people and even realtors how a loan works from kind of start to finish, but not in extreme detail. The way I explain to people is it's like a hamburger the loan officer is like the top bun, the processor is the meat right and the underwriters are the bottom bun. That's the way I kind of explain it.
Speaker 1:And I know you like to use analogy.
Speaker 2:I like to use that. So how would you explain it? And the reason why I say that? Because the loan officer is like the face. It's the first thing you see, right?
Speaker 1:But the loan officer should be more than the face. But you are correct. Yes, I mean, your loan officer is going to be your point of contact for everything, until they themselves either introduce you to the next person in the chain.
Speaker 2:But they should always be involved in what you're saying. Oh, absolutely. But everybody, in that burger you take, you're taking a bite of the top bun, that's right. So I'd say that that's so awesome.
Speaker 1:You know what I'm saying?
Speaker 2:It is true, so, but the processor right is like the meat, because they do a good majority of the work of putting everything together to make it look good for the underwriter right. It was your last line of defense, that bottom bun that says, hey, your loan is approved or not Put it this way, the underwriter is the only one that can approve a loan.
Speaker 1:A loan officer can deny a loan, not approve a loan, but not approve, okay, that's a good way to put it. And then, when it comes to what you want to look for from a loan officer, to buyer's perspective is just remember the acronym CIA credit income assets. That's what we're looking for, so yeah.
Speaker 2:So that's what you would say. This is what you need to qualify for a loan.
Speaker 1:Credit, income and assets. Yep, okay, that's good.
Speaker 2:So anything else I missed on elaborating on that, that people I mean, that's a whole nother conversation. I know it is, that's a whole nother.
Speaker 1:Not going into extreme detail, but if you were to give it a nutshell we can do this every two weeks, kind of You're to give it a nutshell, right?
Speaker 2:That's because a lot of people don't know how it works, especially first time home buyers, I would say it is a process you're never going to as a buyer.
Speaker 1:You're never going to speak to an underwriter. It's just not something that's going to happen. We also have a closer that's involved that helps us communicate with the title company to make sure all of the fees and charges that we disclose to you upfront are as accurate as possible in the end. But in regards to your processor, that's the next person in the team that is going to be communicating with your borrowers directly collecting conditions. I really don't like my processors explaining too too much of the details of the loan itself, the lock itself, anything like that, because essentially that's my job. If a loan officer can't explain those things, then you are just a paper pusher. You are just a shiny object in my opinion.
Speaker 2:And you helped me. You did my loan on my first home. So I want to tell a quick story and then I want you to elaborate on this because I think this will really help a lot of people. We'll get, we'll be fast. We got seven minutes, that's good, okay. So it'll be pretty quick. But remember I went to go buy my first home and my dad, he was very, he was very smart in making me get credit cards when I was really young to build credit right, because you don't build credit unless you have debt right.
Speaker 2:Which credit is really stupid?
Speaker 1:how it works the ability not to completely pay off debt, but to have low balances of debt and to pay it reoccurring right Correct and to help people that are lending you money want to know that you have a history of paying somebody back.
Speaker 2:Yeah, and balances low right, Especially when it comes to credit cards.
Speaker 1:It doesn't matter. At the end of the day, are you on time Paying money?
Speaker 2:back. So you know, I had these credit cards when I was young, at 16 years old, I got two credit cards. So when I went to go buy my first home at 23, or whatever. I was, I would charge a bunch of money on them every month, and maybe they had $2,000 or something and I would pay them off in full every month, right, every single month.
Speaker 1:Yeah.
Speaker 2:And when I went to go buy my first home, I was thinking my credit is going to be the bomb, immaculate, it's going to be the bomb because I've never missed the payment, ever. It's going to be amazing. And then you pull my score and you're like you're at a 640 and I'm like what? Like how am I at a 640?
Speaker 1:Dude. I've never missed the payment ever in my life. Why was I at a 640? So essentially, gentlemen and ladies, if you are playing the let's call it credit card game, where you use your credit card to get points, like we do, and you pay it off every month and you just basically stick it to the credit card companies the best way, you know how. You need to plan to leave a small balance for a month so that it can register that within the system and then you can continue down your road. But if you are not monitoring your credit and the day that the creditor reports to each of the bureaus, you may catch it on a time that your balance is full or a time that your balance is at zero. Either one of those zero or too much on it is going to give you an adverse effects on your credit. So definitely 30% is that?
Speaker 2:happy medium rule. So explain it, explain it.
Speaker 1:If you pay 30% balance or less. And I go even further than that. If you can do 10% or less, there's additional points within that. But I will tell you, every credit score is like a thumbprint. They're all different, every single one of them. What you do for one may not happen to the other. Matter of fact, I'll go even further. You've got three credit bureaus. If you do something to Equifax, it may not even affect your other two bureaus. So make sure, if you're working with the lender, that they run the scenarios and know what to tell you to do on each of the bureaus, not just this general's information, and that's what I'll leave it.
Speaker 2:That's exactly right. And so when people say, hey, my credit karma says this, why is that okay?
Speaker 1:but not great. Number one credit karma uses a completely different scoring model. Number two when's the last time you got a loan from credit karma? Not going to happen. Reason being is they have to give you something of value to justify what they're charging you. The monitoring of your credit is fine, but then when they add that score that they're using their own scoring model for it makes you, as the consumer, feel like you're getting something for your money. Every lender uses a different scoring model, whether it be mortgage lenders, auto lenders, credit card lenders, et cetera. Their different scoring models out there, and I think it's important for you guys to just monitor your credit. Stay ahead of the game. The best thing I can tell you pay your bills on time. That is the number one. I don't care if you've got high balances. Pay the bill on time, and that's the advice.
Speaker 2:I'd give on that, okay, yeah, I mean another podcast on credit. I think would help a lot.
Speaker 1:Okay, I'm getting. We can bring Dylan Shively on here.
Speaker 2:That would be expert.
Speaker 1:He's an expert, yeah.
Speaker 2:That knows stuff, I'm all for that Two to three weeks, let's do it. That sounds good.
Speaker 1:Thank you. Ladies and gentlemen, I want to thank you for tuning in to this episode of me and Austin Ranton about anything and everything but Austin. Thank you for joining. You got anything else you want to add?
Speaker 2:No, just, I really appreciate being here. It's been a long time. You're the man. Yeah, it has been too long.
Speaker 1:Guys, make sure to like, subscribe, share with a friend, but we will catch you on the next one. Welcome to Key Factor's podcast, where knowledge meets ambition in the fast-paced world of real estate and mortgage. I'm your host, mark Jones, bringing you the latest insight, trends and expert advice to navigate this dynamic property market. In each episode, we dive deep into the heart of the industry, dissecting market movement, exploring investment strategies and unlocking the secret to real estate success. Whether you're a seasoned professional, an aspiring investor or simply looking to stay ahead of the curve, this is the ultimate guide to making informed decisions in the world of property and real estate. So grab a seat and let's uncover the key factors that make all the difference. Welcome to Key Factor's podcast. Let the journey begin.