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Key Factors RealEstateAF
Educational Podcast for Consumers, Mortgage & Real Estate Industry Professionals. We'll Talk About It All! Key Factors podcast, powered by https://ReviewMyMortgage.com . Your Host Mark Jones invites Industry Pros to help uncover & educate on the key factors of various topics. There’s something for everyone so let us be your guides and get educated. Subscribe & Follow on Spotify, Apple Podcast, Facebook, Instagram, & all other podcasting platforms. Host : Mark A Jones Founder of ReviewMyMortgage.comProducing Branch MangerSr. Loan Officer. NMLS ID# 513437NMLS Consumer Access: http://www.nmlsconsumeraccess.org/Powered by ReviewMyMortgage.com
Key Factors RealEstateAF
Mortgage Rates, Market Myths, and Why 60% of Buyers Feel House Poor
Is the Fed About to Make a Huge Move? How does it effect you as a homebuyer?
In this eye-opening episode of the Key Factors Podcast – Real Estate AF, host Mark Jones is joined by John Hudson and Brianna Jones to dig deep into the current mortgage climate, financial literacy, and buyer behavior in a volatile market. The trio explores how fear of rejection, lack of trust in lenders, and financial misinformation are keeping 85% of potential homebuyers on the sidelines—even as rates drop.
They break down the true relationship between Fed rate cuts and mortgage rates, challenge the house-poor mindset, and share how tools like LoanBot empower consumers through transparency and options. From the generational wealth gap and 40-year mortgages to the failure of schools to teach basic finance, this episode delivers hard truths and helpful guidance in equal measure.
🧠 Discussion Themes / Talking Points
Fed Rate Cuts vs. Mortgage Rates
Why a Fed cut doesn’t guarantee lower mortgage rates—and how media confuses buyers.
Fear, Trust, and Financial Literacy Gaps
Generational distrust in lenders, fear of rejection, and lack of education are massive hurdles.
LoanBot as a Solution
A tech-driven approach that empowers buyers and gives realtors and LOs a sticky tool to stay top-of-mind.
Expanding Term Lengths & the Case for 40-Year Mortgages
The market may be shifting in term length expectations due to affordability and age.
Buy Now, Not When Everyone Else Does
Encouraging buyers to act before another market frenzy hits.
Guest Info
📇 John Hudson
Owner & Sr. Mortgage Advisor
🏦 H&M Mortgage Group
📍 San Antonio, TX
📧 john@hmmortgagegroup.com
📇 Brianna Jones
Licensed Realtor®
🏡 JBGoodwin REALTORS®
📍 San Antonio, TX
📧 brianna.jones@jbgoodwin.com
Mark Jones | Branch Manager | Sr. Loan Officer nmls# 513437
iThink Mortgage
Founder and Co-Owner of LoanBot & ReviewMyMortgage.com
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.
Thank you, and we're back with another episode of Key Factors Podcast Real Estate AF, where the AF stands for and finance, and I'm your host, mark Jones, and we are now powered by LoanBot. We'll tell you about that a little bit later, but let's get into it with our guests today. I've got some folks joining us that had a pretty solid intellectual conversation a while back. So, by popular demand, first guest we have John Hudson. John, how you doing.
Speaker 2:Man, still number one and still on the run. Amen, that intro should be reigning champions here.
Speaker 1:Yes, that's right. That's right, and my second guest is Brianne Jones, no relation.
Speaker 3:How are you? I'm good. How are you?
Speaker 1:Doing well, doing well. It feels good to be in the studio with you guys. It took a while for us to get here. Love it, yeah. So we've got some things to talk about today and I'm going to allow John to kind of kick us off on this topic.
Speaker 2:All right. Well, everybody knows. The news is out there, right, mortgage rates are coming down. That's right. Everybody rushed back out there and get ready to buy a house. Now is the time. But is it? But is it Right? And so you know again, you know, every time we chat, it's all about educating people, yeah, so how do we make sure that people are really prepared when they make that next step? And so you know, article came out yesterday that I just thought was very apropos. It was perfect timing, considering we all know what's happening this week, right, yeah, it's fed week, fed's cutting rates. That's right, he better. Well, but does that mean mortgage rates are going to come down tomorrow? Good point, we don't, we don't know, we don't know. Ironically enough, you know, a year ago was when the last time the Fed had the big 50 basis point rate cut, mortgage rates went up.
Speaker 1:Yeah, and everybody was going wait. That's not right. I don't get it. I don't understand, and I think it has a lot to do with the media convincing people that it is directly tied to the Fed rate and that is just not the case. If we're looking at what it's closely tied to, it would be the 10-year Treasury Right.
Speaker 2:You know, john, you work, but I was just going to say but that all comes back into this whole process of OK, I mean, mortgage rates have come down, they're in fresh, they're the lowest they've been in a year, right, but are they going to keep going down? Are people finally getting off the fence, right? What's happening? So, yeah, I mean let's have a good discussion here about that educational piece of it.
Speaker 1:First I want to ask, brianna, you being on the real estate side, working your leads?
Speaker 3:Working your leads, contacts, social media, etc. Are you seeing anyone jumping off of what people can afford and what they think they can afford and they're scared?
Speaker 1:to ask.
Speaker 3:Honestly, they're scared to ask the questions and a lot of times they're like they'll ask me and I explain it. And they're like well, wait, well, how? And it just goes to show you that we're not teaching this even at a elementary, fundamental level of high school yeah, no, I have to agree with that um and and a lot of it.
Speaker 1:Um, I don't know what it stemmed from the idea of being fearful of asking the question. Is it lack of trust? Is it um fear of being? Yes, you can actually do this.
Speaker 3:I think it's fear of rejection. Yeah, like human nature is fear of rejection in general, and there's a word for it and I can't remember the actual name.
Speaker 1:Like fear of rejection.
Speaker 3:Yeah. No but there was it was something I was watching the other day and there is an actual definition for it that by nature, humans don't ask questions because they're afraid of getting rejected no matter what.
Speaker 1:While you guys are talking, I'm going to look that up it.
Speaker 3:You know, it doesn't matter if it's. You know, life questions, a work question, something people are afraid of getting rejected, which is, to me, is wow, because I was always taught and raised that there is no stupid question right I mean it may sound stupid, but it's not actually stupid, because you're not going to learn anything if you don't ask.
Speaker 2:I agree 100 percent with that. That's exactly right. I always tell people that the only dumb question in the room is the one you were too afraid to ask Social anxiety maybe that's not right Need for belonging, rejection and sensitivity.
Speaker 1:Well, there's a whole lot of that going on in our society at the moment. That's just the honest truth of it, and I would imagine that that also correlates or ties back to anything including mortgages, buying a home, big purchases, change the idea of change in your life, taking on more responsibility, the idea of this next generation that we have coming up and to term of, well, it's probably time to buy a house or not. They're not, and it probably has to do with they haven't reached any adversity to be able to overcome or fail, the fear of failing.
Speaker 2:Adversity is a big thing, but then on top of that too and I'm going to throw this out there because you know, I bring, I bring stats always, that's right. So the playbook, and this is fascinating. Um, so this was from a uh called the next gen study. Basically they they surveyed millennials and gen zers and asked them all sorts of financial literacy questions. But this was fascinating to to me from the skeptical standpoint. 34% of women do not trust lenders, or no, I'm sorry, only 34% of women trust lenders. Only 42% of men trust lenders. So you've got two thirds that don't trust lenders right out of the gate. And we're the money guys. Yes, but by generation this was fascinating to me only 51 of millennials trust lenders, right, so only half, yeah, but only 32 of gen z, wow, trust lenders, wow.
Speaker 1:So a massive drop off there which I think I find that strange, only because let's correlate it to lenders were being compared to car salesmen at a certain point, sure, but they didn't get that indoctrination or what have you, because they hadn't. That was a while back, you know.
Speaker 2:I mean the big shorts, but on Netflix True.
Speaker 4:Ah, yeah.
Speaker 2:I mean there could be some of that. I mean it could be passed down from millennial parents, true, true, or it could just go into just society as a whole of you know this generation is more technology, yep, social media and everything, because somebody put something on the internet.
Speaker 1:And which I find that, um, I don't want to say it's discouraging. I find it fascinating that you've got folks like us that have been in the business. We consider I consider myself an expert, um, I would consider you an expert. 28 years, yeah, um. And they would trust someone on tiktok making a silly video that's maybe been in the business for a year, maybe over, somebody that knows what they're doing, can actually help them but, most importantly, knows how to talk to them to help them. And I think that that is one of the issues with the newer loan officers, newer realtors to the business they don't know how to communicate properly in regards to helping them accomplish that goal, yeah, does that make sense yeah.
Speaker 2:I think it totally does. And then I think it also leads into that, from an industry standpoint, we're really still not doing a good enough job. I mean we, like you know, as a whole are not doing a good enough job of outreach. Yeah, even from the financial literacy side that you know that that Brie was talking about, I mean it's true, it's true.
Speaker 1:I mean, we try to do things like podcasts, like this, to relate to them, because we know that they're more than likely not going to watch the news, but they will watch social media, they will watch YouTube, um, but you try and throw an educational class in person.
Speaker 3:Nobody shows up.
Speaker 1:Where are these people? And is it because of the social anxiety? Is it because of the fear of failure, fear of rejection? Who knows?
Speaker 3:Yeah, I don't know. I mean, when I've talked about doing it, I get a lot of initial interest. But I also think part of it is okay you talk about doing it, you have to put something together within the next few weeks or that interest just dies off Absolutely, because this culture now is very instant gratification. If you don't do it right, then and there it's on to the next thing They'll go find something else.
Speaker 1:It's almost like you put a video out. Hey, I've got an educational class. It's only six seconds. That's about as much of a bandwidth as they can take. But back to our topic of the rates. I mean we can go into this article here. Let's see here.
Speaker 1:So John brought us a fantastic article from the housing wire and this is a something that anyone can subscribe to. I think you don't have to be a mortgage professional email address. I think it's nine bucks a month, something like that. Yeah, Um, but this gives pretty solid information without a bias of of politics, anything like that. It's just educational in essence. So this is a homebuyer strains by cost, confused about mortgage market. 60% expect to feel house poor once they close. Before we go any further, let's talk about that. Before we go any further, let's talk about that. 60% have the perception that they are going to be house poor day one. I got my keys. I already can't afford it. Yeah, Think about that concept. Yeah, but I think in order to even feel that, they've got to take the step to do it. So the idea and I don't want to say that that's false, but that's a weird statistic to put out knowing that, hey, at least they moved forward because they closed.
Speaker 2:Right. So you know, and I think some of that too is, and it was it was fascinating to me because I I even had this step. Let's see here oh man, it was nuts, but it was. Oh yeah, Like 60%, 60% of home shoppers spent more time shopping for clothes than they did for a mortgage.
Speaker 2:Wow, so where I'm going with that is, people aren't getting all their options. Right, you know, now's a great time for a soft plug, but you know, that's exactly right. But, but you know people, if they're not shopping, so they're only being told what their rate and their paint, what one rate, what one payment would be, and that's the oh, that's, that's all right, that's all there is, Okay, we're done. And then they go go to find a house. Um, so again it's I. People aren't seeing all their options. There's tons of avenues for for affordability. Yeah, you know, I know we've talked about the down payment stuff a lot, but you know there's a call it what it is there's a lot of lenders that discourage people from down payment assistance because those loans don't pay money. That's right. And so you know that family that saved up $16,000, well, they spent it all getting in their house and now they have a dollar left.
Speaker 1:Yeah, yeah, that's so true, so it's people aren't getting all their options is where I'm going, and it also goes back to the idea of why are they not getting their options? Because they're choosing the guy on TikTok that's only been in the business for a year, doesn't truly know what all the options are In addition to doesn't know how to articulate it, or or, uh, I'm going to say, sell it to the customer, because essentially that's what you're doing, whether whether um, in my opinion, you should be selling the best option for that borrow Um. And how do we sell it? By giving more information, by educating. It's not. My coach has a saying and it's like sales is basically educating someone on a product that they didn't know that they needed and showing the value of that product. Pretty simple, yeah, you know good way of putting it, yeah. So to this article. John, I don't know if you can see from there, but you're probably way better reader than I. I can make that.
Speaker 2:Ironically enough, it was right in front of me. I'd have trouble seeing it, but from the beginning, no problem.
Speaker 1:Go for it.
Speaker 2:Yeah, so, yeah, so, obviously right, I mean. So. It says mortgage rates remain below the 50-year average, which is awesome because mortgage rates are continuing to move, trend lower as of today. But check this out. So they did a survey of 1,000 buyers and if you scroll down just a little bit more, because this was a chart, keep going down, keep going down. There's a chart, this one right here, yep, and this was fascinating to me. So think of all the misconceptions. Again, that's out there and again consumers have just been sold on. Oh well, mortgage rates are at all-time high. Well, a year ago and look at that only 15% of consumers did not put buying a house on hold.
Speaker 1:That is a. I'm happy to see that it's truly because what that means is the rest of them. They're still waiting. Yeah, they're still open to buying a home.
Speaker 2:I see that, as there's a tremendous amount of pent-up demand. Absolutely, yeah, I have to agree with that. A quarter of them spent, you know, put their buying a house on hold by more than 25%, and unfortunately, the reality, though, is that, okay, the market has shifted.
Speaker 3:Yeah absolutely the market's shifted yeah 1,000%.
Speaker 2:So we've gone from just seller's market. Now we're a buyer's market again. There's more inventory that's out there. Homes are staying on the market longer, so consumers have the ability to go and negotiate more, and so the sooner we can get people off the fence, the better.
Speaker 1:That's right, that's right.
Speaker 2:But, but yeah. So this was the big thing in that. That article that really stood out to me was man, I mean, you had 85% of people delay buying a house because their perception was that mortgage rates were too high that's right, when in reality they really weren't Right, you know, it just wasn't. They weren't 4%.
Speaker 1:Well, in addition and now I'm going to plug what we created and have launched what has a lender, a realtor, in the past given their borrower in way of a tool that they can utilize to educate themselves on the concept of? Are rates too high? Well, let's look at these different options that maybe make your payment lower, or maybe help you with the down payment that allows you to keep the money you saved up as reserves to help out for the next six months, eight months, while rates trickle back down. And LoanBot, essentially, is that tool. It allows the consumer to put in their criteria. It puts the realtor and loan officer front facing and allows them to go through actual, viable programs.
Speaker 1:We're talking from QM to non-QM, to off-the-wall portfolios. We've added them in there. And the idea is, all of these people that you show here I mean we're talking, 85% of them are still on the fence, but what are they doing? They've got their realtorcom app, their Zillow app I can't think of anything else off the top and being dripped on with all of these email campaigns from realtors, email campaigns from lenders, but there's nothing that they can interact with. And then you have us lenders, realtors, that want to keep these folks in our pipeline. But how do we do that? Hey, happy birthday. I'm calling to awkwardly figure out a way to get you on the phone to dig and see if you're still actually interested in buying International donut day?
Speaker 2:Am I still?
Speaker 1:your guy type concept. You know, it made it awkward for us to keep these folks in our pipeline, um, eager to buy, and you as the lender and or realtor, the one that they're actually going to use.
Speaker 2:Well, so go to that skepticism, skepticism, skepticism piece, right, I mean, it's a. Why do we like shopping on Amazon? It's easy Well it's easy but we're empowered, oh two good, right?
Speaker 1:Yes, I mean, if I want it, I can click it.
Speaker 3:If I don't want it, I can keep keep doing the same.
Speaker 2:Yeah, so you know. That's where a tool like loanbot comes into play, because it does empower the consumer to have their that ability to go and play around on their time on their own time and on their own day and that's always been. You know, one of my big beefs is most originators out there. Only give a consumer like here's your loan.
Speaker 1:Yeah, that's your only option. Yeah, it's like what Matter of fact, good example of that. I had a branch in Brownsville several years back and getting to know these loan officers as their leader, educating them, finding out what it is that they're currently doing, to see if I can inject any kind of value into their process, into their product knowledge, marketing, all that good stuff. And it took me a minute. But as I look back, after they closed several loans, let's say six months later, I go hey guys, you're only selling FHA loans. I'm not upset by that, right, yeah, but was that really the best option for the borrower at that time? And it and it blew this light bulb up, thinking okay, wow, so the newer to the business loan officers and I'm not saying all of you out there, but, um, in general newer to the business loan officers tend to learn one or two programs, get really good at them and that's what they sell, they know, yeah, yeah sorry, how many people do you see out there advertised?
Speaker 2:I'm a VA expert.
Speaker 1:Everybody and their mother. That's exactly right. That's right, Especially the ones that go. I'm a VA expert and I care about the veteran, but I don't offer tech support Right what?
Speaker 2:Check this out. 92% of buyers don't know what the minimum down payment is on a conventional loan.
Speaker 1:That's a large statistic that's way too large, for you know.
Speaker 2:So that goes right back to the point right, when a tool like LoanBot comes into play is let the borrower play. That's right. I mean, if this is how they're going to learn, because they're not showing up for the home buyer class. No, they're not.
Speaker 1:If this is how they're going to learn because they're not showing up for the home buyer class, this is how they're going to learn then we've got to provide them with the tools. That's right. And if you put out an educational video, no matter how great the content is, you're gonna get about six seconds. Yeah, that's it. You know. And it's like buy a house, okay, that's it. Yeah, I mean, what else do we have time for these days? You know, um, and, and that's it's. I don't want to say it's sad. I think it may be a cyclical thing. I don't know when this has happened like this, this pent up buyer's market. I'm sure there was a point in time and I'm sure we got out of it and now we're back in it due to things that have taken place. You know, taken place, you know. But how do we continue to grow the educational stance on that? Other than tools classes, what are some other things that maybe realtors, lenders out there, could be incorporating into their practice?
Speaker 2:I don't know if this may sound goofy or whatnot, but I'd really like to get more into high schools. Yeah, and just doing. They're not buying a house with their head no, but.
Speaker 1:Basic financial literacy.
Speaker 1:What you're doing, john. In that I love that, by the way, you're planting a seed. Yeah, you're planting that initial seed that maybe their parents are renting. Maybe they're not that initial seed that maybe their parents are renting, maybe they're not, but I know many friends that do not have financial literacy conversations with their parents growing up Right, why, I don't know, I had them with my parents. Matter of fact, like I tell you guys, I was the one that filled out my FAFSA, or my parents FAFSA, for me, and I think I was 17 and dad was like here's the tax returns, get what you can get.
Speaker 2:I'm like okay, I'm like damn, y'all made a good body.
Speaker 3:I remember writing writing checks at the HEB when I was all cool and had my first checking account. I still write checks.
Speaker 1:My first one was that what was it? It was before Credit Human San Antonio, federal Bank.
Speaker 1:credit human san antonio federal sack, sack, you yep, um, but yeah, that, that idea of having those conversations inside the home. Some are having them and some aren't, and I think the majority aren't why? Well, you look at stats on how many people think that they're financially sound. It's, it's astonishing how many people do not think that they're financially sound. So why would you think that you should start teaching your kid this, or even fill them in on what's going on in your finances as a parent?
Speaker 2:Yeah, it's uh, um, there's. There's a term that I've seen used the K shaped economy, right so, where it basically along the lines of richer getting richer, poor getting poorer, right, where it's moving in a K? Um. So if you take that concept and just think about this so this was homeownership rates from the last survey of consumer finance for white families 74% homeownership rate, hispanic families 49%, black families 44% so now you couple that right with household net wealth and there's a clear giant gap between homeowners versus renters and just follow that line. Yeah, you know, so it's like. It's like that old uh, that book for economics. You know, these, these things, all these things correlate Absolutely, um. And then I saw a crazy stat the other day, and I can't remember the exact thing right off the top of my head, but it was like more than a third of all car loans now are seven years.
Speaker 1:I mean because our, our beer budget and our mentality of what we want is totally skewed because of the finance piece and being able to stretch it out. Right Gosh, I was putting in mortgage programs this whole last week to catch up on on the new enterprise account that we have and I I'm entering in 40-year mortgages. I'm like what in the hell is going on?
Speaker 3:they do, I don't offer them um yet, and I say yet because that may be the new 30 them, um, yet, and I say yet because that may be the new 30, sad to say, but it just might. But if it, you know, in a consumer's eye it makes it more affordable because it stretches out the loan, lowers the payment. But again, that's where that that education comes in. And you have to sit there and go hey, yeah, it looks good on paper, but look at what you're paying in interest right, yeah well, but at least house is appreciating asset versus the car.
Speaker 2:That's very true.
Speaker 3:That's very true. You drive the car off the lot, you lose 10 grand right there.
Speaker 2:If not more, yeah, but, but but the. So that's not really really scared me right now, and all these things correlate, and then you also play into scale of you know, so many of the social ills that we have in our country. I really don't think it boils down between r's and d's, I think it's haves versus have-nots, yeah, and so the if we can get home ownership rates up across the board for everybody, then it's not going to happen today, it's not happening tomorrow, but a generation from now we'll start to see that pendulum kind of come back into the center.
Speaker 1:So I've got two and I just thought of them now and I made sure to write them down so I don't forget the idea of, and your point of, the white America is ahead of the rest, and I don't think it has anything to do with we have more money than you. It's the idea of they knew about things that the other black Mexican, I can say that were either an understanding, unwilling to tell their children, et cetera to pass down. One that comes to mind is life insurance. Huge, it wasn't that black America, mexican America, et cetera, could not afford life insurance. That's not what it was.
Speaker 1:Life insurance is cheap as $10 a month, so it wasn't affordability, it was a knowledge education, something that was, they felt, nuanced or something that was out of reach, or now, that's not for us. When have you even had a conversation about this? Because, guess what, the white America who knew about this and were willing to, and maybe, maybe they didn't talk to their children, but I guarantee you, when that parent passed away and that life insurance kicked in and that child who is now maybe an adult, hopefully, is inheriting this money, they went oh, wow, I think I'm going to tell my kids about this. This is one of those staple things that we need to have in life moving forward, and that's what started the chain of are they wealthy or are they just educated in that sense to be set up for when the time comes? It doesn't affect and turn a tragedy into something greater that is passed down Right If that makes sense?
Speaker 2:No, it does. I mean the biggest tool or potential enemy that we all have is time, right, and I mean it's the law of compounding. Yeah, I mean, you know, I don't care how often you could put a chart in front of somebody and they actually start doing it, but you know, 50 bucks a month when you're 18 is a hell of a lot better than a thousand dollars a month when you're 30. That's right, as crazy as that sounds.
Speaker 2:Yeah, because it's just, it's the law of compounding and so again. So yeah, I mean that outreach to the younger generation is so important. So how do you get in front of them? I think it's got to be some sort of you know, institutional financial literacy.
Speaker 1:Yeah, yeah, the second point that I wrote down here was we were talking about 40 year mortgages and I seeing them when they first started talking about it several years back, because they've been around for a while. But it's only your non QM, it's only your specific boutique type programs that offer them, and the reason why I say it may become a standard. Even who knows Fannie Mae, freddie Mac, may start adopting it. If you look at the age at which home buyers are starting their journey, it has increased. It absolutely has increased. If you look at the time that people are staying in their homes, that too has increased. It absolutely has increased.
Speaker 1:If you look at the time that people are staying in their homes, that too has increased. So, going towards that route, is that something that maybe we're shifting to because of everything else that is shifting? That way we're living longer. Yeah, I mean, it kind of goes hand in hand. Now I'm not promoting them, but logically I'm thinking it might not be a bad deal, especially if we educate on killing the principal, especially educate on amortization and how that works.
Speaker 2:Right, it's been the traditional 30 year. 30-year mortgage is is an amazing tool, right? I mean, I mean if, as long as it's responsible I should say the responsible 30-year mortgage, you know something, something that's not going to leave somebody completely house poor, um, is an amazing tool because to a degree it is a forced savings over time, correct? Yep, um. So I think the 40 year mortgage could satisfy that. If it's, if it's the only means to get somebody into a house today, to at least get them started on that journey, sure, because, yeah, it's. I mean, you're right. I mean if, if you have so many people putting off making huge financial decisions because of complexity or fear or anything else, well, then again it's only delaying that. And now you have the average age of first-time buyers 37.
Speaker 3:Right, yeah, that's all that stuff. I blew my mind.
Speaker 2:I mean, I was 23 when I bought my first house, yeah, I mean so right out of the gate, right?
Speaker 2:I mean you compare that and that's somebody with halfway through getting a mortgage paid off versus somebody not. Yeah, and and the this notion that, oh well, you know, we're just going to rent for the rest of our lives. You know, I put this out. My question to people is well, who's going to take care of you when you're older and retired? That's right. I mean, there are, you know, reverse mortgage products, cash out along those lines.
Speaker 2:You know when, when, when the house is paid off, and now that's the only means of accessing funds for the rest of your life and you can say that Right. So I mean that's, it's the, the housing responsible. Housing is an amazing financial tool when used properly and and the and the means to get them there. Absolutely Right.
Speaker 4:So definitely your mortgage.
Speaker 2:I mean again, you know it. It looks weird because it's still newer, but if that becomes the only means of a 25-year-old starting, then by all means I'm in.
Speaker 1:I'd like to know and maybe this is just inherent, maybe you know this when did the 30-year mortgage become available?
Speaker 2:oh so, couldn't tell you the us, couldn't tell you the year right off the top of my head, but I'm gonna say it was around the time when mortgage-backed securities um first started crash.
Speaker 1:Wow, so look at that. It's been around for a minute.
Speaker 2:1930, the fha, yeah um the first 15 and 20 years, yep, yep, yep, yeah.
Speaker 1:And then in the 40s, 40s boom, it was okay, night late 1940 night. Uh, the 30-year fixed mortgage became a common, largely through the fha and va. So 1940s is when they started having the conversation and it wasn't like this. It was like how do we get more of these people into homes? Well, it's everything's unaffordable. Let's extend it to 30 year. Well, that became the standard for now. What? Almost a hundred years.
Speaker 2:Yeah, yeah, that's crazy, I mean but, but, but it's yeah. But that 100 years, yeah, yeah, that's crazy, I mean but but but yeah, but that's true and that's a great number. I mean, like the us really is, uh, separates itself from the rest of the globe because of the 30-year fixed rate mortgage, absolutely, yeah, I mean, I mean, you know what has made america so wealthy? I still lead it to the 30-year fixed rate mortgage.
Speaker 1:Yeah, I have to agree, because that was the thing, the catalyst that allowed all those people and still, to this day, allows people to get into a home. Matter of fact, on all of my primary residents, I've never had less than a 30-year mortgage On our investments. We'd do 15, we'd do seven-year terms, stuff like that. But it was pretty cool to have an investment property at 15 year mortgage and pay it off in seven years, because we're taking the money from them and us and throwing it at it and you go whoa building Well that was fast, you know, but I think we mindset wise-wise have a different and a skewed concept of our primary residence, our home.
Speaker 1:Maybe it's they're wanting to make money off of it because they saw what took place in 2020. I don't know, because of all the shows that you see on the, the house, yes, um, what is the other one? Find this, all of those shows that hgtv has had that makes buying a home glamorous and so simple that maybe they think differently than we do about your home. Yeah, this is my home. I'm not trying to make money on it. It's nice if I make money in the end, but my idea is I'm going to live here, right, I'm going to have memories here. All of the things. Yeah, I don't know what, what, what that comes to in regards to that, what do you? What?
Speaker 2:do you see on that?
Speaker 3:I mean great example my house. When I bought it, gosh, four years ago, I bought it for me, I didn't buy it for anybody else. I just, you know I live alone, me and the dogs. But I walked into that house and I was like I got to have this house and I bought it right before things started to shift, so I've way overpaid for it. I will sit here and tell you the Tom black and blue Like that was not my smartest decision.
Speaker 3:But at the same time, like I sat there and I was like I'm not looking to make money off of this. I, this is my home, this is where you know I'm going to have memories here. I mean it's not my forever home. And sure I mean either I might sell it later, I might hang onto it, I don't know. But I did not walk into it looking to go oh, my God, I'm going to buy this house and turn around and sell it in a couple of years for money. Um, and it's it's interesting cause I, you know I've had in the last three or four years. I've had four or five sets of clients buy on the high side and then in less than two or three years they're like wait a minute. I don't like this house.
Speaker 3:We experienced it recently. Or I don't like this house or whatnot, and I want to move. But because they bought high, they still have this expectation and unfortunately, that's where that education comes in. I need to make money off it. I need to make money off it.
Speaker 1:I'm like not going to happen. And lucky. Luckily, in that case scenario the borrower did qualify by continuing to keep their home and allowing someone else to build that equity until it was time that they could either continue to hold it or sell it.
Speaker 3:That's the beauty of having again all these options and showing your clients options rather than just getting a flat out no, you can't do it until you sell your other house, because I've had it now three or four times where I've been able to. Okay, we don't like our house, we want to move. I find them a new house. I'm still able to have them keep their old house, you know, either rent it out or something, but still get into a house that they actually like, that they actually enjoy. That's right, because there's nothing worse than living in a house you are not happy that's right or with neighbors you don't like.
Speaker 1:That's right.
Speaker 3:Any of it. So I mean that. That goes back to why are we not giving people more options? Yeah, because they're out there. Yeah, I mean it happened when I bought my house. I had a lender that I'd worked with for years Tell me hey, actually you don't qualify and the only way you do is if you bring $50,000 down payment. And I was like, and I turned around and I called another lender that was just helping me on a deal and I was like hey, this is what's going on. He's like watch this. Within two weeks, he had it turned around, completely flipped the script. We went with an FHA versus conventional and I walked away taking money home and the reason being is the original lender that you worked with.
Speaker 1:I'd go as far as to say he wasn't familiar or comfortable with an FHA loan, because, if not, why does he not offer that as one of them? A lot of people think well, you're an educated borrower, you've got money, let's go straight conventional.
Speaker 3:Yeah.
Speaker 1:Well, in many cases, let's say, borrower has the 20% to put down, 10%, 5% to put down, but they've got a 680 credit score. So you may get whacked on the interest rate by going with a conventional in addition to the mortgage insurance Right your mortgage insurance, right your mortgage insurance on an fha loan that you're probably going to keep for max of four or five years before you refinance or have the opportunity to refinance, is only 0.55.
Speaker 2:Yeah the whole oh, but there's lifetime. Mi on that oh, who cares?
Speaker 1:yeah, but you're not going to keep it for your lifetime right, yeah, right, and again the education on it too like that's right, that's right. Pause right there. If you're not going to keep it for your lifetime, yeah, and again, the education on it too. That's right, that's right. Pause right there. If you're still sending out pre-approval letters and praying your realtor, send you the next lead. You're already behind.
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Speaker 1:And we're back. Thanks for taking a quick 60 seconds to educate yourself on what LoanBot is. But back to this topic. We were talking about 40-year mortgages being maybe the new norm. It's not now, um, but could it progressively become? I don't know, maybe Um, but then the idea of, like we talked about a bit ago, the 60% think that they're going to be house poor at closing and I don't know let's go back to that because I don't know, if it was they think that they're going to be house poor or they are house poor.
Speaker 2:No, they feel that way. They feel that they are going to be house.
Speaker 1:So 60% expect to feel house poor. So it's, it's this fear of change, fear of upgrading what you're doing. It's not an actual because and that makes sense a little bit more so, because I'm going wait a minute, so you're going to close and you're're poor. What is that lender doing? They didn't educate you enough on all the things that are on your credit report, that are outside of your credit report, etc. But let's talk about what, what? What is poor? What is house poor?
Speaker 2:in. In my eyes right, I mean house poor is if you were absolutely like devastated to write that check every month meaning okay, I just paid my mortgage, how am I going to pay for food and Netflix and just how am I going to live now that I've made that payment? Yes, um, and, and I, and I believe that, then this is what's wrong with going to, like, you know, the red fins or the zillows or the realtorcoms, or because they give these mortgage payment calculators oh, bankrate, that's a great one that are that are awful.
Speaker 2:They don't give consumers real-time data, um, so they're not seeing what a true mortgage payment might be. So they're hooked on this idea of this house. And then they get in. Oh well, now they're seeing the real payment and now they're scrambling. Yeah, so that house, poor thing. I mean that's pretty scary, I agree, and it could easily put somebody that's not disciplined into a debt spiral, which, okay, well, oh, I know, I'll just put everything on my credit card and then it compiles, yes, and compounds and compounds, yeah I mean.
Speaker 2:So you know it's, it's one of those things, right. So where you know. I just come back to when, when you're, when you're preparing to go out and take that next step and move from from renting to building something for yourself in the future, you've got to actually sit down and have a real conversation with a mortgage professional licensed mortgage professional or multiple but get real options so that way you understand what your, what your real payments are going to be, and so that way you can start thinking earlier on in the process of oh you know what okay, well, maybe three hundred thousand dollar mortgage is is where. That's where my comfort factor is going to be you're not the top of your budget.
Speaker 3:Where, like where are you most comfortable? Correct and I think it.
Speaker 2:Oh no I was just gonna say I mean, I mean, how many times have have you taken people out to go see a house and they fall in love with it?
Speaker 3:It's the most expensive one. And then they see the payment and they're like, well, we weren't comfortable with this and I'm like this is why we have this conversation and why my first conversation, before I even go take anybody, is. Here are a couple of mortgage brokers I've worked with. Call all three of them. Have a physical conversation first. We cannot go look at houses and fall in love until you know where you feel safest, at what is comfortable for your lifestyle and the lifestyle you live now and what you want to continue to live.
Speaker 1:Yeah, you know, and I've got two things to talk about in this topic, the first one being lenders are not doing enough listening in that upfront conversation. So I'm going to come back to that and to your point me as a lender. I should, or need to, do a good job of knowing which realtor I'm working with and after time you'll start to understand the traits and how they work, etc. But in many situations I'll have a good conversation with that borrower, get all the information, provide the options, show the options and then let them know. I'm only going to tell your realtor that you're qualified for X amount. Why is that? Well, because every once in a while, after the searching for a week gets frustrating, they're going to plop you one that's a little bit over the price range that we gave and you're going to bite on it. Why? Because it's higher in price range. Typically, when you move up in price range, the houses get nicer. That's just kind of how it works.
Speaker 1:And until you're ready to do that, I will put that in your hands, meaning that you're qualified for 300,000 in my mind, what we see here. But we're going to tell them 250 because that's where your payment comfort is, you and I know that you are qualified for 300. When you're ready, if you're not finding anything under 250, by all means you've got all the ability and power to say I am qualified for 300. Let's bump it up. Mark will confirm. Absolutely. But I'm not going to be the person that gives them the top of the rung, because that's what they're going to show them is the top of the rung. It's easier to sell a house at the top of their budget. It really is Right.
Speaker 1:Yeah, it's easier to sell a house at the top of their budget.
Speaker 2:It really is Right, yeah, well, you know you touched on something and I just want to. I want to hammer out why it's so important that lender and realtor relationship. Because you know, in today's world, right, payment is driven more by rate versus sales price. That's right, that's right. And so when you have a good connection between the loan officer you're working with and the realtor and they're together, then negotiating strategies also come into play. Correct? Because let's say and we'll just use that number, right, so let's say it is a $300,000 house.
Speaker 2:Well, the initial thought would be well, I want to go in and I want to offer them $290,000. Well, why? Because we want to get a deal. It's already just a human nature I want to pay less than what they're selling it for. But if I went in there and said, okay, well, why don't we do this? We're going to give full ask at 300 and get 10 grand in seller concessions and use that to buy down the interest rate, either permanently or temporary. Right To help with that affordability factor. And again, that's one of those things that I don't think is talked about enough either on the, you know, even on the realtor side. I agree.
Speaker 2:It's like, hey, let's go. Let's not just go in there and get the best deal right, the lowest price, let's go in there and get the most concessions, because that is where a consumer in today's world gets a lot more bang for their buck.
Speaker 1:That's correct. That's correct, in addition to the idea of educating them on how long do you plan on staying in this home? Okay, 10 years, great Chances are. You're probably not, but that's okay. We're going to start with 10 years as a basis for all of the options, all of the recommendations that I'm going to be giving you. Why is it more important to have that money in closing cost? Well, you'll be able to keep more in your pocket for the oh shit moments. You'll be able to buy down a rate a little bit maybe if the payment comfort is trying to get to where you want it to be. But if you're talking 10 years, that means at year six, you're building a little bit of equity. That means that you have the opportunity to refinance and get that payment lowered. But I'm using that as the mark of this is what we're basing everything on, our recommendations on. There's no need to sell in those instances. It's recommendations based on what you just told me is your goal and your implied outcome.
Speaker 2:Yeah, so it's funny. More stats two thirds of those consumers don't understand points or how they work. Wow, and that goes back to wow. It's because they're not being given options, Damn it, that's correct. People need to see door number one, door number two, door number three, door number four, door number five.
Speaker 1:Yeah, Choose your own adventure In addition to this is why I think this is the best one for you.
Speaker 2:Right, yeah, this is the best one for you, right, yeah, here, here's my recommendation, but here's your pick, that's right. Um, you know, so it's. You know again, right. So with the house poor thing, let's identify the comfort factor and then kind of work backwards and then identify the payment and you know interestingly enough, you know it's once there's that understanding between the lender and the borrower and all that's well communicated to the realtor, now more options open up and I can give a couple examples of where you know the best way for the consumer to get the most bang for their buck, that they were comfortable in the payment range they were comfortable with, was actually identifying properties a little bit further out of town, in USDA areas. That's right.
Speaker 2:And in both cases we took borrowers from having to have money. You know, basically pay cash at closing. But in both cases we actually got them their earnest money back at closing. That's right, because again, now they got houses with lower tax payment payments and negotiated seller concessions, and so they got 100% financing and got their earnest money back. I mean that's the best idea, but it boiled down to what's the payment you're comfortable with? Okay, now communicate that to the realtor and then you know now, all's now in your court.
Speaker 1:John, you mentioned USDA and I want to ask you a question that I don't know if it's accurate or not. It's just something that I feel, based on what I'm seeing. I used to do a ton of USDA. Then there was a certain point in time where I didn't do any USDA. Now I'm back to doing and offering USDA as an option and I have a feeling that us, as mortgage professionals, steered away from USDA, even though it was the best option for the borrower. Because realtors continue to demand. We need a fast closing.
Speaker 2:Yes, I mean, yeah, I would agree with that.
Speaker 4:I mean, it's the same reason why I mean you know, there was a period where people got away from even VA loans or FHA loans or anything else like that, right?
Speaker 2:So, but there's definitely a resurgence in that, and I do think it boils down to some of the affordability factor. I mean, more people are looking at, you know, just I mean the growth of San Antonio where can I get the most bang for my buck? Okay, it might be in Lavernia, or, you know, you know head. I mean, shoot, there's even pockets, like in spring branch, of USDA, that's right, where there's some great homes being built, yeah so, but but it is, you know, folks looking for where do they get the most bang for their buck? And yeah, maybe the USDA. Maybe that's why we're seeing the resurgence in it. That's true, you know. And along those lines too, you know, the quote, unquote, affordable product that some of the big mega builders are building.
Speaker 1:It's not really very attractive, right, and so Can you dive into that briefly, because the folks out there they think, oh builder, they're just saying that because they're outside lenders.
Speaker 2:No, no, not at all, I mean it's. It's, you know, if there's there's product out there for you know, one hundred and eighty thousand dollars. You know, all in that Looks like it's a couple of containers stacked on top of each other, but could take that 180 000 and at the same neck. You know, go out into the neck of the woods and get five acres in a really nice manufactured house. Right breach, please. Yes, I mean, we love manufacturing homes too. This is not. These are not cousin eddie's tenement on wheels parked in the driveway, not anymore. I mean, we did one. Uh gosh, I mean it was a couple years ago, the biggest one ever saw, but it was like half a million dollars.
Speaker 1:I financed one six months ago for $600,000. Yeah, On the land Right, Double wide deck all the way around retired, let's go.
Speaker 2:And it was a better product than what a mega builder has. And guess what? There's land and established trees, right.
Speaker 1:Not stacked right next to your, exactly your neighbor.
Speaker 2:So, in addition, the taxes which go hand in hand with your payment are going to be lower right out there, you know so, so, yes, so we're definitely seeing a resurgence in usda and for for folks that don't know that are watching this, I mean ask your lender, get on LoanBot and learn more about what the USDA mortgage is, because you know. Second to a VA mortgage, the USDA might be just the next best affordable loan product.
Speaker 1:That's right as a matter of fact if you fit in the box. As a matter of fact, I would say if you're not a veteran, the USDA is the most affordable. Absolutely Zero down. You've got lower mortgage insurance on it.
Speaker 1:Even though you're financing 100% of the property, it's still a lower payment because you've got a mortgage insurance. That's half the amount. Another beautiful piece to it and we don't mean this to be a USDA education session, but it hasn't been talked about you can finance up to the appraised value, plus a little bit more. Yeah.
Speaker 2:You know, yes, you can, absolutely you know.
Speaker 1:These are things that people don't even know. Loan officers don't even know, because somebody went. I'd like to look at the USDA. They went hey manager, what's this USDA? Oh, yeah, yeah. Yeah, that's a 45 day close. Well, nevermind, yeah.
Speaker 2:Right and well, and you and you tie this back to you know house poor. Well, we're getting borrowers in an affordable payment, with them not having to bring money out of closing. That's right. And and you know the this economy is scary. I mean people. People have had their, their, their butts kicked over the last three years. Right, so I mean the dollars they do hang on to are worth less than they were three years ago, right, so they want to hang on to as much as they possibly can. So if we give people those options, then you know what? Now they're feeling less worried about being house poor. That's right. That's right.
Speaker 1:What are your thoughts on this topic? Do you work with a lot of folks that are more payment conscious than, let's say, trying to find the perfect home?
Speaker 3:Yes, does that make sense? Yes, I mean the one I just closed a couple weeks ago. The payment was the biggest issue, rather than price of the home. I mean, don't get me wrong, location for them was a big factor, but that payment was very, that was a big topic. And you know, we looked at a couple of houses and we'd run the numbers and if the payment was over it, they just immediately shut down because they just knew where they were at financially, you know, to be able to make it work yeah, not financially, you know to be able to make it work. And especially, again, they were ones that we were able to still get them into a home that they liked more than their current one, while keeping their other one and, you know, renting it out, which is great for them. But we still had to factor that in that. Okay, there's still two mortgages. We got to be really conscious about this payment.
Speaker 3:But I do. I get a lot of people. I had a conversation with somebody yesterday, a great conversation they're looking to. She wanted to rent and I was like, okay, this is what you're paying in rent, I can find you that, I can find you that and you could build some equity just by buying you know it's yeah it's a starter home, but you know it's a small family, you don't.
Speaker 3:What you were dumping in rent is yeah, I tell people and I'm, I'm straight up, I'm like look, that's a waste, You're paying somebody else's mortgage, You're making somebody else rich.
Speaker 1:That is what I like about you is you are, just like me, very honest and and um unfearful of um how they're going to feel. Why? Because it is the truth.
Speaker 3:It's something that they need to hear, and when it comes to something like this, it's you know it's one of the largest financial decisions you'll ever make in your life. You don't want somebody that's going to sugarcoat things, you don't? You want to know exactly what it is, from point A to point B, and I will tell you that's a really bad idea. But, hey, I can tell you. You don't have to listen to me, but I'm going to tell you straight up that don't do it.
Speaker 1:Just remember where you heard it. Absolutely, I get it. I get it.
Speaker 3:It's definitely been interesting, over the last, I would say, six to eight months of the conversations I've had, how they've shifted more to okay payment. You know, I don't maybe this isn't the perfect, perfect house, but the payment is what I can afford or what I'm comfortable with, sure sure?
Speaker 1:well, I want to. I want to circle this back around to our original topic.
Speaker 2:Unless you've got something there, well, I was just going to say right. So just more fun data, more stats. 52% of buyers feel overwhelmed with financial information and over 50% have delayed important financial decisions due to complexity. So you know, and on top of not getting their options, nothing's being simplified for them either, right, right, so they're being talked to, not talked with.
Speaker 1:Ah, that's a great way to put it. Yes, I like that. And the idea of is the lender, realtor talking to them, because they have not learned to understand what the borrower is giving them, relate to it, to find that commonality, that it would make more sense if you utilize what they just said or what they've experienced to get your point across.
Speaker 2:Right and you touched on that before the break which is people not listening enough correct to what the consumer is saying? Yeah, right that that that initial application interview, because you know for the most, you know for all the most, you know for all intensive purposes. It is very easy for people just to go on onto an app and fill in information, but there's not enough follow-up conversation to really, okay, now we have your application, let's review it together. That's right, and this is where you could pick up. Or, as an originator, right, this is where you pick up. You know what's in between all the lines.
Speaker 1:Yeah, it may not be what they said. It could be how they said it in many cases. Um so, yeah, I want to circle back to what we started this conversation with to get some opinions on this, and it was the idea of the fed more than likely will be cutting interest rates. What will that mean initially? What could it mean for the near future, like right after it happens, and are you already seeing some sentiment of buying or getting back in the market? We know that there's 85% still on the fence, yes. Do you think that that will be enough to spark the interest which then sparks more conversations, more opportunities for us to educate?
Speaker 2:Yes, yes, yes, and, yes, okay, and and where? Where I'm going with that definitely not ADD.
Speaker 1:I don't know how you boom, boom, boom. Yeah, it's, it's, it's.
Speaker 2:uh, no, I've just I've found a way to channel the 8,600 thoughts running through my mind. I still have like five tabs open. I've crashed windows more times because 84 tabs are open on one thing. So, yes, the Fed is going to cut rates tomorrow. I mean 96% odds, I mean it's going to happen. And while what the Fed does when they cut rates, they're cutting the overnight lending rates that banks charge to each other. That's right.
Speaker 2:While it doesn't directly impact mortgages, what the Fed says following their decision, if they're saying that, hey, the economy really is slowing down, that could push more people in or more investors, I should say and these are insurance firms, these are hedge funds, these are governments buying into, buy mortgage backed securities, which raises the price, which brings the yield or the interest rate down. So it doesn't directly mean mean that rates are going to come down, but it could directly mean mean that rates are going to come down. But it could asterisk mark, though, the last time that the fed made a big rate cut decision and they cut rates 50 basis points, literally a year ago. That's right. We were at really look, I mean we were. We were at one year lows, right, pretty much right where we're at today. Fed cut rates by 50 basis points. Rates shot up.
Speaker 1:Mortgage rates shot up and everyone, everybody, the masses were going. Very few were like well, look over here, but the fed cut rates.
Speaker 2:No, why did your mortgage rates go up?
Speaker 2:you're trying to screw me, it's like no, exactly what was told that's not how it works, and and the reason that happened was because the bond market said no, there's still a lot of inflation out there and that is impacting and and so if you're, if you're, if the fed is cutting rates in a high inflation period, you're I mean, it's basically devaluing the future investment of that, of that bond. Yep, so they're saying we don't want it. So, and if they don't want it, how do you get people to buy it? You lower the price and you raise the yield. So that could happen.
Speaker 2:I don't believe that that's going to happen tomorrow, because you've seen a lot of um, you know the job labor reports coming out and being like man, there's not as many jobs have been created as as what they've been saying. And I tell you what there's a lot of openings lately. There's a lot of openings. A lot of the jobs that have been created, right, are, are, are part-time, right, these aren't full-time positions. And so it's. The economy overall is weaker and I believe that the economy will continue. My hot sports opinion here yeah, I believe the economy will continue to get weakened. Why? Because man, the consumer, is getting tapped out in many cases. Yeah, Right.
Speaker 2:You know we're hitting spending limits. We're taking seven-year car loans now, that's right. So less consumer spending means that slower economy, which means that mortgage rates will come down. Ironically enough, retail sales came out this morning hotter than expected. Yeah, like, how is this happening? I don't know if it's all the buy now, pay later, burritos or what, but more money spent, yeah, but at some point the tab is going to come due. And when will that happen? Now I don't want to get too down this rabbit hole or rumor mill, but there was an article this morning that I did see that mentioned that the odds have increased of the Federal Reserve beginning to buy mortgage-backed securities again. Oh man, that sounds beautiful. So what happened the last time the Fed was buying a bunch of mortgage-backed securities?
Speaker 1:What did happen?
Speaker 2:Didn't turn out well well, well, we saw mortgage rates come down to. Oh, yes, yes, yes, yes we're talking historic, yeah, yeah.
Speaker 1:What is the concept of the mechanism?
Speaker 2:absolutely, not wait a minute not, why were they buying they?
Speaker 1:were buying because there was a global pandemic.
Speaker 2:That was absolutely like thrashing the global economy.
Speaker 1:But yes, but uh well, what they're doing is they're throwing their hat in the ring. Yes, yeah.
Speaker 2:Essentially you know Trump wants lower rates. I mean he wants, you know, I mean you hear him all the time. Trump wants lower, lower mortgage rates and you know, as he's maneuvering and getting more people on his corner at the federal reserve board, that could happen and if it does does we will see mortgage rates come down right now. But on the, the big but is mortgage rates come down? So we know what happened on the lending side, what happened on the real estate side.
Speaker 3:last time mortgage rates were at super low rates ran around my head, cut off that too, that too you had an influx of buyers come to the market and flood the market. Yeah, at once and we went down to less than I think it was like three weeks of inventory we're sitting at. I want to say what I saw yesterday or last night was almost 7.1 months of inventory here locally between Austin and San Antonio, but I mean every listing I had during that. I had 10, 15 offers. I was having 10, 15, 20 showings a day.
Speaker 1:Over the sales price.
Speaker 3:Over the sales price. I mean, I don't think we closed one that didn't go at least 50 to 60 over.
Speaker 1:That's right.
Speaker 3:No, uh, inspection, no, nothing. They were just like throwing cash at it. But at you know, I at the same time people were just scrambling for whatever and were buying houses that they didn't even love because they just needed something or felt like they had to buy something because it was that whole also thing of well, everybody else is doing it. Folks listening in my in-frame.
Speaker 1:This is the one thing that I actually disagree with Donald Trump on. I appreciate the sentiment, I appreciate him being aggressive towards it, but logically, economically, if rates were to drop too fast, too soon, we would have and there's not a soul that could argue with me about this, because I've seen people posting and my response is are you sure you want that to happen? Slow down. Do you know what will happen if that takes place? We will have exactly what you're talking about, but I think it will be worse. Oh yeah, I really do, and and it's because of the 85 that's still- sitting there, sitting and waiting.
Speaker 3:That's correct, and I'd rather, like you said, see it go slow. And not only that, but again it goes back to you get this panic buy. And that's the last thing I want are for people to panic buy things that in a year's time they absolutely, absolutely regret. Yeah, because then again it makes my job way harder when they call and they're like we don't like this and I'm like oh, you sold us this thing we don't like.
Speaker 3:Yeah. And I'm like, well, I asked you four times did you really want to do this? Yeah, yeah, yeah. And then a year later it's that buyer's remorse and I'm like, well, I well I can't exactly sell it for what you bought it for. That's right, that's right. You know that I don't want to.
Speaker 3:You know my job is to get you something that you're happy with and that you love, but I also, at the same time, have to sit there and go. Is this the right decision for you? And I don't want to put you in a position that, like again, where I get a phone call in a year or two that you're not happy, and then me personally and this is just me personally I feel like I didn't do my job. Then, if you're not happy in a year or two, that rides on me like that sits very heavy on me, that, okay, where did I go wrong? How did I not either educate you enough or explain this enough for you to understand that if in a year or two's time, this isn't what you want, I haven't done my job?
Speaker 1:That's right. That's right, and I can definitely see how that can impact you as a realtor, having those phone calls. It's only been a year, it's only been two years. What did I miss? Yeah, exactly what did I miss here? But at the same time, we also have to keep in mind people are human.
Speaker 3:Yeah, people are human and I get that.
Speaker 2:Yeah, so I don't want people buying toilet paper off the shelves. And that's what was happening with houses Exactly right, I'm not fighting for toilet paper again.
Speaker 2:But I'm with you, right, and so it needs to be a controlled deal. I mean, if you drop them too fast, then you create a mess again, and all we're doing at that point is, in the next time, we does normalize again. Yeah, now there's even fewer homes on the market, correct, right? So now you're trapping future generations, and here goes that K again, yeah, and so the struggle is going to continue to be real. What I would advise people to do again, right out of that 85% that are waiting today don't wait for rates to get to 3%, right.
Speaker 3:Now the I can always refinance.
Speaker 2:Right, I mean if, but. But you know, find something that you know if you could afford it today, man, awesome.
Speaker 1:You're set. I totally agree. And and my comment about the Donald Trump concept and what he's doing I may not agree with it as a whole, but at the same time, I'm only me with what I know. Uh, it could be another art of the deal, to be honest. It could be another. I'm going to yeah, to get here.
Speaker 2:Well right, so you, you got to think too. I mean his, he's got the tariff thing Correct. So how can I offset potential downside from the tariff thing? Oh, I know, I can make mortgage rates down and drill, baby drill, get gas prices down. I can offset the expense that the tariffs are going to have.
Speaker 2:So it's way bigger than what we're talking about here, for sure, for sure, but this is something we happen to be subject matter experts on. So I For sure, for sure, but, but this is something we happen to be subject matter experts on.
Speaker 1:I just need people to be aware that this is what could happen, and the moral of the story here is don't wait to buy, buy then wait. Yes, you know well, guys, I think that was a pretty good discussion on a lot of quick topics, that many folks out there the 85% is probably going well. What kind of advice should I have? What would a mortgage lender tell me? What would a real estate agent tell me? Because I'm seeing the news and it sounds like rates are going to come down and I think now they've got a pretty good understanding of, at the end of the day, you buy what is comfortable for you. Make sure that you work with someone that is listening and taking in what you're. You're asked questions to listen. Doesn't ask questions um to to go through the motions, because that lender, that realtor should be using what you've given them in their recommendations.
Speaker 1:And overall, we can only educate you so much. We can only lead you to the water so many times at a certain point. We're not going to hold your head down to make you drink. You know, because, like an old saying, that I have some will, some won't. So what? Someone's waiting.
Speaker 2:Yeah.
Speaker 1:And that's that. You guys have anything else to add?
Speaker 2:Yeah, I would just add again. I mean, just the numbers don't lie. The statistics are out there and they're real. And one thing that no one can deny is the mere fact that household net wealth for homeowners in this country hovers around 400,000 today, and the household net wealth for homeowners in this country hovers around 400,000 today, and the household net wealth of a renter hovers around 10,000. Yeah, and it didn't happen overnight, but it started somewhere where that renter became an owner and then things grew and so, just to piggyback off what you said, I mean you know this is how we fix future generations and set them up for for a better place, a better seat at the table, if you will. And it all starts with discovering your options working with the lender that's going to listen and can provide options. Working with a realtor professional that's going to again listen, communicate with the lender and make sure that it really is a team throughout the transaction.
Speaker 1:That's right. That's right. I like that.
Speaker 3:Ask questions, Don't be afraid. Like I said earlier, there is no stupid question. The only question that's stupid is the one you don't ask. If you don't know something, don't be afraid to ask. It's not rejection asking a question and getting an answer you don't like. It's just a fact.
Speaker 1:That's very true and actually, to add to that, there is so much readily available technology.
Speaker 1:You've got ChatGPT, openai, grok, all of these things that can verify what you're trying to find. But keep in mind that those things are still only as good as the information that you provided, the prompt that you give, the insight that you're trying to get out of that. Please remember to cross-reference that with a professional, and it is okay to question that professional, because in many instances, let's say, you've got a situation where you read this, the lender's telling you that it's okay to say, hey, here's the article that I read, lender, can you please explain this to me? Or can you that it's okay to say, hey, here's the article that I read, lender, can you please explain this to me? Or can you please break this down Confirm, deny, et cetera that lender, I don't care who you are, you better be ready and willing and able to explain that to them. Why? Cause that's our fiduciary responsibility, right Period. Um, guys, I want to thank you for joining me back in this new studio Feels good, absolutely Love it, great job.
Speaker 1:Yeah, and those of you out there listening, as always promised, I will continue to bring you experts and professionals that are willing to share their insight without a filter, so that it can possibly help you on the next chapter of your life. But, with that being said, we'll catch you on the next one Peace. If you're still sending out pre-approval letters and praying, your realtor, send you the next lead. You're already behind.
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