Podcast - 8/11/23

I'm Tom.

I'm Jay.

Jay Day and the Day Home Team with Real Estate Teams with our weekly real estate podcast. Jay, last week's podcast, I don't know if you remember the night before the National Football League started. Are you still a believer in the Purple Ravens, of your Baltimore Ravens?

I haven't really followed much this off season. I'll watch the games.

I'll watch 'em when they come up. I know Lamar, Lamar held out. He got that big contract with no agent.

He did.

He got paid. They signed Odell. I'm kind of excited. I'll watch these things once they kick off.

And you just never know what can happen in a season.

And I'm really happy for long suffering Baltimore Oriole fans.

Oh yeah.

Their first place, O's they have been fun to watch. The Yankees are in last place and that organization has been the worst. And to see these Oriole fans happy, they don't even know how to be happy.

Yeah, I mean, I haven't followed them. We used to have season tickets many moons ago, and I would go with my dad to go see Eddie Murray and Kyle Ripkin.

Oh, nice. Those guys were the best man.

Rick Dempsey putting on the shows when it rained and he would go sliding around the bases.

Sure.

The old time Orioles were definitely super enjoyable to watch and to be around. And I'm hearing from a lot of people locally that are Redskin fans that they're excited about the change of,

Oh man, absolutely change in the Josh Harris group.

Yeah, I think that there's a lot of good for them. There's a lot of people thinking positive things will happen because they felt like that franchise has

Been a whole generation of losers. Nobody alive now realizes the glory days of that franchise.

So for those that are skins fans, I'm hoping that change does make you guys a little more excited and makes the team, we're going to invest in the team and spend the money to actually have a team that can compete.

The year is flying by Jay here, now we're in the middle of August here coming into Labor Day and the holidays, what's going on in the industry?

So, I thought it'd be neat to talk about because we do have people, there's all of this crazy news. There's interest rates, prices are high, rents are even high. So I thought it'd be good to sort of chat about what you should know to see if you're ready to actually buy a home. Like, okay, if I'm thinking about buying a home, how do you decide that you're truly ready to do that? And it's interesting because some people reach out to us at the last minute like, oh, my lease is up. And then I have others that reach out to me and say, Hey, I have somebody who is a past client that is getting married and they said we're going to need a bigger space. It's probably not going to happen for a year, but can you sort of educate us on what we need to be doing, what we need to be preparing for? What is the situation with down payments? What does the situation with, what does a mortgage look like? Because when I bought before the rates were in the threes, now they're in the sixes or seven, please help me understand where I need to be to navigate and get there. And again, the market conditions are very interesting that will impact things. But the first thing to look at is do you have a stable job? That is a huge thing. Do you feel that your job is stable? You don't have any fears. You're not in a sector that can get wiped out like we experienced during Covid where, I mean a lot of companies really, really struggled and a lot of them went out of business. And even now we're seeing small businesses struggling. But you want to make sure you have a firm foundation. And the same thing if you're in a position where you're getting commissions or there's bonuses, things like that.You've got to really find out from your employer, are these things still going to happen or is what the market changing the way that it has, they may not be able to do bonuses or there may be a cutback in overtime so that the company can still move forward. So these are all really important things as it comes to that side. Now the next thing is have you figured out what you can afford? And people are like, oh, I played with mortgage calculators. That's not the way to do it. The best thing is we can put you in touch with a lender that can give you many options and explain the pros and the cons of the options. And then I think you remember on our podcast before I talked about some of the regulations and some of the laws that change where people that have an income of six figures and if they have credit scores that are really good and if they're going to put 20% down, their interest rates are higher. But there's ways to avoid that and do recasting and things like that. So from the mortgage side, it's crucial to not play around with calculators and to actually talk real properties with a loan officer. The couple I mentioned to you that's getting married, I said, well, hey, let's look at this. Let's pull a house. Again, I know you're not doing anything but of the houses you've looked at, send me one that you really like and I'm going to send it to the lender. And the lender is going to show you, if you bought today what that looks like, mortgage payment wise, what scenario options you have, if you put 5% down, 10% down all of the different pieces, and that's a real good educational piece to set you up.

You would go through this with a client, with somebody who called with just you would just provide that kind of service, that kind of customer service.

Yeah, because you want people to really know what's happening. I mean, unless you're paying cash where you don't care about the mortgage or anything, one of the most important things is to know what your payment's going to be. And in the area we're in, and I talk about it all the time with Frederick, Frederick City is not just downtown. Frederick City for tax purposes is all around and the lines don't make sense as far as how it goes. It makes sense when you look at most of the subdivisions get put into the city of Frederick because of tax reasons. They can make revenues. If you buy a home in Frederick City, your taxes are going to be a whole lot more than if you buy in the county without city taxes. So you could look at a home in Worman's Mill and then you could go look at a home in Lake Linganore.And even though the home's priced the same, your mortgage payment could be hundreds of dollars different because of the taxes. So that's part of our job. And another important part, and this one I've been talking a lot with clients with recently, how long do you plan on living there? And most people are like, I don't know. And I say, well, can you see yourself living here? Is this your final home? Do you think it is? And if you don't think it is, it probably won't be. I had a client I was working with recently and he was looking at things and him and his wife are in great physical shape, but they were looking for things with a main level master and we hadn't been able to find something that they really loved. And I said to him, that was on your must list, so I didn't question it. However, how long do you think you're planning on being in this house? And he is like maybe five years. And I was like, again, we never know what can happen. Something could happen to me, something could happen to anybody of any age that makes them not be able to handle stairs. That's just life throws curve balls all the time. But if you were at a certain age and you had certain physical issues going on or you knew you were having to have a knee replacement surgery, you knew you had to have hip surgery, anything like that, or you have dizzy spells or whatever it happens to be, that's a little different. If he told me, Jay, this is the house I want to be in until I get put into a nursing home or whatever happens to me, then that's truly a must. We have to make that happen. But if you're only thinking you're going to be there three to five years and we've looked at everything under the sun, maybe we need to expand the search and look at things that don't have a main level master and see what that does. Again, your timing really matters. So that's one example. And another example is, people get hung up on these interest rates and I hear about it. Christina has somebody she's working with now and they had their own lender they wanted to work with and that lender was charging them two points to get their interest rate down. And again, the question comes up, well, how long do you plan on staying in the house? Oh, this is an interim house because our lease is up and we just need a place to go and we don't even know where we want to land. So again, they said maybe five years, maybe two years, we're not a hundred percent sure. So when you're paying points, what that is is a quarter point is 1% of your mortgage. So let's say it's $400,000 house. We'll say that it's one point is $4,000, two points is $8,000. So what you look at is, if I didn't pay the points and I had the higher interest rate, what is my payment with no points? And then what is my payment with the points? You do the math and say, okay, so that's saving me $30 a month, $40 a month, divide that by the $8,000 you were paying. And that tells you how many months it's going to take to even break even. So if you were in that situation, and let's say the break even time was five years, is it worth paying that upfront money? And again, you can also refin. If you end up refining, then you wasted your money on those points completely. So again, the timing matters and it matters for a multitude of reasons. And I really think the biggest challenge is, and everyone's having these big fears that AI is going to take over everything. Everything's going to be computerized. You don't need people for this. You don't need people for that. Well, if you have order takers, that makes perfect sense. However, if you truly have a consultative approach and an educational approach, I don't see how you can totally replace people in this industry because again, this is stuff that people should be talking about. Now, does every agent talk about this? You can answer that question yourself when you're listening to the podcast because if you've done any real estate transactions, if you've been been working with an agent, are any of the things that we talk about, things that they've mentioned to you? If not, maybe you need to think about that. Because again, our job is not to just open a door and show you a house. There's a whole lot more to it. And I think that's what's helped us over the almost 20 years I've been in business, is having that approach, listening and helping people get to where they need to be and advising them of all of their options so that they can make informed decisions that make the most sense for them. So that's my soapbox.

That's not a soapbox. It's been the pretty much the theme since you and I have worked together now over 10 years. Call the pros. You started going over some interest rates and points earlier and I thought, my goodness, this is why you called Jay. This is why you called Jay and Christina they will guide you through.

Oh yeah. So you ready for the house of the week?

Always.

This is an awesome one. This is actually one of my personal listings that I took. 225 Five Forks Lane and Fairfield, PA. It's on the market at 585. It's a rancher, three bedrooms, three full baths, 10 acres that's in clean and green. Hardwood floors throughout the main level, stainless steel appliances. There's a deck out back with a hot tub that conveys, a one car attached garage, a whole house generator. So if the power goes out, you've got nothing to worry about. Backup wood furnace for inside the house. So for those cold nights, you're not relying on just a heat pump. You actually can get that house super comfortable with throwing some wood in there. There's a large barn and stable that has a 30x40 work or storage area, a 20x30 horse barn with two stalls. There's water and electric in the barn. There's also a separate propane tank if you want to heat in there. There's a 10x20 lean-to shed for shade. For the horses, there's large fence, dry lot, there's two fence pastures. If you're looking for something to take your horses to and have privacy, this is a great property. If you go to wfre.com, look up Tom and Jay's real estate podcast. We have aerial images, we have all types of stuff to show you this property. It is really nice. It is private if you want to feel like you're off grid, but not totally be off grid and be close to things, this is a great one. If you like what you see, click on the button to schedule a showing and we'll be happy to get you a private tour.

I'm Tom.

I'm Jay.

Jay Day the Day Home Team of Real Estate Teams weekly real estate podcast. Thank you for listening. Tell your friends all about it.