How can you benefit from mortgage buy downs and capitalize on your financial options?

Should interest rates make your purchase decisions for you?Rob Garcia is the Co-Founder and Chief Strategy Officer for Snapfi Mortgage...He knows the path of travel to your financial success! Tune in!

Episode Transcript

(00:00):
What is up Rob how you been man? How are you? It's been a while ride. I think and that's

(00:26):
probably an understatement. I was gonna say say the least. I think buyers are starting to become
a little more active though. I've noticed I mean what do we got four in the pipeline right now?
Wow compared to none. Like I mean they gotta do something though as far as uh

(00:54):
some kind of incentive. You know we had something for a little bit and then I got shut down and
you know they gotta come up with a good product something that that will attract people back.
Yeah that's an interesting observation. I think you know Matt we're gonna see I mean I'm not I've

(01:19):
told you before we're not in the business of speculating nor predicting because most of the
time we get it wrong right or there's something it's it's really hard to get it and even even the
experts and the economists don't get it right. But last time we talked we did have a conversation
similar to this where we were talking about what do you think is going to happen and and you know

(01:41):
it's the end of the year so it might be a good a good opportunity to talk about that. It's interesting
what's happening the Fed is really set on fighting inflation. I mean we've seen four or five different
increases in their in their money rate and that has impacted mortgage rates which has impacted our
business right. And everybody's celebrating last week's meeting because they didn't raise it as

(02:08):
much but they still they still increased it. So I don't think it's a I think I don't think it's a
reason to celebrate that they slowed down. It's like saying hey you know we're still we're not as
we're not as bad but we're still bad right. We're just taking a little of the sting off before you.
Right and it was December 14th which was that that was last week. Everybody thought I mean the

(02:31):
the rates are already absorbing a lot of what's going on but there's still you know the first
couple days after the increase nothing happened rates actually stayed soft but today I'm just
keeping an eye on the market and the rates are getting a little a little worse now. So
basically that's an indirect way of saying yes I think you're right there's two things that can

(02:52):
save or can improve the market. One is home prices continue to go down as a way of adapting to the
demand right that it that has diminished significantly because of rates and whoever
needs to sell a house they need to sell a house so they're going to have to be more flexible in
terms of how much they can charge for it and the government is going to have to intervene somehow

(03:15):
or help not intervene that's a big word I don't like the government intervening in anything but
they're going to have to figure out a way to to incentivize buyers especially from some home buyers
so that it's easier and more affordable for them because right now it's not affordable and it's
not sustainable. Well what are some things like from your and you know that the mortgage companies

(03:39):
can do to incentivize is there any give there like can you offer different products or different
services or you know what I'm trying to say. Yeah absolutely there's I mean there's different
programs right mortgage companies don't have a lot of wiggle room in terms of what they can do
it's interest rates points and basically service right so those are the things that kind of

(04:04):
differentiate one mortgage company from the other and I mean just being a little creative about
the things that you can you can play with buy down or very well it's also permanent buy downs
you know there's a lot of people talking about the two ones because they're making it
and some of the way that works is you buy the rate down for year one year two and then it goes back

(04:27):
to normal year three that's kind of very generic way of saying it is cheaper than a permanent buy
down which you're paying points for the whole 30 years of the mortgage is it worth it no sure
you're making a a bad that rates are gonna come down in the next two years which is a pretty safe
bet I I rather you know not have to spend the money and then just basically if if you're really

(04:51):
sure you're gonna the rates are gonna come down if you can afford it just do a permanent buy down
or or just buy the at the market and refinancing a year or two when the rates come down right so
we'll see I mean I I don't want anybody listening to this to to say okay Rob said to do this so
I'm gonna do this I mean every case is unique every case is specific so and that's way to do it is

(05:18):
just to talk to a very reputable mortgage advisor like snapfi or any other company that you trust
and make sure you have that person on your side looking at all the different options but uh
but yeah other than that Matt is working with the government we've been working with the government
for for many years now and making those programs available to customers directly I think is at the

(05:38):
lowest possible cost is what we can do at this time just to make sort of fight back a little bit
of what's happening in the industry but um but let me let me turn the tables a little bit to you
tell me what are you doing on the this is on the lender side but what are you doing on the
realty side to keep people engaged right because some people lose a little bit of hope um some people

(05:59):
you know think oh you know I can't really afford it um some people are realizing hey you know buying
a house is a little bit more than a rent uh so I'm not sure if I want to do that like how do you
how do you have those conversations what do you make what do you do to make it more more palatable
for them to to actually stay in the market and buy right now luckily here rents are super high

(06:19):
right and so you know it almost just is a no-brainer to go ahead and get yourself into a purchase
situation if you can because I mean it's like you're gonna pay 2,500 bucks a month for a landlord
not to take care of the property or are you going to pay 2,500 a month to oh no property

(06:39):
you know at the end of the day in five years that property is going to be worth more yeah
yeah so why not purchase it you know if it's not worth more than five to ten years you run it out
to somebody you become that landlord and you do it right that's correct yeah or you sell it and you
capture the equity and it's the best investment in your lifetime you know that's that's really the

(07:04):
conversation I have with people when they're renting you know but one one thing that I really
like to do Rob is just like back to the basics grassroots marketing I mean you know that with
the last promotion that you sent over you know I was like door knocking apartment complexes and

(07:24):
you know duplexes anywhere that because you know where do renters live they live in rentals so why
not put yourself in front of them introducing yourself providing something that that they can
hold and see you know an icebreaker and then then you have something to talk about you know and I

(07:44):
look forward to a program like that coming back again but we do it all the time like Janelle
come up with a flyer it's just a generic flyer like hey it's a great time to buy you know
you know with a smiling couple on it or whatever and we just take it around and and meet people and
talk to people and we make sure that we take a note of who we're reaching out to and that way

(08:10):
we can stop back buying it in a couple weeks to hey like stop buy here's another flyer you know
throw it in the garbage put it on your fridge whatever you're gonna do with it but it's here
with our information on it and just staying in front of people you know that's that's really
important I think right now is communicating with your base you know anybody and this this goes not

(08:33):
just for realtors right like this is anybody in sales so your loan officers I mean same thing they
they've got to stay in front of their base they've got to be reaching out to their sphere of influence
on a daily basis I mean something like send email a christmas card or text message somebody a

(08:55):
christmas card you know saying Merry Christmas yeah Janelle's been doing that she's been going
through our our database of like a thousand people yeah and personally with her thumbs sending the
the text message out to everybody and she's been getting great responses because everybody wants
to hear Merry Christmas they know who we are yeah that's true Matt that's so true and I think at the

(09:19):
end of the day is at it's adding value right like we're fighting against inertia and inertia is people
keep doing what they're familiar with and people who are renting they just keep on renting because
that's easy yeah it's familiar and and it's scary like looking at numbers getting pre-approved for
a loan looking at houses you know just the whole idea of owning a home just feels like a big

(09:42):
responsibility to some so that's what we're fighting we're fighting with inertia and to when
you're fighting with that kind of consumer inertia you have to be in in front of them constantly
reiterating the value of owning a home the the benefits of you know yeah it might be a couple
hundred bucks more than the rent that you're paying for but it's your house and it's your enemy

(10:06):
and you're separating yourself from you know from the renters that would continue to rent for
their for many years to come and continue to make a landlord rich you know I am a landlord myself so
I you know I I would like for them to continue to rent but at the same time I know that's not
sustainable it's not healthy for a financial future so I like your idea I my tip for the day on

(10:30):
follow up and follow through is block it block the time during the week consistently yeah four
hours whatever it is to touch on your yes robots can do a lot yes automation can do a lot I do a
lot of automation myself but it doesn't replace the human touch and it doesn't replace the human
connection so block it and force yourself it's like going to the gym like force yourself to go

(10:54):
to the gym when you have to go to the gym and you might not like it that day it doesn't matter
just go and do it right it's the same thing would follow up and follow through block it on your
calendar live by that block of time and do it even if you miss it once you know every couple
months that at least you know that that's that's 80 percent success right so yeah it's a great

(11:14):
great insight from from you in terms of staying on top of your customer base and making sure that
they know that you're here to help them so yeah and I think that people can really tell when
they're being bought it you know I've noticed that when I send out a mass email yeah I get a whole
lot of nothing and when I get something back something super negative like stop emailing me

(11:37):
or leave me alone you know like I'm going to put you in spam that kind of thing whereas when when
you actually take the time to send a personal email they can tell it's from you and not your CRM
that the response is different like they're respected more when you take the time out of your
day to send them you know to spend time with them basically is how it comes across right yeah and

(12:00):
like you said the human touch I mean it's got to be there you know people like crave it especially
this day and age with with all the technology I mean all they're doing yeah all they're doing
this day and age is like spam phone calls and emails I mean you see them we're all fighting

(12:20):
at work all the time like you want to stop spam you know download this app and you know like
so if you want to reach out to your base you got to do it personally absolutely awesome awesome
well we should be doing this once a week because I think this you have some great insights yeah
yeah this is fun awesome what else anything else for the day I mean we talked about how the market

(12:48):
is trending we talked about what realtors and loan officers anybody in sales needs to do
do you have anything else well I not really but I the thought of the day I woke up this morning
and I just I have you know I I noticed the industry is changing significantly right and we haven't seen

(13:11):
we haven't seen the kind of the core of it yet to the core of the changes yet I think
like I said at the beginning of this conversation the the Fed is is set on fighting inflation so
that's going to continue to impact this industry we've already seen a couple of big companies fold
or close or reduce operations significantly many smaller brokerages both on the realty side

(13:34):
on the other side are going to have to figure out what they're going to do yeah I mean with any
shift in in the market you know like there's there's always some opportunity there yeah you know
yeah it's sad I mean a lot of you know on the real estate side a lot of realtors are going to quit
because they the last two years haven't had to work very hard yeah you know I mean it's pretty easy

(13:56):
to get on a phone call with somebody and score a listing when the prices are like $130,000 over
inflated you know but now that they're not and you've got to really work hard to find that buyer
that wants to buy and you're you're not working as much with listings as far as you know we did

(14:18):
last year in the year before you know a lot of people don't want to get on the phone don't want
to not want to do all this this super basic stuff yeah our CEO says everybody's working
twice as much for half the results so you're you're absolutely right I think it's it's going to be a
natural cleansing if you will of the of the industry in terms of you know those who are not

(14:43):
effective or not here to work and really help people are going to have to turn their way out and
I'm already seeing it I we already had a couple of our loan officers who decided to find something
else to do which is I get it I mean I know no disrespect to anybody I think it's it's absolutely
natural like people start thinking about what they want to do with their lives and whether they're
going to stay in the industry when the industry is tough and but I think that effect is going to be

(15:07):
pretty significant and we're going to see it in the first quarter which is typically the the low
season for us so and from you guys as well so we we'll see what happens what I do know is that this
is not sustainable which it leads me to believe there is there's better days ahead the question is
when would that happen when would that start turning is it at the end of the of the of the

(15:30):
winter at the beginning of spring time or is it going to be in the summer we'll we'll see
but we're here to stay sounds like you guys are too so yeah I was gonna say like in the meantime
it's just a fun time for us to find opportunity and I mean buyers have you know good news is
that buyers have more negotiation power I mean it's a whole lot more fun having conversation

(15:55):
when with a buyer when when they're actually stoked about buying something you know because they
they can say yeah I don't really want to spend that or you know yeah I'll give you full price but
we're gonna need a 12 that is a great thought most of these conversations man I think great
great thought to kind of finish this in a very positive note which is if you you know and I

(16:18):
always tell my you know our customers when they say hey is this the right time to buy you know is
this the right market you know it feels like it's a little icky and weird and prices are might be
coming down and and the rates are a little high in my answer is always very consistent to them
the best time to buy is when you are able to buy not when the market is perfect because guess what

(16:41):
when people try to market time the market most of the time they come up they come on out on the
losing side because it's almost impossible to time the market so they have put purchasing power
they do have leverage they do have the ability to negotiate and all those things are positive so
if you can sustain a little bit of the higher rates that we have for the next year to come

(17:03):
there's gonna be a refinance at some point there's gonna be just just focus on being able to to
afford that monthly payment as long as you are and no loan officers should get you into a loan
that you can't afford it it's it's illegal right but if you can't afford it for the year for a year
or two to come then go for it get the house and then readjust later I think is a very positive

(17:28):
way of ending this conversation today for sure hey thanks for coming on Rob we'll talk to you soon
awesome man thank you for having me all right take care bye bye