October 10, 2025 • 41 mins
"The queen of the closing table" Suzanne Seini and Paul “Fix-It-All” Hanson break down the industry’s spiciest headlines and give first-time buyers a practical game plan.
In this episode:
Compass × Anywhere explained — what the acquisition means for agents, consumers, and competition.
Rates reality check — why 30-yr mortgages follow the 10-year Treasury (not the Fed funds rate) and why ~6% isn’t the villain.
Spread talk — the 10-yr vs 30-yr mortgage spread (~200 bps) and what could push rates under 6%.
Brokerage strategy — recruiting headcount vs. training & retention that actually drives closings.
Homes Gone Wild — a Portland showing, a crawlspace bang-bang-bang, and a fired agent 👀
5 tips for first-time buyers — get pre-approved early, boost credit, plan closing costs & reserves, budget beyond the mortgage (HOA/taxes/insurance/maintenance), and be ready to act—patiently.
Follow Real-ty Talk on Spotify & YouTube. Submit your wild real estate stories for a chance to be featured on Homes Gone Wild.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
You know you can't have it both ways.
Like, don't pretend like that iswhat's best for the consumer,
you know? What?
What? Happened.
I'm so confused. So there's a financial.
Position where if the deal is. Today is like it, almost it,
Suzanne says. We can do better, you know.
(00:23):
Welcome back to your favorite podcast though, Planet Realty
Talk. We are very excited for today's
episode. Lot to unpack.
Yeah, a lot happening in the industry.
Yes. So if you're new to our podcast,
we talk all things real estate, all things business.
And to my right, we have the Queen of the closing table,
(00:44):
Suzanne Seaney, founder and CEO of Innovate Realty, an
independent brokerage all over California now.
Yeah, we're growing fast. Yes, and I am your Hostess with
the mostest. Paul, fix it all, Hanson.
Yes, yes, yeah, I, yes, I have, I fixed some things over the
(01:07):
last week that's. For sure.
Yeah, yeah, well, I'm, I mean, the the name fits.
It really does. Like I, as soon as I heard it, I
was like, this is the one. Like this is what you do, you
know? So yeah, fix some things.
All right. I don't know.
The only downside is that now that people know that, yeah,
they come to me to fix more things.
Yeah, I think you like it though.
(01:29):
I I think you like problem solving.
I do enjoy. Yeah, you do you.
Know being engaged on a problem,yeah, but I don't love some of
the problems I have to. Fix.
Yeah, yeah. So, well, let's dive into a
quick update on market, what's happening.
I mean, it's been an interesting, you know, couple
weeks. I would say I'd love to just
(01:50):
talk a little bit about rates and what's happening on that
side, you know, leading into, I think we've, so if you're new to
the podcast, we, we are not, youknow, this is a disclaimer.
We are not economists and we arenot trying to predict what's
going to happen, but we do trackit daily and we look at it, It's
very important to us. And leading into the Fed meeting
(02:11):
in September, you know, so this is now 4 weeks ago, 30 year
mortgages were in the 66 to 675 range and everyone was
anticipating at least 1/4 point rate cut.
And this is an interesting misconception and we've touched
on it a couple time in previous episodes, but and I I hear it
from agents, buyers, even just people generally, hey, if the
(02:34):
Fed cuts the rate, mortgage shops are going to slash and
it's going to be crazy market. Rates go down and everyone's
jumping in. Yes.
And so and, and, and what, what actually happened was, you know,
the, the, the 30 year fixed mortgage pivots from the 10 year
Treasury rate and that is not tied to the Fed funds rate.
So it can be influenced, but it's not directly correlated or
(02:57):
tied. And so when the Fed funds and,
and that's when we talked about a Fed meeting in September,
that's what they're discussing is the Fed funds rate.
And so they did cut 1/4 point the week leading into that
meeting. So previous to the meeting, 30
year mortgages went all the way down to 615 S the week before.
(03:17):
And you know, it had me a littlebit nervous because there was a
lot of talk around will it be 1/4 or 1/2 a point cut at the
Fed? And I think what we saw was, you
know, some banks and, and mortgage-backed security buyers
getting a little aggressive on the rate in anticipation for
that meeting when they, when they announced that it's a
quarter point. Rates have actually gone back
up. So in the last two weeks since
(03:39):
the meeting, rates are now kind of hovered in around that 63
range. And the 10 year treasury rate,
you know, was as high as 4/4 is now down to four one just over
4.1 as of this morning. So it's going to be really
interesting to see what happens.I mean, some people are thinking
there's going to be additional rate cuts before the end of the
year, you know, certainly early next year, you know, but I, I
(04:02):
think, you know, the biggest thing that we continue to talk
about is this arbitrage between the 10 year treasury rate and
the 30 year fixed mortgage. And we're still close to 200
basis points of spread. You know, we're, we're
traditionally over the last 50 years, there's been about 175
basis points of spread. And so, you know, even if the
Fed doesn't continue to cut rates, if the 10 year can come
(04:22):
back a little bit and if banks find a way to be a little more
stable on that yield, then, you know, we might see sub 6% thirty
year mortgages, which, you know,if you look historically, that's
incredibly cheap. You know, so I know a lot of
people are complaining about affordability and man, 6% is a
lot, but I think in the 50s, sixties, 70s and we start rates
(04:44):
at like 15 and 16 percent, 18% mortgages.
So, I mean, I don't think it's it's terrible.
No, I mean, the interest rate isn't terrible.
I think it's just the concern, Imean, as we know is that home
values just continue to go up, at least here like that.
That is not the case everywhere.You know, I'd say a lot of those
places, especially during COVID when everyone left and moved to
(05:08):
all these other areas where now they could work remote.
I mean, a lot of that has been rolled back.
Like a lot of people are actually not able to work
remote, who thought they would be able to work remote.
And now they're actually trying to sell their house and they're
underwater from selling their house.
So not everywhere prices are really high.
(05:29):
So there are some great opportunities with a 6% interest
rate, but I would say specifically here, you know, in
California or in Southern California, we haven't seen
prices go down, you know, so. Not really.
I mean there's a couple of pockets that we feel have maybe
been down as high as 5% year over year from where things have
(05:51):
traded. But it's it's, it's very pocket
specific. I mean, if you're in, if you
bought in Austin in like 2020 through 2023, you're probably
down 20%. So there's some pockets in the
US that are, you know, definitely impacted just based
on the demand that surged. But yeah, what's what's
happening in the in the brokerage side?
(06:12):
Of the world, yeah, you know, there's yeah.
So we talked about interest rates, but I think more juicy is
that Compass Compass announced that they are going to acquire
anywhere, which if you are unfamiliar with anywhere, that
is the the the parent company ofSotheby's Century 21, Century
(06:38):
21. And, you know, just yeah, like a
a ton of real estate companies. And so I think, you know, it's
caused a bit of, I mean, people are talking about it, that's for
sure. I think it's causing a bit of a
shift in, you know, where you are hanging your license.
(06:59):
I think not everyone wants to goto Compass, you know, and that
is a lot of agents that potentially they're banking on
coming over to Compass and they're going to acquire a lot
of debt to do that. Yeah, we should double click on
the deal because it was, it was interesting.
Compass, you know, typically when you see it's not really a
(07:20):
merger, it is a true acquisitionwhere you see something like
that happen in a public equity. A lot of times if if the
obviously if the deal is good and everyone's excited about it,
the equity goes up. I mean you know or the you know
the stock will trade higher. You would think.
This was cut by, you know, 10% of actually 50.
The stock plummeted 15% in the 3-4 days after the announcement.
And I think it's because of the actual dynamic of the deal.
(07:41):
They are buying it for 1.6 or 1.8 billion, but then they're
also assuming 2.42 point $5 billion worth of debt and it's a
lot of debt and and Compass is already, you know, got a fair
bit of debt on it. I didn't, I'd have to double
check on what they're, you know,earnings ratio is, but I mean,
they're trading north of 20 times earnings.
I think it may be higher, which is, you know, double, you know,
(08:05):
Fact Check me on that. But it's like that's a lot of
debt and in a market nationally where where home sales are down
40% from the peak. I mean, it, it to me it's, it's
a really interesting deal because you've got, you know,
agents that are transacting lesson average by 40%.
And so they're trying to grow through, you know, through
(08:27):
numbers or sheer head count. Yeah.
I mean it, it could be a genius move when you look at the next
10 years. I mean, if you believe that we
still have a major problem with supply, which I think we do, and
if you know, pricing does kind of settle out or even just stall
for a few year period, you know,you're buying a ton of agents.
(08:48):
And if they continue to transactthen it could be a brilliant
move, right, if they can servicethe debt.
Well, and I, what I think is interesting about it is, you
know, they're really going hard after Zillow for, you know,
basically saying that they're, you know, not being fair or not
doing what's just to the consumer.
(09:11):
But you know, I think what's more interesting is with this
acquisition, what they're tryingto do or, or a big piece of this
is they're going to get more listings to put on their site,
right, where they intend on doing the same exact thing, but
with Compass agents, right. And so it actually feels much
worse than what Zillow does, youknow, at least I mean, I, I
(09:34):
think everyone has their, their faults.
And we'll probably talk about Zillow a little bit here as well
because they're in the hot seat.But but you know, it, it's seems
like Compass is really going hard on Zillow, but there are a
lot of aspects to Compasses business that is very similar to
how Zillow operates. So then, you know, getting these
(09:57):
additional listings and then, you know, potentially keeping
them from other agents and only showing those those deals to
Compass agents. You know, it's kind of exactly
opposite of what they say publicly, you know, which is
like, oh, it should be, you know, fair.
And I mean, that's not, and we've talked about it before on
(10:17):
another episode where that doesn't feel fair for the
consumer, you know, that they'renot being shown to the other,
you know, a 70% of agents out there.
Like is that actually what's best for the consumer or is that
what's best for a compass agent you.
Know well, I mean, if you're, ifyou're running that business,
it's, it is a logical decision to a certain degree because if
(10:41):
transaction volumes are down, you want to give your agent pool
an opportunity to transact on both sides of the transaction.
And if you can do that within a week or two week or three-week
period, then you're kind of, youknow, you're cornering the
market to a certain degree. I mean, it as a business model
for them, sure, yes, makes sense.
But I think my, my take on it is, you know, you can't have it
(11:03):
both ways. Like don't pretend like that is
what's best for the consumer, you know, because I think we all
know it's not. So it's, it's more of like,
don't come from this like moral high ground of, you know, going
after Zillow and everything else.
It's it's kind of silly. I, I we have to Fact Check this
too. But I think that's still they,
(11:23):
they with that acquisition, thatteam, if you look at it as a
whole organization, they'll still have less than 10% market
share at a national level. And they're the, you know, the
biggest by far now. Yeah.
And so it is an industry where you know, you don't have to be
the the giant to succeed. I'd love to get your input on,
you know, you're running an independent brokerage and you
(11:46):
can, I think you can grow kind of two ways in today's market.
You can either get your current agent base to transact more or
you can grow through, you know, agent count, right?
And we've seen a lot of drama around this model of, you know,
almost even a multi level recruiting model to drive agent
count. But what's a sustainable way,
(12:08):
like a financially prudent way to grow the agent base or to
grow the, you know, the transaction by agent, you know,
at the brokerage? How do you do that?
Yeah, I mean it it to me it doesn't make sense to just grow
bodies, you know. And so there has to be a good
balance between those two thingslike you have to be able to
(12:29):
train your agents to be able to handle any market and any
situation that they come into. But also you do want to be out
there and, and bringing people to the company, but not at the
expense of, you know, having your agents just solely focused
on recruiting because that completely is, is opposite of
(12:52):
what we're trying to accomplish,right?
It's like, I want to train agents.
I want agents to be focused on transacting.
I don't want agents to be focused on recruiting because
that's where they make money. You know, I think it's great to
have some sort of incentive for agents, if that makes sense.
Like, hey, you came across someone really awesome and
(13:12):
you're going to bring them to the brokerage.
You should get something for that.
And we do offer something for agents for that, but that's not
what I want agents focused on. What I want them focused on is,
you know, successfully doing thebest that they possibly can for
their buyers and sellers and enabling them to do as much
business as possible. So between training and all of
(13:33):
the the different opportunities that we offer for business,
because that's really what it comes down to like an agent, all
they want is to do deals. You know, I mean, I guess unless
they're at one of these multi level marketing brokerages,
sometimes I question that, but but for the most part, they just
want to do business. So if you can show an agent how
to do business, how to be successful, how to make a
(13:56):
living, even in this, you know, tough market, then you're going
to have really happy agents and then you're going to get more
agents because other agents knowthat your agents are happy.
So it all works together. Yeah, I think the way, I guess
the way I view it is, you know, the, the recruiting heavy
business model doesn't seem sustainable to me because, you
(14:19):
know, in this, this may be a huge over generalization, but
when somebody gets their licenseand intends to make money in
real estate, they usually want to make money.
Like that's that's why they they, they see that there's
people out there crushing it, making millions of dollars.
So in their head they're thinking, I'm going to go and do
this, I'm going to take a risk and I'm going to make money.
(14:40):
So in a recruiting heavy model, what you're doing is you're
shifting the focus on, on generating reproducible, you
know, or really focusing on actions that will generate
reproducible results to bring somebody in, getting compensated
for, bring the person over, but not really showing them or
benefiting them on, on how to become a better actual agent.
(15:02):
You know, So my, I guess, you know, we're not thinking of
predictions in this conversation, but my prediction
would be these heavy recruiting models will run out of steam the
minute they stop growing. I mean, they're losing gobs of
money and and then those agents will end up somewhere that has a
platform to benefit them or to create value in the way that
(15:23):
they transact, right? So I mean, my, my recommendation
for somebody that is an agent that's new into the industry
would be to find a brokerage that helps you become better at
transacting, right? Get better at generating leads
and get better at converting those leads to a closing, right?
And if and if you do that, you can kind of build your own
brand. And to your point, the more you
(15:43):
transact, the more agents are going to see that and then
they're going to want to join a team or join your brokerage.
And they're, and you're going toretain them, you know, I mean,
I, that's the other piece of this is these, these brokerages
that are just bringing people injust to have a number.
I mean, they're, they're churning out, you know, and I, I
think we had, I think we were ona call with someone and they
(16:04):
were at another brokerage and they, they asked us like, why is
it that agents from, you know, ex brokerage are all really bad?
And it, it is one of those brokerages and, you know, it's,
it's that, it's that they don't have the support and the
platform to grow their actual business.
And they're focused on, you know, growing agent count,
(16:27):
which, you know, is, is just quite frankly A distraction to,
to, you know, doing deals if, ifthey're focused on that, you
know, so. Interesting.
So what do you think ends up happening in this, if we should
ask this question? We try to run a prediction on
it. What what ends up happening with
this Compass transaction becauseit wouldn't if it goes through
(16:48):
it would close early 26 like like late first quarter, early
second quarter, yeah. So if that closes, does anything
change? Do do agents at Compass start to
look elsewhere because all of the money is going into driving
additional agent count? Do do they actually end up, you
know, retaining even 50% of the agents that are at Sotheby's in
(17:11):
Corcoran and Century 21? Do all those flee?
Like what? What actually happens?
You know, it's, it's tough to say, but in my opinion, it's,
it's the brokerage, it, the Compass is completely different
than Sotheby's, right? So like.
Culture the way it's run. Definitely.
So if you are, you know, bringing on an entire, you know,
(17:32):
group of individuals that is used to doing business one way
and they're not interested in operating that way.
I mean, that's the beauty of real estate and and being an
independent contractor, like as an agent, you can go wherever
you want, whenever you want. So to me, it, it seems like this
is just going to be a bit of a shuffle, you know, and they may
(17:53):
retain some agents, but, you know, Compass historically is
known for paying agents to come to them, Right.
And, you know, we don't, we don't know what they're doing
here. I I would highly doubt that with
this transaction, they will additionally pay agents to come
over to them. Yeah, that would be.
That's why it was like a loaded question because I'm like, you
(18:13):
know, the compass grew the way they grew by paying an agent.
Exactly. Can they do that in this deal
when they're bringing on 2.5 or 2.6?
Million, I mean, you already sawthe the drop, the decrease.
I mean, I can't imagine that that would get much worse, you
know, so interesting. I, I think it'll be really
interesting to see how many agents they actually retain from
(18:36):
this and whether that was worth it or not, you know?
OK, well, with that, let's transition.
It is story time. So homes gone wild.
Paul, fix it all. Hanson is going to read us a
story submitted by our listeners.
If you have a crazy story, make sure you submit it because Paul
(18:59):
loves them. He has a lot of questions.
We want to know all the details.But yeah, let's jump in.
What happened on this story? OK, on this week's episode of
Crazy Stories, this one appears to be really, really long.
So this is Homes Gone Wild. Back in October 2021, day before
(19:21):
Halloween, I showed an older house in northeastern Portland
to be a relatively new or to a relatively new client.
Northeastern Portland. I don't know what is, what's
that's like on the coast or where is that?
He had a limited budget, so we were only looking at a house
that needed cosmetic work and repairs.
He was a little eccentric, not that it mattered.
(19:43):
So then why did you say it? I work with a lot of engineers,
period period period. So we show up at the house just
before dusk and there is a groupof crows flying right over the
front yard. I joke from the client that's
called a murder. Remembering it from The Simpsons
Treehouse of horror episode. I explained the reference but he
didn't appreciate it. So I'm a little confused.
(20:06):
Is this person so he's eccentricso she's assuming or he or he?
Is assuming like. Engineer, like they say they're
eccentric. That doesn't matter.
I work with a lot of. Yeah, Are engineers eccentric?
I don't know, I'm very confused already.
We walk in, we walk inside and the place was basically
untouched for 50 to 60 years. Sounds like a good flip.
(20:26):
It was in a state being sold as is.
We went through the old kitchen which you had to walk through to
pass between main level bedroomsin the living room.
I distinctly remember the wood flooring was made of tiles,
which was unusual. Wood flooring made of tiles.
Like a parquet floor maybe? We go up to the finished attic
(20:50):
and I didn't feel anything was off yet.
Yet we're getting into the good stuff.
We go down to the kitchen to thehallway and look at the two
bedrooms. Suddenly, while I was standing
in the hallway, there was an incredibly loud bang.
It felt like a big collision right under my feet.
Then a few seconds late, a few seconds later, it happened
(21:11):
again. Then a third and fourth time.
Bang Bang bang. We're both pretty freaked out at
this point. We go down to what turned out to
be 1/2 basement, which was unfinished.
I hope there's not like a person.
Yeah, this. Is this is this is good?
OK, this is getting better. All that was down there was a
cement floor and an ancient old furnace.
(21:32):
The area that was under me was avent tucked into 1/2 crawl
space, only two feet tall. We left the property pretty
quickly. I turned off the lights fast,
locked up, and said goodbye to my client.
He ended up firing me a few dayslater.
I'm not sure why, but clearly our experience made an
impression on him. I never told the listing agent,
(21:55):
I just looked at the house photos and got chills.
I don't know what to think aboutour experience, but it certainly
was the weirdest I had had and Ihave shown over 1000 homes at
this stage. It definitely made an amazing
Halloween story the next day. So what?
What happened? I'm so confused.
So they heard banging in the down below them, right?
(22:18):
Yeah. So that's like so that either is
like a a furnace. Which there was a furnace,
right? Yeah, in the crawl space, or
maybe the flooring or maybe the house was falling over, I don't
know. And like the fact that he fired
her and or him and said, I'm notsure why, but clearly our
(22:39):
experience like, like why, you know, I want to know why and I'm
sure you know why. Like I think I know I this is a
heavy assumption, but there's a lot of judgement in that first
section. Like this person's eccentric.
I work with engineers. So this agent messed it up by
not, you know, getting into their client and, you know,
(23:01):
prefacing, I mean, I, I don't know what standard practices.
Again, Full disclosure, I've never been a real estate agent.
But, you know, if if I was an agent, I would think, you know,
and I had a buyer that was important to me, I would, I
would probably try to walk properties before I show it to
the agent totally so that I could.
Yeah, sorry to the client so that I could, I could preface
before I go go into the house. Hey, look, yeah, this is a
(23:22):
fixer. You know, there's banging noises
or whatever you anticipate. Exactly.
You get there 10 minutes before them.
You walk the property. And you know.
Yeah, yeah. You set it up for them and then
you're the expert of the property.
You know, if you're walking through with them and, and
sometimes like if you're drivingtogether, that can be difficult.
(23:43):
There are circumstances where you can't do that.
But if you are able to see it before, you know you absolutely
should so. So this age moral, the story is
this agent dropped the ball, which is why they got fired,
Yeah. We think sounds like that to me.
I mean, you don't. Just if you're listening, we're
sorry. But it's your fault, no one is
going to submit stories if we RIP them apart.
(24:05):
So just kidding, you did an amazing job.
I don't know. I think I think the best, the
best podcast on the planet rightnow is the live podcast called
Kill Tony. He gets people, you know, he
gives them one minute to do stand up comedy.
Yeah. Uninterrupted.
Yeah. And then they just RIP them
apart. Yeah.
(24:25):
And they have hundreds and hundreds of people that sign up
every week to go and do it. So maybe that's what this should
become. Maybe it should just start
ripping agents. Yeah, we're, we're shifting.
It won't be home gone wild. It'll be like, yeah, destroy,
Yeah. Why you suck as an agent?
OK, I love it. All right.
Well, with that, you know, we doget a lot of questions on the
(24:48):
podcast because we talk about things so real estate specific
often because that's our world. We thought that we would put
together 5 tips for first time home buyers in a lower rate
market. So as you mentioned, like we, we
do anticipate it's not a lower rate market right now, but you
(25:10):
know, the feeling is over the next year at least I would
assume. And as you mentioned, like we
might see high fives and, and asyou mentioned, I mean that's,
that's pretty that's low. Like that's if, if you look over
time, that's not bad at all. So I.
I'd love to add some commentary to why we think or why I think
(25:31):
that's not bad. Yeah.
You know, if you are a person buying a $1 million house or
five, let's just say a $500,000 house, it's like right around
the the national average. And you have, you know, 10%
down. So you have 50 grand.
So you're borrowing $450,000 from somebody else to go and buy
this property. Yeah.
And you're saying I'm going to pay you back over the course of
(25:53):
30 years. Yeah.
What kind of a return is acceptable?
Yeah. I mean, money's not free, right?
You don't have 450 grand to go and buy it.
So what what's a reasonable return for that person that's
giving you $450,000? Yeah.
I mean, I don't see 5-6 percent is egregious, right.
I don't think that's a AD returnprofile.
Yeah, it is a business. Yeah, they need to.
(26:16):
Make money, right? So, you know, and to me, I think
we also have to double click on kind of national averages.
Consumers historically before COVID were living in properties
for seven years. So a lot of times I have these
conversations or arguments with a consumer saying, well, 6% is
terrible. It's like, well, so if you look
at the amortization schedule andyou pay the loan in full over
(26:38):
the course of the 30 years, yeah, you're, you're spending a
lot of money and interest, right?
If you're spending it for seven years and you're buying
something different and the homeappreciates, I don't understand
the argument, right. You know, and, and so, and, and
after COVID, I think they're saying that the, the average,
especially with those low rates,you know, the, the home
ownership, you know, people livein houses maybe up to 13 years.
I think it's the anticipation. So maybe, you know, maybe that
(27:00):
rate is a little higher and tougher to swallow, but I, I, I
struggle with that. Like 5-6 percent.
If you're waiting for rates to drop, you're making a mistake.
Right. Like we're not going to see 2%
again. Like, you know, that was
probably never. And I think, yeah.
And I think that, you know, could we, we just recently lived
through that. Yeah.
So there's a lot of, you know it, it feels like 6% is high
(27:25):
because you know there was a 2% interest rate, but it's not,
it's you don't wait for that forsure.
It's absolutely not happening. I have an opinion of that too,
because the people that got a 2%interest rate aren't the ones
that are bitching about 6% rates.
It's the people that waited and didn't buy when it was 2%.
Yeah. So you know it, it seems a lot
(27:48):
to me like people that complain about that have a victim
mentality. It's like, hey, they were 2%.
I just didn't have the money or I didn't get it together.
I'd whatever the reasoning was. And now it's 6 and it's making
it even harder. It's like this is your, like
it's on you. Yeah, it is what it is.
If you wait, if you wait another3-4 years and in the hopes that
(28:08):
rates go back down to two, you're going to lose 3 to 4
years of of appreciation. And so it's just a bad argument.
OK. So with that, 5 tips for first
time home buyers in a lower ratemarket number.
One, OK, we're going back and forth.
So I'll do number one, get pre approved early.
(28:29):
With rates dropping, more buyerswill jump in.
Having a pre approval in hand shows sellers you're serious.
So a pre approval letter, if you're new and this is going to
be the first time you purchase, what that means is that you go
and you work with your lender orbroker on the loan.
And so you're going to give themyour W2 or your income
(28:50):
statements. And they might look at any other
sources of income and they're going to run a ratio of your
debt to income, right? So they want to look at how much
debt you have and your income. And then they're going to
calculate how much of A home youcould actually afford based on
today's rates. And they're going to give you a
letter that then gives you the capacity to say, hey, I've
(29:12):
already been pre approved. I have a, a lender that's ready
to give me a half, $1,000,000 togo and buy this house.
So the agent and the seller on the other end have confidence.
Hey, this person's got their ducks in a row and they can get
it done. Yeah, Yeah.
I mean, you know, as a buyer, you need to know what you're
approved for. And I think oftentimes the
agents we are working with buyers and if they have not done
(29:36):
that step like that, we're kind of like stop everything because
there is no point in wasting anyone's time looking at a ton
of properties if you don't know what you qualify for.
Sometimes their buyers are surprised, you know.
So it's number one, get with that lender, give them all of
your information, find out exactly you know what it is you
(29:56):
need to do to qualify, what you qualify for.
And then when you do find a property, I mean this is the
most important part because you might stumble on something that
you like and you want to be pre approved to immediately submit
an offer. Yeah.
So one of the things that I would say to related to that is
that you, you don't have to justgo to Wells Fargo or chase
around the corner. You know, I, if you're in
(30:17):
Southern California, you're not getting paid to say this.
But if you're in Southern California, I'd reach out to
streamline home lending because they're they're able to broker
the loan, right? So they can go out and get you
pre approved and underwrite yourfile, but they can look at rates
and programs that, that aren't just fitting in one box.
And often times, you know, people, I hear the argument of,
(30:38):
well, going to a broker means I'm probably going to pay some
fees on the front, you know, or higher fees on the front, then
maybe going to a traditional bank.
But I, I, I disagree because the, the broker you're hiring
them to shop and make and, and make sure that you get the best
deal and that you get into the best mortgage based on your,
your current situation. Yeah, I would say it's just it's
(30:58):
exactly opposite of that. It's almost like the that
mentality and in the past the benefit going direct to like a
Bank of America or Wells Fargo may have been speed or you know,
your banker or but that is absolutely not the case.
In fact, I would say brokers with all of their options, they
(31:19):
know who's going to perform the fastest.
I mean, I've seen loans get closed in eight days, you know,
so yeah, definitely point OK #2 work on your credit score.
So we talked about that a littlebit when we talked about pre
approval. But really your credit, your
credit score is everything that's going to determine on,
(31:40):
on, you know, what you actually qualify for because it
determines what the lender is willing to lend, you know, in
loan to value ratio. So basically if you have an 800
plus credit score, you can potentially go and finance 95%
of, I mean some even more of that loan.
(32:03):
And then you know the opposite is true.
If you have a 500 credit score, you might not be so lucky.
So you may have to put a larger down payment.
So making sure that you are paying down some debt, avoiding
any big purchases before you're looking for a home, and just
making sure the credits clean would be huge.
(32:24):
Perfect. Number three, save for closing
costs and reserves. So many first home tires, first
time home buyers believe that the down payment is all they're
going to have to come up with, right?
But that's not the case, no. So there are closing costs,
escrow title. Appraisal.
(32:46):
You know, yeah, inspections. So there's all sorts of little
fees that you're going to have to anticipate spending and and a
great agent should be vocalizingthat early in the process.
Hey, have you thought about this, right?
Even a lender would, would you know, a good broker, a good
lender will bring that up too. But I think depending on the
market you're in, that could be like 2 to 3 or 4% of the total
(33:09):
transaction cost. And if you have great credit,
you could wrap those into your loan.
You know, if you have good debt to income and good credit, but
if you don't and you're right atthe Max, then you got to pay
that upfront. Yeah.
And not just that, I mean, I think having reserves, sometimes
your loan requires you to have reserves, but also you want to
(33:30):
have reserves for after you movein.
Like it is, you know, you have to be prepared that the spending
doesn't stop when you move into that home.
Yes, I would say the spending starts when you move into the.
100% I was going to say the first house I ever bought was
like $100,000 condo and I was soexcited.
I'm like, hey guys, it's done. And then the day I moved in it
(33:51):
was like, oh shoot, the sink doesn't work or the.
I mean, I did inspection all that stuff, but I had to go and
repair a lot of stuff and it gets expensive.
It adds. Yeah.
Yeah, got to be prepared, OK. Know your budget beyond the
mortgage. So don't just look at the
monthly payment. Factor in HOA, insurance, taxes
and then maintenance so you don't stretch yourself too thin.
(34:12):
I think, you know, again, the lender should really be painting
that full picture. But there are times like there
are specific pockets that you know, not only is HOA higher,
but tax rates higher. So you really need to know all
of those numbers before you're making that decision and make
(34:32):
sure that it makes sense. All right.
The last one number 5 is be ready to act, but stay patient.
So I mean, I think what this means is really when you, when
we say be ready to act, that means getting your pre approval,
that means don't make any big purchase, don't go buy a new
car. So, so put yourself in a
financial position where if the deal is great and you fall in
(34:55):
love with the house, you can move quickly because sellers,
especially in today's market, they want surety that a
transaction is going to close, you know, and, and in a market
that where rates are dropping, you know, with, if we still have
this inventory problem, demand should spike and it's going to
get more competitive. And so I think being ready to to
(35:16):
move the minute you find something you love is, is
critical. But but also when we say be
patient, you know, don't go out and buy something just to buy
it, right? You know, find the one that
you're going to be, you know, you're going to be happy with
averages or seven years pre COVID.
Now it's 13. So yeah.
Better like that house. Yeah, yeah, I always.
I actually, it's funny because when I was in the field working
(35:39):
with clients, one of the key things that my clients would
always say is like, it almost Suzanne says we could do better,
you know, because even if my client likes a home, I'm still
always going to point out like, negatives because I want them to
be aware. And sometimes I'm going to see
things that they won't see. And so I even have like multiple
(36:00):
reviews on my Zillow profile that it's like, yeah, Suzanne
told me this wasn't the one thatI could do better.
And we found it, you know, so I'm really big on, I don't want
my buyers to ever have buyer buyer's remorse.
And and so, you know, there's noreason to rush into anything
right now specifically, but being ready to act when you find
(36:23):
the one, that's what's most important.
All right, those are our 5 tips for a first time home buyer in a
lower rate market. So if you are a first time home
buyer and you're interested and you're ready and you want to
start talking to somebody, we are here innovating Realty.
We know, we know 176 really goodagents in Southern California.
(36:45):
Perfect. What else what what what else do
we have to touch on? How is how is overall business
and life and. So overall business, we can
start there. I mean, I think, I think we've
all felt what's happening in themarket.
I think all businesses in our, you know, I would say our
umbrella, it has felt that things have kind of slowed down
(37:08):
a bit, but it's actually been a positive for us.
I would say like what what I seein that is we've had more time
to spend on building the business.
So with us, we have a lot of growth coming that we'll be
talking about very soon, but in multiple areas in Southern
California, we're going to be growing even more.
(37:31):
But again, you know, it's, it's not a, we don't have the compass
model where we feel that we needto, you know, grab every single
real estate agent. We really feel like we do
something kind of special at Innovate.
We generate a ton of leads. We recently onboarded into the
Zillow Flex program. So now we're getting even more
(37:51):
leads than we were before. So you know, it's, we provide
our agents with those opportunities with the training
and, and help them be successful.
And we want people at Innovate that are like minded, that want
to work, you know, and want to take those opportunities and run
with it. So I think for us, you know,
(38:11):
we've, we've put all of these things into place over the past
say six months. And so I'm super excited about
where that's going to take us for the next 6 months and years
to come. But but yeah, so business
overall, I feel like while transactions may be down because
they're down across the board, just gave us more time to spend
on the business. That's awesome.
(38:33):
It's very good, very positive outlook.
What about you guys? Yeah, great.
I mean, I think similar, we havesome assets that we're trying to
sell that, you know, market has been a little slower than we
would have liked. But I mean, I think any
entrepreneur has an opportunity to look at things as glass half
full or glass, you know, half empty.
And I think, you know, when we look back at the last two years,
(38:55):
the operation of Vibe House is in a really, really good job
getting better at completing construction swiftly,
efficiently from a cost standpoint.
And that's what we can control. So we can, we can control the
number of houses we buy, we can control the design and the
product that we put out. We cannot control what the
markets going to do. And so if, if, if we're thinking
(39:16):
long in this business, which we are, you know, that's that's the
number one thing for us to be focused on.
And, you know, I would I'd say we've made a ton of improvement.
We've got some great new team members, you know, in the way
that we manage construction and some great new teams in the
construction department. You know, six months ago I was
freaked out about the workforce.Today, I'm not feeling, you
(39:37):
know, that fear. I mean, we haven't had an issue
getting, you know, additional people or bodies into the into
the business on the constructionside.
So yeah, I'm feeling really goodabout that.
But would love to would love to see the market pick up a little
bit anticipating maybe early next year.
But. OK.
Well, with that personally, anything to share?
No, I mean not nothing. I mean did.
(39:59):
We have the crisis averted yesterday of the school
situation. Yes.
Well, so yes. So yeah, there was.
So my daughter goes to a school and in the older grades there
was a child that had head lice. And so we were all very freaked
out. She did not, thank goodness, but
(40:20):
you know, she was very sad last night because the nurse that
checked her took out her like elastics but didn't put him back
in. And so she was, you know, she
was sad that she didn't have herhair, the rest.
Of the That is a crisis. That is a crisis.
I didn't. Understand her world.
I didn't understand it, but my wife definitely did.
So yeah, that's. Good.
(40:40):
That's cute. OK.
Well with that, I I think that'sa wrap for today.
All right, so if you do not follow us, please do so all
socials. And if you have not yet,
subscribe, hit subscribe on YouTube if you're watching or
Spotify if you're listening there.
And please don't forget to submit your stories.
(41:02):
We love these stories. Give us more details.
And I can't wait to tear into the next bad story.
We'll see you next week.
You know you can't have it both ways.
Like, don't pretend like that iswhat's best for the consumer,
you know? What?
What? Happened.
I'm so confused. So there's a financial.
Position where if the deal is. Today is like it, almost it,
Suzanne says. We can do better, you know.
(00:23):
Welcome back to your favorite podcast though, Planet Realty
Talk. We are very excited for today's
episode. Lot to unpack.
Yeah, a lot happening in the industry.
Yes. So if you're new to our podcast,
we talk all things real estate, all things business.
And to my right, we have the Queen of the closing table,
(00:44):
Suzanne Seaney, founder and CEO of Innovate Realty, an
independent brokerage all over California now.
Yeah, we're growing fast. Yes, and I am your Hostess with
the mostest. Paul, fix it all, Hanson.
Yes, yes, yeah, I, yes, I have, I fixed some things over the
(01:07):
last week that's. For sure.
Yeah, yeah, well, I'm, I mean, the the name fits.
It really does. Like I, as soon as I heard it, I
was like, this is the one. Like this is what you do, you
know? So yeah, fix some things.
All right. I don't know.
The only downside is that now that people know that, yeah,
they come to me to fix more things.
Yeah, I think you like it though.
(01:29):
I I think you like problem solving.
I do enjoy. Yeah, you do you.
Know being engaged on a problem,yeah, but I don't love some of
the problems I have to. Fix.
Yeah, yeah. So, well, let's dive into a
quick update on market, what's happening.
I mean, it's been an interesting, you know, couple
weeks. I would say I'd love to just
(01:50):
talk a little bit about rates and what's happening on that
side, you know, leading into, I think we've, so if you're new to
the podcast, we, we are not, youknow, this is a disclaimer.
We are not economists and we arenot trying to predict what's
going to happen, but we do trackit daily and we look at it, It's
very important to us. And leading into the Fed meeting
(02:11):
in September, you know, so this is now 4 weeks ago, 30 year
mortgages were in the 66 to 675 range and everyone was
anticipating at least 1/4 point rate cut.
And this is an interesting misconception and we've touched
on it a couple time in previous episodes, but and I I hear it
from agents, buyers, even just people generally, hey, if the
(02:34):
Fed cuts the rate, mortgage shops are going to slash and
it's going to be crazy market. Rates go down and everyone's
jumping in. Yes.
And so and, and, and what, what actually happened was, you know,
the, the, the 30 year fixed mortgage pivots from the 10 year
Treasury rate and that is not tied to the Fed funds rate.
So it can be influenced, but it's not directly correlated or
(02:57):
tied. And so when the Fed funds and,
and that's when we talked about a Fed meeting in September,
that's what they're discussing is the Fed funds rate.
And so they did cut 1/4 point the week leading into that
meeting. So previous to the meeting, 30
year mortgages went all the way down to 615 S the week before.
(03:17):
And you know, it had me a littlebit nervous because there was a
lot of talk around will it be 1/4 or 1/2 a point cut at the
Fed? And I think what we saw was, you
know, some banks and, and mortgage-backed security buyers
getting a little aggressive on the rate in anticipation for
that meeting when they, when they announced that it's a
quarter point. Rates have actually gone back
up. So in the last two weeks since
(03:39):
the meeting, rates are now kind of hovered in around that 63
range. And the 10 year treasury rate,
you know, was as high as 4/4 is now down to four one just over
4.1 as of this morning. So it's going to be really
interesting to see what happens.I mean, some people are thinking
there's going to be additional rate cuts before the end of the
year, you know, certainly early next year, you know, but I, I
(04:02):
think, you know, the biggest thing that we continue to talk
about is this arbitrage between the 10 year treasury rate and
the 30 year fixed mortgage. And we're still close to 200
basis points of spread. You know, we're, we're
traditionally over the last 50 years, there's been about 175
basis points of spread. And so, you know, even if the
Fed doesn't continue to cut rates, if the 10 year can come
(04:22):
back a little bit and if banks find a way to be a little more
stable on that yield, then, you know, we might see sub 6% thirty
year mortgages, which, you know,if you look historically, that's
incredibly cheap. You know, so I know a lot of
people are complaining about affordability and man, 6% is a
lot, but I think in the 50s, sixties, 70s and we start rates
(04:44):
at like 15 and 16 percent, 18% mortgages.
So, I mean, I don't think it's it's terrible.
No, I mean, the interest rate isn't terrible.
I think it's just the concern, Imean, as we know is that home
values just continue to go up, at least here like that.
That is not the case everywhere.You know, I'd say a lot of those
places, especially during COVID when everyone left and moved to
(05:08):
all these other areas where now they could work remote.
I mean, a lot of that has been rolled back.
Like a lot of people are actually not able to work
remote, who thought they would be able to work remote.
And now they're actually trying to sell their house and they're
underwater from selling their house.
So not everywhere prices are really high.
(05:29):
So there are some great opportunities with a 6% interest
rate, but I would say specifically here, you know, in
California or in Southern California, we haven't seen
prices go down, you know, so. Not really.
I mean there's a couple of pockets that we feel have maybe
been down as high as 5% year over year from where things have
(05:51):
traded. But it's it's, it's very pocket
specific. I mean, if you're in, if you
bought in Austin in like 2020 through 2023, you're probably
down 20%. So there's some pockets in the
US that are, you know, definitely impacted just based
on the demand that surged. But yeah, what's what's
happening in the in the brokerage side?
(06:12):
Of the world, yeah, you know, there's yeah.
So we talked about interest rates, but I think more juicy is
that Compass Compass announced that they are going to acquire
anywhere, which if you are unfamiliar with anywhere, that
is the the the parent company ofSotheby's Century 21, Century
(06:38):
21. And, you know, just yeah, like a
a ton of real estate companies. And so I think, you know, it's
caused a bit of, I mean, people are talking about it, that's for
sure. I think it's causing a bit of a
shift in, you know, where you are hanging your license.
(06:59):
I think not everyone wants to goto Compass, you know, and that
is a lot of agents that potentially they're banking on
coming over to Compass and they're going to acquire a lot
of debt to do that. Yeah, we should double click on
the deal because it was, it was interesting.
Compass, you know, typically when you see it's not really a
(07:20):
merger, it is a true acquisitionwhere you see something like
that happen in a public equity. A lot of times if if the
obviously if the deal is good and everyone's excited about it,
the equity goes up. I mean you know or the you know
the stock will trade higher. You would think.
This was cut by, you know, 10% of actually 50.
The stock plummeted 15% in the 3-4 days after the announcement.
And I think it's because of the actual dynamic of the deal.
(07:41):
They are buying it for 1.6 or 1.8 billion, but then they're
also assuming 2.42 point $5 billion worth of debt and it's a
lot of debt and and Compass is already, you know, got a fair
bit of debt on it. I didn't, I'd have to double
check on what they're, you know,earnings ratio is, but I mean,
they're trading north of 20 times earnings.
I think it may be higher, which is, you know, double, you know,
(08:05):
Fact Check me on that. But it's like that's a lot of
debt and in a market nationally where where home sales are down
40% from the peak. I mean, it, it to me it's, it's
a really interesting deal because you've got, you know,
agents that are transacting lesson average by 40%.
And so they're trying to grow through, you know, through
(08:27):
numbers or sheer head count. Yeah.
I mean it, it could be a genius move when you look at the next
10 years. I mean, if you believe that we
still have a major problem with supply, which I think we do, and
if you know, pricing does kind of settle out or even just stall
for a few year period, you know,you're buying a ton of agents.
(08:48):
And if they continue to transactthen it could be a brilliant
move, right, if they can servicethe debt.
Well, and I, what I think is interesting about it is, you
know, they're really going hard after Zillow for, you know,
basically saying that they're, you know, not being fair or not
doing what's just to the consumer.
(09:11):
But you know, I think what's more interesting is with this
acquisition, what they're tryingto do or, or a big piece of this
is they're going to get more listings to put on their site,
right, where they intend on doing the same exact thing, but
with Compass agents, right. And so it actually feels much
worse than what Zillow does, youknow, at least I mean, I, I
(09:34):
think everyone has their, their faults.
And we'll probably talk about Zillow a little bit here as well
because they're in the hot seat.But but you know, it, it's seems
like Compass is really going hard on Zillow, but there are a
lot of aspects to Compasses business that is very similar to
how Zillow operates. So then, you know, getting these
(09:57):
additional listings and then, you know, potentially keeping
them from other agents and only showing those those deals to
Compass agents. You know, it's kind of exactly
opposite of what they say publicly, you know, which is
like, oh, it should be, you know, fair.
And I mean, that's not, and we've talked about it before on
(10:17):
another episode where that doesn't feel fair for the
consumer, you know, that they'renot being shown to the other,
you know, a 70% of agents out there.
Like is that actually what's best for the consumer or is that
what's best for a compass agent you.
Know well, I mean, if you're, ifyou're running that business,
it's, it is a logical decision to a certain degree because if
(10:41):
transaction volumes are down, you want to give your agent pool
an opportunity to transact on both sides of the transaction.
And if you can do that within a week or two week or three-week
period, then you're kind of, youknow, you're cornering the
market to a certain degree. I mean, it as a business model
for them, sure, yes, makes sense.
But I think my, my take on it is, you know, you can't have it
(11:03):
both ways. Like don't pretend like that is
what's best for the consumer, you know, because I think we all
know it's not. So it's, it's more of like,
don't come from this like moral high ground of, you know, going
after Zillow and everything else.
It's it's kind of silly. I, I we have to Fact Check this
too. But I think that's still they,
(11:23):
they with that acquisition, thatteam, if you look at it as a
whole organization, they'll still have less than 10% market
share at a national level. And they're the, you know, the
biggest by far now. Yeah.
And so it is an industry where you know, you don't have to be
the the giant to succeed. I'd love to get your input on,
you know, you're running an independent brokerage and you
(11:46):
can, I think you can grow kind of two ways in today's market.
You can either get your current agent base to transact more or
you can grow through, you know, agent count, right?
And we've seen a lot of drama around this model of, you know,
almost even a multi level recruiting model to drive agent
count. But what's a sustainable way,
(12:08):
like a financially prudent way to grow the agent base or to
grow the, you know, the transaction by agent, you know,
at the brokerage? How do you do that?
Yeah, I mean it it to me it doesn't make sense to just grow
bodies, you know. And so there has to be a good
balance between those two thingslike you have to be able to
(12:29):
train your agents to be able to handle any market and any
situation that they come into. But also you do want to be out
there and, and bringing people to the company, but not at the
expense of, you know, having your agents just solely focused
on recruiting because that completely is, is opposite of
(12:52):
what we're trying to accomplish,right?
It's like, I want to train agents.
I want agents to be focused on transacting.
I don't want agents to be focused on recruiting because
that's where they make money. You know, I think it's great to
have some sort of incentive for agents, if that makes sense.
Like, hey, you came across someone really awesome and
(13:12):
you're going to bring them to the brokerage.
You should get something for that.
And we do offer something for agents for that, but that's not
what I want agents focused on. What I want them focused on is,
you know, successfully doing thebest that they possibly can for
their buyers and sellers and enabling them to do as much
business as possible. So between training and all of
(13:33):
the the different opportunities that we offer for business,
because that's really what it comes down to like an agent, all
they want is to do deals. You know, I mean, I guess unless
they're at one of these multi level marketing brokerages,
sometimes I question that, but but for the most part, they just
want to do business. So if you can show an agent how
to do business, how to be successful, how to make a
(13:56):
living, even in this, you know, tough market, then you're going
to have really happy agents and then you're going to get more
agents because other agents knowthat your agents are happy.
So it all works together. Yeah, I think the way, I guess
the way I view it is, you know, the, the recruiting heavy
business model doesn't seem sustainable to me because, you
(14:19):
know, in this, this may be a huge over generalization, but
when somebody gets their licenseand intends to make money in
real estate, they usually want to make money.
Like that's that's why they they, they see that there's
people out there crushing it, making millions of dollars.
So in their head they're thinking, I'm going to go and do
this, I'm going to take a risk and I'm going to make money.
(14:40):
So in a recruiting heavy model, what you're doing is you're
shifting the focus on, on generating reproducible, you
know, or really focusing on actions that will generate
reproducible results to bring somebody in, getting compensated
for, bring the person over, but not really showing them or
benefiting them on, on how to become a better actual agent.
(15:02):
You know, So my, I guess, you know, we're not thinking of
predictions in this conversation, but my prediction
would be these heavy recruiting models will run out of steam the
minute they stop growing. I mean, they're losing gobs of
money and and then those agents will end up somewhere that has a
platform to benefit them or to create value in the way that
(15:23):
they transact, right? So I mean, my, my recommendation
for somebody that is an agent that's new into the industry
would be to find a brokerage that helps you become better at
transacting, right? Get better at generating leads
and get better at converting those leads to a closing, right?
And if and if you do that, you can kind of build your own
brand. And to your point, the more you
(15:43):
transact, the more agents are going to see that and then
they're going to want to join a team or join your brokerage.
And they're, and you're going toretain them, you know, I mean,
I, that's the other piece of this is these, these brokerages
that are just bringing people injust to have a number.
I mean, they're, they're churning out, you know, and I, I
think we had, I think we were ona call with someone and they
(16:04):
were at another brokerage and they, they asked us like, why is
it that agents from, you know, ex brokerage are all really bad?
And it, it is one of those brokerages and, you know, it's,
it's that, it's that they don't have the support and the
platform to grow their actual business.
And they're focused on, you know, growing agent count,
(16:27):
which, you know, is, is just quite frankly A distraction to,
to, you know, doing deals if, ifthey're focused on that, you
know, so. Interesting.
So what do you think ends up happening in this, if we should
ask this question? We try to run a prediction on
it. What what ends up happening with
this Compass transaction becauseit wouldn't if it goes through
(16:48):
it would close early 26 like like late first quarter, early
second quarter, yeah. So if that closes, does anything
change? Do do agents at Compass start to
look elsewhere because all of the money is going into driving
additional agent count? Do do they actually end up, you
know, retaining even 50% of the agents that are at Sotheby's in
(17:11):
Corcoran and Century 21? Do all those flee?
Like what? What actually happens?
You know, it's, it's tough to say, but in my opinion, it's,
it's the brokerage, it, the Compass is completely different
than Sotheby's, right? So like.
Culture the way it's run. Definitely.
So if you are, you know, bringing on an entire, you know,
(17:32):
group of individuals that is used to doing business one way
and they're not interested in operating that way.
I mean, that's the beauty of real estate and and being an
independent contractor, like as an agent, you can go wherever
you want, whenever you want. So to me, it, it seems like this
is just going to be a bit of a shuffle, you know, and they may
(17:53):
retain some agents, but, you know, Compass historically is
known for paying agents to come to them, Right.
And, you know, we don't, we don't know what they're doing
here. I I would highly doubt that with
this transaction, they will additionally pay agents to come
over to them. Yeah, that would be.
That's why it was like a loaded question because I'm like, you
(18:13):
know, the compass grew the way they grew by paying an agent.
Exactly. Can they do that in this deal
when they're bringing on 2.5 or 2.6?
Million, I mean, you already sawthe the drop, the decrease.
I mean, I can't imagine that that would get much worse, you
know, so interesting. I, I think it'll be really
interesting to see how many agents they actually retain from
(18:36):
this and whether that was worth it or not, you know?
OK, well, with that, let's transition.
It is story time. So homes gone wild.
Paul, fix it all. Hanson is going to read us a
story submitted by our listeners.
If you have a crazy story, make sure you submit it because Paul
(18:59):
loves them. He has a lot of questions.
We want to know all the details.But yeah, let's jump in.
What happened on this story? OK, on this week's episode of
Crazy Stories, this one appears to be really, really long.
So this is Homes Gone Wild. Back in October 2021, day before
(19:21):
Halloween, I showed an older house in northeastern Portland
to be a relatively new or to a relatively new client.
Northeastern Portland. I don't know what is, what's
that's like on the coast or where is that?
He had a limited budget, so we were only looking at a house
that needed cosmetic work and repairs.
He was a little eccentric, not that it mattered.
(19:43):
So then why did you say it? I work with a lot of engineers,
period period period. So we show up at the house just
before dusk and there is a groupof crows flying right over the
front yard. I joke from the client that's
called a murder. Remembering it from The Simpsons
Treehouse of horror episode. I explained the reference but he
didn't appreciate it. So I'm a little confused.
(20:06):
Is this person so he's eccentricso she's assuming or he or he?
Is assuming like. Engineer, like they say they're
eccentric. That doesn't matter.
I work with a lot of. Yeah, Are engineers eccentric?
I don't know, I'm very confused already.
We walk in, we walk inside and the place was basically
untouched for 50 to 60 years. Sounds like a good flip.
(20:26):
It was in a state being sold as is.
We went through the old kitchen which you had to walk through to
pass between main level bedroomsin the living room.
I distinctly remember the wood flooring was made of tiles,
which was unusual. Wood flooring made of tiles.
Like a parquet floor maybe? We go up to the finished attic
(20:50):
and I didn't feel anything was off yet.
Yet we're getting into the good stuff.
We go down to the kitchen to thehallway and look at the two
bedrooms. Suddenly, while I was standing
in the hallway, there was an incredibly loud bang.
It felt like a big collision right under my feet.
Then a few seconds late, a few seconds later, it happened
(21:11):
again. Then a third and fourth time.
Bang Bang bang. We're both pretty freaked out at
this point. We go down to what turned out to
be 1/2 basement, which was unfinished.
I hope there's not like a person.
Yeah, this. Is this is this is good?
OK, this is getting better. All that was down there was a
cement floor and an ancient old furnace.
(21:32):
The area that was under me was avent tucked into 1/2 crawl
space, only two feet tall. We left the property pretty
quickly. I turned off the lights fast,
locked up, and said goodbye to my client.
He ended up firing me a few dayslater.
I'm not sure why, but clearly our experience made an
impression on him. I never told the listing agent,
(21:55):
I just looked at the house photos and got chills.
I don't know what to think aboutour experience, but it certainly
was the weirdest I had had and Ihave shown over 1000 homes at
this stage. It definitely made an amazing
Halloween story the next day. So what?
What happened? I'm so confused.
So they heard banging in the down below them, right?
(22:18):
Yeah. So that's like so that either is
like a a furnace. Which there was a furnace,
right? Yeah, in the crawl space, or
maybe the flooring or maybe the house was falling over, I don't
know. And like the fact that he fired
her and or him and said, I'm notsure why, but clearly our
(22:39):
experience like, like why, you know, I want to know why and I'm
sure you know why. Like I think I know I this is a
heavy assumption, but there's a lot of judgement in that first
section. Like this person's eccentric.
I work with engineers. So this agent messed it up by
not, you know, getting into their client and, you know,
(23:01):
prefacing, I mean, I, I don't know what standard practices.
Again, Full disclosure, I've never been a real estate agent.
But, you know, if if I was an agent, I would think, you know,
and I had a buyer that was important to me, I would, I
would probably try to walk properties before I show it to
the agent totally so that I could.
Yeah, sorry to the client so that I could, I could preface
before I go go into the house. Hey, look, yeah, this is a
(23:22):
fixer. You know, there's banging noises
or whatever you anticipate. Exactly.
You get there 10 minutes before them.
You walk the property. And you know.
Yeah, yeah. You set it up for them and then
you're the expert of the property.
You know, if you're walking through with them and, and
sometimes like if you're drivingtogether, that can be difficult.
(23:43):
There are circumstances where you can't do that.
But if you are able to see it before, you know you absolutely
should so. So this age moral, the story is
this agent dropped the ball, which is why they got fired,
Yeah. We think sounds like that to me.
I mean, you don't. Just if you're listening, we're
sorry. But it's your fault, no one is
going to submit stories if we RIP them apart.
(24:05):
So just kidding, you did an amazing job.
I don't know. I think I think the best, the
best podcast on the planet rightnow is the live podcast called
Kill Tony. He gets people, you know, he
gives them one minute to do stand up comedy.
Yeah. Uninterrupted.
Yeah. And then they just RIP them
apart. Yeah.
(24:25):
And they have hundreds and hundreds of people that sign up
every week to go and do it. So maybe that's what this should
become. Maybe it should just start
ripping agents. Yeah, we're, we're shifting.
It won't be home gone wild. It'll be like, yeah, destroy,
Yeah. Why you suck as an agent?
OK, I love it. All right.
Well, with that, you know, we doget a lot of questions on the
(24:48):
podcast because we talk about things so real estate specific
often because that's our world. We thought that we would put
together 5 tips for first time home buyers in a lower rate
market. So as you mentioned, like we, we
do anticipate it's not a lower rate market right now, but you
(25:10):
know, the feeling is over the next year at least I would
assume. And as you mentioned, like we
might see high fives and, and asyou mentioned, I mean that's,
that's pretty that's low. Like that's if, if you look over
time, that's not bad at all. So I.
I'd love to add some commentary to why we think or why I think
(25:31):
that's not bad. Yeah.
You know, if you are a person buying a $1 million house or
five, let's just say a $500,000 house, it's like right around
the the national average. And you have, you know, 10%
down. So you have 50 grand.
So you're borrowing $450,000 from somebody else to go and buy
this property. Yeah.
And you're saying I'm going to pay you back over the course of
(25:53):
30 years. Yeah.
What kind of a return is acceptable?
Yeah. I mean, money's not free, right?
You don't have 450 grand to go and buy it.
So what what's a reasonable return for that person that's
giving you $450,000? Yeah.
I mean, I don't see 5-6 percent is egregious, right.
I don't think that's a AD returnprofile.
Yeah, it is a business. Yeah, they need to.
(26:16):
Make money, right? So, you know, and to me, I think
we also have to double click on kind of national averages.
Consumers historically before COVID were living in properties
for seven years. So a lot of times I have these
conversations or arguments with a consumer saying, well, 6% is
terrible. It's like, well, so if you look
at the amortization schedule andyou pay the loan in full over
(26:38):
the course of the 30 years, yeah, you're, you're spending a
lot of money and interest, right?
If you're spending it for seven years and you're buying
something different and the homeappreciates, I don't understand
the argument, right. You know, and, and so, and, and
after COVID, I think they're saying that the, the average,
especially with those low rates,you know, the, the home
ownership, you know, people livein houses maybe up to 13 years.
I think it's the anticipation. So maybe, you know, maybe that
(27:00):
rate is a little higher and tougher to swallow, but I, I, I
struggle with that. Like 5-6 percent.
If you're waiting for rates to drop, you're making a mistake.
Right. Like we're not going to see 2%
again. Like, you know, that was
probably never. And I think, yeah.
And I think that, you know, could we, we just recently lived
through that. Yeah.
So there's a lot of, you know it, it feels like 6% is high
(27:25):
because you know there was a 2% interest rate, but it's not,
it's you don't wait for that forsure.
It's absolutely not happening. I have an opinion of that too,
because the people that got a 2%interest rate aren't the ones
that are bitching about 6% rates.
It's the people that waited and didn't buy when it was 2%.
Yeah. So you know it, it seems a lot
(27:48):
to me like people that complain about that have a victim
mentality. It's like, hey, they were 2%.
I just didn't have the money or I didn't get it together.
I'd whatever the reasoning was. And now it's 6 and it's making
it even harder. It's like this is your, like
it's on you. Yeah, it is what it is.
If you wait, if you wait another3-4 years and in the hopes that
(28:08):
rates go back down to two, you're going to lose 3 to 4
years of of appreciation. And so it's just a bad argument.
OK. So with that, 5 tips for first
time home buyers in a lower ratemarket number.
One, OK, we're going back and forth.
So I'll do number one, get pre approved early.
(28:29):
With rates dropping, more buyerswill jump in.
Having a pre approval in hand shows sellers you're serious.
So a pre approval letter, if you're new and this is going to
be the first time you purchase, what that means is that you go
and you work with your lender orbroker on the loan.
And so you're going to give themyour W2 or your income
(28:50):
statements. And they might look at any other
sources of income and they're going to run a ratio of your
debt to income, right? So they want to look at how much
debt you have and your income. And then they're going to
calculate how much of A home youcould actually afford based on
today's rates. And they're going to give you a
letter that then gives you the capacity to say, hey, I've
(29:12):
already been pre approved. I have a, a lender that's ready
to give me a half, $1,000,000 togo and buy this house.
So the agent and the seller on the other end have confidence.
Hey, this person's got their ducks in a row and they can get
it done. Yeah, Yeah.
I mean, you know, as a buyer, you need to know what you're
approved for. And I think oftentimes the
agents we are working with buyers and if they have not done
(29:36):
that step like that, we're kind of like stop everything because
there is no point in wasting anyone's time looking at a ton
of properties if you don't know what you qualify for.
Sometimes their buyers are surprised, you know.
So it's number one, get with that lender, give them all of
your information, find out exactly you know what it is you
(29:56):
need to do to qualify, what you qualify for.
And then when you do find a property, I mean this is the
most important part because you might stumble on something that
you like and you want to be pre approved to immediately submit
an offer. Yeah.
So one of the things that I would say to related to that is
that you, you don't have to justgo to Wells Fargo or chase
around the corner. You know, I, if you're in
(30:17):
Southern California, you're not getting paid to say this.
But if you're in Southern California, I'd reach out to
streamline home lending because they're they're able to broker
the loan, right? So they can go out and get you
pre approved and underwrite yourfile, but they can look at rates
and programs that, that aren't just fitting in one box.
And often times, you know, people, I hear the argument of,
(30:38):
well, going to a broker means I'm probably going to pay some
fees on the front, you know, or higher fees on the front, then
maybe going to a traditional bank.
But I, I, I disagree because the, the broker you're hiring
them to shop and make and, and make sure that you get the best
deal and that you get into the best mortgage based on your,
your current situation. Yeah, I would say it's just it's
(30:58):
exactly opposite of that. It's almost like the that
mentality and in the past the benefit going direct to like a
Bank of America or Wells Fargo may have been speed or you know,
your banker or but that is absolutely not the case.
In fact, I would say brokers with all of their options, they
(31:19):
know who's going to perform the fastest.
I mean, I've seen loans get closed in eight days, you know,
so yeah, definitely point OK #2 work on your credit score.
So we talked about that a littlebit when we talked about pre
approval. But really your credit, your
credit score is everything that's going to determine on,
(31:40):
on, you know, what you actually qualify for because it
determines what the lender is willing to lend, you know, in
loan to value ratio. So basically if you have an 800
plus credit score, you can potentially go and finance 95%
of, I mean some even more of that loan.
(32:03):
And then you know the opposite is true.
If you have a 500 credit score, you might not be so lucky.
So you may have to put a larger down payment.
So making sure that you are paying down some debt, avoiding
any big purchases before you're looking for a home, and just
making sure the credits clean would be huge.
(32:24):
Perfect. Number three, save for closing
costs and reserves. So many first home tires, first
time home buyers believe that the down payment is all they're
going to have to come up with, right?
But that's not the case, no. So there are closing costs,
escrow title. Appraisal.
(32:46):
You know, yeah, inspections. So there's all sorts of little
fees that you're going to have to anticipate spending and and a
great agent should be vocalizingthat early in the process.
Hey, have you thought about this, right?
Even a lender would, would you know, a good broker, a good
lender will bring that up too. But I think depending on the
market you're in, that could be like 2 to 3 or 4% of the total
(33:09):
transaction cost. And if you have great credit,
you could wrap those into your loan.
You know, if you have good debt to income and good credit, but
if you don't and you're right atthe Max, then you got to pay
that upfront. Yeah.
And not just that, I mean, I think having reserves, sometimes
your loan requires you to have reserves, but also you want to
(33:30):
have reserves for after you movein.
Like it is, you know, you have to be prepared that the spending
doesn't stop when you move into that home.
Yes, I would say the spending starts when you move into the.
100% I was going to say the first house I ever bought was
like $100,000 condo and I was soexcited.
I'm like, hey guys, it's done. And then the day I moved in it
(33:51):
was like, oh shoot, the sink doesn't work or the.
I mean, I did inspection all that stuff, but I had to go and
repair a lot of stuff and it gets expensive.
It adds. Yeah.
Yeah, got to be prepared, OK. Know your budget beyond the
mortgage. So don't just look at the
monthly payment. Factor in HOA, insurance, taxes
and then maintenance so you don't stretch yourself too thin.
(34:12):
I think, you know, again, the lender should really be painting
that full picture. But there are times like there
are specific pockets that you know, not only is HOA higher,
but tax rates higher. So you really need to know all
of those numbers before you're making that decision and make
(34:32):
sure that it makes sense. All right.
The last one number 5 is be ready to act, but stay patient.
So I mean, I think what this means is really when you, when
we say be ready to act, that means getting your pre approval,
that means don't make any big purchase, don't go buy a new
car. So, so put yourself in a
financial position where if the deal is great and you fall in
(34:55):
love with the house, you can move quickly because sellers,
especially in today's market, they want surety that a
transaction is going to close, you know, and, and in a market
that where rates are dropping, you know, with, if we still have
this inventory problem, demand should spike and it's going to
get more competitive. And so I think being ready to to
(35:16):
move the minute you find something you love is, is
critical. But but also when we say be
patient, you know, don't go out and buy something just to buy
it, right? You know, find the one that
you're going to be, you know, you're going to be happy with
averages or seven years pre COVID.
Now it's 13. So yeah.
Better like that house. Yeah, yeah, I always.
I actually, it's funny because when I was in the field working
(35:39):
with clients, one of the key things that my clients would
always say is like, it almost Suzanne says we could do better,
you know, because even if my client likes a home, I'm still
always going to point out like, negatives because I want them to
be aware. And sometimes I'm going to see
things that they won't see. And so I even have like multiple
(36:00):
reviews on my Zillow profile that it's like, yeah, Suzanne
told me this wasn't the one thatI could do better.
And we found it, you know, so I'm really big on, I don't want
my buyers to ever have buyer buyer's remorse.
And and so, you know, there's noreason to rush into anything
right now specifically, but being ready to act when you find
(36:23):
the one, that's what's most important.
All right, those are our 5 tips for a first time home buyer in a
lower rate market. So if you are a first time home
buyer and you're interested and you're ready and you want to
start talking to somebody, we are here innovating Realty.
We know, we know 176 really goodagents in Southern California.
(36:45):
Perfect. What else what what what else do
we have to touch on? How is how is overall business
and life and. So overall business, we can
start there. I mean, I think, I think we've
all felt what's happening in themarket.
I think all businesses in our, you know, I would say our
umbrella, it has felt that things have kind of slowed down
(37:08):
a bit, but it's actually been a positive for us.
I would say like what what I seein that is we've had more time
to spend on building the business.
So with us, we have a lot of growth coming that we'll be
talking about very soon, but in multiple areas in Southern
California, we're going to be growing even more.
(37:31):
But again, you know, it's, it's not a, we don't have the compass
model where we feel that we needto, you know, grab every single
real estate agent. We really feel like we do
something kind of special at Innovate.
We generate a ton of leads. We recently onboarded into the
Zillow Flex program. So now we're getting even more
(37:51):
leads than we were before. So you know, it's, we provide
our agents with those opportunities with the training
and, and help them be successful.
And we want people at Innovate that are like minded, that want
to work, you know, and want to take those opportunities and run
with it. So I think for us, you know,
(38:11):
we've, we've put all of these things into place over the past
say six months. And so I'm super excited about
where that's going to take us for the next 6 months and years
to come. But but yeah, so business
overall, I feel like while transactions may be down because
they're down across the board, just gave us more time to spend
on the business. That's awesome.
(38:33):
It's very good, very positive outlook.
What about you guys? Yeah, great.
I mean, I think similar, we havesome assets that we're trying to
sell that, you know, market has been a little slower than we
would have liked. But I mean, I think any
entrepreneur has an opportunity to look at things as glass half
full or glass, you know, half empty.
And I think, you know, when we look back at the last two years,
(38:55):
the operation of Vibe House is in a really, really good job
getting better at completing construction swiftly,
efficiently from a cost standpoint.
And that's what we can control. So we can, we can control the
number of houses we buy, we can control the design and the
product that we put out. We cannot control what the
markets going to do. And so if, if, if we're thinking
(39:16):
long in this business, which we are, you know, that's that's the
number one thing for us to be focused on.
And, you know, I would I'd say we've made a ton of improvement.
We've got some great new team members, you know, in the way
that we manage construction and some great new teams in the
construction department. You know, six months ago I was
freaked out about the workforce.Today, I'm not feeling, you
(39:37):
know, that fear. I mean, we haven't had an issue
getting, you know, additional people or bodies into the into
the business on the constructionside.
So yeah, I'm feeling really goodabout that.
But would love to would love to see the market pick up a little
bit anticipating maybe early next year.
But. OK.
Well, with that personally, anything to share?
No, I mean not nothing. I mean did.
(39:59):
We have the crisis averted yesterday of the school
situation. Yes.
Well, so yes. So yeah, there was.
So my daughter goes to a school and in the older grades there
was a child that had head lice. And so we were all very freaked
out. She did not, thank goodness, but
(40:20):
you know, she was very sad last night because the nurse that
checked her took out her like elastics but didn't put him back
in. And so she was, you know, she
was sad that she didn't have herhair, the rest.
Of the That is a crisis. That is a crisis.
I didn't. Understand her world.
I didn't understand it, but my wife definitely did.
So yeah, that's. Good.
(40:40):
That's cute. OK.
Well with that, I I think that'sa wrap for today.
All right, so if you do not follow us, please do so all
socials. And if you have not yet,
subscribe, hit subscribe on YouTube if you're watching or
Spotify if you're listening there.
And please don't forget to submit your stories.
(41:02):
We love these stories. Give us more details.
And I can't wait to tear into the next bad story.
We'll see you next week.
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If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Ruthie's Table 4
For more than 30 years The River Cafe in London, has been the home-from-home of artists, architects, designers, actors, collectors, writers, activists, and politicians. Michael Caine, Glenn Close, JJ Abrams, Steve McQueen, Victoria and David Beckham, and Lily Allen, are just some of the people who love to call The River Cafe home. On River Cafe Table 4, Rogers sits down with her customers—who have become friends—to talk about food memories. Table 4 explores how food impacts every aspect of our lives. “Foods is politics, food is cultural, food is how you express love, food is about your heritage, it defines who you and who you want to be,” says Rogers. Each week, Rogers invites her guest to reminisce about family suppers and first dates, what they cook, how they eat when performing, the restaurants they choose, and what food they seek when they need comfort. And to punctuate each episode of Table 4, guests such as Ralph Fiennes, Emily Blunt, and Alfonso Cuarón, read their favourite recipe from one of the best-selling River Cafe cookbooks. Table 4 itself, is situated near The River Cafe’s open kitchen, close to the bright pink wood-fired oven and next to the glossy yellow pass, where Ruthie oversees the restaurant. You are invited to take a seat at this intimate table and join the conversation. For more information, recipes, and ingredients, go to https://shoptherivercafe.co.uk/ Web: https://rivercafe.co.uk/ Instagram: www.instagram.com/therivercafelondon/ Facebook: https://en-gb.facebook.com/therivercafelondon/ For more podcasts from iHeartRadio, visit the iheartradio app, apple podcasts, or wherever you listen to your favorite shows. Learn more about your ad-choices at https://www.iheartpodcastnetwork.com
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com