October 26, 2023 • 47 mins
Get ready for an eye-opening conversation with Jessica Thomas, a seasoned Loan Officer at Charter West Bank. Proceeding further into the labyrinth of finance, we tackle the mortgage process head-on. Hear Jessica's take on the unique challenges and opportunities of being a loan officer in an industry that thrives on relationships. She also throws light on the vital aspects of transparency and effective communication and provides indispensable consumer tips for securing a mortgage in today's market.
Lastly, we can't ignore the elephant in the room - COVID-19 and its implications on the real estate industry. Jessica opens up about how the pandemic affected her production and sales, compelling her to think outside the box. We also discuss the tricky balancing act of interest rates, recent rate hikes, and strategies for surviving in a competitive market. Above all, we underline the importance of strategic planning for both short and long-term goals. Tune in for a fresh perspective on navigating the financial seas in these challenging times.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to another episode of Stay Modern with
Murray, brought to you by MurrayCustom Pollers, where we build
your dream home together.
Now sit back, buckle up andenjoy the ride with your host.
Speaker 2 (00:14):
Matt Murray.
Good afternoon everyone, andthank you for joining us on this
episode of Stay Modern withMurray.
Today, we were actually talkingto a senior loan officer,
jessica Thomas of Charter WestBank.
Thank you so much for beinghere.
Speaker 3 (00:28):
Thanks so much for having me.
Speaker 2 (00:29):
Thank you, I was actually reading up on you a
little bit.
Question before we get going isI saw on your I think you're
LinkedIn or on your bio that youdo IT, yeah.
Speaker 3 (00:39):
So in my past life I worked for IBM and FISERV, both
financial software companies Onewas HR, one was financial
software.
So coming into this world wascompletely different.
Speaker 2 (00:53):
Right, We'll get into the weeds.
Yeah, the other reason I askedis my brother is a senior
network engineer.
Oh, very cool, For MWI Directused to be Midwest Web, Dean
Hart and them.
So when I saw IT I was like howin the heck did you transition
from IT to?
Speaker 3 (01:08):
I know the funny thing is, prior to that I was in
annuities and back in thefinancial world and my daughter
and I relocated back here afterbeing gone for about seven years
and did like support work.
And then I went intoprogramming, quickly realized
programming is not my jam andthen moved over into a business
(01:30):
analyst role with IBM when theyacquired Cannexa.
Speaker 2 (01:34):
Gotcha?
Yeah Well, let's start from thebeginning.
So you're born and raised here,right?
Speaker 3 (01:38):
Yep.
I am originally from Lincoln,Born and raised.
Graduated from Southeast.
Speaker 2 (01:43):
Southeast awesome.
Speaker 3 (01:45):
Yeah, my early 20s I moved down to Scottsdale Arizona
.
Speaker 2 (01:49):
Oh.
Speaker 3 (01:49):
Yeah, that was fun, that was fun.
Speaker 2 (01:51):
What would you make the move there for?
Speaker 3 (01:53):
Just something different.
I actually worked for WellsFargo at the time and they were
consolidating roles that reallywanted to put me someplace else,
but somewhere else in thecompany, yep, and it's like we
have a position down here inArizona and I'm like I'm on it.
That's awesome yeah because I'dalways wanted to move down
there, and so that was a prettysolid transition and spent a few
years down there and lovedevery minute of it.
(02:15):
Every winter I wish I was there, not here, because I'm really
about warm person.
Speaker 2 (02:21):
I totally agree yeah.
Speaker 3 (02:23):
So yeah, so I went down there and then moved up to
Des Moines.
My husband at the time got ajob up there and we were closer
to family.
Speaker 2 (02:30):
And then about you live from Arizona to Des Moines.
Yeah, how'd that work out foryou?
Speaker 3 (02:36):
It was okay.
Speaker 2 (02:38):
The weather transition though.
Speaker 3 (02:40):
Yeah, well, you know used to it.
I had gotten blood thinned outa little bit down there with the
heat.
Speaker 2 (02:46):
Yeah.
Speaker 3 (02:47):
So I mean it was good , it was solid.
I mean it's actually a greatcommunity, but wanted to be even
closer to home.
Didn't make sense to come backevery weekend, so her and I
moved back here about 13 yearsago.
Speaker 2 (03:01):
Oh, wow, Okay, so been back for quite a while.
So where's she go?
How would you say she's 15?
Speaker 3 (03:06):
She's 15.
She'll be 16 here in about amonth.
Speaker 2 (03:10):
Did she go to your alma mater?
Speaker 3 (03:12):
No, she doesn't.
She actually goes to a privateschool called Acton Academy.
Oh okay, yeah, she opted not todo the traditional high school
route and felt that Acton wasgoing to be a better fit for her
.
Speaker 2 (03:24):
She made the decision , huh.
Speaker 3 (03:26):
Yeah, wow.
She is light years beyond herage Not your typical 15,
16-year-old but she just feltlike that was going to serve her
better.
She's very ambitious and drivenand they have a very
entrepreneurial mindset.
That's awesome.
It's more of an individualizedlearning curriculum and felt
(03:47):
that that was going to give herthe tools and resources to be an
adult.
Speaker 2 (03:51):
How does a, however old she was when she started
trying to make this decision 13,14, how did she even stumble
upon the fact that this was anidea?
Speaker 3 (04:00):
Well, she went to a Montessori school, preschool and
stuff like that, so sheunderstood the concept and her
brother had gone to fundamentals, which was right next door, and
so we kind of seen it andexplored a little bit more and
then toured and did that theyactually got to go and do a day
at the school to kind of reallysee what it was like.
Speaker 1 (04:18):
Yeah, and she was like yeah, this is it.
Speaker 3 (04:21):
And I'm like but what about prom and homecoming and
all those things?
And she's like I do not careabout that.
Speaker 2 (04:25):
You know it's crazy.
I'll have to talk to you moreabout it later.
I love where our son goes, goesto Clefcorn, and I have had
basically zero complaints.
But I hear a lot of horrorstories of high school and
middle school and just the newstuff that's going on in the
world and furries and all thatstuff you can get into the weeds
(04:46):
.
But I've had a lot of peoplecome up to me and actually I
just did a meeting with a bankerslash realtor last weekend.
They were like you really haveyour kids in public school.
You're crazy.
And it got me and my wifetalking.
And then somebody else askedwhy do you have your kids in
public schools?
You need to have them inprivate schools.
I just never really thoughtabout it but it kind of opened
(05:07):
the door for the conversation.
Speaker 3 (05:09):
Yeah, I've been around for about three years and
it is very opposite of thetraditional mindset of schooling
.
Like the students are actuallyin charge of their own learning
and kind of where they want togo, and that's great, because
not every kid learns the same.
My nine-year-old learns verydifferently than what my
15-year-old does and in granted,there's the age difference.
(05:30):
But watching them grow and howthey learn, and it's great that
we have a facility or a schoolthat accommodates that.
Speaker 2 (05:38):
Yeah, that's awesome.
Speaker 3 (05:39):
And they meet the same criteria as they would from
a state school perspective.
So they're not missing out onanything.
They're actually getting, in myopinion, more to be able to be
functioning adults when they getinto that realm.
Yep.
Speaker 2 (05:53):
And so where did you get your?
Did you go to college here?
Speaker 3 (05:56):
Actually don't have a college degree.
I went to SCC for a little bitand that's right when I was with
Wells Fargo and then Irelocated down to Arizona and
none of my credits wouldtransfer Got you.
I was like I'm not even tryingto start this shit all over
again.
I was like close to the finishline and on the Dean's list and
so I ended up just getting intolike life insurance and
(06:16):
annuities and I did someprocessing back then from the
lending side of things and justworked my way through and in my
opinion, I think you gain waymore knowledge and real life
experience than you do sittingthere reading a textbook.
Speaker 2 (06:30):
Agreed.
You know, what's crazy is Ihave my math degree, which I
don't use, but my brother, likeI said, senior network engineer,
brilliant, a genius and hestarted just learning computers
in his basement when he was asenior in high school.
And right when he graduatedhigh school he took all the
senior network engineer testswhatever they're called
(06:52):
Microsoft certified engineer andhe passed all of them.
And then he applied forcolleges after he passed those
and all the professors told himthat the professors are
professors because they couldn'tpass that test.
So they went into teaching andso he would be smarter than them
, and so he didn't go to collegeeither, he just went right into
his field.
Yeah.
Speaker 3 (07:14):
I think as we progress as a society, I think
that will become more prevalentthat there's different avenues
to still get to the same endgoal, type of a thing.
Speaker 2 (07:23):
Yep, completely agree .
Well, how long?
So I know you've kind ofbounced around a little bit,
kind of talk a little bit aboutthat transition, how you got
into the mortgage industry.
Speaker 3 (07:33):
Yeah, so I was again working for IBM and loved what I
did.
I was more of an analyst rolethere, and especially with the
acquisition of what's working,what's not working and how can
we make this more efficient andefficiency type of stuff.
But it wasn't really filling mycup.
I bought my first house when Iwas 19.
(07:53):
Holy, cow.
In the early 2000s and was withWells Fargo.
Speaker 2 (07:58):
Here in Lincoln.
Speaker 3 (07:59):
Yep, I was in Indian Village.
It was a $60,000 house back in2000, 2001.
Speaker 2 (08:04):
That's a lot when you're 19.
Speaker 3 (08:05):
Yeah, but the banker was like I can make this happen,
but you got to get XYZ.
He's like I really don't thinkthat you're going to be able to
do that in a 30-day timeframe.
I'm like watch you clearly don'tknow my ambition and, sure as
shit, I did everything that theytold me I needed to do and
signed the final paperwork.
And they was like wow, and I'mlike yeah, and I really think
(08:31):
home ownership is doable foreverybody.
It's just a matter of when andhow we get there.
And so I recognized about sixyears ago by now, actually,
today was my last day at IBM.
Six years ago.
Speaker 2 (08:43):
Really.
Speaker 3 (08:44):
I resigned and took a couple months off before I got
into this world and I'm justpassionate about helping people
achieve that and I want to takemore of an advisory role with
that, rather than this isn'tjust a transaction.
For me, this is one of thebiggest financial investments
somebody is going to make intheir life and from a real
estate perspective, I actuallywas going to lean more that way,
(09:05):
but I had two small kids.
I had a three-year-old and aseven-year-old or no 10-year-old
.
At the time I didn't want to beshowing houses on nights and
weekends and in the financialworld I had the ability to do
that, but from my home I stillwork nights, I still work
weekends, but I can do it withmy kids run around in the
(09:25):
background, type of the thing.
So it really was just a kind ofthis epiphany of like life's
too short and I want to dosomething that makes me happy.
And then I'm passionate aboutYep.
So that's how I kind oftransitioned into this world.
Speaker 2 (09:38):
So do you have a desk job in the office?
Speaker 3 (09:41):
Yeah, go to the office every single day Nine to
five.
Yeah, yeah.
Speaker 2 (09:46):
So you have a standard job.
It's just your off hours or youcan do it at home and stuff.
Speaker 3 (09:49):
Yeah, I mean I can work anywhere.
I work on vacation like inothers' world.
we don't really get a vacation,especially when you're
commissioned only so you gottawork when people need you.
So I mean, if they were workingon vacation or I'll work in the
office during the day, I'llwork at home at night or on the
weekends.
It's nice that I have thatflexibility, which is one of the
(10:10):
things that I really wanted tobe able to have transitioning to
this to be able to serve peoplebut also be able to keep that
family balance intact as well.
Speaker 2 (10:19):
No, I don't know how much you can share on this, but
you just said something thatmade me realize that I think I
knew this, but maybe I didn't.
You guys are commissioned onlyLike strictly commissioned.
No base pay, correct, holy shit.
Speaker 3 (10:32):
Not every lender is that way.
Some lenders get a base plus asmall commission, but at us at
Trader West, we are 100%commissioned only.
So if I'm not closing loans, Idon't know what page I can.
Speaker 2 (10:43):
Now I understand why you're saying you work on the
weekends and nights.
Speaker 3 (10:47):
But that's the nice thing, Like I could work from
the morning on vacation or workfrom my home in the morning and
go do things with my family inthe afternoon, or whatever that
looks like.
So we are constantly buildingthose relationships with our
clients and with our referralpartners, because it's a team.
Again, it's one of the biggestfinancial decisions you're gonna
(11:09):
make, and so we have to worktogether as a team, both from
referral partner, clientperspective, me, to be able to
get to that end goal of helpingsomebody obtain that home
ownership.
Speaker 2 (11:19):
That's awesome.
So are you guys.
It brings up a lot morequestions now that.
Speaker 3 (11:23):
I know you're commissioned.
Speaker 2 (11:24):
only Now I'm starting to think of all the.
Speaker 1 (11:28):
Yeah, ask away.
Speaker 2 (11:30):
Are you guys in charge of lead acquisition and
stuff?
Speaker 3 (11:33):
We don't get anything given to us.
Speaker 2 (11:34):
Wow.
Speaker 3 (11:35):
It is all about cultivating the relationships
with everybody, holy cow, sowhich it can be hard some days,
but what challenges us helps usgrow, in my opinion, and so I'm
basically like self-employed,but I hang my hat with the bank
(11:56):
and I have tremendous supportfrom Charter West Side and even
the other LOs that I work with.
We have about 35 LOs spreadacross all of Nebraska.
I mean our furthest office isMcCook.
We even have some folks up inSioux City Council Bluffs area
and we really work togethercollectively.
It's not a competition thinginternally, like if I have
(12:18):
questions or if I run acrosssomething on a file and I need
to pick somebody else's brain.
We are always accommodating todo that which is great because
there's a lot of differentchallenges in this industry and
no file is cookie cutter.
Speaker 2 (12:32):
So there's a lot of commonalities between what you
do in a realtor Hang your hatwith somebody and kind of off,
you go on your own.
Speaker 3 (12:40):
Yeah, and again, not every lender is that way.
There's some lenders that getlead generation in and stuff
like that, so but we're not, youknow, so being actively
involved in the realtorcommunity and CPAs and
accountants and you know,divorce attorneys and stuff like
that, it's really kind ofbuilding a pool For me
(13:03):
personally.
I don't want 20 plus differentrealtors that I'm working with.
I want a handful and a half orso of folks that have the same
business mindset as I do andthat honest and transparent and
we're good at communicating andreally working collectively to
get to the end goal.
Speaker 2 (13:19):
Yeah, so with our company, Murray Custom Homes,
obviously, and me being arealtor, I'm assuming our ebbs
and flows and ups and downs arevery similar, so we'll get into
the elephant in the room in asecond.
But do you have any consumertips on obtaining a mortgage
loan or anything like that inthis market without having to
(13:41):
talk too much about what we'reabout to get into Details?
Speaker 3 (13:45):
Just trust your gut.
Work with somebody that you're,work with a team that you jive
well with.
You know again, not everybodyworks the same type of a thing,
but communication andtransparency are probably the
two biggest key factors andensuring that we get to the end
(14:08):
goal smoothly.
Speaker 2 (14:13):
I guess I should say or as smooth as possible For
people that are listening, thatdon't know that haven't done it
before.
Walk us through just a typicallending process with you.
Speaker 3 (14:22):
Yeah, so I normally.
You know I have an online app,I have a mobile app that people
can download and fill out anapplication, but I personally
like to have a phone call withmy clients or potential clients,
because for me that's ourconsultation.
You know I'm taking a bunch ofinformation down but I wanna
know what your short term andyour long term goals are,
because that helps me thenidentify how do we need to
(14:44):
structure this to both meetthose short and long term goals.
So you know, picking up thephone, if you start with a
realtor, they're gonna say gotalk to a lender first, because
that's, honestly, the first stepyou know what we can afford,
know, kind of, what's acomfortable monthly payment for
you.
You know, there's a lot of theconversations that we have.
You know, if you've got Xamount of assets, we don't wanna
deplete all of those.
(15:04):
Life happens, emergencies comeup, so those are important
things to know.
But we'll have a consultationkind of.
Get those, we build the rapport, you know, build the
relationship type of a thing,and then I structure the loan,
you know, kind of to meet thosegoals.
And there's quite a fewdifferent loan products.
You know first time home buyerproducts, but there's so many
(15:25):
other ones, and so I'llstructure the loan, send the
information out.
You know they kind of recap it,look it over.
We'll so go back around, goover any questions that they
have, and then it's househunting and finding that perfect
one and knowing what your musthaves are and what the things
are that you kind of do without.
And then, once we're undercontract, we're working on
(15:49):
collecting any updatedinformation, getting the file
prepped and ready.
I've got a team, I've got aprocessor and an assistant
Awesome and she goes out and youknow, collects any updated
documentation.
We get the file packaged andready to go.
It goes to underwriting, theyreview it.
They could come back and askadditional question for more
documentation.
And then, once we get that backto them, they're putting their
(16:11):
final stamp of approval on itand we're getting to the closing
table.
And that's about a 30 dayprocess.
I recently closed a loan in 14days.
Whole week out, I had toinitiate a bridge loan on top of
that which our bank side does,bridge loans.
So for somebody who wants totransition from their current
home into another home butdoesn't want to have to sell
(16:31):
before they get into this one,luckily we work very closely
with our bank side that canaccommodate, you know, bridge
loans and helots and things likethat, to pull that equity out
to be able to put down on thatnew house and then, once that
house gets sold, that bridgeloan gets paid off.
So Awesome, yeah, tons ofdifferent ways.
Speaker 2 (16:47):
Yeah, so before we get into where we are today,
what was your process like inthe middle of COVID and the
pandemic?
Speaker 3 (16:57):
That was fun, it was so fun, you know.
From a process standpoint itwas the same.
I've got a very boom, boom,boom streamline process because
you have to be able to meetdeadlines and timelines, because
people are transitioning fromone to the other.
So that process, you know, haspretty much stayed the same.
I've tweaked a few things toensure efficiency.
(17:20):
I'm very efficient I try to beat least and I have an amazing
team behind me that we work sowell together that we are able
to get to that end goal.
When COVID hit and ratesdropped, we were all drinking
from a firehouse.
Yeah, you know, when I firststarted, you know I was able to
go out and network and hang outwith, you know, referral
(17:42):
partners and stuff like that.
When COVID hit, nope, I wasable to volunteer.
I was working probably 13,14-hour days on top of that
trying to remodel a house.
Oh wow, Personally, to be ableto get it sold type of a thing.
So it was exhausting.
It was At least, but you knowit's very interesting too
(18:05):
because of the limited inventoryaspect of it.
Speaker 1 (18:07):
Right.
Speaker 3 (18:08):
You had to get creative in ways to be able to
win deals.
I had some clients that werelike I can't justify going
$70,000 over asking price.
I was just going to bow out andI'm like that's cool, we are on
your time, not on my time, andit does not make sense to
overpay for something.
Speaker 2 (18:28):
So many people did though, so many people did yeah.
Yeah.
Speaker 3 (18:32):
You know there's a little bit of justification to
it if this is maybe more of aforever home Right, because that
value is going to alwaysincrease and you're going to be
able to recoup that.
But if this is a first timehome buyer who's maybe going to
be in their home four to fiveyears because statistically
that's the average timeframe itdoes not make sense.
I'm not going to recoup thatoverpayment?
Speaker 2 (18:49):
Yeah, for sure.
Yeah, I'm assuming you guyshave slowed down now.
Yeah, a little bit when, abouthow long ago, if you could put a
number on it.
About how many months ago, whatwas it that you started
noticing the slowdown?
Speaker 3 (19:02):
Probably about a year ago.
So January of last year we werestill about 3.5%.
That just steadily increased.
July-july we were hitting 8%.
That dramatically changessomebody's buying power when you
go from the 3.5% to 7%.
8% that increases the payment 4, 5, 600 bucks, which changes
(19:25):
purchase price.
So it's like this constantbalancing act rate.
So it has slowed down.
People are kind of getting usedto more of these higher
interest rates.
And the problem with 2020 and2021, those were historical lows
.
That's not normal but everybodypsychologically has in their
mindset I'm not giving up my2.5% interest rate.
(19:46):
Well, I totally get that.
But market is cyclical, it'salways going to go up, it's
always going to come down.
We had a really great yearwhere rates were down and now
we're trying to economically andfinancially balance that back
out, type of a thing.
So it was a little bit slowerlast year, slower a little bit
(20:07):
this year, but from a productionstandpoint I'm still doing
close to about the same.
Speaker 2 (20:13):
Are you?
Speaker 3 (20:13):
really, yeah, I mean, it's good to hear.
Yeah, I mean, but it's.
I always describe it as anemotional roller coaster,
because you don't know what thenext day is going to bring you
can start out really high andeverything's going great in the
morning and by the middle of theafternoon, late afternoon shit
hit the fan.
You know it doesn't really helpthat I get alerts at 8 o'clock
(20:34):
in the morning on what the bondmarket is.
It really sets the tone for theday.
Speaker 2 (20:39):
I just try to tune it out right now.
And then the war.
Now it's like, well, yeah,we're in the same world.
Obviously we were hot and thenit kind of started to slow down.
Luckily we had some largeacreages and farm people and had
farm money and we kind of had aniche market there and we had
some backlog from houses that weweren't able to get to or get
(21:01):
the blueprint stun in time.
So we're still production wise,we're still busy, but sales
have curtailed and slowed downtremendously, especially over
the last three or four months.
So we've kind of supplementedit with some flip houses and
remodels and stuff like that.
But yeah, exactly what you say.
I think if you went back andlistened to the podcasts, I put
(21:22):
it on record, just so we couldknow where our train of thought
was and what everybody's trainof thought was, not to prove who
was right or wrong, but just toget it on record of what we
thought was going to happen sixmonths ago, a year ago, a year
and a half ago.
It's been a hell of a lotlonger than what I thought it
was going to.
And Jesus now, I mean, if youlook now I don't know what
(21:42):
you're hearing, but it seemslike we might see another rate
increase before the end of theyear.
Speaker 3 (21:47):
Yeah, so we thought we were going to start seeing a
shift in the market from a rateperspective back in May.
May 10th was this magical day,because the Fed was going to be
looking at the historicalyear-over-year data on where
inflation was and, quitehonestly, his bond market
historically follows whereinflation's at, and so we
thought that that forecast wasgoing to be more favorable.
(22:09):
Well, how the Fed was readingit is that inflation was still
way too high and that freakedthe bond market out in a not
awesome way.
They continued to still do that.
We Powell just spoke yesterday,actually, where inflation is
still reading high.
But what the problem with theFed and what they're doing is
that they're driving forward butthey keep looking in the
(22:31):
rearview mirror.
If you look at the real-timedata from an inflation
perspective, we're a lot closerto where they want to be than
what the numbers are sayingwe're at.
But you've got half the Fedmembers who are reading it one
way and half the new that arereading it the other way, and
you have a bunch of attorneys nooffense to attorneys in the Fed
and you have nobody that has aneconomic background.
(22:54):
So I think we're going tocontinue to see this, probably
for the first half of next year.
It's an election year, sohopefully we'll start seeing
those come down the closer weget to that.
But that's at least what'sbeing forecasted Like.
We thought we'd be in a muchbetter position than where we're
at we're not because of XYZ.
What's being forecasted is it'sgoing to be rough to the end of
(23:16):
the year.
It's going to be rough thebeginning of next year, but
hopefully we'll probably startseeing some of that light at the
end of the tunnel at Q2, q3next year.
Speaker 2 (23:24):
So a lot of people keep asking me and I know the
whole were insulated, a littlebit more than the east or west
coast, and we still have ahousing shortage.
What's your answer as to how orwhere we are now with interest
rates as opposed to where wewere before?
But you still say that yourproduction is almost just as
high.
(23:44):
Now who get asked is like whoor what are those people?
How are they able to afford thehigher rates?
Are they adjusting theiroutlook and their expectations
on the price of house?
Because I'm assuming thatperson that could afford a 500
back when it was 2.5% can nowonly afford a 400 to 450.
Speaker 3 (24:06):
Yeah, I mean it does play a big factor.
But we have those conversationsof, okay, like can we make this
happen?
Like is this comfortable foryou, type of thing.
We know that this isn't goingto be a forever thing, like
we're going to have anopportunity to refinance here
down the road because, again,market cyclical, so it is making
(24:27):
some adjustments from a pricepoint perspective, but we
honestly have a ton of firsttime home buyers still.
Wow.
Speaker 2 (24:34):
That's awesome.
Speaker 3 (24:34):
Well, you have to think about it too.
Like rents dramaticallyincreased and people are like,
well, if I'm paying 1800 to 2000for rent, what can I afford
from a mortgage perspective?
And so you can afford that.
The problem is again like theinventory and that point that's
going to get you there and it'sjust being able to work with a
(24:57):
team that's going to be able toget those offers accepted.
Being creative you know we'rein 2020 and 2021, people were
waiving inspections and goingover asking price.
We're not seeing that Right.
We're still motivated to sell,but willing to do inspections
(25:17):
and not go over asking as muchor at all because properties are
sitting on the market.
So it's again kind of like this, balanced out to where we're
still seeing people first timehome buyers and people that are
either relocating or is a 7%interest rate ideal.
No but it's not 13.
(25:38):
I mean, we could be there.
Exactly, it's all aboutperspective, right?
Yeah, getting things intoperspective form.
If this is a longer term homefor you, yeah, it's going to
stink to have that 7%, but if wehave our game plan in place to
be able to meet the short andlong term goals, it's going to
be fine 12, 18, 24 months downthe road.
So again, it's really kind oflike perspective.
Speaker 2 (26:00):
Right, and what sucks in our world I'm assuming a lot
of home voters are dealing withthis is you know we had drafted
a blueprint for a lot of thesepeople where they have an
expectation on a price persquare foot base, what they can
afford on a new construction.
Let's just say that they canafford an 1,800 square foot
house with all these bells andwhistles.
Well then they go in there andthey meet with their banker
(26:20):
after the interest rates went upfour or five points and they
come back to us and they say,okay, now I only have this
amount of money and it's $60,000, $70,000 less, and so you have
to start making cuts.
You know, you just took thehouse down 100 to 200 square
foot or took off all these bellsand whistles, and so what they
say is they'll just wait.
You know everybody just saysthey'll wait it out.
(26:42):
I don't want to build, you know, our forever home and have it
not be exactly what we want itto be.
So we have all these peopleright now for about the last six
to eight months that are juston the fence, you know.
So sales have really hurt inthe last six to eight months for
us.
Speaker 3 (27:01):
So, in that regards, what solutions are those bankers
not finding to be able to meetin the middle, Like there's a
lot of different loan programsthat we've started trickling
back in because the market hasshifted.
You have two, one buy downs.
You have arms everyone's likearms.
I don't want to do that.
That's so risky.
Anything in life is risky,right.
(27:22):
But again, if you're workingwith an advisor or somebody
that's just slinging atransaction, we're going to know
what those options look like.
On a two one buy down, it'sbasically like a temporary buy
down where you can.
That interest rate gets reducedby 2%, two basis points the
first year.
That goes only one the secondyear and then reverts back to
the original note rate in yearsthree through 30.
(27:43):
Well, again, if we kind of knowwhat's being forecasted in the
market, let's look at that two,one buy down option.
Maybe make that payment moreaffordable so you have more room
in your debt to income ratio,so that you can still get all
the bells and whistles that youwant at an affordable monthly
price within the guidelines ofthe programs.
And then we know we're going tobe able to refinance in the
next year or two.
Speaker 2 (28:03):
So you know I have that question.
Not speaking about anybody inparticular, I don't offend
anybody, but if you look at theaverage American and how much
they consume on credit cardsthat are 20 30% interest rate,
it amazes me that there aren'tmore people or more lenders that
are willing to discuss the armsor the buy downs or anything.
To me it feels like taboo tosuggest a two-one buy down
(28:28):
because they're like what'sgoing to happen after year three
?
That's so short-sighted, you'renot looking to the future.
It's like well, you just made apurchase with a 20% to 30%
interest credit card, or youhave a full credit card at 20%,
right?
So you know what I mean.
Speaker 3 (28:40):
Well, and to that point too, it's like you got
these buyers that aretransitioning from, like, their
first or second home, maybe intothe forever home, maybe doing
the build, and like I don't wantto give up my 2.5% interest
rate, right?
Well, how?
So many Americans have maxedout their credit cards, like
credit card debt is up an insaneamount.
Yep, so you've got yeah, yougot a 2.5% interest rate on your
(29:00):
home loan, but you got how manycredit cards that are maxed out
at 20%?
You got an auto loan at 8%, 9%.
So when you actually look at ablended rate calculation on all
of your monthly debt obligations, you don't have a 2.5% interest
rate on your home.
You're closer to like 7%, right?
So why not sell your house?
Take portion of the equity, payall that debt off, use the
(29:22):
portion of it to get in from aminimum perspective on a new
property, and then we're goingto refinance down the road into
a normal interest rate of around5.5% or whatever you know where
it is.
It's those types ofconversations that people aren't
having because I don't know why.
Yeah, maybe not their mindset.
Speaker 2 (29:41):
And you know talking to a few workers of mine and
patent pass workers particularly, not understanding the equity
in their home.
I think I have a lot of One inparticular that he owned a
$350,000 house and he'd beenpaying on it.
He has it down to like $80,000.
He didn't even realize thisuntil I started talking to him
about it.
He wanted to buy something andI'm like you know what's the
(30:05):
value of your home?
What is it to praise that?
What is your equity in the home?
He didn't even think about thatat all, right.
Speaker 3 (30:12):
The biggest problem is lack of education.
I am huge on education and,again, just being analytical
with it, and maybe that's mynerdy numbers brain, but it's
like, okay, where's the problem,where's the solution, what's
going to make the most financialsense?
But a lot of realtors, too,don't have that knowledge.
(30:35):
They know those tools andresources and people aren't
having those conversations.
We're actually hosting a classhere November 15th on really
where is our market from aBlinken perspective as a whole,
like it's not as bad as peoplethink it is or what the media
likes to make it be.
And then what tools andresources do we have to be able
(30:57):
to help those agents have thoseconversations, educational
conversations with their sellersand buyers to really put things
into perspective for them.
This is doable, let's just doit smart.
Speaker 2 (31:10):
Right.
Well, that's a good perspective.
I've known it but never reallytalked about it in that
perspective of taking yourequity in your house and buying
down your credit cards and getinto a new house Because, like
you said, I mean bar in anyWorld War III or anything like
that you have to look at thefuture of the economics and the
economics, like you said, it'scyclical.
(31:30):
So we're up here now andeventually we're going to go
back down.
I don't think five, 10 yearsago we ever thought we would
have saw 2.5%, but we did you,did, you know, it went up and
then we came back down.
Speaker 3 (31:42):
It's funny to say that because I was at a
mastermind conference in June of19 and Barry Habib is an
economist that we follow veryclosely in our world and I
remember being at thatconference and he's like rates
are going to go to 2, 2.5% andwe're like, oh shit, Not sure
shit, that's where they were.
Speaker 2 (32:01):
When we were in the middle of it I think I just got
used to it and my financialadvisor called me.
Actually, he told me and Ididn't listen.
So then he told my worker,kevin, my senior PM, kevin, and
Kevin came in and he's likeMason's telling you that you
need to get all the money youcan from the bank.
And I've always been a bigbeliever in no debt.
(32:22):
Right, so no debt.
Why have debt if you don't needit?
Obviously, I leveraged debt tobuy lots and stuff like that.
But if there's building, if youhave money, pay it off, don't
just leave money sitting in theaccount.
I didn't understand until westarted trying to buy flip
houses right now.
Why should have done what hesaid?
Because I could have been.
I'm looking at these fliphouses or turning the house into
(32:44):
a rental when you're buyingmoney, when you're borrowing
money at 8.5%, 9% interest onlyloans, jesus, to carry these
houses for six, seven months,versus if I had the money at
2.5%.
And then also the idea oftaking the money at 2.5%,
putting it in the market andyou're making six or 7%
(33:05):
historically 8% and you'remaking 6%, 5% for nothing.
Take all the money you can get,pay 2.5%, make six in a market
and live off of it, so I feellike an idiot.
Speaker 3 (33:22):
We live and learn that, but I think a home is one
of the most underutilizedinvestments.
I had a close friend of minebefore rates went
whack-a-doodle-y abnormal.
She had just graduated fromnursing school and she had about
$90,000 worth of student loandebt and her and her husband had
owned their home for a littleover a decade or whatever, so we
(33:43):
had a crap ton of equity in it.
We did a cash out refinance,paid off 80,000 worth of her
debt and even with a slightincrease in the monthly payment
it was still saving them $400 to$500 a month.
That's awesome, yeah, I meanjust, people don't think of
those things.
They don't know what they don'tknow, and so they're looking to
you as a not a financialadvisor, but you're an advisory
(34:05):
role, in my opinion to figureout what those solutions are to
those to make the most sense.
Speaker 2 (34:12):
Yeah, that's awesome.
You know what I compare it tois.
It draws a similarity at somehealth issues that I've spoke
about, I think, on here a littlebit.
It draws a similarity to we'realmost getting into that medical
world philosophy is there's adifferent lane for each
profession but there's not oneperson that combines all of them
to help you in advisoryposition on what you should do.
(34:34):
You go here for this and ifit's not that, they just kick
you out.
And then you go to anotherdoctor and they say it's not
that and you're just left kindof like well, what the hell is
wrong with me?
Nobody advises you on where togo, what to do, and in this it's
very similar.
There's so many people thatlook at their home loan or their
interest rates is in a sec anda you know a small section
rather than in a whole pictureof I think we've psychologically
(34:57):
been ingrained about rate, rate, rate.
Speaker 3 (34:59):
Right, Like I want the lowest interest rate.
I just had somebody call theother day.
Why want the lowest interestrate?
Well, everybody does.
But are you going to be in thehouse for four to five years, or
are you going to be in thehouse for 20, 30 years?
Speaker 1 (35:11):
Right.
Speaker 3 (35:12):
Rate plays a different factor if you're in
your house for four to fiveyears, in my opinion, than it
does 20 to 30 years.
So let's focus on what the nowis and what the and then like
changes.
Right Like, I thought my lasthouse was going to be my forever
home and that did not end upbeing the case.
But you, just you have toadjust.
You know to the best you can.
You know where you're at now,you know where the market's at,
(35:33):
we know what we've got to workwith.
Let's strategize a plan.
We got that in place and we'lladjust along the way if we need
to.
Speaker 2 (35:40):
Yep, I have a hard time playing that we're in those
multiple hats.
When I was in on the meetingswith drafting and worrying about
their budget and wanting togive them their forever home and
making the house, I alwayswanted to make the house
beautiful.
Still do any additions thatthey put in.
I didn't necessarily have tomake money on it.
(36:00):
I just love the fact they'remaking the house awesome so I
could show it off.
But it's hard when you go to ameeting with a 30-some-year-old
couple or a 20-some-year-oldcouple and they're busting the
bank because this is theirforever home Throughout my years
.
I can't even tell you how manytimes that you know.
Politely, I'll let them knowthat life happens.
You know Shit happens.
(36:21):
Make sure you're planning forthe what ifs.
But they're building theirforever home and they do it.
And then a year or two later Isee it, for example, on Facebook
or on the marketplace and it'slike holy shit.
I wish that we would have donea few things different, like
what you said.
I think there's.
You've got to be cognizant ofwhat if this isn't my forever
home, you got to make sure youbuy it right and make the
(36:44):
investments when you build thehouse to make sure there's a
return on investment if you everdo have to sell Right.
Speaker 3 (36:49):
Well and that's a thing too, a lot of times,
especially with new construction, I have that, I'm very direct
and I don't sugarcoat shit,because that's not going to
serve anybody any purpose, right, myself or the clients.
But when we're dealing with newconstruction it's like, okay,
this is your price point thatyou have in mind.
You will have overages.
We have to be aware of thoseand we have to factor that in
(37:12):
type of the thing, because it isinevitable.
Speaker 2 (37:15):
Yep, it's inevitable.
So I'm on this real estatemastermind group on Facebook.
I joined it for not the rightreason, but then I ended up
becoming a realtor and now I'mpart of it.
It's like when I scroll throughmy Facebook, it's every other
one.
I just can't not read them.
But there's a lot of heatedconversations in there right now
(37:36):
, but one of the ones that seemsto get the most traction is the
whole date, your rate, marryyour house.
What is your take on that?
So we can have people eitherlove you or hate you after this
podcast.
Speaker 3 (37:50):
Right.
Well, we advertise that a lot.
Marry your house at the rate,because, again, you know where
you're at now.
Right, if you fall in love withsomething, because so often is
it the right time to buy, whenis there ever going to be a
right time for anything?
You're never going to moveforward with anything in life if
you're waiting for the righttime, right.
(38:10):
So, if it's something that youfall in love with, home values
are always going to increase.
We are never going to see an0809, like we did, and so you're
going to wait for that interestrate to drop to get into your
magical unicorn of a house thatyou absolutely love, but you're
going to still pay more for it.
(38:31):
So you're not doing yourselfany justice on waiting for rates
to come down to get into thenew house that you absolutely
love, because by the time you dothat, it's going to be
appreciated.
Appreciate it 4, 5, 6% I mean ontarget right now for 2023,.
As of August, we're on track,from a national average, to
appreciate 6%.
(38:52):
So you keep waiting a year ortwo and that's just going to
keep getting more and more andthen you're going to be paying
more for the house.
Yeah, you got a lower interestrate, but you're still back in
the same boat.
Speaker 2 (39:01):
Right yeah, On the surface.
I would never implore somebodyto go from a 2.5% to an 8% rate.
Right On the surface, Right.
But then when you get into theweeds with it, appreciation and
limited availability.
Speaker 3 (39:16):
and we actually have cost of waiting calculators.
Speaker 2 (39:20):
That's awesome.
Speaker 3 (39:20):
That we have through a program that says, okay, if I
wait to buy, and it projects itout in like a four or five year
time frame, you're losing out on20, 30,000 plus in equity and
again you're going to be able torefinance down the road Like
again, it's cyclical, it's thisup and down industry.
Speaker 2 (39:40):
Right, so it's.
The worst thing that I hatedwas we had a few clients.
It was an emotional time, notblaming anybody, not pointing
fingers, but when the ratesstarted going up, we had
everybody that, whether they hadjust started the house or six
months away, they were like Ineed to finish.
Now rates are going up and it'slike well, we just got your
(40:00):
blueprint done, so it's going tobe much, you know.
Like well, you're costing methis amount of money, but their
emails would be over the 30 yearlife of the loan.
You are going to cost me$180,000, I remember
specifically.
So, unless Murray's going topay me $180,000, you need to
have my house done in threemonths.
And it's like it angered mebecause, like what you're saying
(40:24):
, we know you're not going tostick at this interest rate for
the third year loan.
But I mean our contracts statesthat we have 240 days to build
the house.
Speaker 3 (40:33):
We can't just magically, you know build the
house in three months,especially like materials,
perspective delay in those.
But again that kind of bringsme back to why are those lenders
not having conversations onextended rate options?
Because that was a big thingtoo.
Like okay, we're in, we wentfrom three and a half to 5%.
It's going to take my build,you know, six, eight, 10,
(40:56):
whatever months.
Look at extended rate optionsAgain, it's hard too, because
everybody looks for us, for thiscrystal ball to be able to
predict.
I get constantly.
Well, what do you think Ishould do?
Well, I can tell you from myperspective and my knowledge and
what I follow on the industryon a daily basis, of where it's
forecasted to go.
I can't guarantee you I thoughtwe'd be down in the fives by
(41:18):
now, but unfortunately that'snot where we're at.
So there's a lot to kind ofanswer that question.
There's a lot of differentproducts or things in the
industry where, if you're havingthose educational conversations
, you can avoid those types ofthings.
Speaker 2 (41:37):
So once we get off, we'll have you email me and
Shannon some of your ideas,because I love it.
We're needing that right nowwith a lot of people of, like
you said, not wanting them tomake a bad decision, but giving
them options for proceedingforward Because, like you're
saying, we have so many peopleright now that they're probably
(41:58):
20 to 30,000 off of where theywanted to be with their build
and they were supposed to startsix months ago, but we're six
months later and they're stillwaiting for the interest rates
to come down, so they have anextra $20,000 on their loan.
I think, coming from adifferent perspective, from a
different person, I would feelbad just calling you saying, hey
(42:18):
, I think you should do it now,let's go.
It seems so one-sided skin inthe game Right.
Speaker 3 (42:23):
But if you give them the materials or the reports or
things like that and saying,okay, and again, like very
honest and transparent, and if Ithink something's not a great
idea, I will point blank tellyou I can make this happen, but
I don't think it's in your bestfinancial interest.
But if you can collectivelywork together and say, okay,
(42:44):
here's your concerns that I'mhearing and here's the tools
that we've put everythingthrough from a financial aspect
of it to show you that, okay, ifwe make this decision from a
long-term perspective, this iswhat it's going to look like
Because, again, it comes down toeducation.
Giving them every single aspectof the situation so that they
(43:04):
can make an educated decision onwhat's best for them is crucial
in this volatile economy andindustry that we're in.
Speaker 2 (43:12):
Absolutely Well, that's awesome.
I appreciate it.
Any final thoughts?
You have comments plugs.
Speaker 3 (43:22):
It's going to be a rocky, probably, say, eight to
12 months.
But if you're looking at homeownership, whether you're first
time home buyer or somebodythat's transitioning to the next
home, work with somebody thatis going to educate you on
what's truly going on in theindustry, because the media is
(43:42):
going to portray the skiesfalling.
Speaker 1 (43:44):
Every day.
Speaker 3 (43:45):
Right every day.
That's why I don't watch it.
I can't, it's too much.
But work with somebody who canreally be more of that advisory
role and have a team behind you,because this again is one of
the biggest financial purchasesyou're going to make and it has
to make sense for them andprovide them with the education
to be able to make thoseeducated decisions.
Speaker 2 (44:07):
That's awesome.
I appreciate it.
You gave me a couple of newperspectives that I like.
That's great, but no, we needhelp.
We got, like I said, we have acouple of people.
What we've run into, on top ofwhat I've already discussed, is
you have people get preapprovedand you don't look at the date
on the letter.
So then you take them throughthe drafting process, the land
(44:28):
purchase, et cetera, et cetera,and then it's three months later
and then I go to get my loan tobuild their house and my banker
, marlin's asking me for anupdated approval letter and then
when they go back and get theirupdated approval letter, they
can't get approved for thatamount.
So that has happened.
So, yes, trying to get creativewith these people and talk
through the options, I don'tknow.
(44:50):
I can't say that these bankershaven't.
I don't know what has happened.
I just know that we just have alot of people right now that
are just saying they can't do itright now.
So we do have a couple of them,including my employee, tom, our
VP, tom, that you know that hadto get some creative with this
financing and it seems like theyalways make it.
You know, it's always that thecustomer is saying no, we can't
(45:13):
do it, and then we say you gotto get creative, and they get
creative and they get it figuredout.
So I'm excited to kind of getinto the weeds of what that
looks like and how we knowpeople.
Speaker 3 (45:22):
Yeah, and starting with that and then in constant
communication, you know, like ifwe pre-clawed somebody, our
pre-claws are only good for fourmonths, right in 20 days.
So somebody should be havingconversations in the meantime
and just touching base.
No news is still no news, butat least you're connecting and
having those conversations,especially when we are seeing
shifts in the market.
(45:42):
Like we'll see a downtick alittle bit eight to quarter
basis point but then we'll goback up and it's just.
It's constantly being out infront of people and working
together is key.
Speaker 2 (45:52):
Well, it's going to be.
It's going to be a fun,volatile, not fun time.
I don't even know what to say.
Speaker 3 (46:00):
I'm really excited about it, yeah.
Speaker 2 (46:02):
One of the things I can say is I keep telling my
workers so I'm like, you know, Iput you through three or four
years of hell.
Really it was so.
We all knew at some point itwould slow down and our
production team still, you know,overworked and underpaid.
And so I keep telling them hey,man, we'll do flip houses,
we'll do remodels, we'll do theinspection thing, we'll keep
(46:24):
everybody fed and alive andenjoy it a little bit.
Like, let me deal with thestress, let me deal with the
slow down, waking up every daywondering what the economy's
going to do with the interestrates.
You guys just recoup, recoverand be ready and be ready for
the next drop in interest rateswhen we're going to be busy
again.
Speaker 3 (46:42):
So yeah, and I'm not upset about it being a little
bit slower these last couple ofyears because again we were all
drinking from a fire hose.
Speaker 2 (46:49):
We needed it.
Speaker 3 (46:50):
I mean, it was burnt out city and so I've really kind
of just taken this time todecompress and just keep my head
down and focus and advise anddrown out the noise, and we'll
get through this, just like weget through anything.
Speaker 2 (47:03):
Absolutely.
Yeah, well, I appreciate youcoming.
Yeah, I appreciate you.
Thank you so much, but thankyou everyone for joining us on
this episode of Stay Modern withMurray.
Stay tuned for our next episodewith former Husker volleyball
player, tara Mueller.
Speaker 1 (47:16):
If you have questions or topics you'd like us to
discuss, you can email them toinfoatmurraycustomhomescom.
If you liked this episode, besure to subscribe to Stay Modern
with Murray on Apple andSpotify, or check back on our
website and social mediaregularly for the latest
episodes.
Welcome to another episode of Stay Modern with
Murray, brought to you by MurrayCustom Pollers, where we build
your dream home together.
Now sit back, buckle up andenjoy the ride with your host.
Speaker 2 (00:14):
Matt Murray.
Good afternoon everyone, andthank you for joining us on this
episode of Stay Modern withMurray.
Today, we were actually talkingto a senior loan officer,
jessica Thomas of Charter WestBank.
Thank you so much for beinghere.
Speaker 3 (00:28):
Thanks so much for having me.
Speaker 2 (00:29):
Thank you, I was actually reading up on you a
little bit.
Question before we get going isI saw on your I think you're
LinkedIn or on your bio that youdo IT, yeah.
Speaker 3 (00:39):
So in my past life I worked for IBM and FISERV, both
financial software companies Onewas HR, one was financial
software.
So coming into this world wascompletely different.
Speaker 2 (00:53):
Right, We'll get into the weeds.
Yeah, the other reason I askedis my brother is a senior
network engineer.
Oh, very cool, For MWI Directused to be Midwest Web, Dean
Hart and them.
So when I saw IT I was like howin the heck did you transition
from IT to?
Speaker 3 (01:08):
I know the funny thing is, prior to that I was in
annuities and back in thefinancial world and my daughter
and I relocated back here afterbeing gone for about seven years
and did like support work.
And then I went intoprogramming, quickly realized
programming is not my jam andthen moved over into a business
(01:30):
analyst role with IBM when theyacquired Cannexa.
Speaker 2 (01:34):
Gotcha?
Yeah Well, let's start from thebeginning.
So you're born and raised here,right?
Speaker 3 (01:38):
Yep.
I am originally from Lincoln,Born and raised.
Graduated from Southeast.
Speaker 2 (01:43):
Southeast awesome.
Speaker 3 (01:45):
Yeah, my early 20s I moved down to Scottsdale Arizona
.
Speaker 2 (01:49):
Oh.
Speaker 3 (01:49):
Yeah, that was fun, that was fun.
Speaker 2 (01:51):
What would you make the move there for?
Speaker 3 (01:53):
Just something different.
I actually worked for WellsFargo at the time and they were
consolidating roles that reallywanted to put me someplace else,
but somewhere else in thecompany, yep, and it's like we
have a position down here inArizona and I'm like I'm on it.
That's awesome yeah because I'dalways wanted to move down
there, and so that was a prettysolid transition and spent a few
years down there and lovedevery minute of it.
(02:15):
Every winter I wish I was there, not here, because I'm really
about warm person.
Speaker 2 (02:21):
I totally agree yeah.
Speaker 3 (02:23):
So yeah, so I went down there and then moved up to
Des Moines.
My husband at the time got ajob up there and we were closer
to family.
Speaker 2 (02:30):
And then about you live from Arizona to Des Moines.
Yeah, how'd that work out foryou?
Speaker 3 (02:36):
It was okay.
Speaker 2 (02:38):
The weather transition though.
Speaker 3 (02:40):
Yeah, well, you know used to it.
I had gotten blood thinned outa little bit down there with the
heat.
Speaker 2 (02:46):
Yeah.
Speaker 3 (02:47):
So I mean it was good , it was solid.
I mean it's actually a greatcommunity, but wanted to be even
closer to home.
Didn't make sense to come backevery weekend, so her and I
moved back here about 13 yearsago.
Speaker 2 (03:01):
Oh, wow, Okay, so been back for quite a while.
So where's she go?
How would you say she's 15?
Speaker 3 (03:06):
She's 15.
She'll be 16 here in about amonth.
Speaker 2 (03:10):
Did she go to your alma mater?
Speaker 3 (03:12):
No, she doesn't.
She actually goes to a privateschool called Acton Academy.
Oh okay, yeah, she opted not todo the traditional high school
route and felt that Acton wasgoing to be a better fit for her
.
Speaker 2 (03:24):
She made the decision , huh.
Speaker 3 (03:26):
Yeah, wow.
She is light years beyond herage Not your typical 15,
16-year-old but she just feltlike that was going to serve her
better.
She's very ambitious and drivenand they have a very
entrepreneurial mindset.
That's awesome.
It's more of an individualizedlearning curriculum and felt
(03:47):
that that was going to give herthe tools and resources to be an
adult.
Speaker 2 (03:51):
How does a, however old she was when she started
trying to make this decision 13,14, how did she even stumble
upon the fact that this was anidea?
Speaker 3 (04:00):
Well, she went to a Montessori school, preschool and
stuff like that, so sheunderstood the concept and her
brother had gone to fundamentals, which was right next door, and
so we kind of seen it andexplored a little bit more and
then toured and did that theyactually got to go and do a day
at the school to kind of reallysee what it was like.
Speaker 1 (04:18):
Yeah, and she was like yeah, this is it.
Speaker 3 (04:21):
And I'm like but what about prom and homecoming and
all those things?
And she's like I do not careabout that.
Speaker 2 (04:25):
You know it's crazy.
I'll have to talk to you moreabout it later.
I love where our son goes, goesto Clefcorn, and I have had
basically zero complaints.
But I hear a lot of horrorstories of high school and
middle school and just the newstuff that's going on in the
world and furries and all thatstuff you can get into the weeds
(04:46):
.
But I've had a lot of peoplecome up to me and actually I
just did a meeting with a bankerslash realtor last weekend.
They were like you really haveyour kids in public school.
You're crazy.
And it got me and my wifetalking.
And then somebody else askedwhy do you have your kids in
public schools?
You need to have them inprivate schools.
I just never really thoughtabout it but it kind of opened
(05:07):
the door for the conversation.
Speaker 3 (05:09):
Yeah, I've been around for about three years and
it is very opposite of thetraditional mindset of schooling
.
Like the students are actuallyin charge of their own learning
and kind of where they want togo, and that's great, because
not every kid learns the same.
My nine-year-old learns verydifferently than what my
15-year-old does and in granted,there's the age difference.
(05:30):
But watching them grow and howthey learn, and it's great that
we have a facility or a schoolthat accommodates that.
Speaker 2 (05:38):
Yeah, that's awesome.
Speaker 3 (05:39):
And they meet the same criteria as they would from
a state school perspective.
So they're not missing out onanything.
They're actually getting, in myopinion, more to be able to be
functioning adults when they getinto that realm.
Yep.
Speaker 2 (05:53):
And so where did you get your?
Did you go to college here?
Speaker 3 (05:56):
Actually don't have a college degree.
I went to SCC for a little bitand that's right when I was with
Wells Fargo and then Irelocated down to Arizona and
none of my credits wouldtransfer Got you.
I was like I'm not even tryingto start this shit all over
again.
I was like close to the finishline and on the Dean's list and
so I ended up just getting intolike life insurance and
(06:16):
annuities and I did someprocessing back then from the
lending side of things and justworked my way through and in my
opinion, I think you gain waymore knowledge and real life
experience than you do sittingthere reading a textbook.
Speaker 2 (06:30):
Agreed.
You know, what's crazy is Ihave my math degree, which I
don't use, but my brother, likeI said, senior network engineer,
brilliant, a genius and hestarted just learning computers
in his basement when he was asenior in high school.
And right when he graduatedhigh school he took all the
senior network engineer testswhatever they're called
(06:52):
Microsoft certified engineer andhe passed all of them.
And then he applied forcolleges after he passed those
and all the professors told himthat the professors are
professors because they couldn'tpass that test.
So they went into teaching andso he would be smarter than them
, and so he didn't go to collegeeither, he just went right into
his field.
Yeah.
Speaker 3 (07:14):
I think as we progress as a society, I think
that will become more prevalentthat there's different avenues
to still get to the same endgoal, type of a thing.
Speaker 2 (07:23):
Yep, completely agree .
Well, how long?
So I know you've kind ofbounced around a little bit,
kind of talk a little bit aboutthat transition, how you got
into the mortgage industry.
Speaker 3 (07:33):
Yeah, so I was again working for IBM and loved what I
did.
I was more of an analyst rolethere, and especially with the
acquisition of what's working,what's not working and how can
we make this more efficient andefficiency type of stuff.
But it wasn't really filling mycup.
I bought my first house when Iwas 19.
(07:53):
Holy, cow.
In the early 2000s and was withWells Fargo.
Speaker 2 (07:58):
Here in Lincoln.
Speaker 3 (07:59):
Yep, I was in Indian Village.
It was a $60,000 house back in2000, 2001.
Speaker 2 (08:04):
That's a lot when you're 19.
Speaker 3 (08:05):
Yeah, but the banker was like I can make this happen,
but you got to get XYZ.
He's like I really don't thinkthat you're going to be able to
do that in a 30-day timeframe.
I'm like watch you clearly don'tknow my ambition and, sure as
shit, I did everything that theytold me I needed to do and
signed the final paperwork.
And they was like wow, and I'mlike yeah, and I really think
(08:31):
home ownership is doable foreverybody.
It's just a matter of when andhow we get there.
And so I recognized about sixyears ago by now, actually,
today was my last day at IBM.
Six years ago.
Speaker 2 (08:43):
Really.
Speaker 3 (08:44):
I resigned and took a couple months off before I got
into this world and I'm justpassionate about helping people
achieve that and I want to takemore of an advisory role with
that, rather than this isn'tjust a transaction.
For me, this is one of thebiggest financial investments
somebody is going to make intheir life and from a real
estate perspective, I actuallywas going to lean more that way,
(09:05):
but I had two small kids.
I had a three-year-old and aseven-year-old or no 10-year-old
.
At the time I didn't want to beshowing houses on nights and
weekends and in the financialworld I had the ability to do
that, but from my home I stillwork nights, I still work
weekends, but I can do it withmy kids run around in the
(09:25):
background, type of the thing.
So it really was just a kind ofthis epiphany of like life's
too short and I want to dosomething that makes me happy.
And then I'm passionate aboutYep.
So that's how I kind oftransitioned into this world.
Speaker 2 (09:38):
So do you have a desk job in the office?
Speaker 3 (09:41):
Yeah, go to the office every single day Nine to
five.
Yeah, yeah.
Speaker 2 (09:46):
So you have a standard job.
It's just your off hours or youcan do it at home and stuff.
Speaker 3 (09:49):
Yeah, I mean I can work anywhere.
I work on vacation like inothers' world.
we don't really get a vacation,especially when you're
commissioned only so you gottawork when people need you.
So I mean, if they were workingon vacation or I'll work in the
office during the day, I'llwork at home at night or on the
weekends.
It's nice that I have thatflexibility, which is one of the
(10:10):
things that I really wanted tobe able to have transitioning to
this to be able to serve peoplebut also be able to keep that
family balance intact as well.
Speaker 2 (10:19):
No, I don't know how much you can share on this, but
you just said something thatmade me realize that I think I
knew this, but maybe I didn't.
You guys are commissioned onlyLike strictly commissioned.
No base pay, correct, holy shit.
Speaker 3 (10:32):
Not every lender is that way.
Some lenders get a base plus asmall commission, but at us at
Trader West, we are 100%commissioned only.
So if I'm not closing loans, Idon't know what page I can.
Speaker 2 (10:43):
Now I understand why you're saying you work on the
weekends and nights.
Speaker 3 (10:47):
But that's the nice thing, Like I could work from
the morning on vacation or workfrom my home in the morning and
go do things with my family inthe afternoon, or whatever that
looks like.
So we are constantly buildingthose relationships with our
clients and with our referralpartners, because it's a team.
Again, it's one of the biggestfinancial decisions you're gonna
(11:09):
make, and so we have to worktogether as a team, both from
referral partner, clientperspective, me, to be able to
get to that end goal of helpingsomebody obtain that home
ownership.
Speaker 2 (11:19):
That's awesome.
So are you guys.
It brings up a lot morequestions now that.
Speaker 3 (11:23):
I know you're commissioned.
Speaker 2 (11:24):
only Now I'm starting to think of all the.
Speaker 1 (11:28):
Yeah, ask away.
Speaker 2 (11:30):
Are you guys in charge of lead acquisition and
stuff?
Speaker 3 (11:33):
We don't get anything given to us.
Speaker 2 (11:34):
Wow.
Speaker 3 (11:35):
It is all about cultivating the relationships
with everybody, holy cow, sowhich it can be hard some days,
but what challenges us helps usgrow, in my opinion, and so I'm
basically like self-employed,but I hang my hat with the bank
(11:56):
and I have tremendous supportfrom Charter West Side and even
the other LOs that I work with.
We have about 35 LOs spreadacross all of Nebraska.
I mean our furthest office isMcCook.
We even have some folks up inSioux City Council Bluffs area
and we really work togethercollectively.
It's not a competition thinginternally, like if I have
(12:18):
questions or if I run acrosssomething on a file and I need
to pick somebody else's brain.
We are always accommodating todo that which is great because
there's a lot of differentchallenges in this industry and
no file is cookie cutter.
Speaker 2 (12:32):
So there's a lot of commonalities between what you
do in a realtor Hang your hatwith somebody and kind of off,
you go on your own.
Speaker 3 (12:40):
Yeah, and again, not every lender is that way.
There's some lenders that getlead generation in and stuff
like that, so but we're not, youknow, so being actively
involved in the realtorcommunity and CPAs and
accountants and you know,divorce attorneys and stuff like
that, it's really kind ofbuilding a pool For me
(13:03):
personally.
I don't want 20 plus differentrealtors that I'm working with.
I want a handful and a half orso of folks that have the same
business mindset as I do andthat honest and transparent and
we're good at communicating andreally working collectively to
get to the end goal.
Speaker 2 (13:19):
Yeah, so with our company, Murray Custom Homes,
obviously, and me being arealtor, I'm assuming our ebbs
and flows and ups and downs arevery similar, so we'll get into
the elephant in the room in asecond.
But do you have any consumertips on obtaining a mortgage
loan or anything like that inthis market without having to
(13:41):
talk too much about what we'reabout to get into Details?
Speaker 3 (13:45):
Just trust your gut.
Work with somebody that you're,work with a team that you jive
well with.
You know again, not everybodyworks the same type of a thing,
but communication andtransparency are probably the
two biggest key factors andensuring that we get to the end
(14:08):
goal smoothly.
Speaker 2 (14:13):
I guess I should say or as smooth as possible For
people that are listening, thatdon't know that haven't done it
before.
Walk us through just a typicallending process with you.
Speaker 3 (14:22):
Yeah, so I normally.
You know I have an online app,I have a mobile app that people
can download and fill out anapplication, but I personally
like to have a phone call withmy clients or potential clients,
because for me that's ourconsultation.
You know I'm taking a bunch ofinformation down but I wanna
know what your short term andyour long term goals are,
because that helps me thenidentify how do we need to
(14:44):
structure this to both meetthose short and long term goals.
So you know, picking up thephone, if you start with a
realtor, they're gonna say gotalk to a lender first, because
that's, honestly, the first stepyou know what we can afford,
know, kind of, what's acomfortable monthly payment for
you.
You know, there's a lot of theconversations that we have.
You know, if you've got Xamount of assets, we don't wanna
deplete all of those.
(15:04):
Life happens, emergencies comeup, so those are important
things to know.
But we'll have a consultationkind of.
Get those, we build the rapport, you know, build the
relationship type of a thing,and then I structure the loan,
you know, kind of to meet thosegoals.
And there's quite a fewdifferent loan products.
You know first time home buyerproducts, but there's so many
(15:25):
other ones, and so I'llstructure the loan, send the
information out.
You know they kind of recap it,look it over.
We'll so go back around, goover any questions that they
have, and then it's househunting and finding that perfect
one and knowing what your musthaves are and what the things
are that you kind of do without.
And then, once we're undercontract, we're working on
(15:49):
collecting any updatedinformation, getting the file
prepped and ready.
I've got a team, I've got aprocessor and an assistant
Awesome and she goes out and youknow, collects any updated
documentation.
We get the file packaged andready to go.
It goes to underwriting, theyreview it.
They could come back and askadditional question for more
documentation.
And then, once we get that backto them, they're putting their
(16:11):
final stamp of approval on itand we're getting to the closing
table.
And that's about a 30 dayprocess.
I recently closed a loan in 14days.
Whole week out, I had toinitiate a bridge loan on top of
that which our bank side does,bridge loans.
So for somebody who wants totransition from their current
home into another home butdoesn't want to have to sell
(16:31):
before they get into this one,luckily we work very closely
with our bank side that canaccommodate, you know, bridge
loans and helots and things likethat, to pull that equity out
to be able to put down on thatnew house and then, once that
house gets sold, that bridgeloan gets paid off.
So Awesome, yeah, tons ofdifferent ways.
Speaker 2 (16:47):
Yeah, so before we get into where we are today,
what was your process like inthe middle of COVID and the
pandemic?
Speaker 3 (16:57):
That was fun, it was so fun, you know.
From a process standpoint itwas the same.
I've got a very boom, boom,boom streamline process because
you have to be able to meetdeadlines and timelines, because
people are transitioning fromone to the other.
So that process, you know, haspretty much stayed the same.
I've tweaked a few things toensure efficiency.
(17:20):
I'm very efficient I try to beat least and I have an amazing
team behind me that we work sowell together that we are able
to get to that end goal.
When COVID hit and ratesdropped, we were all drinking
from a firehouse.
Yeah, you know, when I firststarted, you know I was able to
go out and network and hang outwith, you know, referral
(17:42):
partners and stuff like that.
When COVID hit, nope, I wasable to volunteer.
I was working probably 13,14-hour days on top of that
trying to remodel a house.
Oh wow, Personally, to be ableto get it sold type of a thing.
So it was exhausting.
It was At least, but you knowit's very interesting too
(18:05):
because of the limited inventoryaspect of it.
Speaker 1 (18:07):
Right.
Speaker 3 (18:08):
You had to get creative in ways to be able to
win deals.
I had some clients that werelike I can't justify going
$70,000 over asking price.
I was just going to bow out andI'm like that's cool, we are on
your time, not on my time, andit does not make sense to
overpay for something.
Speaker 2 (18:28):
So many people did though, so many people did yeah.
Yeah.
Speaker 3 (18:32):
You know there's a little bit of justification to
it if this is maybe more of aforever home Right, because that
value is going to alwaysincrease and you're going to be
able to recoup that.
But if this is a first timehome buyer who's maybe going to
be in their home four to fiveyears because statistically
that's the average timeframe itdoes not make sense.
I'm not going to recoup thatoverpayment?
Speaker 2 (18:49):
Yeah, for sure.
Yeah, I'm assuming you guyshave slowed down now.
Yeah, a little bit when, abouthow long ago, if you could put a
number on it.
About how many months ago, whatwas it that you started
noticing the slowdown?
Speaker 3 (19:02):
Probably about a year ago.
So January of last year we werestill about 3.5%.
That just steadily increased.
July-july we were hitting 8%.
That dramatically changessomebody's buying power when you
go from the 3.5% to 7%.
8% that increases the payment 4, 5, 600 bucks, which changes
(19:25):
purchase price.
So it's like this constantbalancing act rate.
So it has slowed down.
People are kind of getting usedto more of these higher
interest rates.
And the problem with 2020 and2021, those were historical lows
.
That's not normal but everybodypsychologically has in their
mindset I'm not giving up my2.5% interest rate.
(19:46):
Well, I totally get that.
But market is cyclical, it'salways going to go up, it's
always going to come down.
We had a really great yearwhere rates were down and now
we're trying to economically andfinancially balance that back
out, type of a thing.
So it was a little bit slowerlast year, slower a little bit
(20:07):
this year, but from a productionstandpoint I'm still doing
close to about the same.
Speaker 2 (20:13):
Are you?
Speaker 3 (20:13):
really, yeah, I mean, it's good to hear.
Yeah, I mean, but it's.
I always describe it as anemotional roller coaster,
because you don't know what thenext day is going to bring you
can start out really high andeverything's going great in the
morning and by the middle of theafternoon, late afternoon shit
hit the fan.
You know it doesn't really helpthat I get alerts at 8 o'clock
(20:34):
in the morning on what the bondmarket is.
It really sets the tone for theday.
Speaker 2 (20:39):
I just try to tune it out right now.
And then the war.
Now it's like, well, yeah,we're in the same world.
Obviously we were hot and thenit kind of started to slow down.
Luckily we had some largeacreages and farm people and had
farm money and we kind of had aniche market there and we had
some backlog from houses that weweren't able to get to or get
(21:01):
the blueprint stun in time.
So we're still production wise,we're still busy, but sales
have curtailed and slowed downtremendously, especially over
the last three or four months.
So we've kind of supplementedit with some flip houses and
remodels and stuff like that.
But yeah, exactly what you say.
I think if you went back andlistened to the podcasts, I put
(21:22):
it on record, just so we couldknow where our train of thought
was and what everybody's trainof thought was, not to prove who
was right or wrong, but just toget it on record of what we
thought was going to happen sixmonths ago, a year ago, a year
and a half ago.
It's been a hell of a lotlonger than what I thought it
was going to.
And Jesus now, I mean, if youlook now I don't know what
(21:42):
you're hearing, but it seemslike we might see another rate
increase before the end of theyear.
Speaker 3 (21:47):
Yeah, so we thought we were going to start seeing a
shift in the market from a rateperspective back in May.
May 10th was this magical day,because the Fed was going to be
looking at the historicalyear-over-year data on where
inflation was and, quitehonestly, his bond market
historically follows whereinflation's at, and so we
thought that that forecast wasgoing to be more favorable.
(22:09):
Well, how the Fed was readingit is that inflation was still
way too high and that freakedthe bond market out in a not
awesome way.
They continued to still do that.
We Powell just spoke yesterday,actually, where inflation is
still reading high.
But what the problem with theFed and what they're doing is
that they're driving forward butthey keep looking in the
(22:31):
rearview mirror.
If you look at the real-timedata from an inflation
perspective, we're a lot closerto where they want to be than
what the numbers are sayingwe're at.
But you've got half the Fedmembers who are reading it one
way and half the new that arereading it the other way, and
you have a bunch of attorneys nooffense to attorneys in the Fed
and you have nobody that has aneconomic background.
(22:54):
So I think we're going tocontinue to see this, probably
for the first half of next year.
It's an election year, sohopefully we'll start seeing
those come down the closer weget to that.
But that's at least what'sbeing forecasted Like.
We thought we'd be in a muchbetter position than where we're
at we're not because of XYZ.
What's being forecasted is it'sgoing to be rough to the end of
(23:16):
the year.
It's going to be rough thebeginning of next year, but
hopefully we'll probably startseeing some of that light at the
end of the tunnel at Q2, q3next year.
Speaker 2 (23:24):
So a lot of people keep asking me and I know the
whole were insulated, a littlebit more than the east or west
coast, and we still have ahousing shortage.
What's your answer as to how orwhere we are now with interest
rates as opposed to where wewere before?
But you still say that yourproduction is almost just as
high.
(23:44):
Now who get asked is like whoor what are those people?
How are they able to afford thehigher rates?
Are they adjusting theiroutlook and their expectations
on the price of house?
Because I'm assuming thatperson that could afford a 500
back when it was 2.5% can nowonly afford a 400 to 450.
Speaker 3 (24:06):
Yeah, I mean it does play a big factor.
But we have those conversationsof, okay, like can we make this
happen?
Like is this comfortable foryou, type of thing.
We know that this isn't goingto be a forever thing, like
we're going to have anopportunity to refinance here
down the road because, again,market cyclical, so it is making
(24:27):
some adjustments from a pricepoint perspective, but we
honestly have a ton of firsttime home buyers still.
Wow.
Speaker 2 (24:34):
That's awesome.
Speaker 3 (24:34):
Well, you have to think about it too.
Like rents dramaticallyincreased and people are like,
well, if I'm paying 1800 to 2000for rent, what can I afford
from a mortgage perspective?
And so you can afford that.
The problem is again like theinventory and that point that's
going to get you there and it'sjust being able to work with a
(24:57):
team that's going to be able toget those offers accepted.
Being creative you know we'rein 2020 and 2021, people were
waiving inspections and goingover asking price.
We're not seeing that Right.
We're still motivated to sell,but willing to do inspections
(25:17):
and not go over asking as muchor at all because properties are
sitting on the market.
So it's again kind of like this, balanced out to where we're
still seeing people first timehome buyers and people that are
either relocating or is a 7%interest rate ideal.
No but it's not 13.
(25:38):
I mean, we could be there.
Exactly, it's all aboutperspective, right?
Yeah, getting things intoperspective form.
If this is a longer term homefor you, yeah, it's going to
stink to have that 7%, but if wehave our game plan in place to
be able to meet the short andlong term goals, it's going to
be fine 12, 18, 24 months downthe road.
So again, it's really kind oflike perspective.
Speaker 2 (26:00):
Right, and what sucks in our world I'm assuming a lot
of home voters are dealing withthis is you know we had drafted
a blueprint for a lot of thesepeople where they have an
expectation on a price persquare foot base, what they can
afford on a new construction.
Let's just say that they canafford an 1,800 square foot
house with all these bells andwhistles.
Well then they go in there andthey meet with their banker
(26:20):
after the interest rates went upfour or five points and they
come back to us and they say,okay, now I only have this
amount of money and it's $60,000, $70,000 less, and so you have
to start making cuts.
You know, you just took thehouse down 100 to 200 square
foot or took off all these bellsand whistles, and so what they
say is they'll just wait.
You know everybody just saysthey'll wait it out.
(26:42):
I don't want to build, you know, our forever home and have it
not be exactly what we want itto be.
So we have all these peopleright now for about the last six
to eight months that are juston the fence, you know.
So sales have really hurt inthe last six to eight months for
us.
Speaker 3 (27:01):
So, in that regards, what solutions are those bankers
not finding to be able to meetin the middle, Like there's a
lot of different loan programsthat we've started trickling
back in because the market hasshifted.
You have two, one buy downs.
You have arms everyone's likearms.
I don't want to do that.
That's so risky.
Anything in life is risky,right.
(27:22):
But again, if you're workingwith an advisor or somebody
that's just slinging atransaction, we're going to know
what those options look like.
On a two one buy down, it'sbasically like a temporary buy
down where you can.
That interest rate gets reducedby 2%, two basis points the
first year.
That goes only one the secondyear and then reverts back to
the original note rate in yearsthree through 30.
(27:43):
Well, again, if we kind of knowwhat's being forecasted in the
market, let's look at that two,one buy down option.
Maybe make that payment moreaffordable so you have more room
in your debt to income ratio,so that you can still get all
the bells and whistles that youwant at an affordable monthly
price within the guidelines ofthe programs.
And then we know we're going tobe able to refinance in the
next year or two.
Speaker 2 (28:03):
So you know I have that question.
Not speaking about anybody inparticular, I don't offend
anybody, but if you look at theaverage American and how much
they consume on credit cardsthat are 20 30% interest rate,
it amazes me that there aren'tmore people or more lenders that
are willing to discuss the armsor the buy downs or anything.
To me it feels like taboo tosuggest a two-one buy down
(28:28):
because they're like what'sgoing to happen after year three
?
That's so short-sighted, you'renot looking to the future.
It's like well, you just made apurchase with a 20% to 30%
interest credit card, or youhave a full credit card at 20%,
right?
So you know what I mean.
Speaker 3 (28:40):
Well, and to that point too, it's like you got
these buyers that aretransitioning from, like, their
first or second home, maybe intothe forever home, maybe doing
the build, and like I don't wantto give up my 2.5% interest
rate, right?
Well, how?
So many Americans have maxedout their credit cards, like
credit card debt is up an insaneamount.
Yep, so you've got yeah, yougot a 2.5% interest rate on your
(29:00):
home loan, but you got how manycredit cards that are maxed out
at 20%?
You got an auto loan at 8%, 9%.
So when you actually look at ablended rate calculation on all
of your monthly debt obligations, you don't have a 2.5% interest
rate on your home.
You're closer to like 7%, right?
So why not sell your house?
Take portion of the equity, payall that debt off, use the
(29:22):
portion of it to get in from aminimum perspective on a new
property, and then we're goingto refinance down the road into
a normal interest rate of around5.5% or whatever you know where
it is.
It's those types ofconversations that people aren't
having because I don't know why.
Yeah, maybe not their mindset.
Speaker 2 (29:41):
And you know talking to a few workers of mine and
patent pass workers particularly, not understanding the equity
in their home.
I think I have a lot of One inparticular that he owned a
$350,000 house and he'd beenpaying on it.
He has it down to like $80,000.
He didn't even realize thisuntil I started talking to him
about it.
He wanted to buy something andI'm like you know what's the
(30:05):
value of your home?
What is it to praise that?
What is your equity in the home?
He didn't even think about thatat all, right.
Speaker 3 (30:12):
The biggest problem is lack of education.
I am huge on education and,again, just being analytical
with it, and maybe that's mynerdy numbers brain, but it's
like, okay, where's the problem,where's the solution, what's
going to make the most financialsense?
But a lot of realtors, too,don't have that knowledge.
(30:35):
They know those tools andresources and people aren't
having those conversations.
We're actually hosting a classhere November 15th on really
where is our market from aBlinken perspective as a whole,
like it's not as bad as peoplethink it is or what the media
likes to make it be.
And then what tools andresources do we have to be able
(30:57):
to help those agents have thoseconversations, educational
conversations with their sellersand buyers to really put things
into perspective for them.
This is doable, let's just doit smart.
Speaker 2 (31:10):
Right.
Well, that's a good perspective.
I've known it but never reallytalked about it in that
perspective of taking yourequity in your house and buying
down your credit cards and getinto a new house Because, like
you said, I mean bar in anyWorld War III or anything like
that you have to look at thefuture of the economics and the
economics, like you said, it'scyclical.
(31:30):
So we're up here now andeventually we're going to go
back down.
I don't think five, 10 yearsago we ever thought we would
have saw 2.5%, but we did you,did, you know, it went up and
then we came back down.
Speaker 3 (31:42):
It's funny to say that because I was at a
mastermind conference in June of19 and Barry Habib is an
economist that we follow veryclosely in our world and I
remember being at thatconference and he's like rates
are going to go to 2, 2.5% andwe're like, oh shit, Not sure
shit, that's where they were.
Speaker 2 (32:01):
When we were in the middle of it I think I just got
used to it and my financialadvisor called me.
Actually, he told me and Ididn't listen.
So then he told my worker,kevin, my senior PM, kevin, and
Kevin came in and he's likeMason's telling you that you
need to get all the money youcan from the bank.
And I've always been a bigbeliever in no debt.
(32:22):
Right, so no debt.
Why have debt if you don't needit?
Obviously, I leveraged debt tobuy lots and stuff like that.
But if there's building, if youhave money, pay it off, don't
just leave money sitting in theaccount.
I didn't understand until westarted trying to buy flip
houses right now.
Why should have done what hesaid?
Because I could have been.
I'm looking at these fliphouses or turning the house into
(32:44):
a rental when you're buyingmoney, when you're borrowing
money at 8.5%, 9% interest onlyloans, jesus, to carry these
houses for six, seven months,versus if I had the money at
2.5%.
And then also the idea oftaking the money at 2.5%,
putting it in the market andyou're making six or 7%
(33:05):
historically 8% and you'remaking 6%, 5% for nothing.
Take all the money you can get,pay 2.5%, make six in a market
and live off of it, so I feellike an idiot.
Speaker 3 (33:22):
We live and learn that, but I think a home is one
of the most underutilizedinvestments.
I had a close friend of minebefore rates went
whack-a-doodle-y abnormal.
She had just graduated fromnursing school and she had about
$90,000 worth of student loandebt and her and her husband had
owned their home for a littleover a decade or whatever, so we
(33:43):
had a crap ton of equity in it.
We did a cash out refinance,paid off 80,000 worth of her
debt and even with a slightincrease in the monthly payment
it was still saving them $400 to$500 a month.
That's awesome, yeah, I meanjust, people don't think of
those things.
They don't know what they don'tknow, and so they're looking to
you as a not a financialadvisor, but you're an advisory
(34:05):
role, in my opinion to figureout what those solutions are to
those to make the most sense.
Speaker 2 (34:12):
Yeah, that's awesome.
You know what I compare it tois.
It draws a similarity at somehealth issues that I've spoke
about, I think, on here a littlebit.
It draws a similarity to we'realmost getting into that medical
world philosophy is there's adifferent lane for each
profession but there's not oneperson that combines all of them
to help you in advisoryposition on what you should do.
(34:34):
You go here for this and ifit's not that, they just kick
you out.
And then you go to anotherdoctor and they say it's not
that and you're just left kindof like well, what the hell is
wrong with me?
Nobody advises you on where togo, what to do, and in this it's
very similar.
There's so many people thatlook at their home loan or their
interest rates is in a sec anda you know a small section
rather than in a whole pictureof I think we've psychologically
(34:57):
been ingrained about rate, rate, rate.
Speaker 3 (34:59):
Right, Like I want the lowest interest rate.
I just had somebody call theother day.
Why want the lowest interestrate?
Well, everybody does.
But are you going to be in thehouse for four to five years, or
are you going to be in thehouse for 20, 30 years?
Speaker 1 (35:11):
Right.
Speaker 3 (35:12):
Rate plays a different factor if you're in
your house for four to fiveyears, in my opinion, than it
does 20 to 30 years.
So let's focus on what the nowis and what the and then like
changes.
Right Like, I thought my lasthouse was going to be my forever
home and that did not end upbeing the case.
But you, just you have toadjust.
You know to the best you can.
You know where you're at now,you know where the market's at,
(35:33):
we know what we've got to workwith.
Let's strategize a plan.
We got that in place and we'lladjust along the way if we need
to.
Speaker 2 (35:40):
Yep, I have a hard time playing that we're in those
multiple hats.
When I was in on the meetingswith drafting and worrying about
their budget and wanting togive them their forever home and
making the house, I alwayswanted to make the house
beautiful.
Still do any additions thatthey put in.
I didn't necessarily have tomake money on it.
(36:00):
I just love the fact they'remaking the house awesome so I
could show it off.
But it's hard when you go to ameeting with a 30-some-year-old
couple or a 20-some-year-oldcouple and they're busting the
bank because this is theirforever home Throughout my years
.
I can't even tell you how manytimes that you know.
Politely, I'll let them knowthat life happens.
You know Shit happens.
(36:21):
Make sure you're planning forthe what ifs.
But they're building theirforever home and they do it.
And then a year or two later Isee it, for example, on Facebook
or on the marketplace and it'slike holy shit.
I wish that we would have donea few things different, like
what you said.
I think there's.
You've got to be cognizant ofwhat if this isn't my forever
home, you got to make sure youbuy it right and make the
(36:44):
investments when you build thehouse to make sure there's a
return on investment if you everdo have to sell Right.
Speaker 3 (36:49):
Well and that's a thing too, a lot of times,
especially with new construction, I have that, I'm very direct
and I don't sugarcoat shit,because that's not going to
serve anybody any purpose, right, myself or the clients.
But when we're dealing with newconstruction it's like, okay,
this is your price point thatyou have in mind.
You will have overages.
We have to be aware of thoseand we have to factor that in
(37:12):
type of the thing, because it isinevitable.
Speaker 2 (37:15):
Yep, it's inevitable.
So I'm on this real estatemastermind group on Facebook.
I joined it for not the rightreason, but then I ended up
becoming a realtor and now I'mpart of it.
It's like when I scroll throughmy Facebook, it's every other
one.
I just can't not read them.
But there's a lot of heatedconversations in there right now
(37:36):
, but one of the ones that seemsto get the most traction is the
whole date, your rate, marryyour house.
What is your take on that?
So we can have people eitherlove you or hate you after this
podcast.
Speaker 3 (37:50):
Right.
Well, we advertise that a lot.
Marry your house at the rate,because, again, you know where
you're at now.
Right, if you fall in love withsomething, because so often is
it the right time to buy, whenis there ever going to be a
right time for anything?
You're never going to moveforward with anything in life if
you're waiting for the righttime, right.
(38:10):
So, if it's something that youfall in love with, home values
are always going to increase.
We are never going to see an0809, like we did, and so you're
going to wait for that interestrate to drop to get into your
magical unicorn of a house thatyou absolutely love, but you're
going to still pay more for it.
(38:31):
So you're not doing yourselfany justice on waiting for rates
to come down to get into thenew house that you absolutely
love, because by the time you dothat, it's going to be
appreciated.
Appreciate it 4, 5, 6% I mean ontarget right now for 2023,.
As of August, we're on track,from a national average, to
appreciate 6%.
(38:52):
So you keep waiting a year ortwo and that's just going to
keep getting more and more andthen you're going to be paying
more for the house.
Yeah, you got a lower interestrate, but you're still back in
the same boat.
Speaker 2 (39:01):
Right yeah, On the surface.
I would never implore somebodyto go from a 2.5% to an 8% rate.
Right On the surface, Right.
But then when you get into theweeds with it, appreciation and
limited availability.
Speaker 3 (39:16):
and we actually have cost of waiting calculators.
Speaker 2 (39:20):
That's awesome.
Speaker 3 (39:20):
That we have through a program that says, okay, if I
wait to buy, and it projects itout in like a four or five year
time frame, you're losing out on20, 30,000 plus in equity and
again you're going to be able torefinance down the road Like
again, it's cyclical, it's thisup and down industry.
Speaker 2 (39:40):
Right, so it's.
The worst thing that I hatedwas we had a few clients.
It was an emotional time, notblaming anybody, not pointing
fingers, but when the ratesstarted going up, we had
everybody that, whether they hadjust started the house or six
months away, they were like Ineed to finish.
Now rates are going up and it'slike well, we just got your
(40:00):
blueprint done, so it's going tobe much, you know.
Like well, you're costing methis amount of money, but their
emails would be over the 30 yearlife of the loan.
You are going to cost me$180,000, I remember
specifically.
So, unless Murray's going topay me $180,000, you need to
have my house done in threemonths.
And it's like it angered mebecause, like what you're saying
(40:24):
, we know you're not going tostick at this interest rate for
the third year loan.
But I mean our contracts statesthat we have 240 days to build
the house.
Speaker 3 (40:33):
We can't just magically, you know build the
house in three months,especially like materials,
perspective delay in those.
But again that kind of bringsme back to why are those lenders
not having conversations onextended rate options?
Because that was a big thingtoo.
Like okay, we're in, we wentfrom three and a half to 5%.
It's going to take my build,you know, six, eight, 10,
(40:56):
whatever months.
Look at extended rate optionsAgain, it's hard too, because
everybody looks for us, for thiscrystal ball to be able to
predict.
I get constantly.
Well, what do you think Ishould do?
Well, I can tell you from myperspective and my knowledge and
what I follow on the industryon a daily basis, of where it's
forecasted to go.
I can't guarantee you I thoughtwe'd be down in the fives by
(41:18):
now, but unfortunately that'snot where we're at.
So there's a lot to kind ofanswer that question.
There's a lot of differentproducts or things in the
industry where, if you're havingthose educational conversations
, you can avoid those types ofthings.
Speaker 2 (41:37):
So once we get off, we'll have you email me and
Shannon some of your ideas,because I love it.
We're needing that right nowwith a lot of people of, like
you said, not wanting them tomake a bad decision, but giving
them options for proceedingforward Because, like you're
saying, we have so many peopleright now that they're probably
(41:58):
20 to 30,000 off of where theywanted to be with their build
and they were supposed to startsix months ago, but we're six
months later and they're stillwaiting for the interest rates
to come down, so they have anextra $20,000 on their loan.
I think, coming from adifferent perspective, from a
different person, I would feelbad just calling you saying, hey
(42:18):
, I think you should do it now,let's go.
It seems so one-sided skin inthe game Right.
Speaker 3 (42:23):
But if you give them the materials or the reports or
things like that and saying,okay, and again, like very
honest and transparent, and if Ithink something's not a great
idea, I will point blank tellyou I can make this happen, but
I don't think it's in your bestfinancial interest.
But if you can collectivelywork together and say, okay,
(42:44):
here's your concerns that I'mhearing and here's the tools
that we've put everythingthrough from a financial aspect
of it to show you that, okay, ifwe make this decision from a
long-term perspective, this iswhat it's going to look like
Because, again, it comes down toeducation.
Giving them every single aspectof the situation so that they
(43:04):
can make an educated decision onwhat's best for them is crucial
in this volatile economy andindustry that we're in.
Speaker 2 (43:12):
Absolutely Well, that's awesome.
I appreciate it.
Any final thoughts?
You have comments plugs.
Speaker 3 (43:22):
It's going to be a rocky, probably, say, eight to
12 months.
But if you're looking at homeownership, whether you're first
time home buyer or somebodythat's transitioning to the next
home, work with somebody thatis going to educate you on
what's truly going on in theindustry, because the media is
(43:42):
going to portray the skiesfalling.
Speaker 1 (43:44):
Every day.
Speaker 3 (43:45):
Right every day.
That's why I don't watch it.
I can't, it's too much.
But work with somebody who canreally be more of that advisory
role and have a team behind you,because this again is one of
the biggest financial purchasesyou're going to make and it has
to make sense for them andprovide them with the education
to be able to make thoseeducated decisions.
Speaker 2 (44:07):
That's awesome.
I appreciate it.
You gave me a couple of newperspectives that I like.
That's great, but no, we needhelp.
We got, like I said, we have acouple of people.
What we've run into, on top ofwhat I've already discussed, is
you have people get preapprovedand you don't look at the date
on the letter.
So then you take them throughthe drafting process, the land
(44:28):
purchase, et cetera, et cetera,and then it's three months later
and then I go to get my loan tobuild their house and my banker
, marlin's asking me for anupdated approval letter and then
when they go back and get theirupdated approval letter, they
can't get approved for thatamount.
So that has happened.
So, yes, trying to get creativewith these people and talk
through the options, I don'tknow.
(44:50):
I can't say that these bankershaven't.
I don't know what has happened.
I just know that we just have alot of people right now that
are just saying they can't do itright now.
So we do have a couple of them,including my employee, tom, our
VP, tom, that you know that hadto get some creative with this
financing and it seems like theyalways make it.
You know, it's always that thecustomer is saying no, we can't
(45:13):
do it, and then we say you gotto get creative, and they get
creative and they get it figuredout.
So I'm excited to kind of getinto the weeds of what that
looks like and how we knowpeople.
Speaker 3 (45:22):
Yeah, and starting with that and then in constant
communication, you know, like ifwe pre-clawed somebody, our
pre-claws are only good for fourmonths, right in 20 days.
So somebody should be havingconversations in the meantime
and just touching base.
No news is still no news, butat least you're connecting and
having those conversations,especially when we are seeing
shifts in the market.
(45:42):
Like we'll see a downtick alittle bit eight to quarter
basis point but then we'll goback up and it's just.
It's constantly being out infront of people and working
together is key.
Speaker 2 (45:52):
Well, it's going to be.
It's going to be a fun,volatile, not fun time.
I don't even know what to say.
Speaker 3 (46:00):
I'm really excited about it, yeah.
Speaker 2 (46:02):
One of the things I can say is I keep telling my
workers so I'm like, you know, Iput you through three or four
years of hell.
Really it was so.
We all knew at some point itwould slow down and our
production team still, you know,overworked and underpaid.
And so I keep telling them hey,man, we'll do flip houses,
we'll do remodels, we'll do theinspection thing, we'll keep
(46:24):
everybody fed and alive andenjoy it a little bit.
Like, let me deal with thestress, let me deal with the
slow down, waking up every daywondering what the economy's
going to do with the interestrates.
You guys just recoup, recoverand be ready and be ready for
the next drop in interest rateswhen we're going to be busy
again.
Speaker 3 (46:42):
So yeah, and I'm not upset about it being a little
bit slower these last couple ofyears because again we were all
drinking from a fire hose.
Speaker 2 (46:49):
We needed it.
Speaker 3 (46:50):
I mean, it was burnt out city and so I've really kind
of just taken this time todecompress and just keep my head
down and focus and advise anddrown out the noise, and we'll
get through this, just like weget through anything.
Speaker 2 (47:03):
Absolutely.
Yeah, well, I appreciate youcoming.
Yeah, I appreciate you.
Thank you so much, but thankyou everyone for joining us on
this episode of Stay Modern withMurray.
Stay tuned for our next episodewith former Husker volleyball
player, tara Mueller.
Speaker 1 (47:16):
If you have questions or topics you'd like us to
discuss, you can email them toinfoatmurraycustomhomescom.
If you liked this episode, besure to subscribe to Stay Modern
with Murray on Apple andSpotify, or check back on our
website and social mediaregularly for the latest
episodes.
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