Rick Discusses The 2025 Housing Forecast

Rick Discusses The 2025 Housing Forecast

Episode Transcript

Speaker 1 (00:00):
The following is a paid commercial program on ninety four
to three WSC. The views expressed by the host of
this program do not necessarily reflect the views of iHeartMedia
ninety four to three WSC it's advertiser, sponsors or management.
This is The Real Estate Show with rig willis a
show about home sales, mortgage issues, investing in everything about
the American dream. And that means a lot as someone

(00:23):
who enjoys radio and really enjoys your program. And now
The Real Estate Show with rig willis on ninety four
to three in WSC he Charleston.

Speaker 2 (00:33):
Welcome to the Real Estate Show, folks. We talk about
real estate here, buying, selling, and investing in real estate.
And I'm going to start off this morning by apologizing
for those of you that listened to last Saturday show
because we had a little hitch and to get Along
and it didn't come out where you could hear us.

(00:56):
So an apology. We're working on correct it, so hopefully
when this show is aired and you're hearing it, it'll
be very legible and there won't be any hitches in
the get along. Today we're going to talk about housing
forecasts for two thousand and twenty five, The National Association

(01:18):
of Realtors and in turn Turnreilter dot Com put out
their Housing Forecast for twenty twenty five, and the headline says,
mortgage rates to stay above six percent as home prices grow.
And I'm going to basically read this article to you

(01:40):
to set the stage for what's going to happen here
in the local area. Now, remember what I'm about to
read to you is for the whole United States, and
we'll come back after I read this and talk about
the local market. Says your mortgage rates will continue to
average above six percent next year and home prices will

(02:03):
keep rising. The Realtor dot com Economic Research Team predicts
that in twenty twenty five Housing Forecast. The report forecast
that mortgage rates will average six point three percent across
twenty twenty five and end the year at six point

(02:25):
two percent. And that's just a small dip down from
where they are right now, because this year, it looks
like it'll average six point seven percent in twenty twenty four,
and that's a four percent historical average above where it

(02:48):
was before the pandemic. Home prices will grow an additional
three point seven percent through next year after rising four
four percent this year twenty twenty four, The forecast indicates
sales of previously owned homes are projected to tick up

(03:10):
to four point zh seven million, a one and a
half percent gain from this year, but still sluggish compared
to twenty thirteen to twenty nineteen historical average of five
point two eight million. So next year and this year

(03:31):
is going to be substantially less than it used to
be for that period twenty thirteen to two thousand and nineteen.
The supply of homes for sale will be a persistent
challenge for home buyers in recent years. That has been
a challenge will continue to improve, rising eleven point seven

(03:55):
percent across twenty twenty five. The forecast predicts new home
construction will also continue to expand, jumping thirteen point eight
percent from twenty twenty four to one point one million
new unit starts next year. According to the forecast, this

(04:17):
past year brought us a surprising upward trend in home
prices growth, despite the persistence of high mortgage rates and
rising inventory. Mortgage rates are expected to keep mortgage payments
essentially unchanged in twenty twenty five despite continued home growth prices.

(04:42):
So what I've been telling you week after week is
don't wait for the market to change, because it's not
going to change, according to the experts nationally, And I'm
your local expert, and I'm saying it's not going to change.
It's not going to get better forecasts for home buyers.
In twenty twenty five, I'm back to reading from the

(05:04):
National Association of Riders Realtor dot Com research report. Home
buyers hoping for a return of September's near six percent
mortgage rate will be disappointed. The report states, projecting rates
will average six point three during next year. Now, remember

(05:29):
that's an average. Right now, you're in the mid to
upper sixes and actually can get in the low sixes
in some cases. And if you want to buy a
fifteen year mortgage where your payments a little higher, you
can get interest rates in the fives right now. The

(05:52):
report goes on to say that the the market will
be shifting in fai of buyers in certain markets where
there's the inventory is going to be increasing. What we've
been seeing locally, by the way, folks, is the inventory increasing.

(06:13):
Right now? As we come on the air and I'm
recording this show, we have about four thousand two hundred
active residential listings and the Greater Charleston Multiple Listing service,
and that number has been increasing for over the past year.
When the pandemic came to a conclusion, we had about

(06:39):
one thousand active residential listings and since that time the
number of listings has continued to increase. In October, major
markets with at least half of the active listing had
price reductions, including Cincinnati, Lake City, Denver, Phoenix, and Indianapolis.

(07:04):
The top ten markets for the share of listings with
price cuts were either in Ohio, Indiana, or Illinois, led
by Urbana, Ohio with price reductions of seven point one percent.
Now that's not going to happen here in the Charleston

(07:25):
area because we have continuous demand and still a limited supply.
While more inventory means buyers will have more time to
make decisions. In twenty twenty five, in any market, a
fast acting buyer will have a higher likelihood of making

(07:46):
the winning offer. You always want to be the first
one to see a brand new listing when it comes
on the market for sale, so you've got to be ready.
If you're paying cash, you have to have what is
called a proof of funds letter ready In writing to
submit with your offer. If you're going to be getting

(08:07):
a mortgage, don't even go out and start looking at
houses until you have a pre approval letter from a lender,
because if you like what you see, you still need
to take immediate action so you don't lose the house.
And there's no sense in kidding yourself. If you try
to write a contract and you don't have a proof

(08:28):
of funds letter or a pre approval letter, the listing
agent is probably going to tell you I'm not going
to present it until I have that document. So get
with your mortgage lender and get that in writing. And
by the way, when you get with your mortgage lender,
I'm going to make a suggestion that you always get

(08:51):
your pre approval letter for the highest possible amount that
you're qualified to buy. Said differently, if you can qualify
for a six hundred thousand dollars home but only want
to buy a four hundred thousand dollars property, have the
letter written by the mortgage lender that says you can

(09:12):
qualify up to six hundred thousand. Now, why would I
suggest that answer? If there is more than one offer
on the property and that is still happening then your
offer is the one that's going to be accepted, rather
than a competitor's offer that might say you're approved up

(09:32):
to four hundred thousand. Give the seller and the listing
agent a reason to pick your offer. They're not going
to raise the price of the home because you're overqualified,
but it will make a difference in them selecting your
respective offer, and it gives you a little more negotiating room.

(09:53):
Then the article that we're reading goes on to say
forecasts for home sellers in twenty twenty five predicts that
lingering constraints on supply should still give sellers the slight
edge in negotiating with buyers. The latest Realtor dot Com

(10:13):
Market Hotness report talks about in October the top markets
for buyer demand were located in the Northeast and the Midwest,
which surprised me to see the Northeast. I haven't seen
the Northeast being in the top markets for a very, very,

(10:37):
very long time. But what the reason is for the
Northeast because the land prices are very high there and
there's not a lot of vacant land. You don't have
the new construction when you're in the Midwest Southwest and
the south you have a lot of new construction building activity,

(10:57):
which keeps more supply on the market. So supply and
demand ultimately is still the factor that rules real estate
now as it relates to the local market. Here I
mentioned to you there was a limited supply of about
forty two hundred. Well, you need to act swiftly and

(11:17):
quickly even in today's market. And folks, we're going to
come right back after this break and talk more about
Charleston area real estate. I'm Rick Willis. Please reach out
to me Rickwillis dot com, rick at Rickwillis dot com
or call me eight four three three two seven three

(11:38):
zero one seven. See you right after the break. Hello,
this is Rick Willis. I assume you've been listening to
the Rick Willis Real Estate Show. If so, are you
considering buying, selling, or investing in real estate? If so,
you want to make sure you request a copy and
read my special report sports designed especially for those people

(12:02):
looking to buy or sell or invest in real estate.
Special Report number one is about buying real estate, and
you'll discover how to get your best buy and avoid
the ten biggest mistakes home buyers make. Special Report number
two is for those people thinking of selling their property,

(12:23):
you'll discover how to get your home sold quickly and
net the most money. And if you're thinking of investing
in real estate, you'll discover why you want to own
income producing property and what to buy for the safest
place to put your money. You'll also discover how to
use your retirement account for a one k and ira

(12:47):
without having to pay a penalty to buy and own
income producing property. Please note I'm saying income producing property,
I'm not simply saying investment property. To get a freak
copy of any of the special reports I just mentioned
about buying, selling, or investing in real estate, please text
me at eight four three three two seven three oh

(13:11):
one seven or email me at Rick Atrickwillis dot com. Additionally,
please visit my website at Rickwilis dot com. You'll learn
about my background as well as accessing multiple listing. Again,
I repeat, please don't buy, sell, or invest in real

(13:33):
estate without requesting and reading your special report on buying, selling,
or investing in real estate. Text eight four three three
two seven three zero one seven or email Rick Atrikwilis
dot com. When you text or email me, please make
sure you request a very specific special report on buying,

(13:56):
selling or investing, and I will turn around and email
you the special report. Thank you. Welcome back, Welcome back

(14:18):
to Charleston. Welcome back to the second segment of today's
Rick Willis Willis State Show. Folks. For those of you
that don't know who I am, I've been doing this
particular show here in the Charleston area since twenty twenty three.
I relocated to the Low Country in nineteen ninety eight
from the state of Maryland, and I started this show

(14:42):
in twenty twenty three. And at that time we were
a live call in show. I would travel to Houston
North Cut Boulevard in Mount Pleasant where the studio was located,
and I would take calls. It was a live call
in talk radio show. Enter the pandemic and we had

(15:02):
to alter me going into the studio when we started
doing the show remote. Now we're still doing the show remote,
and I'm instead of going to a studio, I have
set up a studio in my home. And for those
of you that don't remember or didn't hear me when

(15:24):
I said on previous shows, I sound a little different
than I have in the past, and that is that
last year in August of twenty twenty three, I had
a stroke, And for those of you that are not
familiar with a stroke, a stroke is what occurs in
your brain when there's a blood vessel that gets clogged

(15:46):
or stopped. And it was on the right side of
my brain, which means that it impacted the left side
of my body. So I was in the hospital for
thirty five days, and then once I was released from
the hospital, it's a long recovery to try to get
to walk and talk. And if you'll notice, my voice

(16:09):
is a little different than what you may have heard
before in the past, but nevertheless, my brain is fine
and I can help you if you're looking to buy
or sell real estate. I am an active, practicing real
estate broker, and when I can't personally show a property

(16:31):
or spend the time I would like walking around a property,
I have a team of several other realtors around me
that are working with me. So please make sure if
you're looking to buy, sell, or invest that you call me,
email me, text me, and let's talk about how I

(16:52):
and my team can help you in continuing to buy property.
If you're an investor or sell your property. If you're
thinking of selling your property. Now, one of the things
that I do a couple of times a year, and
I'm going to do it today, is I'm going to
walk through a contract of sale with you, making comments

(17:15):
to those of you thinking of buying or selling about
things you need to know about the purchase or sale
document that you're going to be asked to sign. So
many people go into buying or selling and they're not
prepared when the actual contract of sale shows up. So
I'm going to give you some tips and pointers on

(17:36):
things to look out for. All Right, here we go.
The agreement itself at the top says agreement contract to
buyers sell real estate. And in this case, I'm going
to go through a residential contract. First paragraph talks about
the buyer and the seller's names. Now, it's not uncommon

(17:59):
that in terms of buying a home, one person might
be more available to look at property than another, even
though the property might be titled in both parties' names.
Only one person needs to be the person to sign
the contract. And there's another spot in the contract the
states were title to be taken in the names of

(18:23):
and strictly for convenience and speed. If it's okay with
your relationship. To have just one person sign the agreement,
it can make life much easier than trying to get
multiple signatures, particularly in the world that we're in today
called docu sign and electronic signing. Sometimes just the process

(18:46):
of trying to get two people's signatures, either electronically or manually,
can slow down the process and cause you to miss
out on a good deal. Now, also in the contract
of sale, it talks about brokerage relationships. It must be

(19:06):
disclosed in writing. If you're a seller, Are you a
customer or a client? Are you a buyer? Are you
a customer or a client? And I'm not going to
go into that particular item today except to say that
you have a choice when you're buying. Do you want
to be represented as a client where you have greater

(19:30):
fiduciary relationship with your agent than if you're just a customer.
That's your decision and your choice. There's a line in
the contract about purchase price. And let me make a
few comments about price. Everybody likes a good deal. Everybody
out there wants to get the lowest possible price on

(19:52):
a property. Let me caution you on a couple things.
Number One, when I'm representing a buyer as a buyer agent.
Before we ever talk about what price to put in
the contract, I usually get the buyer that I'm representing
on a speaker phone with the listing agent, and I

(20:13):
asked the question I say to the listing agent with
the buyer listening in, how motivated is the seller? Have
they received any previous offers? Why didn't they accept the
previous offers? And if they were turned down, what were

(20:34):
the prices that they rejected or turned down or kunter offered. Now,
the other agent doesn't always answer these questions, but I'm
going to be the one asking them, and then I'm
going to ask the buyer when I'm not on the
phone with a listing agent, how bad do you want
this house? Sometimes it's we're going to do whatever it

(20:55):
takes to get it. In other cases it's well, we
don't want to overpay for it, in which case I'll
say to them, well, you really can't overpay because you're
getting financing and the contract is contingent on an appraisal.
Having said that, I again usually asked the listing agent,

(21:17):
if we bring you an offer that's X dollars less
than asking price, what is the seller likely to do again,
I want to know as much information on the front
end as possible when I'm representing a buyer to help
that buyer get a great deal on the house. Now,
the flip side of that is, I was representing a
buyer about thirty days ago. We looked at a property,

(21:42):
and when it came time for the buyer I was
representing to write an offer, I made a phone call
to the listing broker and the agent that I talked
to said, we already have two offers on the property
and the seller is going to be making a decision
here in the next twenty four hours. So, in this

(22:02):
particular case, the buyer that I was representing, by their choice,
offered ten thousand dollars above the asking price on the property,
and yes, they ended up getting the property. Did they
need to offer ten thousand more? Answer? We don't know,
because I did ask the question on behalf of the

(22:23):
buyer I was representing, of how much do we need
to offer to get the house to beat out the
other offers, And the listing agent, being a good listing agent,
did not answer my question because they're representing the seller,
and they said to me, you know, I can't tell
you that, just give me your best offer, and we

(22:43):
did give them the best offer. So again price you
just know that you don't ever get a second chance
at going up in price. Usually, sometimes you can make
an offer on a property at a certain price, you
can have the property accepted the contract, and then after

(23:05):
you do your due diligence, you have the opportunity to
come back and actually adjust the price lower based on
what you find out the condition the property is. Then
the next segment of the contract talks about the property
that you're buying, and there's a segment in here that
says no personal property shall convey accept And this is

(23:29):
where you need an agent who understands the little intricacies
called personal property. In other words, if you have a
refrigerator and it's not connected to an ice maker, so
it's not connected to the wall. Is that refrigerator personal
property or real property? Well you bet it. When when

(23:50):
in doubt you write it in the contract. And I
usually put a blanket claws in there that says all
personal property, all appliance is in property as of whatever
the date I showed the property. And if there's any question,
you can itemize those respective items Paragraph number four says

(24:13):
conveyance or possession date, and that would be the date
that you actually want to close on the property. We'll
talk more about that when we come back from the break.
But for those of you listening, I'd like for you
to tune into my website. I'd like you to visit
my website, Rickwillis dot com. Please visit my biography, read

(24:35):
about it, see if I'm the kind of person that
you'd like to represent you in buying or selling. And
also that you can access multiple listing directly from my
website and get better quality information than you would just
going to the Zillos or the Truliers of the world. Folks,
We're going to take a break and I'll be right here. Hello,

(24:56):
this is Rick Willis. I assume you've been listening to
the Rick Willis Real Estate Show. If so, are you
considering buying, selling, or investing in real estate? If so,
you want to make sure you request a copy and
read my special reports designed especially for those people looking

(25:17):
to buy or sell or invest in real estate. Special
Report number one is about buying real estate, and you'll
discover how to get your best buy and avoid the
ten biggest mistakes home buyers make Special Report Number two
is for those people thinking of selling their property. You'll

(25:38):
discover how to get your home sold quickly and net
the most money. And if you're thinking of investing in
real estate, you'll discover why you want to own income
producing property and what to buy for the safest place
to put your money. You'll also discover how to use
your retirement account for a one ca ira without having

(26:02):
to pay a penalty to buy and own income producing property.
Please note I'm saying income producing property, I'm not simply
saying investment property. To get a free copy of any
of the special reports I just mentioned about buying, selling,
or investing in real estate, please text me at eight

(26:23):
four three three two seven three oh one seven or
email me at Rick Atrickwillis dot com. Additionally, please visit
my website at Rickwillis dot com. You'll learn about my
background as well as accessing multiple listing. Again, I repeat,

(26:45):
please don't buy, sell, or invest in real estate without
requesting and reading your special report on buying, selling or
investing in real estate. Text eight four three three two
seven three zero one seven or email Rick Atrickquillis dot com.
When you text or email me please make sure you

(27:06):
request a very specific special report on buying, selling, or investing,
and I will turn around and email you the special report.
Thank you. Welcome back, Welcome back to Charleston. Welcome back

(27:32):
to the referent segment of today's Rick willis real Estate. Well,
we started off by talking about the status of a
national market in real estate, local market in real estate,
and now we're reviewing a contract of sale. So, whether
you're a buyer or a seller, at some point you're
going to need to review this document. And I'm trying

(27:55):
to give you some tips and pointers on things to
look out for when you're either felling out the agreement
as a buyer or reviewing it a contract submitted to
you as a seller. And I ended up at the
end of the last break talking about possession date. You see,
what a lot of people don't know is that you

(28:16):
can put in any date you want in this document.
So theoretically you could go out today, sign a contract
and say I want to close in December of twenty
twenty five. Now, what are your chances of getting that accepted?
And certain none, but every seller will usually accept thirty

(28:38):
to sixty days, and many will accept ninety days. And
your property offer might be contingent on the sale of
another property, in which case you make a notation of
that on the closing date to be within a certain
number of days or weeks after the sale or contract
on your home that you're selling. But just know that

(29:02):
you have a latitude of putting a data in there.
The next paragraph in the contract talks about earnest money deposit. Now,
earnest money. When you're buying a property, you want to
put up a deposit that does not offend the seller
in terms of how low it is and high enough

(29:22):
that you get their attention. So, unless you're a VA
buyer where you're putting zero down payment and asking the
seller to pay all your closing costs, it's typical and
customary in this area that your earnest money deposit be
at least one percent of the sales price. So if

(29:44):
you're buying a four hundred thousand dollars property, your earnest
money to be four thousand dollars. Now, that is just
a rule of thumb, it's not a policy. It's not
a formal have to. I usually error when I'm representing
a buyer on requesting that the buyer put up more
money than that one percent, because again it shows good

(30:06):
faith on the part of the buyer when the listing
agent is presenting that offer to the seller, and that
money goes in either an attorney trust account or a
real estate agents Companies trust account, so it's not at
risk of you losing it. Now, the flip side of

(30:27):
that is if the deal doesn't make it because of
any for any reason, in order for the deposit to
be returned, you have to have what is called a
release signed of the buyer and the seller. And if
the release isn't signed by the buyer or the seller,
then somebody has to go to court to force the

(30:48):
deposit to be returned. Now, the good news is in
this jurisdiction is that Small Claims Court can hear a
case up to seventy five hundred dollars and it's usually
a pretty quick transaction. But I want you to be
assured that majority of the time, ninety five ninety eight

(31:09):
ninety nine percent of the time, when a transaction doesn't
make it for any reason, there's no reason why. And
it usually occurs that a seller will gladly sign a
release because they want to get their property back on
the market. For sale. Also if you can't buy it. Now,

(31:29):
there's another part of a sales contract that is called
transaction costs. Now, transaction costs used to be known as
closing costs, and they changed the name of this recently
in the last couple of years to broaden the scope
of it. So transaction costs. There are standard customary things

(31:53):
that a buyer normally pays and standard customary things that
a seller normally pays. I recently sold a property, or
shall I say I recently represented a buyer on a
property that the seller said, I'm not going to pay
any closing costs, and because the buyer was getting a

(32:14):
good deal, the buyer did agree to pay both the
seller's closing costs or transaction costs as well as his
closing costs, and the buyer again got a very very
good deal on that property. Now, the flip side of
that is when you're dealing with a seller who's motivated

(32:36):
or there might be a high asking price on the property.
If I'm representing a buyer, we might be asking the
seller to pay for a portion of, if not all,
of the buyer's transaction or closing costs, including pre paid items.
You see when the typical person talks about closing costs.

(32:57):
There's two components of closing costs in terms of categories.
There's the standard things like a title search and title
insurance that a buyer has to have, and then there's
things like prepaid taxes, prepaid insurance policy that a lender

(33:18):
is going to require. And if you're trying to get
the best deal possible on behalf of the buyer, we're
going to ask the seller to pay for those prepaid items.
Also of prepaid taxes, prepaid insurance. So depending upon the
type of financing and depending upon whether you're a homeowner,

(33:40):
occupant or an investor, the seller can pay up to
two percent between two and six percent of the sales
price towards the buyer's transaction costs. And again that could
be for closing costs, it could be for prepaid items.
It can even be applied in certain types of financing

(34:03):
towards the buyer's agent's commission. It can be applied towards
an interest rate buy down on behalf of the buyer.
Many different things can be done with that concession. And
if you're a seller, you need to understand that there
are buyers that might have the income to buy your property,
but they may not have the cash for both the

(34:26):
down payment and the transaction costs, so you don't You
need to make sure you have an open mind if
you're a seller as to what you're willing to pay.
And in some cases the property might need some fix
up or some repairs. And again, as a seller, you
need to be respectful of the fact that when you

(34:47):
look at what you're asking for the property and what
the buyer is willing to pay, that they may need
to come out of pocket for certain things. Another paragraph
in the contract of saying talks about a homeowner association
and any assessments. In some cases, the community requires a

(35:08):
flat fee before a property is conveyed, and the seller
usually wants the buyer to pay, and the buyer wants
the seller to pay. Well, it's a negotiable item. So again,
depending upon how bad you want the property, are you
the only one making the offer or are there multiple offers?

(35:28):
You have to act accordingly. Now in the contract of sale,
there's a clause about financing. You see about twenty five
percent of all buyers to twenty eight percent pay cash.
The other folks go out and get a mortgage. And
depending upon the property you're buying, where it's located, and

(35:50):
type of property, you might have to be You might
be able to buy it putting zero down payment, or
you might have to put thirty percent down. So the
realtor you're working with must have a good working knowledge
of financing, and you need to make sure that when
you get your pre approval letter, you know the amount

(36:11):
of cash that's needed for your down payment. Now, if
you're contingent on a sale of a home, you need
to usually have a separate addendum that goes with this
financing that talks about the fact that you're buying it
subject to and contingent on the sale of an individual property,

(36:35):
and there's a certain amount of time that you'll have
to get your property under contract and a certain amount
of time to close that respective property. One of the
most useful clauses in the contract if you're a buyer,
is there something called a due diligence period. Now, it

(36:55):
used to be years ago before these contracts were modified
that it used to be a home inspection contingency clause. Well,
nowadays it's all encompassing and it just says due diligence.
The due diligence period begins on a certain date and time,

(37:17):
and the buyer has a certain amount of time to
check out anything they want, and that would include getting
a home inspection done if they choose to. Does it
have a well or septic do they need inspecting? What
about verifying the school system? So if you're a buyer,
at the end of the day, you don't have to

(37:38):
have all of your questions answered. You may want to know,
if you're buying a condo, what the budget for the
condo is, Well, you can get that information during the
due diligence period. I recently sold a rental property investment
property to somebody and he wanted the buyer wanted to
see all the leases. Well, we didn't wait and have

(38:01):
the contract contingent on that. That was a part of
the due diligence that we are prepared to ask for
and receive during a certain period of time. So anyway
due diligence, when I'm representing a buyer, I want to
give them all the time they need to conduct all
their respective inspections. When I'm representing a seller and I

(38:24):
receive an offer from another broker and they're asking for
a long time, I question them and say, what is
it that's going to take this much time? Because I
want to have that time as short as possible. Now,
there's also a provision in here that says if you
terminate the contract, the buyer agrees to pay a fee

(38:47):
of blank to terminate under the due diligence. Sometimes that
number is ten thousand dollars on an expensive property or
a unique property. In other times it's zero. It all
depends on the property, depends on the buyer's willingness to
put up a certain amount of money, and it depends

(39:07):
on what the seller will accept there. Obviously, if I'm
representing the buyer, I want to put zero in there.
And there's times that we do that and it works,
and there's times the seller comes back and says, no,
you're welcome to have the time to take take it
off the market for sale, but if you're not going
to go through with it, I want you to forfeit

(39:30):
five hundred dollars, one thousand dollars or any other amount.
In the contract of sale, there's a clause about appraised
value and if you're going to get financing, the financing
is going to be contingent on an appraisal. Now, during
the boom time of two thousand, you know that right

(39:54):
after the pandemic started, there were people writing offers not
contingent on a pray value. They were willing to take
the risk that it would appraise, or they were willing
to pay cash above the appraisal. Most people today are
not willing to do that. So if you're the buyer
and you don't think a home is worth what your

(40:16):
what you're looking at the asking price, just know that
you're not required to buy a property if you're going
to get a loan if a third party appraiser says
it's not worth equal or greater than what your offer is.
Another additional clause in a contract is a wood infestation

(40:38):
report that we're going to come back and talk about
right after this break, Folks. I do this show one
hour a week and the rest of the time I
help people buy, sell, and invest in property. Please reach
out to me for any questions or if I can
do a market analysis for you if you're selling or
have a consultation with you if you're looking to buy,

(41:01):
call me directly eight four three three two seven three
zero one seven or email me. Rick at Rickwillis dot com.
Visit my website Rickwillis dot com. Folks will be right
back after this break. Hello, this is Rick Willis. I
assume you've been listening to the Rick Willis Real Estate Show.

(41:22):
If so, are you considering buying, selling, or investing in
real estate? If so, you want to make sure you
request a copy and read my special reports designed especially
for those people looking to buy, or sell or invest
in real estate. Special Report number one is about buying

(41:43):
real estate, and you'll discover how to get your best
buy and avoid the ten biggest mistakes home buyers make.
Special Report number two is for those people thinking of
selling their property. You'll discover how to get your home
soul quickly and get the most money. And if you're

(42:04):
thinking of investing in real estate, you'll discover why you
want to own income producing property and what to buy
for the safest place to put your money. You'll also
discover how to use your retirement account for oh one
k and ira without having to pay a penalty to
buy and own income producing property. Please note I'm saying

(42:28):
income producing property, I'm not simply saying investment property. To
get a free copy of any of the special reports
I just mentioned, about buying, selling, or investing in real estate.
Please text me at eight four three three two seven
three oh one seven or email me at Rick Atrickwillis

(42:50):
dot com. Additionally, please visit my website at Rickwillis dot com.
You'll learn about my background as well as accessing multiple listing. Again,
I repeat, please, don't buy, sell, or invest in real
estate without requesting and reading your special report on buying, selling,

(43:13):
or investing in real estate. Text eight four three three
two seven three zero one seven or email Rick Atriquilis
dot com. When you text or email me, please make
sure you request a very specific special report on buying, selling,
or investing and I will turn around and email you

(43:34):
the special report. Thank you. Welcome back to Charlson. Welcome

(43:56):
back to the final segment of today's Rick Willis Estate Show.
We've been going through a contract of sale and I've
been mentioning comments about different parts of the contract to
help you if you're both a buyer or a seller.
And I was left off talking about what is called
a wood infestation report. Formerly in the business, we know

(44:20):
it as a CL one hundred, and a CL one
hundred is an inspection of a property that a lender
usually requires unless the both parties waive it, and it
will show the seller excuse me, It'll tell the buyer
is there any fun guy in the property? Is there

(44:40):
any wood rot? Are there any termites or other wood
infestation in the property? And if you're representing, if I'm
representing a buyer, I want the seller to pay for that.
If I'm representing a seller, were usually agree to pay that,
happy to do so. Now there's a misconception in this

(45:03):
market that a termite bond is sufficient. Termite bond is
not the same as a CELL one hundred. Termite bond
means exactly what it says. The property is bonded against
active infestation of bugs. But a cell one hundred branches
out beyond that and deals with things like wood rot

(45:25):
and a few other items. So a CL one hundred
is still required. Now there's a number of other paragraphs
in a contract of sale. But I want to switch
gears right here and just talk about one of my
favorite subjects for the rest of the show, and that

(45:45):
is I want to talk to you about income producing
real estate. I have a particular passion for this because
so many of you do not know about income producing
property and The only time people tend to understand it
is when I explain it to them. Don't confuse an
income property with just a plane, rental property or an

(46:10):
investment property. You see, there's properties you can buy that
have a positive cash flow from the moment you buy them. Now,
I recently listed, and everyone that's a potential investor or
even a homeowner occupant, pay special attention to what I'm
now going to tell you. I just put a property

(46:30):
on the market for sale that has what is called
owner financing. No bank loan is needed. The seller of
the property has said I will hold a mortgage. Now
that means that there's no formal credit score required. That
means there's no formal loan to income, loan to value

(46:51):
ratio required. This particular owner is seventy eight years old,
is relocating out of the area, and this particular property
in the past has been rented for two thousand dollars
per month. This person just listed the property seller financing.

(47:11):
Owner financing could be a great investment property. It could
be a great opportunity for an owner occupant. So this
is a condominium. It's not a single family home, it's
not a townhouse. It's a second floor condominium and it's
in a very very very nice area of North Charleston,

(47:32):
right next to Ladsen Up off Otranto Road. So if
you're in the market for an owner financing situation, which
almost never comes along where you can negotiate the down payment,
the interest rate, and the monthly payments, you want to
reach out to me directly. But regardless of whether that

(47:53):
is something you're interested in or not, you want to
be looking for income producing real estate. Anybody out there
that has any money in the stock market, I'm going
to suggest that you take some gains, take some of
your profits from the stock market increasing so greatly in
the last number of months, the last number of years,

(48:14):
and go in diversify your investment portfolio and buy some
income property. Yes, pay the taxes if you need to
pay the capital gains tax, and let's reallocate your asset
to a safer place. You see, many people right now
want to keep their money in the stock market because

(48:34):
they see it's been rising so rapidly. And I'm going
to suggest to you that's the very same reason that
you ought to be getting money out of the stock market,
because it's risen for so long and recently so high.
There's a risk out there. I subscribe to a lot
of professional journals, blogs, podcasts, and the people in the

(48:58):
world of equities, people in the world that know about
stocks are saying that there's going to be a major correction,
and the major correction, you want to make sure you're
getting your money out of the stock market before the correction.
Better it is to pay some income tax, long term
capital gains tax, and put your money in a safer

(49:19):
place where you can recover very quickly. And whatever you
think you can gain in the stock market by leaving
your money there, you can do the same or equal
by buying income producing real estate. I just recently help
someone buy an income property where they put up fifty

(49:40):
thousand dollars cash to buy the property and they have
a positive cash flow coming out of that property of
about four thousand dollars a year. I believe that would
be about an eight percent cash position. And that doesn't
include the fact that the property is appreciating and you

(50:00):
have income tax benefits while you own it. You see,
while you own an income property, you have the ability,
through a tax deduction called depreciation, to offset your income
and virtually make it tax free by doing what is
called depreciating your property. The IRS allows you to take

(50:23):
the value of the improvement that the property is there
sits on the land, the improvement itself, and you can
depreciate that residential property over twenty seven point five years,
and I believe the commercial property is thirty nine years,
So you can divide that number twenty seven point five

(50:45):
and every year you divide that into the amount of
the asset you're buying, that is the sticks and bricks
and the mortar, and you get to subtract that amount
off your taxable income every year. You see, if you're
buying a property, you're going to be getting tax savings.
And not only do you get a tax savings while

(51:06):
you own the property, if you resell it, you have
the ability to resell the property and never pay any
taxes at the time you sell it, providing you follow
the Internal Revenue ten thirty one exchange Provision, which means
you can sell any property that you have and reinvest

(51:27):
your money in other properties or a property, and if
you follow their guidelines, pay no taxes when you sell it.
You can technically defer all of your income tax until
you pass away and then pass the property on to
your estate, where they will pay no income tax on
that same respective property. Now, there's people listening to me

(51:49):
right now that own property that has appreciated so much
in value that you should be calling me and having
a private conversation with me about how you can sell
that property and pay zero income tax. And if there's
anybody listening that has any vacant land or property that's
not bringing you sufficient income, let's talk about how you

(52:12):
can convert that vacant land that you've been holding to income.
Vacant Land is only good if it's appreciating at about
twenty five to fifty percent a year. Otherwise you're better
off to take that vacant land and convert it to income.
You see, you can't survive off the income from vacant

(52:34):
land very well, but you can convert that vacant land
to income. Now, others of you listening right now need
to know that you can take your four oh one
k in your Ira and without paying a penalty, you
can buy income producing real estate. Now you have to
change custodians from where it is now, but if you

(52:57):
have money in a four oh one k or Ira,
you can convert that to what is called a self
directed IRA or a self directed four oh one k
and we can go out and buy you some property
with income. And that's what you want your primary retirement
to be based on, is income from real estate. Don't

(53:20):
keep buying, don't keep putting money in a four to
oh one k IRA in the stock market. Number one,
it's liable to be You're liable to have a correction
and downturn, but convert it into an income property. I
help many people do this, and it's very easy to do.
And again you can do so without paying a penalty.

(53:42):
So if you're in the market to create income from
your assets, please reach out to me and we'll help
you do that. Later today, I'm going to be visiting
a homeowner in Mount Pleasant who called me this week
and he said, I, uh, I live in a home

(54:03):
in Mountain Pleasant. It's worth over a million dollars and
I have an accessory dwelling unit over a garage. He said.
My goal is to move out of my large home.
My wife's recently passed away, and I want to move
into the garage. But I want you to sell the
property and I want a lifetime rental for the garage.

(54:28):
Now I'm looking forward to meeting this gentleman today because
I'm going to help him accomplish that. He's going to
be able to stay on his own property into a
smaller structure than the main house, and he's going to
be able to sell his existing home for over a
million dollars and have a lifetime rental on his accessory

(54:50):
dwelling unit. And anybody listening might want to follow up
with me on that. Call me eight four three three
two seven three zero one seven, email me Rick at
Rickwillows dot com. Folks, have a great weekend and please
reach out to me. I look forward to speaking with you.