Why You Need A Buyer's Agent

Why You Need A Buyer's Agent

Episode Transcript

(00:00):
The following is a paid commercial programon ninety four three WSC. The views
expressed by the host of this programdo not necessarily reflect the views of iHeartMedia
ninety four three WSC it's advertiser,sponsors or management. This is the Real
Estate Show with Rick Willis. Ishow about home sales, mortgage issues,
investing at everything about the American dreamand I mean the wa that's someone who

(00:23):
enjoys radio and really enjoys your program. And now The Real Estate Show with
Rick Willis on ninety four three tellingyou SC Hello, Charleston, Welcome,
Welcome to the Rick Willis Real EstateShow. Well, we talk real estate
here. Those of you that havebeen listening for weeks or months or years

(00:45):
know that when I say real estate, that could be financing, that could
be investment property, it could bevacant land, it could be commercial.
Many different types of real estate anddifferent aspects to it. And there was
a time when we first started thisshow twenty years ago, when we used

(01:07):
to do the show live and I'dbe in the studio and you could call
in with a question and I wouldanswer your question live on the air.
Then came the pandemic and we startedworking remote, and we've been remote ever
since. I record this show duringthe week you hear it on the weekend,

(01:30):
either Saturday from noon to one orSunday from nine to ten am.
Always, however, it's a pleasureto have you reach out to me with
questions that if you would like meto answer them on the air live so
that you and other people can hearthem well. For those of you that

(01:52):
have listened over the years, youknow that I like to start off the
show by giving you an update onthe local market conditions, and I've been
saying for the last number of weeks, probably the last number of months,
that the local housing market is stableand steady. As of this morning,

(02:13):
when we're prerecording this show, there'stwo thousand, two hundred and ninety six
active residential listings, and always Iwant to put that in context for the
people that haven't heard the show before. During the downturn of the economic cycle
in two thousand and eight, nineten, we had as many as ten

(02:35):
thousand active residential listings, and goingback right before they raised the interest rates
here a year plus ago, wehad as few as less a few as
a thousand active residential listings. Actuallya little bit below a thousand, nine
hundred and some active listings, andnow we've increased the number of listings to

(03:00):
two thousand, two hundred ninety sixas of this morning. And by the
way, in our MLS system,it the number changes in real time,
so before my show ends, itwill no longer be two two hundred ninety
six. It could be more,could be less. Either a brand new
listing comes on the market, ora property is sold and goes to closing

(03:23):
and it's no longer an active listing, or it goes under contract and becomes
contingent or pending. And just forthe record, those of you that do
check out listings, we have acategory called active, meaning it's still actively
looking for a buyer to place itunder contract. We have another category called

(03:46):
ac active contingent. So if you'reout looking for listings and you see contingent
or active contingent, that means itis under a contract but it has some
kind of a contingency on financing,home inspection, etc. And then there's
another category called pending, which meansit's under contract and all contingencies have been

(04:12):
removed. And then finally it goesto a category called sold. And there
are some websites, by the way, that don't do a very good job
of keeping up with that. Whenpeople tell me they're looking on Zillo or
Trulya or some other sites, you'llfind things that appear to be actively for

(04:35):
sale that when people call me thatI'm working with and I check it out
in my local MLS, I findthat those properties are under contract. You
see these big aggregators, i e. The Zillos of the world. What
they do is they have an agreementwith the National Association of Real Tours,

(04:58):
and I'm sure there's a few thatthey pay and they get access to all
of the listings throughout all of theUnited States. And they don't have a
self serving reason to be up todate and accurate. As a matter of
fact, they have just the oppositeself serving reason if they're behind the times

(05:20):
and are not keeping up in realtime with what maybe under contract or available.
They still get people looking, theyget people clicking, they get people
interacting, which, based on theirfee structure of how they charge people that
advertise, they make more money.So if you want to make sure you

(05:43):
are getting real information in real time, you need to make sure you have
access to the Greater Charleston Area MLSAnd if you contact me directly, I
can set you up on an automatedsearch. Actually you can do it automatically
on my website. But if Italk with you about what you're looking for,

(06:04):
I promise you I'll make suggestions thatwill get you more of the kind
of properties that you want to see. Lots of little nuances about how you
program the computer to get the typeof property you're looking for. Okay,
so what is the happening in themarketplace. It's steady. I mentioned to

(06:28):
you the number of active listings,and yes, there are still multiple offers
out there on properties. Yesterday Iwrote an offer on behalf of a buyer,
and believe it or not, thereor two offers on the property.
When I called, mine would havebeen the third and will be the third,

(06:50):
and we got ours accepted. AndI might add that part of working
with a real tour is having anexperienced realtor that knows how to talk to
other agents. You see, inthe business we're in, if you're going
to be buying a property, you'reprobably not going to be buying a property

(07:14):
that's also listed with the agent you'reworking with as your buyer's agent message special
for the people looking for houses.You want a buyer's agent, and you
want a buyer's agent right away inthe beginning of the process when you start
looking. And if you come acrossthat ideal property and you don't have a

(07:36):
buyer's agent, number one year temptedto work with the listing agent who is
working for and on behalf of thebest interest of the seller, not you.
So you want to get your ownbuyer's agent. And when I'm representing
a buyer and they have an interestin a property from the property. While

(07:59):
I'm showing the property, I takemy cell phone out and we call the
listing agent and we ask questions rightin the presence of the buyer that I'm
working with, And I ask questionsof the listing agent. Do you have
any offers on the property? Haveyou had any past offers that have been

(08:20):
turned down? Why were they turneddown? What's the most important thing to
the seller other than price? Ifthey say, well, we have an
offer in hand, well, it'sstill showing as active. Has it been
acted on? No? Not yet. Do you have time for another offer

(08:41):
if we get one to you inthe next several hours, Yes, and
again, this is what a buyer'sagent is supposed to do, and most
buyer agents don't know to do this. I go farther and I say,
well, is the offer that youhave at asking price over the asking price

(09:05):
or less than the asking price?Now, depending upon who the listing agent
is, well determine how they answerthat. There's many an agent that will
say, well, you know,I can't tell you that. Bring us
your best offer, they might say, in which case I'll come back again

(09:26):
and say, well, I knowyou can't tell me the price, but
is it less than the asking price? Well, let's suppose they're really,
really, really stubbornly representing their sellerand they come back and say, well,
I really can't tell you that,just bring us your best offer.
Well, if I bring you afull price offer, is that going to

(09:48):
be enough to put us in firstplace? First position? With your multiple
offers? What other than the priceis critical to your seller? What's important
to your seller? Is it stayingin the house after closing, having a
delayed closing? What is important toyour seller other than price? And if

(10:11):
I'm representing a cash buyer, Ialways let the other agent know that and
ask if that might affect their decisionmaking if it's a cash offer and a
quick closing. If I'm representing afirst time buyer who's getting a one hundred
percent financing but it's preapproved and canclose in thirty days, I want to

(10:33):
know if that's acceptable also, andI'll ask are the other offers cash?
Are they asking the seller to pantyclosing costs? Said differently, Whoever it
is that you have as a buyer'sagent, you want them actively representing you.
Folks were at a time. Myname is Rick Willis. I am

(10:54):
an active practicing realtor. I wantyou to reach out to me. Let
me help you buy, let mehelp you sell. Well, let's just
have a conversation. Call me directly, Rick Willis eight four three three two
seven three zero one seven, Emailme Rick at Rickwillis dot com and visit
my website Rickwillis dot com. We'llbe right back after this break. If

(11:18):
you have real estate questions or ifyou need a market analysis on your property,
call Rick right now at eight fourthree three two seven three zero one
seven, or you can email themat Rick at Rickwillis dot com. Check
out Rick's bio and access all propertieson the MLS at Rickwillis dot com.
Welcome back, Welcome back, Charleston, Welcome back to the second segment of

(11:43):
the Rickwillis Real Estate Show. Well, folks, in that first segment,
I talk to you about the statusof the market and mentioned to you that
it's important that you have the rightbuyer's agent representing you. And most people

(12:05):
that are looking for a property I'vediscovered don't really understand the need for a
buyer's agent and they don't understand thevalue of the right experienced buyer's agent.
You see, when a seller putstheir property on the market for sale,

(12:28):
they list it with a company andthe company has an individual real estate agent
and the agreement that is made betweenthe seller and the company, and of
course there's an individual agent. Apart of that is that they have a
fiduciary duty to represent the best interestof the seller when they sign that listing

(12:54):
agreement exclusive authorization to sell and whenyou, the potential buyer, make contact
with the listing agent. It's importantthat you know that and it's fine if
you make an initial contact with alisting agent, ask a few questions about
the property. Not a problem,but before you go and look at that

(13:20):
property. You want to be intouch with your buyer's agent. Let me
say it differently. If you hadan issue or you had to go to
court and there, let's just sayit was a traffic accident and the other

(13:43):
person had an attorney representing them,would you want your own attorney representing you
or would you want to be dealingwith the attorney that's already been hired by
the person on the other side ofthe transaction, on the legal transaction,
who's also representing the other party who'sagainst you. And it's important that you

(14:07):
look at it that way. Yousee, the seller wants the highest possible
price, You want the lowest possibleprice. And there's other terms and conditions
as a part of that contract,closing date, maybe some personal items that
could be negotiable, etc. Allthings being equal, if it didn't cost

(14:28):
you any money and you needed togo to court, wouldn't you want your
own attorney? And if you weregoing to select an attorney to represent you
in a legal matter, wouldn't youwant to at least know that who you
are selecting is experienced and they're aspecialist in the respective area of what it

(14:50):
is you want to do. Folks, there are six thousand, five hundred
real estate licensees in the Greater Charlestonarea. It won't cost you any money
to work with any of them.Any of them would probably be glad to

(15:11):
say, yeah, I'll go oheatand show you this house or be your
buyer's agent. But it shouldn't bethat simple. You, the prospective buyer,
should be interviewing and know that youhave a choice of people that would
represent you. And that's the keyword that when you select a buyer's agent,

(15:35):
you want to engage in an agreementwhereby they represent you a buyer agency
representation agreement, and you want themto represent you exclusively instead of saying,
well, I'll just call you whenI need you if I need you.

(15:56):
No, no, no no.You see, the right buyer's agent can
play such an important rule. Letme give you an example of some things
that are important to you to knowwhen you have a buyer's agent number one
on the front end. When Ihave somebody that is referred to me that
is going to be buying or ifit's just a random phone call, first

(16:18):
thing I want to do is meetwith them in person. Yeah, I
know, we're in a world wherethat's not absolutely necessary, and a lot
of people don't, but to meit's important. So I'll go out of
my way to meet personally with someonewho's interested in buying a property, so
I can know who they are,they can know who I am, and

(16:42):
we interview each other. I mean, I'll ask the person you know about
what they want and where they wantit. I'll ask them some personal financial
questions and how much cash they haveto work with, have they been to
a lender, how long have theybeen on their job, are they salary

(17:06):
or are they tine nine? Dothey get bonuses or overtime? So I
want to know who they are personally, financially, job wise, and when
they say to me. When Isay, tell me about the property that
you'd like to have, sometimes peoplewill say it's a four bedroom, and
I'll say, well, there's somethingin our area called a frog finished room

(17:30):
over the garage if it had threehonest bedrooms and a room over the garage,
but it didn't have a closet init, so it can't legitimately be
called a bedroom. Could that possiblywork? Well, I want something,
and oh many times it'll be yes, well great. Then you don't just
look for a four bedroom home whenyou're searching correct, right, that's right.

(17:53):
And then we talk about schools ifthey have kids, and we talk
about where they work, and themaximum commuting distance would be. What is
their experience level of looking at individualproperties or neighborhoods. And again, it's
a matter of asking questions and listening, asking questions and listening, asking and

(18:15):
listening. And I've discovered that thatchemistry works well when it's in person.
So that's where I start, isto meet with people and then I ask
them, would you like me toset you up on an automated search whereby

(18:36):
you can see properties that are comingon the market that fit your criteria.
And I always try to expand thecriteria rather than contract. I mean,
there's some people that are so specificthat, oh, I want a swimming
pool in the backyard, and Iwant to make sure it's a fenced yard.

(18:56):
And you can actually be so specificthat you can't find anything that matches
what you're looking for. But whenpeople say, for example, it's a
fenced yard, well, what ifwe find a house and it's perfect and
it doesn't have a fenced yard,but you have the ability to put one
in but everything else is perfect,then it's a great deal. Could that

(19:18):
work for you, etc. Etc. Etc. So you want to make
sure, folks that you have abuyer's agent from the beginning. They will
refer you to the best lender thatthey know to get you a pre approval
letter. Sometimes it's a prequalification letter, sometimes it's a pre approval, and

(19:40):
sometimes it's a formal approval. Andyou haven't even found a house yet,
and you've already gotten some of yourfinancial docs to the lender to get a
headstart. We talk about different kindsof financing. We talk about what the
monthly payment would be. We talkabout how to avoid private mortgage insurance.

(20:02):
When it comes time to actually lookingat a property, the buyer's agent is
there with you when you see it. When we go through the house,
I'm looking for defects in the house, not looking for good things. I'm
not trying to sell the house topeople. And sometimes I even bring a
contractor with me if it needs work, and I know it needs work on

(20:23):
the front end, Let's find outwhat's wrong with this house. Not a
formal inspection per se, but let'sfind out what it might cost to fix
certain things up. Because it's goodfor negotiating. Folks, you want to
have your own buyer's agent, selfserving as it might be. When I'm

(20:44):
not doing this show, I helppeople buy, and I help people buy
whatever they want, and I helpthem get a great deal. There's a
whole lot more that a buyer's agentcan do for you, and we'll talk
about it more after the break.But that being said, reach out to
me if you'd like to interview meabout being your buyer's agent. And remember

(21:07):
there is never a cost to havesomebody with my level of experience representing you.
And if you're a parent listening andyour kids might be looking to buy
or somebody you know, let meknow how to contact them and I'll reach
out to them and help them.Folks, call me directly, Rick Willis.
Let's talk about real estate. Anythingto do with real estate. Eight

(21:30):
four three three two seven three zeroone seven Email me Rick at Rickwillis dot
com. Visit my website Rickwillis dotcom, read my bio, and you
can even access multiple list directly frommy website. Folks will be right back
after this break. If you havereal estate questions or if you need a

(21:52):
market analysis on your property. CallRick right now at eight four three three
two seven three zero one seven,or you can eat no limit Rick Rickwillis
dot com. Check out Rick's bioand access all properties on the MLS at
Rickwillis dot com. Welcome back,Welcome back to Charleston. Welcome back to
the third segment of today's Rickwillis RealEstate Show. Well, prior to the

(22:18):
break, we were talking about theimportance of having a buyer's agent, having
the right buyer's agent, having avery experienced buyer's agent who is representing you,
and that buyer's agent, you willnot be paying the buyer's agent that
you choose to have representing you whenyou buy. It's going to get paid

(22:41):
a part of the commission that theseller agreed to pay when they placed their
home on the market for sale.So be clear that the buyer's agent will
get paid, just not being paidfrom you. Now that being said,
I was talking about the benefits ofhaving a buyer's agent, and we talked

(23:03):
about getting a pre approval letter orgetting pre approved on the front end,
getting to the right lender, andfolks, there are lots of lenders out
there, lots of different loan programs. I mean, you can go to
a credit union, you can goto the place where you bank. You
can go to a large bank,a small bank. You can go online,

(23:29):
use somebody online. I personally alwaysrecommend, by the way that you
use a local brick and mortar lender. Why because they've got their reputation tied
up with making sure they do agood job on your behalf. You deal
with an online lender, and there'sno shortage of them either. You're just

(23:52):
a number, you're just a name, and you're basically dealing with a telemarketer,
if you will. So you workwith somebody. Your buyer's agent can
recommend to you people that they haveworked with in the past. You know
you're not going to get ripped offon the interest rate, and the service
will be quality because they've worked withthem before. And again, that's why

(24:15):
you want a very experienced buyer's agent. So that being said, what else
can a buyer's agent do for you? They help you set up an automated
search for listings. You and yourpartner, the buyer's agent, are seeking
out properties that might fit your criteriaor could fit your criteria, and you

(24:41):
find the property that you want tosee the buyer agent sets up an appointment
for you to see it, andeven that it's experience. Every now and
then I try to set up anappointment for somebody and they say the time
is not available. We can't gothen, and I know it's a hot
property. I know it's going tobe sold quickly. I get on the

(25:03):
phone and I call the listing agentto find every way in the world to
get an exception to what the showingservice tells me is just the standard answer
of when we can go to theproperty. And again, a relationship that
a buyer's agent has with a lotof other agents makes a huge difference in
this business. You see a propertythat you like, and it comes down

(25:27):
to what should I offer. Agood buyer's agent is going to go to
work on your behalf, and it'snot always by the way of how much
less than the asking price you shouldoffer. Yesterday I had an offer that
I wrote on behalf of a buyer, and this particular individual insisted on my

(25:51):
buyer that I was working with,insisted on offering something less than the asking
price, and there was another offeralready submitted on the price, and I
said to Don, I said,Don, there's another offer already there,
offer full price and maybe offer morethan asking price. He offered full price,

(26:12):
the seller countered back above asking pricebecause they liked the other terms of
his offer, and I'll be meetinghim today to get that offer signed.
You see, when you're working withan experienced st agent, it's not about
what they're asking, it's what isthis property worth, and what is it
worth to you, the prospective buyer. This property met all the criteria of

(26:37):
the buyer that I was representing yesterdayat the property when we wrote the offer,
and we offered more than agreed topay more than asking price. Why
because it fit all of his specificcriteria and we've been looking for months now.
You get two times to negotiate anoffer in price. One is when

(27:02):
you make your offer. The othertime is when after you do your home
inspection, you find out what it'sgoing to require by way of fix up
and and or repairs or improvements thatyou choose to do. And that's where
we are now. I invited acontractor over to the property and that contractor

(27:23):
is working up prices as we speakfor not only things that needed repair,
but also things that he wanted upgradedin the property. And because it's going
to be a licensed contractor who's goingto be giving him the estimate, we

(27:44):
can use this as negotiating ability toget the price reduced that we had agreed
upon in the multiple offer situation.Experience makes a difference, folks. And
the agent who's experience that to bringthe contractor out and knows to have the
contractor present what they're going to present, so I can use it properly to

(28:07):
negotiate on behalf of the buyer clientmakes all the difference in the world.
What about getting a seller to payfor some of the costs. Are you
all aware that there's what you callthe market rate of financing, but there's
also something called a buy down.You see, it's possible to get a

(28:27):
buy down that will last for thirtyyears, meaning a permanent reduction in the
rate from the quoted rate or marketrate. And maybe we'll ask the seller
to pay some fees on behalf ofyou the buyer, to get a below
market interest rate, or maybe it'llbe what is called a two one buy
down or a three two one buydown, where in the beginning year and

(28:52):
second year and or third year youhave a lower interest rate or we get
a different type of finance dancing.You see, unfortunately, many many realtors
are not tuned into all the differenttypes of financing. You got financing whereby
the buyer can put no money downat all and have the lender or the

(29:17):
seller pay the closing costs. Youwant to work with an expert. This
is the most expensive thing you're goingto buy in your life, probably would
be this house, in the nexthouse, and the next house. There's
no time to have on the jobtraining with a friend in the business.
Okay, due diligence, there's aclause in a contract. For example,

(29:41):
yesterday when the buyer and the contractorwho was doing both the inspection and fix
up costs were there at the property. I went to the Handahan which is
where the property was, the cityof Handahan. I went there to talk
to the zone office to find outwhat the options and choices were because this

(30:03):
property was point six tenths of anacre, It had a garage, it
had a living area over the garageor potential living area over the garage,
and I wanted to find out withhis zoning allow an accessory dwelling unit.
Could the owner convert this garage intoanother living unit with kitchen and bathroom.

(30:26):
So sometimes it's not just the conditionof the property. Sometimes it's the zoning
or what you can do with itor can you subdivide it. The right
buyer's agent with the right experience knowshow to make that happen. What about
the appraisal you think the agent canhave any bearing on what the property appraises

(30:49):
for? What about the termite reportor what we call the cl one hundred,
negotiating any repairs that might have tobe done for wooden station issues or
would rot if you will. Lotsof little things that make a difference,
folks. Well, I'm not goingto be labor this except to say that

(31:11):
if you're going to be buying aproperty, you want your own buyer's agent.
You want them very experienced. Andremember it doesn't cost you any more
money, meaning the prices zero costszero to have your own buyer's agent.
Folks, I'd love to have youreach out to me and interview me if
you'd like to consider having a buyer'sagent. Okay, let's move on to

(31:33):
the next item here. For whenyou buy a property, you have a
choice of putting no money down.Sometimes you have a choice of putting three
percent down, five percent down,ten percent down, twenty percent down.

(31:53):
And most people start with the philosophyof I want to have the east monthly
payment possible. Well, on facevalue, that makes sense, I want
to have the least payment possible.But let me ask you this. Suppose

(32:14):
just suppose that you didn't use thetotal amount of cash that you had to
buy the home that you live in. Let's suppose that you had a conversation
with me, and maybe you usepart of your cash to buy the home
that you live in, and maybeyou're going to use part of your cash

(32:36):
to buy an investment property, andmaybe by buying the investment property, it'll
offset the payments that you have bynot putting all the money down on buying
your home. Folks, for everythousand dollars that you put as a down
payment, you're only saving anywhere fromfive dollars and eighty nine cents to six

(32:59):
dollars and fifty cents per month.For every thousand you want to put the
minimum down payment possible, even attoday's interest rates. That's correct with the
understanding that you have something called leverage, and rather than putting all your money

(33:22):
into a property that you live in. You use part of those funds to
buy an income producing property that willoffset the higher payments that you didn't want
in the home that you're living in. And I want to share with you
one other thing about homes that youbuy. And this is a special message

(33:45):
for those people that are sixty twoor older. So if you're sixty two
are older, pay attention to whatI'm about to say. Have you ever
heard of a reverse mortgage? Now, most people that when I use the
term reverse mortgage, they say I'mnot interested. And the only person that

(34:10):
would really say that would be somebodywho doesn't understand a reverse mortgage, because
if you buy a property with areverse mortgage, and yes, I'm saying
buy a property with a reverse mortgage. All the ads and commercials you'll see
talk about taking money out of yourproperty with a reverse mortgage, And I'm
saying, what if you put fiftypercent down? What if you bought a

(34:32):
home and had no monthly payments forthe rest of your life? Zero?
You would like that, wouldn't you? Yeah? And then use your other
cash if you have additional funds again, to buy an income producing property.
Now I'm going to expand this conceptof the reverse mortgage for those of you

(34:57):
that are sixty two or older,even if you own your home and plan
on without ever planning on moving,because it's a good concept if you understand
it properly. And for the youngstersout there might be something you learn about
and recommend to your parents, youraunt, your uncle, or sutter.
But suffice it to say that it'lltake me more time than I have that

(35:19):
right now than before the break,and we're going to take a break right
now. So reach out to meif I can help you answer any questions,
meet with me, help you buy, help you sell. Eight four
three three two seven three zero oneseven. Email me Rick at Rickwillis dot
com. Visit my website Rickwillis dotcom, read my biography, access multiple

(35:45):
list, and I'll look forward tospeaking with you. We'll be right back
after this break. If you havereal estate questions or if you need a
market analysis on your property, callRick right now at eight four three three
two seven three zero one seven oran email limit Rick Rickwillis dot com.
Check out Rick's bio and access allproperties on the MLS at Rickwillis dot com.

(36:08):
Welcome back, Welcome back to thefinal segment of today's Rickwillis Real Estate
Show. Well, we ended thelast segment by my mentioning the term reverse
mortgage. And I mentioned also inthe last segment that most people that hear
the word reverse mortgage say, Ihave no interest, and I'm here to

(36:31):
tell you that a reverse mortgage forthe right person is a godsend. Now,
the term reverse mortgage, if you'resixty two or older or getting close
to that age, you want tolisten carefully because you can use this in
your estate planning. Let's assume forjust a minute that you have a home

(36:55):
that you live in right now witha mortgage. Let's also assume that you
have more than a fifty percent equityposition in your home. It would be
possible for you to refinance your existingmortgage, get a reverse mortgage where you

(37:15):
make no monthly payments, none noprincipal or interest, and eliminate that monthly
payment. That's just like getting toraise, isn't it kind of the same
as paying it off, isn't it? So rather than paying off your house,
having a goal of paying it offand being quote debt free, you

(37:37):
want to die with a reverse mortgageon your property because you have the ability
to use the cash that you're notspending on your lifestyle or if you choose
to making an investment in another pieceof real estate. You see in a

(37:59):
reverse morege, which was signed intolaw by Ronald Reagan way back in the
day in the eighties, four seniorsthat are not earning the same amount of
money a reverse mortgage instead of payinga monthly payment. The commercials on TV
will tell you, well, youcan have the lender pay you a monthly

(38:22):
fee. Yes, that's accurate,But I suggest you go ahead and refinance
the house and eliminate the payment.And if you have your house paid for
or a lot of equity in thehouse, you can pull the money out
of your house tax free, taxfree, no taxes on the money you

(38:45):
pull out, have no monthly payments, and reinvest the money to create more
income. It wasn't very long agoI had somebody hear me talking about a
reverse mortgage. They went and talkedto a very special lender that I referred
them to. Most lenders, bythe way, don't do reverse mortgages,

(39:09):
and they pulled several hundred thousand dollarsout of their house. They were mortgage
free. Debt free in their house, no mortgage. They refinanced with a
reverse mortgage, pulled several hundred thousanddollars cash out tax free. Then we
went out and bought an investment propertyand paid cash for it. That brought

(39:30):
in several thousand dollars per month ofincome, and we're managing the property so
they don't have to do anything exceptrefinance and listen to me. And we
found them a great investment property.And then the money just gets deposited in

(39:52):
their account every month, so netnet net, after all expenses, they
got twenty thousand dollars more a yearof income coming in for the rest of
their life and no monthly payments onthe reverse mortgage. Now here's where the
misconception comes in. When you die, if it's a married couple, the

(40:21):
property goes to the spouse. Youdon't have to move out. The bank
doesn't take your property. It's yourproperty, You own it. You have
a deed to your property. Soif you're a married couple in one spouse
passes away, the other person remainsliving there if they choose to, and

(40:42):
you have to pay the taxes andthe insurance of course, and maintain the
property. But you have no monthlypayments, but the monthly payments accrue.
You say, well, what's thecats Well, I don't look at it
as a catch. You either makea normal, traditional monthly payment or in
a reverse mortgage situation where you've pulledcash out, you don't have any payments,

(41:06):
but the interest accrues. For example, let's just make it real simple.
Let's say you have a two hundredthousand dollars reverse mortgage at six percent
interest rate. Six percent interest ontwo hundred thousand is twelve thousand a year,
isn't it. You divide that bytwelve months. That's a thousand dollars

(41:29):
per month that you're not paying,but your mortgage amount goes up that much.
So you have a two hundred thousanddollars loan with a reverse mortgage,
and it increases the thousand dollars amonth. At the end of the first
month, you don't owe two hundredthousand any more. You owe two hundred

(41:49):
and one thousand. At the endof one year, you owe two hundred
and ten thousand dollars. He mightsay, well, why do I want
to do that? Why do Iwant my mortgage to go up? Well,
listen, you saved the thousand amonth, you didn't pay it.
So if you can understand the conceptof cash flow and the time value of

(42:16):
money, you're not making a mortgagepayment. Yes, it's accruing at a
thousand a month, and you mightsay, yeah, but I don't want
my kids to inherit this big debt. Well, let's look at this realistically.
If the house appreciates at four percenta year, and remember it's a

(42:38):
four hundred thousand dollar house, andyou've got a reverse mortgage of fifty percent
of it, which is two hundredthousand, but it's a four hundred thousand
dollar house. If that house appreciatesat three percent a year, that's twelve
thousand dollars, the same as whatyour loan went up, Isn't that right?

(42:59):
That's right. So if it appreciatesanything above three percent, you're making
money. It's not costing money.And your kids or your estate might inherit
that property and it's worth six hundredthousand dollars and your balance is accruing also.
But you remember you're using the moneyeither for your personal enjoyment and lifestyle

(43:24):
or to benefit you see in yourgrandkids more, because now you can afford
to take more trips. You cantake that one week vacation in the summer
with your kids and grandkids. Youcan go skiing out West and you pay
for the whole trip. Hey,it's quality of life. It's not just

(43:45):
money. Look at what you cando with it. Or if you really
understand it, maybe you'll do whatthe folks I just told you about did.
Take the extra proceeds, go buyanother property, and now you own
two properties that are appreciating. Folksare reverse mortgage makes total sense for the
quality of your life and the quantityof your life. If you understand it.

(44:09):
When you die, your spouse inheritsthe property. When both of you
pass away if you're a married couple, then it goes to your estate and
the kids that inherit the property.No, they can't move in it because
they're probably not sixty two or older, but they can sell it and get
all the equity. It doesn't belongto the government, and it doesn't belong

(44:31):
to the bank. You own it, you have the equity. It just
provides you more options while you're aliveof what to do with the excess proceeds.
And again you can invest it inadditional real estate if you choose to
and make it a benefit financially,not an obligation to people that might inherit

(44:51):
your estate. Well, we've talkedabout financing, We've talked about the market
conditions locally, talked about a buyer'sagent. There's a whole lot to this
thing called real estate, isn't there, folks. I've done this for fifty
years. I'm seventy five years old. I got into the real estate business

(45:12):
at the age of twenty three inthe state of Maryland, and I relocated
here to the Low Country in nineteenninety eight, and I know the area.
Well, I'm still actively practicing realestate. I hope you can tell
I really like it. So ifI can help you in any way,
reach out to me, call medirectly. Let's have a consultation. Eight

(45:36):
four three three two seven three zeroone seven. If you think about it,
text me right now and say,yeah, I'd like to talk with
you. And here's my phone number, here's my email address. Reach out
to me and you're welcome to emailme Rick at Rickwillows dot com and let's

(45:58):
pick a time we can meet andchat. No obligation of any kind at
your house for a cup of coffeefor lunch, breakfast, whatever it might
be, and visit my website.Folks read about my bio, who I
am, what my background is,rickwillis dot com and if you choose to,
you can access multiple listing directly frommy website. I hope you got

(46:19):
some value from the show today andwe'll see you next week. Have a
good one.