Transcript
Episode 13 – Buying a Home During the Pandemic (Part 1)
Introduction 00:00
This is Listen Up Home Buyers. The only podcast offering Home Buying advice and tips from true buyer agents and now here’s your host Victoria Ray Henderson.
Victoria Ray Henderson 00:10
Thank you everyone for joining me on Listen up Home Buyers. The podcast that features exclusive buyer brokers and agents from all around the country. This special podcast is focused on what we are all doing during the pandemic to help our Home Buyers. Everyone on this podcast is a member of NAEBA and they’re with an Exclusive Buyer Brokerage in the United States. I’m just going to quickly introduce everyone so you can hear who they are. We’ve got Mike Crowley, who is the owner broker of Spokane Home Buyers in Washington State. Hey, Mike
Mike Crowley 00:41
Hello!
Victoria Ray Henderson 00:41
We’ve got Benjamin Clark. He is the principal broker with Home Buyer Representation in Salt Lake City, Utah.
Benjamin Clark 00:48
Hey guys!
Victoria Ray Henderson 00:49
We have Ramzey Khourey with HelpUBuyAmerica and they’re based in Texas and he is in Houston. Hey Ramzey.
Ramzey Khoury 00:57
Hey, how are you?
Victoria Ray Henderson 00:58
Good. Thanks for joining us and Andi DeFelice she is the Broker of Exclusive Buyer’s Realty in Savannah, Georgia.
Andi DeFelice 01:05
Hello.
Victoria Ray Henderson 01:06
Margaret Lebenson with Elika Associates in New York City. Richard Rosa, the co-founder of Buyers Brokers Only and they serve Massachusetts, New Hampshire and Rhode Island.
Rich Rosa 01:18
Hey everybody.
Victoria Ray Henderson 01:19
Richard Harty, who is the broker with Harty Realty Group in Chicago.
Rich Harty 01:23
Hi, good afternoon.
Victoria Ray Henderson 01:25
I’m Victoria Ray Henderson an Associate Broker with Buyer’s Edge, we’re based in Bethesda, Maryland, Washington DC, and sometime after the pandemic, we will have an office in Northern Virginia to kick off this What are we doing during the pandemic, I was going to start with our friend to the west, Mike Crowley what has been happening in your neck of the woods and Spokane?
Mike Crowley 01:45
Spokane, Washington, I think as far as probably one of the biggest destinations in the United States right now. We have people moving in here from everywhere. Just last year, I’ve had people moving from Las Vegas, Phoenix, California, Missouri, Alaska, Vancouver, Washington and they’re writing offers on home sight unseen, which is I mean, I’ve done that historically, maybe once every 5, 7 years. It’s usually with somebody that’s met me, we’ve looked at houses, they have to leave town and they have a feel for what I what I what I help them find. But this is different this year, I have people that I am writing offers on houses that have never met me, never looked at homes with me in Spokane, and most houses are selling for at least 5% if not 10%, 11%, 12% of the list price.
So we do have a category that I tell my clients are homes that you might buy, but there are only a handful of homes that I will let you buy sight unseen. So that’s kind of the million dollar question as they will say, “OK, looks like a good home” and I’ll say, “Yes, it is a good home” and now they know but is this when I should buy sight unseen, and I’m really careful about how I do that. But we’re finding them and there are sight unseen homes and when I go through the homes, I don’t have to pick out the positive things and I tell him I’m not worried about you moving to Spokane and calling me at two in the morning and complaining about the really nice refrigerator, the beautiful view out the back deal. But you will call and complain if it turns out– You know, there’s a train that’s going by or the bus comes by every 20 minutes, or just any little thing.
So I go through these homes with a really hard look at the negative things and I really don’t have to tell them anything about the positives because the only reason we’re going to look at it is, we’ve already decided with the positives are, my job is to go on to make sure what the negative things are.
Victoria Ray Henderson 03:39
Yes. There’s a lot to unpack there. Is anybody else doing sight unseen purchases with their buyers? Andy, you did you want to comment on?
Andi DeFelice 03:48
No, I will. What I wanted to ask Mike is how are these clients finding you? Do they Google, PBA [phonetic 03:53] and Seattle and that’s how they find you.
Mike Crowley 03:57
That’s some, you know, a guy. We got a lead in office last week and somebody just called our office and he’s asked about two homes and wrote one of them cash sight unseen. Home Inspections this afternoon. We worked on our website over the plague and so we’ve got a pretty good people coming to our website right now, which is probably we’re all busier than we need to be. So that’s a nice thing. We do show some homes in person. So as far as a statewide deal, and that’ll be interesting to hear what you guys are doing. When this first started, we could show one person at a time. That wasn’t very fun because the spouse [phonetic 04:34] would sit in the car. Then we got to two people at a time and as of about a week ago, we cannot have four people in the house with us at a time.
So it was nice when the family in laws couldn’t come look at the house or all the kids could not race through the house. So there were some pluses to it. I haven’t washed my car as much because I can’t drive people around in my car. So I have to remind myself, I still like to have a clean car. I just don’t clean it out every day anymore, but it’s nice. It feels like we’re getting back to normal aside from wearing masks all the time, but to be able to have both couple or a couple in the house, and the kids in the house is a nice feels like we’re getting back to normal even though we don’t know what will happen come the cold weather and stuff.
Victoria Ray Henderson 05:17
So they’re letting you have more than just two people in a house when you’re viewing.
Mike Crowley 05:22
Which is nice with the home inspections, because with the home inspector, I could tell my clients, you too can be there, or I can be there with one of you. But all four of us were not allowed to be in the house during the home inspection and that was hard for me too, because I like to be there.
Victoria Ray Henderson 05:35
Yes, it’s crazy. It really is. All right. Well, Ben Clark in Salt Lake City, Utah. What’s been going on with you and your buyers right now?
Benjamin Clark 05:46
So similar to Mike, we started out where we could only have one buyer in the house at a time and I do miss one of the things I miss the most about doing real estate during this pandemic is having them in the car with me, because there’s a lot– You know, especially if we’re going out and we’re looking at multiple homes and there is… Especially when you’re brand new with a client, we’ve done zoom calls and things like that. But there’s nothing like that time between houses, when you can discuss what they liked, what they didn’t like, are we meeting their expectations, just talking about the market. All of that is really good time with the clients, that makes it easier for me to help them accomplish the goals that they’re trying to accomplish.
So that’s something I miss a lot about doing real estate here but, you know, we were declared an essential service like real estate was in many states, I mean, people do need to buy homes, and people do need to sell homes and we’ve been wearing the gloves and the masks and using the sanitizer and the booties, if people want us to do that. Our market is really hot. I think that’s pretty much nationwide, you know that I’m sure there are pockets where it’s not quite so heavy. We try not to write offers on homes we haven’t seen. But we are depending on our price range of our clients, if they’re in that super-hot market, what I’m trying to do so that we’re not wasting time I’ve got clients who will sometimes be looking over an hour outside of where my office is, and outside of where my clients are looking, since people can live further away from work right now.
The area that they’re looking in for a home is bigger than I think it’s been in the past, they don’t have to go into the office, but maybe a couple times a month, and so they’re willing to live further away from work than they were a year ago and so what I’m finding to be helpful for us so that we’re not running out– You know, two hours of our day to go look at the newest listing that’s going to have 25 offers on it. By the end of the day, I’m trying to run a pre-market analysis, kind of a quick analysis on things, because we’re running into the phenomenon of, there are a few homes that are overpriced, and they still may get multiple offers, but we’re running into homes that are significantly under listed and my buyers get all excited, “Hey, I can buy this home at this price”, when in reality, there’s no chance it’s going to fit in their price range and so after a month or two of running around crazy, putting offers in and getting beat by sometimes $40, $50,000 because the listing agent listed them way too low.
I started doing that and that’s helped my clients and I save a lot of wasted time, and even having conversations with agents, you know, when I do that quick analysis, I call them up and I say, “Do you know that you’re priced at this range?” Obviously, we don’t want to weaken our buyers negotiating position. But sometimes they’re just so out of whack and I’ve even had listing agents Tell me, Yes, I’m sorry, I worked for a team and our strategy is to really under list it and get 45 offers. But the problem is 35 of those 45 offers our buyers who can’t qualify for what it’s ultimately going to go for and there if you add up all the wasted time and the frustration and the lives that they’re essentially playing with by listing the homes improperly, it’s kind of a big eyesore I guess on the industry.
Even you don’t have to underprice a home in this market to get multiple offers in general and also finding that if I can get my clients pre-approved with a three week closing some lenders are 45, 60 days out, but we’re able to get the homes when they bounce back after they don’t appraise because you’ll have buyers and it’ll even say other buyers compared to buyers you’re competing with it’ll say oh well go x over the appraisal will pay 10, 15 over the appraised value. Well, most of my clients especially in the price range where you need to do that, I can’t do that, they’re getting a loan and they don’t want to just throw an extra 15,000 at it.
So we ended up trying to get those homes on the rebound when they don’t appraise because even buyers who say they’ll waive the appraisal, they’ll quickly get that appraisal done during the due diligence period and say they’re canceling for some other reason, when in reality, they realize, “Hey, we’re wasting a ton of money here”. We don’t want to go, they get buyer’s remorse.
Victoria Ray Henderson 10:29
So how many of you are finding: 1) that, obviously the housing inventory all across the country is low. What are the most number of competitive offers that you’ve been in? Like, let’s go around Rich Rosa, what was a big number that you had to deal with?
Rich Rosa 10:48
Actually, it wasn’t recently, a couple of years ago, I had a situation where there was 22 offers on a place. It was listed for 535 and it’s sold for 640. So it went 105 over, and there was 22 offers, but that was actually a few years ago in the Boston area. The inventory has been low for years now. It’s not something that just started the last six months. I mean, COVID made it worse, for sure. But we’ve had pretty tight inventories for at least two or three years now. It’s gone down in Boston. In Massachusetts as a whole inventory has gone down basically every month for about eight and a half years.
Victoria Ray Henderson 11:32
So you cover New Hampshire and Rhode Island too. I mean, just outside of
Rich Rosa 11:37
Not myself, but my company.
Victoria Ray Henderson 11:39
So is it the same there as well. I mean, are we just talking about areas that are around cities being? Is it getting any better for buyers, if they’re farther out?
Rich Rosa 11:48
So, Southern New Hampshire is like Greater Boston and Providence is only about an hour from Boston. So it’s all a similar market. So Western Massachusetts, you know, way west towards Albany, New York isn’t like Boston and Northern New Hampshire is not anything like Southern New Hampshire but Rhode Island– I mean, you could drive through the state of Rhode Island, if you blink, you’ll miss it.
Victoria Ray Henderson 12:18
I forget how close all that was until I get up there. Oh, my God, I’ve gone through two states. So, Margaret, the big topic that’s been all over the place, everything that I’ve read, everybody’s moving out of New York City, is that true?
Margaret Lebenson 12:37
Well, there has been an exodus of, I would say, two kinds of people. I would say, families with school aged children. So there’s really been a big exodus of that.
Victoria Ray Henderson 12:57
That’s something that’s recent– like during the pandemic?
Margaret Lebenson 13:00
Yes, very suddenly.
Victoria Ray Henderson 13:02
Alright.
Margaret Lebenson 13:02
In May, I went into a condo in Williamsburg, Brooklyn, where the egg carton was still on the on the shelf. I mean, some people really ran out of the city. So the two bedroom apartments in the better neighborhoods, there’s a lot of vacancies there. The other Exodus, which is something that has been going on for a long time, our investors in Midtown, so investors are just dumping their condos, especially in Midtown and I mean, actually, for me, this is opened up, I work with a lot of first time buyers.
So it’s really opened up a lot of great opportunities for people looking for two bedroom apartments, maybe people who are planning to have children and then office workers: one of my clients, works for the UN, she has to go to the UN in person. She’s a translator, she bought an electric bike, she’s living in Bushwick right now, but she wants to be in Midtown. So it’s a great opportunity for her the prices in Midtown, are very, very low. They’re lower than they are in Brooklyn. So it’s kind of a Copernican revolution, but there’s definitely a market there.
Victoria Ray Henderson 14:27
So, these people who were exiting is part of it due to the exposure to the virus. I mean, is they don’t want to be in an elevator. They don’t want to be touching. Is it that kind of an exodus or it’s just….?
Margaret Lebenson 14:41
I think it’s about their kids I mean, New Yorkers are really sensitive about their kids’ education. People are very competitive, maybe all over the country they are but especially in New York, they’re just super competitive. You know, they’ll pay many hundreds of 1000s dollars more to be in a better school district than not in the school [phonetic 15:03] district.
So, for these parents, there’s always a compromise, maybe the child is not going to school in their own neighborhood. So now there’s just no school going on in New York City, no one person thought– they just move right out to the suburbs and if they were affluent enough to have like a summer home or family home, I mean, people really took their kids out and I think with a multi being educational and children.
Victoria Ray Henderson 15:34
Ok, guys, did I just want to take a moment and say, you can jump in here. It’s not just me asking questions. If you’ve got a question for anybody who’s talking at any time, just ask. So Rich Harty in a Chicago area. What’s happening in your market, I’m sure it’s crazy competitive, just like it is everywhere else? But what else is going on?
Rich Harty 15:56
It is crazy competitive, just like everybody else is explaining. A couple different things here. So I’m in the Northern suburbs of Chicago, Highland Park, Lake Forest. For years, these markets have been dead. I mean, there has been no activity. Talk on the street is always about how much inventory there is because nobody wants these larger estate homes. They want smaller, empty nester properties and with taxes being what they are, and in Illinois, new buyers are no longer coming out to some of the suburbs and so when the pandemic [inaudible 16:37] I was very busy in the city, with a lot of first time Home Buyers and then as the pandemic wore on, all of a sudden, we began to see this shift into these communities where nobody was buying out in the North suburbs, Northwest suburbs, and inventory has gone down. I mean, has just dried up overnight and what’s interesting is, we’re on the construction side of things as well.
So as we’re looking at homes, we’re looking at condition, and our clients are looking at us to really give them an accurate report of what home is really providing them in terms of long term investment and we pass on a lot of these homes for our clients, because maybe roofs that were cedar steak and they’re going to need $50,000 worth of work and in 3to 5 years and then now all of a sudden these homes that have sat on the market for years are gone and we’re kind of sitting back and wondering whether or not some of these buyers are really aware of exactly what they’re getting themselves into a long term investment.
So that’s what we’re seeing here is that communities that have sat dormant for a long time are now very hot. I’m in the city, some great opportunities, because people are leaving very quickly for a variety of reasons, schools, the pandemic, just to get out into more open spaces.
Victoria Ray Henderson 18:12
So to be clear, you’re seeing people moving out of the city you think?
Rich Harty 18:16
Yes, we’re seeing people that might have made another move into the city, maybe from their first condo to another larger condo, and then to the suburbs and now skipping maybe that interim purchase and coming straight out and then in terms of some first time Home Buyers, I think we’re still seeing some opportunities created by these vacancies, like Margaret just mentioned, that are now an opportunity. For some first time homebuyers that might want to take a chance on getting into one of these condos and with rates lower, they’re getting into a little bit more home than they would have normally
Benjamin Clark 18:58
To something Rich said, there are a lot of homes that come up and I tell my clients that if you have a terrible home, you can sell that in this market, you can sell anything in this market and so, as buyers, especially those first time buyers, they need to be very careful and this is where it’s important to have an agent on your side. Because I’ve seen homes that have mold issues in the attic and in the structural issues coming on the market. Bad roofs, like you said things that can cost 10s of 1000s if not more, and other buyers are snatching them up. I don’t know if they’re ignorant, or I have to presume that they’re ignorant and their agent isn’t really looking out for their best interest because my clients from buying a home that came back on the market like we said, I got a copy of the inspection report. It had mold in the attic mold here.
I said to my clients, you know you’ve got all these issues that You can’t necessarily see when you’re just going through an open house and they decided not to do it and it went right back under contract to somebody else.
Rich Harty 20:11
Andi has proved too that people are moving out of Chicago because I know that she’s working with three people. I keep getting texts from Andi telling me, thank you for sending another person my way.
Andi DeFelice 20:24
Any of y’all that want to send them down that way people love to come to Savannah. We appreciate that Rich, a lot.
Victoria Ray Henderson 20:32
Ramzey khoury, I wanted to give you a chance to tell us about Houston. What’s going on? I’ve been to Houston a few times, it feels like it’s the suburb that never ends. So, what’s happening?
Ramzey Khoury 20:44
So we don’t have zoning here, as you know, and we have a ton of builders, people have been building, they find us an empty spot next to the city and they start building. So empty spots are getting snagged up very quickly. There are a lot of new construction buyers, I’ve had plenty of new construction buyers even before the pandemic. That’s the reason that’s one of the reason that’s causing the low inventory here. It’s because people prefer newer houses versus older, especially in this inside the city. As you go towards the suburb, the new construction is different than the city, the Sydney we have. We’re more townhome oriented. As you go up towards the suburb, it’s more house oriented, you get more space. 1 story, 2 story houses with the big yards.
In Texas, we have your yards. We’re famous for that. Because we love barbecuing and what I’ve noticed is during the pandemic is that right before the World Health Organization said—-declared a pandemic, I had a couple of buyers that were looking at houses and we had pretty decent inventory at that time. It’s still low comparatively to the– You know, we have good inventory. I mean, we’ve had low inventory for years but as we were looking at houses we started offering way lower than the asking at that point. You know, it was in March and April. It was I guess people were panicking. Of course, I like to side with the buyers.
So I told my buyer, you know, we can take advantage of this. I don’t want to sound evil here, but I am on the buyer side. So what we did is we offered the lowest price we would think of and believe it or not, I did that with two clients and the seller took it. Love it and the funny part, actually, it’s not funny, the market started to increase around May and June. That’s when it started getting very hot here in Houston, where there were multiple offers on one property and that’s where I actually lost some clients because we couldn’t– the better option was to wait until the market come down because we did not want to overpay for house. Even if we don’t want to go over appraisal.
So like my other colleague said, we don’t want to have we don’t want to have appraisal issues or come into a situation and that before. So what I use is I use my CMA beforehand, but sometimes they just don’t listen because there are people over bidding. Some people have cash. A lot of people from New York and California come in with cash and they don’t need an appraisal lender. So, they don’t need any of that. So they buy the house they like with the highest price.
So, there’s multiple situations that we’ve been in, right now it’s slowing down a bit but it’s still very hot. Many sellers are asking over market. Luckily, it is slowing down the winter and Houston is always slower than the summer. It’s been going on for more than 10 years. So for my clients who got frustrated with the multiple offer scenario I told them, you know, we can try again in the winter.
Victoria Ray Henderson 25:03
That’s a good strategy. I mean, that’s the only thing we can do.
Ramzey Khoury 25:06
We are still building. There’s high demand for that.
Victoria Ray Henderson 25:13
Yes, Ben, what have you got?
Benjamin Clark 25:16
Yes, make sure I’m unmuted here. One of the things he talked about was new construction and I’ve got three clients building new construction right now and since we’ve gone under contract, they’ve already got 10, 20,000 in equity, because the builders keep raising their prices.
So if they’re first in a subdivision or at the beginning of a subdivision, there’s a great opportunity to get some equity and again, [inaudible 25:39] and super important during that process, instead of working with the builders agent and so I’m doing really well with them and I’m representing them, and we’re making sure that they’re building them a quality home.
One thing that you’ll find in most markets where building is rampant and that’s the case here in Salt Lake, they can’t build homes fast enough for the number of households being created here. But when building is going crazy, the quality of construction tends to go down.
So it’s even more important for them to have someone on their side. So when something goes wrong, which it inevitably will in a new construction project, that’s just the nature of it. They have someone who they can openly talk to, and who can take their side and say no, you’re not being picky by bringing that up. That’s not right, we need to go make that builder make that right.
Victoria Ray Henderson 26:30
Yes, in the Washington DC area, and we cover this huge area and we have a couple of clients buying new construction one up toward Baltimore, one just outside of Washington DC and inevitably, every time we have a home inspection, our inspector finds things sometimes big things: things that are wrong the H back or things that are wrong behind, like a pre drywall inspection and if you don’t have that extra set of eyes and people on your side that it would have just gotten caught up with everything else that it would have been missed.
Benjamin Clark 27:03
Or the builder will tell them, it’s okay and if not okay. They’re just with the builders agent, they don’t know, you know, we’ve helped a lot of clients with new construction, I was the general contractor on my own home, I know Rich Harty does a lot of construction, he has been part of a construction business.
So Chicago, right, you know, things that the typical person doesn’t necessarily know if it’s a problem or not and if they’re told by a builder that something’s OK, and for the most part, people believe them and you hear all the stories after closing in new construction, neighborhoods of all the stuff that went on, you know, on the Facebook pages, about the builder cutting a corner here and there, and then the buyers just don’t know that, that they don’t know those things.
Victoria Ray Henderson 27:46
Yes, they don’t know what they don’t know, Rich Harty, what do you want to share about that?
Rich Harty 27:50
Yeah, I think just trying to make sure that you’re staying ahead of that pace of the frenzy, so that you’re able to provide that accurate information for your clients, and making sure that they don’t have any buyer’s remorse after all the dust settles, because you’re moving at such a quick pace in this market, that you really need to make sure that you’re providing information at rapid speed, so that you can keep your buyer in the right house. But once they close, that, they’re confident that they made the right decision.
Victoria Ray Henderson 28:26
I find that sometimes with your buyers, what you’re doing is actually trying to manage their expectations and you’re trying to make sure that they don’t get caught up in the frenzy of wanting to you know, they thought they might in the moment want to pay more for something and then again, have that buyer’s remorse but a big part of it is that balance of protecting and also being competitive. So Rich Rosa in the Boston area, what are what are you seeing when you’re in that scenario, where you’re trying to be competitive, you want to protect your buyer?
Rich Rosa 29:03
Well, I think along the lines of advising clients in this market, I think that one of the things that I’ve been telling clients for a few years now, because the markets been going up for a few years in the Boston area, and it’s really the case now is, I explained to people that if you think you’re going to have to move in two or three years, you probably shouldn’t be buying a house. Because this is not going to last forever. Markets don’t just keep going up, they level off and they come down and there’s ups and downs.
So I tell people when people ask about, well, what do you think of the market? Should I buy a house, I simply say, “Look, if you think there’s any chance you’re going to have to move in two or three year because for personal reasons or for work reasons, then you probably shouldn’t buy a house. If you could hang in there for eight or 10 years, you’ll probably ride out any sort of ups and downs that might come your way”.
So that’s I think an important piece of it is just understanding that you’re buying, potentially at the top of the market. I mean, although I would have thought that the market would have calmed down in the Boston area. A couple of years ago, it still hasn’t. But eventually it will and if you buy at the top and you’ve got to move in a couple of years, you may find yourself in you don’t want to be and so that’s one of the pieces of advice I give people I have been giving people over the last few years now is to be really careful. If you think you’re going to be able to stay in the house for a while.
Victoria Ray Henderson 30:29
Mike Crowley, what are you telling buyers in Spokane?
Mike Crowley 30:32
The same thing, I basically say real estate is no longer a short term investment, I think the downturn in 2007, 2008. Those people that lost we’re all people that were in a for short term investments, whether it be Florida, Arizona, Las Vegas, California and I’m not saying that you can’t make money short term, but if you’re buying it for a short term investment, be prepared to lose it as well. So same thing, 2, 3, 4 years, it’s just a risk you’re taking, but anything after that it’s an excellent long term investment and buy as you can and never sell again, unless you’re buying something else. That’s what I tell people.
Victoria Ray Henderson 31:08
Anybody want to take a stab at what they think is going to happen in the next six months or a year
Ramzey Khoury 31:13
So I think that here in Houston, especially with low rates, the demand is going to be even higher next summer, especially if they find a vaccine and things will start going back to normal, rates are low. I think it’s going to be a while before we see it drop in price. That’s my opinion.
Victoria Ray Henderson 31:38
OK, Andi what is your thought? What’s going to happen in Savannah?
Andi DeFelice 31:41
Well, we’ve been hovering up [phonetic 31:43] and what’s funny to me is I’m getting some clients, manically looking for this about representation. I love that, then we’re starting to realize what they need. So our market [inaudible 31:59] so we’ve got coverage now, which is great. I don’t see it slowing down and from what I’m talking with other agents and just across the market, I think we’re going to stay pretty steady, at least through the end of the year is the rates stay down, we got a huge military presence in Savannah, and we’ve got a whole bunch of troops coming in in February.
So that’s going to bring even more buyers into our market and there’s a push now to get them to invest in Savannah. So I think we can stay strong. Well, we need to.
Victoria Ray Henderson 32:33
Rich Rosa what’s happening in Boston? Or what do you think is going to happen?
Rich Rosa 32:35
I can’t imagine the markets going to swing to a buyers market anytime soon. I mean, like I said, earlier, it’s been about eight years of inventory decline statewide. There’s communities where there’s less than a month of inventory, there’s communities that have 20 30,000 people, and there’s 12 houses on the market at any given time.
So, I think you’d have to really see a slowdown in the economy or something else that is going to trigger a build up an inventory and until we see that I can’t see how the market shifts. I mean, a lot of people when the pandemic first hit, they said, “Hey, wait, what do you think?” I mean a million people lost their jobs just in Massachusetts, do you think that’s going to sit on the market? And of course, I think everybody thought, maybe it will. But as it turns out, especially in a place like Massachusetts, where there’s so many tech workers, so many people working in the software industry, in the computer industry, in biotech, these are all people that could work from home, they didn’t lose their jobs and then we have a really big medical community, lots of hospitals and so these people were essential workers, and they didn’t lose their jobs either.
So it had– Even though the economy took a big hit, it had very little impact on the Working Lives anyway, of the people who are buying houses. So I think it’s hard to predict. I mean, anything could happen, but we’d have to see a lot more inventory hit the market before we saw any kind of shift.
Rich Rosa 32:45
Yes, and so many people are so concerned and rightly so about having strangers come into their house, and walk all around, shoes on and what not. Anybody want to add a week ago around, add last minute thoughts, anything that wasn’t said that you want to make sure gets tossed in here.
Rich Rosa 34:43
I think that one of the things that Ben in Salt Lake City mentioned was that people were sort of casting a wider net when they were looking at houses farther from the city and I’m seeing that as well. A lot of clients have come to me who probably would have tried to stay within a half an hour commute to Boston or Cambridge, where there was a lot of jobs, obviously and now they’re saying, while their employers are telling them that even when this is over, they’re probably only going to go to the office one or two days a week. So that’s really shifted their mindset in terms of well, if I only have to commute far for one or two days a week, I don’t mind go being an hour outside of the city, as opposed to 30 minutes outside the city. So we’ve seen that shift here.
Andi DeFelice 35:31
I think one thing, and I think you touched on a little bit, especially when you’re dealing with these markets, that we are seeing multiple offer situations, and we’re seeing here as well, as agents, we really have to help our clients set very realistic expectations.
Nothing more disappointing than making the offer on the house of your dreams and it’s not going to happen and not have conversations with my clients all the time, you have to have a way to walk away have to have that number in your mind where you can say I did the best I can, it’s not going to work at this number, I’m going to walk away and finally, no, I’ve had 4 or 5 deals come back to me that we’ve lost because we weren’t the best money wise offer, whatever they took fell apart, the agents will call me back and say, Are you guys still interested, and they’ve ended up with the house that they thought was their dreams and it actually is, so just talk and make realistic expectations with your clients. So you’re on the same page, and nobody’s getting disappointed or frustrated.
Victoria Ray Henderson 36:29
It’s so important to make sure that your clients are choosing lenders who understand the timelines, we’ve had deals almost fall apart, and one fall apart. Because somebody wanted that great rate that, this national lender that we could never talk to on the phone could promise them and that is one of the saddest things to see is, everybody’s on the same page, except the lender, and that’s why I frequently— Obviously it’s the buyers choice, whatever they want to go with whoever they want to choose for so many things, whether it’s the home inspection, the lender, and all these things, but it’s important for everybody to understand that those deadlines, the appraisal, the financing, when they’re not met, you run the risk of being in default.
Mike Crowley 37:15
Are you guys short of appraisers?
Victoria Ray Henderson 37:18
I hear that that appraisers are busy, we haven’t heard we’re short of them in DC.
Mike Crowley 37:22
We are told if they can’t close anything under 45 days here right now.
Rich Harty 37:29
And being able to educate the sellers. Now, where before you’re strong, because you were coming in 30 days and now you’re still strong, because you’re coming in 45 and you know, you’re going to come in in 45 rather than somebody who’s promising 30 days.
Andi DeFelice 37:46
That’s the thing to the online lenders, I literally had a client who had been approved all the way up until two days prior to closing and then he wasn’t improved, I put him with one of my vendors and you close within nine days. But he had sold his home, had his truck packed with the wife and the dogs, and was moving to Savannah.
Fortunately, the house we were buying was already vacant and so he was gracious enough to let him move in early, which I hate for all kinds of reasons. But in that case, [inaudible 38:16] but you’ve really got [inaudible 38:17]. The online lenders and you’ve really got to look at service and the fact that I can walk into the office of a lender and say what is going on, holds a lot of weight that shows my buyer strength as well. I like to be able to pick the phone up and know the guy I’m talking [inaudible 38:37] So there’s a lot to be said for [inaudible 38:41] a little bit with the online stuff. So you know what questions to ask [inaudible 38:44] home to lender this local that knows our market, knows our flood zones. I mean, Savannah has got some pretty intricate little areas that you’ve got to really know about and lenders out in wherever don’t understand.
Victoria Ray Henderson 38:56
That’s a really good point. Rich Rosa next and then Ben Clark. Rich!
Rich Rosa 39:00
Yes, I think two points about the lenders. One is it’s not. You know, the other issue is we talk about how these, these national lenders don’t provide customer service, they don’t meet deadlines and I tell clients that in a competitive offer situation, the listing agents know this too and so if you’re using national lender, and your offers may be a little bit higher than someone who’s using local lender, they may take the lower offer because they are scared that you’re not going to really come through because you’re using the national lender and then someone said something, I think it was you Victoria about trying to get the best interest rate.
What I always remind clients is that if you’re going to shop around for interest rates, you have to shop around on the same day. You can’t call one on one day, somebody else on Tuesday and somebody else on Wednesday because rates change every day. So they may think they’re getting a better rate but the lender they’re with could probably provide that same rate. It’s just that they’ve, they’ve talked to their lender that they’re pre-approved them a few days ago and now they’re talking to someone a few days later and rates may be dropped by an eighth of a point. But what I find is most of the lenders are all offering the same rates. It’s just that if you’re not calling them on the same day, you’re getting different quotes.
Victoria Ray Henderson 40:19
Yes, Ben!
Benjamin Clark 40:20
I think what I’m getting from this conversation and I already know this and you guys already know this but as professionals we know what’s going on with lending, we know what’s going on with appraising, we know what’s going on the seller side, we know what’s going on the buyer side, we know what’s going on with inventory, appreciation, bids negotiations, whether or not you can renegotiate whether what to do if things appraise low, we know all of this and that’s again, just another reason why any buyer should really have a professional and one that knows what’s going on who can explain what’s going on and you can get to the bottom of things. If somebody is pre-approved with the lender, but they don’t know, when the lender can perform by or how long appraisals are taking? We know to ask these questions, but but buyers don’t know and not only is it a terrible thing to get a couple days before closing and find out you don’t really have a loan, but you might lose $10,000 earnest money by doing that. I mean, there are real repercussions to not getting this thing right when you’re buying and selling a home.
So just another plug to get an exclusive buyer’s agent, get an agent on your side who can consult with you explain, like Andi in Georgia said, set your expectations, tell you what’s going to happen so that it’s not stressful and confusing w you get into a home, like I said, I do that pre analysis. So we know, is this I’m going to have 45 offers and is it going to end up at this price? Or is it overpriced, and we might have a shot to go in low, if you if you’re just shooting I’ve heard local agents say on a on an agent Facebook page where we kind of share some information.
I’ve heard agents say that they just tell all their clients they need to pay $20,000 over. I think that’s a terrible strategy. You might get homes and a lot of buyers might get homes just overpaying by 20,000. But you don’t always have to pay 20,000 over to get a home in this market. Get homes I’ve got a client right now that’s about 14,000 under the asking price, and we happen to get it just because we came in at a time when there was a lull in the market. There are still random weekends where open houses don’t do well or you’ve got holiday weekends and there’s just not quite as much competition and sellers actually just like Rich Rosa said, “This isn’t going to last forever” and when they know because the agents telling him you’re going to get 20 offers within the first day, and they’re three days in and they don’t have any offers. All of a sudden they get spooked a little on their site, and it presents an opportunity for us sometimes to grab a really good deal.
Victoria Ray Henderson 43:03
Yes, Ben Clark, I think you’re going to get the last word here because we could definitely talk a lot more about what we’re doing during this pandemic, no doubt and you guys, I’d love for you to join me again for the Listen up Home Buyer Pandemic Podcast No. 2, which will be coming up in a couple of months. But thank you everybody. Thank you very much for joining us on Listen Up Home Buyers.
Benjamin Clark 43:26
Thank you. You guys are the best.
Rich Rosa 43:28
Thank you everyone.
Andi DeFelice 3:30
Good to see everybody.
Introduction 43:31
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