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Join Mike Wise, a seasoned mortgage expert, on "Mortgage Wise with Mike Wise," your go-to podcast for navigating the world of real estate financing. Whether you're a first-time homebuyer, seasoned investor, or industry professional, Mike covers everything you need to know. From in-depth discussions on various loan types and understanding market trends to timely updates on interest rates and their economic and political drivers, Mike keeps you informed and empowered in today's dynamic real estate landscape. Stay tuned for expert insights and practical advice that can make a difference in your financial decisions.
Follow along at http://www.mortgagewisewithmikewise.com
Unknown: The real estate
business is one of the most
volatile industries on the
planet today. So, it's good to
know someone on the inside,
keeping up on all the changes.
This is your go-to podcast for
navigating the world of real
estate financing, mortgage-wise,
with Mike Wise begins now.
All right, today we have a
special guest on Mortgage Wise
with Mike Wise, Katie Connelly.
Welcome to the show. Appreciate
you coming on.
Thanks, Mike. I'm glad to be
here.
Awesome, awesome. How long have
you been in the real estate
business for?
So, I started in 2013 and then I
got my license in 14, so I was
working as an office manager in
13, and with the anticipation of
getting my license, and I did.
So nice. What is that now? More
than 10 years? Yeah,
13 years, ish. You know, 1213,
years, that's a long time. So,
yes. And you were.. I read in
your bio that you were realtor
of the year in 2022 So that's a
mate, right after Covid,
yep,
so that was like a
surprise, it was amazing. Yes,
good. And then, and then I got
to announce and install, or I
guess just announce the 2023
realtor of the year, which was
also very, very rewarding. Yeah,
because you know, this is a peer
of mine and somebody I respect.
So it was,
oh, that's fun, that's good. So
you actually, you've been in for
13 years, you producing that
whole time, but you've managed
like 200 sales agents at a time.
Yep, so yeah, I was, I had the
opportunity a couple years ago
to work for a huge international
organization, real estate
organization, and we had about,
we had over 200 agents, yeah,
and I had a staff, and we had
four locations. It was, it was
crazy, but it was good.
Now, did you like doing, like,
was the, you got back in, and
now you're, are you just a sales
agent now?
Yeah,
so what do you like? What do you
like better? Do you like
managing 200 people, or do you
like just being an agent on your
own and kind of doing your own
thing?
Selling homes is just really,
really rewarding. Helping people
is rewarding, no matter how I do
it. Yeah, so I loved helping
agents, but I was helping them
grow their business and giving
them all the skills and tools,
while also doing it myself,
yeah. And then I said, "Hey, if
I, if I give this energy to my
clients, you know, I could
probably produce even more. So,
and it was, it was a good
experience, but the time, the
time to get back in the, in the
field was definitely coming, and
what, like, what were some of
the things that you, because if
you manage 200 sales people,
right? You see the people that
are winning and the people that
are not winning. What were some
of the things that you maybe
learned from that after you know
managing that many people?
Oh, there's so many different
personalities out there, of
course, and different levels of
success, and people have
different goals, you know.
Sometimes people do want to be
the number one agent countywide
within the company, or whatever,
and then other people do kind of
treat it as a hobby, and then
there's everyone in between. So,
yeah,
that's that's super hard. I've
kind of learned that just
recently, becoming, because part
of CMG, I'm now.. I used to have
my own business, and now CMG, we
have 1500 1700 sales people, and
it is very interesting to see,
like, there's the same thing,
there's some people are in it
just to do a couple deals here
and there, and other people are
in it, like this is their
career, so I know managing to
the people that have their, that
it's their career, they
understand the business more,
they understand the forms. In
fact, we'll get into it a little
bit later, but those people that
are on the fringe always like
that is not really their, it's
their hobby. Sometimes it's a
little hard to kind of train and
deal with, because they have a
lot of questions and a lot of
hand holding.
Yep, and I mean, I tell people
this story all the time. I
remember the first year that I
broke six figures, and it was
like, oh my gosh, I never
thought, and it was during
Covid, I never thought that I
would be able to be home with my
medium-sized child at the time.
She wasn't small, but she wasn't
big, yeah, and, and make money,
and still, you know, take her to
school and do all the things
that I needed to do as a mom. So
I'm like, if I can do it, and
then people can do it on an even
higher level than I'm doing,
like, you can definitely do it
if you want to do it.
Yeah, I mean, you have one
child, have one child, nice. All
right, good. Okay, so
certifications, I'm gonna, I'm
gonna go into certifications.
You have a ton of
certifications. How important is
it to have certifications?
I mean, I'm a lifelong learner,
so I love, I love learning, I
love, you know, coining in on my
skills and getting better at
what I'm doing. It adds, you
know, some sparkles to my
resume, which is fun. I'm not
sure my clients pay attention to
that or know what all the ABCs
and XYZ mean. Yeah, but I know
sitting in those classrooms that
I earned those des. Nations and
certifications, and it puts me a
step ahead of the competition,
because we do have so many
realtors here in Ventura County
for people to choose from.
Yeah, it's there's a lot out
there, and so you have, I'm,
they're up on the screen:
accredited buyers
representation, seller
representation specialist, real
estate negotiation expert, which
we're going to go into a little
bit, military relocation green
and certified forms specialist,
so yeah, the certified forms,
oh, that seems like that's those
are changing all the time,
every six months, yeah, every
six in December we get a forms
update, yeah, that's
awful, so and then the military
relocation one is that I mean
you're you're you're out in
Ventura, so you're close to the
base out there. You get a lot of
military. I do. So,
my dad is a 20 year veteran of
the Navy. He's Navy veteran, and
then he, the next 20 years of
his career, he worked as a
contractor for the US
government. So, I fortunately
didn't have to move that much
growing up. I've lived in
California since I was five. We
moved before then, but the US
government is, I think, the
largest employer in Ventura
County. So, people are moving
from all over, all over the
country, and you know, moving
out of, out of state to go
wherever they're transferred to,
and it's different. It's just a
different kind of, you know, way
to communicate with, with people
that are constantly on the move,
and looking for different things
in a home, you know, they're
looking for a place to live, of
course, but it has to be a smart
investment, because the chance
of them moving somewhere else in
three years and having to sell,
and then, yeah, maybe buy in
another state, or take that
money and do whatever they need
to do with it, has to be, it has
to make sense, and I've seen
that it does, so yeah,
it's a, it's a, the VA loan is
an important loan for current
military people that are
serving, and veterans as well,
and gets them into a house. In
fact, I was, we were talking to
a person last week about buying
a house with no money down, and
going in a little bit above the
purchase, the listing price, and
using that money to pay off debt
to be able to help them like get
into a better situation at that
point in time. So, there's a lot
of things that you can do with
the veterans.
Yep.
So, oh, go ahead. Yeah,
and it's, I mean, it's a super
safe loan, as you know, it's a
government-backed loan, even
with zero down, the job security
is there. It's really hard to
get fired from being in the
military. You have to do
something really, really bad.
Yes, so they, their jobs are
super secure. It's not the
company, well, I was gonna say
the government's not shutting
down, but that happens from here
and there. But people don't lose
their jobs usually. I think the
biggest risk would be doing 100%
financing, and then getting
relocated the next year, and
maybe having to sell your house,
but there's a lot of different
things that can happen. But
overall, super, super good loan,
super good investment for the
veterans. Okay, the negotiation
piece. Have you read the book by
Chris Voss? Read so
many books. What it's called
Never Split the Difference. Yes,
yes. Okay,
so he basically.. the whole
premise of his book is that
compromise is a losing strategy,
and the best negotiators don't
meet in the middle, right? So
it's always like working for
your clients. So I'm wondering,
like, your.. do you say Renee,
or is it just negotiation
expert? Okay, real estate
negotiation. I'm not talking
people.
You don't want to literally
exactly. So when you have that
skill, what is it that when
you're in the middle of a
transaction that sets you apart
from somebody else that doesn't
have that designation?
So it's a lot. The designation
course was a lot about
personality styles and meeting
people where they're at, and
really talking to the highly
analytical person analytically,
and talking to the highly
emotional person emotionally,
and really being able to read
people.
Yeah,
I'm a talker, I'm high energy,
and some people that are
introverts, you know, would
stand back at my natural energy.
So I have to really read the
room and listen to people, and
my what I always say in
negotiations is the best deals
happen when both parties give a
little bit more than they're
comfortable with,
yeah.
And I say that right off the
bat, and people are usually
like, oh, okay, because it's,
it's a win-win situation. Both
parties are gonna win, and
that's what we want.
So he talks about tactical
empathy, so that's like
empathizing from where, where
they're at, like really
understanding what the other
side is feeling, and he talks
about naming it out loud, like
for instance on a listing
appointment, you may think that
the value is 800 and they think
that it's the seller thinks it's
850 or $900,000 so like I really
don't want to sell my house for
eight. $100,000 you know, I
think it's worth $850,000 at
least. So, you have to kind of
empathize with them. How do you
do that?
Yep, I mean, I say we can talk
about price all day, we can set
the price, but ultimately the
market determines the price. So,
if we want the best shot at the
market, it's better to come in
at market value and then see
what that does, rather than try
to put a price tag on something,
and then have it go stale,
because often when we overprice
things, they sell for less than
market value, because they're
already going to be stale. Yeah,
so it's not like buying a car,
where you know you can just come
in, they put a high sticker
price on it, and you're just
going to talk them down. There's
so many checks and balances,
there's what a buyer's willing
to pay, what the bank's willing
to finance for through an
appraisal, and what the seller's
willing to sell for. Yeah, so
real estate's like the perfect
storm. Oh, there's a
lot of, a lot of factors going
into it, for sure. What is when,
when negotiating, when you're
going into maybe a listing
agreement, what would be the
biggest mistake for an agent
going into that listing
agreement, kind of, and giving
something up right away that
they could have, like, like,
maybe it's their commission,
right? So, whatever the
commission is, x or y, the
seller may be playing you
against another agent. What
would that look like, like, what
would be the wrong thing to just
say, "Yep, I'm doing it at X.
Yeah, then your client's gonna
walk all over you throughout the
whole transaction, you know?
They're gonna be, they're gonna
have you by the neck, and
they're gonna walk you all, walk
all over you. So you really need
to be the expert, show your
value, show your worth, and say,
'Hey, this is my job. I'm the
professional, you know? If you,
if you want to do it, you can do
it. You can find somebody else
to do it cheaper, whatever, but
it's not going to be better. I
make, like, the Walmart and
Nordstrom kind of comparison.
Target, yeah,
you can go. I go, you know, I
get stuff at Walmart when I'm,
but my feet stick to the floor.
I'm waiting in line. It takes
forever, like I get my
toothpaste, but this sucked.
Yeah, yeah, experience was not
great. Yeah, yeah. So,
and I, when I leave Nordstrom,
I'm like super happy. I spend
probably more money than I want
to, but it's a really, really
enjoyable experience. Yeah, so
being somewhere, you know,
I can imagine that this
certification that we're talking
about, the negotiation is a good
selling point at that point in
time when you're talking to
somebody about their listing,
and say, look, I, one of my
certifications is a negotiating
expert, and so I'm going to
negotiate the best deal for you
whenever that time comes, we're
going to have the best deal for
you, so having those
negotiations and seeing that
if your seller is putting you
against another agent, which
they should, you know, they
should interview multiple agents
and say, "Hey, I'm going to
stand up to you because I'm a
negotiator and because I'm
working for you, and I'm going
to do that throughout the whole
transaction. If you can walk all
over, you know, person X, and
they're going to cave, then
they're probably going to cave
throughout the process as well,
yeah, yeah,
yeah.
So now flip it to the buyer's
side.
I love buyers, you
love buyers, I do. I love
it's so rewarding,
it's fun to get them out into, I
mean, they're they're looking.
We're going to talk about the
current market in a minute here,
but I think the same thing with
me, like first time home buyers,
especially like getting them
into a house. I just closed one
last week where it was like the
guy was this the first time he's
owned a house, and he, I think
he was probably 3738 years old,
but he was super pumped to own
the house,
yep,
yep, and it's so rewarding. So,
in the book that never split the
difference, Voss, he talks about
no is not the end of the
negotiation, it's probably just
the beginning. So, when you get
a counter offer from the other
agent that says, as is no
concessions, blah blah blah. How
do you handle those things? Is
that a hard no, or is it
something that you feel like you
can still negotiate on? Yeah, so
the
buyer has the right to
investigate, you know, the
average home price, like we
talked about off camera, is
almost a million dollars, it's
like 859 50 here in Ventura
County, so the buyer has the
right to do their
investigations. They can see if
it's going to need a new roof,
$40,000 they're going to see if
it needs new electrical, all
this kind of stuff that's aside
from paint and flooring. Yep, to
see if this investment is really
going to make sense to them.
Yeah, so even if seller says no,
we're not going to do anything,
the buyer still is going to have
all the facts to determine if
this at this price and this
condition of this home is this
something I want to proceed
with, and they can say no. Yeah,
they can say no. I don't, you
know, I'm putting my entire life
savings down. I don't have the
money to do a new roof and
replumb the whole house. I can't
live here comfortably.
Yeah, it's very interesting
because there's some people that
really emotional. Emotionally,
you talked about earlier, like I
really, really want this house,
and you can't really show your
hand that early, because then
you lose a little bit of the
negotiation leverage that you
have. So, okay, so what are you
talked about some of the levers,
new roof things, the
investigations, is there any,
like, in Ventura County
specifically? Are there any kind
of hot buttons that people are
negotiating right now?
Yeah, I mean, always repairs
definitely is, you know, is
something that's important.
There's, there's some
ordinances, like the city of
Ventura has the sewer lateral
ordinance, so we need to make
sure that that's done and safe,
and I'm sure, as you remember,
that came from the foreclosure
days, when people were pouring
cement down the drains and
really damaging these houses.
And then we have the new AB 38
the fire ordinance to harden
your home against wildfires, and
we can't prevent wildfires, but
if we can do what we can to
really make the structure safer.
Yeah,
it can. It can make a huge
difference because people are
concerned about fire.
Yeah,
as they should be.
So, you can tell that Katie's
been doing this for a long time,
and she really knows all of the
negotiating skills, but the
forms, the green designation,
all these things. This goes
into, if you're selling your
house, or if you're buying a new
house, you're going to want an
agent that is experienced, that
can negotiate for you, because
it's, it's a matter of calling
Katie back later on, saying that
was amazing, you did an amazing
job, and based on the
negotiation, we got a lower
price, or we got this, or we got
that, whatever it is, you want
somebody that's been doing it
for a long time, and Katie's
been doing it for 1314, years
now. So, okay, I
had some.. I mean, I had amazing
mentors along the way too, that
were forever students, and you
know, really taught me the
importance of staying involved,
getting involved, and staying
involved, being a constant
learner, learning forms. I'm not
like a sit at your desk kind of
person, but I also don't like to
be caught off guard. So, yeah,
that's why I try to learn forms
inside and out, and there's
still new ones that pop up that
I'm like, How did I not see this
in the 1800 forms catalog. Well,
at the end of the day, when you
1800 forms, there's a lot of
forms. You're almost an attorney
at that point in time, looking
through all these, or
advisors. Yeah, yeah,
you're not an attorney for sure.
I, yeah, but there's a lot of
stuff in there that you have to
know and understand, and again,
same thing, having somebody on
your side to be able to manage
through all of that and pick the
right form at the right time
with the right wording is super
important.
And then we, we talk about AI a
lot too, right? And so I see
agents and I see clients that
are, that'll, you know, kind of
challenge. Well, AI told me that
this is what this form means,
and the internet can scour
everything, so it may be an
outdated form, it may be from
Pennsylvania, it may, it may not
be the right information. So,
really, having a person that is
liable, like I'm liable to give
the right information, I have a
fiduciary duty. I could lose my
job if I give somebody the wrong
information. Yeah,
it's.. it is in very interesting
right now that you know I have
clients that are using AI before
they call me and have their what
they think their ducks are in a
row to ask me the questions. I'm
like, are you, are you using AI
to like get all this? Yeah,
yeah. And like, well, it's not
right.
Yeah, and there's, I mean,
there's attorneys that do house
sales as well, so the internet
can scour their contracts, which
is totally different than than
our contract. There's so much
that the internet can find that
AI can find that's not accurate
and applicable to what we're
doing in a real estate
transaction, and
yet there's a whole lot of good
stuff to it, is
there is, yes, yes, so they
proof my emails, amazing, I love
that,
right, trying to figure out how
to buy with interest rates that
are not three to 4% Just
imagine, without any changes in
your spending habits, we can
help you pay off your home loan
sooner, limiting the interest
expense by 10s, if not hundreds
of 1000s of dollars, and still
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if the all in one loan is right
for you. Yeah, I actually sent a
text to my wife the other day,
she's like, did you use AI to do
that? I'm like, yeah, so the
thought that counts, that's
right, exactly. I started it.
Okay, so 13 years, funniest,
weirdest real estate story, any
like that come to top of mind.
So, I've, I have a fear of being
asked this in podcasts before,
and I don't think that my past
clients will listen to this, but
maybe they will. So, I'll be
super vague, because I would
hate to embarrass somebody.
Yeah, but definitely, like I've
seen like personal preference
things in bedrooms, very, there
was no masking what it was, so
that was interesting. Wasn't
staged,
and I mean, in my listing
appointments, I just come off
the bat and talk about guns and
drugs, you know. Do you have any
guns in the house? Do you have
any drugs in the house? You
know, I've seen homes where
people put a tarp over their
ammo, and I'm like, if there's a
tarp on the ground, people are
gonna wonder, they're gonna lift
it up and wonder what's under
there. I had another seller who
had in his closet, he had like
vintage guns on like racks, and
he put a sheet over it. So I
said, what's behind the sheet? I
thought maybe it was a hole or
something. Yeah, and he's like,
oh no, they're, you know, you
told me to get rid of my guns,
and you know, so I just put a
sheet over them, and I said, if
I'm doing an open house and
somebody comes down the stairs,
because he's like, it's not,
they're not loaded, and I said,
but if I'm doing an open house
and somebody comes down the
stairs with a rifle, like, even
I don't know if it's loaded or
not, like, get it out of here, I
don't want that, yeah, dogs
escape, I've had dogs escape
before, and I'm allergic to
pets, and they're, you know,
they're not my favorite one of
those weirdos that just doesn't
vibe well with pets. So, chasing
someone's dog, yeah, there's
actually my other podcast host,
he's not a dog person either,
and we should have a little
club. My
wife and I, we're like, we've,
we've fostered like over 170
kids, so we're good with kids.
I'm great with pets, yeah, like
not so much. So, yeah. All
right. So, tell me about current
market. What are the things,
like, what on the seller side?
What are the most common reasons
sellers are giving, like, I
don't want to list right now,
like, what are the reasons that
they're giving you?
Yeah, so I mean, you know,
people love to talk about
interest rates, and I'm like,
well, let's remember what
happened when we had super low
interest rates, people were
paying 70 to $100,000 over list
price, like, yeah, the best time
to buy a house is always
yesterday or five years ago.
Yeah, always. Yep. So that's
definitely a concern for
sellers. We don't see too many
concerns about I don't have too
many people that are like
anti-stranger that don't want
people coming in their house.
Usually when somebody's ready to
sell their house, they're very
proud, like, "Come in, come see
it, my house is the best. Yeah,
and so, so that's pretty cool.
Yeah, things are things are
moving a little bit slower than
they were a couple years ago,
but I think it's because buyers
have more options, so they're
able to really find what they're
looking for.
Yeah, so like a lot of.. let me
talk about interest rates real
quick, right? So, interest
rates, even the Fed met last
week. The Fed is basically, for
the next year, is basically kind
of put out there like we're not
changing rates, so the I don't
see the interest rates going
down very much right now, so I
think that when we talk about
even negotiations with people
that are buying houses, I'm
talking about using seller
credits to actually buy down the
interest rate today, and if you
have to pay a little bit more to
get the interest rate down, you
can, but that's, you know, I've
heard a lot of agents say that
their clients are basically
waiting for interest rates to go
down, they're not going down,
like they're like maybe a little
bit, I just, they're gonna be
between six and 7% maybe touch
the high fives, but at the end
of the day, they're just not
going down anytime soon, and so
it's almost like, what interest
rate do you, would you buy at
today? And rental prices are
going up, you know. In the city
of Oxnard, we have a rent
ordinance where you can't raise
the rent more than 4% When that
passed, guess what happened? All
the landlords maxed it out every
year, they'll max out that 4%
every year, yeah. Because they
don't, you know, whatever, they
just do that well. So, your
rental, if you're, if you're a
first-time homebuyer and you're
renting something, your rent
payment is going to go up every
year, and you might as well just
buy something, because that's
the only way to have it go down
eventually.
Yeah, and so we, you know, the
30 year fixed rate loan is a
inflation buster, kind of,
because technically your rate
is, it's the same, your payments
the same for 30 years, and your
rent is going to go up over
time. So, yeah, and I do, I
agree with you with those
ordinances that are going in
with the rents, you know, if I
was leasing a property today, I
would put in automatic increases
at 4% every single year, so that
it just goes up every single
year. I mean, that's just,
yep. And people can, with a
mortgage, you can refinance, you
can stretch it out, you know,
and lower your payment. The
rates go down, you can lower
your payment. I had people when
rates were crazy low refi, and
they called me. Oh my gosh, this
saved me $700 a month. Yeah,
like that makes a huge
difference. My dad just paid off
his house. Yeah, I'm like, I
don't know anyone that's paid
off their house. Yeah, and he's
like, I just feel like I gave
myself a raise. And I remember,
I remember when my parents
bought that house, and it was,
it was hard. Yeah, like it was,
it was not easy. And now look
at, yeah, gave himself a raise,
and that's what I would say. We
talked about a little bit about
the, you know, how good you feel
about getting first-time
homebuyers or people into a
house, buyers, and it is
generally in California,
especially. It is a stretch to
get people into their house, and
when I'm looking at loans, the
debt ratios, they're like,
really, you know, 45 to 50% of
their gross income, and it's,
it's tough to make those
payments, but 234, years later,
their incomes go up, maybe
interest rates come down, and it
starts to feel a little bit
better at that point in time, so
lifestyles
change, people get raises,
people get married, you know,
people get inheritances from
whatever, their families, or,
you know, a cash out from stocks
or something.
Yeah, it's all over the place.
Staying
optimistic, that's
right. Exactly, there's,
there's, you know, on the buy
side, I should say this. Do you
have clients right now that
aren't moving because of their
low interest rate that they have
on their house right now?
Yes, that's definitely an
objection with sellers. And how
do you handle that objection?
Like, is there a.
Is a tough one, I mean, when we
see these big five bedroom, two
story houses for two people,
because they're empty nesters,
it's a lot of maintenance, it's
it's a big house, yeah, and so,
yeah, this is your rate's going
to be a little bit higher,
you're going to make a ton of
money on this house, yeah, you
could buy down the rate because
they have a lot of equity, they
have a
lot of equity, yeah, and just
the quality of life is gonna be
better, you know, you're gonna
have something that is easier to
maintain, it hopefully could be
newer, easier, like, like I
said, it's
there's a lot of factors out
there you had to go through, and
you have to empathize with their
situation, where they're at, a
lot of times, you know, in, for
instance, this building that
we're in right now, I own
it. Beautiful, the..
and I have a loan on it. It
just.. the interest rate just
went up 2% because it's an
adjustable rate mortgage, and it
was so.. I had it locked in for
five years, and it just went up
by 2% but my payment actually
went down because my balance
over the last five years, I kept
on paying it down, paying it
down, paying it down, and I was
aggressive in paying it down,
and so when the rate changed, it
changed on the new balance, and
the new balance is lower. Same
thing with your sellers that
have this low interest rate, but
a ton of equity, they can
probably go in and buy a house,
if not all cash, they can buy it
with a lot lower loan balance,
even with a higher interest
rate, their payment may actually
be lower, which they don't think
about all these things, and
that's why having a team of a
lender, a real estate agent that
have been doing this for a long,
long time have the ability to
kind of work through some of
those things,
and to get creative. I had my
last bar that I, that I just
closed, he did, and I'm not sure
what it's called, but where you
pay bimonthly or twice a month
payments.
Yes,
and so he had told his morgue
professional at the time, like,
hey, this is how I pay my rent,
I pay it on the first and the
15th, because this is how I get
paid, and I said I think there's
a way to do that, so it makes
the most sense for you and your
family, and they amortized it
out, it makes more sense, so
lifestyle wise it made sense for
him, and then financially it
made a lot more sense to him as
well.
Well, I'm going to try something
out on you in just a little bit
and see if you like this other
loan, and it'll be probably the
first time you heard it, but
we'll, we'll go over it and see.
So, hurdles right now for people
buying houses, it seems like the
market is, is kind of.. I've
heard it called like a weird
market, right? Yeah,
it's weird.
So, you know, you have houses
that you list, they go into
escrow right away. There's
houses that have been sitting on
the market for 3040-560, 90 days
that they just won't move. Like,
what is the, like,
the magic song?
Yeah, what is it that's
happening? Anything that you can
come to, like, comes to mind.
I mean, there's so much. Condos
used to move a lot faster. Now I
feel like condos aren't moving
as fast. Single-family homes
that are dialed in and done are
really moving, which is great. I
guess people don't want to do
the work anymore. They're,
they're back to work from being
at home, yeah, during Covid. So,
a totally redone house is
dialed in, ready to go.
Yeah, people aren't open to a
project anymore, and even
investors - I'm not seeing as
many investors really kind of
digging for projects. Yeah, it
seems like
the, you have to buy right, and
that's, you know, that's tough
to do these days. So, one of the
things that, for first-time
homebuyers that I forgot to
mention that I wanted to mention
is that Lawrence Yun, he's the
chief economist for NAR. I've
seen him speak,
he's amazing. Yeah, he's a good
guy. He says the US median home
price is again nationwide
$430,000 today, 90,000 back in
1992 He says that it's going to
be a million dollars in 2050
Okay, so in Ventura County, when
we kind of kind of extrapolate
those numbers, we're at between
900 and a million dollars, right
now, for a median price. So, in
2050 we're talking about $2
million houses as being the
median price in Ventura County.
Is that realistic? You're like,
I don't know.
Yeah, it's just crazy how
everything gets more expensive,
bread, eggs, gas prices, and
then we see salaries also going
up, minimum wage is constantly
going up. They don't necessarily
keep up with each other, but I
think there is a correlation
somewhere. $2 million is crazy
for a first-time homebuyer, but
that's how it's been in the
Silicon Valley, that's how it is
in most parts of Orange. County,
and then obviously in Ventura
County, here we, we have high
median home prices. So
it's this morning, driving to
work, listening to the news, and
they were talking about average
age of a first time home buyer,
who knows what it is, 35 to 40
years old right now, a lot of
people living with their
parents, I personally think that
there's some, you said incomes
go up, and you know your tastes
change, and so forth, all those,
these things, but at the end of
the day, is there a little bit
of younger people wanting to
have experiences, wanting to go
out to restaurants and
experience the food, vacations,
destination spots, concerts,
whatever, rather than owning a
house.
So, I feel, and we touched on
this on my other podcast, I feel
like my generation, in, you
know, my mid 40s, so like those
kind of millennials in their
late 30s, mid 40s, that was kind
of what we did, you know, we
wanted to have experiences, a
lot of my friends travel and
still, and still travel, and I
had two agents that I talked to
a couple weeks ago that both had
put buyers in their early 20s
into new homes, and I have a 17
year old, yeah, so she, I mean,
her and her friends like to go
to the mall, like bringing back
stuff, yeah, that you know was,
we thought was going to be dead,
and home ownership is also one
of those things, I think, I
think it's, yeah, and it's
important, it's important to buy
a home, and well, this is just
a perfect example of it, right,
it's like if you had an
investment that I told you that
you were gonna double in 25
years, 24 years, that's, you
know, that's pretty good. And
not only is your investment
gonna double, you're amortizing,
if you're amortizing your loan,
you're paying it off, so in 25
years you could have it, you
know, paid off, or very close to
being paid off.
And in our 20s, we have
different needs, like you could
buy so much, like you can live
in a studio apartment, or you
know, a one-bedroom without a
garage. Like, now in our 40s, we
need a garage to store the
holiday decorations. We need to
have a backyard for our pets. We
just need more things. Yeah,
that that first-time homebuyer,
who is young, in their 20s,
that's maybe coming from a
college dorm or their parents'
house, their needs are minimal.
Yeah,
you know, so they can just get
into something, hopefully keep
it for the rest of their lives
as a rental or sell it and put
it, put the money down on on a
bigger house when they're ready.
On the, the.. when I was
listening this morning to the
news, it was basically like, oh,
I work at home, and I'm like,
well, shoot, if you work at home
and you're living in Northern
California, in Silicon Valley,
where the prices are just crazy.
Could you work in Tennessee,
North Dakota, like South, like,
could you move there, still work
from home, and you know, be able
to afford a house in Riverside
County or Kern County? You know,
there's places in California
that are a lot more affordable
than Ventura County, and of
course, Silicon Valley.
Yeah, yeah, for sure. Okay, so
I'm going to give you, since you
mentioned amortized loans and
biweekly payments and all that
stuff, right? So I'm going to
talk about my all-in-one loan.
Have you heard of this?
I think so, but they all kind of
jumbled together. My friends,
that's okay. I always say this
isn't my language, and I just
receive the information. I do
this at the
end, just in case, like I
stumped you, and you're like, I
don't know, I don't really care.
So, anyways, this is the all in
one loan. The all in one loan is
a first lien line of credit,
okay? And we pair it with a
checking account, so every
deposit that you make, so in
your instance, when you get a
commission check, it goes into
your checking account at
midnight that night, when it's
deposited, it automatically goes
over without you doing anything
and pays down your line of
credit. Now there's zero in your
checking account, you've paid
your mortgage down, and this is
a daily interest loan. So, the
lower the loan balance is, the
less interest you pay. When you
need the money to pay your
utility bill, you're going to
log into your checking account.
You're going to pay your bill.
The bill comes in to get
cleared. It says there's no
money in your checking account.
It automatically goes over and
just takes that $200 out of your
all in one loan, increases it by
$200 gives the money to your
checking account, clears your
utility bill for you. Okay, so
now this is not an amortized
loan, it is a daily interest
loan, and by doing this month in
and month out, if you pay your
bills, if you stick to a budget,
I should say you'll pay it off
in half the amount of time, and
you'll save hundreds, and
especially in Ventura County,
you'll save hundreds of 1000s of
dollars in avoided interest
cost, so it is. A great loan,
especially for people that are,
you know, they're buying a
house, they're in their
high-income earning years, you
know, rather than waiting 30
years to pay it off, they're
paying it off in 15 years or 10
years and saving a lot of money
in the meantime. So I try to
tell everybody about this loan.
It is
a, you know, the guy that you
talked about with the biweekly
payments. It's very similar to
that, but you still have access
to every single dollar that
you've put paid down on your
loan. It's a line of credit,
it's a big credit card that you
can use whenever you want to, so
have you had any pushback from
borrowers on that? From I feel
like people are still
traumatized from, like, we were
like, this is the greatest idea
ever. And then, and people are
still a little untrusting of
untraditional ways. So, we've
had this loan for over 20 years,
2525 years down, zero
delinquencies, zero
foreclosures, and yes, when I
talk to people, some of them are
just like, that sounds way too
complicated for me, and I said,
would you want to save 100
$200,000 and it intrigues them,
and they're, they basically say,
well, why doesn't everybody have
this loan, and they say, well,
that's why I'm talking to you
about it right now, because I
do, I love this loan, I have
this loan, I gave it to my son,
and so forth, so it is a, it's
a, it's a different way of
thinking, but yes, the, the,
that's probably the hardest
sell, because the 30 year fixed
rate loan, do you know why that
came about.
No,
so 1930s there was, they were
doing adjustable rate mortgages
at the time, inflation like went
out of control because of the
war. Okay, so when their rates
changed on those houses or on
those loans, the rates went up
significantly, put people in
foreclosure, they lost their
houses, and so the government
put in a 30 year fixed rate
loan. The 30 year fixed rate
loan, same payment 30 years. I
know that I'm like, I wig out on
like these things, right? So the
30 year fixed rate loan, great
loan, same payment 30 years.
Back then it was, you had one
job, you bought one house, at
the end of 30 years, you
retired, you didn't have a
mortgage payment, you were all
done, people didn't refinance,
people didn't do those things to
lower the payment and get, you
know, cash out or whatever,
right, and it's front loaded
with interest, so when you're
paying on a 30 year fixed rate
loan, the bank, they make all
their money in the first 15
years, and even though it's a
great loan that I sell a lot of,
it's still like really nerdy
people that look at this and go,
oh, 90% of my payment goes to
interest during the first 989 10
years, like, yes, that's when I
get into, like, this is the
solution for this loan. So, but,
yeah,
great. And there's, I mean,
there's a ton of really smart,
savvy people out there. I feel
like the news will tell us that
people are getting dumber, but
people are really savvy,
yes,
you know, and want to think
creatively and think outside the
box and do things differently
than you know than has been done
in the past.
Yes,
so
having said all that, an
experienced real estate agent
like Katie, an experienced loan
officer like myself, it is super
important to have those people
when you are making the biggest
purchase of your life, a house
is, unless you're buying a
business, you know, that's,
that's a, you know, big
business, buying the house is
the most, the biggest purchase
of your life in most instances,
and so having that person on
your side as your team going
into this transaction is super,
super important. Thank you very
much for coming. I appreciate
it. It was great. Yes, if do you
have like a handle or like,
I mean, if you Google Katie
Connolly Realtor, I'll probably
pop up on my Instagram is Katie
dot Connolly dot Realtor, same.
My Facebook is Katie Connelly on
LinkedIn. I think I use my
grown-up named Catherine. Yeah,
the
growth, it's my same face
on all across all those
platforms. Nice,
awesome. Yeah, so if you're, if
you're missing her face, there
you go, there's her face. Yeah,
this is Mortgage Wise with Mike
Wise. Thanks for joining us,
we'll see you next time on the
next podcast.
This has been Mortgage Wise with
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