Listen in as we talk with diversified mortgage about loans and identity theft and later we weigh the pitfalls and benefits of buying a fixer upper. As always, we strive to give you news you can use and help you with knowledge in the market place.
This is the Idaho Real Estate Buzz I'm Dave Burnett along with Thom Dallman with CORE Group Realty. Coregrouprealty.com that is the website for you to go to check out all the things we’re talking about not only today but that's going on with CORE Group Realty, Thom is also the designated broker and co-owner of CORE Group Realty. Welcome back!
Thom: Thank you Dave, I appreciate you having me here! And partnering with me on this!
Dave: And I do want to point this out, that we do have the opportunity to do this show at CORE Group Realty right here, right near the Boise Towne Square Mall right here on Emerald street of which you are always welcome to come in, stop by, talk to any of the representatives here about what's happening.
Thom: Yeah, please do. We love walk-ins!
Dave: Nice office, just a great ... and I will say this they're not in here with us but great staff as well. You do have some good people working here for you.
Thom: Yeah, they're wonderful!
Dave: You know I mentioned the website coregrouprealty.com and that is where you can find all the homes that have been listed, the new listings, the featured listings, there's a coming soon tab that we'll hopefully get a couple things populated there coming up here very shortly but check all of those out. What are the featured listings that you're talking about this week?
Thom: Sure, we've got two actually that recently have gone through price reductions. We've got ... or as I like to call them, price improvements! We've got the first one is a property here in West Boise, it's at 4194 W. Marlebone Way. That just got dropped to $349,847. That is a 3,692 square foot house.
Dave: That's a big home.
Thom: That is a big home, it's got 7 bedrooms. 7 bedrooms and 4 bathrooms.
Dave: So if you've got 5-6 kids, you're in good luck here.
Thom: You're in great shape. This is one that our custom home builder, in house home builder, Innovative Custom Homes, they actually went in and remodeled this home so it's beautifully re-done like we said, huge home with 2 master suites, granite counter tops, custom cabinets in the kitchen, tile in the bathrooms, and so forth. .22 of a lot so really good price for a really big home right here in West Boise.
Dave: I guess it's kind of like double the size of a normal lot. .22 isn't it?
Thom: Yeah, your average is about .18 .2, it's about an average lot.
Dave: That's a good size lot.
Thom: It's decent size yeah for sure.
Dave: Great home, and there's so many families here in the Treasure Valley with larger families that are looking for homes like that so the kids aren't having to bunk up in bunk beds next to each other especially as the kids get older, it's tough to do that. So 7 bedrooms, that would be awesome.
Thom: And price per square foot is $90 so that's a pretty good price for such a big house.
Dave: You know if you were to do that and figure out the price per square foot, what is an average more or less or what should you be looking for?
Thom: I have using price per square foot because it's just so varied on the house and the lots and stuff too.
Dave: Well it depends on the house too. You can have a super primo house or you can have a dump but on average?
Thom: On average I would say $110-$130 is kind of even up into the $140s is what a traditional re-sale is going for.
Dave: So if you find a house that you like and it's in that $100 a square foot price range that's pretty good.
Thom: That would be a pretty good price. Definitely want to do your comparables in the neighborhood and stuff, make sure and check those prices but yeah.
Dave: And that's one of the things where if you don't do real estate very often, and most of us don't, those comparables are so important and it's really not something an untrained person can do, but your staff could do that.
Thom: Oh yes, we have trained listing partners that do that all day long. That's what they specialize in and that's what they are professionals at is looking at those comparables and we just had a recent call this week where someone wanted a second opinion on what their house is. They have it listed and we had to do a thorough search because it's one of those North End homes that, there's not a lot of comparables in the North End for some of these homes. We really kind of had to do some digging and research into what the market will hold for that house.
Dave: It's funny, I was walking in my neighborhood 2 weekends ago and talking to one of my neighbors and one of the houses is for sale in the neighborhood and he goes, "You see how much they want for that house?" I said "No, I didn't look." He goes, "I don't know what they're thinking!" But the thing is, if you don't do a comparable you don't know what the value of that home is, and he's here scoffing at it going "Oh, they're out of their mind" but that house has sold in the past two weeks.
Thom: Oh they must not have been too far out of their mind then!
Dave: It must have been priced pretty decent, we'll see if that guy puts his house up for sale now.
Thom: Well yeah and that's kind of what you want if you have a house in the neighborhood that's listed kind of high, you want it to get sold because that's going to help your value of your own home.
Dave: Exactly, tell everyone you know that home is for sale. But if somebody wants to see this, they can see it at coregrouprealty.com and if you like the look of that big home you can get one of the agents to take you out and show it to you.
Thom: Yeah, for sure, we have someone always handy and ready to go for sure.
Dave: What else do you have featured this week?
Thom: We are also featuring a Meridian house at 2021 N. Silverleaf Place, this one's a 2800 square foot home, 2850-ish right around there. 4 bedroom 2.5 bath on a nice decent lot too, it's a .32 sized lot. This one is priced at $315,000 and it's just a beautiful home with lots of great curb appeal, it's got the nice little curved staircase as you enter into the front of the house as well as high ceilings, gorgeous chandeliers, huge kitchen with a center island. Just overall a really beautiful home with a double deep garage for a 4th car. 4 car garage. 3 or 4 car garage depending on how you use it.
Dave: And depending on what you drive!
Thom: And what you drive!
Dave: If you drive an extended cab F250 you may not get 2 of those in there. Let me ask you this question and not speaking on Michelle Diversified Mortgage her side of it, but we have seen the prices of homes coming up from the real estate agent world perspective, is it beginning to plateau a bit or is it still climbing?
Thom: It's still climbing, we actually just got our numbers for August and we are still up, we're up from last year about 7.2% in price change, so it's still continuing to climb a little bit. Supply's still low, still a great time to sell your house because the supply is low but the demand is still there. We still have more buyers in the market right now than we did last year, Ada county alone we had 1,000 sales in August whereas last year this time we had 850 sales.
Dave: So it's going up.
Thom: So there's a huge demand still and I know there's a lot of people who are hesitate to sell because we're going into Fall and the market's going to slow down, but typically we see still a lot of buyers wanting to get into their homes before the holidays and so forth so it's still a great opportunity to get your home sold.
Dave: I just talked to a couple yesterday as a matter of fact that had moved here from New Jersey because he opened his mouth to talk and I said, "Where are you from?" and he said "New Jersey" and I said "What are you doing here?" He said "Well, we just bought a home moved here at the end of July and the company moved them into town here. So there's still people coming in from out of town coming into town and the just bought a home, a new home that has just been built. What do you call those? A spec home? It was new, a speculation home that they build it seeing if they can sell it.
Thom: Yes, a builder has built that home specifically to just put it on the market and have something in the inventory.
Dave: Which it sold, so I guess there are still people moving to town and people moving up so things are happening out there.
Thom: And there are downsizers, don' forget them.
Dave: And that is important, if you're thinking about downsizing, you might want to give Thom Dallman here a CORE Group Realty a call or one of his staff here to say "OK if I downsize, what are my options that are out there" and that way we can get that house listed and get it sold and downsize.
Thom: Exactly, we do that quite often.
Dave: Coregrouprealty.com that is the website where you can go to and check out these featured listings which we've been talking about. That and there's more that can go there and in fact through coregrouprealty.com you have access to all of multiple listings.
Thom: You sure do, it's updated every 15 minutes so you have the most current information handy and available.
Dave: And roughly, how many homes are available at multiple listing would you say? Any rough idea?
Thom: Currently listed active homes? I'm going to say we are ... I think we're around 2,300?
Dave: Alright so that's a lot of homes to look at.
Thom: And that's like in Ada County.
Dave: But there's a lot of looking to do.
Thom: Yeah there are a lot of homes actually active right now.
Dave: So if you think you're going to do it in 10 minutes, that's not going to happen. It's going to take a while to take a look and if you have questions about any of those homes you can call CORE Group Realty and talk to one of their customer care agents and get that dealt with as well. Coregrouprealty.com that is the website to go to. We're going to be talking to Michelle Guth coming up, talking about the world of finance because let's be honest that's right where it comes down to what kind of house you can buy, how big of a house you can buy and all of i comes down to that, we'll talk to Michelle at Diversified Mortgage and hear what the latest is as well, plus going to be talking to one of your vendors that you have coming up in just a bit. Well, that's another thing on the website.
Thom: Oh yes, our service providers.
Dave: Your service providers.
Thom: We have a list of tired and true people that we've worked with side by side throughout the years and have had really good relationships with.
Dave: This is the Idaho Real Estate Buzz I'm Dave Burnett along with Thom Dallman of CORE Group Realty. Coregrouprealty.com is the website for you t, 933-7777 is the phone number. And Thom each and every week we get the chance to talk to the folks at Diversified Mortgage about finances and what's happening and this week is no different.
Thom: We do, they're so full of knowledge and they're great partners with us and share so much information. I'm really excited for our guest from DMG today.
Dave: Yes, Michelle Guth taking the week off and Molly Timian joins us. Molly what's your official title there at Diversified Mortgage?
Molly: I am the processing manager.
Dave: Processing manager.
Thom: Processing manager, she processes people!
Dave: Like I said, it's kind of a simple way to really say what you do which is a complicated job. What all does that entail when it comes to lending and being the processing manager?
Molly: Well it's basically just trying to streamline the process from application o when someone's actually ready to sit down and they've found their house with CORE Group, talked to Thom or his folks over there, we get the application, get the information, then the loan officers hand it off to me. We get it going with our processing team here and basically work through all of the milestones from inception to funding. And it's great.
Thom: Would you kind of classify yourselves as kind of investigators? You kind of get to look into everyone's financials to make sure that they qualify, make sure everything's going smoothly for the process.
Molly; Absolutely. We actually kind of get to know the client better probably than even their kids at some point. You literally get to know everything about them, their income ... the application even asks your age, social security, that kind of stuff. And then basically that application is the format for us to verify all that information from the name, social security, there's a series of validations that you go through for that. Look at the income, 2-year history on income, 2-year history of residence, we take a look at their credit. Debt to income is one of the big things and that's kind of one of those of foreign words. You say debt to income and everybody kind of assumes that ... I'm not really sure what they assume on that because you get such a big broad spectrum with regards to questions on that but essentially you take a look at their gross income, so basically before any taxes are taken out and you basically look at all of their debt that shows up on their credit report. Other things that we would take a look at and include in there would be like child support, if they have expenses through work so if somebody has extra expenses that they write off on their taxes, like that, we would analyze the tax returns for anybody that would be self-employed. Maybe they receive income from an annuity or some other kinds of retirement that are not necessarily just "Here's how much you get every single month" so there's lots of ... it's a pretty laborious process and I think sometimes ...
Thom: Well and they add to it in July with the student loans as well, now there's all kinds of student loans ... if you have student loans.
Molly: Yeah they actually on student loans that's a big deal, it's been kind of a bummer for some clients because we take 1%. So even if you have a payment established on a student loan, if it is not 1% of the balance we use 1% when we are doing our calculations so that was a huge change this Summer. And it does match all of the programs though.
Dave: There's a lot of people with student loans out there in this day and age after the recession I know a lot of people went back to school whether they needed it or not they went back.
Molly: Yeah, a lot of people were encouraged to do it and if they wanted to continue on with benefits and things like that on unemployment.
Dave: Well, let me ask you this and I also kind of find this fascinating when it comes to people of different ages. And the change in attitude. There was a time when ... and I remember my mom and dad, you didn't talk about finances. That was as intimate as anything else in a relationship but now I know with my kids they talk about credit scores, they talk about this and that person makes this money, everyone knows how much money everyone makes blah blah blah. Have you thought over your years working in this industry a change in attitude among people?
Molly: Oh yes very much. People will offer up information with regards to their credit, their income before sometimes they even give you their name and it's sort of amazing I'll get phone calls where they've started looking at houses or we're following up on a lead and before I've even said "Hi my name is Molly" it's "My credit score is about 650 and I've been told that my income to how much I make or ... how much I'm having to spend every month on my payments is too high but I don't think it is so I want to buy a house." But with the credit score, I don't know what a good word for that is but everybody "gets it." They get a beat 15 times a day.
Thom: Well I think that's a testament to where the trend is right now and it's just ... people are doing so much research on line and getting so much knowledge before they even start the process of looking for homes and stuff like that. That's what we always talk about on the radio show is having that knowledge, being prepared for when you do get into it. I think that's a great testament to that, that people are searching for that knowledge.
Dave: I have one credit card that when we go online to pay it every month, it tracks you by month where you're at and it's like there was a time when I bought my first house was the first time I had ever heard about a credit score before and I was like "They score that?? How am I doing there?" but I think it is, again, and with identity theft it's just something in this day and age that people keep track of.
Molly: They do, well identity theft actually is one of the things that actually slows our loans down because it is so prevalent.
Dave: What is the process if somebody comes in and they find out that there has been identity theft. You say it slows the process down, does it ever stop it or is it something you deal with?
Molly: Most of the time we can work through it, it has stopped it a couple times. I would say in the 20+ years I've done this it used to be the one that was incredibly rare and this year we've probably seen 15 or 20 cases of it. Most of the time the identity theft has already been ... they've already identified it or they've been told of it or they've unfortunately had to deal with the consequences of it. Where it interferes with the loan process is where we're doing ... they call it an IRS it's an IRS identification so we look at the tax transcripts for the last 2 years. The IRS won't allow us to do that if there's been any kind of identity theft. And one of the biggest identity theft issues right now is tax returns. People have been filing false tax returns using someone else's social security number so they'll send in their tax return and you see it a lot with self-employed just because unfortunately a lot of people in this day and age a lot of people want their information or they want your tax ID number. A tax ID number for a business is as close to the chest as the social security number. And that gets out and they'll file a tax return as a business sort of early in the year so when they do that the IRS sort of goes "Hey what's going on man we already have a tax return for ya and already paid out on the income" and that process with the IRS is incredibly laborious and incredibly long. When that happens we actually have to send the clients to the IRS office here in Boise to get those for us.
Thom: Yikes now you've scared me as a business owner ... I give out my tax number to pretty much anybody that asks for it for tax purposes and what not and I'm like ... I'm going to hold that a little bit closer.
Dave: I have a daughter that refuses to believe me that when I got my very first checking account the bank has us put our social security number on the checks as ID.
Thom: Actually I remember doing that.
Dave: I think back and I think "Wow." and I tell her and she goes "They did not."
Molly: Absolutely, I can remember doing it. I was in the bank business when they did it, certain states required it, Utah was one of them.
Dave: Yeah you had to put your social security number on the check.
Molly: And you handed it out to everybody because checks were the way you did it.
Dave: That was the debit card of the day. So, I guess we started to talk about the process what you do here for Diversified Mortgage. By the way what is the phone number if somebody wants to get a hold of you here at Diversified. What is your phone number here?
Molly: It's 208-853-7878.
Dave: Easy to find right here is this Marigold around here? Marigold right off of Glenwood. You can stop by or call and make an appointment whether you're looking at refinancing, looking for a loan or looking for that financial advice I know Michelle has said you guys are always open to talk to folks just about whether they stand and what they want to do if they want to get pre-qualified. A wise thing to do in the real estate world is knowing what you've got that you can work with.
Molly: It is, it's a great thing to do and actually Michelle is wonderful at that. Actually a lot of people are clients that we work with for several years. And we'll sit down with them and work out a plan and pretty much if the client is willing to do the things that have been set out for them we will get them in the house and that is one of the most fun things to do here.
Thom: I can testify to that because we've ... for any of our houses we've always gone through Michelle and Diversified so I can attest for it.
Dave: Thom for the company for CORE Group Realty how important though is it for you to have somebody that you know just as a partner in getting this transaction done?
Thom: It's so huge and important because this is the most important purchase that most people are doing in their lives and to us it is so important to have that trusted adviser that people that we know that are going to do well and treat our clients with respect and just make sure that they're getting everything that they need and there's not going to be a hold up in the process, there's not going to be a hold up I 100% trust and rely on Diversified Mortgage and the team here, Molly included on everything that we do as far as lending goes and whenever we have questions, whenever we have issues they are quick to respond and give us answers and they're knowledgeable! They just always know the answers.
Dave: Well Molly we just want to thank you for sharing with us and joining us here getting to know some of the staff here at Diversified Mortgage on the show on the Idaho Real Estate Buzz. Again that number if somebody wants to get a hold of you?
Dave: This is the Idaho Real Estate Buzz to talk more with Thom Dallman here on 580 KIDO.
Dave: This is the Idaho Real Estate Buzz I'm Dave Burnett he is Thom Dallman who is the co-owner and designated broker of CORE Group Realty. Coregrouprealty.com the website for you to go to 933-7777. I want you to get that phone number in your mind just say 933 and then keep dialing 7s until it rings. That's the number you can call at any time to reach the Customer Care department at CORE Group Realty and of course to reach one of the agents if there's something we talk about in here that you go "Hmm.. I'd like to look into that." You can give that number a call.
Thom: Oh yeah, please! We have people standing by 24/7 usually ready to answer questions. It might be kind of hard to get someone in the middle of the night but you never know.
Dave: Going hand in hand, if you're up in the middle of the night and somebody will be able to take care of that for you. But you know, I think one of the things, it's kind of interesting that real estate has changed at least from he pedestrian view in my view, and that is the home flipping shows. Flip or that, this or that. The Property Brothers, it kind of makes you look at real estate I mean when you buy a home it's a personal thing, sometimes very difficult to sell your home because it's emotional. Your kids took their first steps there, you had prom, their graduation, you first got married and moved in there. So it is an emotional decision to sell and sometimes difficult to sell.
Thom: We've got one of those properties over there in Payette where it's basically the family was raised in it, you've got this lovely lady that has brought up her kids and her family and everything in this house in this little cute 4.5-acre farm pretty much right there in the middle of Payette. So there's a lot of emotional attachment to the house as far as that moving on with the next phase of her life.
Dave: But that's where it, to me, and I think you'd back me up on this, a really good real estate agent who gets that who understands that, but can help look past that because it's a business transaction. Even though you've got all of these memories they understand that, but they also know that this has to be put forward as a property to sell as a business.
Thom: Yes, you still have to deal with the current market values and so forth and be very conscious of the emotional attachment that the sellers have and also the real estate reality of what the market can support for that particular house.
Dave: But I think that same thing exists now when you look at these fix-em shows there's no emotional attachment for people as they flip these homes. It is a business deal.
Thom: It is a definite business deal and they're in it to make a profit. Sometimes it's a small profit, sometimes it's not very much, sometimes it's a big profit depending on the property and the extent of what they have to go in to do to fix up the property.
Dave: But I've run into a number of people now that they're not fixing to flip it but they are challenged to buy fixer uppers and to go "Let's buy this house, we can get it for a bargain and then the money that we save we'll put into fixing it up." What are some of the pitfalls ...
Thom: Or move in while they're fixing it up! I've seen that happen quite a few times.
Dave: That happens a lot, let's fix up a bedroom and a bathroom good enough to live in and we'll fix it. What are some of the pitfalls or benefits of fixer uppers?
Thom: Obviously the disruption to your life if you move into the house is a huge pitfall of buying a fixer upper and moving into it. I see that quite often, people buy a fixer upper and move in it and live in it for 2 years to save on the capital gains on it and either sell it or rent it out after the 2 years and the pitfall is that you have to live in the house that you know is torn up. You might have to go down to the gas station at some point to use the restroom because your restroom is torn up as you're replacing toilets and such.
Dave: Well you don't think about the fact where if you're re-doing a kitchen you don't really think about the fact that you might be without a sink or you might be without a stove or you might be cooking on a stove just plugged in to the middle of a room with bare sub-flooring and dealing with a dish pan full of water.
Thom: I had a friend who lived around a McDonald's and by the time he got done with his kitchen he was so sick and tired of going to McDonald's for breakfast lunch and dinner.
Dave: I mean you don't even think about the fact that if you have an over the range microwave guess what, you don't have a microwave. You might have to go buy a $99 microwave to set on a box in the corner. You have to weigh those.
Thom: Some of the inconveniences like that but on the other side there's that concept of sweat equity that you can get out of a project like this. That equity that you get for doing some of that work yourself and not hiring contractors and living in the property and doing it on your own time that can definitely be profitable as you kind of work on that stuff and get in there and tile.
Dave: I guess ... I'm going to say something that's kind of obvious but I'll let you verify that. It takes a certain mentality a certain personality to be able to do that, doesn't it?
Thom: Oh yes. It really does. It's hard.
Dave: And so as an individual it's hard. For a married couple, any words of advice?
Thom: Avoid it if you can! Yeah no, I've seen married couples going and doing these fix-its and they have to have a really good relationship because there's some interesting phenomenon about married couples that they don't like to hear criticism from their spouse and so when someone's doing something wrong and the other one mentions it, it can usually result in a pretty good fight.
Dave: I think what I've been told and what I've experienced because we've remodeled a kitchen once, took about a month to do, is that some of those little things that are irritating are just magnified. Suddenly that dirty cereal bowl that's normally left in the sink which is irritating is magnified into that is a national crisis. Which is easy to laugh at and you're going through it and it happens.
Thom: One of the biggest fights I've seen happen was basically over whether to spend the extra money for that nicer tile or to spend the extra money for that nicer stove. Sometimes there's no a return on your investment when you spend money on the most expensive stove you can find but one or the other in the relationship says "No, I want to go all the way and get the nicest things and it will be more attractive when we do get it on the market."
Dave: Now one of the things we talked about earlier in the show I would think is probably pretty important is comparables in the community in your neighborhood because you kind of do want to make sure that you're making the house comparable to other homes?
Thom: Yes, you don't want to over-style your house beyond what your neighbors or your neighborhood is doing. You can over amend your house and put in such nice fixtures that it actually doesn't ... you don't get your return on your investment because you just don't get enough to actually get a return on those items. So you have to be super aware of what other homes are selling for, what they have in their homes as far as countertops as far as appliances as far as all that stuff. Make sure that you are looking at those comparables at those active homes and sold homes or pending at least to see what they've got going on in the neighborhood.
Dave: Well let me put you on the spot here. We talk about a lot of different homes, we talk about coregrouprealty.com the website, do you have any listings that you would consider fixer uppers that would be out there that you could help people to jump into?
Thom: Yeah, actually we've got a great property over at 9724 Horseshoe Bend Road. We've talked about this one in the past, that one is a 3400 square foot home listed at $250,000. It's one of those properties that is cash and conventional only homes because it does have work done so it won't pass an FHA or a VA appraisal but 3400 square feet. It's big, it's on .7 of an acre so if a developer was thinking about getting in and doing one of those in-fills, sub-divide it, put it into .2 acre parcels and do three little houses there or getting a 203K loan which is a rehab loan to go in there and fix up the house is always an option as well.
Dave: Which would bring it up to standards for a traditional loan.
Thom: Yes, for a traditional loan. So there are some great options on this house over there on Horseshoe Bend Road.
Dave: Do you see that very often where they take a house that has enough land on it to divide up does that happen very often?
Thom: Oh yeah you can see it happen quite often right now especially around the BSU area and up on the bench. That's where those row homes are going in, people are buying kind of the bigger lots or houses on bigger lots and then subdividing them into the smaller ones so you see 3 of those row homes going in. So it's happening quiet frequently.
Dave: If you did that, if you bought a house and then split it off, you can probably make at least enough money to at least subsidize the home that you're in can't you? Get it big enough one of them could pay for the thing.
Thom: There are some great profits but it does take money some cash to be able to do that or the ability to get a construction loan and so forth. So you really want to do your due diligence when you're doing that, make sure that the zoning permits it and that you can get it passed while you're going through your inspection time phrases for those bu some great options for these.
Dave: And again CORE Group Realty can help you. If you've thought about that or thought "I wonder if that's possible." or maybe this is the first time you heard us talking about it today and you thought "Oh maybe that's a good idea." If you want to talk to one of the agents here, they can help guide you through it and help you find the property and let you know what the pitfalls and everything that goes with it is. And you can do that by calling 933-7777 if you want to ask for Thom go straight to the top, you can ask for Thom he's more than happy to take your calls or he'll also there's a lot of different agents here that are specialists in areas whether it's bare land or condos or property out in rural areas you have a lot of people that really kind of specialize in those areas. You can find them at coregrouprealty.com. We'll do this again next Saturday. We do it every Saturday at 2:00 and next week, no exception. This is the Idaho Real Estate Buzz I'm Dave Burnett, he is Thom Dallman with CORE Group Realty on 580 KIDO.
7977 W Marigold St, Boise, ID 83714