Here is this week's Idaho Real Estate Buzz with Dave Burnett, Thom Dallman, and Michelle Guth from Diversified Mortgage Group. Doling out all kinds of great information for the Home Buyer or Seller. Everything from property condition requirements for loans on Boise Idaho homes to what is currently on the market and listed. There are also some helpful tips on when you should look at buying versus renting. Are you just gifting your money to your landlord that you could be paying yourself on through this investment?
Dave: This is the Idaho Real Estate Buzz, I'm Dave Burnett along with Thom Dallman who is the co-owner and designated broker of Core Group Realty. Core Group Realty, of course you can go to their website, CoreGroupRealty.com or you can give them a call at 933-7777. So just start dialing. Thom, it's another great weekend and a great time to buy here in the Treasure Valley.
Thom: Yeah, it sure is. This holiday weekend is a good time to get out with your family and maybe go check out a few houses, which we definitely have a few that we can recommend people to check out obviously.
Dave: And I want to point out it is a holiday weekend but there is staff on the phone to answer any questions.
Thom: Yep, we have our phones being answered all day long so we definitely have agents available. Agents available here that are out showing property and ready to help people look.
Dave: Well speaking of that, the website is a great place to start, CoreGroupRealty.com, with some of the special things that you have up and offered.
Thom: Yeah let's talk about one of our featured listings, a great house that's been on the market for just a couple weeks now, it's at 2199 E. Handel Street in Meridian. It's
a great home in the Vienna Woods subdivision, beautiful subdivision. It's a 3,000 square foot home, 4-bedroom house with 3 bathrooms, priced at $387,900. It's just a remarkable house with so many features to it. It has a custom alder entry door, it's got beautiful oak floors throughout, they've just updated the carpet, they've got custom Hunter Douglas wood blinds, 10 foot ceilings. It's just a beautiful home, huge pantry for that family that loves to store their food and everything so it's really go everything that a family needs.
Dave: For somebody that does not want to worry about landscaping, I assume,.mature trees and plants on the property?
Thom: Yep, great landscaping job, it's all around just a beautiful house.
Dave: It's kind of got that Wow Factor.
Thom: It's got it! It's got everything in it. It's got two different eating areas, a more formal dining area and a breakfast nook surrounded by beautiful windows overlooking the backyard. It's a gorgeous home so I highly recommend taking a look.
Dave: They can find that at CoreGroupRealty.com?
Thom: CoreGroupRealty.com on our Featured Listings, and once again that's 2199 E.
Handel Street in Meridian, ID.
Dave: Perfect, so if you go online, you see that, you like what you see, you can call and see it this weekend.
Thom: Yes, we have agents standing by, haha.
Dave: You know on the website there is the Coming Soon tab you can hit and of course as we try to explain every week, that is properties that haven't officially been listed, there not on the MLS, it's kind of in house and you can kind of get a head start. And really with a shortage of houses, a head start is a good thing to have!
Thom: In today's market where we have such a low inventory, having every advantage that you can in getting into homes before they actually hit the MLS is a really big advantage.
Dave: And if you're new to the real estate world, and I sometimes forget about it, but if somebody is new, maybe just graduated from college and has never bought properties. MLS is Multiple Listing Services and that's kind of thrown out there to everybody.
Thom: Exactly, it actually downloads into our system so if they go to CoreGroupRealty.com and actually do the Home Search function from there, they get access to that. It's uploaded every 15 minutes so it's very current. They get access to all that information and everything that's available out there. We do actually have a new listing that I'd like to talk about too.
Dave: So there are a few houses for sale out there.
Thom: Haha, just a couple. We have a new listing that just came on this week at 4600 W. Clark street, it's a cute little bench house. Of course I guess it's not little considering it's 1,182 square feet, it's a 3 bedroom, 1.5 bath on .2 of an acre. It's a great house with hardwood floors throughout the house. They've got concrete kitchen countertops, which is kind of a trendy new thing to do. It's got a great, large backyard with garden space, very mature landscaping and beautiful trees. I'll give you one guess on what it has... The RV parking. We've talked about it the last couple weeks; all these homes seem to have RV parking on them. The really nice thing is it's the bench house so it has irrigation for the yard, so money saving right there not having to pay for the city water.
Dave: And fully fenced?
Thom: Fully fenced, yes it sure is.
Dave: So if you have animals, you have pets you're already take care of.
Thom: Correct, they can roam the yard at will.
Dave: And what's the address on that?
Thom: One again, that's 4600 W. Clark street in Boise. It's live and ready to be looked at! It's priced at $159,000, a really great price for a bench property.
Dave: Yep, so a nice starter home or maybe even a property for rent?
Thom: Oh yeah, it would be a great investment for a rental property.
Dave: What else do you have?
Thom: Well I've got a couple price drops on a couple homes that we've done some adjustments on to get some more interest in them. The first one is 1720 E. Sagemoor drive in Meridian, it's a great 4 bedroom, 2.5 bath at 2,300 square feet, it's got a 2 car garage, granite counter tops, tile and hardwood floors, also a giant bonus room. And that one actually is priced at $249,900 now. 1720 E. Sagemoor drive in Meridian.
Dave: You know that bonus room is such a nice feature for families. You can go live there, that's where you watch the TV, that's where the kids play games, etc. Not in the rest of the house generally. A bonus room is very nice.
Thom: Not just for families, but also for married couples, you know sometimes you just need that space away from your spouse, haha, "I'm going to the bonus room, or the man cave or whatever.”
Dave: We're not gonna talk about that, we'll both be in trouble.. Not even going to go down that road, haha.
Thom: So we do have another property at 10397 W. Hinsdale court. It's another 4 bedroom, 3 bath, 2 story house, 4,000 square feet so it's a nice big house on .23 of an acre. 3 car garage and has a swimming pool, central vac and requirement and it also has a bonus room. This one is priced at $355,000 right now, great house once again over at 10397 W. Hinsdale court.
Dave: And that is in west Boise.
Dave: A nice location, I’m kind of familiar, I owned a home kind of in that area at one point. Very nice, easy access and some great schools over in that area. Speaking of that we are at that time where school is out and this is a time i think traditionally where some people think about making that move. Trying to make the move while kids are out of school.
Thom: Traditionally, yeah people will make that switch while they can in between schools.
Dave: And again, if you've thought about selling your house or even if you're thinking about it, give Core Group Realty a call.
Thom: It's a great time to sell right now, it's a sellers’ market. All I'm hearing all last week is about all of these multiple offers where the buyer’s agents are competing on houses and the houses are selling above list price right now.
Dave: And I will say this, you want an experienced realtor at this point. Because if you get in a bidding war, or trying to do this or that, someone to say, "I'll pay you more, but here's what you're going to do.." Someone who's negotiating. If you're out against other realtors and you're just kind of on your own doing it or have somebody not experienced, you're going to lose.
Thom: Yes, you can lose out on some money in your transaction if you don't have a good person helping you along those lines, and hopefully guiding you and instructing you. One of the biggest things we're running into right now is the appraisal process, because these houses are getting out bid and over bid and what not, and so you really need your trusted agent to be able to tell you, "hey, we're kind of reaching that point where this house may not appraise for what these offers are coming in it." So we
have to be really in-tune with the market place and what that appraisal could come in at and knowing what to do if it does come in under.
Dave: And that of course is where Diversified Mortgage and Michelle Guth comes in.
Thom: Oh yes.
Dave: You can go run it by her and she'll go, "mmm, that's not gonna make it."
Thom: Exactly, she's really great about that.
Dave: Diversified Mortgage, Equal Housing Lender, one of the co-sponsors of this show each and every Saturday morning. So it is a great time if you're thinking about selling that home, now would be the time to give Thom and his staff a call here at Core Group Realty. And I point out from time to time and I really do mean this, if you want to come in and interview Thom or anyone on his staff to make sure it's a right fit, because you want a real estate agent that's a right fit for ya.
Thom: Oh yeah, absolutely. There's so many out there right now, so many real estate agents that are just jumping in the market because they can, and kudos to them it's a great business to be in and it's a fun business, but it's a business that you really need to know what's going on. You need to know your information if you're going to be representing people on their contracts, negotiating one of their biggest deals.
Dave: Come on in to Core Group Realty and talk to them, make sure it's the right fit for you, ask them about multi-marketing, about social media, about all the different ways of marketing your home. And at the end of the interview shake hands and part your ways, otherwise you know what, they will get you hooked up with the right person here. You do have a lot of real estate agents trained in different areas.
Thom: Oh yeah, we specialize on the buyer’s side and on the listing side to make sure that people are being represented accurately. And if I could really quick mention, you said something about social media, right now that featured home that we were talking about at 2199 E.Handel, we have a posting on our Facebook page right now. Curious to see what people think about the dining room vs. the eating nook and which one their family would use the most of, we'd love to see people get on their telling us what they would prefer.
Dave: And what is your Facebook site?
Thom: If you go to Facebook and look up Core Group Realty it will pop up.
Dave: There you go, you can favorite it and kind of keep track of what's going on, especially if you're buying a home right now, it's a good way to keep track.
Thom: We put all of our Coming Soon's all of our new listings on there, we share information about real estate, we have fun stuff on there too. We share our blog on there, we share this radio program, everything gets shared that we do.
Dave: Alright, it is Core Group Realty and this is the Idaho Real Estate Buzz, I think I called it radio Buzz last week, haha.
Dave: We'll continue on the other side speaking to Michelle Guth, we'll be talking to her from Diversified Mortgage as we continue here on 580 KIDO.
Dave: This is the Idaho Real Estate Buzz, I'm Dave Burnett along with Thom Dallman of Core Group Realty and also Michelle Guth from Diversified Mortgage, equal housing lender is with us again today. And we've talked over the past couple weeks about qualifying, credit scores, we've talked about different kinds of loans that are out there.. And something that I would like to find out, because you do see this from time to time. You see older homes, perhaps built in the 60's and 70's that need a little TLC..
Thom: Oh yeah, we run into that quite a bit actually in some of these older properties that may not have been kept up as well and there's a lot of people who are watching these home "fix it up" shows on tv so they think, "Oh I'm gonna get right into one of these fixer uppers and get a lone of the house and move forward with fixing it up and making it look good on my own and the way that I want it to look."
Dave: But I guess what we come down to and Michelle you're the expert on this, sometimes we forget, you don't own your home, the bank owns it and you're buying it from the bank so...there's certain guidelines isn't there as far as homes and getting loans in terms of the condition of the properties?
Michelle: There are, with respect to some of the government programs, so your FHA, your VA, your Rural Development programs.. They all have criteria with lending requirements as far as the property conditions, so for example you can't have any exterior chipped peeling paint. And then if you're looking at that older home prior to the lead based paint, so mid 70's home you're typically going to have lead based paint. If there is exterior peeling paint then they basically have to re-mediate the paint, and there's some added steps for that. We have a lot of criteria we need to watch for.
Dave: How closely do they look? I mean do they get up there with a magnifying glass? Or is it just kind of they inspect it and know what they are looking for?
Michelle: Well Thom's team when they go under contract is going to have them do a home inspection where they are going to really get in and scour that property for the major items. But for lending purposes, the appraiser is going to go out and some of the things they are going to highlight is again the exterior chipped or peeling paint and that even includes things like decks and out buildings. So if you have an old wood shed out back with chipped peeling paint they have to re-mediate that for it to mean the loan program. Other thing is maybe cracked or broken windows, missing hand railings, and the big thing is missing smoke detectors, that is mandated in every loan program. Quite often we find that there's no smoke detectors and it's an easy fix so if you're thinking of selling your home, first and foremost call Core Group Realty because they'll give them a checklist of things they recommend. Get the differed maintenance done and put in your smoke detectors. It's a quick and cheap fix that's going to help the process go a little smoother.
Dave: Okay, so paint is an issue. Here's a big one which can be expensive..the roof.
Michelle: Exactly, and we are seeing more and more of that. Typically, we only have to have a certification of two years’ life remaining on the roof, so a lot of the times it will pass, when it doesn't then at that point we are needing the roof either repaired or replaced. We have some options on that, a lot of the times the sellers say, "you know I recognize the roof needs replaced, but maybe I don't have the income to do it right now and I won't until after the property closes." So we can do what's called an Escrow Hold-back in some cases. We do it on a case by case bases, and what we would do is get a bid for the roof repair and then whatever that repair cost is we're going to take that plus 50% of that bid and we'll hold it back from their proceeds at closing, and have them do the repairs immediately following; to bring that property up to lending standards.
Dave: I think what I'm seeing, Thom is the old, "where there's a will there's a way."
Thom: Oh yeah, there's definitely some options out there for some of these properties that you have to do those things on and making sure that we can work with the lending guidelines to make sure that happens. Some of them may be a little bit too much and so the sellers might have to do some fixing up before they can actually move forward with the sale of the property. It really kind of comes down to that looking at what the issue is, figuring out what options there are. Whether it has to be done before or after closing and kind of working through those different scenarios. And that is why it's so important to have your agent involved in that because they can help guide you through some of that stuff and being in communication with the lenders and the inspectors and know what options there are.
Dave: Okay, so we've got paint, we've got roofs, and I bet I know another one of the biggies. You ready?
Michelle: I'm ready.
Dave: Okay, I'm guessing at this.. Foundations.
Michelle: Oh without a doubt, that's pretty much a hard stop right there. So if we have major foundation issues it's probably not going to pass any type of lending scenario.
Dave: A big old crack in the foundation or...
Michelle: A crack isn't necessarily going to negate moving forward but they’re going to have to get probably a foundation review done on it and a certification and do some repairs. So they can repair foundations but if it's sliding off of a hill like some of the properties we've recently seen, which is just dis-heartening for those poor homeowners. Obviously that type of situation we're probably not gonna have to have a lending program for them.
Thom: Yeah, a few issues with that.
Dave: You know, maybe that's a topic I'd like to talk with you about sometime coming up in the future.. You've got banks on the hook for this. Not this time, we don't have time to go into it today but I'd be fascinated to find out what happens on the financial end of that and who is it that's going to wind up really taking it. That would be interesting to watch as we proceed through the summer. For those who aren't aware there are several homes up in the foothills that are sliding down, they're blaming the county, the county is saying, “no, you did it." Lots of finger pointing going on. But when it all comes right down to it there's some lending institutions that sunk some money into those, because those aren't $50,000 homes.
Michelle: And even the home owner at that point. I mean the home owner has their equity at risk, the lender has their collateral at risk, it's a no win situation for everybody.
Dave: It truly is a tragic situation. Okay, so if we're talking about flipping homes and getting into an older home, is there kind of a quick checklist of things that the agent at Core Group Realty and the person looking can kind of go over to say, "these are potential problems."
Michelle: Sure. Well for flipping typically in many cases the flippers are not going to be coming to us for financing anyways. So that's going to be more in Thom's realm, but for somebody who says, "I don't mind having some sweat equity and doing these repairs myself", we're gonna look at it again if it's health and safety, if it's cosmetic where they're walking in and it's got that fabulous avocado green fridge and the marigold yellow dishwasher, that's cosmetic. I mean that's being impacted in the appraised value it's not necessarily a collateral issue. I mean if they want to buy something like that that needs updating; carpet, paint that type of thing that's fine, that's not going to impact their ability to get a loan on the property. But again its things such as missing steps, damaged decks, missing hand railings, cracked windows, and even condensation in windows.. People a lot of the time think they have to replace those windows, that's not necessarily going to be a requirement under lending standards. If the window is secure, condensation is not necessarily a requirement to have to replace that window. These are all things we're gonna discuss with the homeowner and the agents when they address their concerns with the property and how that's going to impact the type of loan they're getting. We can troubleshoot a lot of that before they even submit the offer to make sure it's not going to pose a problem for the program type that they are approved for.
Thom: Exactly and on our side of this looking at it, what I like to commonly refer to it as is Safety and Soundness. The safety and soundness of the house, to make sure that you're safe when you're in it and the soundness of the house means the structure of the house is gonna be protected for numerous years and not have water intrusion or any kind of damage that can hurt the property. So we always talk about the safety and soundness of the house, making sure that everybody's safe and that the house is going to be sound going forward.
Dave: Let me ask you this quickly, Thom, and that is for the agents at Core Group Realty, when you go out to look at a home is that something that you might say to a homeowner, "Before we can even list this for you, this, that and this needs to be done"?
Thom: We do that often, yes. We actually really encourage especially on our listing side for new homes coming on the market to actually have an inspector do a pre-inspection. Go through the home and identify the things that you may have to fix before buyers even come through the house.
Dave: And we've kind of talked about older homes, homes in the 60's, 70's, but Michelle have you ever run across new homes that have issues?
Michelle: We have, actually I can tell you my own personal experience when I bought a home. I did a new construction property about 10 years ago and a lot of the times people say you don't need to get a home inspection; you have a builder’s warranty on it. Well the inspector had crawled into the crawl space and basically the sewage line where you have one of those metal belly bands that they secure it to the foundation of the property and the footing was tied up with a rotten T-shirt. So had they not caught that, you can imagine over time you would not have that secured and that pipe could have very well disconnected and we could have had a crawl space full of sewer. I don't think there was any ill intent, I think it was just a quick fix and they probably forgot to go back and get it. But yes, it's a huge investment, get a home inspection, haha.
Thom: And just going off of that, I personally had a house too that we had built that had the same thing happen, but it became disconnected sometime during the construction phase so we did actually have to have some remediation done in the crawl space on that property. You just never know with new construction what's going to happen so it's always important to have that inspection done.
Dave: Michelle if somebody wants to get ahold of you and talk about loans, perhaps an older home, or a new home, how do they get ahold of you?
Michelle: Give us a call at the office at 853-7878 or visit our website at DMGLoans.com
Dave: And where is your office?
Michelle: We are central Boise, pretty easy to get to from anywhere. We're over by the Hawk stadium and fairgrounds near the river. Glenwood and Marigold, it's really easy to get to.
Dave: Alright and if somebody wants to come talk to you about perhaps credit or prequalifying, they can just call and make an appointment?
Michelle: Please do, we'd love to visit with you.
Dave: Alright, Michelle Guth with Diversified Mortgage. I wonder whose T-shirt that was, it wasn't yours was it?
Michelle: Haha, it was not mine, haha.
Dave: Michelle got her t-shirt back and everything was good. That is quite a story. I'm sure somebody somewhere went, "ah I'll just tie it up with that and fix it later."
Thom: Yeah exactly and forgot to go back to it.
Michelle: Someone’s a giver. They donated their shirt, haha.
Dave: This is the Idaho Real Estate buzz with Core Group Realty and Diversified Mortgage, we'll continue on the other side here on 580 KIDO.
Dave: This is the Idaho Real Estate Buzz, I'm Dave Burnett along with Thom Dallman of Core Group Realty, the co-owner and designated broker here at Core. It is a great time to buy, we say that a lot, and it's true.
Thom: It's very true, rates are great right now.
Dave: I saw a feature on TV earlier talking about the rental market and how good it is to rent, how bad it is to rent, I wanted to talk to you a little bit. Renting vs. buying.
Thom: We get that question a lot. What is a good time to actually think about buying vs. renting and things like that? All the time, we get questions like that.
Dave: And you see a lot, I know they just built over at Glenwood and State, a bunch of apartments over there. You're seeing more and more apartments going up. But I guess the question is going to come down to this, "Am I throwing money down a rat hole by renting?"
Thom: You could be, renting obviously is important, there's certain situations in life that happen where you need to be able to rent. You may have bad credit or you may have some career uncertainties if you will. If you're not sure that you're going to stick with the current job that you have or maybe you just moved to the area and don't know much of what Boise has or the surrounding areas so you don't know where you want to live.
Dave: Or maybe you're here temporarily.
Thom: Exactly. So renting definitely serves its purpose on certain accounts and for certain people, but there comes a time when you kind of realize that your rent is just going to pay someone else's mortgage on a property when you could be paying your own mortgage, and investing in yourself.
Dave: Yeah, somebody else is getting the appreciation which I guess it's not free money but it's worth something. I bet some houses worth $150,000 it's now worth $170,000 and somebody made that $20,000. If you're renting, it wasn't you. (laughing). It was somebody else who made that based on your monthly payment going to them. Well let's look at a couple of things as far as when would buying be good?
Thom: Buying becomes good if you know that you have a stable job, if you know that you have an area that you want to live in and are going to stay in for a few years. If you kind of look there's some really great calculators out there. If you go to Realtor.com for example has one that does a little renting vs. owning so you can plug in the value of a house that you want to purchase vs the rent in that same kind of house. And I actually did a little sample of one of those so we can talk about that in a little bit. It’s a great tool to actually compare and see what's the cost of a mortgage vs renting a property and traditionally the model that I did was a $250,000 home, about 2100 square feet, I just took some averages on that. And it's 3 years, if you're living in that home for 3 years that's that conversion point to where you're actually saving money and investing in yourself after 3 years.
Dave: Thom it's so amazing how quickly 3 years comes and goes.
Thom: Oh gosh, it fly's by so quickly.
Dave: It does, you turn around and it's like, “wow, really?" I mean I can't hardly believe we built our home in Eagle in 1998. And it really doesn't seem that long ago, not until I'm looking at it now and suddenly we've got a mortgage that we'll have paid off in five years, we'll be done. It doesn't seem like that long, so 3 years goes by in a blink of an eye.
Thom: It does, it really does. I've lived in my house for 7 and it feels like I just moved in last year.
Dave: I mean I don't have all my boxes unpacked in the garage yet.
Thom: Exactly. We won't talk about that part, haha. But yeah, so I went to once again we talk about Diversified Mortgage and how we are affiliated with them, they have a great mortgage calculator on their website, DMGloans.com. So I went on there and I just quickly plugged in for that $250,000 house at that 2,100 square feet in Boise, to see what kind of a typical mortgage would cost, and then when you add on taxes and insurance onto that. We are looking at roughly around that $1,300-$1,400 cost per month to have a mortgage. So when you look at Craigslist and look at homes that have 2,100 square feet, the average came out to be $1,500 for rent. So it's actually more expensive to rent a 2,100 square foot house than it is to buy one in today's current market.
Dave: So at that point, you're losing money.
Thom: Yeah you're losing a couple hundred dollars a month potentially, not to mention the equity that you lose renting vs buying as well as the tax deductions, you get tax deductions for the interest that you pay towards your mortgage every year.
Dave: Well and not only the interest, but your taxes, some taxes that comes off of your tax return as well. I guess the negative some people will say, "If I'm renting and my hot water heater breaks down, I don't have to pay for that."
Thom: That's true, that is one of the benefits to renting is you have no maintenance charges, you get to push that all off onto your landlord.
Dave: But I've got news for ya, if the landlord's putting $300-$400 a month in his pocket as profit, you are paying for that hot water heater.
Dave: You may not feel it but over the course of time, you're paying for that upgrade.
Thom: That's the purpose of that rent, is to cover those costs, they factor that in when they're doing their rent calculations. Investors are pretty wise about making sure that they have enough money coming in that they cover those expenses. So technically yes, you do actually pay for that.
Dave: Yeah, if you're paying for a rental and it's $1,000 a month and that's all you're charging, you're not doing it right.
Dave: So in long run you're paying for the upkeep of that place, because the investor's smart. They're not going to take the hit.
Thom: Exactly, it's just spread out over months rather than out of pocket all at one time.
Dave: Let me hit you with another one out of left field here though. Let's say I've moved to the area, just coming here but I do want to buy, I kind of want to avoid long term leases, like a year long lease.
Thom: Yeah, there's people offering 6 month leases for a little shorter term so that you can get familiar with the area. So definitely avoiding that 1 year lease is a good way to go, especially if you know that you want to buy eventually. Make sure that you're asking for those options for those shorter leases.
Dave: Okay, another question for you and that is you throughout the fact that some people rent because they have bad credit. This is something that Michelle Guth and Diversified Mortgage can help with.
Thom: Oh they can, they're really great, they have some great connections with credit repair people. They will guide you along that process and check in with you, making sure that you're staying on track to get to that eventual spot that you need to be at with your credit score and so forth.
Dave: If you want to talk to Michelle Guth you can call Thom at 933-7777 at Core Group Realty, he'll get you hooked up with Michelle Guth and Diversified Mortgage to help repair you credit, to find out where you stand, and how long realistically it will take for you to get in shape to buy a home so you're not throwing money away.
Thom: And once again if you go to DMGloans.com that's where I went to the mortgage calculator and they have a lot of useful information on their website as well. If you go to CoreGroupRealty.com we have a service provider tab that talks about all of our vendors and shows all of our vendors that we work with and people that we've built really good relationships with.
Dave: You know, I know from doing shows in the past as well, if you're buying a home there are also policies you can buy for those major appliance repairs aren't there?
Thom: Yep, there's a home warranty plan, is that what you're talking about? We have a great connection with a home warranty company, Home Warranties of America, Lorri Appadoca is our local representative there and she's amazing at what she does in helping our clients through that process. Yeah the home warranty plan is a great plan, when we talk about that maintenance and those break downs throughout the house...
Dave: Air conditioning, heating, those kinds of appliances, they can get expensive.
Thom: They can get pretty expensive to have that replaced and so with the Home Warranty plan in line you just pay that $60 or $70 service charge for them to come out and they take care of the rest. It's definitely a good way to go, especially where we were talking about the maintenance of upkeep of those emergencies in the house, that's a great protection plan for that.
Dave: Which by the way if you own a home, you're not looking to buy a home, you can get one of those warranties on your existing home.
Thom: Oh yeah, you can get it at any time. We actually recommend when we have a consultation with a potential new listing. We recommend that they think about getting a home warranty plan in advance to getting it listed so that if anything does come up during the process of the inspections a lot of the time the home warranty plan can kick in and help cover any repairs that might be done during the inspection.
Dave: So just kind of to recap here in the last couple of minutes in this segment, if you're looking at a $250,000 home the comparables in the area to rent is about $1,500 a month and a mortgage is about $1,400.
Thom: Exactly so your actually a little cheaper on the mortgage side of things traditionally. And it of course depends on things like down payments and stuff like that, so that can fluctuate depending on that. It's definitely a market to investigate and make sure that you're doing your due diligence if you are paying rent, to look at how much it's going to cost to own.
Dave: And here's the upside too, you don't have to ask permission if you want to paint a bedroom.
Thom: Oh yeah, right?
Dave: If you want your bedroom green...
Thom: Call your landlord and say, "Can I paint my bedroom purple?" (laughing)
Dave: You don't have to worry about it because at that point it's your property.
Thom: Exactly, that is a definite advantage to owning your own home.
Dave: This is the Idaho Real Estate Buzz if you're interested in buying, if that kind of intrigues you to see if it would be better to rent or buy, give Thom a call 933-7777 or you can stop on by here on Emerald where they are located at Core Group Realty and find out, "Am I in the market to buy? Am I in the market to rent?" And they can help answer those questions for you 24/7 you can call that number 933-7777 even if it's a holiday weekend you can do it. We'll continue on the other side, this is the Idaho Real Estate Buzz, I'm Dave Burnett along with Thom Dallman the co-owner and designated broker at Core Group Realty. Here on 580 KIDO.
Dave: This is the Idaho Real Estate buzz, I'm Dave Burnett along with Thom Dallman, the co-owner and the designated broker of Core Group Realty. 933-7777 that is the phone number to call, or you can go to CoreGroupRealty.com and that is Core with a C, CoreGroupRealty.com and check out their website. The "Coming Soon" tab, the "Featured Listings" they have them all there for you. I want to talk a little bit, we've touched on this before..Some people go, "I'm not gonna use a realtor, they're going to take a percentage of my money, I'll just sell it myself."
Thom: (laughing) Exactly, the For Sale by Owner.
Dave: Let's talk about that. I mean there are companies that help walk you through that but let's talk a little bit about the headaches of selling. It's funny I mentioned a couple of weeks ago, in my neighborhood a For Sale sign came up, red and white, looked like they got it down at Winco, "For Sale by Owner", and they listed the stuff on there. I notice they do have a real estate sign now, so two, three weeks into it they went, "Nope."
Thom: They realized it's hard. Probably one of the major benefits is they probably got tired of trying to show the house. They have to be there and present and bringing the buyers in, show the house, and that's one of the big advantages of having a real estate agent associated with that. You just leave, let the house be shown, go walk the dogs in the park or go spend whatever time you have. Time is valuable to people.
Dave: Go see your mother in-law.
Thom: Uh, yeah.
Dave: Just saying. You know one of the questions I have about this when your selling, I've never sold a house on my own. Your home is kind of a personal thing, it's not like a business, it's not like a rental, so somebody comes in and goes," Why the heck would you do that?" It can kind of be insulting.
Thom: Oh yeah, very much so.
Dave: They would take it personally.
Thom: I 100% recommend to all sellers to not be present when a buyer's there because that does happen. I've seen it happen, I've seen buyers make comments and the sellers get upset and it makes a very tense situation, when you have a buyer there that may potentially want to put an offer on your house but then get turned away from it just because they don't like your reaction to something.
Dave: Yeah, uh, "What knuckle head planted a tree there?"
Dave: "That would have been me". (laughing). That personal thing that you're selling that you don't want to have to deal with. Somebody not emotionally attached..
Thom: Unbiased. You have unbiased people helping you negotiate and taking the emotions out of the negations, because that's what happens a lot of times in the negotiation process is people get really personally attached. They've done upgrades and different things to make it their personal space and so when other people are not liking that or they may raise the value of it thinking that purple wall that they painted made the value so much more when in actuality it could decrease the value of the house.
Dave: I guess when it comes to selling a home there's really one of two reasons you're selling. Either you really don't want to sell so there's emotional strings attached where you can get your feelings hurt or you can't wait to get out of the place. But that emotion will come out as well to the buyer. "Why are they trying to get out of this place if it's so wonderful?"
Thom: "Why are they so motivated to leave?" Yeah, exactly.
Dave: So that way you're not there to have to deal with all of that emotion.
Thom: Let the agents deal with that, don't get yourself involved in all that emotional baggage if you will that kind of comes with that.
Dave: Okay, so some of the other differences?
Thom: Sure, uh so surveys show that 43% of the people that are buying homes right now have bought their homes starting on the internet. They are starting their search on the internet. Real estate agents traditionally have more access through their websites and through the MLS feeds to get homes out there on all the different websites out there. You as a for sale by owner can go in and log into Truly.com or you can log into Zillow.com and you can put your listing in there, but it's a lot of work.
Dave: Or Facebook, but Facebook may shut you down by the way. If you're trying to sell stuff on a personal Facebook site.
Thom: Yeah, they don't like that very much.
Dave: They may pull your account.
Thom: And most traditional real estate offices that do have Facebook pages and stuff like that where they can post that stuff have got followers. Like our Facebook page at Core Group Realty has 8,300 followers right now last count. So when I post a house that's listed, it goes out to those 8,000 people around the world to see. There's definitely advantages for getting the exposure that you need to the most buyers when you go through a real estate agent vs. having to do the work yourself. I mean once again, time is money and time is precious for people. For a "For Sale by Owner" to have to go through that process and go all day long trying to make sure that they are covering all their bases and getting it onto all the different sites.
Dave: I guess I have a question right now, for somebody who may be driving in their car or sitting at home right now listening, here's my question for ya..How much is your house worth? Can you answer that question? I couldn't. I could not answer that question of how much my house is worth, I have no clue. I know what the tax appraisal is but that's not what the house value is.
Thom: Exactly and we have good tools for doing that and we are experts at looking at the market place and knowing what that value is, so we can navigate that for you. A good example of not knowing your value is one of my employees was just saying that a friend of theirs had just purchased a "For Sale by Owner" and was gloating about the fact that their buyer’s agent who represented them on their side and took them to the "For Sale by Owner" actually got the house at way under value. The seller just didn't know or didn't want to look at the values. So they got a really good deal, and they were bragging about it, because it was a "For Sale by Owner".
Dave: My father-in-law, I'm going to tell on him, he doesn't live here now. But he owned a home on Stirrup on the south part of town and decided to sell it himself. This was several years ago. So he looked around at other "For Sale" signs and went, "Okay, I'll price it at this." A guy comes up, knocks on the door, says, “Is that what you're asking for the house?" He said yep and the man says, "I'll buy it." And my father-in-law says, "Don't you want to see the house?" He said," Nope I'll buy it right now." And he sold it and when we found out what he sold it for it was like,"Noooo." You just probably lost about $25,000-$30,000.
Thom: Oh my gosh.
Dave: Because he decided after looking around he was going to do it, he's kind of stubborn, and he goes,
ah nah that was what it was worth." And it's like okay that's why the guy didn't even want to see it.
Thom: Yeah, the "For Sale by Owner" concept that comes about is people think they are going to save money. Or maybe they are upside down and they just can't afford the commission for it, but they don't realize how much money that a real estate agent can actually help them get. It was actually the National Association of Realtors that did a survey back in 2013 where they actually showed the comparison of the same homes listed by owners vs. with realtors. On average they got about $40,000 more going through a real estate agent, so there's definitely a financial advantage of knowing the market place like a real estate agent.
Dave: You know it's something that for me as a consumer I'll maybe do four, five, six house deals in my life time. How many house deals have you done this month?
Thom: (laughing) Right?! Me and my team have done a lot.
Dave: So there's a lot that's been done with Core Group Realty and it's something that I don't do very often.
Thom: Exactly. And one of the other things that I'd like to talk about too is safety. As a "For Sale by Owner" you're opening up your door to all kinds of potential people coming through and unfortunately we do have the bad seeds out there. The people who come and scope out the "For Sale by Owners" to see if they have any valuables that they see if they can figure out a way to distract the seller so they can go in and steal their valuables and what not. There's a huge safety concern for "For Sale by Owners" and what they take on as far as that responsibility by inviting people to just come through their homes without and agent.
Dave: It's something that I wouldn't want my wife to be exposed. Somebody calls and says,"yeah we'd like to look at the home." If I'm not there I don't want her having to show the house, who knows who these people might be.
Thom: The real estate agents qualify the buyers, they are good at knowing who is real and who is not and making sure that they are qualified. Making sure that you're actually showing property to people that actually can afford the house. We've seen that a lot, people who are like, “I want to buy this house for $250,000." And then come to find out they can only afford $150,000. They waste a lot of time and energy looking at homes that they can't afford. So that's what a real estate agent and people like Michelle Guth over at Diversified Mortgage that we partner with are good about, making sure that the people that we are getting into the homes are qualified for that specific home.
Dave: But I will say this, to give the flip side. There are people who have sold their home themselves successfully, there are people who have bought homes successfully.
Dave: The question is you need to way the pluses and minuses and decide if you really want the headache. Like I said in my neighborhood somebody had a "For Sale by Owner" sign up about two and a half weeks and then a real estate sign went up because he suddenly went, “this is not worth the headache."
Thom: Exactly. Yeah there's 10% of the homes that are sold that are sold "For Sale by Owner" in the market place right now in this day and age. That's actually down, traditionally it was always around 20% I think is what reports show. They said usually it was about 20% and just in the last 10 years it's gone down to 10%. People are understanding the importance of having those real estate agents helping you.
Dave: Again no knock on the newspaper, but there was a time when you'd go sit down, you'd get the Saturday paper, because Sunday was kind of the job listings and Saturday was a real estate and car listings. You'd sit down and go through it and circle and go, "ah that's a good one." That doesn't happen anymore, it's on the internet and me as an individual I don't have the kind of power on the internet to get that information out.
Thom: Yeah, there's a lot of places to put that information and a lot of places that people are looking for that information so getting it out there is key to making sure your house sells successfully and that's what a real estate agent brings to the table.
Dave: Which Core Group Realty, that is the company you can come to, but let's be honest, I think you would advise just to get a professional real estate agent.
Thom: Oh yes, of course. You know of course I run a real estate business so I'm going to say that but just for different concerns such as more money for you house, safety for you and your family, there's just so many different concerns that it just benefits you to get that real estate agent and let them help you with that home sale.
Dave: If you'd like to talk to Thom and the team at Core Group Realty you can do that by calling 933-7777 any time, day and night, 24/7 you can call and talk to the folks at Core Group Realty. Thom, thank you so much.
Thom: Thank you.
Dave: It's a great time to buy a house. We'll continue again next week right here 2 o'clock right here on 580 KIDO.