Learn about the process of getting your home listed with Core Group Realty; from the initial consultation to having professional photos taken and finally having a live listing! Ron Wieczorek stops by to chat about what it takes to get qualified for a home loan. Thom and Dave also discuss the financial benefits of buying vs. renting.
Dave Burnett: This is the Idaho Real Estate Buzz, he is Thom Dallman the co-owner, designated broker of Core Group Realty. Coregrouprealty.com the website. You can always call 208-933-7777 or stop by the offices Monday through Friday, you're here, right here-
Thom Dallman: Yeah, doors are open 8:00-5:00, Monday through Friday, come on by. Come and chat with someone, we always have an agent on duty. Technically the agent on duty is her from 8:30-4:30 do anytime between those times if you wanna just come in and chat, and just find out information on real estate, whatever you want. We've got people here to help you out.
Dave Burnett: Perfect. Because there's people that might just be kinda kicking tires thinking about it. You can come in for a free consultation.
Thom Dallman: We have it all the time.
Dave Burnett: Find out what happens there 'cause it is a big investment, we've talked about it before, the biggest investment you'll probably, unless you own a business, the biggest investment you'll make in your life.
Thom Dallman: Yeah, pretty much one of the biggest. Investing in yourself, and investing in your future, and your family, it's worth it.
Dave Burnett: It is huge. Coregrouprealty.com is the website where you can go and find out all the listings that are there for Core Group, and featured listings, and not always is it a home necessarily.
Thom Dallman: Not necessarily.
Dave Burnett: That's listed. You got perspective businesses listing.
Thom Dallman: Yeah we just listed this week a house that is currently being used as a Bed and Breakfast. So it's got a lot of potential there as far as a business goes, as well as just a beautiful home in general itself. So this listing's over on Victory Road, it's at 10325 Victory Road. It's on almost a full acre, it's .91 to be exact. It's a big 4116 square foot house.
Dave Burnett: Does it have living quarters in it as well for whoever buys it, lives there. Is that-
Thom Dallman: Yeah. Oh yeah. It's a full functioning house so it's got a kitchen, and dining room, and just everything that you could want in a house, in a home. But the convenient part of it is that each of the bedrooms are basically en suite, so they all have their own bathroom, and shower, and toilet area, if you will. And that's the reason why it's being used as a Bed and Breakfast is because they have that option to be able to rent those rooms out individually to people.
Dave Burnett: Now how many rooms are there available for rent? So you have that information?
Thom Dallman: So there's four bedrooms, they're up on the second floor. Three of them are smaller rooms that they rent out, and then they have the master bedroom where the current sellers live, in the master bedroom, and then they rent out the three other rooms. So yeah, it's a really elegant home. I can't stress enough how elegant it is. It's just a beautiful elegant home that was built in 1980, it's got I believe four fireplaces throughout the house. The master has a fireplace, it has a library with a fireplace, a living room with a fireplace, and then there is another ... Maybe there's just the three fireplaces. Oh no, sorry, there's a wood stove. There's a wood fireplace in the kitchen as well. So yeah, it's just a neat home and one of the really most unique features, we don't have documentation on it, but they were told when they purchased the house that the wood floors on the main level and the banister, were actually brought over from the old Canyon County Court House. When they demolished that they rescued the banister, and the flooring, and stuff, and put it into this house.
So it's really unique old flooring and banisters.
Dave Burnett: Michael installed the hardwood flooring that's in there.
Thom Dallman: Yeah the entryway is just gorgeous. When you walk in and see that ornate banister going up the stairwell, it's just gorgeous.
Dave Burnett: I guess I never really thought about owning a Bed and Breakfast, but it is a business you have to love people, you gotta be a people lover 'cause-
Thom Dallman: 'Cause you're pretty much inviting strangers into your house.
Dave Burnett: Yeah, so you are entertaining there, but for some people it's the right fit and something that would be a nice business for them.
Thom Dallman: Exactly. And it's got this huge back yard that's just ... They've done such a great job with the landscaping, it's got fruit trees throughout. They have a whole lot of bamboo that grows really quickly, and stuff like that. It's well secluded from the neighbors so you have that privacy going on. It comes with a hot tub. It's got two sheds. Two sheds and then it's got another out building that they were originally gonna build an exercise room in, but it's more of a shop right now. So it's a storage shop and stuff like that.
Dave Burnett: Excellent. So if somebody wants to see this now, because it is a functioning business, I would assume you need to make that appointment to be able to get in to see the whole place.
Thom Dallman: Yep. This is an appointment only and sometimes if they have guests they won't necessarily allow people to see some of the bedrooms 'cause the guests obviously want their privacy and stuff. So there may be times that when you go to view it that you might not be able to see all the bedrooms.
Dave Burnett: It might take two visits to see it.
Thom Dallman: Exactly. But yeah, it's perfectly located right here on Victory between Five Mile and Maple Grove, so it's a great access to schools, to Costco, to all the businesses and stuff like that. A quick jump onto the connector to get downtown. So it's a great location too for this Bed and Breakfast.
Dave Burnett: The interesting thing with Bed and Breakfast is that not only can out-of-town people visit, but for people in town, that wanna get away in town sometimes will go to a Bed and Breakfast as well.
Thom Dallman: Exactly.
Dave Burnett: And you have a complete listing there at coregrouprealty.com.
Thom Dallman: Yep. If you go to coregrouprealty.com and click on our featured listings page, you'll see the listing there, and see all the information on the house.
Dave Burnett: Excellent. We got a couple of minutes here. I wanna talk a little bit about that process. When somebody will list a home, not necessarily a business, but even a home, what's the process on what that homeowner has to go through to get the photos, to get all the information, what happens there?
Thom Dallman: Well I guess the first thing that really happens is a consultation with us, with the real estate agent who ... And I usually recommend consulting with a couple real estate agents and interview them. Interview the agents to find that right fit for you. Ask what their marketing plan is. Ask what sets them apart from other real estate agents. And stuff like that. So you're finding that right fit for you, and that right person that you feel that you can trust and stuff like that. But they're gonna give you a good idea of your value. And part of that consultation too is kinda walking through the house and pointing out things like, "Hey, I would take these pictures down. I would move this furniture this way to showcase your house." And stuff like that so pretty much from there usually that agent will go back and they'll scour the MLS for comparable houses that have sold recently, 'cause we wanna make sure that we value that house where the appraisers are going to get that value in it.
And from there, once we get that value and communicate that to the seller, it's getting over there and signing paperwork. Usually we'll schedule some time to schedule paperwork. While we're doing that we're gonna say, "Hey, we'll have a photographer show up maybe that day or the next day to get professional photos done." That's how we do it anyways.
Dave Burnett: So in other words-
Thom Dallman: Not to demean other agents, but there are some agents out there that just take pictures with their cell phones, which is a big pet peeve of mine for sure for some reason.
Dave Burnett: Well if you're trying to sell it you want it presented in the best light.
Thom Dallman: Right. Exactly.
Dave Burnett: You really do.
Thom Dallman: So from there it's pretty quick to get it onto the MLS at that point. Making sure that the sellers are aware of how the showings are gonna go. Usually asking the sellers not to be present when the showings go on. All in all I would say from our first consultation to actually getting it listed we usually try to get a week of time in there.
Dave Burnett: That's not too bad.
Thom Dallman: To get all the paperwork done, to get the photos done, and all that stuff, and you get signs delivered, and all that fun stuff.
Dave Burnett: If you're interested, if you have a property you want listed, you wanna talk to the folks at Core Group Realty. Give them a call, 208-933-7777.
Thom Dallman: Exactly.
Dave Burnett: Perfect. That way if you're looking to sell or if you're looking to buy, either way they can get you all taken care of. Easy to do, and really, and I will say this being in and out of the offices on a regular basis, no pressure, a great group of people, and they will find the agent that is perfect for you, and the perfect fit so that you're comfortable and happy.
Thom Dallman: Exactly.
Dave Burnett: Very good. We'll continue. This is the Idaho Real Estate Buzz being brought to you by Core Group Realty, call them today, 202-933-7777. Or you can go online, coregrouprealty.com. Find out why they say you get more with Core.
Dave Burnett: This is the Idaho Real Estate Buzz with Thom Dallman, the co-owner, designated broker of CORE Group Realty, coregrouprealty.com, that is the website. 208-933-7777. Now Thom, we talk every week about financing.
Thom Dallman: We do.
Dave Burnett: Because that's a huge part of any home purchase.
Thom Dallman: What do we say every week? Money makes the world go round, right?
Dave Burnett: If you can't scratch a check for it, you're going to talk about getting a loan for it and borrowing money. And of course, Eagle Home Mortgage in with us each and every week as, Ron, we talk about different things. We've gone kind of over a series here recently, but one of the things that I have a question about, I wanna talk to you about, is what do we have to verify when we're getting a loan, what is it we verify?
Ron Wieczorek: Everything. Verify that you exist, are we done? That was a quick topic, what's next?
Dave Burnett: The reason why I ask is really kind of two things: when it comes to verifying what I'm worth, to the bank, what I'm worth. There's the pay stubs, that's fairly clear isn't it?
Thom Dallman: Or do you have pay stubs?
Ron Wieczorek: Yeah, everyone's paid differently.
Thom Dallman: Yeah, right?
Ron Wieczorek: We know that in the real estate business, being on commission, whether you're a realtor or loan officer or whatever that it's not always a pay stub. A pay stub's the cleanest. If I can get a pay stub, and you're on salary, that's the easiest route, but sometimes you get a pay stub, and you're on commission, or you're on productivity, and that can change how you qualify.
Dave Burnett: Or you have a bunch of overtime.
Ron Wieczorek: Or a bunch of overtime, and we always look, history repeats itself and we can use history as a basis of what's going to happen in the future. If you're somebody that's on commission or productivity, and we know it, then we're going to go back a little further and say have you done this for two years, at least. Now it doesn't have to be with the same company, necessarily. It can be just in the same industry, cause we also know that a lot of commissioned employees will go from job to job. Maybe not quarterly or semi-annually, but one year here, two years here, three years here, six months here, six months there, but as long as you've shown that history that you can do that, that's what we can use as far as your income.
Just a regular salary person, easy, put it in the system, the math is done for you. With commission or overtime, that's more of a “you have to show you've done it before”. Kinda where my mind goes with that, along the same vein, is a second job. I have a lot of clients that'll say “well I'm making more money cause I'm working the second job. I've been there six months”. We go back to that two year, because if you have a second job, unless you've shown the ability to do it for two years, because that's life changing, not many people... Shoot there's not a lot of people that go to a job every day, one, much less two. It's those kind of unique scenarios that you really have to be careful and vet out a little more, ask those extra questions, and get that extra documentation.
When you ask what I'm gonna have to verify, it's gonna be the simple question is everything, I kinda jokingly said. We're gonna want to dig deeper into your life, and your work history, and just make sure that all those numbers are right, and we have a fair estimation that you're gonna keep that behavior up moving forward.
Dave Burnett: Consistency is the key there.
Ron Wieczorek: In everything in life, I think consistency is the key, but yes.
Dave Burnett: Then let me ask you this question: let's get down to talk about assets.
Ron Wieczorek: That's the big one.
Dave Burnett: The things that I have. The things that I kind of control or own.
Ron Wieczorek: Right, and sometimes what happens is, when folks know they're gonna buy a house, and maybe not everyone saves a little piece of their paycheck and puts it in their checking or savings or stocks and just stores it away for when they're gonna buy a house. Sometimes it's more sporadic or more spontaneous and they're, “I think I'm going to buy a house in the next six months”, and then they start...
Thom Dallman: Stockpiling.
Ron Wieczorek: Start pulling from places sometimes that they should, sometimes that they shouldn't. Sometimes even if they should, they should be documenting, and we just want to get out ahead of that. I've seen people have a garage sale and sell things or just sell stuff around the house to get money, to raise money, to buy the new house. That's perfectly fine. You just have to be able to document it.
Dave Burnett: Okay.
Ron Wieczorek: Show receipts, or take a picture of what you sold. Just have something to verify, cause we're gonna look. We get pretty creative, but we're gonna look at what that item is worth. If you told me you sold a bag for $500, and I'm looking on say, Craigslist, and it's $100 everywhere, I'm gonna say maybe not. Maybe that... unless you found that one person that was gonna buy it for $500.
Thom Dallman: Right.
Ron Wieczorek: We have to be reasonable, and be able to trace it.
Dave Burnett: Let's talk about a couple of terms here: liquid assets and I guess, what's the opposite? Non-liquid assets?
Ron Wieczorek: Yeah.
Dave Burnett: Liquid assets, is that something I can convert and turn into money right away?
Ron Wieczorek: Yeah liquid assets is just, it's just what's sitting there. Some non-liquid and liquid can sometimes be in the same breath.
Dave Burnett: Right.
Ron Wieczorek: My mind goes to your 401(k).
Dave Burnett: That was what my question was going to get to. Is that really liquid or not?
Ron Wieczorek: It is. In most cases it is. Everybody that has a 401(k), you have terms of withdrawal. You usually don't see 'em. You ask your whatever company has the 401(k), and they'll provide you with terms of withdrawal or provide us with terms of withdrawal. Most people have the ability, when they have a 401k, that they can pull a certain amount out and pay themselves back. We use that source as a down payment all the time, every day. It's a very, very common source, and it is liquid. If you just want to pull it all out tomorrow, odds are you're going to, well not odds are, you are going to have penalties. You're gonna pay taxes, so we're gonna always give ya a haircut.
If you have 100 thousand dollars, we use a round number in your 401(k), you're gonna see on my loan application I give you credit for 60 thousand. And you'll say “well I said I had a hundred thousand, did you not listen to me?”, no we did listen to you, it's just that we can only count a certain percentage because we know that you're gonna get taxed, and you're going to have penalties, if you were to withdraw it all the way. Now, nobody's gonna do that.
Dave Burnett: Well let me ask you this then, with your 401(k), are we talking about borrowing against it?
Ron Wieczorek: That's what at the end of the day you're going to do.
Dave Burnett: For you as a financial company then, you have to count what my payment back would be, how much I borrow, it's like a loan, right?
Ron Wieczorek: It is a loan and that's a good, good question, because, when you're vested and you take the loan against your 401(k), you would think that it would appear as a new debt. That, say they're gonna take a hundred bucks out of your paycheck till it's paid back.
Dave Burnett: Right.
Ron Wieczorek: You don't have to really pay that back, because you're paying yourself back.
Dave Burnett: Right, it's your money.
Ron Wieczorek: It's your money, so that's where the taxes and penalties come into play. We have tight ratios a lot, and maybe a loan against a 401(k), where we actually used it as a debt, would hurt or cripple the loan. As long as we still have those terms of withdrawal, and we know they have the ability to do it, usually you're not going to get counted against your debt ratio. Even though you plan to pay it back, and you're gonna pay it back, it's not like you went and got a credit card advance, something unsecured. This is your money that you're paying back, and you have incentives to do so, cause, if you don't, then you suffer those penalties on withdrawal, but that's still your money.
Dave Burnett: Right.
Ron Wieczorek: You're not gonna get penalized for that. That's the most common vehicle that, you say non-liquid, that we can pull money out of. We do it on a daily basis.
Dave Burnett: Okay.
Ron Wieczorek: That's why I always press folks for what they... don't just think checking and savings, think of the other things. If you are tighter in the other areas, this is your reserves, this makes you look better on paper. These are what we call compensating factors, so that's always, always a good resource.
Dave Burnett: What I'm looking at then, the financial institution looks at it saying, “while there's steps to get it out, it is money that's available, if you were to default on that loan that is available to you”.
Ron Wieczorek: Right.
Dave Burnett: As long as you mention that, let's talk about it. I've got a credit card with ten thousand dollars limit on it.
Ron Wieczorek: Right.
Dave Burnett: That's not an asset.
Ron Wieczorek: That is not an asset, and we're not gonna use that. I've had a lot of clients that “well I'll just pull it out and put it on my bank account, I'm good to go, right?”. No! Please do not do that.
Thom Dallman: Please do not.
Ron Wieczorek: Cause we will not use that as secured funds, we will not use that as viable funds. Any lender's going to ask for 60 days of pay stubs. If you did that three months ago, and we don't know about it, and maybe there's some gray area there, but that's already on your credit, you're already paying that debt back, that is a debt. If it's been seasoned for 60 days or more, then odds are you've cheated the system a little bit and you've found...
Dave Burnett: It'll count against you.
Ron Wieczorek: Debt wise, but you still have that money in your pocket and you'll be able to use it as your down payment. If you're strategizing that far ahead of time, and that's the only way to get money, then make sure it's at least two cycles ahead of time to do it, but I don't condone it.
Dave Burnett: Let's talk about other assets. Let's say, I open up my garage and look, it's a 1967 California classic mustang.
Thom Dallman: Wow.
Dave Burnett: That's worth, I happen to know somebody has one.
Ron Wieczorek: Oh wow.
Dave Burnett: With only eight thousand miles on it.
Ron Wieczorek: Wow.
Dave Burnett: But, you have that in your garage in pristine condition. It's an asset. Is that something that can be used as an asset?
Ron Wieczorek: Not for, well if you sell it...
Dave Burnett: Yes.
Ron Wieczorek: Then yeah that's real money. We're never gonna look at goods like that, personal property, as being...
Dave Burnett: So personal property doesn't count.
Ron Wieczorek: It doesn't count. It's nice to have, and if you sell it and we can document it, we'll use it. Often times when we're filling out loan applications, and clients will start listing cars that they have, or coins, or baseball cards, or, I've seen all things, but no we're not going to use that.
Dave Burnett: Okay
Ron Wieczorek: As an asset. I'd like to come over and see it, and maybe make a low-ball offer, if he's not too attached, catch him on a bad day. But no, we won't use that.
Dave Burnett: Okay so personal items like that, unless you sell it, not gonna be used.
Ron Wieczorek: Not gonna be used. One thing we can use, and it comes up a lot. We're in wedding season right now, and if you have an influx of money, or a young couple, even if you're an older couple, if you're a couple that just got an influx of money, and it was from wedding gifts. It can be a pain to document each one, Aunt Rose gave us 50 dollars. Or if it was my aunt it was eight dollars, but you can use your wedding gifts, you just have to be pretty judicious in documenting. Hopefully you made that deposit all at once instead of just stringing it out, cause it's easier to do it all at once than it would be over the course of time.
Dave Burnett: So we're talking about consistency, when it comes to paychecks and income, and then assets that you have that are liquid, that aren't personal possessions, in doing that. If somebody has a question, they wanna sit down with you, talk about what their worth is in that sense for getting a loan, how do they get hold of you?
Ron Wieczorek: Call me right on my cell phone: 208-869-9154.
Dave Burnett: Alright, very good. Eagle Home Mortgage, don't be confused, well they can give loans at Eagle, but they're not based out of Eagle, it's a national company.
Ron Wieczorek: Yes.
Dave Burnett: Look them up and give them a call, and you will be happy. We're going to continue on the other side. This is the Idaho Real Estate Buzz, being brought to you by CORE Group Realty, coregrouprealty.com. Find out why they say you get more, with CORE.
Dave Burnett: This is the Idaho Real Estate Buzz with Thom Dallman the co-owner, designated broker of Core Group Realty, coregrouprealty.com. That is a website for you to go to, and of course, you can always call (208) 933-7777. If you're looking for a real estate agent either for buying a home or selling a home, Core Group can help take care of that for you. So give them a call today and get an appointment set up to come in and talk.
Thom Dallman: Yes, please do.
Dave Burnett: One of the things we talk about from time to time because it is a question that comes up, and that is, "Should I rent or should I buy?" What are the advantages of renting and buying and really, when it comes down to it, we're talking about finances, is a part of that.
Thom Dallman: Exactly. We always tell people that they should really check with a lender and talk about it. If you're coming up to the end of your lease and are kind of wondering about it, it's a good time to look and see. Historically, there's always been that kind of fluctuation between rentals and whether it's more affordable to rent or to buy a house or invest in yourself and stuff like that. But right now with just the economy and the way that the housing is booming and stuff, is getting to a point where the rentals really cost you more than what just buying a house would, what a mortgage would cost, because our interest rates are so low, and rentals keep going up. The cost of rentals keep going up.
So a recent report was just put out by that company, Keeping Current Matters. Keepingcurrentmatters.com is the website to go to to check it out, but they just did a report or pulled a report that showed that currently in America it takes about 28.8% of your income to be able to afford just the median rent right now in America.
Dave Burnett: Let's just round it up, 29%?
Thom Dallman: 29%.
Dave Burnett: 29%. If you're gonna rent, it's gonna take about 29% of your income.
Thom Dallman: Whereas right now, to afford a median home in the marketplace right now, it takes about 17.1% of your rounded down I guess, or even rounded up, 18%.
Dave Burnett: Yeah, or 17 to 20 - That's a pretty big difference.
Thom Dallman: That's a pretty substantial difference. Now this is averaged over America, throughout America so there's some places where it's for example a report that was put out by Trulia it showed that in California it's 57% cheaper to buy than to rent. Whereas, in ... Oh sorry that was in Detroit. In San Jose, California it's 6% cheaper to rent than buy. Whereas, Detroit is 57%. I mean there's obviously different areas but I feel here in Boise, I don't have the exact numbers but we're seeing a lot of people who are paying more than, what they would on a mortgage for a single family house, 2000 square foot, three bedroom, two bath.
Dave Burnett: I got into a conversation with somebody this week because we were talking about I'd recently got my property tax assessment. How much my property taxes went up. And this gentlemen said "well that's why I rent and I don't own, is because that way I don't have to worry about property taxes." And I said "wait a minute, you think for one second the guy who owns your rental is paying those property taxes for you? That's included in your rent."
Thom Dallman: Did you ask him how much his rent goes up every year?
Dave Burnett: Well he goes, "I suppose that could be the case." No it's the case!
Thom Dallman: That's the case.
Dave Burnett: Unless you've got a really generous guy.
Thom Dallman: Most landlord's, with those increase in taxes they have to, they have to raise the rents to be able to offset that. They're in the business not to, be nice to people. They're in the business to make money.
Dave Burnett: If they lose money, they'll lose a house and you'll lose a place to live.
Thom Dallman: Yeah that's one way to look at it is, those people that are paying that rent are basically paying those taxes and paying the mortgage for those landlords.
Dave Burnett: I guess you need to assess at that point whether then, is it better that you pay the taxes or you pay the guy who's buying the property making the investment.
Thom Dallman: And most loans wrap those taxes into your loan payments and stuff like that. So you don't necessarily see that hard hit and have to pay those taxes up front. They're wrapped into your loan, its divided into the twelve months. It just makes more sense.
Dave Burnett: We're seeing a lot of apartment complexes going up all around, all around the area. I mean it's amazing to-
Thom Dallman: Yeah there's still the big demand for renters.
Dave Burnett: If you drive up and down State Street, they're putting up some brand new apartments up that direction as well. I suppose there is a time, where renting is good if you're not going to stay somewhere very long, probably not a good idea to buy.
Thom Dallman: Exactly. We're working with, one of my agents working with a company that is ... moving some of their employee's here just short term. So our ... Sorry, they're moving here permanently but they're looking for short term rental places because they don't want to force their people into homes right away, in case they decide to move back out or what not.
Dave Burnett: Or they can to decide where they want to live.
Thom Dallman: Yeah where they wanna live and stuff like that. It happens quite frequently especially with the way that we're growing and stuff that people will just move into town and rent for a year. So they can explore and really figure out where they want to live and people don't wanna commit to a certain area right away.
Dave Burnett: Other reasons I've heard people give for renting as opposed to owning and that is in the situation where somebody's where a couple's living together. They're not officially legally married and so they just wanna keep that somewhat clean that they don't have to worry about that in case they break up.
Thom Dallman: Exactly. I guess newer couples.
Dave Burnett: I guess that would be a reason.
Thom Dallman: Newer couples, I've heard of people, obviously people who run into a string of bad luck with their credit and stuff like that, aren't able to get into homes. As well as new students, kids out, right out of college still trying to figure out where they wanna live, A. What kind of job they wanna have and so forth.
Dave Burnett: And where they wanna go.
Thom Dallman: Those people tend to, those students tend to rent while they're trying to figure things out too. There is a time and a place of course for rentals and that's the reason why those apartments are being built.
Dave Burnett: It all comes down to just no stability in whether it's employment whether it's in relationships, whether it's in career choice, whatever it is. It's all that ... So if you're stable in what you're doing, if you're not purchasing a home, you're probably leaving money on the table. Just that simple.
Thom Dallman: I mean if you think about the tax savings that you get when you buy a home, writing off your interest on your taxes. The equity that you build. Those people who bought 10 years ago have a ton of equity in their home right now.
Dave Burnett: We aren't talking 10 years ago Thom, we're looking at the numbers, we're talking from from last year.
Thom Dallman: Last year alone, yeah.
Dave Burnett: Prices of some homes have gone up 30, 40, $50,000. I know it's on paper, but that's a chunk of change.
Thom Dallman: That is a pretty good chunk of change. Just the equity and the tax savings alone, is just an investment in yourself instead of investing in someone else's mortgage payments.
Dave Burnett: And I guess another advantage of owning and this is something I like, if I decide I want to paint a room, I paint a room.
Thom Dallman: Oh the freedom, yeah. The freedom to paint your house whatever color you want. Might have to check receipts in order to be going crazy on the outside of your house.
Dave Burnett: But on the inside-
Thom Dallman: Your HOA.
Dave Burnett: There's a TV ad that's out that makes me laugh. There's a teenager painting his room and the mother walks in he goes, it's something to the effect of "I didn't mean any color paint it black. But if you wanna go nuts and paint your room a dark purple or whatever, you can do that.
Thom Dallman: You can do it.
Dave Burnett: When it comes to owning pets. You don't have to pay deposits. You don't have to worry about, "oh let's sneak that cat in or let's sneak that dog in." You own it and so that way you can provide for that pet as well.
Thom Dallman: There's so much freedom that you have when you're a home owner as far as doing stuff like that. I like it.
Dave Burnett: It does come to a great advantage. Now bringing that all back down again. There are so many areas in the Treasure Valley we talked about the, "I don't really know where I wanna live." There really is a big difference of lifestyle. Let's say if you're going to live in Middleton as opposed to living in the North End. Or as opposed to living in the South Side of the city. That's one of the things if you have somebody coming to town like Core Groups agents can really help to show people, okay here's a variety of things you can look at lifestyle .
Thom Dallman: Oh yeah. We frequently have our agents kind of take people who are new to town out and do a little tour of the city basically. And show them the different aspects of town and stuff like that. And it's about a two hour tour of going all the way around and stuff and really kind of getting people familiar with the area. It's a beautiful area and like you said there's so many different unique areas within each of the cities that are just beautiful.
Dave Burnett: When I first moved here, I moved here back in 1986. There wasn't that much variety unless you went and lived in the country, or if you lived in town. There wasn't a whole lot of variety but Boise and the whole Treasure Valley has grown to the point where there really is a lifestyle variety, which is a good thing.
Thom Dallman: Get your small town feeling, like you said Middleton or even Kuna. You can get your wonderful suburban neighborhood feel and Meridian your downtown living and the North End.
Dave Burnett: North End which is a whole unique experience. If you wanna condo downtown you can get that as well. This is the Idaho Real Estate Buzz where yes we do talk about more than just buying and selling we like to talk about things happening that can impact you as an owner or as an investor into property. You can always check out the website which is coregrouprealty.com or call (208) 933-7777. That is the phone number to call if you'd like to set up that tour. I'm glad it's not a three hour tour, it's a little too much like Gilligan's Island.
Thom Dallman: Like Gilligan's Island. There's a flashback.
Dave Burnett: Isn't that funny how that term goes there. It's about a two hour tour if you wanna tour and find out what there is offered here in the Treasure Valley. We'll continue on the other side it's the Idaho Real Estate Buzz being brought to you by Core Group Realty, coregrouprealty.com.
Find out why they say you get more, with Core.
Dave Burnett: This is the Idaho Real Estate Buzz with Thom Dallman, the co-owner, designated broker of Core Group Realty, coregroupreality.com is the website. 208/933-7777. You know we are in what is called a seller's market. Not buyers. For the buyer ...
Thom Dallman: You almost said buyer's market didn't you.
Dave Burnett: I got reversed there. If you are a buyer looking, you have to have every advantage you've got right now.
Thom Dallman: You have to in this market. We've had some interesting trials and tribulations this week with different offers and stuff like that. It's important and it's why I kind of wanted to talk about this a little bit. Is because it's hard to get your offers accepted right now. Especially when there's four, five or six offers, you know, going in on homes and stuff. So you definitely want to make sure you put your best foot forward.
Dave Burnett: Well I guess here will be my generic question. How do you get your offer, how do you get your voice above the noise.
Thom Dallman: Yeah, it really kind of depends on situations. You know one of the things that I usually suggest is always offer your best up front. A lot of people still kind of have this weird mentality of oh, you don't, you never give what their asking, on the list price, and it's just not that market anymore.
Dave Burnett: Somebody will.
Thom Dallman: Yeah, somebody will and somebody will go over it. I just did, tried to help some friends with a transaction this week that they went, when all was said and done, tried to go about $20,000 over the ask price. It was in that $500 to $600 price range and they still didn't get it. We did everything possible, one of the most unique things that I hadn't, we hadn't done before, is we actually offered for the sellers to rent back basically. Stay in the house, after it was closed, because that was one of their concerns. We had actually done a little bit of research in chatting with the listing agent, and found out that they were eager to sell their house but that they didn't really have any place to go just yet. They still had some time. One of their major concerns was that they wouldn't have a place to go. So we threw in the offer that we would let them stay in the house for 30 days.
Dave Burnett: Sell it, close it.
Thom Dallman: Close it, let them stay in the house for 30 days until they found some place to go.
Dave Burnett: Still wasn't enough?
Thom Dallman: Rent free. It still wasn't enough. I even surprisingly enough, and I won't do this for everybody, but these were my really good friends, and so I actually offered to not take a commission on it so that the sellers could have more net to them. You know minus my commission and stuff. Remembering that the commissions are usually paid from the sellers. From the sellers profits and stuff. So, I actually offered to not even take a commission and still didn't get anything, so.
Dave Burnett: It is tough, and as you said, if you don't offer the asking price. If it's priced properly, that's where a good real estate agent will help you to know if the property you're looking at, if that's in the ballpark. If you're not going to offer the offering price, somebody will. And if you don't look genuine that could cause you trouble in trying to get a second offer in.
Thom Dallman: Of for sure, for sure, yeah. You know, part of that was finding that seller's true motivation. Have your agent try to grill the listing agent to try to see what the motivation is for the sellers. There might be some Wiggle room in there to help those sellers out. You know, maybe they don't have the money to pay their closing costs. Maybe they're selling this house because they really need to get their loans paid off and debts paid off and stuff like that. So there's one of those things that you could do, you know, maybe if you have some excess cash, offer to pay the closing costs for the sellers and help them out in the route. So there're things that you can do as far as trying to help those sellers out and making it more appealing to them. But, first and foremost offer what they want. Offer your best up front.
We do have what is known as an escalation clause that we have used in the past. An escalation clause is a form that basically says, "Hey look, we're offering you X amount of dollars. If you get offers over this amount, we want to compete with those, and we're willing to give an additional $1,000 increments up to a certain point and have a max on that."
You know, for instance if you put an offer at $100,000 but you were willing to go up to $110,000 we can put that escalation clause into place so that $1,000 increments goes up, maybe someone puts in an offer at $105,000, hopefully after all is said and done your escalation clause will get it at $106,000.
Dave Burnett: I guess what I think when I hear that though, I think as a seller I'm thinking, well they're willing to pay more? Why not pay me more? I guess I would have that mindset.
Thom Dallman: Yeah, I think that that could happen out there, but it hasn't. You know most, with what we do with our escalation clause that we have verbiage in there says they have to present us with the offer, a competing offer, so it proves that we are going above what they asked.
Dave Burnett: I want the home, I want the opportunity to get into a bidding war on it.
Thom Dallman: Exactly.
Dave Burnett: Let me ask you this, if you're coming down to bidding on a house with somebody, and let's say you and I are bidding on a house and you get the bid, $250,000 darn it, I really wanted it. Is there something written in there that if you fall through, if your loan, if your financing, if you take to ... that they could then come back to me?
Thom Dallman: So actually I've done that this week. I have some clients, sorry my own listing that I helped. We had a couple, we had four offers on it actually, they really liked two of the offers, of course one was superior so we accepted the one that was superior. We asked the buyer's agent for the second one to see if their client would be interested in being in a backup position. So we have an actual form that's called our backup offer position which actually would be an offer into a backup position so if that first one, for any reason, falls through it would automatically convert. We'd give notice to the second offer and say, "Hey this feel through, here's your opportunity, do you want it?"
Dave Burnett: Kind of like a first right of refusal.
Thom Dallman: Basically yeah, so ...
Dave Burnett: If they don't do it then I want to do it.
Thom Dallman: Correct so, yeah, so backup offers, you know, it doesn't hurt to do that. We've seen deals fall through just, you know, either they go through the inspection and don't, you know the buyers get cold feet, and don't like, you have something in the house, you have things like that, so it does happen on occasion that deals fall through. So it doesn't hurt to ask to be put in a backup position.
Dave Burnett: Does it also help if I'm making an offer that, and again I'm just throwing this out here, if I offer a larger than average earnest money. Let's say the average earnest money is $2,000, and I say, you know what, I am sincere, I'll give you $10,000 in earnest money.
Thom Dallman: There's a reason why they use earnest in the earnest money. It shows you're earnest. It shows that you really want this and like you said sincere about purchasing the house. The more earnest money you put down the more attractive it is to the sellers and shows that you are willing to forfeit that money if you decide to walk away or anything like that. So it just shows how much more interested you are into it.
That was one of the other deciding factors on our multiple offers we had this week, was you know they had very large down payments and stuff that they were willing to put up. And earnest money, you know larger earnest monies and stuff than the other offers. So larger earnest money, larger down payments, very attractive to people it shows that you're really willing to pony up for this property.
Dave Burnett: Something else on your list at Core Group that we have time, I think, for one more, I'm glad to say.
Thom Dallman: There's two other really quick things. One is a personal letter. Personal letters. There are listing agents out there that are like personal letters are you know, whatever. But I've had a lot of offers accepted because of a personal letter from the buyer saying, "I love your property, I am so excited to take care of and grow my family, do whatever." I had one client that actually said, you know because the house had a couple of things that hadn't been finished in, they were remodeling. She's like, "I want to finish your remodel. I'm so passionate about remodeling, finishing the remodel that you've done a great job on so far. I'll share pictures with you." At the end of the day, they got the bid. They got the offer accepted over others because she was willing to go to the seller's motivation and pain point and say, "You've done a great job on this remodel, I want to finish it and show you what it looks like when it's done."
Dave Burnett: I guess that's important. Sometimes we forget that selling a home it's personal. It's not like a business where okay business transaction, I sold the restaurant, out of here.
Thom Dallman: There's always a great passion about the homes.
Dave Burnett: It's like owning a boat. The best day when you buy it, next best day is when you sell it. But when it comes to home, it's personal, so if I know somebody's, I hadn't really ever thought about that. If I know somebody is going to take care of what has been where I raised my kids, that could help.
Thom Dallman: Exactly.
Dave Burnett: That could help.
Thom Dallman: Yeah, if you had a couple of offers and one of them had a letter saying I've got these three kids. We're moving to Boise because I want a better life for them, wouldn't you be more apt to be like, oh I raised my kids here, it's nice to know that another family is going to raise their kids here.
Dave Burnett: Yeah.
Thom Dallman: Yeah, it works.
Dave Burnett: Having thoughts like that.
Thom Dallman: It works. I hate sharing that tip out there with other real estate agents.
Dave Burnett: If you're a real estate agent, don't listen. Don't take that tip, that or come talk to Thom about working with Core Group.
Thom Dallman: Exactly.
Dave Burnett: If you're interested and want to talk to one of the agents at Core Group, if you have a home that you want to sell and you want to know that it's going to be taken care of. You know, that's one of the things with your agents here, they are very good about that. Getting the right deal. Getting the right people into that home. Give them a call, 208/933-7777, that of course the number to call. Core Group Reality, the sponsors of the Idaho Real Estate Buzz. Find out why they say, "You get more with Core."