Shawna Schnabel, our listing specialist joins the guys to talk about her new listing that backs up to Boise Ranch Golf Course! Student loans seems to be the topic of conversation when Ron Wieczorek from Flagstar Bank pops in.

Thom and Dave also talk about owner carry financing, something we don’t see a lot of these days, but it could be an option for you. Wondering about the home buying process in general? Well, listen in to get some info on the inspection part of a transaction.


Segment 1

Dave Burnett: This is the Idaho Real Estate Buzz. He is Thom Dallman, the co-owner, also an associate broker at Core Group Realty at EXP. CoreGroupRealty.com, that's a website you can always go to, or you can call 208-933-7777. Thom, another a great week to get out there and buy or sell a home as things are very active.

Thom Dallman: It's a very active market right now. There's a lot of activity going on out there. Interest rates are still really good for the buyers out there looking for stuff. Sellers are starting to pop up here and there. It's actually a really good time to get out there and sell your house or buy a house.

Dave Burnett: Yup. When school coming to a close all around the valley, people can make decisions on what they're going to do this summer.

Thom Dallman: Exactly.

Dave Burnett: Get on it.

Thom Dallman: We love activity. We love activity.

Dave Burnett: It is a good thing. What have we got going on this week?

Thom Dallman: Well, we've got a bunch of activity going on. We've been going on listing appointments right and left, and getting things geared up. In the next coming couple of weeks, we'll hopefully have stuff for stuff to share with everybody, but we have one listing that's come on week, and Shawna Schnabel's here, one of our listing specialists, to chat about that.

Dave Burnett: What you got, Shawna?

Shawna Schnabel: I have an absolutely beautifully home in southwest Boise. It's actually in the southwest Boise meridian area right up there right off Boise Ranch Golf Course. This property does sit on the golf course, so you've both an incredible view out the back.

Dave Burnett: Oh darn.

Shawna Schnabel: It is an absolutely classic beauty. It's a single level, just under 2,500 square feet. Has a fabulous three-car garage. When you walk in the home, you've got beautiful hardwood floors, kind of an open center area to the home for your entertaining and general communications there. It has a really nice little sunroom off the back, which is really a little bit hard to find. Low maintenance backyard. Couple of the really cool features on this one is it does have dual masters. To one side, you've got a big beautiful master, dual head showers, built-ins in the walk-in closet. Just a really, really nice private master. Then when you go to the other side, there is a secondary master with its own on-suite bathroom. Then two other bedrooms.

It's also has one of the nicest pantries that I've seen in quite some time. It's actually an eight-by-eight room with full counters and overhead cabinets. It's just like a little mini kitchen in there with a sink. Yeah, it is just a beautiful home. It was built in '02, but they've upgraded the HVAC system, the hot water heater. They upgraded the windows on the sunny side, so it's got triple pane windows, so super efficient home. They have added the ever-necessary golf ball screens so that the golf balls don't get in there-

Thom Dallman: Not come into the house.

Shawna Schnabel: ... and damage the home.

Dave Burnett: What is the magic of living on a golf course? Is it because you can go to your backyard and there's something to always watch? Because that's just ... a lot of people that I want to live on a golf course. Is that the magic of it?

Shawna Schnabel: I think it is. If you're a golf enthusiast, it's wonderful to be able to just walk down the street and go golfing. That's just a fabulous thing. If you're not a golfer, the views are just beautiful. I mean, it's gorgeous.

Dave Burnett: Like having a park in your backyard.

Shawna Schnabel: Yeah, it's like having a city park. Absolutely.

Thom Dallman: Yeah. It's like a park in your backyard.

Dave Burnett: What is the address of this place over by Boise Ranch? South of the city. John is going-

Shawna Schnabel: It's on Medalist, and I don't recall the house number right at this moment, but it's on Medalist.

Dave Burnett: Medalist? Okay, here's what you do.

Thom Dallman: I happen to have my computer here.

Shawna Schnabel: Tom's got it.

Thom Dallman: Let's talk a little bit more about the house while I go pull it up real quick.

Dave Burnett: By the way, the Boise Ranch Golf Course south of Boise, Medalist. You can always go to CoreGroupRealty.com, and search that way. Just look for Medalist in the ... It will come up, which is what Tom is doing right now on his computer.

Thom Dallman: Yes, it's at 12439 West Medalist Drive.

Dave Burnett: Okay.

Shawna Schnabel: There you go.

Dave Burnett: If you're looking at Google Maps, you look up that address, you'll be able to see it that way.

Thom Dallman: Exactly.

Dave Burnett: Just a nice home on a golf course.

Shawna Schnabel: Yes.

Dave Burnett: It's funny. I know three different people, I can name them right now. Three people that insist that they want to buy a house on a golf course. Guess what? Maybe I'll send a name to you there.

Shawna Schnabel: All right.

Thom Dallman: Right.

Shawna Schnabel: Send them on over. We will be more than happy to accommodate showings during the day. My seller does not want evening showings. Other than that, we are going to be showing this house all weekend long.

Dave Burnett: Very good.

Thom Dallman: Did you mention the motorized blinds? I just noticed the description.

Shawna Schnabel: That's out in the sunroom.

Thom Dallman: In the sunroom?

Shawna Schnabel: Yeah. It doesn't have them everywhere, but out in the sunroom, it does have motorized blinds for those real hot afternoons. Although it's got pretty good trees on the west side to provide a little bit of shade. Also has a lovely water feature in the backyard, and all those nice things. It's just such a nice home.

Dave Burnett: With an edding up that way, it's not a water trap for the golfers.

Thom Dallman: Exactly.

Shawna Schnabel: Correct. Yes, exactly.

Dave Burnett: A nice feature.

Thom Dallman: That's where I tend to go when I'm golfing. They always go into the people's yards if there's houses nearby, the sandpit.

Dave Burnett: You buy the same kind of golf balls I have, water balls. They just go right straight to the water. Doesn't matter.

Thom Dallman: Exactly.

Shawna Schnabel: I don't golf, but I would certainly enjoy living there and enjoying that view. I would be walking down to the pleb house all the time. They have a lovely patio. I see people sitting out there all the time.

Thom Dallman: With a glass of wine here.

Shawna Schnabel: Yeah.

Thom Dallman: Nice.

Dave Burnett: Actually, fairly easy access to the freeway so-

Shawna Schnabel: Super easy.

Dave Burnett: East or west of the city.

Shawna Schnabel: Yup, yup.

Dave Burnett: You get easy access to the-

Shawna Schnabel: Right down just one main street over to Eagle Road and down to the freeway. Yup.

Dave Burnett: Very good. Check that one out on Medalist Drive, south of the city.

Thom Dallman: Exactly. If that one doesn't work for you, give us a call, and we can look at other golf course homes that might be available, that might suit your need too.

Shawna Schnabel: Absolutely.

Thom Dallman: Don't be afraid to give us a call. We can check those things out for you.

Dave Burnett: Perfect, yeah. One of the couples I know, he's a golfer. She's never picked up a club, but she says, "You know what? I'd like to sit on the back porch and watch."

Thom Dallman: Watch.

Dave Burnett: Give them something to amuse her I guess.

Thom Dallman: Exactly, exactly.

Dave Burnett: Watching the golf. CoreGroupRealty.com, that is the website to go to. That really is a nice saying. As you're relaxing this weekend, you can go to the website and check this out along with other featured homes.

Thom Dallman: Yup. Go CoreGroupRealty.comand click on featured listings, and we have all of our listings there. Everything from lots all the way up to these houses. We have a little retreat up in Featherville that we have currently listed-

Dave Burnett: That's right.

Thom Dallman: ... that we're trying to get that perfect family into. Yeah, got everything there.

Dave Burnett: Very good. I noticed this week too I got a notice off of Facebook from the Core Group site on Facebook. I hesitate to mention it because it may have already have been sold, but got a nice listing there. If folks want to friend Core Group Realty on Facebook, they can do that too.

Thom Dallman: Yeah, yeah. Just plug in Core Group Realty on Facebook, and you'll find out site. If you follow us there, these listings are usually posted as well as any changes that we have, any information that we have about the market. We post those occasionally on there too, so it's a great site to follow.

Dave Burnett: I will give testimony to this. I do follow Core Group on Facebook, and this is totally my opinion. The nice thing is you don't bombard me with ads. Hate that, when you like something and they bombard you with ads two, three, four times a day. Just get a post here and there, updated listing, what's going on. It's a nice and comfortable easy to do.

Thom Dallman: Yeah. We keep our social media ... We don't overdo our social media. We're not on there constantly posting everything constantly. Keeps people interested. We don't just post all our listings. We post interesting articles, facts, things like that.

Dave Burnett: It's comfortable. That's what I would call it. It is comfortable social media. We'll continue on the other side. If you have an interest in this home that Shawna has listed or any of the homes at Core Group, you can go to CoreGroupRealty.com or call 208-933-7777. We'll find out a little bit more about financing, what's happening in the marketing place. Ron will be up with this in just a minute. As we continue, Flagstar Bank, one of the sponsors of the program and the folks at Core Group Realty at EXP. CoreGroupRealty.com is a website. 208-933-7777. Find out why they say you get more with Core.

Segment 2

Dave Burnett: This is the Idaho Real Estate Buzz. He is Thom Dallman, the co-owner. Also associate broker at Core Group Realty at eXp. CoreGroupRealty.com the website. 208-933-7777. And Thom, every week we get to talk to Ron at Flagstar Bank about different items that we've been doing. King of a potpourri.

Thom Dallman: Yes, we do. Ron's potpourri. If you've been listening, you know we've got an assortment of stuff that Ron's been talking about.

Dave Burnett: If you go into Ron's office, on the corner of his desk is a big stack of papers that he saves for the program. Am I right?

Ron Wieczorek: That's not a lie.

Dave Burnett: Okay.

Ron Wieczorek: That's not a lie.

Thom Dallman: The stack keeps growing every time he walks into the studio, he's got a bigger stack. Right now his stack is about 10 pages high of things that he wants to talk about.

Ron Wieczorek: I don't know if it's pathetic, interesting or a combination of both.

Dave Burnett: We were just worried about-

Thom Dallman: It's all of the above.

Dave Burnett: Here's the good news is, he wants to tie a bow on part of it.

Thom Dallman: Yeah.

Ron Wieczorek: Yeah, let's get some closure.

Thom Dallman: Right?

Dave Burnett: Something we talked a little bit about last week, home flipping and how ...

Ron Wieczorek: That's how we started the conversation was home flipping. And then which bled into remodeling costs and how a lot of home owners are putting a lot of money into remodeling. And how some home owners are maybe overspending on the inside of the house when they should be spending on the outside if they plan to sell because as Thom pointed out it's all about curb appeal.

Thom Dallman: Curb appeal.

Ron Wieczorek: So I wanted to just kind of dip my toe right back in that to tie a bow on it, like you said, and despite having a large equity in reserves in their homes, many home owners are taking on these home improvement projects by using their savings or their credit cards, which can be kind of dicey.

Dave Burnett: Yeah.

Ron Wieczorek: And there was a study where there was 1200 current home owners and 52% plan to make home improvements over the next 12 months. And 25% expected to do so in the next 3 months, so it's a hot topic inside houses that after hours and ...

Thom Dallman: I really want them to follow up that report by going back to those people, the 52% that said they'd plan on it and see how many actually do it.

Ron Wieczorek: Yeah, well, that's everything in life, right?

Thom Dallman: Exactly.

Ron Wieczorek: The road to hell's paved with great expectations.

Thom Dallman: Exactly.

Ron Wieczorek: I don't know what that would look like, but it seems like a lot of people are doing. Maybe not that time frame because it's always hard ... Three months can fly pretty quick. It seems fly by in 90 days. That's a joke, three months.

Thom Dallman: No, I got it.

Ron Wieczorek: Yeah, I know.

Thom Dallman: Such a dad joke.

Ron Wieczorek: I have a plethora of ... But 82% agree that the home they own is a financial asset, so that's a good start, right?

Dave Burnett: Mm-hmm (affirmative).

Ron Wieczorek: Because it is a financial asset.

Dave Burnett: Mm-hmm (affirmative).

Ron Wieczorek: And 47% say the reason they bought the home was because it was a good investment, so these are good numbers. This is a good place for your head to be at, and 22% purchased with the mission to start building equity in the house.

Dave Burnett: Mm-hmm (affirmative).

Ron Wieczorek: That's what we see a lot in my industry. And that's kind of the ... We're seeing a lot of that in The Valley right now and that's the success stories. Once you get past that burden of renting and now you become a homeowner, there's just that feeling, not only do you start building wealth, you get the mortgage interest write-off. But you have that ... It's just a different attitude walking around that you have that pride of being a homeowner and at the same time, you're starting to build your wealth. And that's really what it comes down to. And I know, how does this relate to remodeling costs, is what Dave's eyes are looking ...

Dave Burnett: That's what I'm thinking. I'm waiting for this bow to cinch up here.

Thom Dallman: The bow, the bow.

Ron Wieczorek: The bow, yeah. Sometimes I promise a bow and I don't give a bow. So according to the remodeling.net, bathroom remodels are typically in the range of ... Now these are some how much do they cost? And it's a pretty big range, anywhere from $19000 to $61000.

Dave Burnett: For a bathroom?

Ron Wieczorek: For a bathroom.

Thom Dallman: For a bathroom, yeah.

Dave Burnett: Holy cow.

Ron Wieczorek: Is that a big bathroom?

Thom Dallman: Can you imagine what you could do for $61000 for a bathroom?

Ron Wieczorek: You tell me.

Thom Dallman: No.

Dave Burnett: We're talking ...

Thom Dallman: I don't even know for sure.

Dave Burnett: We're talking more than a new toilet, I'm telling you that.

Ron Wieczorek: Yeah. Right? Exactly. Yeah it's a golden ...

Dave Burnett: I'm thinking.

Thom Dallman: Now I imagine that that's probably actually extending walls out into the yard to create bigger bathrooms, because I have a client that we're talking about doing something like that and things. So and that price range does go up when you're actually moving walls and stuff like that. So I can see a bathroom remodel to that extent.

Ron Wieczorek: Yeah.

Dave Burnett: And if you're putting in a big garden tub and the floor has to be reinforced, I guess I could see that jumping up pretty quickly.

Thom Dallman: Yeah, exactly.

Ron Wieczorek: Or, they might have the guy that's in charge of the government contracts. The toilet seat might cost 20 grand, so that may be where some of these numbers are coming from.

Thom Dallman: That could be.

Dave Burnett: Don't hire him.

Thom Dallman: Yes.

Ron Wieczorek: No offense if you're listening.

Dave Burnett: Yes. Just don't come around, that's all.

Ron Wieczorek: Now the kitchens made more sense to me. Now that has to be a big bathroom, what are we doing to a bathroom to put $19,000 to $61,000? But there's a lot out there. And like I kind of mentioned last week, there's a lot of inspirations. You have all these TV shows that are centric about home remodeling. You have Pinterest, you have social media outlets. So there's a lot of ideas out there and a lot of people are getting pretty creative. Some are budget savvy and some apparently are not.

Dave Burnett: Or they've got a bigger wallet than-

Ron Wieczorek: And some of it's for show, right? Some of it's just like, look what I've got. And the kitchens range from ... This even though it's still huge numbers, it made more sense to me because I can see how a kitchen can get really expensive really fast.

Thom Dallman: Pricey, yeah.

Ron Wieczorek: But those range from $63,000 to $125,000.

Thom Dallman: Wow.

Ron Wieczorek: Dave still is like, that's not reasonable.

Dave Burnett: Well see, I remodeled my kitchen here a couple of years ago and we put on all new cabinets, all new floors, all new appliances. And I was under $30,000 for it.

Thom Dallman: Yeah.

Dave Burnett: So when you said 60, I'm thinking, is that the top end?

Ron Wieczorek: You got off cheap, Dave.

Dave Burnett: I got off very cheap. But I did do some of the labor myself.

Thom Dallman: I think those numbers are somewhat high personally because I do think that there are options to do that $30000 remodel or even less than that. You don't have to go so into debt for a kitchen remodel.

Ron Wieczorek: No, and I agree. I met a guy that he put a range in. And it came from France. So this is not your normal ... The range alone cost $190,000.

Thom Dallman: Oh yeah, for sure.

Dave Burnett: Serious? Special range.

Thom Dallman: Yeah.

Ron Wieczorek: Yeah. He might be ...

Dave Burnett: And I would assume, maybe I'm wrong in assuming this that if you're remodeling your kitchen and you're in San Jose, you're going to pay a different fee than if you're in Sweet Idaho.

Ron Wieczorek: Right.

Thom Dallman: Yeah.

Ron Wieczorek: And the do-it-yourself part if big for me. Because there is a shortage of labor. And when there's a shortage of labor, that price tag goes up for per hours worked. And that's in those numbers. So you're not just talking about how much does the granite cost? How much does that range cost?

Thom Dallman: Exactly.

Ron Wieczorek: You're talking about what that good labor costs.

Thom Dallman: It's all that stuff.

Ron Wieczorek: And a lot of good labor's out building houses. So it's kind of hard to wrangle that in and get them to say, yeah I'm going to stop this project and work on the inside of your house. So I think a lot of it plays into effect there as well. So it's not all just the materials that we have in mind. If you're handy enough and you can do it, and your wife trusts you to handle that project, then maybe you'll get off a little bit cheaper.

Thom Dallman: Exactly.

Ron Wieczorek: And then again, depends on what your budget is. What your goals are. Some people just want to, look what I have. And that's probably the $125,000 number. And the $61,000 on the bathroom, but labor goes into it as well. And so only 38%, which I thought was intriguing said they would consider using the equity in their homes despite having over 100K in equity in their homes to do the projects, which is if you have the cash that's great. But if you're using ... Like some people said with credit cards, I don't love that idea.

Dave Burnett: That can run the cost of your home remodel up quickly.

Ron Wieczorek: Real quickly. And then you're paying for it for years.

Dave Burnett: Yeah.

Ron Wieczorek: You know what I mean? Unless you do have that liquidity, 60 grand on a credit card. If you even have that ability to do that, even if it's a quarter of that, it could take a long time to pay off. And you don't get the mortgage interest write-off. So the mortgage in me is saying, use the ... If you're going to do those projects, use the home equity to do it. There's a lot of products out there that won't touch your first mortgage if you already have a low rate on it. And then you can come right behind it and just use a home equity line of credit and it kind of works as an open checking account against your home. So you have a lot of options when it comes to that. So there's my tying the bow on that conversation.

Dave Burnett: All right. There you go. We have about four or five minutes left.

Ron Wieczorek: I can do student loans real quick, because this has been on my mind.

Thom Dallman: Let's talk about student loans.

Ron Wieczorek: Student loans is a big deal right now. And there's one and a half trillion dollars in student loans in the US alone right now.

Dave Burnett: Wow.

Thom Dallman: Wow.

Ron Wieczorek: That's a huge, huge number.

Thom Dallman: That is.

Ron Wieczorek: And what we're seeing a lot with that is, we have to use your student loans against your debt ratio. So if you owe even a modest amount, which is $20,000, you use 1% of the payment, that's $200 a month. So that's already on top of if your budget's small, $200 a month means a little different to someone else than it does to the first time home buyers. And that could really put a strangle hold on what you can afford. And it can when you're paying down your student loans it's a heavy burden on you, it limits the amount of down payment that you can put on the home. So not only is it reducing your affordability in the home, it's also preventing you from maybe putting the down payment that you want to put down.

And we're seeing a lot of ... seven in 10 working adults right now with student loans, say their finances cause them stress. They're staying up at night. They're stressed out about their finances. And four in 10 of interviewed say their finances cause ... These are people without student loans now, cause them stress anyway.

Thom Dallman: Yeah.

Ron Wieczorek: So four in 10 are stressed about ...

Thom Dallman: Does anybody not stay up all night long and worry about their finances?

Ron Wieczorek: Maybe not all night long, but ...

Thom Dallman: Maybe those billionaires.

Ron Wieczorek: But I definitely pop up out of bed sometimes.

Thom Dallman: Right?

Ron Wieczorek: So even without the ... With sans student loans, it's a stressful topic as it is.

Thom Dallman: Oh yeah.

Ron Wieczorek: And you throw the student loans on top of it, it becomes even more of a burden. And we talk about millennials a lot, and 46% of millennials have $25000 or more in student loans.

Dave Burnett: That's almost half.

Ron Wieczorek: Yeah, right.

Dave Burnett: That was a lot.

Ron Wieczorek: Yeah. And I see ... Someone says they have $25,000 in student loans and I guess I'm now so immune to it, I'm like, "So?"

Dave Burnett: Yeah.

Ron Wieczorek: That's normal.

Dave Burnett: That's not that much.

Ron Wieczorek: That's even minimal, right?

Dave Burnett: Yeah.

Ron Wieczorek: I've seen hundreds. I've seen a doctor friend of mine had over $300,000 in student loans.

Dave Burnett: Yeah. $20,000 is very workable.

Ron Wieczorek: Right.

Dave Burnett: I was listening to a radio program this morning that was talking about the average was ... I think he was talking about the average in the group he was working with is over $70,000 in student loans.

Ron Wieczorek: Yeah, that's normal.

Thom Dallman: Oh my gosh.

Ron Wieczorek: And you don't think of it when you're a 19 year old kid that some schools do a better job of it, of counseling those students and saying, this is what you're getting into. But most ... This is what I wanted ... Either I take it or I don't get a degree. So I'm going to do that.

Thom Dallman: Yeah. Right.

Ron Wieczorek: So that's a pressing topic. And baby boomers are actually stepping up to the plate and I've talked about in the past risking their own wealth or maybe going back to work to kind of help out their kids to get out of this student loan debt. Or at least help them along with it. And one big thing, and this is the one thing I wanted to focus on it, you're starting to see a lot of employers. So now that we know it's becoming an issue, it's affecting our newest generation of very smart, productive workers, they're starting to incentivize in their contracts that they will help ... Almost like a mini 401K on the side where they're setting up incentives to help pay their student ... Like X amount of your paycheck and we'll match this, will go towards your student loans. So that's attracting that demographic because it's a real issue for them.

And they're saying I'm choosing between job X and job Y, but this one is going to help me out with my student loans. So where do I sign? So I thought that was pretty forward thinking and intriguing to see that that's out there.

Thom Dallman: Yeah, interesting yeah.

Dave Burnett: If I was a millennial with $30, $40,000 and a job said they'd pay part of my student loans, I'd definitely listen.

Thom Dallman: Yeah.

Ron Wieczorek: Dave you're not a millennial.

Dave Burnett: No. And I don't have any student loans.

Thom Dallman: You said if.

Dave Burnett: Back when I went to college, I won't even tell you, tuition was nothing compared to what it is now. It was not much at all. Abraham Lincoln.

Ron Wieczorek: It's changed a lot. It's changed a lot.

Dave Burnett: Ron, if somebody wants to get a hold of you at Flagstar Bank and by the way equal opportunity lender and talk to you about loans, about maybe they have student loans. How that works and how that affects what they're doing, how do they get a hold of you?

Ron Wieczorek: My cell phone is always on me. It's area code 208-869-9154.

Dave Burnett: And of course you can always go to CoreGroupRealty.com and find them on the preferred vendors with Flagstar Bank. Ron, thank you so much. We appreciate it as we continue with Ron's Potpourri. That's the flavor coming out of your radio here this weekend. It is the Idaho Real Estate Buzz being brought to you by the folks at Core Group Realty and Flagstar Bank. Find out why they say that you get more at Core.

Segment 3

Dave Burnett: This is the Idaho Real Estate Buzz. He is Thom Dallman, the co-owner, associate broker at Core Group Reality at EXP. CoreGroupRealty.com, that's a website for you to go to or you can always call 208 933-7777.

Thom, one of the things a term that comes out or actually one of the actions that happens to me is always kind of scary.

Thom Dallman: Yeah, what's that?

Dave Burnett: That would be owner carried contracts.

Thom Dallman: Owner carried contracts. Yep, that's something that's not very common these days but still actually happens every once in a while. We actually had someone asking about that this week. One of our clients who found a house that was not quite conforming for regular loans. As everybody knows, lenders have to send in an appraiser, they have to appraise the house and it has to meet certain standards for the house to be eligible for a loan. He found a house that he really loved, unfortunately it was not, there were some issues with it that would prevent it from actually getting a loan on it so he was curious about owner carries and whether the seller would consider an owner carry.

Dave Burnett: That could be anything from the foundation, the way the foundation is in the house. There's a lot of different reasons why.

Thom Dallman: There's all kinds of little and it can be such a small little fix issue that could lead to it and maybe the seller just doesn't have the money to fix the problem and stuff. Owner carries kind of an option for something like that. Owner carry can be an option for someone who doesn't qualify for a loan, maybe their credit is just out of reach for debt to income ratio to where they just don't qualify just yet. But maybe they want to get into a house now rather than wait a year or two to be able to get their credit in line, stuff like that. There's several options or several reasons why people would want to go to owner carry for sure.

Dave Burnett: The first thing, for the seller, the person carrying the loan, if they can afford to carry that loan, all of that interest that would be going to a bank or a mortgage company, is going to them.

Thom Dallman: That's one of the benefits for a seller. If they own the house outright and can actually can afford to manage it and whatnot, they get that benefit of the interest coming in. They get the benefit of being able to spread the capital gains on that property out while they're carrying that loan.

Dave Burnett: Check with your tax attorney.

Thom Dallman: Yes, once again, check with your tax attorney to make sure that works for you.

Dave Burnett: But anyone's who's ever checked their balance of their home loan and they see how little it's going down because most of it's going to interest. And if you're the one carrying the contract, that's coming to you so that really is a benefit.

Thom Dallman: Correct.

Dave Burnett: But for the person buying, what are some of the benefits of getting an owner carried contract?

Thom Dallman: Well really the benefits to the buyer is that they can get into a house that they want now instead of waiting for a couple years and who knows what inventory's going to do in a couple years. Who knows what interest rates are going to do in couple years, things like that. They can really get into the home that they want sooner than rather than waiting.

Let's think of some of the other benefits for them. Since there's no bank fees and appraisal costs associated with the owner carry, you don't have those fees and stuff like that. Typically an owner carry, the seller will still want to do a credit check but you have the option, they're a little bit more lenient let's say, than the bank when it comes to your credit and stuff like that.

Dave Burnett: If you've got some marks that are explainable or might be able to get them taken care of.

Thom Dallman: Exactly, exactly. There's definitely some benefits for a buyer. Again, into an owner carry. And then for this case where the house doesn't quite qualify. There's just a few things that need to be repaired, seller can't repair them. They don't have really the extra cash and whatnot to fix them and this buyer is somewhat of a handyman so he has no problem getting in there and fixing those items and using some of his own money to get in there and fix it so that in a couple of years when it's ready and everything, he can refinance it under his name and get it refinanced.

Dave Burnett: I was going to say, that is something, if you are buying and going in with an owner carried contract, you need to keep in mind, if there is something wrong with the house that the bank wouldn't do it, before you can sell it through a bank, you're going to have to get that fixed.

Thom Dallman: Exactly. Yes.

Dave Burnett: I guess that's where.

Thom Dallman: Sellers need to know that.

Dave Burnett: It's takes a little bit of knowledge and that's where a real estate agent can help and say that, "Here's a problem, this foundation needs to be fixed here." And they can help guide you to the people that can tell you what needs to be done to be able to qualify.

Thom Dallman: Exactly, that's what we're here for is to help you with that process. Yeah, there's definitely some pros and cons on both sides for the seller and the buyers. The downside is if you as a buyer, if you run into some difficulty, you lose your job, the seller can still foreclose on you just like a bank, so you're still in that predicament where you're making these payments to the owner and then maybe you did a large down payment and stuff like that, then all of a sudden you can't afford to pay your loan. You can get foreclosed on just like a bank and lose the house. That is kind of a con if you think about it, a little bit for the seller too because the seller does at that point have to go through a foreclosure process. They have to file the notice of default and do the whole series of steps to foreclose on the buyer. There's kind of that little bit of a con as well.

Dave Burnett: Let me ask you this question, is the steps, and is something I've often wondered, are the steps of going through closing, title company, inspection, all of it, is that all the same as if you were going with a traditional bank?

Thom Dallman: I would yeah. I highly recommend it. Going through the escrow company because they'll still report it. They'll still record it to the city and state and stuff like that and do all the proper paperwork. So yes, most of the owner carries that we've always done, they've gone through an escrow company. And we've actually encouraged them to have their long term escrow which is the payments after the fact, after the closing, through the title companies as well. What we recommend is that the buyer and seller set up an escrow account with a title company so that the title company's the one that receives the payments from the buyer and then distributes it.

Dave Burnett: I'm not mailing you the payment. I'm sending it out to an escrow company.

Thom Dallman: Correct. And that way they can still collect the taxes and insurances and make sure that that money is set aside to make those payments. They don't get those bills directly. The buyer does have to send the bills to the title company to get them paid. But at least it's a security for the sellers to know what they're monitoring that and they're taking care of the payments and stuff like that so the seller just kind of sits back and gets those check in their accounts.

Dave Burnett: I guess it also kind of takes away the personal contact between a buyer and a seller, whether you're buying a car or buying a home, that personal contact could be suddenly it's, hey, why is this? That personal contact's better not have, I think. That's just me. Maybe I'm not very friendly. It's just kind of a protection.

Thom Dallman: Yeah, it's a protection and it does just things happen and one wrong thing said can cause a dispute that can just make living there uncomfortable and stuff like that. Things like that.

Dave Burnett: Owner carried contracts.

Thom Dallman: Owner carried contracts, they happen very infrequently but every once in a while they do. Main reason why they happen so infrequently is once again, the seller has to own that home outright. They have to want to be able to manage that and want to collect that interest and so forth and be in that situation where they can have multiple homes.

Dave Burnett: Being a bank.

Thom Dallman: Exactly. Yes, being a bank.

Dave Burnett: Being a bank because that's kind of the position you're going to put yourself in.

Thom Dallman: Exactly.

Dave Burnett: Asking if I have the folks at Core Group Realty at EXP looking for a home for me, is it something I can ask for. Say, "Could you ask the owner if they'd be willing to carry the contract?"

Thom Dallman: Oh yeah, oh yeah, that happens every once in while. For instance in this case, where they found the house that was perfect for them but it just didn't meet the standards for financing so they're the ones that actually asked, "Hey, do you think the seller would consider an owner carry?" It's something that we do on occasion, ask sellers. Once again, it's very rare.

Dave Burnett: I was going to say, not as common now as maybe it was five, six years ago.

Thom Dallman: Exactly. Exactly. It's very rare, like I said, because of the fact that they have to own the home outright. They can't have a loan on the property and stuff like that.

Dave Burnett: Very good. Thom, if somebody wants information about Core Group or about owner carry contracts, the best and easiest way to get hold of you guys?

Thom Dallman: You know you can email us at info@coregrouprealty.com or you can just go to our website, CoreGroupRealty.com and check us out there. We have a contact page where you can just fill out some information and send it to us or just give us a call, 208 933-7777, keep dialing those sevens until you get through.

Dave Burnett: And let me ask you this or actually mention this because there is, if you fill out the contact information, some people are hesitant to do that because they think they're going to be harassed. That's not the case at all with Core.

Thom Dallman: No, we will reach out to you obviously because you've sent us your information, we'll reach out, we'll try to make contact with you to get your information but all you have to do is say, "That's all I needed, I don't really need you to contact me anymore." We may send you a monthly market update because we feel like everybody should be educated about the market and things like that. But other than that, we try to take a step back approach and let people kind of come to us as they need information.

Dave Burnett: Fill it out without fear.

Thom Dallman: Without fear.

Dave Burnett: CoreGroupRealty.com, that is the website. Or 208 933-7777. If you have questions about owner carried contracts, whether you are an owner or whether you're wanting to buy, it is worth exploring and talking to the folks at Core. We'll continue as we move along here on this weekend as you'll get a chance to find out well, let's say this first. It's all being brought to you by the folks at Flagstar Bank, one of the sponsors of this show, which is a traditional mortgage company and of course, the folks at Core Group. Find out why they say, "You get more with Core."

Segment 4

Dave Burnett: This is the Idaho Real Estate Buzz. He is Thom Dallman, the co-owner, Associate Broker at Core Group Realty at eXp. CoreGroupRealty.com, the website. 208-933-7777. That is the phone number for you to call. You know, sometimes we throw out terms, Thom, like... Well, there's evaluations, inspections. I mean, there's a lot of different terms that are in there, and for you with Core Group, you're in it all the time, so it's no big deal. For me, who does a real estate transaction once a blue moon, some of these terms can get confusing, and why I'm getting it done.

Thom Dallman: Exactly. We talk about it all the time, that there's several steps through the whole process and points where you, as an educated buyer, need to make sure that you're staying on track for time frames, things that you need to get done, and stuff like that. And you know, for example, we always talk about inspections and appraisals, very two different processes at different times in the escrow process that are super important to the transaction. They're important for the buyers, for the inspection part, and for the appraisal part, for the lender, and the buyer too to find out the value of the house, and make sure that they're getting a loan that's equal to the value of the house and so forth.

Dave Burnett: But an appraisal and in inspection, not the same thing?

Thom Dallman: Nope. Not at all.

Dave Burnett: All right.

Thom Dallman: Yeah, the inspection is done fairly early in the process once you've had a accepted contract, and that is purely for the sake of mind for the buyer to let them know if there's anything wrong, substantially wrong, or anything that could go wrong over the next couple years. They're looking for defaults in the house, things that are of issue that might be safety and security issues for someone living in the house, and things like that. Something for the buyer to really watch out for. You know, not only for their own safety, but for the long run if it, for example, a roof's going to go bad in the next couple years. That's a costly expense to replace a roof, or it can be. And so a buyer needs to be aware of things like that.

Dave Burnett: Can these inspections... And I'm just saying this because somebody I know who sold their house not too long ago, it was a couple years ago, but they had the inspector came through. And I mean, the inspector came through with a little post-it notes, and even on paint dings and nicks, left a little post-it note next to it saying that that probably should be fixed. Can they be that extensive, or-

Thom Dallman: I don't think I've ever actually had anybody like an inspector actually go that far to mark chips in the paint and stuff like that. I've seen that on new construction where they've done that, or for new construction, because when you're buying a brand new house, it should not have flaws like that. And that's one of my favorite things to do. Actually, it's called a blue tape walkthrough on new construction, where the buyers, and sometimes their agents and their inspector have the option to walk through and put little pieces of blue tape on spots where there's flaws like that and stuff. It's one of my favorite processes of helping buyers with a new construction. Oh man, I get in there.

Dave Burnett: Thom the nitpicker.

Thom Dallman: I pick out every single flaw in those walls, and everywhere that I can-

Dave Burnett: This guy, actually was a gal, but went through and put a little post-it note saying you might want to get that fixed, you might want get this fixed.

Thom Dallman: Interesting. Yeah, normally-

Dave Burnett: And "might" words, not, "You have to."

Thom Dallman: Yeah, exactly. Normally they'll do a report. The inspector will go in, they'll do a big report, they'll send you a... It can be anywhere from 30 pages up to 60 pages of all the detailed things. And they may point out... I've seen them do dings in bathtubs, and stuff like that. Things that could cause long-term damage if it's left unattended, but typically for interior paint and stuff like that, they won't check that stuff, because it's going to be assumed that a house that's lived in is going to have holes in the walls from pictures being hung, or it may have nicks and-

Dave Burnett: -just to repaint.

Thom Dallman: Exactly.

Dave Burnett: In general.

Thom Dallman: Exactly. No, typically, the inspectors are focused on things of safety and soundness, such as checking the roof, checking the exterior of the home to make sure that there's no chipping paint on the exterior of the home that's going to have water damage over time if left unattended. They're going to go up in the attic, and check the attic to make sure there's no mold, to make sure there's sufficient insulation, or make sure that the insulation hasn't been moved when people are storing things in their attic. Sometimes insulation gets moved, and there can be sections that are not covered anymore, so they're going to go through your electric and plumbing systems to make sure everything's up to code, that there hasn't been any damage done to the plumbing, or anything added electricity-wise without permits, things like that. They're going to go through the faucets, the bathtubs to make sure they're not leaking, like there's evidence of water damage anywhere, and things like that.

They're going to go through your HVAC. They're going to make sure that the HVAC is running, that it heats and cools appropriately if you have an air conditioner in the house. They're going to check the water heater, make sure that the water heater's functioning correctly and has... I think rule of thumb is usually two to three years, that everything has a two to three year lifespan, and let you know if it's going to go out. They're going to check your windows to make sure your windows aren't leaking. Just everything about the house that could go wrong, they're going to check that. A good inspector will check that, and a good inspector... And by good inspector, I mean make sure you're doing your due diligence in reviewing their license history, their history as far as how long they've been in the business, how long they've been doing inspections, do they have referrals, and things like that. And make sure that you're getting someone that is qualified to get out there and inspect the house.

Dave Burnett: An inspection, that's something that's paid for by the seller, or is that paid for by the buyer?

Thom Dallman: That is paid for by the buyer. It is a buyer's expense.

Dave Burnett: Okay.

Thom Dallman: They run anywhere from $250 up to $400, depending on variables as far as how size, and inspector, and so forth. So yeah, it is a cost that the buyers take on, and it's towards the beginning of the process once you get under contract.

Dave Burnett: Now when it comes to the repairs, is that something negotiated at that time, that the owners say is, "I'll do this, that, and the other, but I'm not going to do this, or..."-

Thom Dallman: Correct.

Dave Burnett: So you can kind of... Either the owner will take it all on, or you can negotiate.

Thom Dallman: Yeah. Typically in the contract we'll have a time frame to get the inspection done, and to turn over to the seller a list of things that we want fixed.

Dave Burnett: Mm-hmm (affirmative).

Thom Dallman: You have kind of that option at that point to either move forward with purchase of the house with nothing, doing nothing. You can terminate the contract at that point. Just say, "You know what? There's so many issues here, and I just don't feel comfortable buying the house. I'm just going to walk away from the contract," and get your earnest money back. Or you can give them a list. You can give them a list of things that you want fixed, and say, "Hey, here's 10 items that the inspectors found that is wrong with the house that we need addressed, or we want addressed," and so forth. That's typically what happens. There are a couple other options in there as far as getting a price reduction. "Hey, will you reduce the price, the price of the house, because of these issues? It's going to cost about $5,000 to replace the roof. Will you reduce the cost?" That's all part of that negotiation that happens once the inspection's done, and we find out what's if or what's wrong with the house.

Dave Burnett: And that really is where having a good agent makes a difference?

Thom Dallman: Correct.

Dave Burnett: Because it's not me going to the homeowner saying, "Hey, bub."

Thom Dallman: Yeah.

Dave Burnett: "You got to fix this stuff."

Thom Dallman: Well, yeah.

Dave Burnett: But the agent will go and negotiate-

Thom Dallman: I think that's the important part of having agents involved, making sure that you get a certified inspector, not just a family member who happens to feel they are comfortable with houses, stuff like that, because sellers will take it more seriously if it's a certified inspector that sends over the report and stuff like that. So yeah, it's important to make sure that it's done by the qualified person, and help you with those negotiations so you don't A, purchase a house that has so many flaws that you're going to end up spending a lot more money, or B, just walking away with money on the table that you could technically get and stuff.

Dave Burnett: Well, Thom, if somebody wants more information, maybe they want more information about home inspections, that's really one of the things you can do when you sit down to council. If you're selling a house, you can say, "You know what? We got an inspector who will come out. We'll run through it and see what needs to be done."

Thom Dallman: Exactly. Yeah, there are some inspectors out there that will do a pre-listing inspection. They'll just do some of the major highlight or high points of the house to go through and just check the major points of the house, such as the attic space, the crawl space, the furnace, and things like that.

Dave Burnett: I don't think that's a bad idea.

Thom Dallman: A little bit of a cheaper amount so that the seller isn't going to be surprised.

Dave Burnett: I was thinking for myself, I've lived in my house forever, for a long, long time, and probably if I were to decide to sell my house, it wouldn't be a bad idea to have it inspected just so I kind of got an idea of what I got to do.

Thom Dallman: Yeah. Exactly. Oh, we recommend it all the time to do a pre-listing inspection, just so a seller's not caught off guard. There's nothing worse than a seller selling their house, and then all of sudden being told, "Hey, you only have a year left on that roof. It's going to be a $10,000 fix," and stuff like that. So yeah, it's highly recommended. Honestly, as a homeowner, it's not bad to every two or three years have an inspector come by and just check it out just to make sure you don't have anything happening that you're not aware of and stuff.

Dave Burnett: Thom, if somebody wants to get a hold of you, how do they do it?

Thom Dallman: Give us a call. 208-933-7777 is our number. We have agents standing by 24/7 pretty much.

Dave Burnett: Perfect.

Thom Dallman: You might have a hard time getting someone after 10:00, but-

Dave Burnett: - the next morning.

Thom Dallman: But yeah, we'll get back to you for sure. Leave a message please.

Dave Burnett: Very good.

Thom Dallman: Or just email us at info@coregrouprealty.com, and someone will respond to that email as well.

Dave Burnett: Perfect. Core Group, of course, one of the sponsors of this program, along with the folks at Flagstar Bank. Call today. 208-933-7777. Find out why they say, "You get more with Core."


Ron Wieczorek

Flagstar Bank

208 869-9154


Core Group at eXp Realty

208 639-7700



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