What is owner-carried financing and when should buyers and sellers consider using it? To find more about this non-traditional financing option, check out today’s message.
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buying in boise idaho
Today on the Buzz, Dave and Thom talk about energy efficiency in the home and give you some small tips that you can utilize to prep your home for winter. As we enter winter we also welcome the season of giving, Thom is here to tell you about our partnership with the Boise Rescue Mission and what you can do to make an impact right here in our local community this holiday season.
We have a full show for you today. Michelle Guth is here talking about when it's a good time to pay off a mortgage and what reverse mortgage's are. Dave and Thom are jumping back in, talking about prepping your home for another predicted rough winter and then filling you in on distressed properties; what they are and if you should buy one.
Dave Burnett: This is the Idaho real estate buzz, I'm Dave Burnett. He is Thom Dallman, the co owner, designated broker of Core Group Realty. Coregrouprealty.com is the website. Call 933, well actually call 208-933-7777.
Thom Dallman: Can't forget that 208.
Dave Burnett: I know I keep doing that. Every time I get burned. So, 208-933-7777. Find out why they say "You get more with Core." Thom , another week is underway and this is a big week because the clocks change tomorrow actually tonight overnight into tomorrow.
Thom Dallman: Oh yeah. Yep it's that time, so.
Dave Burnett: We fall back so Sunday everything will seem wrong
Thom Dallman: Exactly.
Dave Burnett: But it is still a great time to buy a home.
Thom Dallman: At least it'll be a little bit light when you head out the door for work.
Dave Burnett: Exactly. It'll be dark when you come home.
Thom Dallman: Yeah, exactly.
Dave Burnett: But it is a good time to buy or sell a home as things very busy in the Treasure Valley.
Thom Dallman: It is, it is. The market continues to be active, still got listings coming on, still got people out there looking to buy. So, it's still a strong market. Home prices are still being steadily up there at the top of the market, so. Definitely great time to sell and we kind of go into the winter months. We're hearing a little bit more of "Oh I think I'll wait until spring." And we tell clients winter sometimes is the better time to sell because everybody kind of has that mentality of wait until spring.
Dave Burnett: Yep.
Thom Dallman: So we still have the same number of buyers. We still have buyers who are interested in looking. We have buyers that are wanting to get in before the holidays into a new home. So, it's still a really good time to get out there and get your home listed and sold on the market because people are thinking the same thing. Let's wait until spring.
Dave Burnett: Yep, yep. And really right now because people are looking now because they want to be in by the holidays and if they are doing that buying and that right now they will be in by Christmas.
Thom Dallman: Exactly.
Dave Burnett: So, now is a great time to do it. In fact, you have three new listings to talk about this morning.
Thom Dallman: Yeah, I got three great listings that I wanted to chat about once again on coregrouprealty.com. You can find these on our featured listings page. But these are fun acreage properties out in Napa. We just happened to get these three listings and wanted to share them with everybody, so. Just starting out with the first one, 1525 South Side Blvd. So this is over there off of Amity and South Side. This is a six bedroom, three and a half bath. 2,682 square foot home. Nice, spacious home with lots of room, in it for everyone's needs. They just had recent upgrades that included the mosaic tiles in the bathroom. Granite countertops as well and an upstairs tub. They have a separate entry into a Master suite that features a freshly painted walk-out deck. So you can walk out your master bedroom onto the deck and everything.
Dave Burnett: Nice.
Thom Dallman: So yeah. Right. Wake up in the morning and go grab your coffee and go sit on the deck. How awesome is that.
Dave Burnett: That is perfect.
Thom Dallman: Nice thing is, it is also on one acre. So, 1.074 of an acre.
Dave Burnett: So you're not sitting on your back deck looking at your neighbor's house.
Thom Dallman: Looking into your neighbor’s yard. Exactly
Dave Burnett: Or having your neighbor look out the window at you.
Thom Dallman: Exactly.
Dave Burnett: You have a little space.
Thom Dallman: You have a little space so you can go out there in your robe and feel comfortable. And so forth.
Dave Burnett: That's nice.
Thom Dallman: And this is actually listed at $300,000 so for, you know, that big of space and that big of acreage it's really good price.
Dave Burnett: That's a good buy.
Thom Dallman: Yeah, it's a really good buy for that size of house.
Dave Burnett: And what's the address on this place again?
Thom Dallman: This was 1525 South Side Blvd. In Napa.
Dave Burnett: Nice.
Thom Dallman: Yeah, it's really a great price. Another great price. This next house is at 27 North Pitt Lane in Napa. This is a smaller house at 1,728 but still, you know, good size. Three bedroom, two bath. But the nice thing is it's on 2.272 of an acre. So, nice big acreage. This is original owners that have lived in this house. It was built in 2004. It was custom built for them. It has corals, outbuildings. It has one acre of fenced pasture grass. That's huge.
Dave Burnett: If you've got horses, that's a big deal.
Thom Dallman: Exactly.
Dave Burnett: That really is. That way you're not hauling hay in there all the time.
Thom Dallman: Exactly. Yeah, you can just throw the horses into the pasture or the cows or whatever you have.
Dave Burnett: Yeah, but seriously. Ada County, at least it used to be, I don't know about recently, Ada county and of course Kenton county included in that, has more horses per capita than any other county in America.
Thom Dallman: Oh really. I didn't know that.
Dave Burnett: Yeah. There's a lot, a lot of horses, yeah. Now that...
Thom Dallman: That's an interesting fact that I did not know.
Dave Burnett: Yeah, that may have changed in the past couple years, but I know about five years ago it was that case more per capita in Ada county than any other county in America. So there's a lot of people with horses looking for a place that they can keep them right on sight instead of having to put them out into a...
Thom Dallman: Exactly.
Dave Burnett: It's not a kennel. I guess it would be wherever it is you put a horse.
Thom Dallman: Exactly. Into the barn, I guess.
Dave Burnett: Exactly.
Thom Dallman: Yeah, so this one not only has all the space and everything. It also has four apple trees, two peach trees, and three nectarine trees.
Dave Burnett: And a partridge in a pear tree.
Thom Dallman: And a partridge in a pear tree, yeah. No pear trees, unfortunately.
Dave Burnett: Oh, okay.
Thom Dallman: No, but yeah it has a great fruit trees out there so you can go pick your fruit and do some canning for the winter time if you want or whatnot.
Dave Burnett: So, it really is kind of country living.
Thom Dallman: It is total country living. Yep. Our agent has said it's almost like living in kind of your own little old town 'cause there's so many out buildings and stuff like that. Tack room, chicken coop. All that stuff and so, great opportunity. Happy Valley, it's off of Happy Valley and Victory, so great location. It's just a quick little jump over to Garrity Blvd. It's two miles from Garrity Blvd. Got a spacious great room, baker's pantry, custom cabinets that were put in that are hickory. Just really a great property to check out and it $375,000.
Dave Burnett: With all that acreage.
Thom Dallman: So, great price for that acreage and to have that all set up and ready to go for animals.
Dave Burnett: And the nice thing about these properties, hearing about, you don't have to go out to see them yet. You can see them online at coregrouprealty.com.
Thom Dallman: Exactly.
Dave Burnett: So you can them out online and then you can give the call to 208-933-7777 to say "Hey, I want to see this place."
Thom Dallman: Exactly. This does have appointment only. You do have to give two hours notice. Just give us a call. We'll get an agent on the line and get them to get that appointment for you and get you out there.
Dave Burnett: Nice.
Thom Dallman: 27 North Pitt Lane. That's the address to check out for that one.
Dave Burnett: And number three on your list.
Thom Dallman: Number three is the higher end home. This is actually a Trade Winds built home. Back in 2002 they built this custom. But this is a four bedroom, three and a half bath. 4,628 square feet.
Dave Burnett: That's a big house.
Thom Dallman: That's a big house. That's a very big house. And on 1.32 acres. So big house, big yard with stunning views. It's got beautiful views all the way around. Comes with an in-law suite as well. We talk about how multiple generations are living together these days. So, it has its own in-law suite for the in-laws to hang out in. It's got open concept with a step down bar so that it doesn't obstruct the view out the windows. Gourmet kitchen, jetted bathtubs, stainless steel appliances. There's a double sided fireplace in the master suite.
Dave Burnett: Wow.
Thom Dallman: So, that you can enjoy that from the jetted tub.
Dave Burnett: So this is kind of Cadillac.
Thom Dallman: It's a very, very nice house. And the price on this is $675,000. You know, but you get all the amenities. You get a custom home, you get the acreage. Beautiful, beautiful home on 12640 Deer Ridge Trail. That's off of twelfth avenue. Go out Deer Flat kind of out there by Lake Wolf if I'm not mistaken. Great opportunity to own a beautiful home. You know, with 4,628 square feet. Everybody would have room for wherever they want to go.
Dave Burnett: Plus you get a place to put mother-in-law.
Thom Dallman: Right? Exactly, so.
Dave Burnett: And that really is a nice option as people are choosing to take care of their parents or in-laws as they age. To be able to give them their own space, but yet they are close at hand so that way, you know, you can help take care.
Thom Dallman: And help out and take care. You know, save on bills and everything. It's a great option if you guys are in the market. For anybody who's in the market for it. And it's all single level. It's all completely single level home with just an upstairs bonus room. Great option definitely for anybody who's looking for this type of house. Give us a call. 12640 Deer Ridge Trail is the house. Give us a call and we can schedule someone to get you out there and take a look at it.
Dave Burnett: And as always you can check those out at coregrouprealty.com and that's core with a "c". Coregrouprealty.com. Or if you want call an agent and get something set up you can call right now. You can call anytime. 208-933-7777 because Thom never sleeps.
Thom Dallman: Never.
Dave Burnett: No, there is some of that customer care agent that will take care of you and get in touch with an agent to be able to take a look at these properties on your schedule and your convenience.
Thom Dallman: Yeah, for sure. We're here and ready so please, give us a call.
Dave Burnett: 208-933-7777. This is the Idaho Real Estate Buzz. We get together and do this each and every Saturday. We appreciate you stopping on by. We're going to talk with Michelle Guth with Diversified Mortgage. One of the sponsors of this show, Diversified Mortgage and of course Core Group Realty. Coregrouprealty.com. Find out why they say you get more with Core.
Dave Burnett: This is the Idaho Real Estate Buzz. I'm Dave Burnett, along with Thom Dallman of Core Group Realty, and as always we're joined by Michelle Guth with Diversified Mortgage Equal Opportunity Lender as we talk about all things financial when it comes to real estate. Good afternoon.
Michelle Guth: Good afternoon to you gentlemen.
Dave Burnett: All right, a quick question for you before we get into the other topic. Is there a right time, and maybe this isn't the right place to talk about it, but is there a right time and a right place to pay off your mortgage if you can?
Michelle Guth: Boy there is so many different scenarios Dave as to what would justify somebody paying off a mortgage, whether it makes financial sense for them. In some cases absolutely that could be the right route to go, but I would think a lot of financial planners would probably want you to have a mortgage and utilize the equity in your home for investment purposes.
Dave Burnett: Because that is still a tax deduction.
Michelle Guth: Currently. It can be a tax deduction, absolutely, but the thought is quite frequently financial planners have the capability of making a higher rate of earnings on the funds that you pull from equity in your home in investments at a higher rate, a return, than what you would pay in mortgage interest. They will, in many cases, have you leverage that equity so that they can turn around and invest those funds into, hopefully and typically a very safe investment strategy like a guaranteed annuity for example and so forth. I would just caution anybody into pulling all their equity and then going into high risks stocks or something, but definitely consult with a financial advisor. That might be something they would recommend you do.
Dave Burnett: Well let's talk about something else that kind of left-handedly is related to it, and that is reverse mortgages. We see the TV ads that talk about these. They get some very trusted elderly actress statesman to come out and tell us "reverse mortgage, it may be right for you." Is it something that is a good thing, is it a bad thing? Explain what a reverse mortgage is.
Michelle Guth: Well again I think it's specific to the individual, but it's an incredible program that can be life-altering for a senior citizen that's on a very fixed income and that maybe has a very limited asset portfolio. In doing that, the reverse mortgage allows them to pull out equity. They can use it in various different strategies for helping with their finances. For example, they can have a line of credit sitting there, where they only advance it in the event of an emergency, or they can have a combination of a line of credit and then a monthly distribution. So if they want to supplement their fixed income, they can be set up that way. Or they can even do what's called a lump sum distribution, where they will literally say this is the max lending limit that you can get, and they give them the full disbursement at the time of closing. Then in some cases that's when they do take those funds and invest them with an annuity for example with a financial planner where they have that fixed guaranteed income.
Dave Burnett: Does your house have to be paid off to do a reverse mortgage?
Michelle Guth: Nope. It's based off, basically they're going to look at the borrower's life expectancy, their current age, and there is a required equity position. They'll look at, there's a chart we have to put all the numbers into. Typically, very rough numbers, you usually have to have say 40% to 50% equity in your home to be eligible for a reverse mortgage, but again it depends on your age and so forth. But I do have several clients where, I mean the approach with real estate many years ago was that you work really hard to get that mortgage paid off as quickly as you can. Again, many people that the approach that that is your biggest non-performing asset that you have, so why not have it work for you. For reverse mortgage, I have several clients that are on very limited fixed incomes and they're not getting by on their social security. But they have this home that's free and clear, so we will do a monthly distribution where we can supplement their income every single month and really help improve their quality of life.
Dave Burnett: Now is this something that you could get setup at Diversified Mortgage?
Michelle Guth: Absolutely. We do have reverse mortgage specialists within our organization, and we would love to sit down and visit with them. The other thing I love about this product is there are so many protections in place for our seniors. They have to go through a detailed counseling session through a third-party vendor. So they will go through an hour counseling to make sure they have a clear understanding of what the reverse mortgage is and everything it entails.
Dave Burnett: Why is that, that they require that?
Michelle Guth: Again, just to make sure that there's no predatory lending, that they absolutely have a clear understanding of the product. Because we are working with our seniors, we want to make sure that they clearly understand.
Dave Burnett: Okay. Couple of questions for you. What if I outlive my expectancy? Let's say they expect me to live to 80, they're going to reverse loan to me, and at 80 I'm still alive. Do I get tossed out of my house?
Michelle Guth: Absolutely not. That's one of the perks of the reverse mortgage and also one of the biggest misconceptions is that the bank owns my house and they're going to kick me out. You cannot outlive your mortgage as long as you are in that property, you're maintaining your taxes, your insurance, and your homeowner's association dues, you cannot outlive your mortgage. If you're in there for years after you've exceeded your available equity, you stay in that property until literally you vacate it. They will not kick you out.
Dave Burnett: Okay because that was always one of my concerns is that, "Hey, we know you're 85, but get out." That was always one of my concerns if you were to do that. What about people who have children and you're thinking about I want to go ahead and give this as an inheritance to my kids. At that point the equity is gone, is it not?
Michelle Guth: Well, yes and no. Again it depends on, every situation is different. They maybe started out just taking minimal light monthly distribution, they haven't pull a lot of equity, but any equity that's remaining in that property, the heirs to the home have the right to refinance the property or sell the property and any remaining equity will go to the estate or the heirs, however the estate is setup.
Dave Burnett: So at the time of death then, the property is still there and the heirs have to decide what to do with it, or does the bank own it?
Michelle Guth: Correct. No, again that's a misconception is it's no different than a forward mortgage, a traditional mortgage, is that once something happens to the owner of that property, it goes to the heirs to determine what they want to do as far as liquidating that property, retaining it, whatever they want to do. They have the same choices with a reverse mortgage that they would with a forward mortgage.
Dave Burnett: I guess one of my concerns is anytime you see something on TV, you've always got to raise your eyebrow and go hmm. You see people talking about-
Thom Dallman: Ask about the details.
Dave Burnett: -reverse mortgages. I guess again, this to me, this isn't you saying it, but to me that falls under the category like loans on TV or loans on the internet. I'd rather have somebody local I can come in and talk to and ask these stupid questions to.
Michelle Guth: They're actually not stupid questions. It can be a confusing, complicated program. I found that with my seniors, we have a lot of reverse mortgages, and they are on the 1-800 numbers. Almost all of my clients said I am not comfortable dealing with somebody over the phone on this. They want that personal attention, and even after the fact. We definitely pride ourselves in being that local face to help walk them through the process.
Dave Burnett: Well there are a lot of questions, and I guess for listeners who are out there who have parents who are in that position, who are elderly, it would be a good thing for them if they could come in and sit and counsel as well so that everybody is on the same page.
Michelle Guth: Many times we meet with extended family members. A lot of times the children will come in with them, which we encourage them to do. That's so they get another person hearing the information so that they have questions down the road they have an added ear to retain all of the information.
Dave Burnett: Yeah because there's a lot of information.
Michelle Guth: It is. There's a ton, and there's so many, like you said, different options you can do with reverse mortgage to set it up. We want to make sure that we find the best choice to help with their long-term financial goals.
Dave Burnett: So reverse mortgages, it requires homeowner occupied, owner occupied? Is that a requirement?
Michelle Guth: Has to, you have to live in the property. Correct. Otherwise, if you vacate the property, at that point that is when they will call the note due. If you went into an assisted living for example, at that point you need to start working on having that mortgage paid off through either again refinance, selling the property, or so.
Dave Burnett: So you have to be owner occupied. Obviously you have to have some equity in the house?
Michelle Guth: A good amount of equity, yes. That is one of the caveats. The reason for that is with a reverse mortgage, unlike a forward mortgage where you are making payments and you're watching the balance slowly go down, with a reverse mortgage the interest is growing and compounding every single month, so it is eating up the equity in the home. But the hope and assumption is that if we continue to stay in a strong housing market that some of that appreciation is going to allow that equity to be maintained to a certain degree so that you don't outgrow your equity. Again, depending on how long you're in the house.
Dave Burnett: This may be a question you can't answer, but you said a good amount of equity. Is there a number figure on that or percentage that is, what is a good amount?
Michelle Guth: Again, it depends on the age of the client, but typically it's about 40% to 50% equity in your home to be potentially eligible for a reverse mortgage.
Dave Burnett: Okay, that's not too bad, half paid off.
Michelle Guth: Yeah, rough numbers. It's interesting I had a client call just this week and she wants to get a home equity, or excuse me a line of credit against her reverse mortgage because she wants to start dispersing proceeds to her children now so she can watch them actually benefit from their inheritance versus waiting until she passes.
Dave Burnett: That's nice.
Michelle Guth: She owns her home free and clear. She doesn't have a mortgage on it, and she feels like this is something I want to do, I want to give them the funds now so I can see them enjoy it. There's so many different ways that you can look at utilizing that product.
Dave Burnett: But then again that would, for people involved, would require a check with your tax advisor as well. Would it not?
Michelle Guth: Potentially, as far as inheritance yes.
Dave Burnett: When that all goes there. If somebody is interested in a reverse mortgage, how do they get a hold of you there at Diversified?
Michelle Guth: Give us a call at 853-7878 or even just stop by our office if you happen to be in our area. We're over on the corner of Glenwood and Marigold, right there behind the Jackson's gas station and Garden City Hall, real easy to find us.
Dave Burnett: Excellent. Reverse mortgages, don't be frightened because you hear it on TV.
Thom Dallman: Don't be afraid.
Dave Burnett: Yeah, so it is something that might be a real viable option for you. If you're a child that's worried, "oh my goodness, there's goes my inherence," you probably don't deserve it anyway. Can I say that?
Michelle Guth: You just did.
Dave Burnett: That would be Dave Burnett. I'm the one who said that. Well, I mean honestly. Just speaking honestly, there are those who can't wait so that they can ... That's not the right attitude to have. You want mom and dad to be able to live comfortably, and this is one way they can do it.
Michelle Guth: Agreed. They've worked their entire lives to get to that point, and they definitely deserve the reap the rewards of their hard work.
Dave Burnett: Thom, I don't know how many times we have said this is probably the biggest investment the average person is going to make in their lives, so in that sense it can also be the biggest nest egg.
Thom Dallman: Exactly. Exactly. It's definitely one of the aspects of investment that people use towards this retirement, towards everything that's financial to them. It's definitely important to make sure that you know all your numbers and have your trusted advisors with you.
Dave Burnett: Very good. Michelle, thank you so much.
Michelle Guth: My pleasure, thank you.
Dave Burnett: Diversified Mortgage Equal Opportunity Lender, as we talk to her each and every week here on the Idaho Real Estate Buzz being brought to you by Diversified Mortgage and Core Group Realty. Call 933-7777, find out why they say, "You get more with Core."
Dave Burnett: This is the Idaho Real Estate Buzz. I'm Dave Burnett. He is Thom Dallman, the co-owner, designated broker of Core Group Reality. Coregroupreality.com. That is the website to go to, and to find out why you get more with Core. Well, we've hit that time of year Thom, where-
Thom Dallman: It's so cold.
Dave Burnett: Old man winter is not far off.
Thom Dallman: Not far at all. It's going to be interesting to see how this winter plays out, with all these predictions we're hearing, and everything.
Dave Burnett: We were talking during the commercial break, and I'll be the first to confess, I got a little surprise last year. It was November and I didn't have my leaves in the backyard raked up, and it started to snowing. Got frozen, and I didn't get to those leaves until spring, and after it all thawed out.
Thom Dallman: Exactly. So you had a big yard full of mulch.
Dave Burnett: Basically, I did. I guess in talking to people, people are out buying snow blowers. People are out getting their shovels, or ice melt. They're getting things ready, and they're getting their home ready for winter, I think a little early this year.
Thom Dallman: It's so important this year because once again, people are kind of talking about the Farmer's Almanac and how it's kind of predicting and it's always pretty accurate from what I understand. It's predicting that we'll have a little bit worse winter than we did last year. As everybody knows, last year was pretty bad, one that we're not used to.
Dave Burnett: While this may sound like an old wives' tail as well, but I always put a lot of stock in this. I used to be and avid hunter. I just don't take the time to do it now. But, those that have been out game hunting have said the animals have a lot of fat on them. They did last year. Somehow animals know.
Thom Dallman: Know that it's going to be bad.
Dave Burnett: And so, they've really gotten fattened up this year. Could be getting ready for another tough winter out there.
Thom Dallman: Exactly, exactly.
Dave Burnett: But, you need to get your house ready.
Thom Dallman: Let's talk about some things to get ready for this because as the snow starts to fall and these cold temperatures start moving in, you're going to want to get out there and do this before it hits.
Dave Burnett: We've had temperatures right down to freezing, but we will get temperatures below freezing. Let's start with maybe some of that, some of where your home maybe vulnerable to the cold temperature.
Thom Dallman: Sure, sure. One of the most important things that I always try and remind people is to get out and drain your hoses. Disconnect them from the house. Then, put covers, even if it's just wrap a towel around your hose bib, on the exterior of the house. That's a huge freezing point if you have any kind of moisture left in there. It gets that cold it can go into the pipe and cause a break and freeze right there, where all of a sudden you have water pouring out. Always a good idea to drain those hoses. Put them in the garage, and put those caps on. I think they're two dollars for the styrofoam caps.
Dave Burnett: Just a couple of bucks. They're not much money.
Thom Dallman: Exactly. It just goes right on there. It covers the hose bib and so forth, especially if your hose bib is right outside of the major area in your home, and stuff like that. Definitely one of the most important things, I always tell people to walk around the exterior of your house and look at your grates, whether it's your foundations vents or your gables, in the soffit and stuff like that, to make sure that they're all intact, and that they're screwed up, because this is also the time of year that the mice and birds try to get access to your house, and stuff like that.
Dave Burnett: Mice, birds and snakes.
Thom Dallman: Exactly, exactly. It's not bad to make sure that as the snow builds up, that your vents on the foundation of the house are protected to keep the snow from melting and going in there. Keeping an eye on those things. Totally important.
Dave Burnett: Stan has always had a rule of thumb with those foundation grates, they open, they close. Closed in the winter, open in the summer. That is kind of the rule of thumb on those to keep the underside of the house from getting too cold.
Thom Dallman: It's a very valid point.
Dave Burnett: Another thing, if I might toss in here, besides the hoses, if you haven't had your sprinkler system blown out yet-
Thom Dallman: Oh, yeah. Do it soon.
Dave Burnett: Get it done, because otherwise next year you get the pleasure of having a new sprinkler system.
Thom Dallman: This week when we saw the temperatures, predicting that they were going to go below 28 degrees, I was like sending a frank note off to the guy that does our sprinklers, that says, did you do them yet? Luckily he had already done them. I just wasn't aware of it. Definitely important.
Dave Burnett: So, make sure that's done.
Thom Dallman: Important to make sure you get in there and drain it and stuff like that. They always say that you should cover your air conditioner unit for the wintertime, too. To prevent a lot of abuse on it from all the winds and snow and debris flying around in the air.
Dave Burnett: Just the dirt that gets in the little coils.
Thom Dallman: Exactly. Making sure that ... Check your roof. Check for loose tiles. Loose tiles will slide off as the snow kind of builds up on them. You want to make sure-
Dave Burnett: Better to do it now, while it's still a little warm.
Thom Dallman: Exactly.
Dave Burnett: Then when it's 15 degrees out, and the wind's blowing.
Thom Dallman: Exactly.
Dave Burnett: I guess the other thing, and I know a lot of people were caught by this last year, and that is your gutters, downspouts, and your runoff at the house, so that it doesn't go to the foundations.
Thom Dallman: Gutters, gutters, gutters. Make sure your gutters are clear. This time of year, all those leaves and stuff collect in your gutters, go down into the downspouts, and clog up your downspouts. That's what causes a lot of the ice dams and backups. You need to make sure that stuff is cleared out so that there's sufficient melt off for the house. Making sure that it is directed away from the house so it doesn't get into your foundation.
Dave Burnett: Which you can do with ... There's kind of a little splash plate you can put under the gutter and or-
Thom Dallman: ... inexpensive.
Dave Burnett: I think six bucks, you can get that little extending sort of things [crosstalk 00:06:04] to let the water-
Thom Dallman: ... pipes that extend out a little bit further into your yard so you don't have to worry about it hitting your foundation. One of the other things that I always try and remind people to do is to make sure that you're checking your smoke detectors. It's always a good idea. Stan was on here a while back talking about radon gas. To maybe double check, to have someone check for radon, just to make sure now that you're closing up your house for the winter, and there's not as much-
Dave Burnett: ... ventilation.
Thom Dallman: Ventilation, yeah. You want to make sure that you're not filling your house up with radon gas. This is also the great time to go up into your attic space and make sure your insulation is doing well, and that it's not ... If you have an older house it's not degraded, that it's still up to par.
Dave Burnett: Good and fluffy.
Thom Dallman: Good and fluffy, exactly.
Dave Burnett: That's really what you want. You don't your insulation all packed down in there. You want it good and fluffy. Another thing to be aware of it. Don't lay the Christmas decorations on the insulation. It's supposed to be fluffy, not all packed down.
Thom Dallman: Exactly, exactly. Now's the perfect time to do it, before it gets too cold, before your energy bill starts going up. One of the other things that I really recommend is going around to your windows and doors, making sure that weather-stripping is done. Making sure that you don't have any leaks coming through the windows, all your seals are good. That's a huge energy saver when you go through and double check that stuff, and replace that weather-stripping that needs to be replaced.
Dave Burnett: I noticed something that's developed in my house, and I don't know if it's because of settling, the age of the door. But, I've noticed that the bottom corner, the right hand corner where the door opens, I can see a little bit of daylight through there.
Thom Dallman: If you see daylight, that means that there's water coming through.
Dave Burnett: I went and bought, and they actually have for sale, just a little L that goes right in the corner there. Sealed it right up.
Thom Dallman: Sure, yeah. That's also a spot where, as snow builds up, in that corner, and starts melting, you can get water intrusion into your house. Really super important, during the day when the sun's out, to go through and just look at your doors from a distance. See if you can see any sunlight coming through them.
Dave Burnett: And not a good thing.
Thom Dallman: Yeah, that's not a good thing at all.
Dave Burnett: It works okay in the summertime, but it doesn't work so good in the wintertime.
Thom Dallman: Exactly, exactly. Let's talk a little bit about plumbing. This is also the time of year where you have lots of family coming over for the holidays. Lots of food, lots of stuff that people will be indulging in. For those family members that are here, let me do the dishes. All of a sudden your kitchen sink is filled with mashed potato leftovers, and turkey leftovers. Just remembering to check your plumbing for ... Have a professional come in and maybe snake it out. Want to make sure that you're not putting food down into your plumbing, to keep it clear so you don't have any backups. Throw some Drano down, or some drain cleaner just to kind of clear it out before the holidays. It's always a great idea to prevent any kind of backups.
Dave Burnett: The holidays is a whole ... In fact that's a whole other topic for another time, getting your home ready for visitors and company, because that is stressful. For some reason, we don't like people to visit us and see how we really live.
Thom Dallman: Exactly. Got keep the house all straightened out.
Dave Burnett: You gotta get everything taken care of.
Thom Dallman: You gotta wash your linens to make sure you have clean linens for them.
Dave Burnett: But it is one of those things as we've entered into what I call, the slippery slope to the Super Bowl, where we go through Halloween, then it's Thanksgiving. Oh my goodness, then it's Christmas, and now it's the Super Bowl. It goes fast. It really does hit fast.
Thom Dallman: It does.
Dave Burnett: Now's the time to get ready for that.
Thom Dallman: This whole year has just gone fast for me personally. One other thing I like to talk about is if you have a wood burning fireplace, making sure that you get that chimney cleaned out, because you're going to be burning ... If this is truly going to be one of those strong winters, you're going to burning a lot of firewood in there. So, make sure your flue is tight and sealed when closed. Make sure that you have it cleaned out to get all the resins out of it, so there's no access for fire to get up there and catch fire.
Dave Burnett: Another thing when it comes to fireplaces, and that is to check and make sure if you have a gas fireplace, to make sure the pilot light is lit correctly. To make sure that all of that is in working order, so that you don't wind up with an explosion. That could truly be devastating.
Thom Dallman: If you haven't used it all summer, it's a good time to get in there and turn it on, and make sure that everything is working correctly. That's very true.
Dave Burnett: Because we're hitting that time where you're going to start having those cold evenings. A little fire would be awfully nice to have, whether it's wood, or whether it's gas. Get somebody who ... A true chimney sweep company to come out, and really clean that. Not only just clean, but to inspect that chimney, because there's time where there could be cracks that you're not even aware of, that's opened into your attic, or into your home that could cause some serious problems.
Thom Dallman: Could cause a little spark to go in there. That's a huge proponent, too. Make sure that you're watching for any of that degrading mortar in the attic space, to prevent anything like that.
Dave Burnett: Never fails, when we hit this time of year, you always hear those fire calls out for chimney fires. Don't let it be you this year. Get that taken care of.
Thom Dallman: That's a good point, too, to make sure that you have your emergency kits all prepared. That you have your emergency plan with your family. That everyone knows where to go, where to meet, how to get out of the house if there is an emergency like that. Make those plans well known. Have a big discussion about it. Maybe even practice it a couple of times, just to make sure.
Dave Burnett: We all think about it. We all know it's a good idea, but we don't do it. The problem is, if there is that emergency, whether it's a fire, or whether it was an earthquake, or whatever it might be. I look at Northern California and the fires that they had. Those who had a plan, they were in good shape. Those that didn't, they were running for cover. While we think maybe, that's a good idea. It's more than a good idea. It's a necessity to have.
Thom Dallman: You don't want to be like that elderly couple that had to hang out in the swimming pool for numerous hours-
Dave Burnett: ... amazing story.
Thom Dallman: ... while the fire burnt around them. Yeah, wasn't that?
Dave Burnett: Just an amazing story.
Thom Dallman: Just the proof of the things that we go through to survive life sometimes.
Dave Burnett: Don't wait until Thanksgiving. Get your home ready for winter and do it this weekend.
Thom Dallman: Exactly.
Dave Burnett: Very good. This is the Idaho Real Estate Buzz. Being brought to you by Diversified Mortgage, equal opportunity lender, and by Core Group Reality. Call today, 208-933-7777. Whether you're looking to buy or sell your home, talk to the experts at Core Group. They're sponsors of the show. It's the Idaho Real Estate Buzz.
Dave Burnett: This is the Idaho Real Estate Buzz. I'm Dave Burnett. He is Thom Dallman, the co-owner, designated broker of Core Group Realty. CoreGroupRealty.com, that's the website you can always go to 24/7 and the number you can always call is 208-933-7777. A customer care agent could take care of you. Even if it's on the weekend, they'll take care of you and get you directed where you need to go when it comes to buying and selling a home, or answers about the website.
Thom Dallman: Yeah, where you have people standing by ready to help for whatever questions you have, or there is. Anything from ... We frequently get, "What's the weather like in Boise?"
Dave Burnett: Let me look out the window.
Thom Dallman: Cold right now.
Dave Burnett: Okay, there you go.
Thom Dallman: All the way up to what I wanted to chat about a little bit today, is what is a distressed property? We get that-
Dave Burnett: Distressed property.
Thom Dallman: Yeah, we get that question all the time, especially there's kind of a push right now with all the home flippers and stuff like that, that you see on TV, and those topics. People are kind of like, "Hey, I want to buy this distressed property. What exactly is a distressed property?"
Dave Burnett: Let me as you this. I know if we go back 4 or 5 years ago, there were a lot of properties that were foreclosed on. Maybe not necessarily ... What is the description of distressed?
Thom Dallman: Basically that's one of the descriptions. It's a house that has gone through some kind of stressful situation.
Dave Burnett: Financial or physical?
Thom Dallman: Financial, physical, all of the above really. Starting at the beginning of the process, especially during the economic downturn, there was a lot of short-sales. Short-sales are considered a distressed property because the value is less than what people owed on their homes. So they were in distress, because they couldn't sell. They couldn't sell their home because there was such a big difference, and they couldn't pay off their loans. So-
Dave Burnett: So there's not as many of them now as there used to be?
Thom Dallman: There's not. There's very few short-sales on the market these days. There still are some, unfortunately, for various reasons. At the height of the market, 10, 11 years ago, homes sold for really super high ends. So there are still a few homes that people have that are in the short-sale situation. Maybe they got a home equity line and cashed out a bunch of equity, and took their loans back up to above market price. So those are considered distressed properties because you do have to negotiate with the bank. You do have to work with them to get that sold, and to forgive the difference on the property. And that can take a long time. If you put an offer in on a short-sale, be prepared to wait six months to get it-
Dave Burnett: Be patient
Thom Dallman: From the bank.
Dave Burnett: Be patient. You have people here at Core Group Realty that are kind of, I guess, experts. People who really have been through distressed purchases, so they know what they’re doing.
Thom Dallman: A majority of our agents, at one point or another, dealt with distressed properties, as far as either selling or helping people to buy them.
Dave Burnett: 'Cause it's a little different story than just selling a house?
Thom Dallman: Exactly. Yeah it is, because especially on the ... So another line of distressed property is the foreclosed on ones. The ones that the bank has already foreclosed on, taken over, and now they're selling it, and stuff. So in that situation it takes often times a lot of time between when the bank takes over the house, to when they actually can get it on the market and sold. So the house sits there vacant for often times a year, maybe even a couple of years.
Dave Burnett: Which is tough on a house.
Thom Dallman: It's tough on a house to not have any movement in it. And so the deterioration of the home causes it to have a lot issues and stuff like that.
Dave Burnett: See that almost seemed odd to me. It would seem if a house was sitting empty undisturbed, may be great. Because it preserves it, but it really doesn't-
Thom Dallman: You'd think so.
Dave Burnett: Without having ... Living in a home is the best thing for a home.
Thom Dallman: Exactly. The movement, keeping furnaces going, and the mechanisms, and checking on it.
Dave Burnett: The plumbing
Thom Dallman: The plumbing, and stuff like that. It's actually better for a home to have people in it, ... Living in it. So foreclosed on properties ... Those are an example of distressed properties. And there's numerous different banks and entities that foreclose on these properties. They all kind of have different processes of buying these properties. So when it comes time to put offers in on these type of properties, there's everything from auction places, the HUD, which is Human ... Or I'm sorry, Housing and Urban Development authorities. They have a online system that you go in and put your offer in. And then you have 24 hours. If you win the bid and to get people go over to them and stuff like that. There's different processes for each bank on when it comes to purchasing these types of properties. So you want to have an agent that is familiar with them, or has the access to someone who's fluent and able to know what the process is.
Dave Burnett: I know you have personal experience with flipping homes. Something you did for a while.
Thom Dallman: When I started out my real estate career, I started by flipping homes.
Dave Burnett: Are there thing to look for in a distressed property? Or things to avoid?
Thom Dallman: Yeah
Dave Burnett: That might be the bigger question
Thom Dallman: Exactly. Oh gosh there's so many different ways to kind of look at property, and it really depends on numerous things like your ability to have cash for fixing things up. What's your financing like. Each home is ... Has to be looked at to what is going to get it up to its best suitable use right now. What things can go in there. Not over indulging on some of the amenities, unless it calls for it in that particular neighborhood that it's in, and stuff like that. I wish there was a cookie-cutter way of saying here’s what you need to look for. But it really kind of depends on what your ability is to funds. It really depends on your ability to get in and do stuff. So if you don't have a lot of funds, you're not gonna want something that you have to go in and completely gut and redo everything, and has electrical problems that you have to go in and fix. That really has to be up to each individual person and their investment and how they want to-
Dave Burnett: I think it does. You watch these shows, these flipping shows, and it's like just before a commercial by the way, so it's always when they go on commercial. It's like, "Oh no Bill, we're gonna have to redo the entire HVAC system". That's a lot of money.
Thom Dallman: I promise you that nine out of ten times they did know about that. That is just for show. Most people have-
Dave Burnett: Well you should know about it?
Thom Dallman: An in-depth inspection. Yeah in-depth inspection and get in there and evaluate every single aspect of that house. SO you know how much you're gonna end up spending for the different things-
Dave Burnett: If you buy a distressed [crosstalk 00:07:07] home and you don't know that the heater doesn't work in it-
Thom Dallman: Right?
Dave Burnett: You're in the wrong business.
Thom Dallman: Exactly
Dave Burnett: You are in the wrong business.
Thom Dallman: Exactly. Now that being said, there are certain little things that you can't really identify, such as opening up a wall to create space and stuff like that. That the inside is covered in mold, and stuff like that. There are certain things that you will run into that-
Dave Burnett: Suddenly there's wiring running through that wall that you didn't know about. And it's like you've gotta move that.
Thom Dallman: Exactly, and it's expensive move wiring.
Dave Burnett: You'd think it'd be easy, but not so.
Thom Dallman: Exactly, or plumbing. Sometimes the plumbing that goes up to the second level that you would think was in a totally different spot, and it's in that wall. There's little things like that do pop up, but for the most part when it's a plumbing issue, when it's a HVAC issue, the foundation issues and stuff like that, those things are usually detected beforehand. And once again all costs money. You need money to be able to do that. And you need to know is it worth the investment. Is it worth the money? How much ... A, are you buying the house for? B, how much is it gonna take to get it up to the standard so that people can live in it. And then how much can you sell it for in the current market place? You're gonna have to have a real estate professional that can do your market analysis on it and tell you those numbers. And tell you what is it that you can sell this for. If you purchase it at this, put this much money into ti, you can sell it at this much and you'll make this much in equity.
Dave Burnett: And here at Core Group we have people that can kind of give you ... They can't promise you-
Thom Dallman: Can't make promises.
Dave Burnett: Can't make promises.
Thom Dallman: Exactly.
Dave Burnett: But they can give you an idea that this is how much a house in good condition in this neighborhood ... This is how much you can expect it to sell for.
Thom Dallman: When you do market analysis for that particular house and what it would sell for with the certain amenities put into it. So-
Dave Burnett: So if someone is thinking about, why don't we try this? Why don’t we but a distressed home and put a little ... 'Cause some of it's just cosmetics. Sometimes it's just paint. A little tender loving care, a new carpet, put a For Sale Sign up, you're good to go.
Thom Dallman: Removing some of the debris, getting the landscaping up. Remember that a lot of times on these distressed properties, people have given up on them. So they've given up on the landscaping. They've given up on the care of the house. If it's bank-owned it's been sitting there for years. The yard's probably gonna be dead so you're gonna wanna put in some yard work and stuff like that. Some new grass-
Dave Burnett: But again that's elbow grease, a lot of that. That is just getting in, digging, flowers, some cheap mulch-
Thom Dallman: It's light equity
Dave Burnett: Simple is better. Don't try to overdo it. Just do simple landscaping. It's better.
Thom Dallman: Exactly. So, there's the concept of "Do you have the cash for it" or "Are you gonna get financing". There's not a lot of financing programs out there for buying these we're [inaudible 00:09:58] loans and stuff like that usually require the home to be in a good condition, a livable condition and stuff like that. You have to evaluate that as well. A lot of these investors that go in are paying cash, so you may go into a house wanting to put in a bid in on it and find yourself competing with another investor that's doing cash.
Dave Burnett: Somebody who's got a big bank roll.
Thom Dallman: Exactly. There's different things that you have to take into consideration to when buying these properties. Just the lack of distressed properties right now since we have such a strong market. There's not as much out there that's available. We're getting calls all the time from investors wanting to find those properties, and we have to tell them it's just very [crosstalk 00:10:37] right now. I think the last time I looked we were at only 8% of the properties out there are distressed properties. So-
Dave Burnett: That's pretty low.
Thom Dallman: Very small number.
Dave Burnett: But if somebody is interested in finding out more about distressed properties they can contact you here?
Thom Dallman: Yeah. Give us a call. We have people standing by that can answer questions on them and help you understand the process a little bit more.
Dave Burnett: Perfect. Core Group Realty. That is the place to call, and here's the number 208-933-7777. Thom we've talked about this a lot of times. Even if you just wanna come in and explore the idea of buying a home, or selling a home, we're more than willing to sit down and talk to these folks about what options are there for them
Thom Dallman: Yeah come on in, come on in. We are right here on Emerald, for people to come on and stop by. We're here from eight to five, Monday through Friday. We usually have someone here ready to go and answer your questions. Swing on in 8665 West Emerald Street, Suite 140, just right down from Town Square Mall. Give us a call 208-933-7777. Chat with someone. Just reach out. Let us answer your questions.
Dave Burnett: Perfect. It's the Idaho Real Estate Buzz. We do this each and every week. We'd love to have you back again next week. Tell your family. Tell your friends about the Idaho Real Estate Buzz. Everybody knows somebody who's trying to buy or sell a home. Let them know about Core Group Realty. All being brought to you by diversified mortgage, equal opportunity lenders and Core Group Realty. Call today 208-933-7777. Find out why they say "You get more with Core".
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Today Dave and Thom are talking with our weekly guest, Michelle Guth of Diversified Mortgage about how employment effects qualifying for home loans. And later we have Darius Elison of One Call Restoration giving us the low down on mold in the home. Don't miss this information packed show!
Today on the Buzz we are talking with Michelle Guth and Bill Young from Diversified Mortgage about the difference between 203k loans and the renovation loan program. Later Thom and Dave are discussing technology in the home and how it's changed over the years, as well as the probate process, what it is and how it works. We hope you enjoy!
Today on the Real Estate buzz we have Gabe Cordova with Firepoint, LLC here talking about our website CoreHomeSearch.com and how by utilizing it you can make your home search quick and easy, seeing the most up to date information out there. Later in the show we have our weekly guest, Michelle Guth with Diversified Mortgage discussing what NOT to do when you decide to buy a home. We have a great show for you today, enjoy!