Navigating Homeownership: Tips, Tricks, and Expert Insights

This is episode number 320 of The Homeowner Show. Whether you're DIY or looking to hire, we're here to help you find the best information and options for you and your home. My name is Kevin Hackett, and here with me is Craig Williams.

Hello, hello, hello, and welcome to The Homeowner Show. We are so glad that you could join us for another live episode here in the studio, and boy, do we have a full house tonight, Kev.

Yeah, we— they're— this is maybe the most we've ever had in here at one time.

Not the most stuff, but the most people.

We got a lot of stuff. We got a lot of stuff, that's for sure.

So, um, let's get this thing rolling, man.

All right.

Uh, there's— well, okay, so here's, here's news, fun stuff for the beginning of the show. All right, the people love that. Um, let me tell you what's not a good idea.

Okay.

Is to schedule a podcast on your anniversary.

That was the first dumb mistake.

Um, the day after you buy a new horse.

Oh yeah. And you don't even have the horse here to show anybody.

I don't. It's not even— so it's—

yeah.

Um, yeah, I'm not an intelligent man.

Well, but we all knew that.

That being said, I am taking her on a lovely trip tomorrow.

Yeah.

For about a week. That's good.

So she's gonna love that.

We're not celebrating today.

Are you gonna take your wife?

Yes.

Oh, not just the horse.

Not just the horse.

The horse is a dude, right? The horse is a he.

Okay.

Yep.

No.

All right.

Good to know.

Yeah.

No, I, that was, that's the first time I've been to a horse auction in almost 20 years. Oh really?

And I had a blast. I bet you did.

Yeah.

Yeah. Yeah.

Were they cutting and everything?

Cutting?

Yeah. What were they doing out there with the horses? They just walking 'em through?

Yeah. They, they just bring 'em out there.

But so we had, they weren't cutting or anything?

No, no, no. It was, it was just, it was like if you could ride 'em, you could ride 'em back and forth. You could lead 'em back through. We, the biggest sale of the day, there was a 1-year-old stud colt that sold for $32,000.

You didn't get that one? I didn't get that one. Oh, come on.

Yeah. I also didn't want that one.

Oh, okay.

I have no need for a stud colt.

Not with that attitude.

I was looking for something I could ride with my kids.

Okay.

So, and I got him.

Yeah.

So I'm awesome. I'm stoked.

How old is he?

He's 12.

12?

Yep. He's 12. He's a brown and white paint.

I told you, paint have always been my favorite horses.

Dude, I've always wanted one and I've never had one. This is my first one.

Okay.

I'm excited. So we went for a ride yesterday. We got to know one another.

Yeah.

I think we understand each other.

Does he like you? Yeah. Yeah.

All right, good. So, but he's hanging out at my mom and dad's while we're outta town, cuz I don't need Crazy Horse here alone with my children.

Well, we got a lot of stuff to talk about, but before we do that, we need to talk about our sponsors.

Let's do it.

We're really glad that, uh, we have some awesome sponsors. The number one, uh, sponsor we're gonna talk about tonight is Lone Star Appliance Repair.

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Uh-huh.

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That's right.

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But— No. They want you there.

They will make sure that you don't tap into the grid as much as possible. possible and make sure that you have energy independence for you and your home. Any other specials that they're running right now?

No, not, not right now. But here, here's the thing that I will tell you. If you're interested in solar, now's the time to get in because, uh, with, with all the stuff going on with, uh, the government and different, you know, Elon Musk, different things here and there, who knows what incentives are gonna be available next month?

Who knows?

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Right.

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Yeah. It's cheap.

Yeah. I mean, just for one.

For one. Yeah.

But, like, if you— if you're tired of cleaning your toilet, if you're tired of the ugly stain, that shows up the ring from hard water. I know hard water is a big deal around here.

It is.

You know, and that can create a nasty ring at the bottom of the toilet. No one wants to clean that.

No. I mean, a lot of people just think their, their toilet's too dirty and they, and then they, and they're, oh, I gotta get a pumice stone out and clean this thing or whatever. And then they never do it and it gets, you know, worse and worse and worse. And the truth is, you don't have to do any of that. You don't have to put chemicals in your toilet. You don't have to put the nasty blue stuff in there. Look, your toilet water is not blue, y'all. It's not green, it's not blue.

There's nothing natural about that.

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That's right. They just figured out how to leverage it and make it—

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And guess what? This thing's gonna last, they say, at least 10 years. Yeah, they warranty it for 10 years, which means it's probably gonna last longer than that.

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Awesome. Let's get into this crazy episode because it's, it's going to be a wild night. Let's, let's go around the table and, and introduce ourselves so that, uh, everybody knows. Corey, you're the veteran.

My name's Kevin.

Yeah, Kevin.

Oh, we're not starting with me.

Okay.

All right.

Go ahead. Go ahead, Greg. I'm sorry.

To my left. Okay. Corey, Corey, you're, you're the veteran here. Let's, let's, let's get it rolling with you.

All right, cool. Uh, appreciate y'all having me. Uh, Corey Reeves with Reeves Realty Group. We're a husband and wife team outta Montgomery County, uh, specializing in everything real estate. So, um, couldn't be happier to be here, and I think this is gonna be a ton of fun.

Well, get, let, let the night, let the night roll on. You'll be happier.

You think so?

Yeah, absolutely. All right.

My name is James Barnes. I'm with CMG.

home loans.

And I am very excited to be here as well, uh, learning a lot from you guys already. Yeah, um, it's fun. It's gonna be a fun night for sure.

Dude, shout out your show.

Uh, my show— so I have, uh, uh, oh my God, I'm sorry, my brain just went out.

It's called a podcast.

It's the podcast, you know, because I just re— I just rebranded. So my show is called Lone Star Living. Lone Star Living on YouTube. All right, great.

But, uh, I appreciate you. Lone Star Law? Lone.

L-O-N-E. Lone Star, like the Lone Star State.

Oh, I love it.

Yes.

So thank you guys.

She's just messing with you because you hadn't had her on yet.

It's coming.

It's coming.

I'll have you guys on my show too.

My turn?

Yeah, absolutely. Okay.

Hey, hey there. Laura Jackson with Upward Title. I am your marketing support specialist, and I'm excited to be surrounded by so many amazing people in the industry, whether it's title, lender, real estate agent, or any of the people that we actually need in our business. So thanks for having us here today. We really appreciate it.

Awesome.

Yeah. And then now I'd like to pass the microphone to the Texas Regional Director.

Thank you, Laura. I'm excited to be here as well. My name is Anna Sheffield. I am with Upward Title as well. I have the pleasure of working all over the state, not only here in Houston, but in Dallas and San Antonio to help close all of those real estate transactions. Awesome. Yeah.

We appreciate everybody being here. I mean, if you guys hadn't picked up on the theme yet, we're going to be talking about plumbing tonight.

That's right. Plumbing. Yes. How do we get that plumbing from the street to your house?

Yeah.

I mean, actually from your house back to the street.

All the answers.

I feel like real estate is definitely all the plumbing ways. it takes you different journeys.

Well, so let me—

I think we handle all of that, don't we?

Yeah, it's, it's involved. It's involved. So let, let me, let me kick it off with this because we had a clip this last week that just took off like none other. Um, and we were— Kevin and I were having a conversation about pretreats on homes, and I had made the statement that, you know, for people that have been listening to the show for a long time, I, I do pest control and I, I work with a lot of builders And I was having a conversation with one of these— I'm not going to mention the builder because I don't want them to like think that I'm throwing shade at them or anything like that. But like the statement that this guy made to me from this building company was like, look, we're moving out of building luxury

homes right now because they're just not selling like they used to. And we posted the clip and I was, I was making that statement in conjunction with like there's that, that conversation. Part of that conversation was They're not requiring pretreats on these new builds. And everybody jumped in the comments, was like, you're a moron. You don't know what you're talking about. Every home has to have a pretreat. And I'm like, yeah, it depends on where you live.

Mm-hmm.

Like, it just, I mean, like, it really does. I mean, like Montgomery County, you don't have to have a pretreat.

Mm-hmm.

City of Houston, you gotta have a pretreat. But whatever got, what everybody seemed to be getting upset about was whether or not they're, everyone was like, no, no, no. I mean, people are still building luxury homes. It's like, I know people are building luxury homes. I just don't think they're building as many luxury homes. as they did, mostly because, and, and, and you might be able to speak to this more than anybody, but like, I don't think people can afford them like they used to.

Mm-hmm.

And everyone's like, nah, you're a moron. And I'm like, well then go out and do your own research or start your own show. But I wanna hear from you guys. I mean, like, what, what are you guys seeing and, and hearing? You know, as you, you know, you're, you guys are feet on the ground for, for home sales, for home loans, for titles, and you guys are seeing what's coming across the books. I mean, are you guys seeing luxury go up? Are you seeing luxury go down? Are you seeing more like lower income housing being sold? Like what, what are you guys seeing out actually out there in the field?

You want it from a realtor point of view?

Yeah, I want it from everybody's perspective.

All right, so I'll give you a realtor point of view. Um, we are having more success on our luxury side. Mm-hmm. As opposed to our $350,000, $375,000, $400,000 and down.

Uh-huh.

Um, cuz the market doesn't directly affect them as much.

Sure.

With the 7% or 6.5 or 6.8 or whatever, decide what color juice it's drinking that day because it literally changes daily. So when you start talking luxury and you start talking a certain lifestyle, people are looking for amenities, people are looking for architecture, people are looking for acreage, people are looking for locality, amenities. I think, I believe all of those things take outdoor living spaces. Those all take account. And the people with the luxury price tag aren't looking at the market.

Yeah, they're not dissuaded by that.

They're not. The market, as you're talking about, is how's luxury doing? Well, we just went under contract today, matter of fact, on a $1.3 million listing in Spring Branch. And I was out on a listing appointment this Saturday against some heavy competition, actually won the listing, and it's going to be listed for $1.1 million in Conroe next week. So luxury's moving.

Yeah. Is the one, I mean, like, are the ones that you guys are, and like Corey, this could be you, it could be anybody, but like, sure. Is, I mean, new builds, are they in neighborhoods? Are they being, are they like buying property and then building it? Are they neighborhood homes? Like that, that's really kind of what I'm like, I'm dialing in on?

Both.

Uh-huh.

So we have got a, um, a client that just bought 3.6 acres, okay, to build a luxury home on in Crown Ranch. And then we've also got, um, we work with custom home builders as well, and we do the listings for them. And we have a 1.275 on an acre and a half of property. And then we've also got the one we went under contract on today and the listing that's coming that are all resale. They're older homes.

Yeah.

So ours is, we're kind of seeing on that luxury price point, it doesn't matter if it's new build, acreage, in town, they all have something to offer. And if you're looking at the lower price points, those are more subdivision homes. Those are more community homes.

Right. Well, I'm glad you said that because I think that's a nuance that the people that were commenting on it were picking up on. Yeah, was like, I was talking, I was talking to about like the guys like— and I'm not— this isn't who I was talking to. I'm talking about guys like Lennar, David Weekley, people that are actually doing like neighborhood development kind of stuff, you know. I'm sorry, what were you—

No, I agree with you. So, and, and kind of piggyback on what Corey said, so the luxury market's always been a smaller niche and they're not as affected by interest rates for sure.

Sure.

However, You're 100% right. These bigger builders, I've seen this product now, they are shrinking. It's shrinking and it's because of affordability for a lot of people. So the luxury market is a smaller niche, then you've got everybody else. And so these builders have, I have seen it. I'm doing a loan right now for somebody in Willis, as a matter of fact, right up the street here. The house might be 1,000 square feet.

Right.

Might be.

Oh, wow.

in the whole neighborhood. They look like tiny homes.

Yeah.

That's basically what it is. It looks like. So it's interesting to me because I've been doing this for a while, like, like a lot of us have, and I've just seen how you go from— it used to be they built these big houses, the production builders specifically. I've worked for, for 4 production builders and the sales keep shrinking and shrinking.

So how, how are those, uh, homes selling right now? Because, right, you know, the market's fluctuated so much in the past 5 years and You know, with, with, doesn't really matter. I mean, we, we could talk about price point all day long.

Mm-hmm.

But I'm curious, how are they selling? Because I've got a, I got a friend who just recently sold a house, took her like 6 months to get it off the market. And another friend who, uh, put their house up and within, uh, a week, uh, they had multiple over, uh, asking offers. Now I know a lot of that has to do with where the, the house is listed at financially, but I'm just curious what you're seeing the market bear right now.

That's probably a quick question more so for Corey.

All right. So to, to, to answer that, a couple months ago we were at 3 months of inventory.

Okay.

Currently we're at 5.6.

Oh, dang.

Okay. So we are nearing what is called a balanced market. All right. Okay. So new construction homes are, They're motivated. So we're seeing more sellers' concessions, more BTSAs, which is a bonus to commission, which we can give as a realtor, give to the buyer to help them with closing costs and things of that nature. They're also buying rates down. We've seen 'em all the way from 1.99 on a stair-step, like a 1-3-2-1 type deal where it goes up gradually, or we're seeing 'em at 4.89 or 5.99 locked.

Mm-hmm.

But still playing closing cost and title and things of that nature to get them in the door. But what we have seen is the earnest money on new construction go up drastically. It used to be $500 would lock you in a contract. Now it's $5,000 will lock you in a contract because they want people that are actually serious and not just tire kickers. And I don't mean that in a bad way, but if you're looking at new construction and they're taking that off the market for somebody to buy, They're wanting skin in the game. Yeah. So does that answer your question?

Well, yeah, I don't, I, I think it does. I, I think that, um, what, what I'm hearing is you, you may have your house on the market for a little bit longer, but— All right.

So your question was, are they moving? The ques— to answer that, not as much as you would think. And that's where all the incentives are coming in because they're trying to move 'em faster.

But that feels better on some level for a buyer for sure.

Well, no, it's a balanced market. We're getting—

I think that, I think that balance though, right? Because it's been hard for a buyer for a while, right? Especially with the, um, not just, not just the, the prices being high, but also the, the interest rates being high, people having a hard time getting funded at all.

Mm-hmm.

So I, I think it feels a little bit better to go, oh, you're gonna, you're gonna bring a little bit something to the table. Now I feel like I'm getting a deal. Even if I'm not getting a deal, it feels a little bit better for the buyer. Now the seller No, it's still what it is.

It's a balanced market.

But it's balanced, right? Yeah, I like it.

So this is the feel of where real estate should be.

Yeah.

Historically, 6% is average across the board. Okay. Okay.

So I was, I was gonna say it doesn't— I don't even think it feels fair to say that it's high.

It's not high. It's historically average. Okay. And especially if you can buy the rate down to 6.5% or 6%.

Sure.

I bought a house in 2002 and I paid 6% for it and thought I got a great deal.

Sure.

Right. And then we got spoiled after 2009 with the, with the housing crash. And then it went down to 4s, 3s, and then 2s when COVID hit. And now we're— what we're seeing is a market adjustment, right?

Exactly.

And a market adjustment is going to start working with, um, the price of the homes as far as the inventory of the homes versus the interest rate. So all those 3 work together. All right, so when you have a balanced market, the seller's still selling for fair market value, the buyer's paying fair market value. Yeah. So what was happening in the 2%, 3%, 4% error is you were seeing crazy numbers, over-market inflation, appraisals coming in all over the place. And now appraisals are starting to come in a little lower and the market is rectifying itself. So good.

It's, it's good.

It's good for everybody. Yeah, in my opinion. But on a real estate side, the hustlers are going to win and the ones that aren't Aren't, right? Because we're back to old school tactics with open houses, farming, cold calls, like reaching out to people, SOI, sphere of influence, your network, your people, all of that. So don't forget, you've got to be a good negotiator now. And you got to negotiate. Yes, because you might have, you might have multiple realtors walking into that house trying to secure that deal, right? And then on the buy side, you've got to represent your buyer as well and put them in the best light they can based on what the seller's looking for. So it's a,

it's a, it's a tap dance.

That's not, that's not cool, man. That sounds like work.

Yeah. Well, it is work.

Yeah.

I, I really feel like these days you, you have to really know how to perform your job and as, as a real estate agent, like you've gotta, you've gotta hire an agent that knows how to negotiate, right?

Yeah. So all of these, you know, people that came in going, oh, I'm gonna sell all these houses because, you know, I'm getting into real estate. They've been in real estate for 14 months and then they're getting out, right?

Right.

And they're like, oh, I lost all my money. Um, because they didn't know what they were doing. And these 30-year, you know, people that are veterans, yeah, they're out there doing it and going, these people don't know what they're doing. They, they, they've got it easy, quote unquote. But it will get back to what you're saying. And so it really is going to matter that those people who are buying and selling a home are looking, vetting your realtor. Don't just hire your next door neighbor or the person you go to, you know, go to church with or whoever it is. Like, find who actually knows what they're doing, has some history, some track record, and, and, you know, vet them. I think it's really, really important.

Winners win. So the reality is when rates are 3%, Everybody feels like a winner. Everybody got participation trophy as a realtor, and everybody wants to be a realtor because everybody can win. But honestly, people like Corey and people that have been doing this like are real professionals. They like it when the market's hard. Sure, because they're all the all the people that are the fake they're out.

Right?

The core is like people like that. They're just going to do what they need to do no matter what the market doesn't matter what the market is. Sure, people have to buy. People have to. sell.

People have to move.

People have to relocate.

They do.

It doesn't matter what the interest rate is. People are going to make those decisions.

I was actually going to say, when y'all were talking about the market, Texas is a really viable market right now. And if you look at the people who are coming here, we are seeing a massive amount of relocation from all influx of it. And so if we look at transactions that we're closing, they are a little bit on that higher luxury and they are relocation. So it's really great for our market here in Texas.

Yeah.

Absolutely.

I mean, just for context, I just looked it up. I was curious what the interest rate was in the '80s, because I remember my parents buying a house in the '80s.

The average was around 12 to 16%.

So here's what it says. Yeah, the average 30-year fixed rate was 13.7.

There you go.

So, but it peaked at 16.6.

Exactly. And they were, and people were buying houses all over the place.

Buy that and then see how you feel now.

It's like Christy said, is that when you live in dirt?

Yeah, yeah, exactly.

That was the dirt house.

And you'll be happy to have it.

But listen, the reality is people don't, people don't care about— they don't, they don't care about here.

They care about right now.

And Corey's 100% right. We got so spoiled after COVID. Actually, even before that, when— let's go back to 2008. Rates went dropping down because they, they had to encourage people to go buy homes. And we were spoiled for so long. And Corey's right, we're in adjustment now. And so it took a while, especially in 2022, because I guess— I don't know if you guys remember, the first 5 months of 2022 is when you had 50 offers for one house.

Yeah.

Rates started to go up, and then the spigot got turned off in the summer of 2022. It started to slow down. But like I said, we're just in that part where we're adjusting, and it just takes people. We're still here.

We're still standing.

We're still here.

We're still here.

We're still here.

Yeah. Well, I mean, I'll be transparent about just this property. We, we bought this property for about $320,000, right?

And how many acres?

6.

Yeah.

Nice.

Right?

6 acres.

Um, tell them about your bees too.

Wait, wait, I got—

They have nice bees.

Don't, don't bring me too much attention.

I want to need to know basis.

That's right.

For real.

We don't like GPS coordinates. But during 2021, 2022, 3 times got offered $1 million.

Right?

Which is hard to turn down.

Absolutely.

Right?

But like, what am I gonna do with that?

What are you gonna buy?

Sure.

Yeah. I mean, you're gonna turn around and you're not gonna be able to get 6 acres again.

I mean, I mean, not with the buildings that you have on this property. I mean, you might know, but do y'all know of any place like this that I could buy for a million bucks right now?

No.

No.

Buildings and—

Right. No.

It's like, that sounds great.

Yes, house, yes. Not with the compound.

Right.

Right.

Right.

So it's— and so you have to do that, like, value adjustment in your head is like, what do I have? And what is it? What is the market actually doing?

Like, what could I—

like, I'd have to, like, move to, like, I don't know, north of Willis.

Yeah, absolutely.

Yeah. You know, I could—

Northeast Louisiana.

That would do it.

So the point—

She's making crawfish.

The point she's making is Why would you ever do that?

I wouldn't.

I wouldn't invest in a casino.

Yeah. But that's, but that's, that's the, the situation where we live. And, and I think that where it really hurts people is first-time homebuyers are really still struggling. They're going, I don't have that kind of money. I don't have any equity to put in here. And, and, and, and the—

Well, it's, it's a different world too. I mean, you brought up 2008. I mean, it changed the qualifications.

Sure.

For buyers.

Yes.

Right? I mean, like, what— and the thing that I keep hearing is like, I don't make enough money.

Yep.

I've got student loan debt. I've got all this stuff going on, which like, I don't— I, me personally, I take as like an excuse, like, figure it out. But you know, what are, what are like the hurdles that these guys are having to, to get through in order to get to, you know, owning real estate right now?

So the school loans is funny you bring that up. I'm not even going to talk about this. It's a crazy situation I got right now with somebody that's got a ridiculous amount of school loans. It's insanity. And I'm like, are you a doctor?

No, they're not.

No, no, it's insanity. So it is a big deal for a lot of people. Um, school loans are definitely one because now— and the thing about it is like the rule changed a couple years ago. It was worse 2 years ago.

Oh really?

For school loans. Yeah, we were taking 1%. Now, now Pricing, of course, was different, a little different than it was 2 years ago than it is now. Now we're taking 0.5%. It's still keeping a lot of people from not being able to qualify. We're talking—

Okay, real quick, what do you mean when you're saying 1%?

So whatever the, the, the percentage, whatever the school loan is, we are required, if they're not in repayment, okay, which honestly I try and tell people, hey, you're going to get— it's actually better if you are in repayment because it's almost always less than me taking A half a percent of the—

And what can you explain by repayment?

So they have school loans and they actually have a repayment plan. So they're paying $50 a month. I'm just using whatever.

Sure.

Yeah.

Okay. It's not, it's not in deferment, basically.

Right.

It's not in deferment. Yeah.

So anybody that's in deferment right now, because I have, I see it all the time, they think they're good. And I'm like, no, you're not.

It's still on your record. I still see that number.

Unfortunately, I have to take 0.5% of that and count it as a mortgage payment. That's just the rule. So it used to be 1%. So we've gotten better. And unfortunately, it's still a roadblock for a lot of people. So that's probably one of the bigger things, honestly. That's just funny that you bring that up because I've been thinking about that.

Well, part of that, I would assume, is because of the size of the loan. I mean, you got $150,000, $200,000 more than that, you know, and, and half a percent of that.

Yes.

On a monthly payment. I mean, that can be, that can wind up being multiple hundreds of dollars.

And that, that, that in and of itself will keep people from being able to pay for something. It does. Yeah, it does. A lot of times, especially first-time homebuyers.

Yeah.

Like I said, they don't know until we start looking at it.

So, um, let me ask a question if you don't mind, James, um, for our new homebuyers out there. Let's say they've been in a job for 1 year and they've switched to a new job. Then you have a total of 2 years. Is that good? Does it matter if they switched careers per se?

Yes, it matters. So, a couple things with this. So, yes, it does matter if you're changing careers. It absolutely matters. Um, now if you're a W-2 employee and you're going to another W-2 employee job, a lot of times we can kind of tie it together some kind of way. But if you're going from W-2 to 1099, it's gonna be hard. Um, if you're going from W-2 to W-2, completely changing jobs or career, should I say, it's possible we can kind of try and weave it together some kind of way to make the connection. But yeah, you're W-2 to 1099 or W-2 to self-employed, oh my God. But yeah, almost.

So as long as you stay like W-2 to W-2 and there's no lapse really in employment, we usually can get around that. Yeah. Okay, great. Because that's always the question I get from new home buyers, first-time home buyers.

The question I would have there though is, okay, so what is the length of time we need to be considering? So if I'm a, if I'm a home buyer and I'm trying to go out there and buy a home, I, you know, let's say I have switched. How long? Let's say, and I would assume the harder one is going from W-2 to 1099 because it's You know, way, way more, uh, you know, fluctuation there. Um, how long, how much history do I need there?

30 days on a job. So if you're changing jobs and you start a new job, we only need 30 days.

Okay.

But same industry.

Okay.

Yes. But you were talking about 1099. Although you may not be able to get, there are other, other loan programs out there. They're just not the traditional. So there's other ways to get around if you're a 1099. Uh, if you got some money, there's other programs that are out there that could help somebody get into a home. Just maybe not a traditional conventional loan or FHA or something.

Like stable loans, things like that.

Right, yeah. There's non-QM type products that are out there for people that are in that situation. And there's a lot of people—

Do you do those kind of products?

Absolutely, yeah. So if you're in a situation where you're— or people that don't— that like to not pay taxes legally.

Legally not pay taxes.

They write off a lot of stuff.

They write off.

I get it.

But yeah, I think what you're talking about, you hear a lot of these quote unquote life coaches and things like that trying to encourage young people into entrepreneurship will tell them, keep your regular job and then get a side hustle. That's probably why they're telling them to do that. It's like they understand how difficult it is to borrow money when you're self-employed.

It's a challenge. It's not impossible.

No, it's not.

So if you want to be self-employed—

If you're really, really good at being self-employed, you can find money. Absolutely.

It's out there. But yeah, there's other programs that are available for people that are in that situation. And so I have a lot of those people.

What I hear is one of the most important things is find— I mean, and Corey, I know that you're good at what you do. And so you're probably encouraging people to do this to begin with. But if I'm out there going, hey, I want to buy a house, one of the things I got to know is how viable that is. And I know you're not probably going to talk to anybody until they've already gotten prequalified. That's my guess.

No.

Because, because it's a waste of your time.

No, it's not.

It's not a waste of your time.

No.

Okay. Tell me about it. Because I'm curious. Because I think that, because I would, because I, like, let's just say that Let's say I'm, you know, I'm out there, I'm, I'm doing good. I make $60 grand a year. And so I feel, I feel like I can go. You're not doing good with that.

I, I, I feel good about myself.

You know, mama, mama said I was doing good. So I, I think I can buy me a $400,000 house, but I can't probably. But what do you, what do I do in that situation? How do you, what, how do you handle that, Corey?

What, what, what are we saying? You make $60,000? We making, you making $80,000? Are you requesting that people be pre-approved before you say something?

That's a great question.

Well, that's where I was going. Thank you, Laura.

She takes a sip from her cup.

I was just circling back. And I appreciate that very, very much. So circling back, if somebody calls me and starts telling me that they found a house and they want to go buy it, my first question to them is, have you talked to a lender and are you pre-approved? Because if not, I've got several I can send you And you tell me which one you like the best, and then you send me a pre-approval letter, and we'll work with the lender, and then we will go schedule your showing. And that is great because you have educated, you have helped your client, because a lot of buyers don't know that, right? So for someone, a buyer, to go to an agent and ask to see a house and be turned down

because they're not pre-approved, well, maybe that buyer didn't know. So as a good realtor, it is your job to educate the client and send them very many, several referrals of great industry experts to get them what they need. So I love that. Well, everybody's case is different, right? And whether you're a broker or you work for a big bank or whatever, everybody has different programs and everybody has different situations. So we usually give them a handful to choose from. And in doing so, looking for the right fit fit, maybe it's a non-QM, maybe it's a standard, maybe it's FHA, maybe it's a conventional, maybe it's USDA. I mean, all lenders specify and specialize in something. Yeah. And they're all good at their

avenue, right? So some are better than others at certain roads, so to speak, right? So stay in your own lane.

That's, that's how I feel about it. Well, and I think there's multiple reasons why you want to do this though. One of them is because you have to know what you can afford. You have to know that. But here's the other thing. Let's say that you want to afford something and you can't. The lender can help you understand what you need to do to get to the place you really want to be.

Yes.

So this is a big deal right now because I see this all the time. People, people's perception of what $400,000 is today and what that feels like monthly payment-wise, they're completely off base.

Yeah, yeah, yeah.

Right.

Well, that's like $1,000.

They forgot about the HOA.

Exactly.

That's my point.

Yeah.

Like, for the For $1,000, I can get into a $400,000.

No. And they don't know. And a lot of that also is insurance. Yeah. There's another thing right now. It's high right now.

It is.

And so I used to guesstimate insurance, like when I'm doing an estimate for— I don't do that anymore because it's so different. Yeah.

So you better check that roof.

For like Corey and like, this is the thing. Corey knows like there are unfortunately are realtors that there's Pop-Tart realtors. Yes, that somebody calls and they just go. Like, they do it. They're still out there. But don't use those things. It makes no sense. So to me, it's to the buyer. It's for you. This is not for me as a realtor. This is for you. Like, why would you not know where you're at financially? Because, because rates are all over the place, insurance, all kinds of things. And but yeah, the perception that people have of what a payment would be, because I get people to say, oh, I want, I want a $1,500 payment, and I'm like Okay,

that's cool. What type of a price point are you looking for? Oh, well, $350,000. And I'm like, this is not 2003.

Are you going to put down $180,000?

Because maybe. But they don't know.

Right.

They don't have any—

they just don't know. And so that's our job is to let people know.

The other thing that I see all the time is people are like, well, I got great credit.

Right.

What does that even mean to you? Because what you think that means and what, and, and, oh, by the way, your little, you know, credit card statement is wrong.

Credit Karma told them.

Your credit statement is wrong.

And, and it, it may be close, but it doesn't really— and you don't really know what that means. And so I, I think that that's your creditworthiness, right, is a real important thing for you to know.

So let's talk about that, because I feel like, um, credit sometimes is a huge, um— it's almost like they don't want to talk about it. They're embarrassed by their credit. And I tell first-time homebuyers all the time, like, please don't be embarrassed. We have seen everything that you can imagine, and we understand. And don't ever feel embarrassed to go to someone, a lender or a realtor, and say, hey, my credit's not so good. Well, guess what? Your lender, your agent, and also title can refer you to someone that can help you with that. Like, never be embarrassed by your credit score. Let us help you because we want you to be able to buy that home. Don't hide because you have a bad credit

score or you think you have a bad credit score because sometimes they go, I've got a credit score of— I'm like, girl, that's not bad.

Oh, I hear it. My score is only 760. And I'm like, I think we can work with that.

Yeah.

Well, and I think on top of that, a lot of people are so uneducated on what credit is.

100%.

I'll tell you this, like, I remember, uh, y'all, y'all gonna laugh at me because I didn't know what I didn't know. But, uh, early on in our marriage, uh, it was time we needed to get a credit card. We didn't have one at the time. We needed to get a credit card and I was pre-approved for a $30,000 limit. And so my wife was like, oh, we don't need that much. So just tell them, tell them to bump it down to like $15,000, I think is what we did. And I told them that and they're like, sure. Well, that was dumb of us because we didn't understand that, that your credit, the, the amount of credit that you can

have, it, it makes a difference on your credit score.

Yeah.

And how much your utilization, how much you're using of that.

Yeah.

There's so much, there's so much that goes into your credit score that most people are unaware of. So, again, I, I guess the thing that I'm, I'm harping on right now, we've spent way too long talking about it probably, is the education side of buying a home. is so vitally important. You can't just decide one day I'm gonna do something and then have spent no time educating yourself on what that actually means.

Well, I would like to add to this. Okay? Not only is the pre-approval important, the earnest money is important.

Okay. What is earnest money?

So I can get somebody approved for a $400,000 loan, but I need to make sure they've got 1% in their checking account. So they can put it down on the house that they find. Do you mind if we have Anna explain what earnest money is? No, that's an escrow thing. Yeah, so there, that's perfect.

Thank you, Laura.

Take it away.

Well, earnest money is negotiated, but most of the time you will find that, you know, agents will negotiate a percentage of the sales price. And the earnest money is money that is deposited with a title agent primarily because we're a neutral third party to the transaction. And so it goes into escrow, and it's that money that is saying, hey, I intend to purchase this house from the seller. Thank you. And then it is applied towards their closing once they go to closing, right? Now, earnest money is immediately deposited with the title company, and a lot of people don't know that. And so they think, oh— I'll give you a check. You know, sit there, but no, it's immediately deposited. Again, it's, it's

part of the contract, so it makes the contract unfulfilled. And then it stays in escrow until you get to closing.

What happens if you guys are essentially like verifying that they're telling the truth about the money that they gave you?

Well, and that's a good question because a lot of time with the money that we do receive, it does require verification, right? So if it's a cashier's check, we're calling to verify that the cashier's check is good. It's where a lot of fraud happens. And yes. In that instance. So yeah.

I watched Catch Me If You Can. All right.

You know, we should have a whole episode on fraudsters.

Yeah.

As a matter of fact, that is actually the number one issue that title companies are facing today is fraud. And so much of it from earnest money. I mean, we had a cash transaction where a buyer brought us a cashier's check because they wanted to put most of their money down. Then within, I think it was like 2 to 3 days after the file opened, they terminated the contract and they wanted us to wire all their earnest money back to them. This was upwards of like $30,000. Well, we called to verify the cashier's check and it was actually fraud. So had we actually wired that money out, we would've been out that money.

That's slick.

Oh yeah. New scams every day of the week going on with those.

Every day. Let me tell you, I see them so many— like, I talk to agents all day, every day, and they say, oh, I had a buyer from X state. And I'm always like, they start talking, I'm like, that sounds like fraud.

Right.

Because we experience the same thing in title. It could be someone saying that they're an agent or no, they're a buyer, they're a seller. They already have an offer on their house. They don't want to use the agent. I'm going to send in the contract. We immediately ask for their driver's license and they run. There's so many chances for these people to get in and scam you. You have to be so careful.

Yeah.

The thing about our company is our wire desk is like Fort Knox. I mean, like, because of these fraudsters, we have to be so careful. You have to fill out several documents. You have to do a knowledge-based questionnaire to be able to wire or accept the wire because of this. And we make sure that everything and your money is protected. And it's very important that you do use a title company that does practices safe things like that because your money can get taken very easily.

So there's a few things I want to say here. Number one, Most people have no idea about title company, right? Because, because I don't deal with that. Like, I'm more in touch with my mortgage broker than I am with my title company because I don't deal with that. That's, that's all. And so again, this goes back to you knowing your realtor. You need to make sure that they actually know what they're doing, that they've got good connections, that they're really solid with all of that. So that's the first thing.

I have a, I have a, I have a quiz for you.

Oh, oh gosh. Bring it.

Just one question. It's not a whole quiz. Okay. Do you know what—

we got this.

Do you actually know, um, what we actually provide for the transaction?

What the title company does? I know that you guys clear all mechanical liens. I know that you clear all liens against the property and make sure that there's no other, like, financial burdens against that particular property. And so other than that, Anybody else?

Well, I would assume on top of that, you make sure the whole thing is legal.

Yeah.

And make sure that there's actual transaction documents that show that you, that there's a transfer of ownership that actually happens and that, and that it gets filed with the city and with everybody correctly so that you're not out there saying, here's all my money. And then you don't own anything afterwards.

But do you know what it's called?

It's called safety, y'all. Like, anybody else?

CYA.

That's what it's called.

Wait. Okay, so let me, let me, let me, let me be very honest with you, and I'm just going to put it out there because I really don't care. And when I was a real estate agent, I didn't, I didn't know either. There's so many things about title I didn't know. And so now that I do, I'm on this side of it. I can tell you. Does anybody know the answer besides title? We provide title insurance.

Oh, wait, wait. You know, that's kind of a trick question. Wait, I don't— I still have no clue what you just said.

Well, and that's actually what's really funny about it is people immediately go to, oh, they take care of all the legal documents or they do this. And that's actually a part of the facilitation. But at the end of the day, we're an insurance company, just like you go get car insurance, home insurance, anybody, policies out there. We issue a title insurance policy. To protect that buyer from all those things.

So, yes, they were.

I think we got—

we got— sorry, we had a technical difficulty. But what she's saying is—

No, I was listening. There was somebody's phone was on.

So I kept hearing music and I thought it was time for me to sing.

No, I didn't know.

That could be true.

But, but like a lot of people don't know that we provide title insurance.

What does that mean?

Well, it's an insurance policy.

She worked really hard to set that up.

Yeah, she did.

I'm like, thank you, Laura, for that handoff. It's a policy, just like— and I was explaining, you go get car insurance, right? It's a protection. So if with car insurance, if something, God forbid, happens to you, you have a policy that you can go and place a claim with. That is what title insurance is. It's actually given to the borrower. And it is for the value of their home. So the seller is transferring title over to the buyer, and they get what's called an owner's title policy. And that policy protects them from past history. It's not a go-forward basis, right? So a lot of people think with insurance, it's as I move forward, where title insurance, it protects you from what potentially could

have happened. So the seller lying to us about a debt or a lien that they never paid off.

Right. Property taxes.

taxes not getting paid. That's what the insurance policy protects them on. So we also issue a policy to the lender, which is a mortgagee's policy. So, yeah.

So I have a question. It's not a trick question. So does the borrower only become your client after the transaction?

That is correct.

Okay.

They, as far as an insurance policy holder, it happens upon simultaneously in Texas, it's upon closing and funding. So once you close the transaction and we—

Then they become your client.

They become a policyholder.

Policyholder.

Okay.

And that policy is only good to the time in which they turn around and sell that property. And policies are never transferable. So I can't give you my policy.

Okay.

And then I'm going to dumb it down real quick because she's the expert. I'm going to dumb it down real quick. So the way, if we think about it, and when Corey does a— negotiates a deal and they go under contract, which means they have an They have an executed contract between the buyer and seller. So once we have an executed contract, Corey's going to send it to the title company.

Right.

Hopefully it's Upper Title.

If you want it to go through, I mean.

And so we've got to execute a contract then between the buyer and the seller. So then we It's called opening title and then titles open. Title is research. A lot of lenders in there as well.

Uh-huh.

And so basically that's how we open title. That's how the agents bring us the business and they usually want to bring it to someone, a title company that has great communication and really knows what they're doing, of course. And there's so many laws. Real estate's always changing, right?

Right.

You've got to know all those and you want to make sure that you always open title and have someone handle it that actually knows 100% all the rules, all the changes and everything. And so with that being said, I dumbed it down. I hope I—

No, it's good.

Okay, great.

I'm actually curious, like right now, what you guys are seeing as far as Liens. I mean, how often are you guys having to like resolve liens, finding liens?

Hold on, I got this one real quick. Okay, let me tell you, um, let me tell you what never goes away is when you, when you bail somebody out of jail and you don't pay it. ABC Bonding's gonna be on there, okay? And I can pull up— I can pull it up and I can see it.

And, um, oh, I know, I'm never bailing you out of jail, Craig, ever. You are staying in there, buddy, because I am not having a lien on my house. Because not only am I not bailing you out, I'm not paying for it either.

Right. They don't want to pay for it because they forgot they bailed somebody out. That's right.

I believe in consequences.

It's fine.

The most common lien, let me just say those. So liens, it's interesting. Most people associate a lien with a mortgage, right? I took out a loan. I owe my mortgage. Title companies actually search everything. So we're not only searching what's in the real property records, we're actually searching things that are in public records. So like you have a federal tax lien, you have a bankruptcy, you have a child support lien. Hey, by the way, you have an abstract of judgment. Or maybe you just, like she was talking about, a bail bondsman. Those are abstracts of judgments. So we look for everything that's against a property. The most common issues that we see is people where they just don't know. Right?

Most people know about their mortgages, but they didn't realize, oh, I haven't paid my child support lien in 10 years. You mean I actually have to take care of that when I go to sell my property? 100%.

Yeah.

I haven't paid my IRS taxes. Yes, you have to take care of those things, right? Or it could be as simple as, I live in a homeowners association and I just don't want to ever bring my trash can in. And so, the HOA company goes and places a lien or files a certified letter And by the way, you have to take care of all those things. Yeah, right. So it's, it's an encumbrance of anything that you might owe, whether it's to the state government or to an individual. Yeah.

You see, the thing is, though, the great thing is, though, you can call Upper Title and they can help you. Ashley's so good at that. Like, hey, let me, let me show you how we can, we can solve this.

She's good at that. She doesn't want to be on the microphone. It's kind of hurt my feelings.

We're going to get Ashley on here.

But Laura is correct. I mean, at the end of the day, the reason why most people don't know about what we do is because we take care of everything.

Thank you, Kevin.

And you want to work with somebody that understands the process and it makes it easy for you, right? So if we're telling you this is what we need to do, we're problem solvers. We're figuring all those things out. We're not expecting you to go take care of it.

Well, and look, y'all want this deal to go through as badly as anybody wants the deal to go through. So that's the other thing that I think we have to always remember in this process is Everybody at the table is for you. Everybody at the table is for you. So, you know, nobody gets paid here unless you make a transaction, you know? So everybody wants this to happen for you.

Absolutely. And make sure that you always interview everyone. I mean, interview your real estate agent, interview your lender, and make sure they're surrounded by a really good network of people because they're the ones that are gonna be able to refer you on Like right then, hey, I need this. Hey, I need a roofer. Hey, I need this. Oh, I've got it. I've got it. Always make sure that you're with a realtor or a title company lender that's got all those things that they can give you right away, because I think that's really important. Well, I'm going to piggyback on that, Miss Title Queen. So when we deal with the roofers and the contractors and the flooring people and all of that, when we're putting the mortgage together or we're selling the

home, We do a lot of pay at close. Yeah. So that way we can get top market value to the seller. We just closed on one in March. Can you explain that?

Sure.

I was going to. Thank you. Yeah, I'm right on top of it.

He's loading the gun.

It's fine. Yeah. So we just closed on one in March, Laura, and it took— I'm here, Corey.

I'm here, Corey.

So it took, so it took about 3 months to get the property up to value. We ran an appraisal as far as looking comps, things of that nature, assessment, right? And we figured it'd come in at about $500,000. It was roughly 2 acres, generational property, 2 houses, shop, super nice, unrestricted, well, zoned light commercial. So you could run a business out of it if you chose to. Well, he wanted $7 million or $6.98 million. And I was like, okay, this is what we got to do. So we went in and we spent $60,000 with the contractors, $48,000 on remodels, $8,000 for flooring. We did some carpet cleaning, we painted, we did it all. Did some landscaping and raised the tree levels, all that stuff. So all in all, we had about $60K tied up in

the remodel of this place. We closed on it at $730,000.

Hmm.

And it was all pay at close. So when we're working with the contractors, we take those invoices, those receipts, and when we open title, when somebody puts a contract on it, send them over to you. But you've got to have a good agent that knows how to do that because they're out there. It's a specialty trade. Yeah. And so I think that that's a big bonus when it comes to selling your home. Well, this agent here spent 35 years in the HVAC contracting world, and I learned how to do all of it. And not only that, I owned and ran my own lawn and landscaping business for 7 and a half years and turned around and sold it for half a million

dollars when I was 27. So I've been around the landscaping side of it. I've been around the construction, the HVAC, all of that. So I partner with people we know, like, and trust, and people that will help us get to the fair market value for the seller And we negotiate what those terms are. We look at those and we send the receipts over and invoices to you. And then when we sell it, the equity is mostly tied up in the home and it's not breaking the bank to try to get it to fair market value. That's awesome. Like, I love that. There's so many people that don't know that you can do that. So that's such good information for

sellers because if they don't want to come out of pocket right then, say they've got something else, they, you know, like that's That's such a good thing to offer them. Yeah, I appreciate it. It's a value that we add to our customers and something that a lot of people don't think about doing, especially a pay-at-close. Right.

Yeah.

You know, it's like, oh my God, I got to put a new roof on. I'm like, don't worry, we got a roofer. We got the equity. We'll just take it out of the sale of the home. And that way insurance can write a policy and it's not 20 years old because that's— you mentioned that earlier. I think both of y'all did that. You know, when we get over the 10-year mark, it's extremely hard to sell a home. With a, you know, because it takes some beating out in the sun. We're in Texas, right? Mm-hmm. So 10 years and older, we start getting into some gray areas where insurance is either going to be really high

or it's not going to be available. And then if you've got a lender and a loan you're dealing with, then we got issues because then you can't get a loan. You got to have insurance to be able to get financed. So then we got an issue there. So if we can get the roof changed out, your insurance is cheaper, everybody's happy, and we on going down the road.

Well, I, I think one of the things Kevin and I have been harping on for months now is people, people need to educate themselves on their insurance policy for homeowners. Absolutely. Because one of the things that we know that's coming down the pipeline is that roofs are going away. Oh, yeah. As, as part of, like, a blanket— Coverage.

Blanket coverage.

Blanket coverage.

Yeah.

And so I think, I think guys like you are gonna become some of roofers' best friends because roofers are gonna have to pivot how they're even doing their business. They gotta figure it out. Absolutely. Because, like, insurance companies are not gonna be their best clients anymore.

Mhmm.

You know, because one, a lot of people aren't going to realize that that's gone. They're not paying attention to their policies. I mean, we had—

Sorry, you're saying you should get your roof done right now?

You should. Absolutely. Absolutely.

Yeah.

If you can.

If you can. I mean, they're denying them like crazy.

They are.

And for good reason. I mean, like, they're losing their butts on them. And, you know, like, they— and, you know, like, look, insurance companies are in the business of making money just like everybody else. Oh, yeah.

They're for profit.

What are they going to be insuring at that point?

Right. I mean, that's the— well, you can get us started on that because— but I think that—

And flood skeptical.

There's just so many of those nuances that you have to be aware of. And so let me— that actually perfectly leads me into this. So I'm going to ask every— I'm going to ask one question. I want all you all to answer this question because I think it's— no, we'll start with you, Corey. So here's— yeah, we're starting with you.

Okay.

So it's, it's an easy question because y'all, y'all are professionals and y'all know how to answer this question. If I'm a, if I'm a buyer and I'm, I heard on the Homeowner Show that you're, you need to interview your, your people. You need to know what you're getting into. What questions should I ask? So you're a realtor. How do I know what's a good realtor from a bad realtor? How do I ask good questions to get the answer of, I should hire this realtor over this realtor? I'm gonna ask you for mortgage. I'm gonna ask you for title.

What's your average price point that you sell?

Okay.

How many transactions have you done?

Like in general?

In general.

Okay, all of them.

Per year.

Okay, per year.

Okay, per year, right? Um, what's your, you know, your sales volume is what you're, what you're essentially asking, right? If you go out to a million-dollar listing and you specialize in $350,000 buyers, and you're looking at a listing appointment, you're probably not the right agent to list that property because you don't know anything about a luxury market. Even though you could probably wing it, you might not do the best value for your client.

Sure.

So I also have another question. If I was— are you going to answer your phone when I call you? Because a transaction, real estate, it's very emotional for the buyer, for the seller. Bags under my eyes? Yeah. Are you going to be available when I call you at 7, 8 o'clock at night? No, that's early. I know. Yeah, try 10:30 or 11.

She's getting revved up. Yeah, yeah, yeah.

Try a little later than that. Now, that usually follows through on weekends as well for me. So here lately we've been holding 4 open houses a weekend and I've been doing all of those myself. And that's another thing. How many open houses? How do you showcase my home? What kind of videos are you doing? What kind of twilight videos are you doing? What kind of Video package? Are you doing Matterport? What, what are you doing? Are you doing leads generation, uh, like generating, um, Facebook, uh, targeting, YouTube channels, marketing, uh, reverse prospecting? We do all of that.

Okay.

So when you are looking for a realtor, how many avenues do you have to connect to people? How are you showcasing my home? Um, What does your fear of influence look like in your pool of buyers that you're going to be able to get my home sold? So if you're a buyer looking for an agent, how good are your negotiating skills? What's your price point? How long have you been at it? What's your background? Do you have a sales background? Because you're looking for somebody— you don't want to go hire an engineer when you're trying to negotiate a price point.

Right.

Right. So those are, those are things I would look for personally if I was gonna go hire a realtor and I was looking for somebody that was on top of their A-game. I'd want somebody that, that hits my target market and has the negotiating skills to get me there.

Right. I love it. Good, good, good. So James, you're next, man.

So for me, um, I think the first thing would be pre-qualified versus pre-approved, cuz it is not the same thing.

Okay.

So a lot of people will go online. Get prequalified. Okay. The difference between prequalification and preapproval— people get prequalified all the time and don't get loans because it's not the same thing. So people get prequalified.

I got an email the other day said I was prequalified.

It happens all the time.

Yeah, but that was for me.

Everybody's always prequalified for a car through Chase.

So the main difference really is it's documentation and actually going to an underwriter. Okay.

Prequalification.

you're not going to an underwriter. They're just giving you some information to give you a piece of paper and say, hey, you're prequalified for $500,000. When I get documentation and actually run it through my underwriting, it might be something different. So if you're— especially if you're doing an online situation, which I highly discourage people from doing this, but they're going to do what they're going to do.

I'm not going to say it.

Listen, I tell people all the time, even if they don't use me, find somebody local.

Yeah.

Because Texas is different. We're different. Like, if you don't know anybody, if, if they're outta, outta state, it drives me nuts. I say, if you're not gonna use me, just get somebody in Texas. Right.

I wanna take the microphone.

Hey, right here. Seriously, everybody, you want somebody local because you want your realtor to be able to go to their office and sit down and have a conversation. If things get sketchy and we find ourselves in a gray area, I want to know who we're talking to and who's underwriting the loan. And I can go see them in my target market and it's not somebody in Washington State.

Yeah, because Capital One, they'll just do— they got great rates, I heard.

They do.

Let me also tell you—

That's entrapment.

Yeah, I know.

I know. I love our local lenders. I will say that. They treat our escrow officers so well, and sometimes they're not treated that way.

Well, I mean, when you have someone sitting in a cubicle working for Sprocket, um, I'm not gonna say any company names, but—

I know.

Turn to the chair.

Sorry. A, B, C, or again.

It's not the best experience. And I'm like, I'm serious with people, like, especially first-time buyers. Like, they need somebody that will literally answer the phone. Like, I answer my phone, it doesn't matter. Weekends, nights, I will respond to people. You're not going to get that if you're dealing with somebody sitting in a cubicle or something. It's just, it's a different experience. So that would be the first thing. Make sure you're pre-approved, not pre-qualified, because it is not the same thing. Um, what's the difference?

Did you say that already?

I did.

I mean, the biggest difference is, like I said, it's documentation, number one. You, you actually make what you—

we—

I verify that you actually make.

James, James, how long— now that we're on that, and it's saying, uh, let's— we're talking to a first-time homebuyer. How long is your preapproval good for?

4 months, typically.

4 months? Okay.

Yeah. So I don't necessarily have to re-pull credit. I like to say 3 because once we get to the 4-month mark, then I have to re— typically I had to re-pull.

And is it okay to get 2 preapprovals from 2 different lenders? Is that going to affect your credit?

If it's within about 30 days, no.

Okay.

The bureaus are smart enough I use that word loosely, um, to let people look around for a mortgage, right? So they're not going to penalize you if you come to me and then you go to another lender. Now, you don't want to be going to 5, 6. That just— I don't think that's necessary. But you're not going to get penalized. They won't penalize you. So people do it. It's fine. It is what it is. But yeah, they— the bureaus are smart enough to understand people are going to shop for a mortgage. So they're not just going to go with the first person, although some people do. It's okay.

Yeah.

Especially if it's mixed. Um, you don't have to shop. I'm joking. But the other thing would be points. So a lot of lenders will send, send these estimates to people and they make it look real pretty, okay? And they never tell the buyer, hey, this rate, you're gonna pay for this. They just stick it in there.

What are points, Jay?

I'm about to get the great quick question. So I hate mortgage talk when I'm not talking to mortgage people. So points is just nothing but a percentage. So, and there's nothing wrong with it, it's just you need to be aware that you're this estimate you're getting, and that rate looks— because all people focus on is the interest rates. Most people, they're just looking at the interest rate.

That's my point. James, do points cost money?

They do. They are, they are not free. Okay, so again, there's nothing wrong with points. You just need to be aware that it's in there. And a lot of times people don't know. They just get these estimates from people, and they'll send it to me and say, hey, well, this lender's giving me this rate. And I'm like, okay, that's cool. They're charging you 2 points, and a point is a percentage of the loan amount. Okay. Not the sale price, the loan amount. Everything's based on loan amount for lenders.

Sure.

So it's not the sale price. So, but they don't know, the buyer doesn't know. All they're doing is looking at what that rate says.

Yeah.

And so I have to break it down and say, well, we're not comparing apples to apples. It's not the same thing.

Yeah.

So you want to know, and again, there's nothing wrong with paying points. There's nothing wrong with it, but you just want to know, okay. this rate this lender's giving me, is there— are there points involved? Because if you're not used to looking at this statement, you don't know. I look at them all the time, but most people have no idea.

Well, and you need someone that will explain it to you, dumb it down, right?

I mean, is it— is this similar?

I mean, I just— I don't understand most of this kind of stuff. My wife handles all this. Um, uh, are the points— are you saying like they're adding more to the loan in order to cover the cost of the points? It does. Or is it like cash in hand?

Not the loan necessarily. Usually it's part of their closing costs.

Okay.

So, but again, the buyers don't know it. Yeah.

Right. What's, to me, it's like the same way when people are like, oh, I'm paying 0% interest. Like, you're paying 0%, but you're paying a premium for the product so that your, your payments are bigger for the thing that you're buying. You're paying 0%, but they already got their money.

Right. Cars are a little bit different.

Go ahead.

Go ahead.

Oh, sure.

So I wanna, I wanna chime in on this, right? Because we work hand in hand together. And if I'm representing a buyer, the buyer's a little tight on cash and we're looking at houses, I will go look for a house. And if that house is listed for $420,000, let's take for instance, right?

Right.

And we know that the house is priced a little under market. We think we can get $425,000. Now I'm on the buy side. I'm looking at what it's listed for. I run the comps. Believe it or not, we look at comps on the buy side because we want to see if the listing is actually priced to market.

Okay.

Okay, it's not just overinflated. So we look at what it could go for, how long it's been on the market. We pull comps just like if we were going to do a listing. We pull comps to represent our buyer. That being said, we might go in and offer $5,000 over list price but ask for $10,000 back in seller's concessions, which we use to buy points down. Okay, so we let the seller buy the points down For us, but we might compensate them a little in doing so. So it's a win-win on both sides.

Okay.

So we get really creative on our side.

Yeah.

So anyway, I just wanted to add that.

So I but I can't sell you points.

Yeah.

That doesn't seem fair.

Hey, Excalibur.

I can buy it for you.

Hey, Excalibur. I've got a question for you in a minute. Okay. Come on. Can I ask?

Unless I mean.

Are you done?

Um, I mean, those are, those are some of the main things. And the other thing is, same thing for me, is availability. That's fine.

So points, pre-approval, I'm picking like—

but, um, and the same thing, like availability. I think that's a huge thing for people to be available, especially when you're talking first-time homebuyers. Like, they have questions. And I tell people all the time, as soon as you start looking for a home, you got advice from everybody. Everybody's got advice. Hey, everybody's got advice.

Go to your local industry expert. experts, whether it's anyone that can refer you to someone that knows the answer.

True. But I tell people, listen, I literally— this is my conversation with you. Listen, as soon as you start, as soon as you start this process, everybody's got advice for you.

Yeah.

So people that bought a house in 2009 that got a 3% interest rate, they're going to tell you what they did.

They got all kinds.

And I'm like, listen, this is a different market.

Yeah.

2 years ago was different. So I always explain that.

So Availability.

I tell people, listen, I'm available. I am. I literally, I'm available on the weekends. Corey calls me on the weekend. He, he just 2 days ago, but, and I answered and I was 5 minutes too late. Anyway, that's another story. Uh, but, but again, locally, local people are just, it's just, it's a better process. And I swear, I tell people, even if you don't use me, just find somebody that's local.

But you're buying local. Like, that's a dumb thing. Like, everybody's buying local. You're not buying. I mean, unless you got money and you're buying, you know, somewhere else, you're mostly buying local. So why wouldn't you want to be able to walk into someone's office?

Absolutely.

I mean, just, I mean, that just makes sense.

Well, don't you think you get better service when you pay someone $100 versus a lot more? No, like you're, you're buying your service. No, I actually like, and people want Discount real estate, and it doesn't do you any good. Discount real estate with the most valuable asset you will ever have in your life, and I want discount? That's— you know what, I'll go buy discount toilet paper.

That's like buying toilet paper.

I'm not buying paper. I'm not, right, right. I'm not, I'm not, I'm not looking for discounts. Don't be a TPT.

But here's the truth. Like, I, I, I'll tell people all the time, you can, you can have things good, cheap, or fast, and you can only have 2 of those things, right? You, if you want something good and cheap, it's not gonna be fast. If you want something fast and good, it's not gonna be cheap, right?

Right.

And, and the truth also is true most of the time. If you're looking for something to be done well and make sure that you're getting like the best customer service, find someone small.

Yeah.

I mean, it's just true. I know for a fact that I'm going to pay more for Excalibur's, whatever they do to my house, than I am going to pay for Orkin to come do it. But I'm going to get a much better product. If I have a problem, Craig's just going to come back. He's just going to fix it. It's not going to be somebody else. It's going to be Craig. Craig's going to show up and he owns the company. And so I just know that I'm going to get better service.

And he's going to personally wrestle that raccoon out of your attic.

I know he will.

All by himself.

With glee.

Yeah, but I just— That's something you want to see.

Do we have a time limit on it?

Well, there's a video somewhere.

There's—

again, they're not going to be cheap. Fast and good, maybe, but they ain't going to be cheap. I just think that that's the thing we have to all recognize is these big companies don't care about you. The local companies, they do care about you for 2 reasons. Number one, you're not just a number. But number two, the other reason that it's important is they need your referral. Like, they want you to— they, they want you to speak well of them in your community. It makes a difference to them.

Yep. Sprocket doesn't care about you.

Right.

Stop picking on Sprocket. You better stop picking on Sprocket.

Sprocket's mortgage.

As we talk about like, um, creating these great relationships that are local. When I was an agent, I never had a title company, don't get mad at me. I mean, I was loyal to my title company, but I never had someone come and say it like, hey, I want to help you build your business.

Mm-hmm.

I want to help you market yourself better. Hey, have you met my escrow officer? She's amazing. Hey, let me introduce you to the Texas regional director if you ever have any questions. And we're always available. I never had that. And so what we want to create with our company is something local, something that agents depend on, and they know that our customer service is beyond a doubt, like, incredible. Like, they know our escrow officers are available, and that's what you need as an agent, because as an agent, you're not only dealing with emotional transactions, you're dealing with a lot of mad people sometimes.

Yeah.

Because it is so emotional. And what we deal with on our side, and I know our escrow office, it's high stress.

Yeah.

And, but you also need to be able to provide that value to your clients. And I'm talking to agents, to real estate agents. If you've never had that, like, you know, always, you know, reach out to us, reach out to Kori, reach out to James, and they'll tell you like what we do for our agents. And I speak from that because I was an agent. And I know how hard that job is. And I know how huge it is to have a company and market experts to help you in this industry and to rely on is huge. And I was never given that opportunity. And that is something that we want to give to our customers.

That's all I have.

I love it, Laura.

Nobody puts baby in the corner.

I just want to echo what she's saying because at the end of the day, being in the business as long as I had, everybody has different expectations. Everybody has different needs. And we talk about, you know, when we're asked that question, why should they choose you? Why should they choose that person? It's really up to us as professionals and people in the local areas to uncover their needs. I can't assume that your needs are going to be the same as yours, right?

Sure.

So taking time and a vested interest and understanding those things is going to make you a better servant to them, right? So if you take time in the beginning and maybe ask those important questions, I always find when somebody says, why should I choose you? Well, tell me what's important to you. What are you looking for? Do you even know what I do? Do you know the steps in the process? Where can I guide you the most? Right? Because you could deal with someone that's like, hey, I do this every day of the week. Just put papers in front of me and sign. And then you can have that other person that's like, Never done this before. I'm scared. What do I need to understand? And you really got to have those people that

can be a chameleon, trans, you know, into all different ways to helping people.

Yeah. My guess is that most people, if you ask that question to most people, they're going to go, I don't know what I don't know, especially with title. With mortgage, maybe. Definitely with realtor, maybe a little bit more because their sister did it once in COVID. But the title, people, they're the ones that people know the least about.

So, absolutely.

So really good questions.

Yeah, well, and I think, you know, and a lot of the— when from a title company's perspective, our clients typically are real estate agents, lenders, investors, and builders. However, we spoke about it earlier, our client is actually the buyer, right? They're the ones that are receiving the insurance policy on the transaction.

Paying for it.

And, well, you know, it's negotiated, right? But most of the time it is negotiable. But they actually are the ones that have the choice if you look at it, because it's their policy. So we don't normally get a chance to talk to them upfront. So where our education comes in is working with our clients, the agents, the lenders, and making sure we understand their needs because we're expecting them to communicate with their clients.

Again, and that— so, so what I'm hearing is Yeah, you will have a conversation with you. We can answer whatever you need us to answer, but please find a good realtor who—

Call your agent.

Call your agent.

Call your lender.

Make sure. And, and honestly, like, that is, in my opinion, Corey, your, your conversation is the most important. If you know, if, if, if the Corey Reeves, uh, your agent knows what he should know or she should know, then they're gonna know the best person to help with your mortgage. Mhmm. Your mortgage may look different than someone else's mortgage. So they should know what's gonna be best for your mortgage or for selling your house, whatever the case is. And the same thing for title. They're gonna understand those nuances. And, you know, the— I guess that's a really great question is how networked are you? Like, what, what does that look like? You know?

And I know that's a, that's a, that's probably a double-edged sword on some level, right? I'm not sure if networked is the right answer. I think educated Because I've got to know enough people and trust enough people and rely on enough people that when somebody asks me a question, I know exactly where to go to find that answer.

Sure.

Right? So if somebody calls me to ask me to sell their house or a buyer wants to buy, I work with a trusted title company. Okay? Because you know why? They communicate. It's all about communication. Lender, There's a lot of lenders out there. Everybody knows a realtor. We answer our phone, we communicate, and we're educated. Educated is number one on the top of my list on anything that I'm looking for. How well educated are you on the products that you sell and represent, right? Because realtors have to know a little bit of everything. Mm-hmm. We might not be masters on all of it, but I guarantee you I'll know a little bit about everything because I wouldn't be good at my job

if I Sure. Right? Because I need to know the questions to ask title. I need to know the questions to ask the lender. I know I need to know how to navigate those seller's concessions and what the points mean and how much that's going to cost. And can I get a down payment assistance program because I got $4,000 in the bank but I want a $250,000 house? And I'll know that it's only going to cost you $2,500 to get in it because we can negotiate it, right? And earnest money is always negotiable. Most people don't think it is.

Yeah.

It is. Most people think it's a standard 1%. Nope, it's negotiable. So you can come in with half. You're not liquid, but you're good. You've got money on the other end. You're on a contingency. Okay, here's, here's all my proof. My, my lender gave my sellers or my buyer— here's the proof of funds. We're good. We just don't have a ton of money, but we're going to close in 30 days. Can you work with us? Those are all conversations that you have, and you go through title and make sure there's no liens or there's no taxes. any problems on the other side. And so it's very important to answer your question. And I would say, always ask questions. Ask questions. Ask

your agent questions. Ask your lender questions. There's no stupid question. Ask title questions. Usually your realtor does that for you, but if you're a buyer or seller closing with us, ask questions. A lot of people are scared to ask questions.

100%.

Yeah.

Please ask questions. We are here to answer them. Kori is. James is here to answer. Anna, Ashley, Like, there is no stupid question to ask. And I didn't know that when I started out as an agent, but as a buyer, seller, anyone, ask questions.

Yeah.

I, I, I think, I think questions is every home, home buyer's best arsenal.

Mm-hmm.

You know, because one, because most people, I think to your point, are afraid to look stupid.

Mm-hmm. Yeah.

You know, or uninformed. And it's like, like, look, you maybe, you might do this like maybe 3 times in your life.

I was just about to, that was just exactly what I was about to say. Like, we do this all the time.

Yeah.

Yeah. So we understand the craziness that's involved, and we try to minimize that. All of us try to minimize it as much as possible.

We make it easy.

We make it well.

We do.

Ducks. Yeah. So we're floating along the water, and everything's coming.

What are you saying? What are you saying? I can't hear you. Ducks. Ducks. Ducks. There's no context. He's right.

But that's a great analogy because you just see the duck smoothly like this. And underneath he's like struggling, right?

Hot mess.

So all the behind the scenes stuff, like for me as a— the stuff that happens behind the scenes is incredible.

Can we talk about clear to close?

Oh my gosh.

Please.

What, what, what did she say? Clear to close.

I would like for you to tell everyone about clear to close. Ashley would like everyone to— What does everybody in our industry call it? What's the abbreviation?

CTC.

But what happens?

Well, first of all, that's not the best word in the industry. Funded is the best word.

Okay.

And what does that mean? It is not CTC.

But what happens? What still has to happen?

So CTC is clear to close, which does not mean it's all good. Let's be very clear.

Lenders, stop telling your clients.

I don't do that.

We're ready to close ASAP.

Well, I mean, CTC is the big step. It's a big step. Don't get me wrong. But then there's still stuff. Yeah, there's still stuff that can happen, unfortunately. Like, don't buy a car, right?

Yeah, buy a washing machine, stuff happens. Couch to match the, the architecture.

100%. Yeah, so CTC is great. That pretty much means underwriter's pretty much done with the loan and, hey, we're gonna do paperwork and get your stuff to title.

And title still has to balance. Yes.

Right. And then stuff can happen after that. But until we hear funded, all of us, no one's feeling good about anything.

That's right.

CTC is nice. Funded is better.

Funded is the best.

Funded is the best because that means we're done.

Everything's done. Well, that means money's in the bank. Yeah, transfer's in the bank.

Yeah, that is the word. Yeah, it's not CTC.

A lot goes on like that and no one sees. Like, it could be the day of the closing.

Who actually makes that call?

What's that?

Funded?

Title?

Well, it's a combination.

Yeah, lender and title.

So So there's multiple pens being pulled?

Yeah, so basically you get everybody signed and then we send everything to the lender for them to review. And then the money portion has to still transpire. So we have to make sure we get the buyer's funds in. If the seller had to bring us money, the lender's money.

You have to worry about fraudsters.

And then we have to make sure all that money is in there. So once the lender says, hey, everything's good to go on our end, you're authorized to disburse. We then say, okay, now we've gotten all those funds and we are now officially funded. Everybody's signed, all the money's there, we've cleared all the money, and we're good to go.

They paid all of the contractors.

Yeah, we paid all the debts. Well, we're in the process.

And the mortgage company has a funder, by the way. It is not me as a loan officer. I do not make that call.

Well, and that's what people think is they're like, hey, what are you just waiting on? It's like, it's not just a, you know, it is a process, but there are multiple people that are involved in it.

Yeah.

And it can take some time, you know, after you sign.

What should people generally expect time-wise on average? I'm not saying like—

Like contract negotiation to close?

Yeah. Yeah. 30 days.