The Jason Theory
Jason Stratton of KlopasStratton Team, a top 20 team in the nation with over 1.5 billion sold , sits down with weekly guests to talk about becoming successful, the real estate market, and crazy stories/people we run into. Visit www.klopasstratton.com to see more!
The Jason Theory
S4 E8 - The Art of a Winning in a Brutal Real Estate Market
Navigating the competitive housing market requires strategic mortgage preparation and understanding winning tactics to secure your dream home.
• Going through underwriting before making offers gives you a crucial competitive advantage
• Waiving mortgage contingency is often necessary to compete with cash offers
• Strong buyer consultations upfront prepare clients for the competitive market reality
• Showing higher down payments on offers (even if you later reduce it) strengthens your position
• Local lenders who call listing agents personally give buyers a significant edge over big banks
• Multiple offer situations require speed and decisiveness, not waiting for open houses
• Property values in the Midwest are rising four times the national average
• Waiting for interest rates to drop is often a losing strategy as home prices continue to rise
• Time-limited offers can help avoid bidding wars by forcing sellers to decide before open houses
• Having well-defined non-negotiables helps agents and lenders maintain their reputation
Because this is a huge deal, like, even if you're not going to waive your mortgage contingency, when Mike calls you up or calls up the selling agent and says hey, we've already gone through underwriting. This is, if you haven't done this, I'm going to tell you right now you're not going to get a home. Yeah, period, I mean, unless no one wants it and there's dead bodies hanging around, right, right, right. What's the five Ps? What's the five Ps? Do you remember it?
Speaker 2:Proper preparation prevents poor performance.
Speaker 1:There you go. It doesn't matter how much money we get, if we don't close, it's no money right? So no, close is no money. I'm everything that I am because of my dad's death, and I wouldn't be as successful without his death. Hey, welcome to the Jason Theory.
Speaker 1:Today we're going to talk about some really cool stuff that's going to help you secure your property. What we're going to get into with my next guest is the best way to beat other offers, how you can prep the mortgage side so that you can beat other offers. And then we're going to get into some investment property. Then beat other offers, and then we're going to get into some investment property, new products and then we'll just talk about some mindset stuff and how he's built his business and how he keeps himself going and in our job, not having someone on your neck telling you what to do, you kind of have to self-motivate. So we'll talk about that first.
Speaker 1:But we'll talk about that too. But I first want to really get into our speaker who's speaking and then get into how do you win in one of the most difficult markets, and that's the Midwest market in 2025, which is different than every other market. The Midwest is up four times the national average. We have severe supply issues and we're going to talk about how you can win that place that you love. So, mike, give us a little bit background on you and let's get into it.
Speaker 2:Yeah, thanks, I'm finally, on the Jason theory, I'm excited we're here. I love this podcast, it's a great podcast and, gosh, it's nice to be here. My name is Mike Black and I've been a lender for 23 years now Long time, so I've been here a long time. I've been anywhere from the big bank environment, so I kind of know how that operation works and what that looks like for my clients when they're, you know, considering going down that path for for financing. And then you know the mortgage banker side now, where we have a you know sort of array of options to offer people and solutions and customized mortgages and things of that nature.
Speaker 2:But yeah, no, I've, I've really built my business in general just on high touch service with clients, and what I mean by that and I know it's kind of going to lead into what you want to talk about today is just, you know, I took the approach back in like 2012 to really just spend more time up front with clients versus just, you know, push button, shoot rocket, get mortgage. Yeah, Doesn't work like that, Right? So you know, we are just very dialed in with that upfront process because what we find is, you know, by going through that and you know, getting people, I like to say comfortable with the uncomfortable. It makes your job easier.
Speaker 1:Okay, I like that Getting comfortable with the uncomfortable, so just not telling people what they want to hear, but what they need to know.
Speaker 2:Totally. I mean, there's really nothing comfortable about buying a house today, in 2025, would you say.
Speaker 1:Yeah, no, it's not. Being upfront in the process is probably the only way that you actually can get a house is just knowing what you're actually starting, what your journey is and what you're going to need to do to get it. And that's not saying that it's an impossible dream. It is hard, don't get me wrong, but you know anything. That's hard, hard. It's worth its weight in gold. So you kind of want to go down that route totally.
Speaker 1:Um, let's talk about the fact that most of my sales right now are done and I talked about this actually a couple weeks on the podcast when I did it by myself is having, um, a cash offer with mortgage allowed, which means that you could be cash. Normally you're not, because there is something that says straight cash. But you're telling a seller hey, I know I can get the loan, I don't need a mortgage contingency. Which means, hey, as a seller, the minute we're out of AI and I get the earnest money, the earnest money is at risk. That's called being hard.
Speaker 1:The earnest money is at risk and the seller can feel comfortable that they know that you're so qualified and you're so comfortable in getting the loan that you don't need another out if you can't get it, talk about that and what steps. This is scary, right, because someone's going to have 5%, could have 50,000, 60,000, 30,000. They could have that money at risk. What do you tell people how to prepare for that and what steps do they need to do? Like if if someone said to you okay, mike, I want to do that, but I don't want to lose my money.
Speaker 2:What are the steps? I mean it all starts at the buyer consultation that we offer from the start, from the very start.
Speaker 2:So you know, at the very beginning, when I meet a client, it's really just information gathering. But once we know what they look like and we get all their documentation pulled together, and nowadays I mean, I used to only ask for proof of funds to show down payment. That was, you know, probably eight, six, seven, eight years ago. Nowadays I want to see the big picture. I want to see, like what you know they have in 401k. I want to see what they have in their investments, and the reason being is that when you get into what you're talking about, you know cash with the option to finance and waiving mortgage contingencies, which is pretty much what you got to do to win what you're buying, right. Yeah, I want to give them confidence that they can do this without stepping on a landmine, and what we do is we do a deep dive.
Speaker 2:I go through an entire interview process with the client. I want to make sure all the I's are dotted and the T's are crossed and I want to make sure that, as we go along the process of making an offer in today's market and what that looks like, I want to really touch on here's some tactics and strategies that we are going to have to do, and Jason's going to talk to you about this as well when you get into his consultation, if he hasn't already. But these are some things that you're going to have to do to win the deal, and I want you to have the confidence behind it, because we've already sent you through underwriting and we've got a loan for you.
Speaker 1:Yeah, can you explain that when? Because this is a huge deal, like even if you're not going to waive your mortgage contingency, when Mike calls you up or calls up the selling agent and says, hey, we've already gone through underwriting. This is if you're. If you haven't done this, I'm going to tell you right now you're not going to get a home period, I mean unless no one wants it and there's dead bodies hanging around, right right right. So if you want a home that doesn't have dead bodies, explain what going through underwriting is, because people don't understand that.
Speaker 2:True. So what that entails is we're going to get we're going to do a deep dive on your finances. We're going to get your last two years, your W-2s If you're W-2ed. We're going to look at your tax returns for the last two years. We're going to get your bank statements, your financial statements, pulled together.
Speaker 2:The nice part about our process right now is that we're not doing hard credit pulls, which was a reluctancy that people have, especially if they're not sure if they're ready to do this just yet. We just do a soft pull on your credit right now. So what's the difference between a hard pull and a soft pull? The hard pull just goes down as a hard inquiry on your credit right now. So what's the difference between a hard pull and a soft pull? The hard pull just goes down as a hard inquiry on your credit report. Soft pull gives me the same credit report in hand, and so so some lenders out there will do a hard pull.
Speaker 2:I don't believe in it up front, because your credit's good for 90 days typically, and so we don't want to have to keep doing hard pulls during the process because it's going to drop your scores Right. So we we'd prefer to do a soft pull up front for underwriting purposes. It gives us the same report that you would get on a hard pull. What do you? What's the? What do you get on a hard?
Speaker 2:pull that you don't get on the soft um, you might not see some like judgments and some things uh along that, if there's some really bad derogatory things, but your score would reflect that yeah, so it's like all right, there's a bad score here.
Speaker 1:There's something.
Speaker 2:We don't know what it is, but we've got enough Correct, okay, correct, but we're going to see if you've got, you know, seven, 60 plus credit score, we're not worried about judgments on your credit report, right.
Speaker 2:So we'll do a deep dive on that. We'll take everything, we'll get it into a, a, a licensed underwriter to underwrite your loan, and basically what they're doing is they're giving you an approval saying that, subject to, there's not any issues with the property, there's no issues with the condo association, you don't have any insurance issues with title, you've got a loan and you're solid and we're going to fund. So once we get through all that and we know what you look like and we know that you're approved, that's where we kind of do the deep dive on saying what type of property are you buying? Are you in a high rise condo? That looks a little bit different in waving things, cause you don't know if there's any problems on the high rise building, or you know low rise but you do have your attorney review period where you have time to review those docs, absolutely so, like, so, like once.
Speaker 1:I just want to just tell that to people, cause I in the back of my head I'm like well, what happens if titles clouded or this or this, you're with the property that comes up in the title search. You're fine when decks and bylaws and budgets and minutes come out in Illinois, it doesn't matter how long the attorney review period is. If the attorney review period is closed and you don't have all the docs, it's three business days from the last document you get. So, even though you've pulled your mortgage contingency and you have a full underwriting, if there's an issue with the building, you still get your money back. You just have three days to look at all that stuff over and that's going to be on the 22.1. So that's going to be a disclosure. It says hey, we have a special assessment, we have this, we have this, you are fully protected on that building until you get every single document. I just want people to understand that.
Speaker 2:Yeah, and that's on five units and up. Yeah, if you're in five units and up, that's where we have to, you know, kind of do our due diligence on the con. Now, a lot of times we have we got a whole list of condos, like I mean, it's hundreds of condos Because a kind of could be approved by you guys already, like you did a loan there a week ago or something.
Speaker 2:Yeah, if it's on the approved list that we have already, that means it just means that you're waiving your financing contingency to get out of the deal and get your earnest money back. That's what that means. So if we're doing that and we know we've got a five unit up condo building here in the city that needs some work done on it, that's one of the first things that we're going to do during attorney review. Is we're going to do, uh, get the condo question out. We're going to make sure we um, you know, do get the budget, get all the things that we need to approve the building and if something comes up where they're you know they're structural issues or whatever that uh that may be on that you can get out of it.
Speaker 1:Yeah, so the so waiving the mortgage contingency. The only thing you're really waiving is your is your ability to say, hey, I can't myself personally can't get financing. But what Mike's saying is, if you do it the right way, like he's saying, you want to run through underwriting. So by the time you put that offer in, when I get offers, it'll say you have ran through underwriting, these are the only conditions. And then I look at the conditions and it's stuff that's on the building side, on the title side. So you're like, okay, I know we're good here, this offer is good as gold. They've already gone through everything. And I will tell my seller hey, they just need an appraisal and they just need this and this. And the appraisal doesn't really matter either now because you've waived that mortgage contingency.
Speaker 2:Yeah. And so you gotta be a little careful with clients that if the client's putting down three, three percent or you know five percent, you gotta be a little careful with that.
Speaker 1:Because you could get stung on the appraisal.
Speaker 2:Yeah, and so so let's talk about that as a tactic, right? Yeah, One of the things that I've done since really, the pandemic started was I started getting all their assets pulled together, and the reason that I do that is so that I can verify that they have enough to put 20% down. Now, that doesn't mean that's what they're going to put down, but you know I've verified that they've had enough to do that, and so that's a tactic. We've used a lot to win deals where we've showed a bigger down payment, because you know, if you're a listing agent and you get an offer with 5% down versus an offer with 25% down, your seller is probably going to lean more towards that 25% down number.
Speaker 1:And it's so interesting, like I've seen sometimes where people are like I'll get offers and I'll be around, and one's got 5% and one's got 10%, or the earnest money is like five grand, but they're putting 20% down. And I'm like all that stuff matters, like like we're looking at that and people are like, well, why does it matter? And I'm like I'm like because we need to know that if something goes wrong, that you have the ability to buffer it. Yeah.
Speaker 2:Yeah, I mean, I've actually had listing agents call me that I knew on the other side of the deal where my buyers came through and my pre-approval letter said 20% down but the contract was written with 5% down. And I've actually had listening agents call me like hey, is there a disconnect here? And I'm like you know what? I think that was a mistake by the agent. We'll get that fixed. But they wanted my seller's not going to accept this with 5% down. No, yeah, so that's legitimately has happened to me before and we get people get mad at me when I say that I'm like.
Speaker 1:your terms are not great.
Speaker 2:Well, and the thing that people need to understand this goes back to the whole buyer consultation and the things that we talk about during that is that just because we put 25% or 20% down on the contract I don't know how many times you look at your closing disclosures when you go to closing, but a lot of times people switch that back and the reality of it is is we are telling the sellers that we have the ability to put 20%.
Speaker 2:You don't have to you don't have to, but we go back after you go under contract and we can make the adjustments. We can do 10% down or 5% down as long as your loan goes through and you get to the closing table. No one cares at that point when you're at the closing table. But what people have to understand is that the seller doesn't see your financing all the way through the entire process. All they see is the bottom line at closing. When they get there and they see that they've got their money, yeah Right. So that's a tactic that we use a lot. You know I could tell you a number of success stories around it, especially when property values were jumping up so much during the pandemic, where we showed 25% down and my client was a first time home buyer and ended up putting 3% down. And then a year later I went and refinanced them and they had 25% equity in their property at that point.
Speaker 2:So that's just you know. But again, the planning, the planning phase is the upfront heavy lifting. It's not fun, you have to get all your documents pulled together and it's not a lot nowadays, but you know it's more if you're self-employed. But the planning phases is is the magic behind the search.
Speaker 1:Yeah, it's. It's interesting when I, when I'll get, I'll have like, I'll tell someone, hey, you know, call Mike, get this done, get this done, get this done. And then they're like you know they'll. They'll be like, yeah, yeah, yeah. And then we go see something on Sunday or on Saturday and like, oh, we love it. I'm like right, what was your approval? And they're like, oh, you know, we, I'm like there's. I literally tell them, I go, I'm not writing this, there's nothing you have. No, you have no, you have nothing that says that you can buy it. I mean, do you want to? You have to take care of that in the beginning. And I think if you do all those stuff that you're talking about, and then you say to the person, hey, listen, let's get to a point where you're so confident that you know you can get the loan, that, if need be, we can drop the mortgage contingency.
Speaker 2:Yeah, yeah, and I mean that's. I mean you can probably talk on that too, but I mean I think, if you're competing against cash out there, that dropping the mortgage contingency is about the only way to do it.
Speaker 1:I haven't done a deal where there's been a mortgage contingency in a long time, even on the buy side. But, like you said, at that buyer consultation I said listen, this is what you're going to. You know they're like everyone's like oh my God, it's so scary out there. I'm like it is, I go. But these are the steps that you can take where you have the greatest chance of getting something. And I tell people I go, I've never I've bought you know probably a lot of properties, but let's just say the properties that I live in and the last seven properties. I've never had a mortgage contingency.
Speaker 2:I just, I just say to people I go, I either know I can get the loan or I can't get the loan, and if I can't get the loan I'm not putting an offer in. Yeah, I mean, and the other side of it too is like I think when they hear, when they know it from me and they know what their financial picture looks like, and then they hear it from you, those two, when those two things come together, they know that this is what they're going to have to do to compete. I mean, we've been on multiple offers this year where we've had 10 to. I think the biggest one I was on was out in Mount Prospect. It was like 35 offers. Oh my God, how do you go through those as an agent? I mean, I wouldn't want to go through those as an agent. So I think that might be where some of the agents just people are like why didn't they let the open house finish up? They just took an offer. It's probably because they don't want to go through 35 offers.
Speaker 2:Right, but you know it's again like we've beat cash offers. It's not cash offers. People got to understand is that they can still get out of the contract. They can still get out of the contract. Just because someone's making a cash offer does not mean that you know you can't get out of the. Just because they're paying cash does not mean you still can't go through attorney review and you don't kill the deal yeah.
Speaker 2:So I think you know, from what we've experienced this year, I think, just getting the other side comfortable with who they're working with. You know, I know, you know you're going to touch on this, but you know I I call every single. I want my clients to tell me every time an offer is going out, because I want that listing agent to know that I'm a local lender. You know, I know what I'm doing, I've been doing this for a long time and that me and Jason have a great team set up here to really execute at a high level. The clients have been through underwriting. It would blow your mind. Well, you know, because you don't probably get a lot of calls on these, but like I was just in one the other day with 20 offers out in Highland Park, I was the only one that called.
Speaker 1:So that, I think, is a huge difference between the different companies. Like people always say to me, you know, like, listen, the 10 years, the 10 year, right. The rates, the rate it's everything else, it's the service, right, everything else is, you know, like, listen, you can go to someone else and they're going to sell your house or they may you, they may help you buy a house cheaper than me. I'm just, they're just not gonna give you the service that I have. So if you're okay with that, I'm okay with it too.
Speaker 1:Like I always say to people, listen, you know, I always say to people not everybody needs to drive a Ferrari. I like that you go in a Ferrari, get you to the same place, yeah, ferrari just gets there a little more comfortable, yeah, and probably faster. So like you don't have to do that, right, but like what you're saying is over the last and I agree with you over the last three or four years, the phone calls not all the time, but I do get calls from the bankers and from the mortgage brokers and I'm telling you it is a huge difference, it makes a difference, and you're not gonna get that call. You're not gonna get that call from a large bank where the person that's doing your loan is housed in San Francisco, texas or Florida or New York.
Speaker 2:No, I mean, there's a definite difference. I mean, and you know, if we want to touch on that, I mean you got online lenders, which is probably going to be your cheapest channel to go through, and not always. I mean, if you go to Rockets website today, it's you'll see on there that there's a lot of points that you pay for those rates that they're advertising. Um, then you got your banks and you know they're nine to five, they're, you know, monitored on their phones, like it's. It's a different feel. They sit in the banking center all day. And then you got us.
Speaker 2:We're consultants, and so I'm like you, I'm not. I'm not like, uh, I'm, I'm competitive, but I'm not cheap. Yeah, and I that's the way I like to put it is like you know, we're we're not going to be like the absolute cheapest on the block and we're not going to be the highest. We're going to be competitive, we're going to get you a competitive deal, but we're also going to be there on Saturdays and Sundays when you need us, and that's primarily when I'm on the phones with clients. I'm working Saturdays and Sundays. I'm calling listing agents. I hate losing man. I I hate losing. So, like you know we get into that battle and that's what I prep people for in that buyer consultation. You are getting ready to get into a battle, but you've got an army behind you that's going to help you like really take over that big banker.
Speaker 1:They're not battling, they're they're. They're not around on Saturday? Well, they're just, no matter what happens, they're getting paid, they're just clicking. They're just they're. They're getting paid, they're just clicking, they're just they're they're. What do?
Speaker 2:you call it that timestamp Well yeah that's in their clock.
Speaker 2:Not only that, but I mean you know you have to be prepared, if you go down that path, um, to lose a lot more than you win, and you also have to be prepared to babysit, because you're going to babysit your loan and again, if you have the time to do it and you have the time to babysit, what I like to tell people is you should partner with someone like myself. When you're going out there and going to battle and rolling your sleeves up and trying to win deals. Look, if you want to, like, a year down the road, refinance with your bank, do it. That's fine. You got all the time in the world. You're not under contract. You don't have all the pressures of waiving contingencies. You've got a lot more time on your hands to maybe go to, like you know, a rocket mortgage to do your refinance. But you need to use, like extreme professionals that are going to put a make a good impression on you and your team that you're using for the transaction when you're out there trying to win purchasers right now.
Speaker 1:I always ask, like we'll be sitting down at the buyer consultation and I'll be like, okay, who's your like, how are you going to get the money? And the minute they tell me oh, you know I'm going to go, like the first thing. If someone tells me a credit union, I'm like, okay, so when that falls through, who's the second person? So when we're, when we're five days away from the mortgage contingency and you losing the house, who's the second person you're going to know? Then they're like well, what do you mean? Like, listen, I go. And that's what I say to them. I go listen, these banks don't have a vested interest in you. They just don't. They're not relationship-based right. So, however, they perform with you, that's it.
Speaker 2:Well, and even if they are relationship-based, I'll tell you that I, you know, went with my bank one time and it was on a prop. I have a very good relationship with them and they just didn't like my property. So I didn't know this, but it, you know, I had to babysit I'm in the business all the way to the finish line and on the finish line I got denied. They don't want to do the deal. It was yeah and it was brand new. It was new construction townhomes. It's not like there was anything like crazy going on here, it was just they didn't like the deal and it put me in a really bad spot.
Speaker 2:So I think what people don't realize is when that happens and what you just said. You got five days before you're, you're supposed to close and things blow up. Nowadays sellers don't play around You're, you're getting penalties. You got a per day, per day charges that you incur. I don't like. I mean in this market I don't want to give the sellers any reason to back out, because a lot of times there's backup offers behind your offer.
Speaker 1:Yeah, people think that the like you know, like I had a, we had a inspection yesterday I'm talking to the agent, you know, and I know there's backup offers, right, some very my language is very specific Like I'm saying things in the way that I need to say them because I know if I say the wrong thing, I'm just going to get a cancellation letter and I don't think buyers realize that, like the seller can cancel on you, the same way the buyer can.
Speaker 1:It's right in the contract. The minute that attorney review is open, if you cannot come to agreement, either side can cancel and you can just sit there and wait for the days to expire and say I'm canceling. But most lawyers know that you're just going to sit there. So what they do is just like let's just, let's just do this now and we're just canceling on you and taking another offer. And if you, when you go to contract, people are still doing showings, it's AI, there's no inventory. I go to contract on something on Thursday, I'm doing showings still all the way to Friday, saturday, sunday, monday and we're taking backups. Like everyone needs to be on point.
Speaker 2:I agree, I agree, and you know one of the uh, one of the other things that that we talked about a little bit earlier too, is it? You know, when you do have that 20% down, 25% down buyer and they're waving everything, um, you know, I've seen it and we've done it ourselves. But you know, I've seen agents and you're really good at this Is that what never happened to you? But they try to pull some tricks during attorney review. You know, going out and getting the appraisal done real fast.
Speaker 1:Oh, dude, that's the best.
Speaker 2:I know that doesn't happen in your world. Have I ever told? Have we talked about that on the phone? Well, I just had one happen the other day, where it was out in Highland Park actually, and we did a rush appraisal during attorney review because they were worried about the value what?
Speaker 1:did the agent say?
Speaker 2:And it came in low. It was a property they put in on the market a year later, didn't do a touch of work to it and tried to sell it for $120,000 more and my agent's like, hey, just, we're going to order the appraisal quick during attorney review. But we made a cash off cash with the option to finance offer on it and I had the appraiser out there before the inspector came out.
Speaker 2:So, and and and, lo and behold, it came in low. And she's like listening to agents like, well, you know, you guys did a cash with the option to finance. And our the buyer's agent said, well, you know, we're still in an ai right now, we're attorney reviews, so we can cancel. And she was like, oh my gosh, I've been doing this for so long. How did that slip past me?
Speaker 1:oh no, so whenever I get a cash, so listen, it's a standing like I've gotten. I got into a not a fight, a friendly conversation two weeks ago. Someone tried that on me and we're cash with option to finance. And I got a call the next day and I said, I said to the agent, I said to the, to the, to the appraiser, I'm like, oh, okay, he's like, well, he's like, listen, I got to get in there. It's a rush. And I was like no one gets in to any of my properties until we're out of attorney review. I'm like, bro, I'm way too smart for that. That is a trick. Now, listen, do I do it? Yeah, but you know, that's why that's so funny, because that's why sleeping with the enemy is so important. And I've stressed this If your buying agent or selling agent only works one angle, do not hire them, because if you're an agent on one side, you don't understand the angles that people take, because we've never experienced them, and there's a lot of them you can take.
Speaker 2:Oh, that's a big one, there's a lot of them you can take. That's a big one, there's a lot of angles.
Speaker 1:You can take and so I can show you text messages from to other, to not to brokers, but to more, to appraisers. I don't let anybody to lay eyes over people like we want it. It just happened. It just happened to me at twenty nine, oh one, sacramento, and I literally texted a guy and then, and then the banker, the mortgage broker, called up. We got to get the person in. I go no one gets in until review is closed period.
Speaker 2:So that goes back to you're competitive but you're not cheap right? Yeah, because those are the things that people don't know no, and you know, sellers sometimes just take the path of I'm going to go with the cheapest agent or whoever tells me what I want to hear Cheapest agent cheapest lawyer, cheapest rate, cheapest this.
Speaker 1:It's like like I know it's so, I know it's like so, said so many times, but like no one walks into a doctor and says I need eye surgery, give me the cheapest doctor you have. No, I know that like it's so played out, like every person that like always says that when I, when they're like talking to people you don't say I want that it's your largest investment. Spend an extra couple thousand bucks and make sure you're protected.
Speaker 2:I agree. I mean it's it's mind boggling, but it happens and it's going to continue to happen. And and you know, as we see, you know rates drop and things of that nature. People are looking for the cheapest deal. And you know, I tell my clients all the time like, be careful what you wish for, because, um, there's a lot of like things that can come up during this process and there's so many third parties involved and there's so many hands in the cookie jar that you just got to make sure that the people that are working for you are looking out for you, looking out for your best interest. And you know there's, I know there's time and there's not, not everybody does that.
Speaker 2:No, I mean there's. You know I can't tell you how many clients cause. I ask them a lot of questions around what's important to you during this process and you know a lot of a lot of people just want to know the hard truth, even if it's not what they want to hear.
Speaker 1:So there's times where I've way to to to study this or know it. But I think for every client you lose from telling somebody you can't afford that place, for every client you lose, I think you pick up three. I agree Because I know when people refer me out, the first thing they say to like if someone's used me and they refer me out to somebody else, the first thing they say is like. When I meet with those buyers, my client, like all my friend, tells me you're going to shoot me straight and that you don't mince words, that you're direct, and I'm like, yeah, I'm like I may offend people when I tell you like I had a text thread yesterday with a tenant so I sold this guy's place. He's renting Don't even get me into that and he's paying like $5,000 a month.
Speaker 1:He listens to this podcast. You know who you are. He spends $5,000 a month on rent and he just is like I don't want to spend that, I don't want to spend that. He keeps looking for 3,500, right, which is where his place is, but every place that's at 3,500 doesn't like. And I just finally texted him. I said listen, man, your budget doesn't match your eyes. I go either. Go back to your parents' basement. I said or readjust your thoughts, that's it yeah yeah, yeah, and call me when you're ready.
Speaker 2:I want a Bentley but I can't afford it. Yeah.
Speaker 1:I always say that to my clients I want this, I want this, I want this, not the fucking truth. We're at the.
Speaker 2:U S government. We can't just print money Right, right, right right. So to kind of sum up what you're talking about and the number one thing you, if you're, if your lender and your realtor are sitting down and doing a buyer consultation with you or a seller's not sitting down and doing a real deep dive on a listing presentation with you, they're missing everything, the buyers especially. They're missing everything. There was a point in time where I had a guy that told me that, hey, it's a waste of time to meet he works at a credit union. It's a waste of time to meet he's. He works at a credit union. It's a waste of time to meet clients.
Speaker 2:And I, I did that for for years of my career and I and it was just, I felt like a commodity and I hated the feeling of meeting with clients. No, I not meeting with clients. Yeah, yeah. Well, he works at a credit union. I know, don't take any advice from him. Well, we worked at the same company at the time that we worked together. He works at a credit union now, but that's his model and that's what he likes For me. I like that long-term relationship with people where I'm really helping them with a solution to customize what they're getting into. And it goes in and not only with their finances and making sure they're in the right spot and their budget because we do go to a deep dive on their budget but also just how to go out there and do this the right way.
Speaker 1:Now, now, here you're getting into a person that does their job and is not happy, and yourself, who's happy there? That's a that's a whole different ball of wax. I mean, that's like I talked to agents that only do Zillow. These people are miserable and they may make a lot of money, and you know. But are they happy? Yeah, right, they may be wealthy, they're not successful? Yeah, so that's just, that's just to me, that's just having some self-worth on what you do. If someone doesn't want to meet with somebody on anything that they're doing, they're not proud of what they're doing, yeah, and they don't see, they don't see that's it.
Speaker 1:You're, you're hiding. You're like, oh, you know, like like, when people say, what do you do, I'm like, oh, I sell real estate, residential real estate. I'm not like, I don't think it's a bad thing, I you know, and like no-transcript, I mean that's the difference between you and that person. Yeah, and that's just sales. It's like do you actually?
Speaker 2:care Well, especially when you're in that divorce situation where they're separate. I mean it's tough. You have to know how to handle all aspects of that Cause. It's on the mortgage, on the mortgage end.
Speaker 1:I don't even know how you do it, because when I talk to clients that are divorced and they're still being alimony and payments, when they sit down and talk about all right, I want to buy a place by this I'm back in my head. I'm like oh man, that's a fucking mess.
Speaker 2:I mean, I've been through that before so I can relate, and so I think that's probably how I handle that the most like. The best is that I've. You know I can relate to what they're going through and it is not fun.
Speaker 1:No, let me tell you, no, it's, and I will tell you. When you're sitting down with a consultation and and there's two people that are just, you're at the table with two people that don't like each other, man, you, you leave that place and you're like, oh yeah, they don't like each other and the and and fight like uh, I was uh, I was like I don't know, I was talking to my wife and I was like, yeah, I like this, left this place there. You know they're just, you know they're splitting man. P people like when you don't like something, you will fight about the color of grass.
Speaker 2:Well, I mean, we're right in the middle of the money grass. It's money like down to usually. So we're at that like tipping point where, like you know, this is kind of one of the last steps of the process.
Speaker 1:And I just tell them I just want to make this painless, yeah, Like like you guys got enough stuff going on, Let me burden everything just but again that goes back to um, you're competitive but not cheap.
Speaker 2:And so you know when, you know how to handle those situations, you know how to talk to your clients, you know how to have like a good deep conversation where it's going to like keep people. I think our jobs are really just to keep people calm. Oh yeah, because there's like this market, there's nothing calm about it, no, nothing calm about it. And so you know keeping people's heads on straight. I mean, you know I could tell you, my wife and I, when we bought our, before we bought our house, we were under a contract for a place over in North center. And you know this is and I share the story with my clients but before we even had a chance, I didn't trust the construction on the place. So I got, I hired a really higher end inspector and it was cost a little more than normal.
Speaker 1:but once again, yeah right, you want a $500 inspector or you want a $1,200 inspector no, I wanted a $1,200 inspector. Well, it's a. It's a multimillion dollar or over. I mean you're going to squabble about 500 bucks.
Speaker 2:Yeah, so before we, the crazy part is is, before I even had a chance to turn my inspection results over to the other side and start negotiating, they canceled my contract during attorney review and went with a higher offer. Now, that's the kind of stuff that you know can happen in this market right now, and you know, are they allowed to do that? I mean technically, no, but you know they can back out during attorney review too. Yeah, they're just. You're just. You're just You're wasting time trying to sue them, or?
Speaker 1:go after You're wasting time waiting to the end, because once reviews open, it's like if it doesn't, if it can't end during that time, it's over. Yeah, so they just speed up the process, like we know. We're in five days, we're canceling. Let's just cancel.
Speaker 2:So, so when that happened, it's like my wife was crushed, like she was absolutely crushed about it and um, um, you know, one of the things you just have to know and this is where good advice comes into play is that before you even get out there and start looking, with Jason, for example, you cannot fall in love with a place until it's yours right, that is like my number one rule of thumb, like, do not fall in love with the place until you actually have the keys in your hands and we're closed, because there's so much that can happen.
Speaker 2:And you know it is really important on my my job's, really important during the process, because you know when there are contingencies in play, you know you don't want to give the sellers any reason whatsoever to back out. Yeah, and they will. They're just, they're fidgety right now. They're just as nervous as the buyers are because sometimes they haven't even found a place yet. Yeah, they're banking on that sale to get their place, you know. So there's a lot of, there's just a lot of tension, I think when you're going through that process and you know you got to make sure that, no matter what.
Speaker 1:But that's another thing that happens with someone like yourself that you're not going to get that Like what's somewhere. Oh, we'll just be like you have to hit those dates. Yes, a big bank, a credit union, someone that's remote, they don't. They don't care about the data they don't even look at. I had one person told me that they don't even look at the file till it's like five days before the contingency is up.
Speaker 2:Or they order the condo questionnaire like like the week of closing, what the fuck.
Speaker 1:That that's. But I will tell you, attorneys do that too and I'm like what the fuck? Yeah, like I had, like, when I start working with an attorney, I work with two people pretty much exclusively. You know, I like, I know this is crazy, but I set my standard and I said listen, I'm going to work with you. These are, these are the three things.
Speaker 1:Number one a letter does not go out with me, not CC'd on it, ever. I don't care if it's whatever it is. I need to see everything, because I know the most about the deal period. Right, you got. You know we got to hit the dates. You know we can't wait to the end. Like, there are certain things I like. I just and you can never like I, there's attorneys that will act, I mean, get enough and I'll come back right in. There's attorneys that will will, that will do stuff without even telling their clients. Yeah, I'm like, hey, man, like, so, like when I give, like, let's say we go to contract, I'll CC you, I'll CC the attorney, I'll CC everybody. I will write on there there were 10 offers. This is why we got the place. Let's keep that in mind so we don't lose the place. Yeah, like, these are all the things, because if everyone doesn't know the urgency that's involved and people don't understand what's going on, and I don't expect, I don't expect everyone to know what the hell we just went through.
Speaker 2:Yeah, yes, I mean that this communication one-on-one, huge and and there's such a lack of communication in our industry.
Speaker 1:Well, when you pay for what for? But that's, that's, that's the payment part. Yeah Right, You're not paying, like I always tell people. You're not paying for the rate, You're paying for the service.
Speaker 2:Yeah, I mean, it even goes like you're right and you are, you're paying for. You're paying for an eight o'clock call on Sunday, totally, and so, like does you too, is just not only the lack of communication but just a lack of look like that. You just said you have a contract, you, you have all these notes on here so that everybody knows what to expect and why we won the deal and what cannot happen to kill the deal. It's. It's the same in my world. It's like, you know, we get a con.
Speaker 2:We get condo questionnaires back too all the time and it's like are we reading them before we submit them or are we just pushing papers? And a lot of lenders out there right now are just pushing papers. I can't tell you, just this week alone, I've gotten three condo buildings off the Fannie Do Not Lend list because other lenders shot something over to them that was incorrect, right, so we can see the notes on Fannie's site on why it's ineligible for financing, and it was a question that was answered wrong. It's like, guys, you know, are you a problem solver?
Speaker 1:You're a paper pusher, right and so you know it's the same with the contracts.
Speaker 2:Yeah, Keeping that deal together is paramount. We got to you know, I think who you choose to work with on your process is a make or break. It can be a make or break on your whole entire experience.
Speaker 1:And yeah, like, if I see, you know, like in people, like people may just say that I'm saying this, but like when you see attorneys, you know, when you see lenders, you know when you're working with more with uh, I mean that matters in this, in this environment, everything matters. Everything matters Like and people don't get that Like everything matters I've had.
Speaker 2:I've had your sister accept a few of my deals, that uh, or offers from our buyers and she's on the other side and they were really hard deals and she she knew they were hard but I think she she's accepted it Cause she knew she had a good team that was going to figure it out.
Speaker 1:I mean it just matters. I mean like there's a, there's a level of professionalism and I think, you know, I think in any business, people like have that thought that that stuff matters.
Speaker 2:Yeah, what's what is like your, besides the cash, with the option of finance, like what? What other good tactics are you using for your buyers right now to kind of separate yourself from other offers out there?
Speaker 1:I will tell you that I and I have and I always, I always tell this to people like, when there's five day attorney review, I literally this may sound contradictory, but I will explain why I take it to seven and the agent will be like, well, can we have five? And I said, listen. I said I can't perform everything I need to perform in five days and I don't want to ask for an extension. So I'm just coming to you in a way that's honest. I said I can do a two day attorney review period and I go and I will ask for an extension. In a way that's honest, I said I can do a two day attorney review period and I go and I will ask for an extension in a day and a half. I go why don't I say we all been here, why don't we do it the right way? So all the dates are met and we have no issues and I'm just super, super, like upfront with everything, like beyond upfront, and that's my reputation. So like, your reputation precedes you, like my father always said that to me, right? So like, as soon as you establish that reputation, you just have to maintain it. And sometimes, maintaining that relationship, that, I'm sorry, maintaining that um, the reputation, uh, leads you to firing clients? Yeah, and I have no problem if a client is going to. If I spend 20 some years having reputation, I'm not going to let one client ruin that reputation, not because of me, like people will think. People will think like people that don't understand sales is like, oh, he's firing that person because it's too much work or he's firing this person because it's this they don't get along. No, I'm firing that person because I got 400 other clients in the next 10 years that are going to be affected by that one person and I'm not going to let them lose places because of you.
Speaker 1:And I actually, when I fire people, I tell them that I said the reason I'm letting you go has nothing to do with the fact that we've looked at 200 properties, or this or that or that mean you disagree on things. You're not upfront with me, which means I can't be upfront with the seller or the buyer or this or that. So, like, if your basis is lying to me, which you're lying to me only hurts you, because if I don't know the truth, I can't perform for you. But you lying to me means I'm lying to them unbeknownst to me Right. So then I can't my word to them, cannot hold a candle. And then, on top of that, when I go to submit offers in a month and it's the same agent or this or that, that person's at a disadvantage. Yeah, like. And if you don't think you, if you're with a, if you're with an agent that does not have a good reputation, or you hear rumors of a bad reputation, but you like the person I'm just letting you know you're entering that market at a disadvantage.
Speaker 1:I can name four or five people right now, which I won't do, where the offers are on the table. If I see your name, all things remain constant. I see your name and I see Quicken, or I see Chase, or I see Bank of America. I'm going to sit the offers down. I know him. He's going to close. I never get anywhere with Chase. Bank of America is going to give you a. You're not going to hit your, I can tell you you're not going to hit your Critical dates in there Dates and also a Bank of America is terrible with appraisals.
Speaker 1:Oh, Chase, you don't have a parking spot. Chase is not going to want to do the loan because it's not a homogeneous product. Yeah, I'm like these are all the things In 22 years. These are all the things that go wrong that I've seen go wrong. This is the one that's going to close, yeah.
Speaker 2:It's called the non-negotiables, right, I mean going back to what you said with your process and firing clients, I mean you've got to have those non-negotiables in place. You can't establish a business. Yeah, I mean you've got to know what that for me. I know what that perfect client looks like. They want to go through my process, they want to do everything that you know. We asked them upfront. They're kind, they're courteous, they're not like pushing back on everything.
Speaker 1:I mean there's a, there's such thing as defining what your perfect client looks like, and perfect clients usually hang out with other perfect clients, and shitty clients usually hang out with other shitty clients. Like when you have a crappy client, you're done with it. You're like you're like as soon as referral comes to them and like you hang out with this person.
Speaker 2:Yeah, I'm just so busy, but that's why you that's why you can do what you can do and I can do. What I can do in our business is that we've we've got that defined and it's okay to like pass on a client because they just don't conform to that box. And and you know, I've got I know other loan officers that are constantly doing credit repair and this and that, but that's what you attract. If that's who your client is and that's okay, it's okay to do credit repairs on people and do things of that nature. It's just not who my perfect client looks like. Um, because it's just a lot of work. I mean I'll give people advice on credit, but I don't have time to like. You know I like clients that have good credit. You know not that I'm you know?
Speaker 1:No, I hear you no. No, it's fine.
Speaker 2:You know I'm not judgmental, but you know, and if they don't have great credit, at least are willing to take advice on how to get it up, and and then show me that you're willing to do that, show me that you're willing to do it, and I'll give you my time. Yeah, exactly.
Speaker 1:There's no reason to give your time if that time's not reciprocated. What's the point? I mean, I said the same thing to my kids. Why would I give you my time? I tell my kids all the time. Why would I give you my time? Why am I going to sit outside and rebound you for an hour?
Speaker 2:When own that sounds like my, cut my conversation my four-year-old this morning at camp yeah, he had a meltdown to bring him home this morning, so uh, don't just leave him there.
Speaker 1:You know he's, it's a new camp so he's on day two and I he doesn't know anybody there, so it was uh. Is that your? Is that? Four?
Speaker 2:four-year-olds he's a little young like yeah, that's that's they.
Speaker 1:They stay out, that's by by six or seven.
Speaker 2:It's like he ought to left him there for sure by six or seven. It's like, deal with it. He ought to have left him there for sure by six or seven, but he's still a little guy. But no, I know another tactic that I love that you use, if we can touch on this yeah, but just putting that timeline out there. That's another one that you and I have talked about in the past where helping to win multiple offers, where you put a timeline, this is a great offer we're giving you. We need to hear back by this time.
Speaker 2:Oh, yeah, tell me how that's performed for you this year, cause I love that story.
Speaker 1:It it's so I had my first time that it didn't work, but it's like the 90% effective and basically saying, hey, this is this is our time. This is you know. I know you're going to get offers. You want to do Saturdays and Sundays. Here's our offer on Friday night. It's an amazing offer. It's everything you want, and the thought process is, once again, this is talking about talking to your client and then also saying to your client if it doesn't work, you're not getting the place. Are you okay? And I will say that like three or four times no, no, we're okay. I'm like I know. I just want to ask again, because a lot of people say they're okay and are not like this is our best. You're either going to take it or you're not, because if they're not going to take your best on Friday, they're not going to take your best on Sunday. There's no difference. So why not just wedge in? Now?
Speaker 1:I will tell you what happened to Sophia is. She got an offer and it was the same style as mine, where I just say this is it? However, it was price based in terms of today. On Friday, this offer is this dollar amount. On Sunday, it's this dollar amount. So we're staying in the game, but our dollar amount is changing. Yeah, so it's going down by Sunday. It's going down, okay, and her clients took it. Wow, and you know what they said. They said, well, that's all our furniture for our new house, let's just take that off. You know, and I will tell you another thing, and you know you can relay this to your clients. When a person I yelled at it, I talked about this, I did a podcast on my own, I just went over like just rants. When someone I listened to that one.
Speaker 1:Yeah, like when someone goes into a place and you like it and you know you see 20 people that are there and you want to put an offer in and it's. You leave the house at one. Why don't I hear from your agent? And I hear from your agent the next day, and then you're upset that the place is gone. Yeah, yeah, what are you waiting for? And then, and then you're like oh, you didn't wait for us, Like you never called me, you never told me you liked it. You know you may have said during oh, we really liked this. What's? Oh, we're going to put an offer in. Okay, Where's the offer?
Speaker 2:So when you're on the this is our curiosity cause this is how we want our house when you're on, cause that that story that I told you earlier, where we got our offer declined we went out the following Thursday and we had a, you know, private showing set up for a Saturday morning and we came in, we had the offer written up before we even went into the private showing and we walked out the front door and hit submit right when we walked out it was full price offer. You know, quick, close, everything that they were looking for, right on that offer. They had an open house on Sunday. Sunday I was like they're going to. There's no way we're going to, they're going to accept this. They accepted our offer on the counter offers.
Speaker 2:On Sunday during the open house, we accepted their counter and on Monday they had like nine offers that came through. So, like, how often do you see like I mean, when you're on the listing side, if someone comes in there, you know you like the, you like the family, you like the, you know the agent on the other side they come in and you just make a really strong offer up front. How much weight does that carry before you get into?
Speaker 1:like a huge. So I had this conversation with a seller at 2343 Montrose last week. We got an amazing offer. They left, did the same thing, total, like uh, uh, no mortgage contingency, but but can you know, cash with, with mortgage, um, as is with inspection. It was a great offer and they did it on the first day and we had an open house the next day and they had a timestamp, you know, for that night.
Speaker 1:Yeah, and my client's like what do you think? And I was over asking and I said, well, I go, the mathematician would say this to me. This is what I said to my clients. I said these are fictitious numbers but we'll just go with it. We'll listen at 750, get an offer for 800. That's clean, clean. It's only good for one day. I said what are the odds of you getting an 810 or 815 offer on a 750 with no contingencies, as is close whenever you want to close, versus a 760 or 740 on Monday? I said the risk reward is not there, it's nominal. If anything. Right, maybe you lose 10 grand. But here's the problem the house is not worth 800. There's no mortgage contingency. They're putting 30% down, which means appraisal has gone to, appraisal has gone to and they can make up the difference if this or this.
Speaker 1:Because I had what I do is. I said send me your cash accounts. I want to see how much cash you have. And if you know, I said I tell the agent. I said, do you want this place? You have to give me what I want because I'm going to make my people feel fuzzy. Yeah, and then they show me a cash account with, like they show me like $2 million in in stocks, $2 million in stocks, 30% down, $50,000 over asking. And they wrote it the hour that they left. Yeah, I'm like that is somebody who's in it for the long haul and wants it. They ain't backing out they. I'm like that is somebody who's in it for the long haul and wants it. They ain't backing out.
Speaker 2:They ain't backing out man.
Speaker 1:They're not. I give you like, like there's always something could happen, Like somebody could get fired. You know someone could pass. Like there's something that could happen. I said, but the upside is, the downside is so far greater than the upside here because everything is perfect. So even if somebody gives you eight, 50 and they have a mortgage, it ain't closing Right.
Speaker 1:Somebody can write you an offer fucking $2 million on a $200,000 piece of land. Yeah, that doesn't really matter, right? It's only worth when it closes. Exactly, it's all garbage. Till that happens, I go so what? So what? Are you willing to make that mistake? I said you know, tomorrow it's going to be a hundred degrees out, yeah, possibly rain. I'm like it's up to you. I said but we get to Monday, tuesday in this market, and we had 45 people through. Now, mind you, we had two offers but I had 40 parties that came through. That came through. So two offers on 40 parties, not 20, not 15.
Speaker 1:And we were pushing the price to begin with and I was like you know? And then they were like, yeah, let's do it Now. I said to the people we're going to sign the offer. I said but I'm still doing the open house on Sunday. Yeah, I said because you know, I don't know I don't have to mark a contingent. I told him I'm marking a contingent on Monday. Yeah, if you're like it's signed, you have the first right refusal. I said but these are the backups we're taking, just in case. I did the open house on Sunday. They came to the open house, it was packed, they left. The agent calls me and she goes we're, we're, we're. Literally. She goes, we're, we're changing the offer to no inspection whatsoever, we're not even coming. So they got so panicked that you know that they did that and I'm like listen, I'm sorry, I'm going to keep you on your heels. That's my job, like I'm going to at all points. If you're a buyer and you're buying one of my things, you're never going to be comfortable. That's my job.
Speaker 1:Yeah, I mean, but that's what a good agent does, that's my job, Like everyone else would like would cancel the open house and say I'm going to hang out. Yeah, I'm like no man, I got the two hours. It's already blocked off anyways. I'm like let's just keep the. Let's keep their feet to the fire.
Speaker 2:Yeah, get the pressure on. Yeah, keep the pressure on. The pressure's on, wow, pressure's on. It's a great story.
Speaker 1:Yeah and that, and that's like I always make sure that you constantly are still doing your showings. Just you know, hey, listen, that's my duty to my client. I'm not going to be lazy, I want to make sure that there's still urgency pressured on that buyer.
Speaker 2:By the way, that's my number two rule of thumb when you're going through this process. If a property checks 70 to 80% of the boxes, don't think about it, just make the offer, get it, do it quick. Sometimes that first offer is what sellers are looking for. They're looking for that like good, strong offer that comes in. I can't tell you how many times I've been in a situation where they do let it ride through the open house, but they always come back to the people that made the first offer, oh yeah. And they're always like hey, you know, we we let this thing ride. We're in multiples right now, but but we wanted to give you guys the chance, cause we really liked you when you were the first offer and, in all fairness, you came in really strong. Yeah, right.
Speaker 1:I don't understand. People wait to offer. There's no listen. It's going to be multiple offers. What are you? Who are you fooling?
Speaker 2:Who's advising you to do that yeah?
Speaker 1:The one person from a couple of weeks ago that never had a chance to offer was that a multi-unit Cleveland. He called me directly and I'm like first off, I can't speak to you. He's it's like we said this, this and this and this. I'm like, hey, man, you know you want to call me in a conference call with your agent, I'm totally fine. So she calls me back and I literally said to her I go why'd you wait? You know why did you wait that you know there's 20 people there. People are talking about writing offers. Why would you wait? Somebody came in, gave us $100,000 over no inspection, full cash, gave me a cash statement. It's going to close in three weeks. Why would I wait for you? Yeah, it's a head scratcher. It's like, well, we're going to be cashed too. And I'm like, I don't know that you didn't offer Again. But that's being prepared, that's being that's talking.
Speaker 2:That's what I was going to say.
Speaker 1:That's talking to you.
Speaker 2:That talking to you, that's talking to me and having a listen. You have to have a plan. You know it's crazy because when I don't meet with a client which is very rare, but you know, I get that call on the weekends, like you said earlier, like why haven't you talked to? Where's your pre-approval in your hands? Oh, now you got to call mike on saturdays and sundays. Those deals never work like they're no they're because they're, they're not ready.
Speaker 2:they're not ready, they're not prepared. They're not even ready to make the right offer that you want them to make, because they don't have confidence in their abilities to perform at a high level with their finances. Some of them do, but I can tell you that you know the people that I actually sit down and meet with I think we're batting like 600 this year on winning multiple offers, which I think is pretty darn good yeah.
Speaker 2:Well, you have a plan. We have a plan in place, we know exactly what it looks like, we know exactly where we're going with it. And look, things pop up. I mean you're seeing it right now. There's more inventory that's popping on that whole like unlocked buyer that's going to come out of the woodworks when rates get down low. Sixes here soon. You think that's going to create more inventory. But it's not. No, it's not. It's a one-to-one trade-off. You know, you're going to see, I think it's, I think it's five to one.
Speaker 1:The wrong way. Yeah, totally, and you know we're, I think.
Speaker 2:What is the number it's like? I think if you get down to six and a quarter, there's like five and a half million holders'm like man you're going to have.
Speaker 1:I was talking to a buyer and they're like what are my rates? And I go, man for your sake. They nearly shut their pants. I go, for your sake. I hope they go up two points. And they're like what do you mean? I'm like dude, you need people out of the market. You get rates go up two points. You're going to be able to like pick off what you want.
Speaker 2:We're seeing it right now. I mean, and again, I don't know what that window looks like, but I think I think I just I was on my way over here, I was listening, because the CPI came out this morning and there's a 57% chance that there's three rate cuts by the end of the year. Yeah, I read that too. So it's like it's heating up, and so you know, my advice to buyers out there right now is that if you're waiting for rates to come down, it's the worst it's the worst thing you could possibly do.
Speaker 1:It's people don't. I don't know if it's like a people that just didn't pass math or I don't think that.
Speaker 2:I don't think people really truly realize that. Maybe they'll hear it on your podcast today, but it is. It is not nearly as expensive to just the closing cost for refinancing than it is to purchase. It's a fraction of the cost. I mean, in some cases we're doing no closing cost refinances, but a typical refinance is going to cost you about 2,500.
Speaker 1:Well, it's probably cheaper than the 30 grand or 50 grand You're gonna have to pay for a house when rates are in their fives Exactly.
Speaker 2:Exactly that too. But you know that's, that's the trade-off right, and I've I've worked out so many different models for people where they're like, you know, we want to rate till, wait, till rates get down to five and a half percent, and then I show them, like, what the value goes up to, you know, while they're waiting for that to happen, and what they're purchasing that now. And the funny part is is that even if rates get out of the five and a half percent, the price that they're going to pay on the new values that are continuously going up is higher than the rate of their payment at the five and a half percent they would have gotten today on a refinance.
Speaker 1:So I don't think people sit back and like really think of things like in a logical standpoint, like, hey, this, this, this. But once again, I think that is the person that comes and meets with you beforehand and says hey, this is our thought process, what should we do, this, this and this. And it's like hey man, you know it's, you know it's. It's the person that I'll talk to and say, like hey man, you know what? There's nothing wrong with it. This buying's not for you, you're a lifetime renter, which is fine.
Speaker 2:I'm really glad you talked about this today, cause this is like it doesn't get talked about enough, and you know, I think people just you know, watch the news and hear about the markets and but they don't hear about the preparation that goes into doing this the right way and winning at a high level.
Speaker 1:And I'm really glad you brought this up today. So think about it it's the most money that most people will ever spend in their lives.
Speaker 2:Yeah.
Speaker 2:The most if you don't prep for it you know, and I think that Well, and also the most money they'll ever make in their life. Yeah, I mean, I can tell you that you know just my mom alone. We just sat down and went down the path of memory lane the other day about her owning a home since I was like six years old and today she's in her mid seventies and her real estate makes up like 70% of her overall wealth. Yeah, there's a study on that too. The boomers are killing it, the boomers are killing it right now.
Speaker 2:So, like you know, it's not only the biggest purchases they're going to make, but it's also one of the biggest investments. It's going to get them the best return over time.
Speaker 1:And I mean, if you make a mistake on that thing too. It's like night and day time.
Speaker 1:Yeah, no-transcript, you can buy the wrong inventory in a certain area. That that inventory just through the demographics are going doesn't make sense. Just through the demographics are going doesn't make sense. I mean, you know, listen, buying a home in Lincoln Square and buying a home in the Ukrainian village 10 years ago, right, Lincoln Square now, I mean it's insane. It's like two and a half million dollars. You know Ukrainian village, you know, maybe you're one one to one five, so like finding Well, I'm in Irving and that's why I'm going up over there right now.
Speaker 1:Yeah, I mean you're going to see two to three hundred percent increases.
Speaker 2:Yeah, yeah.
Speaker 1:Crazy Because you have Lincoln Square, you have Avondale and you and Irving gives you great highway access, blue line metro stops everywhere, you know you have high streets, you've got Milwaukee, you've got the renovation and Portage Park is exploding. That, yeah, that whole area is yeah, it's doing park is exploding.
Speaker 2:That, yeah, that whole area is, yeah, it's doing well and there's nowhere else. I mean, it feels like that you can't get dirt, so irving you can still get. Yeah, you can still. There's a lot of bungalows they're building right now and on my street there's like four new houses going yeah so it's just.
Speaker 2:But you know again, like I just, I'm really glad you talked about this today because I just think it's not talked about enough. And, and you know listeners out there if you're a lender, especially realtors, are always mostly going to sit down and meet with you. But if the lender's not sitting down and doing a deep dive with you and going through your finances, running a budget on you, talking to you about tactics and strategies, it's just a big miss. And I, you know I'm not saying that just because that's my model, I'm saying it because I see it and you see it all the time.
Speaker 1:Well, if you can't cut a check for the house, how your finances are and how you are with your mortgage broker and how prepped you are for that is everything. Listen, man, like I said, you can write an offer for $2 million. If you can't get the financing, it's not an offer. Yeah, I had two fall throughs. Can't get the financing. It's not an offer. Yeah, I, I, I had two fall throughs One.
Speaker 1:One fall through was I have a property in in um in uptown, and it fell through with another agent that fell through with me and my clients. Like you know. You know we had to lower the price. She's like oh, I, you know I got this and I got this. I'm like well, you never did like, just because if it doesn't close, you didn't get, you didn't get it Right. Like someone like I know that's terrible to say and I'm like I was telling her cause she's older. I'm like I'm not trying to be mean. I'm like if someone writes you to offer for one, two, it doesn't mean the property is worth one, two, it's not getting there because it's not worth that. This is what it's worth.
Speaker 2:Yeah, that's a that's wild. Did you wanted to? I don't know. I mean, I don't know if you want to talk about investment properties or not, but Dude we are like well, let's do another one. Let's do another one. Yeah, we're hitting an hour, as it is. Okay. Good, that was an hour. Yeah, wow that was.
Speaker 1:I do want to do that because I had we'll do another one because I have a ton of investment clients but I had somebody come, what ADSCR, yeah, and she spent like five minutes telling about it and I was like what Cause? Yeah, there's a whole, no, doc, there's like for investment, like it's a whole thing, yeah, so yeah, we'll.
Speaker 2:We'll say that for later. Let's say that for later, you know, but I appreciate you having me yeah. And I think, I think, can I give a shameless plug to my podcast? Yes, please do. If you want to follow me. I'm on on YouTube, instagram, facebook, social media, on more than a mortgage. We talk about building wealth and wealth strategies around real estate, and we also talk about things other than that.
Speaker 1:And then what's your insurance? What's your at for your regular? So for your regular Instagram at J Michael Black, ok, and your phone number 773-426-6798.
Speaker 2:Email Michael at J Michael Black Group dot com, number 773-426-6798. Yeah, email Michael at jmichaelblackgroupcom.
Speaker 1:All right, I appreciate you having me on today? Hold up. What's the other thing that my kids always use? Oh, it was developed in Stanford, where they talk to each other Snap, do you have a snap? Do I have a snap? I don't do snap.
Speaker 2:I'm like there's-. I know you don't do snap. I'm like there's. I know you don't. There's way too many things out there to follow. I think I've got enough, so that's all they, my kids just use snap. Really it's like oh my god, I heard it. I heard a realtor this morning talking about she uses whatsapp like for a lot of like marketing. I've never heard of that before, but it was on a podcast I listened to this morning. Whatsapp, whatsapp, I know I just use why do I international?
Speaker 2:It's like an international texting app, so oh, oh that's.
Speaker 1:Yeah, oh that's. You can't trace anything. Oh, if you, I'm gonna tell you right now, if you like. So if someone says to you hey, do you have this, can we talk on this? Yeah, it's a scam. Okay, yeah, that's. Because it's completely cryptic. So like when they're trying to scam people, you can't figure out where it's coming from. So when people say to me I want to do what's, I'm like I only do conversations on a regular phone or email. Yeah, like what my boss is like, talk about that. I'm like well, I'm sorry, find another agent. That's just a total scam. Yeah, it's cryptic.
Speaker 2:It's Well, there's a, I know there's like signal and things like that.
Speaker 1:Someone just bought. That too? I don't. I think Facebook may own that.
Speaker 2:I think Meta may own it. I think you're right. You're exactly right.
Speaker 1:She said that too on there. Meta owns it, it's, it's just honestly it's for criminal activity.
Speaker 2:Yeah, Just let you know, or international cause.
Speaker 1:It's criminal activity.
Speaker 1:So, yeah, so yeah, that's my warning If someone asks to do business on that, they're, they're angling. At some point you're going to get like, have you ever thought about getting into crypto? And I'm like, yeah, bye. Then I just took the app off because everything was criminal. All right, Well, thank you so much. Yeah, We'll, we'll get. I want to. We're going to have part two. We're going to talk about that, because I was like I've never heard of this. I should know it. So I want to get into that, especially since I have a ton of investor clients.
Speaker 2:Well, there's some good, unique, like non-QM stuff out there I think people need to hear about, so we'll, we'll do another.
Speaker 1:Yeah, we'll do another one. All right, thank you so much. Subscribe to the Jason theory We'll have. This will be. This will be our September, no end of August, and if you have any questions with Mike, you can reach out to him or you can reach out to me and I'll DM him and get you guys together. Thanks again for your time and be good, bye-bye.