Getting deep into market conditions!! The change has arrived!
Season 2 Episode 1
In this episode with Fred Glick & Rene Perez, Jr.
An introduction to Fred’s new cohost Rene Perez Jr. and an outline of the new season. Rene, a fluent Spanish speaker, discusses his background growing up in San Diego, attending college in Santa Barbara, and then traveling abroad to Russia. He majored in neuroscience in college, which helps him connect with the psychology of real estate. Eventually, Rene will be setting up a Spanish version of WFRE, and throughout the season, we will have different agents like Renchell and John as guests on the podcast.
Episode one investigates the recent slowdown that Arrivva has experienced with our listing. We currently have three houses listed, and traffic has slowed. Fred and Rene discuss the reasons behind the slowdown. In the last few weeks, there were two holidays, Father’s Day and the Fourth of July, and people are ready to take their masks off and celebrate with family and friends. Clients are not interested in attending open houses or looking at real estate. They are tired of quarantining.
Resources Mentioned in this episode:
We Fixed Real Estate Season 2 Episode 1 Transcript
This is Season Two of We Fixed Real Estate. We want to thank Misty for hosting season one. And now I’m going to be taking over along with Rene Perez, Jr. Let’s make sure I get the junior in there.
Yeah, the junior or the second that also works. Oh, do for DOS.
Yeah, but dos. That’s There’s your nickname the dos.
Yeah, that would be nice. Yeah.
Renee is fluent in Spanish since that’s his primary language growing up. That’s the language your parents yell at you in. Is your primary language?
Yeah, you’re correct.
You know, like me, I had to put up with a Yiddish word that I didn’t understand. It’s the way you talk in front of the kids you talk to in Yiddish?
Well, that’s probably even better, because then you just kind of keep doing your thing. And you don’t know what they were saying. So, you just kind of do you.
But you know, you get curious.
And then words and you start using themselves. I mean, I still use Yiddish words pop out of my mouth every once in a while. I just, it’s just embedded in me, I guess. So. Anyway, we’re supposed to be talking real estate here. But, part of season two is just kind of gonna ramble a little bit. And try to bring everything and what goes on in life and what goes on in real estate and what goes on in law and just kind of melt it all in and chat about it. We’re going to try and review what happened with us the weekend before with our listings with our buyers, where the activity is, bring in some people including a guy that we have, who is in Los Angeles, doing commercial mortgages, but is all in tune with what’s going on in Venice on the ground, a matter of fact, he’s trying to get a commercial property right on the boardwalk financed, and it’s impossible, because of all the homeless situation. So, it’s gonna be good. His name is John, we’ll probably have it edited into this podcast, or it might be on the next one. It depends on when we record it. But it’s good guy, it’d be a lot of fun. You might hear from a woman named Renchell. Rench, we call her. She’s great. She does our southern California stuff. And hopefully, we’ll get her to pop in and say something. But right now, she’s too shy. We have people in Philadelphia too. We’ll get to all these markets, we kind of want to get Season Two rolling and see what it is. So, Rene why don’t you kind of introduce yourself since you’re brand new, and just kind of give people your whole spiel. And then there we go, Yiddish, haha.
Yeah, elevator speech. Okay. So, as Fred mentioned, Rene Perez Junior, or Dos, or a second, however, you like, so I grew up in San Diego, Southern California, they went to college in Santa Barbara, UC Santa Barbara. And then I actually left California, I left the United States, I went to go study abroad in Russia, St. Petersburg. So, I’ve been just filled with different cultures.
Of course, you know, I kind of just keep it to whatever the person that I’m talking to, whatever they say the city is called. That’s what I say. I don’t cause any problems. Yeah. So, you know, my career has definitely taken twists and turns of what I was going to do and what I’m doing. So, I have a bunch of certifications, even from the financial background, to the business background. I mean, my actual major was in neuroscience, which really turns into the psychology of real estate. That’s something that I really hope for to kind of connect with people in terms of making sure that people understand what’s the psychology behind the sellers and the buyers. It’s still a crazy hot market. So how do we make sure that you know, not only do we understand, as we are your agents, but also as people? What is the right quote, unquote, right stuff to do moving forward? So, you know, I am excited to be here. So, I am in San Francisco. I lived in Sacramento for a bit, but I grew up in San Diego. So, anyone having any questions around the California market, I’m ready to answer. You know, so I’m excited to be here and getting season two started in you know, booming for sure. Back to you Fred.
Fred 4:42 (in olde tyme imitation)
Back to you Fred.
We’re regressing already one great thing about what he’s going to do is we’re gonna put together and I’m gonna have him do it. A real estate podcast in Spanish. I mean, we can get these translated and then have some kind of A.I. function where it makes a speech, but it will sound too mono until they invent your really good, cool-sounding AI voices.
Yeah, and you know, that’s really important not just for Spanish speakers, but for any other foreign languages, a lot of our parents don’t understand. I mean, they understand real estate, but they don’t have the resources for that. So, we want to make sure that what we offer really gets to those markets, too. So I am excited to also be a part of those segments of the market.
Yeah, I was just gonna say, I mean, I was back in Philadelphia, before we came out here. A normal deal is like $225,000 then try to get somebody with three and a half percent down, you know, it was a lot of work to get people houses at those cheap prices and then I came out here and it’s just seven figures and up for 90% of the deals. I mean, I’m not setting the prices but it’s good that I came out here to come up with the idea of the flat fee. So, it makes sense and I’m really happy to have Rene aboard he’s a top-flight dude and he comes up with ideas, I love it. So, I see a lot of me in you on you know, not going.
Hey, you know, it happens. If you see us in person, I’m much better looking. You know, what can you do?
Girls, he’s single. Okay?
You know, I do not like to make that public information, but, yes, I am single. So, the editor should cut that out. Don’t! Oh, no, no, you know what I want the editors that keep that in you know, it’s more visibility, you know what they say, not only in real estate but also in life. If you are not visible, you’re invisible. Yeah, actually. So I already messed that quote up he will also.
Tell you about Florida, which is not a market we are in, because, he just so accidentally went to Florida for a couple of weeks. Hey, tell us about that? I mean, this is real estate. Forget all the crazy stuff, but what about the real estate markets down there? Any of them Orlando, Miami, Miami Beach.
So what I have to say is that there’s a lot of I think hype surrounding the Florida market. It’s like oh, we want to leave California and we want to go to the beaches. Long-term-wise, all that fluff. I don’t see it as long-term potential, because of the humidity. Just for someone that grew up in California, you have the beaches, you have everything you need, you have the Mexican food. You don’t really need Miami you don’t need Florida and for those of you that have never been to Disney World, you have Disney Land here in LA. You don’t need it over there. So, for those people that you know, there’s that, I guess, that itch, to go to Miami or Florida in general. It’s just a different world and believes it, or not, as much as people want to complain about California there’s just nothing like California.
Yeah, I mean, I get the dollars when it says let’s move to Florida. They have no state income tax. Movers find that it’s disgusting there. Especially in the summer. You just melt, I’ve been there a dozen times. It’s just the humidity is ugly. And there’s nothing to do and you’re boxed in. You know, especially Miami Beach, just condo, condo, condo, condo, condo, condo, condo, condo, it’s just monotonous. And there are just so many people and it just gets to a point. I don’t know. It’s not for me, it’s for other people. It’s limited. I mean, you just you can build just so many condos because then it becomes a ridiculous strain. They don’t seem to care as much about environmental stuff down there as we do in California. But there’s, you know, there are reasons.
Yeah, now that’s now on my drive from Orlando to Miami. I do drive past Palm Beach now that that’s a market and I’d like to get into how he started these multimillion I haven’t looked into the prices of it. But these 20 feet hedges, right. Amazing architecture.
In the 20s, when the barons of the day, built these houses with the money they had and labor was cheap real estate wasn’t a thing back then. It wasn’t really that expensive to build. So yeah, there’s just some absolutely beautiful, beautiful places, but it’s what happened in the 60s 70s, and 80s. I remember going there as a kid in the 60s to Miami Beach when it was completely all old Jewish people. My grandparents lived there. You know, nice, it was okay, and then South Beach and just boom, kaboom it just the timing of South Beach was just fabulous.
And I do have to say that for all those that make it seem like California has been closing in Florida and everything else has been open. But walking past the restaurants and the shops and the buildings, not everything is fully reopened. So it’s, you know, one of those things that makes you think it’s like, there’s a lot of rundown buildings and things that I don’t think are going to open back, even though COVID continues.
You know, it’s hard for people just to restart they were using their savings to live off of, and, you know, they got to find… I’m sure there are loans and wanting to get into that. That’s a whole again, that’s a whole another show. We’re not a news show, we’re definitely just commentary. Anyway, back to real estate, let’s get to the coast where we’re headed. We were on a call today with a potential seller from Palo Alto. And we both came to the same conclusion. It was kind of funny that the other day when there were hurricanes back east and horrible rain all up and down the East Coast and spotty all over the country. And it was like 110 in Idaho. It was 72 and sunny in Palo Alto, nowhere else. And we’ve decided that Elon (Musk) and, you know, Larry (Page), the boys just came together and said: “put a freaking hole here.” You know, let’s test if it works. And it works. So for no other reason. Palo Alto real estate is going up?
Yeah, boy, you know, it’s expensive, expensive. Even the sun can come to Bay Area.
You get the sun, you pay for the sun. $3 million houses become $11 million houses overnight. Amazing. Anyway, and we kid. Haha. So let’s get to this coast. Over the last couple of weeks, well say three weeks. If you haven’t noticed the market, in some places kind of went off the shelf a little bit, because a bunch of things came together. Number one, everybody could take off their mask in California. Number two, there were scheduled things to do that these people with or without masks could do now, that they couldn’t do before, like, go to a baseball game. Number three, kids were out of school. Number four, it was nice out and so the priority of running around like a maniac and getting outbid like crazy. And there have also been a couple of articles about people who’ve just given up. And it all just came to a head. And it just took a breath. Of course, that’s when we listed three houses.
And to point number five, typically, when there’s a holiday that makes, you know, potentials for families that go see houses, we have two holidays, Father’s Day, and Fourth of July. And guess what people have been in their homes for an entire year. They’re not going to go see houses, they’re going to go celebrate. So, it just adds to the whole. You’ll see more articles about these and they’re starting to come out now where it’s like, oh, the real estate market has shifted a bit. There’s more inventory. There are just more things.
Our friend from CNBC just put one out, saying that the markets cooled off, you know, they work a little with generic numbers. And there was a nice little drop in total transactions and an increase in listings. I mean, it’s general it’s all over the country. But well, we have a house in Piedmont that literally fell off the shelf, everything fell off the shelf that we don’t know what happened. It was one of the hottest markets we had lost a deal there for 700 grand over asking. And we went like three, I think Yeah,
So, there’s also the ridiculousness of the East Bay in the El Cerrito area and Piedmont area where we have these agents who really disgustingly underprice properties right, so.
in El Cerrito, this woman does it all the time. Yep. It’s being deceptive and what it’s doing. It’s wasting time.
Yep. It’s just Chris’s idea that you know, people can afford a lower-priced home, they can actually place a bid. Hey, guess what? the buyers are not going to accept them. So, why do it? why deal with that? You know, and also, you know, we talk about the psychology of it all. You see these properties and it’s like, Okay, well, what’s the point of putting your bid there? I’m being blown away with 500k plus asking so it’s I don’t know, it’s interesting to see. And I’ve talked to other agents, in the city, there’s a lot of properties that are going into a month on the market, which is starting to be unusual for the California market, in general. And these are not fixer-uppers. So typically in a home a fixer-upper that needs to work, that might have a few damages, you know, a lot of needed renovation, you see them, you know, maybe 60 days on the market, but eventually an investor knows of the potential of the home and they buy it. But now even with good homes that are in school, and good nine and 10, out of 10 school districts, they’re there for, you know, almost a month now.
So, you are talking, San Francisco, right?
I’m talking San Francisco, I’m talking Piedmont, especially in Piedmont, that’s where I’ve talked to most of the agents. So, I’m looking at a few houses, and these are three-bedroom houses, 1500 square feet, properties, and, you know, they’re not moving as quickly as they should be. Now, are we going to see these houses being bought up in the next month or so because school season is coming up? Probably most likely. But you know, that’s just kind of what we have to wait and see in the next few weeks.
And that’s the thing, and it’s just hard to tell you. Why, I mean, we just kind of get feels and market sense. And, you know, numbers, that’s kind of all we can go by and talking to as many people as we can. But, it’s so hard it there might be some minutia part of the market. That’s insane right now,
Well, and we also have clients that because the market has been so hot, these have started renting, and these are people who are in tech. These are people who were serious buyers who have looked at least, you know, 10 plus homes, and they said, You know what, I’m just going to rent for a year, see if there’s a short break in the market. And then I’ll jump in later. A lot of the tech industries and I know this, because I do have colleagues who are in big companies like Google and Amazon, Facebook, they’re going to go back to the office three days a week, and two days working from home and starting September. So that new policy of working from home that’s going to end. Now, how do companies transition into fully in office? Well, hey, guess what? A lot of people in tech, don’t like to make breakfast, lunch, or dinner. These companies are going to continue offering catered lunches. And hey, guess what, that makes everybody happy to go to the office. you’re going to see all these companies say like, Hey, we’re gonna offer you remotely, you know, for a couple of days. But if you come you know that incentive, we’re going to offer you catered lunches, these $5 sandwiches, all yours.
You will remember them. And so, you know, let’s say you did that you rented. Let’s say we had a couple who were moving here from Jersey, they had two girls, they had to get him in school, we understood. We tried couldn’t find anything they rented. Okay, so now I think we’re kind of in a market plateau in the Bay Area because we’re kind of seeing prices, everybody’s kind of coming down just a little bit, just a little bit. It’s like the only good thing about this happening to us is walking to the sky has got an overpriced listing. And he’s trying to do it by himself and he just raised the price, so, we’ll have that listing eventually. But anyway, Believe, you, me, I want a market where it’s kind of a balance of buyers and sellers, too many sellers. That’s a big problem. Because it’s so hard to make them understand they have to reduce the price if they want to sell their property. Too many buyers; it’s just your emotional drain that people have for putting in 17,000 offers. Now our average person last who dropped out is like two or three maybe it’s just like Okay, I get it I’m out and that’s fine you know and I can appreciate it. Because, it’s money I mean it’s a lot of money, but anyway that’s what I’m saying kind of it’s going to flatten out and hopefully kind of gets to normal
I mean, I for one I would rather keep the mix of buyers and sellers more of a balance sheet because I don’t know, it’s scary. I did not really have adulthood during the 08 bubbles, but I don’t want to see another housing bubble.
I love the fact that we charge a flat fee because it not only will homeowners understand, it’s like, this is all you have to pay to list the house. But, banks who will take repossessions have commonly given very lucrative commissions out to the listing agents to sell their properties when they don’t need to do that anymore, we get one corporation foreclosures to understand, hey, it’s a fixed fee. Here it is, boom, they know what it’s going to cost them. Do you know? Also, if you pay the buyer broker a fixed fee, then they’ll be thrilled to do it. Because this will be a time when the only buyers will be the investors. and that happens, and I’ve been through two or three of these. So, you just got to adapt. So anyway, anybody in a corporation listening do listings for the foreclosures, fixed fee arriva.com, we should throw in a commercial now, but I don’t want to get too showy. Anyway, back to the market. Now here’s in contrast to the San Francisco market is the San Diego market. Your basic four-bedroom, two-and-a-half-bath suburban house with a pool in the backyard in a nice neighborhood and a nine school district is still having deadlock. It’s like because it’s the Tour de France week, I’ll give one cycling reference. It’s as if there are 100 people on a bike and you’re trying to win the race, although the road just gets thinner and thinner and thinner. So in the end, only one bike can win the race. Only one person can be in position number one. That’s what it’s like. And it’s just human carnage. It just has to be human carnage.
Yeah. San Diego is a beautiful city. It’s a beautiful place and a lot of things are coming up.
healthcare period. An amount of health care companies are coming there. They finally figured out San Diego’s got literally the best weather in California, because of itself. And that’s it. And you know, the five is there and divides everything. period
For you got the 5, 15, 701. I mean, you have the border, you know, the biggest border in the entire I think it’s in the world. I think it’s the most heavily trafficked. Yeah, I think it’s a heavily trafficked border.
Yeah, pre-Covid. But even now, I mean, you have these people who are just itching to get back into the country just on visas to go back shopping. I know it’s not real estate specifically, but still, it’s still…
Pent up demand and travel. I mean, free trade travel Canada. You know, basically, you can’t go between the borders if you’re a normal person, Mexico. No. I mean, so when all this is done, and when the rest of you get vaccinated to make it easier for all of us. That no commentary there.
We’re gonna need our booster shots soon, though.
Well, yeah, one of the companies I saw it is dealing with booster shots.
they’re all gonna be, it’s all about the money. Come on, we’re all gonna get booster shots. Whatever they give us, it’s fine. It’s fine. We eat so much crap. Anyways.
So Rene has demonstrated what he was eating. And I think that’s where we started here.
So yeah, I’m on one side of chicken wings. And on the other side, I have See’s Candies. There you go.
There you go!
What is there enough to love in here in the States? you have everything. And all these malls. That’s why I’ve been going to the malls the last couple of weekends. And I mean, there’s a lot of activity which brings it brings it back to the real estate market. All these stores are actually open. So hey, guess what? movie theaters? A lot of actual high-caliber movies are out? In theaters, right? So, why would I go see houses?
It’s like a pipe burst or something happens. The same thing, like with a car, something happens. And that’s when you decide. I just got to do it. I gotta get rid of it. But the demand-supply ratio if it was 100 to one is now I don’t know, we’ll call it 57 to one. You know, it’s, it’s what do you think a scale of 100.
I go a little into the 70s. you know, it’s like, if we knew what the market was gonna tell us in a couple of months from now, we would all just be taking a breather and relaxing. Just saying. So, I actually just got off the phone with one of our clients and the question is: okay, we’re going to have the offer date being one week from now. We have a listing for a week. We’ve had it for a week. We’re gonna have another weekend. What if we don’t have any offers? Okay, well, what if you don’t have any offers? That’s just a – that’s just a part of the market. And that’s where the remarketing, and we discussed where we’re gonna move forward. Now, Fred, what do you think we do in these types of situations? You have a hot market, you have a house for two weeks, when which in the past, it’s worked for just having a house for two weeks. How do you label it?
Look in the market used to be Show me the money, it’s changed from “Show me the money,” to “show me the value,” I think is probably the way to say it. So you got to come down to a price that buyers are willing to pay. The thing I tell every seller is: it’s not about how much you want, it can’t be. Because somebody else is writing the check. Somebody else is saying that has a value to me of x. And that’s it! So, you know, I had people at the open house, you know, ask me what the offer date was. Do we have the disclosures? things like that. it’s being downloaded a few times. There are other houses on the market, and there is a little increase. So, it’s every house for himself, so you’ve got the value. So if there are no offers, that means your price is too high. Now, I don’t understand why people just don’t come in and make an offer. There’s this thing of like, you have to wait until the price is lowered to make an offer. We can go lower, but I want to pay $50,000 less, I’ll put in the offer now. This is what it’s worth to me right now. Take it or leave it. Sometimes sellers will just say you know what I’m done. Take it.
I think that might be just because the buyers that are into the market now, have been in the market for all this pandemic. So like they’ve been in the market since February. So they’ve probably gotten their minds blown away by how much they’ve lost bids. So, they don’t even want to get into the hassle of underbidding. So, it’s kind of a psychological dynamic of I know that this has been in the market for a while.
Okay, come on we have buyers, they’re business guys, they get it. I mean, it’s like, I don’t know. People, I’m really not talking about our clients, I’m talking kind of, you know, the other buyers, the other agents, and do the agents even say to people, hey, make an offer lower. Or call us and say look, dudes, what’s up? And, you know, I don’t want recalls like that.
So there’s this method of negotiation or some kind of unwritten rule that says you can’t do it anymore?
Unless you lower the price. or lower the price, I’m not making a move.
You know, it’s funny, you know, when you want agents to not call you asking stupid questions, they call. But, when it should be a call, that would make sense. That’s when they don’t call.
It didn’t take him long to learn. That’s what I love now. Yeah, you know, I don’t get it. So I can’t answer the question. But the best thing I can do is present the property is for the highest and best return. That’s my job. Get the most money for the people. Put out the best product I can. So, I dunno should start having podcasts at the house? There we go.
So here’s my idea.
Video. Meeting so yeah.
So apart from what I’m doing, I’m still learning how to use our drone. I’m trying to learn how to use it inside the house and also your thoughts on everything. It’s done pretty well. So, sooner rather than later. We’re also going to have this podcast be recorded through our properties while we’re walking through. I just think it makes sense.
I didn’t know you got that far with the drone?
Oh, yeah. Yeah, it is. Just, I love their projects, you know, from 3d to aerial shots. It’s from building bots. It’s a lot of work that we do here at arrivva.
We also have our own matter port now Oh yeah, we’re gonna be doing our own matter porting.
Which it’s crazy how much, sometimes, we overpay for these things. It’s quite simple. It’s quite easy to do so I guess, maybe, I should see that before I actually record it.
Basically Apple’s system of lock you in and they got away with it.
Which also, it’s ridiculous how all these devices, force you to buy Apple products. So I can’t actually use the Matterport camera or the drone. If I don’t have an iPhone or an iPad. That’s ridiculous. I love my Samsung phone. So anyway, I don’t want to be marketing apple in our podcasts, but I don’t want to be the anti marketer of Apple.
I am one of those goofballs with two phones, I have one for me. I have a Google 5a 4g and I got an apple 12 because you know, there’s sometimes there’s an app on one side, that’s on the other that actually need for business. First of all, and second of all, it’s like, I don’t even publish one number. So if you call me on there, I’ll know it’s spam. Nobody calls me on it, which is great. And I have a number block going out. So I am an anti-spammer person. I’m one of those. I just, I just have fun with them. They’re my we just kid, my spammer friends. Especially all the agents By the way, agents, please do not blast email us a flyer about your new listing. We have clients that can read the MLS really well. It’s called Redfin.
Anyway, you would think they can read your thing and people can read.
The thing is, I’m not being arrogant. I’m just saying, I don’t want to spend my time having to waste my time going through your emails when I could be working for my clients, I don’t make any money looking at what you send me, I need to work for my clients. Time management.
So I mean, the other interesting thing is, even with emails, agents pick and choose what to do with their email. Sometimes they’re full-on ready to send emails with this generic listing. But then when you ask a question about the listing, then they take two-three days to respond.
are the assistant supposed to do it? And she’s only part-time?
Yeah, pick one system. Our email is our first name at arrivva.com. Don’t give it to the spammers. But you can get to us. Yeah, we keep it kind of off the site, because the spam would just be insanely insane. That reminds me, remind me to talk to you about that. Um, anyway, he, you know, here’s another thing, let’s just branch off to this. And he talked enough about my one more market. And then I have something else go into Yorba Linda, California, in the heart of Orange County. houses, they’re like, Yay, 800 to 900,000 a million. It’s insanity there. It’s a nine School District. And there was an agent. I don’t even know what happened. But somebody’s brother-in-law and wife contacted the agent, and he’s the buyer. And now this agent claiming that he’s his client. And there’s like, 52 there are no more showings. It’s only been up for like three days. Like it’s insanity there, too. So you’re in Yorba Linda. Godspeed to you!
You know, it’s, there’s just so many clients out there. It’s just amazing how these agents have to be trying to pull clients away. If you want to pull clients away and bring value to your clients. Easy.
Yeah, here’s the thing when I was going to talk about it that more agents somehow have to understand their individual markets. What’s happening? If everything is going for 100 to 150,000, over, your client says, I want to go 25,000 over, you literally got to tell them, Dude, it’s you have no choice. You have no chance. And a lot of agents especially in Southern California, love to brag we’ve had 42 packages downloaded and 18 offers so far are you putting in an offer? I never answer that, it’s insane. So if you’re never going to be able to close the deal, oh, and here’s and here’s the second part, if you’re never able to close the deal on price, forget it. The second thing is a mortgage. Okay? Please understand this. I beg of all of you, no matter where you go to get pre-approved. You must in a seller’s market like this, get a real pre-approval and what that means is you give the mortgage people your pay stubs, your bank statements, your W2s, whatever they need. They give it to an actual underwriter who works for them. Who actually says yes, we promised to lend this person money. They gave us all this documentation it’s still subject to an agreement of sale and an appraisal. That’s what you need in order to bid because then the only thing the lender needs to do is an actual appraisal of the property. That’s it. They’re done. Yeah, there are few other things, but I’m saying they can do it a lot quicker and close a lot quicker. Because, if you went to a mortgage broker, who we are mortgage brokers, and you got a Fannie Mae approval, we can give you a Fannie Mae approval, that’s called a pre-qualification. That means, yeah, based on what you told us, it’s okay. Mortgage brokers are not allowed to write out a form that says, Yes, we guarantee to give you money, because they’re not the people with the money. So, what we do is we send it to a company. We’re using Flagstar bank right now; to give us real pre-approvals. And then we give the real pre-approval to our buyer, and everything goes through us whether they’re going to they can’t get the same prices, nobody leads, goes to the bank directly. So what do we care about, and it gives legitimacy to your approval. So you need a really full, legitimate real approval. So you can be able to cut down the time that it takes to close and get into an appraisal.
And so not only are you cutting time into your closing time for your property but let’s say that you’re in a bid situation, we as agents, you know, we look at, you know, different bids. And if I see a pre-qualification and the pre-approval, I’m going to go with the pre-approval, and that’s why it’s important in this seller’s market. Yeah, sure. If it’s a buyers market, there are just tons of tons of houses, and every bridge is fighting with everybody. Go ahead, Fred.
Okay, here’s the other important thing, you’re going to have to waive the mortgage. If so, what that means is, if you do not get the mortgage for some reason, any reason, too bad, you lose your deposit, and your deposit is 3% of the sale price in California. So, million-dollar house $30,000. Do you decide to go with a mortgage broker? Who says, Yeah, don’t worry about it. They send your loan to a lender, something about your income, let’s say you’re one month short of using your restrictive stock to qualify. So if you close one month later, you could because the guidelines said it has to be two full years. The guy was sloppy, he only saw a year and 11 months, guess what you lose $30,000. These are the things this is why the underwriter works for the people who lend them money. So hello, they have to stand behind the underwriter. So that’s a big difference. And also, by the way, you’re waiving the appraisal. So if the property doesn’t come in, bummer, it’s not the seller’s problem. They don’t renegotiate, we just had that issue. And my buyers asked us to try to renegotiate it’s like, what? Read the contract, they don’t have to do it.
Unknown Speaker 37:58
Have to do it. And do it to that point, friend. That’s why when you’re bidding on a property, your bid what you think is fair in your mind, right? If you think it’s overpriced, and you think it’s just too much money, then you go on to the next house, you know, until you feel comfortable overbidding. Now you want to be google it on the safer side, just kind of take a taste of the market, you’ve paid a fair price or what you think is a fair price. And then you kind of get the feel of it. We like to tell our clients, you know, what? If this is your first time in the market, maybe submit a deal that sounds good to you. And then you get the feel of what it’s like, you know, and we also call listing agents to see hey, how close were we and they get back to us and you’re like, Hey, you know what, you’re on the lower end. And, you know, hey, sometimes agents can be a little sneaky and not be, you know, completely honest. But when we you lose a bid, and it closes, and then you see the closing price, then after a month that you submitted the bid, then you can kind of take a feel of Okay, you know what, yeah, I didn’t bid at the correct price. I have to be a little more aggressive. And it’s just like that perfect area, okay, I’m being aggressive enough. But at the same time, I’m comfortable with the price that I’m paying, and I won’t feel bad if it later doesn’t appraise, for example, you know, it’s one of those risks. I mean, everything is just a kind of weird way. Yeah. Weirdly average risk. Yes.
That’s a term used. I don’t know, five years, 10 years now we’re gonna look back and say, you know, wow, we thought those prices were crazy. Look how crazy it is now, but in order to do that, you got to keep it good. The problem is, this is an epicenter for money. I mean, this is what people do deals with People have IPOs there are all kinds of stuff going on. There are all kinds of people who have a lot of money doing a lot of things and spreading it around. It’s a question of how much they want to pay people to do it how? You know, it seems that the supply equals the demand.
And to go to that point. So as you see the market mature a little, and there’s just no more room in the cities. Hey, guess what, there are places like Tracy, we haven’t even talked about Tracy, where you leave the area, right? You leave the epicenter of all that tech and all that IPOs. And Tracy, which is, for those of you that don’t know, it’s about an hour and a half or two from Fremont. Right? Is that an accurate representation?
An hour and a half? Yeah. It’s nothing you want to do every day.
And still, you have people that say, like, hey, so I’m going to be living and I’m going to be working in the Bay Area peninsula. But I’m looking at properties. And Tracy, you know, and first of all, if you’re thinking of doing that, I recommend you to take that trip a couple of times during the week, to find out how that one hour and a half turns into two and a half hours because of traffic.
Yeah, exactly. Do it at like seven o’clock in the morning. from there to here.
Actually, that reminded me so I actually spoke with an agent who told me that they have a client who would have to get up at four in the morning, to get to the office around 7:30. Just to make sure that they got there on time. but you see in this area, Tracy, it’s there’s just not that much to do. The weather is insanely hot, and the houses are still being bid 15% plus. And if you’re looking at even new construction, new construction that has a waitlist of 200 plus people, I was quoted 250 plus. I’m thinking, you know, we’re gonna look 510 years from now and just continue to see this price going up because people need to live, people want that single-family home, right, that’s, at the end of the day, that’s what you’re looking for. That’s what everybody should be aiming for. And, hey, when you’re in college, you’re used to living with 10 plus people, well, those 10 plus people, each of those need to have a single-family home. So, I don’t know, I’m not too much worried about the appraisals that don’t go the way we would like them to go. But you know, it’s something to think about, you know, if you’re worried about that, there’s still younger people looking for single-family houses in the future. So the market will be there.
Let me just throw this out. If any of you are agents around the country, just want to let us know what’s going on in your market. Send us an email podcast at arrivva.com a-r-r-i-v-v-a.com. And just let us know, because we’re gonna try to do this once a week, kind of right after the weekend, kind of preview what’s coming up this week, if anything. So could be fun. So anyway, coming up this week is worth about 40 minutes now we don’t want to bore people. We’re really just going to do open houses. It’s kind of like we are at this plateau. There’s just nothing to do. It’s like the buyers are gonna be there and they’re not. We’re kind of waiting for the sense of urgency to restart in people. I don’t know what that trigger is. But I think we’ll still have decent flow this coming weekend. In Norcal, I’m probably the same, maybe a little fewer people than we did last week.
Actually, actually think the opposite. I think that this weekend’s going to be much better in terms of people showing up to open houses because finally, people have that break, right? People are finally getting out of vacation mode and ramping up to the next school year. If you go to Target and all these stores you start seeing you know as early as July that back-to-school gear. So to me, it’s more of an end game situation where it’s like Okay, this next week we’re ramping up into the end of July here where we should start seeing a change in the tone of people leaving vacation mode and getting back to business. So maybe a little too optimistic. We’ll see in next week’s episode if I was right or wrong.
The difference between Rene and I is Rene gets out in the world. So I just like being old and that’s fine with me. But I’m gonna throw this out to you because I’ll keep pumping this idea for forever until it works. But there will come a time and it’ll work. In a lot of the world, people don’t own actual real estate. let me explain. Or I should say they don’t own the real property. I’m in the Real Property brokerage business, I’m not in the real estate brokerage business, because all real estate is the physical house, let’s say on a piece of land. What real property is, is that real estate plus the land plus anything under the land and anything above the land, so it’s property rights. having said that, I think there will come a time where they’ll do like they do in a lot of parts of the world where we’ll start seeing people buying houses, just literally buying the real estate, but not buying the land. So people will retain the land and maybe get a fee. And I’ll end up being a lot cheaper for people to buy houses. So take a million-dollar house, let’s say 200,000 is the land value, the house is worth 800. Probably, in this case, it’s the other way around. But that’s a different story. I’m just trying to give an example. So someone could quote-unquote, sell the house for 800,000, you can get a Fannie Mae mortgage, even up to 95% loan to value, as long as the land lease, that’s what it’s called when you lease it, take just the real estate, you’ve leased the land, and you’re gonna pay a fee, maybe I don’t know, $1,000 a year to use the land, because the people got the bulk of their money out. So it’s just a maintenance fee or something, who knows. But Fannie Mae says, as long as you get a 40-year land lease, they’ll give you a 30-year mortgage. Simple. So it’s already done, the financing is already there, everything’s in place to be able to do this. This makes it so much cheap. And it also allows people who own property here who have to sell or want to sell for some reason, still have kind of their foot in the real estate game. So I don’t know, 10 years from now that land be worth 300,000 350,000. And they could sell just the land.
Can the owner of the land choose when to sell if someone owns that property, or do they have to talk to the property owner?
So here’s what’s going to happen. There’s a lot of little things like that. So say you want to sell after 12 years. Now the land lease is down to 28 years, the new people need a Fannie Mae mortgage, well, couple of things can happen, they can buy the land, and the real estate, just negotiates the seller price and put it into one deal. Or the seller, the owner of the land can give them an extension to make it 40 years. I’m sure there’ll be a fee for that. But these are the nuances that can be worked out. This is done in the commercial world, and in the residential world around the world. So I’m sure these details have come out. I’m just trying to give the theory to people sticking it in their head as to how to be able to, you know, solve some of this craziness. You know, there might be some sellers who want to do this. So I don’t know 5% of the sellers wanted to sell like this. That helps a lot of people getting houses. So anyway, 49 minutes into this.
We got a good 15 minutes of good podcasts. I used to do a bit of radio back in college and this is the first time that I’ve been back in the studio I guess recording ha ha
We have something in common I was a station manager or something, like I was in some management capacity and on-air personality at WFDM 690 on you, ’re A.M. dial
I will look up your old radio shows then. I’m sure they have those Recordings somewhere. But yeah, no, my thought my thought is..
They deleted my old Facebook account so you’ll never find it.
Okay, because it was important. Yeah, no, my thought is eventually we have these podcasts in the Stanford studio. Once everything opens up. Yeah.
You’ve been there when I did. Yes. To do CNBC hits over there.
Once I go back to school, I spoke to someone I didn’t like the Berkeley one. We should probably delete this part. But he and I went to I talked to the Stanford people, and they’re like, Yeah, well, right now it is summer and we would connect to the person when school starts. And you know, that way we can actually have an actual studio higher-end stuff going on. Better edits.
We need to get really good guests.
Oh, yeah. But I mean, Palo Alto, the guests are everywhere. And see, it’s like, it’s like the Fed printer.
The problem we’re what we’re trying to do with this podcast is kind of give you everything you need to be in the residential real estate market, either selling or buying. We’re primarily in California. We’re working the Seattle, Washington market, Philadelphia, the five County area kind of in towards Philly. And we’re coming to Austin, Texas real soon, y’all. So beware, and eventually, when the paperwork gets done in Georgia we will venture out there.
I was on the phone, but which by the way, I’m really disappointed with the Department of real estate, I was on the phone for about an hour and 45 minutes before I hung up. So tomorrow morning, I’m gonna be on the phone as soon as they open. And hopefully, I get an answer. Because
Even before they open, I’m sure it’ll
Know this reminds me of the of the IRS days when you’re trying to call EDD for the unemployment. And when do they get back to you? That’s ridiculous. Anyways, did you know that the EDD became the most hated organization or department? So it used to be a DMV is, you know, by far the most hated department, and at some point on the ranking EDD most hated department. It’s just insane.
But there are so many jobs that would be lost, it was catastrophic. So, ladies and gentlemen, that’s the answer to why you have to put up with this, from companies different story, you’re just cheap. But we can have another show about that. But we’re not going to.
It is about just kind of adding tech to everything, you need to automate things, you need to make it simpler, there’s no need to have a person involved when you can just have some bot help you. And then when the process gets a little more complicated, then you get the human involved.
But there, I have looked at and I thought this whole COVID thing was the end of analog and the beginning of the digital age completely, but they’re still analog people out there. And I feel sorry for them. I mean, they just, they don’t know, you had a guy on the phone today, he wanted to come to our office, it’s like, dude, it kind of doesn’t work that way anymore. You know, it’s, I feel bad for them. And, you know, but you got to service them. So we try our best to come to them, actually, you know, we’re happy to but he just, you know, just wanted that. But we have people that we deal with sellers buyers who just text, you know, we have a number. And then we just text those numbers. And that’s it. It works. And we connect it to our slack. But, you know, we try to stay in slack with our friends at Slack, we have some things we’d like from you, but it’s been going well.
You have to connect with people from Slack, maybe a podcast with them every night. I’d like them.
Find the slack, person. Real estate in slack. Because it’s interesting. I’m happy to like, tell you how we work. This is not rocket science. It’s just knowing how to use slack. It’s a pleasure. But oh, we’re not supposed to tell our competition.
Oh, no! They’re gonna get away from AOL emails, and they’re gonna actually get regular emails. Yeah. You know, I feel like it’s like, it’s like when companies just put all their information out there. You know, sure the information is out there. But there is still have to be the actual people to want to move forward. In the real estate business. I gotta say, I’ve only been doing this for about a year. And I don’t see people wanting to change their ways. I don’t see people trying to change their old ways. So it’s astounding if you’re listening to this podcast, and you’re in your early 20s, and you want to learn real estate and you want to be part of the transformation into tech and real estate, please email us.
Especially if you’re female. Oh, you kids have all the fun.
Oh, yeah, LinkedIn and Instagram, all the rest?
Well, I didn’t want to discuss that, actually. So here are my thoughts before we leave. So I do not believe in dating apps. Because, you know, two, three years from now.
Because the federal shopped.
I guess that too, but no, the thing is, in my idea, you meet someone, and you have a story of how you met that person. Right? And I don’t want my introduction to someone’s like, Oh, yeah, I met them through an app. And I don’t care that that’s how most of these people did it
It’s so romantic.
Know what, maybe I already met, you know, my girlfriend at some event. I don’t even know. That’s, that’s what I would prefer, you know, we were at this. We’re at this conference. And that’s how we met. not on some dating app. And then we went to a bar. And that doesn’t make sense.
Ask me how did I meet my wife?
How did you meet your wife?
But see, look at that. I mean, you laugh. And it’s funny. It makes sense. I mean, it’s the general consensus of how people meet nowadays, especially through COVID and I respect that.
We actually did it by phone for like, three weeks. So yeah. You.
Lucky, lucky you.
I know I try
which is hard to believe. Because if I would have seen you on Tinder, I would have said swipe left instantly. So you are probably using Photoshop yourself. Just a few Apple iPhone edits
I saw a picture of me on CNBC one day, it was like this picture. Yeah, we’re gonna get a haircut soon, too. I’m just gonna probably do a full face. Okay, now we’re done. People who don’t know,
This is a podcast, we’re just cut this out. It’s fine.
Freeform Real Estate. I don’t know where you’re viewing this. So we can point and, you know, say yes. And go below and subscribe. And you know, the drill. I mean, just you want to do this, but we’re gonna try to keep it super light. Next week, we’re actually going to have a guy on, john from Southern California, I mentioned because it’s been an hour so far. So do it next week, talking about Venice, so that should be cool. We’ll do it then. There’s talk about Yeah, you can google and read about it for now. But he’s kind of on the ground so he can give you a little more. A little more detail on what it really smells like. Can’t get that on Google. The smell machine has not been released yet. Not yet. Not yet. It’s coming soon. No. Did I just say that in there?
I know. I think you know something. I think you know something. And if you do, please tell us all in the next episode. Don’t you want to hear about that just waiting until the end of the season when Fred discusses what Google’s working on?
We’re not even talking Silver’s the new AMC, or what’s that stupid saying?
I need to buy some silver.
We’re not financial advisors.
Exactly, yeah. I only need one more course in order to be a financial advisor. So maybe I should do that. I don’t know. We will see, anyway.
In the middle of everything I froze. Well, anyway, everybody, have a good week. We’ll chat next week. Cheers.