Why Buyers Walk Away: The Pricing Mistakes Sellers Keep Making With Fred Glick Of Arrivva

Drew Thomas Hendricks00:00:19

Another episode of We Fixed Real Estate. We’re gonna start on why it may be best for you to not buy a house.

Fred Glick00:00:25

Roll the videotape, as they would say.

This guy is my new favorite TikTok.

tylerstanleyre00:00:30

If you are truly currently debating buying versus renting forever, you need to watch this video. This is truly what I believe to be one of the best buy versus rent calculations currently out in the marketplace. And I just wanted to quickly walk through the logic and how the calculation actually works.

So just to give it a little back bit of background of what the problem I was trying to solve is a lot of these calculators to do these analysis have the basic information and advanced information. But I wanted to start to challenge what these calculators could actually do with a lot of the what ifs that are questions that people often have when they’re debating on whether or not to actually rent or buy a home.

And just to get into the results, payment on whether or not you are saving by renting or buying will be right here.

Fred Glick00:01:20

He sat there and he walked you through it. He did a spreadsheet showing you why you shouldn’t buy a house, and instead you should rent and invest, and it’s like $4 million difference.

Drew Thomas Hendricks00:01:34

Now explain it, Fred.

Fred Glick00:01:36

How’d you like that one? I love this guy. It’s my new favorite TikToker. I mean, he is just, nothing exciting in terms of he is not gonna charge, he’s near George Clooney girls, but I love him. He is great. He is just a dude who gets it and he is just showing based on data why you shouldn’t buy a house. So this is hurting my own business, allegedly.

Drew Thomas Hendricks00:02:05

It’s not just depends, it’s impersonal, I mean, everybody’s circumstances are different.

Fred Glick00:02:10

Right, right, right, right.

Drew Thomas Hendricks00:02:10

In this scenario, you shouldn’t buy a house, but you can change the data and…

Fred Glick00:02:14

Yeah. So his idea is, “Look. When you buy a house, these are all the costs you’re gonna have.” And yes, you can switch around and he even said, hey, just send him a DM and he’ll switch around the data for you. You should really just release the spreadsheet and let us all play with it.

But you get into a house, you gotta buy furniture, you gotta buy things to repair it with. You’ve gotta buy new windows, you gotta eventually replace this and that and the other thing. And it all adds up and yet appreciates but he did some guidelines on appreciation, you know, very conservative, but he said also rent and invest. And if you invested, you know, S&P 500. So it just goes into the whole thing of how you can invest. And I think he ended up with about $4 million more if you didn’t buy a house.

Drew Thomas Hendricks00:03:04

Wow.

Fred Glick00:03:05

After X number of years. I think 30, that was 30 years, I think. But it was interesting. I mean, that doesn’t even take consideration. If you rent, you rent for a year, you go somewhere else with a house, you’re stuck and you got costs going in, going out, and et cetera, et cetera.

So, it was pretty cool. I enjoyed it. I enjoy him. I’m following him. Doesn’t have a lot of followers and those are the fun people to find when you get them first.

Drew Thomas Hendricks00:03:32

That is fascinating. You gotta run the numbers yourself and make sure it makes sense for you. And if you’re not handy around the house, maybe a house isn’t for you.

Fred Glick00:03:40

If you can’t afford to hire the guy to come in and do it, and by the way, you can get $15 off TaskRabbit, you may as well do a commercial for them.

Drew Thomas Hendricks00:03:49

Yes.

Fred Glick00:03:49

And we’ll publish the link right here.

Drew Thomas Hendricks00:03:52

Now, let’s say you’ve gone ahead and you’ve bought the house. Now you wanna sell the house. What do you have to say for those people? The first weekend comes and goes and there’s no offers.

Fred Glick00:04:00

Yeah, I mean, it used to be buyers were falling outta trees and houses were flying off the shelves. We’re in the second worst time of the year to list the house, which is July, August, especially July.

July, people’s brains are completely somewhere else. I guess it’s not just the Tour de France, but you know, there’s plenty going on. People were seeing a little more on the market now. And also you gotta understand some of the pricing sometimes.

What’s interesting is some listing agents and sellers will say, “Okay, we’re gonna list the house for $2 million.” And then it takes them two months to get the place ready. And the seller says that, “Yeah, I wanna list it for $2 million ’cause that’s what I want.” But the comps have changed, the prices may have come down a hair, and maybe it doesn’t make sense to listed at 2 million, listed it 1,850,000 or 1,999,000. But if the market shifts, you gotta know it. So you really have to make sure and wait the price of listing until literally the date you go on the market. ‘Cause you need to know what the comparables are. Because you have to think like a buyer. What’s a buyer looking at? You know? Just because your pictures look nicer is not gonna get them in because the price is higher compared to other stuff that’s in the market. They’re gonna look at everything. So you gotta make sure it makes sense.

I also tell sellers, go out to the open houses to the other houses. Take some, take tours of them so you know what your competition is. So when someone gives you an offer and it’s lower and you know, then you’ve been to the other house and yeah, you understand that kitchen is a lot nicer and a lot more spacious and it makes a lot more sense for people. You don’t wanna do it as a seller, it’s just a thing. It’s just, this is my house and I designed it beautiful. But just like our friend Tyler, you gotta be realistic and logic and use the data. So that’s what we try to do.

This leads us right into Reddit of the week. So the person hired someone to sell their house, they didn’t sell it. Now they figure they’re just gonna get their own license and sell their own house. Or buy their own house.

Drew Thomas Hendricks00:06:21

Or buy their own house.

Fred Glick00:06:22

Yeah. People like, yeah, you sort of had it right, but anyway. Guy puts on Reddit that he wants to be his own agent and buy his own house. No experience, just thought, “Hey, I’ll save on the commission.” You know, he thinks he has what it takes. The short answer is no. You remember the line about a fool for a client, you know, for attorneys, same kind of thing. You don’t know the forms, you don’t know how to fill them out.

You don’t even know what you’re negotiating. You’ve never done it. You don’t know how to, what to schedule, how to do it. Yeah. You can read on the internet kind of how. But the agent can take advantage of you and you don’t even know it. Like, here’s an example. Oh, in a county where normally a seller pays all the closing costs for title and escrow, they make you pay it. Little things, but it all adds up and when you have to try to negotiate, inspections and things like that. It’s crazy stuff. 

So the other thing, and this a lot of agents don’t realize,  when they list their own house or when they represent themselves as a buyer, it’s right there on the contract, their errors and emission insurance is not applicable. It will not cover you for mistakes you made on your own listing. Because, you know, I figure the actuary tables say that there’s been more fraud that way, from my house, and there’s the ins and outs. And so they just said, ‘No, we’re just not gonna cover you.” So a lot of agents just don’t get it. And they could be in double, they could be on double secret probation.

Drew Thomas Hendricks00:08:09

Oh, and that’s an agent actually trying to sell their own house.

Fred Glick00:08:13

Yeah, yeah. Or an agent representing themselves to buy a house.

Drew Thomas Hendricks00:08:17

It’s kinda like a doctor. You don’t operate on yourself unless you’re on tv.

Fred Glick00:08:20

Yeah. You know, it’s 1831 and middle of nowhere and you have to get a tree bark and have to cut open to get the,

Drew Thomas Hendricks00:08:33

You’re better off having another doctor do it.

Fred Glick00:08:36

Yeah, pretty much.  Pretty much. But that’s TV in and movies and now AI makes it more wonderful. All right. Enough of that.

Drew Thomas Hendricks00:08:50

We are now at the shit’s getting real segment.

SB130.

Fred Glick00:08:56

Alright SB130. You know my love of condo management companies.

Drew Thomas Hendricks00:09:03

Oh, AB130.

Fred Glick00:09:05

AB130, yeah. Assembly Bill 130 as oppose to Senate Bill 130. So the story was, okay, you can see the video if you want, but it’s no big deal. The bottom line was a woman inside her unit, yes, inside her unit, put up a door. And one of the Karens who was on the board of directors walk past her house or something and saw it and then had her fined and fined like $500 a day for doing it.

I mean, it is just. Right. Exactly.

Drew Thomas Hendricks00:09:39

Are you allowed to do anything you want inside?

Fred Glick00:09:42

I don’t know the rules of this association, but, but this AB 130, it’s gonna pass, it will limit the amount of fine that an association can charge. It’s a hundred dollars for the fine period. That’s it. So the, you know, it’s beating down the Karens of the world. I love it. ‘Cause it’s 99% just so stupid.

Drew Thomas Hendricks00:10:06

Oh yeah, we had a, our friends were getting fined like a hundred dollars a day or a week for their week for the plants in their front yard. ‘Cause they weren’t approved.

Fred Glick00:10:15

Yeah.

Drew Thomas Hendricks00:10:16

Different.

Fred Glick00:10:18

Okay. Crazy.

Drew Thomas Hendricks00:10:21

Now it’s just, you can’t have a recurring fine. It’s just $100 if you, so couldn’t you just pay that fine and hasn’t already paid the fine and it changes.

Fred Glick00:10:29

It hasn’t passed yet. So yeah, who knows? But good they’re doing something about it.

Drew Thomas Hendricks00:10:36

It’s gotta be, there’s gotta be more to it. ‘Cause I can see that almost being like a building permit. You wanna do something that’s against HOA, you just pay a hundred dollars and you’ve already been fined for it, so they can’t get re-fined.

Fred Glick00:10:47

Yeah.

Drew Thomas Hendricks00:10:48

We’re gonna dip into appraisals at the end. If there is time and we’ve got a couple minutes, head to their seat to listen to appraisals.

Fred Glick00:10:58

Yeah, well, what you don’t know, which I’ve mentioned, but nobody pays attention to, is the fact that an appraiser knows the sale price of the property before they do an appraisal.

They also get an estimate from a loan officer or the mortgage company or someone there, gives them an estimate on what the value of the property is for an appraisal, for a refinance. So former Ginnie Mae president came out and has a whole article and we’ll post a link to it. Alanna McCargo, supposed the link about promoting fairness and accurate appraisals and changing the system. And one of the big things was to get rid of the fact that the appraiser knows the sale price. So we’re all excited about that. Probably most agents have no idea. But now reality’s gonna come in and this will help.

This will help people when there is a real appraisal that an arrogant seller who wants to, you know, every last dime. I mean, you still can buy it at the sale price especially if you don’t have an appraisal waiver if you’re willing to pay a few extra bucks, some people are, ’cause the market’s just crazy in an ascending market. But, you know, in a quote unquote, normal market where people are getting really overcharged for the properties, this is great. So we’ll see what happens.

Drew Thomas Hendricks00:12:28

Are appraisals more lenient when you’re buying a house? Like when you’re buying a house versus refinancing a house?

Fred Glick00:12:37

It depends. You have to go by what the comparable sales are. So it doesn’t matter if it’s an appraisal for a refi or a purchase, the value on that day is the value of that day. It’s not, you get to know the type of financing.

This was 12 years ago and my house was, it was a different house and I, well, and I needed the appraisal to come in at 495. She would only come to 490. You know what? She’s doing her job.

Drew Thomas Hendricks00:13:03

She’s doing her job at five grand and a 490, was an interesting wine in the sand asking for 525.

Fred Glick00:13:15

There were no comparables. That’s…

Drew Thomas Hendricks00:13:18

That was the thing.

Fred Glick00:13:19

You can’t be the highest price in the neighborhood. The highest appraisal in the neighborhood when you’re refinancing. ‘Cause nobody’s establishing the value.

Drew Thomas Hendricks00:13:28

Of what you’re willing to pay.

Fred Glick00:13:29

Buyers establishing the value of what they’re willing to pay. Exactly.

Drew Thomas Hendricks00:13:33

I get it.

Fred Glick00:13:34

See what I mean?

Drew Thomas Hendricks00:13:35

So with refis, you really are stuck to the comps.

Fred Glick00:13:39

You got it. When someone’s willing to pay for a similar house.

Drew Thomas Hendricks00:13:43

With the new house, you can see all these people are willing to pay for it and you kind of set the new price of the house.

Fred Glick00:13:49

Exactly.

Drew Thomas Hendricks00:13:50

That makes a lot of sense to me.

Fred Glick00:13:54

There you go. And with that, I think we’re done.

Drew Thomas Hendricks00:13:58

Yeah, I do. Another episode of We Fixed Real Estate. I’m gonna go take an aspirin.