Tag Archives : foreclosures

 

If you prefer to view and comment on Facebook vs. the YouTube video above, click here: Facebook Live.

Below is the actual St. George Real Estate Morning Drive show, hosted by St. George Real Estate Agent Jeremy Larkin, word for word! Enjoy and please share if you find it valuable! 

Jeremy Larkin and The Larkin Group @ Keller Williams Realty can be reached by calling 435-767-9821, or emailing sales@gostgeorge.com. 

Andy: News radio 94.9, 890 KDXU. Good morning to you. Tell me this guy has the coolest music in the biz right here. It is Jeremy Larkin. I did not even want to turn it down. You have got Jeremy Larkin, St. George Real Estate travel show, and I know Jeremy is trying to get all is tech set up and everything over there. Are you ready, Jeremy?
Jeremy: I loved how you stuttered there. You had a hard time.
Andy: Well, it has been a weird kind of –
Jeremy: I do not know what else to say about it, Andy. Let’s just name the elephant in the room. Right?
Andy: It has been a weird kind of day. You look outside and our red rocks are covered in white snow. I know you had issues this morning with the two-hour delayed start for school.
Jeremy: Yeah, this threw the kids’ schedule off a little bit this morning. No one in this room has a child going to school except for me.
Michelle: That is true.
Jeremy: And there are a whole bunch of us in this room. There are five people in this room. You know what is amazing?
Andy: I have two by the way.
Jeremy: Oh you do have two high schoolers?
Andy: Yes.
Jeremy: Okay. So you do.
Andy: Yes.
Jeremy: That is nice. That is good. So for them, it is cool. They are like I have got to sleep in and I will just drive to school. I have two boys that are going to school at odd hours. So normally the one is going either at 6:55 at the bus stop or he is being delivered at 7:30, and then the other goes at 8:15. So with the radio show and then a meeting at 9:30, I am finagling this kind of thing. It is being finagled as they say.
Andy: That is a good work.
Jeremy: Really, it is. It is being finagled. Today, Andy? Whoops, I dropped my microphone. I am going to invite you to lend that microphone to these guys today because we are going to have three of us on the show today.
Andy: Okay. Okay.
Jeremy: I have got some incredible guests in the studio. Andy Griffin is almost a guest because he is brand new. I have got Chantry Abbot with Guild Mortgage, on the air with us. One of our great friends, incredible home mortgage lender. And I have got, well, why don’t you introduce yourself, Michelle.
Michelle: Hey, Michelle Evans with the Larkin Group. Glad to be here.
Jeremy: I like it.
Michelle: Glad to get here safe and sound in all the slush.
Jeremy: It is kind of slushy out there. It was 33, I think, all night long.
Michelle: Oh perfect. One degree.
Jeremy: And I think that is why school did not get cancelled. So the kids can blame one degree. Because I think at 32 degrees, you would have had some really extra nasty roads and it would have been different. Right?
Michelle: Yeah, I was surprised that they were all right. They are slushy, but it is doable.
Andy: Yeah.
Jeremy: Chant, what do you got over there?
Chantry: See this kid is making a snowman. Kind of cool, right?
Jeremy: Isn’t this amazing?
Chantry: Bluff Street Park.
Jeremy: Yeah, it is absolutely incredible. We are at the Cherry Creek Studios on North Bluff Street, which is on the west side of Bluff, up on a hill. And those of us watching our live feed, we are on Facebook dot com slash Jeremy Larkin. Or we are on YouTube Live which is YouTube dot com slash Go St. George TV. But from here we see everything. Like we see everything.
Michelle: It is a great view.
Jeremy: It is incredible. It is amazing. So we are looking out at Bluff Street Park, and the famed snowstorm of 2013, we could not get up this hill, and last night they were forecasting five inches. I would be shocked if we even got two inches. I do not know.
Michelle: Yeah.
Jeremy: Chantry, what did you get at your house? Maybe an inch?
Chantry: Yeah. But I think there was more in like Santa Clara. I saw some folks this morning that got quite a bit.
Jeremy: Where it is higher.
Chantry: It was pretty hard.
Jeremy: Yeah. I went up to the Ledges last night at 8:30, eight o’clock, maybe to take my kids to a little get together and it was like a full-scale, winter, just a blizzard on the way up to the Ledges. It was incredible. And there was this fog later between here and the Ledges.
Michelle: Yeah.
Jeremy: So then you were going up and then it was snowing and you could not see, and it was wacky. So anyway, gang, look, clearly everyone knows it is snowing outside, and all of our friends on Facebook are going to make sure that we know that. Are they not? Everyone is going to do that today. So we are going to have a fun discussion. I do not know what Jesse has got going on. He is over there. What do you have going on over there? What is that? My phone died? I do not know, man. Who knows? So we are running Facebook Live. We are going to talk today about what realtors and lenders actually get paid for. Is that fair?
Michelle: That sounds good.
Jeremy: So Chantry has been with us for a really long time. How many years? A decade?
Chantry: I remember working with you back when you were starting to take over all the foreclosures. So that was probably –
Jeremy: 2010.
Chantry: So let’s say 2010, 2009 or 10.
Jeremy: 2010.
Chantry: I am tangled with my coat here.
Jeremy: So there you go. I do not know about this phone. So it is funny, guys. We are running a Facebook Live, and for whatever reason, it just died on us. I hope we are still live, but I think we are still going to, we are good to go. We are good to go. So 2009, 2010, you came into our world. Right? And since that time, have you ever been paid a salary to close mortgages?
Chantry: I have not.
Jeremy: Right. Michelle, how long have you been in the real estate business?
Michelle: Going on ten years.
Jeremy: Ten years. Have you ever been paid a salary to sell real estate?
Michelle: Never.
Jeremy: No, so we only get paid, right, gang, when the deal closes. That is the only way to describe it.
Chantry: Yep.
Jeremy: Right. And so Michelle and I were in this discussion I think yesterday talking about this dynamic that folks perceive, so this is the perception. So the perception is like Michelle goes out and shows homes and that is where she is doing the work. So the real work she is doing is showing people homes. Like find me a home. Correct?
Michelle: Right. It is all in the finding.
Jeremy: Yeah, it is in the finding. And the perception of course, is that that is where it is. That is where the pay –
Michelle: The value (indiscernible) –
Jeremy: Where the value is.
Michelle: Yes, to open the door.
Jeremy: It is to open the door, and at the end of the day, let’s all be frank with ourselves. What hourly rate could we pay someone to open doors? Could we pay someone minimum wage?
Michelle: We sure could.
Chantry: Sure.
Jeremy: Yeah, what is minimum wage anymore?
Chantry: Seven-fifty or something. Right?
Jeremy: Yeah, $7.50 a hour. We could theoretically pay someone $7.50 to open doors. And the issue is that for us in the real estate business, the real work, the real work especially if you are buying a home, right, begins when Michelle?
Michelle: When it goes under contract.
Jeremy: Right. So, what do you mean by under contract?
Michelle: Well, and putting it under contract, too. So it is the negotiation of getting it under contract, and particularly in the last few years where it has been a seller’s market, so you have really got to know your stuff to be able to win that contract for your buyer.
Jeremy: Yeah, absolutely. Right? So the work for the real estate agent happens we, like when it goes under contract, and of course, what Michelle is saying is when we get into the negotiation for the contract. Right?
Michelle: Right.
Jeremy: That is the issue. That is the issue.
Michelle: Yes.
Jeremy: You told me a cool story, and Chant, I am going to have you chime in here momentarily. You bought a home here how long ago?
Michelle: Yeah, back in ’05.
Jeremy: Okay, and you were not even an agent at the time.
Michelle: No.
Jeremy: Of course.
Michelle: I was teaching out at Tuacahn High School and I used Will Potter, who is now our competitor.
Jeremy: Yeah.
Michelle: He was great. He did a great job.
Jeremy: Great guy in town.
Michelle: We had three days to find a home. He blocked that out for us. We looked at 32 homes. I just want to say, so sorry, Will. I am just going to apologize publicly for doing that to you.
Jeremy: 32 homes. That is ten a day. That is a lot of homes.
Michelle: Oh my gosh, we ran the guy ragged. And ironically, we went back and bought the very first home that we saw. Anyway, and then I was teaching out at Tuacahn High School and he called me and he said when is your lunch hour? I said well it is from 12-1 or whatever it was, and he said I need to come out and have you sign this addendum. I said well you do not have to do it then. You can do it later or whatever. I had no perception that we have legal confines, legal deadlines that, he said, no, I need to have you sign this by five o’clock. I was like wow. Okay.
Jeremy: Hey, come on, you do not have to do that. It is fine.
Michelle: Like it is okay. I was trying to be so nice to the guy. Clueless. And what is funny is that I had bought four homes prior to that. So I think a lot of times agents think oh well, they have been around the block. They have bought a home or two before. And granted, I was probably not as smart as most about it. But you just do not realize what is the process once it is under contract? And I think that is probably some of the pushback of millennials. Well, I can find a house online.
Jeremy: Correct.
Michelle: And we are like right. That is just getting us into the game.
Chantry: And you probably will find it online right?
Michelle: Yeah.
Chantry: No matter how many –
Jeremy: 95% likelihood, guys.
Chantry: And no matter how much somebody tells you what they want –
Jeremy: 95% likelihood.
Chantry: They know what they want. Right?
Michelle: Yeah.
Chantry: They cannot really relay it. So look online. That is just the beginning. That is the easy part.
Michelle: Yeah, yeah. That is the fun part.
Chantry: Jeremy, when did you get in the business?
Jeremy: 2005.
Chantry: That was probably right after they had the books. Do you remember the books?
Jeremy: The books were obviously previous to my time.
Chantry: Not by far though, right?
Jeremy: I do not think by far.
Chantry: Probably late 90s, early 2000s.
Jeremy: What was the MLS called at that time? The Multiple Listing Service. It was called –
Chantry: I do not know.
Jeremy: Oh, what was it? It was this weird –
Michelle: I do not know.
Chantry: So those you that do not know, was it once a month, once a month the Board of Realtors would print out a book with a page for every single listing that was out there. So if there were 500 listings, there were would be 500 pages that would have property for sale.
Jeremy: Right.
Chantry: There was not an internet so the buyers could not go find the homes. So they really did need to sit down with an agent and flip through this book and try to figure it all this out and which ones were sold and which ones were not.
Michelle: Right.
Chantry: Now with the internet you find a house on the internet.
Michelle: Right.
Chantry: So anyone can do that.
Michelle: And the contract was so much less back then. So it really was, their perception was correct.
Jeremy: Yeah, we have added five more pages of contract paperwork.
Michelle: It really was finding the house. The weight was more on that.
Jeremy: Right.
Michelle: And much less with the contract. Now it has flipped. Now it is reversed.
Jeremy: Well, and let’s understand how buyers, let’s hit that door. These guys are exceptionally loud down the hall, aren’t they? Let’s remember how a buyer finds a home. Right? And so this is really good. If you are a home seller, I hope you will really listen really closely to this today. So what will happen is someone will put their home on the market, and they will be like if I can just broadcast this enough times, if I can just be in everybody’s face long enough, we will find a buyer. Right? But how do buyers, in fact, find the home they want to buy?
Michelle: Almost always online.
Jeremy: But how? When I say how, how does a buyer find a home? Do they go hey, a realtor called me and said they have the home for me?
Michelle: Oh, no never. They are out on the home websites. They are out looking. They are searching themselves. They can do it online.
Chantry: So wouldn’t you say really the only accurate, there are others. Yeah, we talk about Zillow and stuff, but only one that is truly live, real-time accurate is probably the Multiple Listing Service that you have to get by –
Jeremy: Yeah.
Michelle: Primary source. That feeds all those websites.
Chantry: — through a real estate agent.
Jeremy: Yeah, so let’s think about this. Chantry, let’s say that you want to buy a home today. What kind of home would you want to buy? Let’s just have some fun here.
Chantry: If I were to buy a house today?
Jeremy: If you were to buy a house today, what would it be?
Chantry: Let’s buy a million-dollar house in Green Springs.
Jeremy: And what would be a couple basic criteria that you –
Chantry: Really nice swimming pool, maybe a game room in the basement.
Jeremy: Okay.
Chantry: Four or five bedrooms, maybe a big casita. Kind of know we are dreaming. Right?
Jeremy: Okay. No, we are dreaming. Okay. Beautiful. So what you would do, where would you go to start looking?
Chantry: Well, me, knowing what I know, I would call a real estate friend, one of you guys, and say hey, this is what I am looking for. Set me up on a search.
Jeremy: Yeah, so two things that actually happen. Right? Number one, you call an agent and say set me up on a search. Tell me if you find anything. And then number two, you and your wife at eleven o’clock at night would be on a computer –
Chantry: Yep. Michelle said –
Jeremy: — or on an app searching. And you would be like Zillow dot com. Show me every home that is four bedrooms, three bathrooms, 3100 square feet or bigger, in the Green Springs area. I want a pool. It needs to be under a million dollars, and here is what would happen. You would actually burn yourself out looking, obsessing, you would obsess. Let me explain. This is really good. Jesse, just yell. Am I accurate with how buyers search for homes?
Jesse: Oh yeah.
Jeremy: They will drive their agent crazy searching. Hey, I saw this new one. I saw this new one. Did you see you the new one? Hey, what did you do this weekend? Well, actually we know that we are working with you, but we drove around, and we went in 27 open houses because we figured that somehow what we wanted you were not showing to us. But we could not find anything. And then we went to Craigslist and then we went to KSL dot com and we went to Zillow dot com, and then we came back around. They will literally drive themselves sick and they will get to this point of fatigue where they are like I do not even think I can look at another home. So what I always remind sellers is that if your home is a great home priced in a proper way, will buyers find it, yes or no?
Michelle: Absolutely.
Jeremy: Instantaneously.
Michelle: Many times over.
Jeremy: Yeah. So here is the other thing that sellers do not realize. Is it the buyer that is overlooking your home? Probably overlooked it like 30 times. Here is why. They tried KSL. They saw it there. They went to Zillow. They saw it there. They figured maybe realtor dot com would have it. They saw it there. They are getting listings emailed to them from five different agents because bless our hearts, that is what we do. We are consumers. So we go around and we see five different real estate signs. We call all of them, and all the agents being agents the way we are, hey Michelle, thanks for calling. Hey, how about we set you up on a home search. We will send you all the new listings in the morning. Wouldn’t that be great?
Michelle: Oh yeah.
Jeremy: Chantry is smiling because that is exactly what we do. I will just get you what you want in the time you want. Won’t that be great? There is a real estate script. They are getting listings from 5 to 10 agents based on their criteria. Are they seeing the home, yes or no?
Chantry: Absolutely.
Jeremy: They have overlooked your home so many times. Actually, you would be offended at how many times they looked at it and said no. We have seen it. No. Right? So we are having this interesting conversation here today about understanding the consumer’s mindset. Right?
Michelle: Right.
Jeremy: So the consumer’s mindset is number one, from the seller’s perspective, well, maybe there is someone out there who does not know about my home. Trust me, everyone knows about your home that is looking for a home, especially if you hired a good agent.
Michelle: And when they come in for a consultation and we pull up a list of homes that they are interested in and I will say hey, I just want to make sure we vetted the process. Have you seen this one, this one, this one? And not only have they usually seen it, but they have named it. Oh yeah, the big tree home. Oh yeah, the lion house because there is lion statue on it.
Jeremy: They have named every home.
Michelle: They are very familiar. They have seen it multiple times on multiple occasions.
Jeremy: And this is a my reminder I would give to sellers. For people who are selling and trying to find a home, I want you to think about what you are doing. You are doing what I am saying the buyer for your home is doing. You know you have seen all the homes. So the buyers come in. You take them out, Michelle, and for $7.25, $7.50 a hour, no pay per hour, you show them homes. And the real work begins the day that you say oh we found a home.
Michelle: Yeah. We want to make an offer. We do not want to let this one get away. So then we start the negotiations.
Jeremy: What kind of paperwork is required to buy a home right now in the state of Utah?
Michelle: Well, you have got the contract, six-page contract.
Jeremy: Real Estate purchase contract.
Michelle: Right.
Jeremy: A Rep-C.
Michelle: Yeah. Then you have got a buyer-broker agreement so that we have –
Jeremy: With the broker.
Michelle: — a right to represent you in the deal.
Chantry: Six pages does not do it justice. There is no inch that is not used. It is a lot.
Michelle: Yeah, it is a lot.
Jeremy: It is 29 sections, 26 sections.
Chantry: It is not like hey let’s just hand this to a, we have seen horror stories when people try not to use a realtor. It is like let’s just take this contract and fill it out and turn it into a seller. There are so many things in that contract that if they do not know exactly what they are doing, they are going to miss out on something.
Jeremy: Yeah, so it is six-pages. There 26 sections.
Michelle: Yeah.
Chantry: 26 sections, yeah.
Michelle: Yeah, and for example like what loan are you using? What loan are you using? That will determine an additional addendum that is required for that loan.
Jeremy: Okay.
Michelle: Then there is the buyer due diligence checklist that the state requires that. So that is something to warn the buyers hey here is a list of stuff to be sure that you are checking off so that you make sure that you are making the right decision. That has to be included. And then negotiations go back and forth which will add addenda to the contract. It can get pretty –
Jeremy: Addenda.
Michelle: Yeah, did you like that?
Jeremy: You know what is interesting?
Michelle: Not addendums.
Jeremy: How about this? How about this? Section 8.4, additional earnest money. If the Rep-C has not been previously cancelled by the buyer as provided in Sections 8.1, 8.2, or 8.3 as applicable, then no later than the due diligence deadline or the financing appraisal deadline, whichever is later, buyer will or will not deposit additional earnest money. Any additional earnest money deposited, if applicable, and sometimes referred to herein as the deposits, that the earnest money deposit or deposits, if applicable, shall be credited toward the purchase price at closing. Did anyone hear anything I just said?
Chantry: It is very attorney-speak.
Jeremy: That is one stupid paragraph —
Michelle: Yeah. Legalese.
Jeremy: — of 26 sections of a contract. Right?
Chantry: And I know I should not use this term, but I do tell them when they are working with Michelle or someone that is really good like Michelle that Michelle is your attorney. You can find the house. She has to let you in, and there are a lot of things that she does need involved there, but she is your attorney, really.
Jeremy: Yeah, because they sign (indiscernible) that we are not legal help but we are playing that.
Michelle: Yeah.
Jeremy: How about this, and by the way, I have got Michelle Evans with the Larkin Group with our team over at the Keller Williams Realty. I have got Chantry Abbott, Guild Mortgage. So Chantry, you are a lender. What about if somebody submits a contract to you and it has deadlines that say that there is a financing and appraisal deadline? You get to deal with that. Right?
Chantry: Yeah, we have to make sure that we have got their loan approved and their appraisal reviewed, and everything looks good, otherwise they are potentially risking their earnest money deposit, which if you do not know what that is, like a security deposit, and sometimes it can be really expensive. We have seen $5,000, $10,000 can be in trouble if they are not having a real estate agent that is taking care of those deadlines.
Jeremy: How many pages in your typical loan contract to close a loan? I do not mean the contract with you. I mean the actual loan agreement with the bank. How many pages? Typically.
Chantry: Like at closing, it is probably roughly 30 pages.
Jeremy: 30 pages. Has anyone ever read one of those? It is epic. Right?
Chantry: Yeah.
Jeremy: It is epic boilerplate –
Michelle: Take your dictionary.
Jeremy: — legal-speak. Right? So Chantry, what if I turn in the contract to you that says listen, Michelle, wrote an offer. The offer is contingent on an appraisal. It is contingent on –
Michelle: Due diligence
Jeremy: — due diligence or a home inspection. It is also contingent on the seller who is in San Francisco selling their home, and there is an addendum that says that they have just put their home on the market in San Francisco, and they have 21 days to sell the home, and if they do not sell the home in 21 days, then we can cancel the contract and come back. While that is at it, we have a 72-hour clause that will allow other buyers to come in and the other buyers can make offers on the listing that Michelle wrote an offer on and then they could kick the first buyer out of place. Do you see that stuff as a lender?
Chantry: Yeah, quite often.
Jeremy: All of the time. When does the work begin, guys? The work begins at contract.
Chantry: Yes.
Michelle: Very much so.
Jeremy: And so if we are selling your home, by the way, the work, of course, begins when we start marketing your property. Of course, right? But we are really more, the day that we sign that listing agreement and we start saying let’s schedule photography and let’s do what we do. But if you are buying a home, the heavy-duty work, that is contract work.
Michelle: And I think that they do not realize that there is a second set of negotiations. So during that due diligence period, that is 10 days, two weeks roughly that you have to get a home inspection done and then there is a second set of negotiations. Because a home is sold as is, but often sellers will defer maintenance and just feel like well the buyer can take care of that.
Jeremy: So you mean there is a negotiation to buy the house and then there is another second negotiation once they have done an inspection?
Michelle: correct.
Jeremy: What if the appraisal comes in low, Chantry?
Chantry: Another opportunity for a negotiation. Right? So I guess that is a third potential negotiation.
Jeremy: What percentage, Chantry, of deals do you see have an appraisal come in low right now?
Chantry: Probably 95% of them are just fine. So maybe 1 out of 20 or something along those lines. There is an appraisal something. Sometimes it is not just value. Maybe it is the roof has an issue that needs to be fixed or things like that.
Jeremy: Guys, it is snowing really hard out there. I just want to interrupt this previously scheduled program.
Michelle: Gosh, it is pretty.
Jeremy: So, Michelle, Chantry, so happy you are with us today. Let me share some statistics with some folks this morning. It is February 21st. We got a little bit of a slow start at the Larkin Group this year. Last year, we had 173 buyers or sellers, families we helped. But we have 21 properties under contract, representing a buyer or seller. We have closed 13. So all that paperwork we just talked about, 13 times we have closed it. We have 21 under contract. We have executed 31 contracts since January 1st, meaning we took a buyer out, went through all that nonsense, negotiated a purchase price, negotiated a deal, went through the inspections, went through the appraisals, went through all the headache. Chantry, does sometimes days before closing a lender, like the underwriting lender come back and say that they need a pay stub from 2007 to prove that these people are actually real?
Chantry: Can. We sure try hard to avoid it but yeah, it is just one of those things sometimes. Right?
Jeremy: Yeah, right. So we have put 31 contracts together like this, and eight of them have fallen apart so far this year. That is the numbers so far. So 8 of 31 have fallen apart. And why do contracts fall out, Michelle? Like what would be the reasons? Why do deals fall apart mostly?
Michelle: They cannot qualify for their loan is a big one. They change their mind is another one. Something happens during the home inspection and if the seller is not willing to credit or repair that issue, then they are like we are out.
Jeremy: Yeah.
Michelle: So that is another thing.
Jeremy: You mean they get scared. They get nervous, they do not like the neighborhood, they do not like the church, parish, whatever they went to. They found five broken roof tiles and maybe they are concerned that, and the list goes on and on. Right?
Michelle: It does.
Chantry: Appraisal. Appraisal does not come out good. There is an issue.
Michelle: Their home does not sell. It was contingent on –
Jeremy: Yeah, they had to sell their home.
Michelle: Their contract fell through back in San Francisco or whatever it could be.
Jeremy: Yeah, the domino chain. Chantry, as we wrap up, final minute. Most important message you feel like buyers and sellers need from a lending perspective today.
Chantry: Yeah, I just think that I have preached about this a bunch of times. But interest rates, we all know at some point, are going to be going up. Right? They have gone up about 1% in 2018. They went up about 1% in 2017.
Jeremy: Yeah. By the way, that costs people 20% of their purchasing power.
Chantry: And that is what I was going to tie it into. Perfect.
Jeremy: Ooops.
Chantry: If that goes up, no, it is great. If that goes up 1% again in 2019, which it probably will, most likely, who knows, but probably, that impacts their purchasing power or their monthly payment by 10%, which means home prices would have to change by 10% or they would have to buy a 10% less home. So I know the price of the house matters. I bought a place in 2007. I still have it. I have a ton of equity.
Jeremy: Worst possible time to buy a house.
Chantry: I have a ton of equity because it does not matter that much unless you are going to sell it next year.
Jeremy: Yep. Exactly. Exactly.
Michelle: Yeah.
Jeremy: Michelle, thank you for being on here with us today.
Michelle: Thank you.
Jeremy: And for bringing your expertise and talking about what realtors, I was about to say real estate agents, real estate agents and mortgage professionals, mortgage lenders, we get paid to produce an outcome. Right? At the end of the day, we do not get paid for the hours we work because sometimes we work 100 hours and sometimes, we work seven on the same deal. Right?
Michelle: Right.
Jeremy: We get paid to produce an outcome. We get paid to walk somebody through the most complicated and emotional process of their life, and that might include needing to reduce their price if they are selling the home. All sorts of things.
Chantry: I think we protect them through that process. Right? That is what we do.
Jeremy: Bingo. Bingo. Guys, I want you to visit St. George Home Searching dot com. St. George Home Searching dot com because we are talking about the MLS. If you want to look at every single house that is on the Multiple Listing Service right now, St. George Home Searching dot com. You can click on the link there to find out what your home is worth. Check it out. Thanks, Chantry Abbott, Guild Mortgage. 674-1090 if you want to speak with him. 674-1090. If you want to reach out to us, 275-1690. Sold in St. George dot com. There you go. End of story.

 

 

Click on Facebook Live. to see the entire recorded show from Facebook! Below is the actual S. George Real Estate Morning Drive show, hosted by St. George Real Estate Agent Jeremy Larkin, word for word! Enjoy and please share if you find it valuable! 

Jeremy Larkin and The Larkin Group @ Keller Williams Realty can be reached by calling 435-767-9821, or emailing sales@gostgeorge.com. 

Jeremy:  Good morning.  How are we doing, folks?  I am here.  I am alive.  I have got a dead laptop. I am not sure why it is dead.  But guess what?  Does that ever happen?

Mike: All the time.

Jeremy:  So batteries actually die on these things –

Chantry:  Only when you need it though.  Right?

Jeremy:  Yeah, I know. It is okay.  We will plug it in and we will be good to go. I have got Chantry Abbot this morning with Guild Mortgage. Chantry, good morning.

Chantry:  Good morning.

Jeremy:  Give me something good.  What is the greatest thing that is happening in your life right now?

Chantry:  Oh man, the greatest thing that is happening in my life.  I just went to, my son’s doing, he is four –

Jeremy:  Got it.

Chantry:  — and so yesterday, I snuck out of work a little early and well, at about lunch time. Snuck out for a little break, and he is in a gymnastics class.

Jeremy:  Oh man.

Chantry:  And he totally digs it.  Somersaults and all that.

Jeremy:  I have got a 17-year-old who always referred to her gymnastics when she was that age as nastics.

Chantry:  Yeah.

Jeremy:  Something like that.  It is pretty fun.

Chantry:  I have been telling him that the Ninja Turtles do gymnastics, so he is really into the Ninja Turtles.

Mike:  He is sold.

Chantry:  Yeah, he is in that really learn his stuff.

Jeremy:  That is amazing.  I love this. Well, so that is your great thing this morning.  Isn’t that great?  You know what? Let me tell you what is going on great in my life, by the way, folks, is I hauled two kids off to school this morning, and I think they were both just about late.  We are talking about scratching the, oooo, the very edge.  One went over to Tonaquint Intermediate and another to Dixie Middle, and once upon a time they were four.  They were four years old. And there you have it.  We got up.  So but those guys, these two dudes and I actually, all four of the kids, we went up to Bryant Head this last weekend –

Chantry:  I was actually going to say they are probably bummed they were not going skiing today.

Jeremy: Yeah, they probably were.  They probably were.  Bryant Head missed the snow on this storm, but we were there this last weekend, and if anybody out there is thinking about getting up to the mountain, it is actually looking really, really good for this time of year.  I am shocked.  Salt Lake had 14 inches or something overnight.  I saw that.  But it is pretty good for December, I do not know what the day was, tenth.

Chantry:  When do Washington County Schools get out for the Christmas Break?

Jeremy:  So the kids will get out the Friday before Christmas which seems like it is the 21^st or second.

Chantry:  So that would be a week from tomorrow?

Jeremy:  Yeah, the 21^st. So a week from tomorrow. These kids are seven days left, and then they will have ten days off.  Look, it is the most wonderful time of the year.  The fun thing with Christmas break is that you are actually excited.  For all you parents out there, I think you know what I am talking about. It is actually exciting.  It is fun to have the kids home, and a lot of parents are off of work at least part of that time.  A little easier than summer.  Summer you are thinking, we have got a whole two months of this stuff, don’t we?  Now what am I supposed to do with these kids?

Chantry:  Right.

Jeremy:  And if you are working mom or a working dad –

Chantry:  Yeah, how do I deal with that?

Jeremy:  That gets really busy. Really, really busy. Here we are. We are all on our own plane with our kids and Mike has got his kids grown.  Mine are kind of in between and you have little, a little child.  And that is where we are at.  So Chantry and I are going to be talking about, this is exciting, okay.  It is funny that bad news is often exciting.  It is just so bizarre what is happening in some of these real estate markets.  Right?

Chantry:  Right. It is going to come as a surprise to most probably.  Right?

Jeremy:  Yeah, absolutely. So we are going to talk a little bit about what is going on in Dallas, Texas. Frisco, Texas.  By the way, Frisco, Texas, outside of St. George, fastest growing community in the United States of America.  And just crazy.  There is a Toyota plant there and jobs.  We are going to talk about what is happening with the real estate market.  And the teaser for our listeners out there: builders making hundred thousand and bigger dollar price reductions on their listings, offering real estate agents trips and travel all over the planet to sell their homes.  Some strange stuff going on out there.

Chantry: Yeah, the trip to Mexico caught my eye.

Jeremy:  Oh, is that what got you excited?  Did you want to move out there?

Chantry:  No, I will just take a trip there.  That is all.

Jeremy:  Actually I was just saying to Texas so you can start –

Chantry: I could sell some houses out there.

Jeremy:  So we are going to talk about what is going on with the real estate market and really the US housing boom coming to an end and what that means, and whether you should be alarmed, and whether St. George is next.  November was a very strange month for everyone in the real estate market, both in sales, real estate sales and in lending, that is what Chantry does.  He is with a company, Guild Mortgage, and they have worked with us for so long, at least coming up on a decade and do such amazing work. Of course, what they do is help people find the money they need to purchase a home.  And they have worked with, I do not know, certainly dozens and probably more like hundreds of our clients over the years.  Right?

Chantry:  Yeah, hundreds. Yeah.

Jeremy:  Hundreds of clients.

Chantry:  Families.

Jeremy: And you have been doing mortgage lending, I like to tell people home lending in a way because sometimes people out there in the public are like well, I do not.  Do you know what I mean?

Chantry: Yeah.

Jeremy:  But mortgages or loans for people purchasing homes for how many years?

Chantry:  It will be 13 when the calendar turns.

Jeremy:  Thirteen.

Chantry:  Crazy.  It was 2006.

Jeremy:  This is wild.  So let’s do some history.  So thirteen, 2006, 2008 is when they really say the bubble burst.

Chantry:  Yeah.

Jeremy:  So we are decade. We are having a ten-year anniversary, and we talked a little bit about this on our show last week.  So you read these articles –

Chantry:  That I did.

Jeremy:  — that I am talking about? Should I give folks the highlights?  Let me give you the headline for this article.  It is Bloomberg, and we will post this into the Facebook comments.  If you are not watching us on Facebook Live, you can catch us at Facebook dot com slash Jeremy Larkin.  The way it sounds, J-E-R-E-M-Y, Larkin, L-A-R-K-I-N. Facebook dot com slash Jeremy Larkin.  We are streaming it live.  We stream it live every week and then we post this over to the Larkin Group Facebook page.  Of course, if you are listening to us on the radio, you are either on 890AM or 94.9FM.  So our Facebook listeners, if you want to get on the radio, you can hop to 94.9FM, 890AM.

Chantry:  If anybody wants to, I have got my phone.  I am going to see if there are any comments.  I just barely thought of it.

Jeremy:  Oh beautiful, beautiful.

Chantry:  So if anybody wants to comment on Facebook, we will answer the question.

Jeremy:  Yeah, I love this.  Yeah, if you guys have questions, specific questions for Chantry who is doing lending, specific questions for me. So let me give you the headline:  Free vacations, $100,000 discounts, home builders get desperate with hot markets cooling and mortgage rising the industry turns to incentives to boost sales. And of course, Bloomberg paints this in such a dramatic fashion, do they not?  A real estate broker in suburban Dallas is raking in freebies this year.  Trips to Lake Tahoe and Santa Barbara in California, Cabo San Lucas in Mexico, and a dude ranch in Wyoming.  The home buyers he represents are cashing in, too.  They are winning price cuts of more than $100,000 on top of free upgrades such as media rooms, cabinets, and blinds.  This feels a lot like, when you hear this, some stuff we saw here a long time ago.

Chantry:  Sure, yeah.

Jeremy:  Doesn’t it? It goes on to say the generosity flows from an increasingly desperate home builder market. Hot markets are cooling as fast as interest rises, and this is where they really throw the drama on here.  Some flare.  In the great housing slowdown of ’18, it is like they have added, they have created their own term, shoppers are reclaiming the upper hand after years of soaring prices that placed most inventory out of reach of many families.  Everyone is hungry for buyers, he says. What do you think, man?  When you see that, what are your thoughts?

Chantry:  So sure, has the market shifted a little bit?  Absolutely. Is that an extreme version of it?  Yeah, of course it is.

Jeremy:  For sure.

Chantry:  But anybody that follows the housing market, it is kind of interesting.  It has been very similar to the stock market. So those of you that follow the stock market have noticed some things have changed over the last couple of months, quite significantly. And we have noticed that in the real estate market. But it had to.  It was out of control.  This summer, all of us were looking at each other going there are no homes for sale.

Jeremy:  It was weird. It was ridiculous.

Chantry:  Buyers have no, buyers have no control. And it was not just prices that were that were crazy.  It was terms. It was like they could not ask for anything.  They had to close really fast.

Jeremy:  Yeah.

Chantry: They had to make offers sight unseen.  Just weird stuff that just is not really good for a buyer.

Jeremy:  No, it is not good for a buyer at all. And one of the challenges we have in real estate is anytime that the market turns to where one group has the serious upper hand, either a seller’s market or a buyer’s market, it is going to create weird dynamics.

Chantry:  Not good.  Yeah.

Jeremy:  And this is not good either.  What we are hearing about in Texas. Definitely, when Bloomberg and Wall Street Journal and, and, and start running articles saying that the housing market is coming to a massive halt in Dallas, it scares people.

Chantry:  Sure.

Jeremy: Right?

Chantry:  Yeah.  Especially what happened ten years ago.  We all think oh, can that happen again.

Jeremy:  Excuse me, yeah, there is just no question.  And we do sit here wondering what will happen?  Like coming up here, it is interesting.  It says, let’s talk about some things that are issues that slow the housing market down, and we will answer the question whether St. George is next.  Rising interest rates –

Chantry:  Yes.

Jeremy:  — and we are going to ask you specifically about that. Trump did a tax overhaul that caps the, places caps on tax deductions for mortgage interest.  That is an issue.  Right?

Chantry:  Sure.

Jeremy:  They are hurting really like high tax areas.  New York, massive high taxes that really hurts those people.  4,000 new condo units listed for sale, will be listed for sale in 2019 in Manhattan they said.

Chantry:  Yeah.

Jeremy:  In Manhattan.

Chantry: Wow.

Jeremy:  Not in New York City.  Right?

Chantry:  Yeah.

Jeremy:  4,000 new condo units. You have got, okay, they talked about Austin and San Jose, California. Austin, Texas. San Jose, California. They have put, like immigration restrictions have kind of slowed down high-skilled workers coming into those markets. Some of these places are now less appealing to your Chinese buyers and your foreigners.  We do not see as much of that here.

Chantry:  Right.

Jeremy:  How often have you ever seen a foreign buyer try to get a mortgage?

Chantry:  It is really rare.  Occasionally we will get the Canadians because they love the warm weather here.

Jeremy:  Right.

Chantry:  Really honestly, some of them, it is the first warm place south.

Jeremy: Yeah.

Chantry:  So if you are heading south –

Jeremy:  It is.

Chantry:  — on I-15, boom, first warm place, really nice, great spot.

Jeremy: That is a great point.

Chantry:  So we get a little bit of that. But it does not drive our market by any means.

Jeremy:  No, not at all.

Chantry: But to your point, with the rising interest rates and home prices as we know just continued to go up and up and up, it is all about affordability.

Jeremy:  It is.

Chantry:  It really ends up being to a point where if prices get too high, rates go up, it is just not affordable anymore. So there has to be some sort of a shift back to normal.

Jeremy:  There absolutely does. So what you are saying is, from your perspective, this housing, the great housing slow down of 2018 is not a problem.

Chantry:  Yeah, let’s understand one big difference.

Jeremy:  Yeah, let’s do.

Chantry:  In 2006, do you remember the loan that they called the Stated Income/Stated Asset?

Jeremy:  Oh, for sure, I do.

Chantry:  Okay, so what this was was you are sitting across the desk from a mortgage guy and they say well, you need to make $10,000 a month, Mr. Schoolteacher. You make $10,000 –

Jeremy:  So what would he do?

Chantry:  — a month, correct?  Wink, wink.  And then all of a sudden, the deal is closed.  You did not have to document anything.  It was insane. There was no common sense, greed, crazy, stupid, whatever you want to call it.  Loans were getting done to people that just should never have gotten the loans.  Period. End of story.  And so, it made everything go out of control, and these people were doing it knowing that they could not afford the house payment. They just thought –

Jeremy:  Right.

Chantry:  They just thought if I do this, I can hang on for a year and then I will sell it and make all this money because my neighbor did that.

Jeremy:  right.  Right.

Chantry: And so let’s do that.  I know I cannot afford a $2500 house payment.  My neighbor just did it, and we can sell it in a year, and we can do it for a year.  Pull it out of our retirement.  That is what was going on.  See people were getting these loans they could never afford.  Ever.

Jeremy:  Not a chance.

Chantry: They never even thought –

Jeremy:  Not a chance.

Chantry: The people did not think they could afford them.  So now the total difference is loans are tough.  Loans are, it is hard to get a loan.  People that get a loan, by the end of it, they are tired of all these rules and giving us pay stub after pay stub and bank statement after bank statement and all this stuff we have to dig into, and absolutely the whole point of it is to make sure the mortgage industry feels like this person can actually afford this house payment.

Jeremy:  Well, right.  You need to make $10,000.  You know it is funny you ask that because I happen to be making $10,000.

Chantry:  Oh, that is weird timing, right?

Jeremy:  Actually, it is 12,000.  Well it is funny you would say that because I just got a text from my boss.  My income was raised.

Chantry:  Yeah, exactly.  Right.

Jeremy: It is like this is incredible. Right?  It is amazing how everybody seemed to have the qualifications during that time to do this. Right?

Chantry:  You did not have to get anything. It was just whatever you said, get a loan.

Jeremy: Well, okay, so the big difference now, that Chantry is saying, we have got Chantry Abbott here with Guild Mortgage here in St. George, we are talking about the great housing slow down.  I love this term.  I think I am going to run with it.   That Bloomberg News has put out of 2018 and we shared, if you just picked up the show, the fact that, and good morning to everybody on Facebook, and good morning to all of our listeners.  Thank you so much for your support.  Talking about the fact that in some of these housing markets it is slowing down.  So we saw massive, they are giving away vacations and crazy incentives and free media rooms and free upgrades and free cabinetry.  And they are giving away, they are reducing prices a hundred to two thousand dollars on these expensive homes by the way. Just to be clear, Chantry, I think people need to understand this.  They are reducing the price of seven to hundred million dollar homes by a hundred thousand dollars.

Chantry:  Right, yeah.  It sounds really –

Jeremy:  These are not $300,000 homes.

Chantry: A $3,000,000 house had $100,000 reduction.

Jeremy: Yeah, so let’s be clear.  However, what Chantry is saying here is that the difference between ten years ago as the housing market kind of catches up to itself, is that people are actually qualifying for the loans, aren’t they?

Chantry:  I have not done a loan since 2008 that was not like extreme documentation of being able to make the payment.  It has happened. People still have stuff happen in their life, and they are going to have short sales or foreclosures or fire sales.  I have to get rid of the house.  For the most part, these people are affording their payment barring a catastrophe, and that was not the case then. So that is where, sure, are we going to have a slowdown? Yeah, we needed it. We needed it.

Jeremy: Yeah.

Chantry:  It was a bummer for homebuyers.  There was not anything for sale. It was a little bit out of control, and I do not even necessarily mean prices were out of control. I just mean there were not enough, you sit down with a buyer and you go here are the two homes that are available. Which one do you want to buy? The seller has all the control in that situation, and that is just not good.

Jeremy:  It is not good at all.  And the sellers are like this is great. So, let’s put this in perspective for our local people. I have a comment.  I have an observation and a question.  Let’s start with the question. The prevailing 30-year interest rate today if I went to get a mortgage is what?

Chantry: About four and three-quarters.

Jeremy:  Okay, so it is four and three-quarters percent to get a home mortgage today, typically. Assuming fair credit and all that stuff, good credit.  Okay.

Chantry:  Somewhere in there 5% —

Jeremy:  Good credit, by the way, we are not talking 800.  Just thinking if you have got 700 –

Chantry:  Four and three-quarters, 5%, whatever.

Jeremy:  Okay.  Yep. What is the average interest rate that people have paid since they started tracking interest rates to borrow money for a home?

Chantry: Great question. So the mortgage industry as we know it, Fannie Mae and FHA, and it has been around since the 1950s we will say.

Jeremy:  Okay.

Chantry:  It is a little over 8% is the average rate over that timeframe to current.  And that is taking in current day when they have been crazy low, which is throwing the average off, right?

Jeremy:  This is crazy.

Chantry:  So the government made interest rates lower than they should have.  Even counting that, the average is still over 8%.

Jeremy:  This is, okay, this is going to be fun.  Typical person comes in your office today and wants to buy a $300,000 home, which is the average home in St. George right now.

Chantry:  Yeah.

Jeremy:  It is actually 330, 340, but I am going to say 300, okay, because I think the average is skewed because of higher –

Chantry:  Yeah.

Jeremy: Really is 300.

Chantry:  Take out the extremes.

Jeremy:  Yeah, the stuff that people are really affording.  If they buy a $300,000 home, your typical client, just no specifics, what is their payment? Like the typical payment?  What is the most average payment you send out of your office?

Chantry:  $15-1800.

Jeremy:  Okay, so let’s call it $1650 a month.  So the average mortgage payment that someone is coming out of Chantry Abbott’s office, Guild Mortgage, when they go in there and they hire them to help them get a loan, it is $1650.  Chant, just for fun, and I am putting you on the spot, if interest rates went from 4 ¾ to 8%. Today we are 4 ¾.  Eight is the historical average.  If they went up by 3 ¼ points, what would that payment 1650 be?  Just as a guess.

Chantry: I will do the math, but I am going to say about $400 a month higher, probably over two grand.  At least probably.

Jeremy:  So we are four –

Chantry:  I am going to do the math.

Jeremy:  He is going to do the math.  He is going to do some math. So let me put this in perspective as he playing around here.  He is actually just making his move on whatever, what is the game that everybody plays?  It is almost like Scrabble that they are playing with their friends.

Chantry:  Oh yeah.  Words –

Jeremy:  Words with Friends.  He just needs to make a move on Words with Friends and he will be back on. If interest rates right now, because we are going to tie this in, because we started the show by saying that the housing market is falling apart in Texas.  I do not know if it is falling apart, but wow, it has kind of shut off overnight.  If you read the article I linked in on Facebook to Bloomberg, you will be fascinated at the way it reads.  If rate were today at the historical average interest rates for you to buy a home, your payment would go up by an average of $400 for the typical homebuyer. From 4 ¾% what is the number?

Chantry:  It is about 500 actually.

Jeremy:  Five hundred.  Okay.  This is even better. Thank you for adding some excitement.

Chantry:  So about a 3% difference on that scenario is almost $500 a month.

Jeremy:  So it is very simple where we are going with this. So the question is what are rates?  4 ¾%. The simple point is that this is absolutely a time that is still a great time to be buying a home.  Now, here is the observation I wanted to make.  We are seeing the For Sale By Owner sign go up everywhere in Washington County –

Chantry:  Right.

Jeremy:  — in the last 30 days.

Chatnry:  It is easy.  Let’s just sell it on our own.  Right.

Jeremy:  Have we noticed historically, gang, that consumers are always six months behind every trend?

Chantry:  Yeah, yeah.

Jeremy:  We are always six months behind.

Chantry:  Yeah.

Jeremy: Now here is the reality –

Chantry:  We all know that guy.  Oh, my buddy made a bunch of money in the stock market.  I am going to hurry and jump in. It is like you missed it.

Jeremy:  Yeah, you missed it.  Right?  So what is going to happen with most of these people selling their home by owner, and I have to be very honest about this, we are needing to reduce the price of most MLS listings right now to get to them in line with what the market is really supporting, and we have talked about this for a month because sellers have been asking more than the market would support.  Values are not really going down.

Chantry:  Yeah.

Jeremy:  Right?  In St. George.  People have simply been asking more than the market will support.

Chantry: Well, what people do and I think this is where you are getting is their house is realistically worth 300, but they think, you know what, I have heard it is crazy.

Jeremy:  I will do it at 325.

Chantry: There is nothing out there.  Maybe we put our house up for sale for 330 and see if we get it.  And if we get it, really cool, let’s sell it.

Jeremy:  You know what?  Let’s just go 600 and see what we get.  Okay, but they are not going that crazy.

Chantry:  Let’s just put it up for sale at 330, 350, and we get that.  Cool, we will sell.

Jeremy:  Right.

Chantry: And that is not what is going to happen now.

Jeremy:  Right. So the For Sale by Owner, where every professionally marketed agent listed is being reduced, most of the For Sale By Owners are not going to have success right now, and it is going to be hard, and that is going to be frustrating.

Chantry:  Every time I do a mortgage and there is a For Sale By Owner, the buyer thinks he is going to get a deal.  There is no real estate commission, so I am going to offer him super low.

Jeremy:  The buyer wants the deal.  So folks, if you want to reach out to Chantry Abbott at Guild Mortgage, 674-1090?

Chantry:  Yes.

Jeremy:  Best number, 674-1090, and Mike will give you our contact information.  Have an amazing week.  Get your Christmas shopping done and check out the article we linked on Facebook about free vacations for realtors in Texas.  No free vacations here that I have seen.

Chantry:  There is one for Mexico, I think.  I do not know when that was.

Jeremy:  Okay.  All right, man.

Mike:  (Indiscernible)

Jeremy:  There is a dude ranch vacation.

Mike:  Dude. All right. You have been listening to St. George Real Estate Morning Drive.  For information, call 275-1690 or find them online, Sold in St. George dot com.