The Reality of Real Estate with Chris and Bri
Brianna Lehman, the Realtor, and Christopher Lynch, the Lender, give a real take on making home ownership attainable. They break down real-life scenarios, trends in the market and give their personal tools to make homeownership not just your dream but your reality.
The Reality of Real Estate with Chris and Bri
Realizing Your Property's Value and Refinancing Like a Pro
Ever wondered how to figure out your home's true worth without getting an appraiser involved? Look no further! Chris and I strip down the complexities of seller-side real estate in an episode that's a gold mine for anyone ready to put that 'For Sale' sign up. We expose the truth behind online estimates and arm you with the power of market analysis, ensuring you price your property perfectly. And when your property tax bill makes you do a double-take, we've got your back, offering tactics to challenge those hikes and shedding light on how tax assessments weave into the fabric of our communities.
But that's just the opening act! We go on to dissect the often perplexing world of home refinancing and equity financing. From timing your refinance to navigating the various types available, we lay it all out. Want to know how a HELOC could finance your next big life event or even a new investment property? I've got the insights. As we close, Chris and I reflect on homeownership's profound impact, extending a warm invitation for you to reach out and join our conversation. Wherever you are on your property journey, this episode is brimming with wisdom to fuel your real estate dreams.
YouTube: https://www.youtube.com/@LucasLiveMedia
Instagram: https://www.instagram.com/realityofrealestatepodcast/
Email: Brianna Lehman- blehmanrealtor@gmail.com
Email: Christopher Lynch- Christopher.Lynch@ccm.com
Hey everyone, what's going on? Welcome to the Reality of Real Estate podcast. I am one of your hosts, Christopher Lynch, and welcome my co-host.
Speaker 2:Hey everybody, my name is Brianna Lehmann.
Speaker 1:We give you a real take on making home ownership attainable.
Speaker 2:We will be breaking down real-life scenarios, trends in the current market and giving you our personal tools to make home ownership not just your dream, but your reality.
Speaker 1:Get ready to be inspired, motivated and ready to take action towards building your own empire.
Speaker 2:Because when you invest in real estate, you aren't just purchasing a home, you're investing in your future. We're back.
Speaker 1:Yes, we are Welcome welcome.
Speaker 2:And this episode we're going to talk actually about selling. We are very buyer-based. I typically only work with buyers. You obviously work mainly with buyers in the lending side, but I can help sellers. We can list your house. You can help sellers with different aspects of it. So I thought it'd be a good idea to talk about what that looks like and how we can help you.
Speaker 1:And even not necessarily on just my side as a seller, but just if you are a current home owner. Right, absolutely, and whether your house is working for you right now. But when you bought your house, you knew that it necessarily wasn't going to be your forever home. And just so, what all of that looks like? Yep, so yeah, okay.
Speaker 2:So one thing that I get asked all the time is what is my house worth? Like what do you think I could sell my house for? And then they'll say do we need an appraisal? Like, what do I have to do? You don't need an appraisal. I can absolutely run a market analysis for you based on what is selling in your area.
Speaker 2:Your testament is not real. Zestaments are not real. I get that all the time. They're like oh, this says yeah, everyone. Your testament is not real. I get this all the time. Hey Zillow says that my house is worth $500,000. Great, it's probably not. It could be worth more, it could be worth less. So what it does is it takes an whole area per se and just pulls all the sales. So it doesn't take into account the size of your home, any updates you've done or haven't done. It is just an overview of the market, the zip code that you live in, so it's not accurate. If you have questions about that, that's one thing that I do for sellers all the time is say let me run an actual market analysis for you where I'm going to look at the size of your home, how many rooms you have, your bedrooms, basement, garage, yard size, age of the house, everything, and give you a very accurate estimate on what your house is worth, not testament.
Speaker 1:That was a little petty.
Speaker 2:Are we going to get sued for that? I got it, so it's not going to come for me.
Speaker 1:I mean I just buy Zillow, so come for us, I do too.
Speaker 2:We don't even use it. I mean it's hard because their app is so user friendly.
Speaker 1:It is, and that is the best user friendly app.
Speaker 2:The MLS has stepped up. There's an app now that we can use and then like whatever, but I get why people use it. It's user friendly. It's not real time. I still get people sending me properties all the time from Zillow and I'm like that's been pending for three days, so yeah, like I had a client.
Speaker 1:They got updated yesterday and said that they lost out on a bid, but she texts me at 703 this morning and said, it still says that it's for sale and I'm just like you got to give it a second At some point today. You will see that it says pending, or like it won't come up as available.
Speaker 2:Had that exact conversation on Monday morning. There's like well, it still says that it's available on Zillow and I'm like, yeah, zillow's not real time. Everybody trust me and Chris, but so I get asked that all the time Like Zillow says it's worth this, or even like houses that people are going to buy. I know we're going back to that now, but let me run a market analysis for you. Yeah, the biggest thing when we talked about this yesterday and team meeting is that start County property taxes are going up and they need to stop, because if they raise my property taxes on my house one more time, we're going to fight but you can fight it.
Speaker 1:Yes, you can.
Speaker 2:You can have us run a market analysis for you. I can give you that information and then you can submit it to the county, the auditor site. There is a form you have to fill out. There's a process that you do that you can fight your property taxes going up. It's kind of funny because on one hand, they're saying like your property values this and you're fighting the opposite. But if you're not planning on moving in the next five years, fight the property taxes.
Speaker 1:And you know my thing, for that is when it pertains to. I'll just use my house for an example from the time that we bought it until when it did increase. It was a big increase and I was just like yeah like where do you do one?
Speaker 1:But I also was just like, okay, like what are they actually saying that the value is? Because I am nosy and petty and like a little bit Of a PI. I asked my neighbors if they got the same things and they were just like, yes, we did. And my one neighbor was like I don't agree with mine, so like what do I need to do sort of a thing. But I Got a recent letter that said that they weren't going to change them again, like they felt like the last cuz yours was adjusted enough.
Speaker 1:Yeah, and so like the last adjustment was sufficient and we're good, but it's also just a quick reminder of paying attention to what your property taxes are actually contributing to right in the community to where Sometimes it does.
Speaker 1:You know it makes sense and you just kind of have to bite the bullet and move on, but other times it's like there's no way that this is what, like you know. You're saying that my house is worth, especially if, like you, are someone who recently purchased your home Outside of a market analysis they will use At least last year they said that they would use an appraisal that was completed within the last two years Because, from their perspective, they don't go into your home.
Speaker 1:Yeah doing drive-by and then based on the homes in your zip code. So when you give them that appraisal, I don't know if they're looking at the whole thing. If they're looking at, like the interior photos, but they should not be taking that into an account. On the value, but you can use that to support it. But again, just kind of paying attention to how that value is estimated right. And if you agree or disagree for sure.
Speaker 2:So Definitely pay attention to that. Utilize us if you need to yes as far as listing your home, if you're considering it or thinking about it or Want me to come out to see what you need to do or what I would suggest doing. That happens a lot too, is I'll have clients call me and say, hey, we're thinking about selling. Could you come over and tell us exactly like what would add value to the home, what's worth doing, what's not worth doing?
Speaker 1:I love that people do that.
Speaker 2:Yes, they do that all the time and I wish that more people would do it, because we also on the other side get the calls where it's like, hey, we did x, y and z, so now our house should be increased by 20,000, and I'm like, actually you did nothing of value and that sucks. I'm sorry that you did that you know, so yes, and I won't say nothing about you if you're updating your house in any capacity it's going to give you.
Speaker 1:It'll at least appeal. Yeah, but like for an example, if you replace would just say mechanicals, or if you got a new roof, like that's just required maintenance of being a homeowner. So If your roof cost you x amount of dollars, like sure that might help a little bit. But yeah, yeah, like if you put on a 20,000 dollar roof, but it's only changing your home value by 8500 dollars right. Because other people in your neighborhood have also put on new roofs within the last three years.
Speaker 1:Right like you have to take that into consideration, and I get it that it's just like oh why, I should have left this to the next person but, you didn't know if you were going to be moving or not. And you also don't know if, when you put your house on the market, if that buyer is comfortable, you know buying a new roof. So there's things like that. But like, if your furnace isn't working, that's not anyone else's responsibility other than yours.
Speaker 2:That's not an upgrade on the appraisers list.
Speaker 1:That is a requirement you have to have that.
Speaker 2:So, yes, those conversations happen often. I think a lot of times people don't realize that I can help you list your house. Now, I work on a team. We've talked about this. So, just like refresh everybody's memory, I work on a team. I work for Jose Medina. There are listing agents and they are buying agents. I mainly work with buyers, however, I can do both if it's in my sphere or people that come to me directly. A lot of times, especially with investors, I'll say, like, have Jose, he's definitely the professional there, but I will help you. I can't help you, I want to help you.
Speaker 1:So I like it On my side. It's really helpful if you are a current homeowner and if you know that you're gonna be selling your house, what is gonna be like your net proceeds? And how do you want to make best use of that money?
Speaker 2:Yep.
Speaker 1:And going towards the next home. It's a very helpful and healthy conversation because if they've met with you, they have their market analysis and you're just like hey, your house is not worth 5.25,.
Speaker 1:It's actually potentially worth somewhere between 4.75 to 4.90, then that gives us a ballpark to where we can look at the numbers and see what it actually is going to allow them to do. Same way, like I had a guy who bought his house for I think it was like $60,000 some dollars in 2017. Well, now his house is worth like a little over 130 just because of what he's done to it.
Speaker 1:So still like great numbers that we're working with here but, like that house kind of served its purpose in his life and now he is engaged and life is changing. So like now, what are we gonna do and what do you want to do with this money? So just that stuff to where? If you don't know what you're potentially going to net, then we wanna figure that out before we figure out whatever you're gonna do on the next deal, yep, and we will do a net sheet for you when we would come look at your house and different scenarios too, if you sold for this.
Speaker 2:If you sold for that. Here you are, and then that helps another reason why making sure that you're partnered with the right people, because then I'm gonna bring that to you and say here's the net sheet. Here's what they're estimated to net, based on where they sell and county fees and all of those things that sellers don't realize. They have closing costs as well. They have fees on their side that they will be responsible to pay for and what they could be potentially asked for from a buyer.
Speaker 1:And it is helpful because when you come to me, we can look at that net sheet and do we go best case scenario or are we only gonna do worst case scenario?
Speaker 1:I'll be honest, I'm a realist and I say that you go worst case scenario especially if you are someone who is adamant, saying that, like this house has served its purpose in our life, we're moving regardless. So if that is the case, then worst case it would be best. That would allow for us to structure out your next deal and then, if it ends up at best case scenario according to your net sheet, that's a win and count your blessings. But now, when that kind of aligns up, do you wanna use the best case scenario figures or whatever house that you're choosing to buy? Do you need to buy new furniture? Do you need to buy appliances? Do you need to? Whatever that looks like, we looked at it as worst case. So now you have this additional money that we weren't really.
Speaker 2:Accounting for yeah.
Speaker 1:So it's that. But I also would say, for current homeowners, if you're just like hey, because of the pandemic, because of whatever, we have all this debt that we've accumulated that we didn't really think that we would have accumulated, and if you currently own your home and if you are in a good equity position, let's talk about what a refinance looks like for you, to where you can do a cash out refi or you can take advantage of the home equity line of credit to hit the reset button in a more controlled and manageable way of doing things. So then, that way, when all the dust has settled and you can kind of get a real good grasp on your life again, just cause you feel like things are all over the place and a little bit chaotic, now you can actually manage this and you don't feel like you're robbing Peter to pay Paul.
Speaker 2:It's sort of a thing.
Speaker 1:But also for like the people who are like we like our house, but we don't love our house anymore. Do you want to take advantage of some form of like a renovation loan?
Speaker 2:Do you?
Speaker 1:wanna look into doing a cash out refi, because you're handy and you feel like you are well equipped to be able to do a lot of renovation projects on your own, or like you have family and friends who can help you do it. So then, that way, when you do wanna sell your house, you've customized it based upon what you are feeling. So that is something that a lot of people forget about as well, that you can do.
Speaker 2:And then refinances. You handle those right.
Speaker 1:So just a traditional rate and term refinance. You can do a cash out refi If you have a VA loan or an FHA loan. You can do what's called a streamline, which is helpful. It's not the same On the lending side. It kind of looks like the same, but it's not. And it just essentially allows you to kind of jump from this situation to this situation which puts you in a better situation.
Speaker 2:So when can homeowners refinance?
Speaker 1:Now that is depending on whoever your home is financed with and how long you've had it financed.
Speaker 1:Most places, so in general people, as long as you are outside of your first six months worth of payments, so essentially you don't make your first mortgage payment until. So if you closed in February, your first mortgage payment is not gonna be due until April. So you would need to make six months starting of both payments, starting with your first payment due in April. So I always say you're looking at essentially somewhere between like seven to eight months after closing and that's when you can look into a refinance. Some people say that the interest rate would need to at least be a full percent less. But maybe if you're in an FHA loan and you wanna go conventional even if it were at like a half a percent, and you've done some things and we feel pretty confident that you could get rid of the PMI by going from FHA to conventional, let's talk about it let's explore.
Speaker 1:So even at that half a percent. But if you get that rid of that PMI or even reduce what you're paying in that, does that make a big enough difference to your monthly payment?
Speaker 2:Does it take a 30 day process typically or less? Just like the same time as a contract.
Speaker 1:That, depending on the lender my team our goal is to always try to do whether it's cash out, streamline or just a rate in term our goal is to try to be able to do them like have it from start to finish done somewhere between 19 and 22 days. That is our goal. Does it always happen that way? No, not all the time, to where, like, it does end up being a full 30 day, but our goal is that 19 to 22.
Speaker 2:So how many times can a homeowner refinance within the term of their loan?
Speaker 1:As many times as they want to, but I can say that it doesn't necessarily make sense for you to do so because there are closing costs that are going to be a factor.
Speaker 1:You can have those costs rolled into your new loan. But with what those costs are and you're adding in, does it actually make sense? But then, especially for you get into like with VA loans, specifically if it does not make sense for you to go from. So if you're currently at six and a quarter VA but current market rates are at 6.75, they're gonna say what are you doing?
Speaker 2:Right.
Speaker 1:So unless you're like really stretching out that term to where that payment is lowering, those sorts of things, that's gonna be the immediate question from an underwriter and just like from the compliance side of things, like are you sure that you're making the right move here? And you, as the loan officer, did you educate your client to let them know like hey, this actually may or may not be the best situation for you. Like we have to answer to someone based upon your request, especially if it looks like you are like always someone coming back to wanna do a refinance when it doesn't necessarily make sense on paper. But they also don't know whatever conversation we've had because you could be in a situation to where you stretch back out that term and yet it is a higher interest rate and if that payment is decreasing by a hundred to $200, whatever, they're not in privy to the conversation to know that on your day to day that it actually really does make a difference.
Speaker 2:Right.
Speaker 1:Because of whatever is actually currently on your plate. So we just kinda have to prove that to them and just say, hey, like, due to X, y and Z, yes, this does make sense or no? I actually agree, and maybe it's not something that I like really considered. I heard their story and listened to their request, like all right, I agreed with them. But now playing it back and looking at other scenarios and stuff like that and just like so maybe we do wait a little bit longer.
Speaker 2:Right.
Speaker 1:And that's how you look at it. Home equity lines of credit are great. They help you do a lot of things. When I used to work at the credit union, people use them for renovation projects. Some people use them for, like, their vacations, their kids' first car, or like, especially had one client and he had five daughters and they were all a year apart.
Speaker 2:Oh my.
Speaker 1:God, how, I don't even know, but they all got married essentially within a year from each other, and so like they were getting married. He'd pay one kid's wedding off and then have to. You know, here comes the next one, and except for his youngest two, they got married in the same year, like three months apart, and so like they didn't get the same amount of money.
Speaker 2:Yeah, that's crazy yeah.
Speaker 1:But he also said that they had a lot of extra things that his other children did not get because they were the two.
Speaker 2:yeah, so when it comes to home equity line, what's the limitation on that?
Speaker 1:Home equity lines of credit are depends on who you do it through. But, like through CCM, they actually allow for you to go up to 85% loan to value. This is tricky because 85% loan to value minus whatever you currently owe on your first mortgage.
Speaker 1:So that is just very key and something to take into consideration and sometimes, like there is a minimum amount, like through CCM, it's $25,000. So, like, the lowest HELOC you can have is for 25 grand, but if your house is worth a hundred, you owe $80,000 on it. You don't have an option right now.
Speaker 2:Right, and I've had clients use their HELOC to buy investment property.
Speaker 1:Yes, I always say that that is like an amazing thing to do. You have way more opportunity because then at that point you are a cash buyer.
Speaker 2:You have two properties for your one mortgage?
Speaker 1:Yes, and so, even if, like, the HELOC is a second mortgage but you have that opportunity available to you, use it If you are debt free or like in a position to where, like you know, maybe you lease your cars and you don't have any credit card debt and you have your mortgage, but you have all this equity in your house, take out a home equity line of credit. You will have the ability to draw on it for anywhere between you know somewhere usually for most places, anywhere between like two to five years, and take a draw from it, use the equity to allow you to invest in other things. Sometimes it's like you have a buddy or a sibling who is like, hey, I want to be able to tap into real estate investing but, I don't have all the money to be able to do it.
Speaker 2:Partner together.
Speaker 1:You need to meet with you know proper people to help you figure out exactly how things are going to be.
Speaker 1:Split, but partner together and take advantage of it. We just talked about in our previous episode that you know Canton and Maslin are on the top three emerging you know housing markets, especially if you are local. Take advantage of your equity in your home if you know you're not going to sell your house and be in a position even if you do sell your house, then whatever the proceeds are from your house, you're paying off those loans and putting yourself in a different position. Or like if you wanna buy a house at auction nine times out of 10, those are cash only deals. So if you don't have you know X amount of dollars just laying around for play money, use your equity. That's good. Or if you do buy an investment property that needs work and you're okay with having you know you're loan on it or whatever, take out a HELOC to where you can do whatever renovations need to be done If you are low on cash or you don't want to.
Speaker 1:Basically, you know, stretch yourself too thin on the cash you have available.
Speaker 2:Right.
Speaker 1:Options are there, but you have to talk to people to say, like, how do I really structure this strategize here and put myself in position to make it all work?
Speaker 2:Yeah, that was good. Yeah, it was good.
Speaker 1:That was a lot.
Speaker 2:It was a lot.
Speaker 1:Hopefully you had a pen and paper. If not, you can go back and re-listen.
Speaker 2:The lending side is very like. I'm not great with math and numbers, but like, even just listening to you I learned stuff, so that was good.
Speaker 1:Yeah.
Speaker 2:All right. Well, we'll see you guys back. If you have any questions again, please always reach out to us. Let us know how we can help you, because we're always available and ready to go.
Speaker 1:Yes, I appreciate you saying that, because we didn't even say that in our last episode. What's wrong with us?
Speaker 2:I don't know. All right, we will see you guys soon.
Speaker 1:Bye guys, toodles, all right friends, as we close things out today, remember homeownership is more than just a roof over your head. It's a symbol of your strength, resilience and determination.
Speaker 2:Take action, embrace growth and never be discouraged about where you are in your journey.
Speaker 1:And remember to follow us on Instagram at reality of real estate podcast.
Speaker 2:Our emails are linked in the description below. You can reach us at Christopherlynch at CCMcom. And my email is blaymanrealtor at gmailcom. All right, toodles.
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