[00:00:06] Speaker: Matt Ruhan, realtor to the stars, parent of two cats, three kids, a wonderful husband and a hero to many.

[00:00:21] Speaker: Hello everyone, this is Matt Rine and my very first ever Matt Rine podcast. And so welcome everyone and see how embarrassed I can make myself here in another 30 minutes. That's the goal here guys, right? I love it. I love it. Well, I'm here and so I'm doing this the right way. We are in a beautiful studio. So if it's going to be a disaster, I want it to be a beautiful disaster, if nothing else.

[00:00:45] Speaker: And so I wanted to make this first podcast about something that I hear about all the time. And so this first one's gonna be the journey that we're hearing and the stories that we're experiencing specifically on the buy side of this business, because all I hear is information that's only half accurate, information that relates to the entire country, and we are situated here in Maryland. So we're in the Baltimore Metro area,

[00:01:12] Speaker: And everyone knows that real estate is. Local. It's local. And so it's all about location. And so I want to provide some value to our current clients, past clients, and maybe potential clients here in the Maryland area. And so as a guest today, I wanted to bring someone that's, uh, also local. His office is here in the Towson area, but you serve pretty much all of Maryland. Yep. Maryland, DC, Delaware, Pennsylvania, Florida, technically too.

[00:01:39] Speaker: There you go. If you're listening in Florida, Mr. John Wald here can assist you. And so John, go ahead and give yourself a quick intro. I know you're one of the top producing guys. I have always been impressed with what you've done and we've partnered up in the recent years. And so go ahead and give the folks an idea of your experience.

[00:01:57] Speaker: Yeah, I appreciate that. So, uh, John, well, primary residential mortgages company, we I've been at the business for 17 years, um, fell into this business after college and never left. And we've grown our business on just always doing the right thing. And I'm really happy that we have the ability to partner with you and a lot of other top agents in the area. Um, it is, you know, it's, it's a fun business. It can be stressful, but it is also just a great business because every situation is different.

[00:02:28] Speaker: Yeah, and as I think about this podcast and what I'd like it to be over the coming months and maybe years, we'll see how this works. But I think about, I've been doing this 15 years myself and the idea that this can be Groundhog's Day, you're selling a home, right? And so, but it's always different. And I think what makes it different, it's the people. And so everyone has a different story, everyone has a different life experience and they come with them, if you will, with different baggage. And that to me is one of the most interesting things about this.

[00:02:57] Speaker: Everybody's got a different why, and it's always important as a lender, as a realtor, to understand the why. Why are they buying this house? Is it an investment? Is it purchase? Is it a primary residence? Are you growing a family? That's the fun part about this business that I love.

[00:03:12] Speaker: Yeah, I think there's extra value we have. And someone, I do Zillow calls, I do all kinds of stuff. That's how I meet clients. And I had someone on the phone yesterday that literally interviewed me for 10 minutes. Well, and it's the most unusual thing on the buyer side. In this specific podcast here today, this episode is for the buyers. And so do exactly like this potential client did with me. She interviewed me for 10 minutes on the buy side.

[00:03:38] Speaker: And because they, you know, a lot of buyers feel that they're not paying directly for their agent, therefore, you know, just show me the door, open the door guy. And she valued this position enough to interview me.

[00:03:53] Speaker: And I don't do you ever hear that that people actually interview their agent on the buy side? I mean, personally, I would hope that they do because that person is really guiding them, telling them about neighborhoods and finding, you know, that that agent shouldn't just open a door. That agent should find out why they're buying how many bedrooms, how many bathrooms, what your budget.

[00:04:13] Speaker: So, if you're a buyer, I would hope that you spend the time to vet your agent, vet your lender, and it's not about the deal. It's really about the person.

[00:04:24] Speaker: Yeah, I just think you should have an advocate and accepting someone that doesn't share your values or share, you know, the level of experience that you'd expect. I mean, it's crazy. It's not free buyers. It's your money that funds the transaction. So you might not feel it the same way you will when you interview on the listing side. It's just as important. Yeah, maybe more.

[00:04:46] Speaker: Absolutely. And so let's get into it a little bit. So I should probably introduce myself as we start this. And so I didn't even do that. So I'll get this down, guys, eventually. So I already mentioned my name is Matt Ryan. So I've been here 15 years in the Baltimore metro area. I'm currently, I say the top 1% as they always put in your little slogan. So we're going to do about $40 million roughly this year and transaction volume. Very impressive.

[00:05:13] Speaker: Yeah, I'm pretty happy with it. So that's a pretty good year. And I have some market statistics as to what this last market was in general. And so I'm very proud of those numbers and what that represents this year in particular, because it was a challenging year for real estate. Second half, absolutely.

[00:05:31] Speaker: Yes. And so we have a lot of new realtors. So if you're a new realtor listening to this, you can judge how strong the market is by how many new realtors enter the market. So it typically corrects itself when we peak out. And that has found itself very true once again. And so that's where we are right now. And so I work with buyers and sellers and I travel pretty much everywhere in Maryland except for over the Bay Bridge. I don't do any of the Eastern Shore.

[00:06:00] Speaker: And you get an awesome team too. It's not just you, you've got a great staff behind you that really takes things from contract to close and help you out when you're not there, which is very rare. Yes, and that did not always, that's not, that'll be a whole nother podcast, but that journey that that takes and the amount of times that you fail and you don't hire correctly, you don't train correctly. I mean, I have a list of all the things I've done wrong. So anything that's gone right today is a result of many failed attempts in the past.

[00:06:28] Speaker: And so let's get into it. So if you're a buyer and you're starting to look at this market, we're in 2022 and what you're hearing on the news, which is tough to listen to these days because everything is so darn negative. It's hard to take, quite frankly, personally, but you're hearing all the negatives. You know that Federal Reserve is continuing to raise interest rates. And do you want to say what just happened yesterday once again?

[00:06:52] Speaker: Yeah, so we had another Fed hike, right? And the Fed said, hey, we're going to raise the overnight lending rate, which impacts credit cards, mortgages, car loans, everything that you borrow money on by 75 basis points. And a basis point, just so you know, and we're recording this in November, 2022, just in case you're listening to this. Good point. Good point.

[00:07:10] Speaker: Yeah, go ahead. A basis point, 75 basis points is 0.75% of 8%. And the reason, and I'll get into kind of why they're raising this and what they're trying to counter is inflation.

[00:07:27] Speaker: And inflation is this word that we've kind of had our head in the sand for years over COVID, right? When we were printing money, we were like, oh, money's going to be worth the same as it is today as it will be in the future. Well, it's not. And inflation simply means that your money today is not what it will be worth in the future because

[00:07:48] Speaker: what's happening is we've just maxed out. We've got inflation is through the roof at this moment. So the Federal Reserve is coming in and trying to counter inflation by making goods a little bit more expensive and slowing the economy down. And that's essentially what we're doing as a Federal Reserve. Chairman Powell is coming out, and yesterday he came out, said we're raising it by 75 basis points.

[00:08:12] Speaker: which we all anticipated. So every mortgage company, every mortgage backed security, the entire market anticipated this rate hike. So it wasn't a surprise. What's most interesting is the commentary that happens after the rate hike.

[00:08:28] Speaker: And when Chairman Powell went out ahead and said, hey, we kind of let inflation go out of control. We understand that we're going to continue to raise rates and we might be too aggressive right now, but we'd rather be too aggressive right now than let it continue to get out of control.

[00:08:48] Speaker: And I want to stop just for a second, because if you have a PhD in economics and these are all things you understand probably even better than a realtor and lender here in Maryland, that's true. You know, if you're listening to this and you fall into that category, this is not necessarily designed for you. This is really designed to help explain this as just fundamentally. And I say WebMD.

[00:09:12] Speaker: Yeah, like you're Googling this. We're helping you understand the basics because what I hear when people try to explain this to me when I have clients that are making decisions for their families and they don't understand the terms, yet alone what it means. So I just want to pause for a second and understand, you know, you've described what inflation is, but inflation is a good thing or is it a bad thing? Do you know what in general, do we want inflation to be zero? No.

[00:09:40] Speaker: But there's a healthy mark of inflation. Right now, the fact that inflation is eight, nine percent is not a healthy mark. Around a two percent mark is a good inflationary number. We all know, like, look at your parents, right? You know, your your parents bought their house probably for 60 to $100,000. That same house right now is not worth 60 to $100,000. Right. We inflation is healthy. Money growing is healthy. But at a rate that is out of control is not healthy.

[00:10:10] Speaker: Yeah, and so an economist I heard present described roughly that 2% target rate that the Federal Reserve has is designed to expand our economy. And so having deflation or stagflation where it's not growing or it's going backwards is not a good thing.

[00:10:25] Speaker: And so we just want it to be, like you said, in a controlled fashion. So inflation isn't negative necessarily, right? So that's the first thing I wanted to put out there. And so in order to get back to 2%, we're going to have to continue to raise the Fed rate. And this is another term that I hear all the time, and I wanted to help see if you could expand on what the Federal Reserve rate is.

[00:10:48] Speaker: So it's the overnight lending rate that the banks use to borrow money on a basis, right? And the Fed rate is not going to directly impact, like the 75 basis points that they raise is not going to directly impact your credit card right then and there. It's not going to directly impact your car loan right then and there. It just means that the money is more expensive for us to borrow, essentially.

[00:11:16] Speaker: You know, so in the question that I always get, I mean, I had five realtors text me, their clients are so nervous, you know, yesterday, feds are going to raise rates, this and that. I always tell people the day that the Fed raises rates, typically interest rates don't change. And the question is, is, well, John, why is that?

[00:11:33] Speaker: Well, the Federal Reserve, we anticipate the mortgage-backed securities, right? Every loan is sold and packaged up as a mortgage-backed securities. The bond market, which is the mortgage-backed security market, understand that there's going to be a raise in rates. They've already predicted the 75 basis point increase. And it's intentional, correct? Correct. They signal their moves well in advance intentionally. Correct.

[00:11:58] Speaker: So we're not, exactly. The day of, it's not like all of a sudden the interest rate that morning was seven and that evening it's, you know, eight percent. It is, we anticipate what the rate move is going to be. We actually anticipate what the next rate move is going to be based on the notes that they share with the general public the day after, the day of the

[00:12:19] Speaker: meeting. So we are anticipating another rate hike, 50 to 75 basis points in December. In December. Right. So it's not exact days, but it does have a clear impact on mortgages. I mean, think about when we went to bed December 31st, 2021, interest rates were in the threes.

[00:12:41] Speaker: Right now, you're sitting in the mid sevens. So it has a huge impact on the economy and the marketplace. And look, interest rates play a big role in your monthly payment, there's no doubt, which is why 2020 and 2021 was pandemonium because rates were in the twos and the threes in some cases. I'd like to say in the front lines of that hysteria and going 20, 30, 40 offers and just it was nuts.

[00:13:06] Speaker: I mean, giving up your first born some people for an offer, not literally like, well, I don't don't want any. I mean, we've lost some and I was so aggressive on the offer, I couldn't believe it. But I just kept thinking this is not healthy. This is not the way it should be. And so raising the rates are a good thing to to assist us. However, when I just see the future of what's about to happen in every, quote unquote, expert that speaks in this.

[00:13:31] Speaker: I mean, they don't describe this as something that's going to be raising and raising. Like the Fed can only go so far. As soon as they believe that inflation is under control, what's going to happen? What are they going to do next? We're going to, well, not we. I wish I had that much power. Yeah, I don't. Go ahead. The market predicts that interest rates are going to fall by Q3 of 2023.

[00:13:54] Speaker: The Mortgage Banker Association just came out and said that rates are going to fall around four and a half to five and a half percent by Q3 of 2023. OK, so that is a huge indicator that, you know, they're really being extremely aggressive on the market and inflation and trying to get things under control. And then the market is going to normalize a healthy interest rate is a five percent interest rate.

[00:14:18] Speaker: Right. We've been spoiled. And trust me, I've enjoyed it. Okay. We all, yes. With the twos. We all enjoyed, yes. But it's not something that could sustain in a normal place. So, you know, what we are predicting, and this is why I'm talking to a lot of buyers, right? And they're like, John, I can't afford at seven and a half percent. I just don't like it. I don't want to do it. I can't do it. I mean, how many times have you heard that conversation?

[00:14:44] Speaker: I hear it every day. Yeah. That's the reason I wanted to get on here and help describe this and bringing someone like yourself one that originates a ton of loans in Maryland. It's just you're listening in on a conversation that if you're if you haven't had this yet with a local lender, you're listening to the conversation you would be having with someone like John. Yep. And the conversation goes pretty simply, right? Look,

[00:15:07] Speaker: A year ago this time, you were competing with 15 other people in that exact same house. So you had to put a billion different offers in. Yes, interest rates are lower and money was cheaper, and your payment was a little bit less. But you have an advantage now that you didn't have then, and you have the ability to negotiate on price, terms, and seller contribution. Your payment is going to be higher, but what I'm telling people is, look,

[00:15:32] Speaker: You have the ability to get a deal on a house depending on the market, right? That specific market, how long the house has been listed for. But you have an ability to get a deal that you didn't have a year ago. You will have a higher interest rate, right? Nobody has a magic button that they could go back to two and a half percent.

[00:15:54] Speaker: You are going to have a higher interest rate, but the mortgage banker association, which is pretty darn accurate, is expecting interest rates. Let's say they fall to five and a half percent. You're dropping a total of two percent on your interest rate. You are going to save a ton of money. So what we're doing is putting people, hoping, not hoping, we're putting people into mortgages, right, at seven and a half percent, which we have some tools, which I'm going to talk to you in about a second. But we're putting people into this mortgage.

[00:16:21] Speaker: and saying, look, you are going to refinance the average person refinances.

[00:16:26] Speaker: a 30-year mortgage, right? A lot of people are like, I'm gonna get in a 30-mortgage, I'm gonna stay in it for 30 years. No, you're not, right? The average person will refinance that mortgage about two times in a 10-year period. Is it because they wanna pull out cash? Is it because they wanna do renovations to their house, pay off student loans, pay for colleges? We don't know, right? Everybody's gotta why. Well, I'll tell you, I heard this, I'm in the business, and when I bought my home, which we anticipate being our forever home here in Lutherville,

[00:16:55] Speaker: I love the place. I was trying to be convinced this exact situation not to go even for a 30 year fix, but to do an arm because the rate, it was significantly better and I was in the jumbo category and it just made sense. And I'm in the business. I've heard that statistic thrown at me a million times and it's challenging because that's risk and it makes you nervous. And one of the things I want to highlight is that I've heard this approach, the likelihood of you not refinancing, if you buy today in November, December, 2022,

[00:17:25] Speaker: The likelihood of you not refinancing in the next couple of years is zero. Correct. It's what I've heard. But you talk to a buyer, they say, Matt, that's speculation. I'm not going to buy a home that I can only quote unquote afford or want to afford based on what you're saying there because what if it goes up to 9%?

[00:17:41] Speaker: And I don't blame them, right? Which is why we're typically putting people into a 30 year fix at 7.5% or whatever the range is. So if it goes up to 9%, you're in a 30 year fixed and it's never going to change, right? So, you know, we completely do a 180. We have no idea what's going on. Next thing you'll rates are 15%. Well, you still have a half a percent or half of what the market's selling right now. And you're fixed in for a 30 year fixed.

[00:18:06] Speaker: Arms also don't always have the best rates right now because of an inverted yield curve, right? We're not going to go ahead and see the best interest rate on an arm in some cases. But again, the 30-year fix gives them the cushion. But what I was just talking to you about before getting over here is we have the options for these buy-downs. And these buy-downs, again, I've been at it for 17 years. These buy-downs were popular years ago.

[00:18:30] Speaker: They come back. So the buy downs give us, if you as the real estate agent can negotiate seller contribution, we could use a portion or all of the seller contribution to temporarily buy down the interest rate for the consumer. So let's pretend the interest rate is seven and a half percent. We have many different buy down options. The one I like the best is a one percent buy down over a two year period. And I'll explain to that why.

[00:18:59] Speaker: Instead of having a 7.5% interest rate, you will have a 6.5% interest rate for a two-year period, okay? And we're using the seller proceeds to offset that monthly payment and get it at 6.5%. And after that period, for the next 28 years, in the event that you don't refinance, your interest rate is going to be a fixed 7.5%, right?

[00:19:22] Speaker: So it's a standard 30 year mortgage, but it's a buy down, temporarily buy down for 24 months. And the benefit is, let's say in 12 months, the rates are five and a half percent. You'd be refinancing anyway, locking in the lower rate. Absolutely. And you want to know the best part about that is you're going to temporarily be at six and a half percent for that 24 month period.

[00:19:42] Speaker: Let's pretend that cost you or the seller $10,000. So essentially what we're doing is putting $10,000 in an escrow account and we're paying the difference between seven and a half percent interest rate and six and a half and we're giving that credit. We're taking it out of that money that the seller gave you. Let's pretend you only are in that home for four months because all of a sudden now interest rates are five and a half percent. You don't lose that $10,000 in there.

[00:20:07] Speaker: If there's money left over in the escrow account, the buy-down account, that money goes down to your principal curtailment. So instead of you owing $200,000 on a mortgage and you had $10,000 in that escrow account, you used up $2,000 of it. You now have an $8,000 credit against your principal when you refinance. So you're never losing that money because a lot of people are going to say, hey, John,

[00:20:32] Speaker: I'm going to just use that $10,000 seller contribution to buy the interest rate down. So instead of 7.5%, I just want to use that $10,000 to get a rate of 7%. I counter them and say, look, if rates are at 5.5%, you use that $10,000 that you're never going to get back. At least now for a 24 month period, we could give you a lower monthly payment.

[00:20:55] Speaker: And then that money is never disappearing. You're going to be able to use it as a principal curtailment, which just simply means instead of owing $200,000, now you owe $192,000 on your mortgage payoff when you do a refinance. So it's a huge opportunity. It's a huge win for people. There's a 2-1 buy down. So instead of having a 7.5%, you'll have a 5.5% and then a 6.5%.

[00:21:18] Speaker: I like the 1% buydown over two years. But you still have to be qualified. If I'm a buyer, I have to be qualified for the 7.5% payment. Great point. Yep. You have to be qualified for that. So this is just a way to kind of retroactively get me back to the rates from months ago. Yep. And save money. And one of the things I just wanted to clarify, if you're watching this and you have no idea what a seller contribution is,

[00:21:43] Speaker: you know the seller contribution to clarify there that's when a seller during the negotiating process when you write a contract they are willing to give you if you will a credit to the buyer it's the same as cash. So to know how common were they a year ago.

[00:21:57] Speaker: it was laughable. If you asked for $1, they would throw it out. If you asked for a home inspection a year ago, they would throw it out. And the best way to do it, you risk being salesy when you tell people this because it's almost like you get your cake and you eat it too. Because the market shifted, anytime there's uncertainty, there's opportunity. And so the fact that I have to do a podcast to describe what these things are and to calm people down to get them through this initial purchase,

[00:22:26] Speaker: I say if you were looking to make a move in the last year and you missed it, or two years, three years, and now you're here, there's always a benefit to everything that there's, whether it's a potential negative, right? So yes, there's higher rates, but we have negotiating power now. There's only a few markets in all of Maryland where it's really competitive. Most markets, days on market have crept up.

[00:22:48] Speaker: Things have slowed down. You know, the good home still sell like crazy, but you're not going to be nearly as, you know, it's not going to be a line around the block for an open house on a Sunday like there used to be. Correct. And if there is, it's it's rare. And so you can basically get a better position to get a better deal on your home and then improve your rate down the road. Yeah.

[00:23:12] Speaker: And so I think it's an advantageous thing for a buyer to understand, to know their options. And I'll probably say it a few times, you don't have to remember anything we just said, right? Because if this is new to you, you don't need to know all of this and spend the next 10...

[00:23:28] Speaker: hours of your life googling, you just can call one of us. And that's the purpose of having a professional is to look at their scenario. And I do my darnedest to get people to speak to someone like John first before we tour homes. And it's because it's all in the game plan. And I want to know, I call it the buffet of options. I want to know what all the options are before we see the first house, because that will dramatically impact potentially where we look, how we go about it, what price range we look in, everything.

[00:23:56] Speaker: Yeah, I mean, and here's the advantage of buying now too, is you have the seller contribution in some cases, most cases I would say, you have the ability to either negotiate on price or seller contribution or terms, okay? I've seen offers that are contingent upon them selling, the buyer selling their other house, and years ago I've never seen that. Like, you know, the past two years I had not seen that. I'm seeing that more often.

[00:24:20] Speaker: But what's going to happen is all those people, so if you could afford the payment right now, it is a great time to buy because what's going to happen is when the rates drop, because they will drop, those people that can't afford, say, a seven and a half percent interest rate now can afford at a five and a half percent interest rate.

[00:24:41] Speaker: we're gonna see a lot more people come out of the woodworks. There's not that many people, there's not that many buyer shopping for homes right now. So you're gonna see a lot more people when the rates are lower and there's gonna be a lot more competition. And the inventory hasn't magically shot up. That's what some people couldn't predict. And everything we're saying is just, you put an asterisk next to all of it because we're local experts. There's very few national speakers that are gonna be able to speak more intelligently than we can locally.

[00:25:10] Speaker: A lot of people could speak probably better, at least than I can, at a national level. But I'm in the streets. I'm doing this all day, every day. I'm getting to talk to folks about this situation in our local neighborhood here in Maryland. And so, you know, I just wanted to point that out. And some of the stats that you just mentioned, I pulled this up because I think it's interesting because I'm a big nerd about this, but the closed sales volume

[00:25:34] Speaker: in the Baltimore metro area is down by almost 40%, 39.1% from this time last year. And you- And where's the Baltimore metro area? That's Baltimore City, Baltimore County, right? Just that area. It's pretty much mostly where we service. So it's Howard County, Harford County, Carroll County. It's the metro area kind of surrounding it. I call it like a 30, 40 minute radius from the city. Cool. And so that's pretty much the metro area that they're referring to.

[00:26:01] Speaker: And so the daily inventory is up, but it's only up by 20%. So the inventory of available homes is only up 20% compared to 40% decrease in total sales. And so if all of this sounds like this is the worst time to sell your home ever, the truth is it's not really because inventory is still tight.

[00:26:21] Speaker: And and so it's just everything in the last couple years has taught me that that there's a first for everything and for me I've been done. I've done this 15 years. I went through 0 809 this feels different to me than that This is a lot different I wanted to bring up 0 809 because so many times people like dude There's gonna be a market crash like everybody like they whisper it when they say I don't know about you. They're like

[00:26:42] Speaker: And I'm like, no, it's not a market crash, right? What happened is we have so many pre-qualified buyers. We had so many people that are so qualified right now. Like in terms of underwriting guidelines, the difference between what happened in lead up to 2008

[00:27:00] Speaker: And today is underwriting and mortgages. Right. Back then, we would take your pulse and say, OK, you got a mortgage to go 100 percent. Actually, you just got out of bankruptcy a day ago. You got a 520 credit score. Not a problem. We'll give you 110 percent of the home's value and we could pay off your car, too. Right. Nowadays, it is very detail oriented and the people that are buying homes are very, very qualified.

[00:27:25] Speaker: So, we're not going to all of a sudden see a huge influx of inventory where people are going to be gobbling up or people can't sell their house. To your point, it is still a good time to sell, but it's also still a good time to buy because there's so many people that are sitting on the fence that can't afford the 7.5%.

[00:27:45] Speaker: And they're waiting for the five and a half to happen. And when that does happen, we're going to see people trickle back into this marketplace where right now I tell people this is like Coles or Marshalls. It's a good deal, right? You could get a good deal on something.

[00:28:00] Speaker: Well, and it's just the reality is if you can afford in this market to buy still now, if you're priced out and you're just you're priced out, that's just unfortunately what's happening to some people. But if you can still afford and you are in a position to be able to refinance six months, two years down the road, this is actually more advantageous for you. And refinance in question, too, is everybody's like, refinance, that's going to cost me a ton of money.

[00:28:22] Speaker: No, it's not actually. A refinance will cost, roll in, all the roll, because everything's typically rolled into the refinance. The refinance cost is around 3,000 bucks. 3,200 bucks is what I always estimate. Now what's going to happen is you're also going to skip a month's mortgage payment, and in some cases you could get some cash back. So it's not going to cost you anything. When you're buying a home, you're trading

[00:28:47] Speaker: the house from the seller to the buyer. And that's where a bulk of the costs are coming from. When it's a refinance, it's your house. So all you're doing is really just renegotiating the terms of the mortgage. Yeah. And so the other point I was going to make is that showings are down 33% year over year. And so that's according to the Bright MLS, which is our local multiple listing service. And so we are just not seeing the activity volume that we once did.

[00:29:14] Speaker: And so that's another point for our buyers out there. There is less competition. So if I could have a sound bite with that re-recording, it's like, I think some of the feedback we might get when people read this, so you have two people that are potentially biased, right? We're salespeople. Let's not put it past that. I'm a very effective salesperson. So are you. And we're, you know, pitching a product that we can sell. And the reality is when you look at the underlying statements behind it, this is nothing like 0809.

[00:29:41] Speaker: And when you say it out loud, it sounds like you're trying to sell a bill of goods to some folks. And I have people that are very skeptical when you say that to them. And I always ask them, it's just, are you reading sound bites or listening to sound bites? Are you reading the headlines or do you know the local marketplace? And even in 08, 09, like again, I was originating then and I had some of my best years during that time.

[00:30:03] Speaker: And it was because people were gobbling up deals and this and that, but it's still a it's always a good time to buy a home because you need a roof over your head. We're not going to sell you something just to buy a home, right? Buying a home is an emotional purchase and you have to be vested into that purchase. So, you know, oh, oh, nine.

[00:30:26] Speaker: Again, I bought my house in 08, I'm trying to think, I bought my house in Canton in 08 and I ended up selling it, made a profit, and I needed a roof over my head. You're buying a home because you want a home.

[00:30:39] Speaker: If you have a long enough holding period, put it another way, if you have enough long enough holding period when you buy real estate, it's your protection. It's folks that have a very short window. If you have to move into the Baltimore metro area and you have one year, you're here at Hopkins. That's a much more, I mean, the level of risk is significantly higher. If you're going to live somewhere for years,

[00:31:02] Speaker: I mean, it's like buying in the market. How do you time the market? It's impossible time. Just educate yourself, get the right product, the right loan product, get the right home, and move forward. And again, real estate is local, local, local, right? So 0809 around here, we're still very strong. Because again, if you listen to the national data, like Boise, Idaho went up like 30%.

[00:31:28] Speaker: But if you look around here, we've got government institutions, right? We're surrounded by the government. We're surrounded by hospitals, Hopkins, University of Maryland, different institutions like that.

[00:31:41] Speaker: Real estate is local, right? And my mother was a real estate agent in New York for about a hot minute. And I remember her coming back home and being like, John, the three rules of real estate, location, location, location. Well, this Baltimore metro area is in a great location because we are protected by government jobs, hospitals. And historically, we are always better off in a recessionary times or a bad real estate time because of that reason.

[00:32:09] Speaker: We don't, when I look at the data, and we work with a lot of people that are coming from out of state. And when you share that with them, we don't have the highs and lows that many parts of the country experience. We don't come to Maryland and think, in general, your home's gonna quadruple in value in two years. This is not Austin, Texas. This is not Las Vegas. This is not what some refer to as like a Class A real estate environment. So our market is not that. But boy, is it stable. It's like a blue chip.

[00:32:39] Speaker: Yeah, something very steady. It's going to pay out a dividend over years, you know. Right. Right. So it's a it's a different beast. And so you have different expectations. It safeguards us. Now it prevents us from the crashes. Typically, it can still go down. But we've never experienced anything, fortunately, like Florida and some of these other parts of the country. Yeah, let's do that.

[00:33:00] Speaker: And I wanted to bring something else up to change gears slightly. And so I printed off a couple of things that a good friend of mine shares. He's an investor. He's boy, is he into really specifically Tesla. And so I'm going to do 15 videos just on that either normal realtor and have nothing

[00:33:18] Speaker: to do with Tesla other than I own a ton of their stock. I'm a big advocate, but one of the things he highlights is CEO business confidence and expectations for our economy six months ahead. And so this comes from Goldman Sachs global investment research. And I wish I could share this maybe in post edit we can, but it highlights all the years when they do this and they've been doing this survey since 1985. And I can tell you that's 37 years ago. Don't ask me how I know that number so quickly.

[00:33:47] Speaker: And it's my age people, it's not that funny. And so what you'll see is 2022, where we are now, it's actually the lowest confidence that CEOs have ever reported since they've started doing this. And that includes several downturn and recessions. And what that correlates to is that the S&P 500 index can tie when there's a peak and a valley, they correlate to the S&P index. Isn't that interesting?

[00:34:14] Speaker: And so we're at the lowest point that it's ever been. And so what that determines to them is when you look at the graph, it appears that we're going to rebound in a significant way from the historical perspective of what we should expect because they anticipate six months to be rough, but the future is very bright. That's typically what it correlates to. And if you look at Mortgage Banker Association that just came out and published a few, I think it was a week and a half ago.

[00:34:38] Speaker: They predict that rates are going to go to around four and a half to five and a half percent, right? Because everybody's predicting that the economy is going to be recovering very soon. And the implications for that in our world, getting it back to what we do for a living. So when we buy homes, when you get back to four and a half, five percent interest rates in a tightened inventory environment, what's going to happen? Everybody and their mother is going to be coming out of the woodwork.

[00:35:03] Speaker: And then it's a competitive situation again and we're probably gonna find ourselves right in a very similar buying frenzy that you had previously. And so the point is if you're listening to this or watching this and you're on the fence as to when to make a move, I would speak to a lending professional.

[00:35:21] Speaker: That's the first thing to do. That's the first second and third thing to do. I put everybody in front of a lender first. Let's have that discussion, create a framework for what your search is going to be, and then we can create a game plan to see homes and see what areas make sense and so forth. When you meet with a lender, I always tell people, I may be able to qualify you for a lot more than what you're comfortable with.

[00:35:41] Speaker: come to me with, hey, John, I really don't want my payment to be higher than X, and then we're going to work into that. That's the most important thing because we want to qualify you on a payment, and that's what people always miss, right?

[00:35:58] Speaker: Rate is a rate. But what's your payment? Are you comfortable with the payment? Forget the rate because the payment hopefully will only be less when rates get lower. But are you comfortable with the payment? Because that's what you should be looking at. Don't listen to the news that's telling you you should buy now because rates are low or rates you shouldn't buy now because rates are high.

[00:36:17] Speaker: get comfortable with your monthly payment and go out and find a house. Now as a consumer here, right? I buy homes too. What I'm hoping that I don't hear in that statement is that don't pay attention to it. I'm not going to look at it. Whatever you put on there, I'm happy with John.

[00:36:32] Speaker: That's not what you're saying. No, not at all. So you can still be a smart buyer. Right. And still make sure you're getting the best terms, best rate. You're just saying that that what do you what do you say? What are you saying specifically? Because I don't want when I hear that I'm like, are my not going to look at the rate again? No, not at all. And that's the point is, is again, you need to focus on the payment, not the rate. Right. There was this thing that always said, you know, marry the house, date the rate. Right. And look, I think that's kind of cheesy. But yeah, a little bit.

[00:37:02] Speaker: But look, there's, at the end of the day, you really just want to be most comfortable with the monthly payment because you are likely going to refinance, you are going to sell the house, and you want to be focused on your payment, not listen to all the noise. Because once you say, hey, John, I want my payment to be $3,000 a month or whatever it is, we're going to build a home for that. Now, yes, a payment of $3,000 a month with 3% interest rates, you're going to get a higher priced home, right? And a bigger house.

[00:37:32] Speaker: on a higher interest rate, you're going to get a lower house because your payment's not going to be the same with two and a half versus seven and a half percent. But what we want to do is show you where you currently are today on the payment that you're comfortable with and hopefully that will get you the house that you want to grow into and live at.

[00:37:51] Speaker: And if it doesn't, yeah, then sit on the side until rates get lower. But don't listen to the media or anybody that's saying don't buy now because rates are high. Because as Matt's trying to say is once rates get lower, which they will happen, we are going to see an influx of people coming into this market.

[00:38:10] Speaker: And we want to make sure that you have an opportunity to negotiate terms, price, contribution, repairs, where we saw that a year ago, we didn't have any of that ability. That's right. Preach it, John. Well, I'm going to switch gears entirely here because this is the first podcast that I've ever attempted.

[00:38:32] Speaker: And so john is my first guest that i've ever had so it only gets better from here. I know that to be true Come on. How could you be referring to you of course, but my lack of abilities? Um, and so we're here in a studio here in talcen which beats the heck out of whatever I do in my office and so what the reason i'm doing this and i've talked a bunch of people everyone's like should I do a podcast and

[00:38:55] Speaker: And it makes, what do I have to say? What am I gonna talk about for 30 or 40 minutes? And I'm probably talking circles at times and I have much respect for those that do podcasts for years and have just such talent for it. But what are you seeing when people, you did a podcast recently for another real estate agent.

[00:39:13] Speaker: I did. So what is your feeling in terms of podcasts? Now I'm going to ask the man who's actually the sound engineer whose studio this is because he got me involved in this. This is his idea. So blame him. But I want to first hear what I mean, you just did another couple of years ago. Did you ever do podcast? No. And so it's a thing, right?

[00:39:32] Speaker: I listen to a podcast when I'm at the gym, you know, and I like listening to it. It's good content. I feel like I'm educated. But isn't it reserved for the experts? Like the people, like that's in my head. The apprehension I had about doing this is I'm just a dude. Yeah, but you're not a dude because you did $40 million in business.

[00:39:50] Speaker: this year. I did 50 million dollars in business this year. We've seen, and countless years behind that, we've seen, we are experts. And I think it's hard sometimes to look at yourself in that sense. When I go home, that's not the way I'm received. Me too, I'm married quite often. Yeah.

[00:40:13] Speaker: Yeah, so I mean, maybe that's true, but it's you know, and that's it's just interesting to hear. And this is what he he just, I guess, got me involved to say you have to do this because he people have podcasts. These are like HVAC specialists. These are people that that talk about their industry, their trade. And what's interesting, he said that if you're local, that people typically want to hear from someone that's local. So if you live in Maryland or moving to Maryland, it might be better. Like once I become a little more refined in my

[00:40:40] Speaker: I hope you invite me back for that one. Eventually. It's going to be a while. We don't know how to edit this one hard enough. But it's just like if the local element and hearing someone and the amount of time I spend on YouTube going down the rabbit hole that I go down on random things.

[00:40:58] Speaker: It's just, you know, and I wanted to hear from you if you can get on mic. What were you saying about podcast and how you feel that you kind of compared it to everyone having a website and no one wanted to have a website for their small little company. And now everyone has a website. If you're not found online, you don't exist.

[00:41:14] Speaker: So yeah, the brands now need to have a personality and an emotional connection with people. More and more, it has been scientifically proven that data doesn't change behavior of people, but emotions do. And the best way to connect with people is through storytelling. That is what we're doing right now. It's not the same just to tell them

[00:41:40] Speaker: X, Y, or Z, the graphs are saying to, hey, this is me, I'm John, I'm Mark, or whatever, no, and this is my story, this is what I do, this is how I got a house, this is what happened afterwards, and to tell your story, and also hearing the story on your side, like you being the realtor, or being the loan officer, no, or whatever, it just connects you more and gives you a little bit more

[00:42:08] Speaker: of confidence of what you're hearing instead of a faceless name or brand. And so basically what I'm seeing passing now is that we're in 1995 and a guy that I don't know manufactures socks is saying to you like, why have a web page? I don't need a web page. And now it's like, it's just dumb to think that you don't need a web page.

[00:42:33] Speaker: Yeah, I think so. And I think one of the reasons I wanted to bring that up is because everyone that I talk to is apprehensive. They're nervous about doing a podcast for the same reasons I think I am. I don't know what to say. Who am I to be the one talking anyway, regardless of my production or what I am or who I am? Because it's weird. It's a weird thing to talk out loud in this capacity. I don't want to be judged.

[00:42:57] Speaker: I don't need someone that thinks, you know, that I'm a complete idiot now. It's like, you know, it's just so that I think I can't be the only one that thinks that way, no matter how qualified you are or how many times you've done what you do in your profession.

[00:43:10] Speaker: me as a former client of yours like there's so much information that's so interesting to me that maybe for you it's like really simple things no but you're you're an expert and that's so much there's so much valuable information every time i speak to you that has a lot of value and i think that that there's thousands of people in my exact position that uh

[00:43:35] Speaker: We would love to know more about your world. Everyone, like you say, we will always need a house. We will always need a roof on our heads. Unfortunately, none of this is taught in school. We need to get all of this information. Thankfully, we have these technologies that now make it available for us.

[00:43:59] Speaker: Yeah. And I've been to listen to Gary Keller speak and he's one of the experts or the thought leaders in real estate. And he describes how crazy is it? You're in America. We know exactly how much an iPhone cost or how much those shoes cost or these discretionary items that we spend all our money on. But you say, what is that? What should that home trade for? What does that commercial building and what are the rent rates in this neighborhood? People don't know any of these things.

[00:44:24] Speaker: And it's shocking, like this is where wealth is created and majority of wealth in this country resides for most of us. And many people are just really not aware of these things. Well, I think that's why I like working with you and your team is it's educational, right? And I fell into this industry.

[00:44:42] Speaker: I bought my first house 18 years ago and I remember the mortgage guy I worked with was basically sign their date there, date there, sign their date there, date there. It did exactly what he told me to do. Payment was supposed to be X. I got my first mortgage payment. It was Y. Y was a lot more than X. Now, you can't do that anymore, thank God. But I got into this industry because I hated that experience.

[00:45:03] Speaker: And one thing I commend about you and your team is you take an educational approach on real estate and you take the time. You don't just go open a door. You take the time to explain, hey, this neighborhood, this is why you want to invest in this. If you traditionally hold on to a house in this community, it will go up by this appreciation rate.

[00:45:24] Speaker: You know, these are the things that I think that just people don't understand, which is why, to your point earlier, it is so important to pick somebody that is local, knowledgeable, and frankly, you know, interview the person, make sure that this person actually knows what they're doing. Well, it's, I take it, I'm A, my personality, I'm nerdy, so I've been that way my whole life. I've been a straight A student since first grade, not because I wanted to, it's just because I'm so, I can't help it, like I'm a perfectionist.

[00:45:53] Speaker: And so I take that into this world. And so I just take that approach with everything I do. And when I have an agent join the team, that's the approach, the way I teach them, because that's me. And I want to do a consult first. I don't want to just open doors. And it's the most fascinating thing. I have an agent that joined me. His name is Mike. He's a rock star. He's listening. He's a good dude. And he came from Redfin, one of the best agents at Redfin at the time.

[00:46:18] Speaker: and he just joined me earlier this year in the approach that they have at Redfin. No offense to that, probably nice, but to talk about specific brokerages, but it is what it is. I don't know any of the rules, but they trained them to open doors.

[00:46:33] Speaker: And when I learned that, I about fell over. They're not allowed to add any value intentionally, and it's their model. So did you know that? I just fell over. So their job, if you call Redfin, is to literally have them open doors if you have a showing assistant, and they can't comment about the condition of the home, the neighborhood, or anything else.

[00:46:52] Speaker: I fell over. I just said, what value does that provide someone? And that's the industry. That's who I compete against. These are my colleagues. So I don't want to put them down, but it's just the idea that that's who you could be represented technically by.

[00:47:06] Speaker: Or for the same, quote unquote, value or money, which is on the buy side, really nothing directly from most folks. You can get someone that's going to invest time, energy and information and teach you and educate you and make sure you have a great experience. Well, you're a lifelong client, not a transaction.

[00:47:25] Speaker: That's literally, verbatim what I tell folks. If I think of you transactionally with dollar signs above your head, that's how you're gonna feel. And what's more important to me, I know this to be true, isn't your transaction. It's an advocacy.

[00:47:41] Speaker: I would like you, right, to have an experience, whether you don't even buy. What if we educate you and I get them connected to you and they decide it's not right for them? I'd much rather have that open conversation and we table it for a year or two or do whatever. Those folks will literally refer me and I've never even helped them buy.

[00:47:57] Speaker: And a referral is, anybody listening to this that owns a small business, a referral is the best thing you could ever get. Forget the bottle of wine. And so if you're referred, it just means something. So that's just the way I view it. And it's an approach that I've taken. I think it's one of the reasons I'm successful. And just seeing other models pop up where that's not what they care about. And it's because they have the eyeballs.

[00:48:21] Speaker: Well, and they don't. Yeah, exactly. It's just a transaction. They have the eyeballs. Yep. They have people clicking. Yep. And I had a deal with a red fin or I shouldn't. Oh, with an agent because again, look, not all, look, we're talking red fin. There are great agents at red fin. That is true. So in this particular case, though, the client was like, I'm going, I click the button, they open the door. I want to buy this house for this price.

[00:48:44] Speaker: I said, okay, like, have you talked to a local agent that you should be represented by? And he was initially referred to me by another local agent. So I went back to the local agent. I said, look, in full disclosure, he's looking at this red fin house. He just wants to make an offer on it. They looked at the house. He ended up

[00:49:03] Speaker: going back to the original agent, and that original agent ended up getting that house for $40,000 under what the Redfin agent that opened the door that day said he should offer. It's really just making sure you have the right team, and that's why you refer me, that's why you refer the title company that you refer, that's why you refer your

[00:49:26] Speaker: financial advisor. I wanna control as many variables in my little world as possible because I think ultimately I'm on the hook for that experience. So if your lender experience is really rough and I recommend it, I'm screwed. You're not gonna refer me. So it's like I wanna control as many variables to ensure the experience is as good. And I recommend if you're in a different market, when I refer people to other markets, I interview them and one of the questions you should interview is who is your team? How long have you worked with them?

[00:49:55] Speaker: how successful are they and they should be able to answer that really well and why should i work with them and the amount of times that you've saved some of my client's tails they've gotten approved when they weren't otherwise going to something crazy happens near the end and we have to to audible you need a big producer in the loan side of things that can basically get exceptions and talk directly to upper management instantly that's the value that a good lending partner has and

[00:50:24] Speaker: I mean, to me, that's invaluable. And that's not what you get when you do a 1-800 number with Rocket Mortgage. No. It has not been my experience. No. And look, Rocket is a great marketer. Great marketer. They have this inflation buster, right, where again, we're recording this in November. They have an inflation buster. Well, their inflation buster that they're bragging and you see on the internet and you see all over any college football game,

[00:50:50] Speaker: All it is is the two one buy down or the one one buy down that I just explained earlier. It is nothing special, but they just have, like you said, the eyeballs. And so somebody thinks they're getting this great deal because they coined it the inflation buster. Sure. And then all of a sudden it's really not anything different. And you're dealing with somebody in Detroit when you're buying a house here in Maryland.

[00:51:13] Speaker: Well, the risk, I mean, the writing's on the wall. There's tremendous risk. These big, big, big companies are going to own the eyeballs, the space. And so the Zillow, the Redfin, they're going to, and they're curating the experience because they want to control all the variables. They're going to have, they already do in-house lending, in the house title. They're going to do it all and they're going to try to make it into a cocoon so it's an easy click, like a buy now button on Amazon.

[00:51:34] Speaker: And by the way, if Amazon gets into this space, watch out, we're all working for Amazon because I've still not figured out why they haven't entered this space. They'd own it in five days. It's terrifying. And it's, I don't think necessarily good for the market or for the consumer, but the day's coming. Yeah. And so- Well, Jeff Bezos is looking into the Washington commanders right now. As he should. I'm looking into it too. He just borrowed a couple billion.

[00:52:00] Speaker: I'm also looking into it, but the market's changing and everything's so I would just say the same thing as like financial advisors a lot of the market share got eaten up right with these big brokers I think that's gonna probably happen here in real estate But we're the local guys We're still the small outfits relative to the big multi-billion dollar companies and I think you have a tremendous value and opportunity when you're on our side and

[00:52:22] Speaker: And you got the best interest of the client as we're sitting here in your client's house recording a podcast in his studio, which is Immaculate, by the way. Yeah, it's lovely. So I think that speaks volumes to your business.

[00:52:35] Speaker: Yeah, it's wonderful. So this is our first go at it. And so we hope that this adds some value and we will continue to get better and improve and do our thing. Although I'm very happy with how it turned out to John. Thank you so much for joining me on this. And hopefully this makes some sense. And if you ever need assistance.

[00:52:53] Speaker: My name is Matt Ryan. My information will be on here. I'll be happy to help have a conversation about your situation. This is John Wall. John will have all his info on the bottom. Appreciate it. And always available, you know, cell phone, email. You know, unfortunately for my family, I'm picking up the phone at all times, just as I know you are with your schedule. Yeah, with three kids in the background. You know when I'm home, I can't hide it. It is what it is. So that's it. Well, thanks so much for listening. Thanks.