[00:00:05] Speaker A: The Michael Hatfield ReMax team presents real estate and more.
[00:00:11] Speaker B: Bay Area real estate is different than all of America and why? What's up with home buyers? What's on sellers minds? How is the market? And much, much more.
[00:00:22] Speaker A: Now here's your host, Michael Hatfield. Well, welcome to the Real Estate and More show and thank you for tuning in. Our esteemed guest is a person, has been a area resident for more than 40 years, knows a lot about the value of homes here. But now, due to the ever increasing home values, wildfires, government missteps, he has questions about our Bay Area housing market. He's not afraid to ask the question, is this the best time to buy or sell a home? This Gentleman goes by Mr. Charles. Load your questions and let's have them. Mr. Charles, welcome to the show, sir.
[00:01:00] Speaker B: Okay, Michael, thank you. It's nice to be here.
[00:01:02] Speaker A: Yeah. Tell us a little bit about yourself, Mr. Charles. You lived in the Bay Area 40 years, 100 years? How long?
[00:01:08] Speaker B: Yeah, I came out here by invitation of the government as a second lieutenant in the air Force, and I was stationed in San Francisco and I've never left. I left San Francisco, but I'm not leaving the Bay Area. No, that's for sure.
[00:01:22] Speaker A: Do you still think that this is a great place to bring up your family?
[00:01:25] Speaker B: Well, yeah, I don't have to bring them up. They're here. And there's 11 of us that live within a mile of each other. And so we feel pretty fortunate. My sons, their wives, their kids, and, you know, we all live within a mile of each other. Pretty nice.
[00:01:42] Speaker A: Yeah.
[00:01:42] Speaker B: Yeah.
[00:01:44] Speaker A: Back up just a little from the microphone. We're overdriving it. I've got an issue with this and I don't know why. Charlie. Okay, just a little bit. Perfect.
[00:01:53] Speaker B: All right.
[00:01:53] Speaker A: Do you feel that home appreciation in the San Francisco Bay Area has been a big benefit to you and your family?
[00:02:00] Speaker B: Yes, that's to say the least. Yeah, we've been very, very lucky because we've owned our home for, I don't know, over 20 years. I sort of remember when we bought it, my wife, we were renting at the time where we wanted to buy or close to it. And my wife said, you know, there's a place up the hill. We take a look at that. Maybe we want to buy that. I said, oh, that's going to probably be too expensive. Well, it was not. Compared to today, it wasn't. So, yeah, we've been very fortunate.
[00:02:31] Speaker A: Well, everyone has to seemingly stretch just a little bit on their first home. And if you can do that and get in a home in the Bay Area. You're gonna make money while you sleep.
[00:02:42] Speaker B: I think so, yeah, it's still. It's still pretty good. You just have to be able to, you know, to afford it. And a lot of places are a lot less expensive than other places, but, you know, you know what your budget is. You can figure it out. And a lot of it's tax deductible when you pay. But, you know, there's just a lot of things to consider, and people have to. You can't just go blindly into owning a home. You sort of have to know what you're getting into, and you may have friends that are doing the same thing, but, yeah, you figure it out one way or the other. And if it works. If it works, it works.
[00:03:16] Speaker A: Well, you certainly want an experienced realtor. And by the way, anybody out there that's ready to buy or sell their home, give us a call at 925-322-7775. We'd be happy to. About listing your home for sale. So has your home gained a lot in value, you would say, or some in value? And tell me the overall deal. What about tax benefits that you've had by owning your own home? Have those been helpful?
[00:03:43] Speaker B: Well, sure, that's. It's very helpful. But, yeah, you say, has it gained a lot in value? For heaven's sakes, I couldn't afford to move in there now, so. But we've been there for. For over 20 years. And what are the mortgage rates these days, Michael? Maybe 7% or something?
[00:04:02] Speaker A: Well, a lot of them are quoting a certain number in the sixes, but by the time you put in a point in order to get that loan, you're in the sevens. They've been pretty consistent for the last 18 to 22 months. They haven't changed very much, except for the end of. I think it was September of last year, where the Federal Reserve looked like they were going to be aggressive and, you know, lowering the interest rates. And then they popped them right back up there and just put a real damper on some of the markets that we have now here in the Bay Area.
[00:04:38] Speaker B: Well, of course, you know, years ago, as you know, I mean, interest rates were all over the place.
Even they got up to, what, 18% at some point. And I remember we paid. When we initially bought our house, we paid like 8%. I thought, Geez, that's a lot. But when the home is only $400,000, what the heck is 8%? Nothing. You know, nobody cares.
[00:04:59] Speaker A: Yeah.
[00:05:00] Speaker B: So it's, you know, it was a big fact. It's a big factor now. It wasn't such a big factor then because the price of homes was way less than it is now.
[00:05:10] Speaker A: Charlie, I think I told you one time, I think I paid on my first home, it was like 12% interest. And then I actually had to borrow money from a friend of mine. That helped out there, but it was not easy to get in even back then. Had to stretch a little bit. Do you think we're ever going to see the 3% mortgage rate again, Charlie?
[00:05:33] Speaker B: I don't think in my lifetime. I don't think so. There doesn't seem to be any reason for it to be like that, so.
And it's certainly not up to you or me what's going to happen, but I don't think so. I don't think that's going to happen.
[00:05:47] Speaker A: Well, you know, interestingly, a large segment of our homebuyer today are people that are just focusing only on the mortgage interest rates. So you said it very poignantly when you said if you can afford getting into your house, even though the interest rates are higher, you should stretch just a little bit. You didn't really say that. I did, but you should probably stretch just a little bit and get in there, and then when they do come down, go ahead and refinance.
[00:06:16] Speaker B: Well, sure. I mean, that's what we did. I remember it was like. Like 8%. And they thought. But we weren't thinking anything about it. We were arguing over $5,000, the price of the house. You know, now that seems like a pretty. Pretty trivial thing to be talking about, but that's what it is. But the interest rates were higher, but the prices were much lower, so the actual cost wasn't bad. And that's why, as you said, they got up there to 18%. But, you know, if your house is $200,000, what is 18% not going to matter that much? Right.
[00:06:51] Speaker A: Well, you know, the national average for, like, for I don't know how many decades has been like 7.72%. I mean, you have to pay money to borrow money that isn't yours, and that's just part of what you got to do. But, you know, a lot of people don't really look at the other benefits, such as your tax benefits. You know, you have the ability of a tax credit once you've bought, you know, when you go to sell it, if you're married, you have a $500,000 tax credit to where before you have to pay any money on the gain, they take that off of there for you. So that helps you there. Not to mention the fact you do have a mortgage interest deduction. You know, I'm expecting it might just be a little bit better moving ahead.
[00:07:35] Speaker B: Well, I think it would certainly help people because right now it's up there 7% or a little higher, a little lower. But all of that means it's still a lot more expensive than for the same amount of money than it was years and years ago.
So, you know, you just have to kind of roll with it. And if you can figure it out with your finances, you sit there with your, your wife or your family or whatever you're doing and if you think you can afford it, it's probably going to get better over the years, you know, for you.
[00:08:09] Speaker A: So we're going to take a short break. We'll be right back. ReMax.
[00:08:16] Speaker C: The real estate minute with REMAX expert Michael Hatfield. Bay Area housing markets are always changing. What should we think of that, Michael?
[00:08:24] Speaker D: You know, Mark Twain said I seldom saw an opportunity until it ceased to be one. We live in the greatest housing market in the nation. But careful thoughts should be given each time one buys or sells sells a home. A good agent can help you grasp a great opportunity.
[00:08:40] Speaker C: Tell us about discount agents, Michael.
[00:08:42] Speaker D: Discount agents can list your home, but without telling my secrets, they're unlikely to do all we do for clients. It's an unnecessary risk to save a few thousand by hiring a junior agent and lose tens of thousands through a poorly done transaction. You don't know what you don't know, it's wise to hire someone who does.
[00:09:00] Speaker C: If you or someone you know is interested in buying or selling a home, call the Michael Hatfield ReMax team at 925-322-7775 or go to michaelhatfieldhomes.com when your real estate needs are beyond the standard and you demand more than the status quo, look no further than the Michael Hatfield ReMax, a court team with offices in Danville and nine more Bay Area locations. Here's Michael Hatfield to tell us more.
[00:09:26] Speaker A: Do you have a housing problem such as you live in a three bedroom home with three children and need one more bedroom.
[00:09:32] Speaker D: You want better schools or your kids.
[00:09:34] Speaker A: Grown up moved out is just too large. Our team is a five star agent who serves our clients housing needs as our number one priority. Call us for a free buyer consultation to start working on your housing problem. Now let us help you to solve your housing issue, whatever your need may be.
[00:09:51] Speaker C: Call 925-322-7775 to partner buyer or seller needs with the Michael Hatfield Re Max Accord team. That's 9253-227779-25322-7775. Come discover a new level of excellence in real estate with the Michael Hatfield ReMax Accord Team.
[00:10:14] Speaker A: Now back to our show.
[00:10:20] Speaker B: I just, you know, as far as I'm concerned, I just feel really lucky we did things when we did.
[00:10:26] Speaker A: Absolutely. I think you'd be lucky today too, by going in and buying. I don't think you can go wrong.
You have to give it a little bit of time for the home to gain. The appreciation doesn't always come at one time. It might be, you know, it might take a, you know, three, four, five, six years before you start to see some value gains here in the San Francisco Bay area. But one thing about this area is that I believe that you're going to see them at one point or another because that's the historical. For the last 40 years, you've seen the values increase.
[00:10:57] Speaker B: No, absolutely. And I don't know very many homes that have decreased in value. I mean, that would be a front page story or something. That just doesn't happen. So.
[00:11:10] Speaker A: Well, you do remember, you have to.
[00:11:11] Speaker B: Get the right timing.
[00:11:11] Speaker A: You do remember the actual 2008 time. Then values went down because that was some other input from outside the industry, outside the housing industry that caused that to happen, the mortgage meltdown, as we call it, that period. But we'd never seen one of those before. Doesn't mean we see them again. But over time, all those values have come right back.
[00:11:36] Speaker B: Yeah, they certainly have. And there aren't very many places, you know, around the Bay Area where homes decrease in value.
It's something that people just don't talk about. Doesn't happen.
[00:11:49] Speaker A: Yeah, you know, interesting. Since the election in November, we have seen December numbers come in almost 16% higher in housing starts. Housing starts rocketed up 16 in December. Both single family and multifamily seeing big gains. So there's a lot of really good sentiment out there that as we go forward, we're going to see some good things happen.
[00:12:18] Speaker B: Yeah, I think so. It's just, you know, you have to pay attention if you're on the verge of thinking about buying a home, you just have to pay attention to things. You get a realtor, you know, a nice realtor like you and, you know, because you know a lot more about it, you know, the ins and outs of everything and to operate without one just doesn't make a lot of sense.
[00:12:41] Speaker A: So you want somebody experienced, whether or not it's a realtor or not, somebody that's really experienced. Especially in the documentation we have today. When you bought your home, you are not going to remember it probably, but it was a one page deposit receipt. One page. Now we got 16, 17 pages on the residential purchase agreement, plus the associated disclosures, acknowledgements and advisories. There's a lot to know about that.
[00:13:05] Speaker B: I know. Yeah. Way too much, Way too much to think about. It wasn't, wasn't that way a long time ago, but now.
Yeah, you've got to pay attention and you know, you just don't. If you're a buyer, you don't want to have to know every little detail. That's why you have a. That's why you have a real estate agent to help you. I have mistakes.
[00:13:25] Speaker A: Totally agree. Now, you had a question about insurance. You know, we just recently had the big fires down in Los Angeles. We've had fires up in the Chico area. We've had fires in Napa. And you had a question about insurance. I think it was.
[00:13:41] Speaker B: Well, I mean, everybody has a big question about their own home. If they own a home with all these fires, what's going to happen to those poor people in Los Angeles? That's just a tragedy. And you know, they had to bail out and everything, but, but now people are looking, oh, what if something like that happened to me? So you've got to be looking at what it costs to, you know, to insure your home on whatever it is. And I know some friends where they've canceled the insurance and they had to go somewhere else. And we've been fortunate. That has not happened to us. And. But yeah, you gotta pay attention to that now. A long time ago you didn't think much about that. But right now with all the fires that are going on now, that's on everybody's mind if they own a home.
[00:14:35] Speaker A: Yeah, interesting. That's one of the first things when we represent a buyer that we do is we lock and load them with a really good plan and get some kind of a commitment from whatever insurance company is needed or will provide insurance. That's one of the first things that we do and has now become a contingency available for a buyer. If you can't get insurance, then that means your lender is not going to loan until you do. So it's an important factor now in the home buy. And just one of those little things that's crept up on us and it's made it happen. Incidentally, there is what we call the California Fair Plan, enacted after the time of the Chico fires and then Napa fires. And what it is, is it's all of the major insurance companies combined, the backup to share risk. And by doing that, half of the plan is done by a regular insurance company, and then the other portion is the California Fair Plan, and that portion is actually insured by that conglomeration of insurance companies. Policies are more expensive when you have to use the California Fair Plan. And in a nutshell, if you're near a fire zone or fire hazard zone, you're definitely going to have to do that.
[00:15:55] Speaker B: Well, see, those are all things you as a realtor know about, but I don't know if every homeowner knows all those things you were talking about. They have their, you know, their insurance company that they've worked with for a long time, and they get a hold of them and say, okay, what's going to happen? How much is going to cost me to insure this home?
But they might not know all the tricks like I would assume you do.
[00:16:22] Speaker A: I don't know about all the tricks, but we work pretty hard at it. Charlie, you've been listening to the Real Estate and More show, and we have, let's call him the man on the Street. On the show today is Mr. Charles. I call him Charlie. And he's putting all of these questions together for us just so that he can put us on the spot and make us look bad in front of all of you folks. Not really, but it's a pleasure to see him. So, Charlie, did you have another one of those questions about buyer representation agreements that have just become law?
[00:16:52] Speaker B: Well, yeah, because they didn't have those when I was buying a home. So what are the ins and outs of that?
If we wanted to just buy another house. Now, how does that work? Give me an easy to remember plan of buyer representation and the ins and outs of that.
[00:17:16] Speaker A: Well, now you have like a listing agreement for a seller and a seller's agent. You have a buyer representation agreement that is endorsed by both sides. His buyer's broker and buyer's agent and the actual buyer in order for him, by California law, now this has to be done. It's five pages. It looks very, very ominous. And it says that if there is going to be a payment, that that payment is going to be made by the buyer or by a seller of a property. So it actually lays out the terms of who's representing who and then says, okay, well, the buyer is going to pay for his own fees or we're going to ask in any deal for the seller to pay the buyer's broker and buyer's agent fees. That's normally the way it works. It still happens today, even after the advent of, of the buyer representation agreement. One other thing is if you go into an open house, they always ask you to sign are you represented by a buyer agent or not? So you should be able to be cooperative with the host of the open house and put down, well, I'm having Michael Hatfield Dream act represent me. You should put that down and make sure that the agent there knows that. And then you should assess, assume that that agent hosting that open house is representing the seller. So that's it in a nutshell. It's by California law now, if you go to look at homes or four or five homes, you're going to be asked to endorse that buyer representation agreement.
[00:19:04] Speaker B: Well, I guess those are pretty good ideas, but that didn't exist when, you know, when we were buying our home. They just didn't have things like that. And especially if you're going to walk into an open house and you had to sign something, that didn't happen either. But now that's why you have an agent that can tell you these things. And I mean, if I were doing it again, you got to think about that. And then what about how are buyers and sellers agents compensated now? Because I think that's changed too, a little bit, right?
[00:19:41] Speaker A: Yeah, it actually has, but it hasn't. Typically, for the last several decades, the compensation for a buyer's broker and agent has been included in the offer that he makes and is paid from the seller's side, roughly speaking, throughout time. There's a percentage there and it is attributable to whatever area that you're in. But it's always been in the past paid by the seller side. I would say always, I would say 98, 9%. And now the opportunity is for the buyer to say, I'm going to go and I'm going to pay my agent directly and you make an offer net of the buyer's compensation being paid by me. So it could go either way, or you can ask the seller, hey, I want you to pay that. Which is good in my view, because it still allows the value of the homes to be consistent. Meaning that home prices have typically paid for the compensation to the brokers through the sale of the property from the seller side. And if you're paying it from the buyer side, it's showing the house sold for less money than what it really did.
[00:20:59] Speaker B: Okay, then but these are important things, and I don't think this was the case years ago where you didn't have to think about stuff like that. You had a buying agent, and you didn't even think about the commissions or what it was. You just. All you were worried about was buying the house.
And if there was a seller, if they had to do any.
What do you call that? What's the word for fixing up the house?
[00:21:26] Speaker A: Improvement. Repairs.
[00:21:28] Speaker B: Yeah, but you have to do certain things or you wouldn't be able to sell it. If you don't paint your bathroom or whatever it might be. But I don't know if those things are around much anymore. People will buy the house if they like it. You know, they'll figure that out one way or the other.
[00:21:47] Speaker A: Well, I don't know. It sure seems like the homes in our market today, which is our market today, has a limited number of sellers and a limited number of buyers. At this point, things are looking like they might start sparking up a little bit, but it's a limited amount of number of sellers and a limited number of buyers. So in order for the homes to sell, you definitely want to have your seller spruce it up, as you like to say.
But you do definitely want to make it look good. You want to stage the home. You want to have it ready for a person to say, this home has just made me feel like this is someplace that I need to live, and it makes me feel comfortable. So, you know, that's what I'm going to do is I'm going to offer to buy it.
[00:22:34] Speaker B: And the selling agent, like you, let's say you would know what to. You can probably walk inside a house and look around the outside and say, well, here's what I think we have to do to get them a maximum value out of this.
[00:22:46] Speaker A: Exactly correct.
[00:22:47] Speaker B: Whether it's put on a new roof or paint this or do that, that's what you know, that's where you're earning your money. So you kind of tell what has to be done to make it saleable.
[00:23:01] Speaker A: Well, so much is important. Based on intuition of an experienced agent. There's so much that is helpful to a client when we do walk in. You know, the house has been painted last week. Well, that's not needed to be done. What about the countertops? What about this? How can we best present this home to where it will be attractive to the most amount of sellers? That's what we're thinking as a real estate team.
[00:23:28] Speaker B: Yeah. And almost any home that's going to be sold is going to, they're going to have to do something to make it more attractive, right?
[00:23:36] Speaker A: You have to. Yeah, you, you really have to. If you just take a home and it hasn't, there's deferred maintenance from 30 years and it doesn't look really good, a lot of people say, no, I'm not going to make an offer with that. So what we do, if the house is. And the sellers are minimal, we want to try and get them the maximum amount of proceeds from the sale. And that may include painting the inside, painting the outside. Maybe the floors are really bad. So you redo the floors and you have to actually put a little money in it to get it spruced up. Then once it's spruced up, normally we usually use a very good stager interior designer. I've had one on the show before. She's an amazing lady. She knows exactly what to do to make that home appeal to the most number of buyers.
[00:24:30] Speaker B: Yep. Now those things are all, they're all important. You spend, you spend a dime to make a dollar. So you have to make it look good.
[00:24:39] Speaker A: Yeah, yeah, I hear you there, there.
So seller contingency. A lot of people don't really know what a seller contingency is.
[00:24:49] Speaker B: Right, right.
[00:24:51] Speaker A: Yeah. It means that the seller has got to find another house before they can vacate their own. You know, when we go in and we take a listing contract, we sit and talk with the seller, find out what their needs are. Are they going to go and buy a 80 foot mobile home or an RV and go around the States or have they already bought another home elsewhere or they're going to do something else? You know, we need to know those things. And when we know those items, it can so much help us to prepare the home and prepare a potential buyer to come in with the biggest amount of money, hopefully a bag of gold for the sellers.
[00:25:31] Speaker B: And Michael, do most sellers have contingencies?
[00:25:36] Speaker A: Oh, yeah, absolutely.
They don't really have the I gotta sell this house before I can buy the other one. So often. But when they do, it's a real challenge for a, for their realtor to do. But there are contingencies and that's what I first started to respond to in the contract. The contingencies are normally investigations where the buyer has to either do his own inspections or if the seller has already done them, review them and approve the ones that have been done. Look at the HOA documents, feel comfortable that buying the house is what they want without potential things such as natural hazard report indicating that it's in a high fire zone and it's going to cost a lot to insure it, that kind of a thing. So there's the investigations contingency, which is the first one. In fact, we have a home that's about ready to have it removed where the listing agent is about ready to be removed tomorrow.
So that's one contingency. The second one is appraisal. If the house does not appraise at the value of the contract, the lender is only going to loan 80% of what that appraised value may be, which is. That's okay. But most of the homes are all appraising pretty much to the value. And then of course there's the loan contingency, which means that if you don't get the loan, they don't have to buy the house, which doesn't put their earnest money deposit at risk.
[00:27:07] Speaker B: Well, you're starting to talk about a lot of things that a seller or a buyer without a realtor helping, helping them, guide them through these things, that can be pretty sticky. You could make some mistakes.
[00:27:21] Speaker A: Yeah, absolutely. Well, Charlie, looks like we've come almost to the end of this time here. They're going to yell at us for saying, hey, you guys are sitting in the those seats too long. So do you have any actions that you would recommend giving to our audience out there? Do you have any words of wisdom?
[00:27:39] Speaker B: Well, you just have to pay attention to what's going on. You'll start looking when you're going to buy a house. It's not like you make up your mind today and do it tomorrow, but you start looking around, you start talking to your friends, you kind of snoop into. You sort of know what the value is.
But you need somebody like you or an agent that knows what they're doing to help you through the process because ultimately that costs you some money. But you probably make it up in the sale or the buying one way or the other. So it's worth it.
[00:28:14] Speaker A: Wow. All really good to know and thank you for your questions, Mr. Charles. I k a Charlie, you've been listening to the Real Estate and More show and I thank you for listening in. Buying or selling a home is one of the biggest financial decisions you'll ever make. And it can be very challenging experience or one filled with excitement and joy. Buyers often face difficulties of personalizing their home and their new space, managing the payments and so forth. Get an experienced agent. We're happy to talk with you about listing your home if you're ready, or representing you as a buyer. We'll be right back with our next special guest. Stay tuned. Please remember to go to our new YouTube handle, my real Talkshow.
[00:29:00] Speaker D: That's my real Talk
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[00:29:05] Speaker A: You can also find past aired shows at our handle My real talkshow on YouTube.com.
