[00:00:05] Speaker A: The Michael Hatfield ReMax team presents real Estate and More. 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 B: Now here's your host, Michael Hatfield.
[00:00:25] Speaker A: Welcome to the Real Estate and More show. Your go to show for helpful real estate insights. Today we're diving into just why having a professional Realtor is crucial when buying or selling a home. Did you know that it is reported that homes sold off the MLS lose an average of $5,000 in that transaction, adding up to $1 billion in lost value nationwide. We'll break down the importance of working with a licensed agent, the latest mortgage rate tre and why you should buy the home and date the rate. Co host Nancy Hatfield joins us today to share her insights and strategies to help you navigate today's market with confidence. Welcome to the show, Nance.
[00:01:15] Speaker C: Thanks, Michael.
[00:01:16] Speaker A: I'm glad you're here.
[00:01:17] Speaker C: Thank you.
[00:01:18] Speaker A: Yeah, you know, the other day a fellow called me and he said, you know, I don't need a realtor. I heard you show I don't need a realtor.
I can do this all myself. And I said, well, in all due respect, sir, you know, if you want, that's just fine. You know, that's your choice to do that. But the reason that you definitely want to think about, you know, having a realtor represent you is the same reason that you would have a lawyer represent you if you were accused of a wrongdoing. You don't want to give up your piece of your farm. And generally speaking, you know what Zillow now is saying and the big Z with the latest report, you leave money on the table if you do not have a licensed Realtor working for you. And so you know that that's something to really think about and something to, to really seriously consider. You want somebody on your side and someone that takes care of you. You have to be an agent also to access the multiple listing service and homes that are not listed on the multiple listing service. According to Zillow's newest report, they lose quite a bit of money. It's something like $5,000 a transaction. So to access that MLS, you need a licensed Realtor, someone that has put their integrity, their credibility on the line to become a Realtor. Then once you paid the necessary dues annually and the subscriptions and such, then you can access the mls, which is the most accurate source of data on the Internet currently. So that's just another reason that you would want to, to do that. Don't you agree?
[00:03:03] Speaker C: I do agree.
[00:03:04] Speaker A: Well, tell me more.
[00:03:06] Speaker C: So in the San Francisco Bay area, these homes off the MLS typically sold for $4,975 less than those listed on the MLS in 2023 and 2024, a median loss of 1.5. Nationwide, this study showed 1.5%. Yes. 1.5% nationwide. And off MLS sales lowered the closing price in 44 out of our 46 states included in its study, the big Z reported as a point. You may know that data input into the MLS requires a licensed agent. And by the way, the MLS provides the most accurate source of information about a seller's home. And sellers in 33 states experience meeting losses exceeding 1%. And sellers in 10 states saw losses greater than 2%. So that's, that's significant.
[00:04:10] Speaker A: Yeah. You know, anybody can put information about a property into the mls.
Not anybody can do it. You have to be a licensed real estate professional in order to put that information into the mls. If you're not and you were to put that information in there, the information integrity would be not as, not quite as high, I would assume.
[00:04:35] Speaker C: Right. Thinking about selling your home or finding your dream property, call the Michael Hatfield ReMax team at 925-322-7775. We're here to guide you through every step.
[00:04:50] Speaker A: The greatest medium loss, by the way, in the report on selling your home with use of the MLS versus not, by the way, was in California where sellers not using the MLS saw an average price reduction of $30,075 or 3.7%. And that was followed by New York, which was off 3.7% or $13,749. And then Massachusetts at 3.4% or $20,171 difference. That's a medium loss where sellers not using the multiple saw that price reduction in what that home sold for.
[00:05:39] Speaker C: That would make me motivated to have it on the market versus not. But sometimes there could be a reason.
[00:05:46] Speaker A: Or two on the mls. Right. That's the market. When a Realtor tends to say on the market, it means on the MLS that it's put on the MLS and, and then vetted with anybody out there through the various syndications that are a result of having a home or placed on the multiple listing service.
[00:06:08] Speaker C: So that study also found that homes in all price tiers typically sold for less when sold off of the mls. And interestingly, the lower priced homes were most severely impacted. And you know, that's unfortunate because that's where you would want to get the Most for your home when you sell it on the market. So for this report, the Big Z analyzed 10 million transactions with 2.7 million meeting criteria for comparing homes that sold on the MLS versus privately listed sales. Some 97% of transactions were for homes included in the MLS listing, while pocket listings, sales that were marketed privately and seemingly only submitted to the MLS once a purchase contract was in place accounted for 2%.
[00:07:03] Speaker A: Yeah, so. So pocket listings essentially are listings that are, that are taken, they're not vetted throughout the mls. Some sellers wish this to happen this way. So like you could take a listing and instruct your agent that, hey, I only want to, you know, have the property market throughout the agents of Re Max Accord.
And so in our meetings that we have intra company, we would market the property that way. That's called a pocket listing in simple terms. So just to let you know.
[00:07:33] Speaker C: Right. You don't always hear that term, so you might not know.
[00:07:36] Speaker A: No, no. Okay. So anyhow, the. I just find this information really remarkable and I'm not trying to justify a job for me and my family. It's that people need to understand that real estate professionals are just that. They're professionals. You would not want to hire an attorney because he has the word attorn in front of back of his name. You would want to hire a very good attorney. If you are accused of wrongdoing in real estate. It's a function of not only aggravation, frustration if something goes wrong, but it's also a function of your hard earned dollars. Whether or not you're a buyer, you end up paying more. If you're a seller, you end up not getting as much of proceeds back from your sale. I just find this information very, very interesting.
[00:08:29] Speaker C: We're going to take a short break. We'll be right back.
[00:08:32] Speaker A: The ReMax.
[00:08:35] Speaker D: The Real Estate Minute with RE MAX expert Michael Hatfield. Bay Area housing markets are always changing. What should we think of that, Michael?
[00:08:43] Speaker B: 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 a home. A good agent can help you grasp a great opportunity.
[00:08:59] Speaker D: Tell us about discount agents, Michael.
[00:09:01] Speaker B: 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.
[00:09:19] Speaker D: 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.
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.
[00:09:45] Speaker B: Do you have a housing problem such as you live in a three bedroom home with three children and need one more bedroom. You want better schools or your kid's grown up, moved out and your home 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.
[00:10:10] Speaker D: Call 925-322-7775 to partner buyer or seller needs with the Michael Hatfield Re Maxaccord team. That's 9253-2277-7592-5322-7775. Come discover a new level of excellence in real estate with the Michael Hatfield ReMax Accord Team.
[00:10:33] Speaker A: Now back to our show.
[00:10:36] Speaker C: It is interesting. Since December of last year, 2024, we've been watching the rate of the 10 year treasury bond which is an indicator that is an important element baked into mortgage interest rates. In December, the 10 year bond was 4.1 and since has trickled down to 4.21. As we've said before, we believe that loan mortgage rates are going lower, perhaps into the fives in the near future.
[00:11:05] Speaker A: Nobody's saying that. But we are.
[00:11:07] Speaker C: We are. We understand that. Yes, we do understand that weaker economic data is what tends to promote bond buying, which in turn pushes the home loan rates lower.
We note that a person with great credit can rope in a 30 year fixed loan at around 6.337% even, even better perhaps. So just think on a $500,000 loan at 6%, your payment would be 27 2009, 74 per month and a $500,000 30 year loan at 7%, 1% difference would make your payment what? Michael?
[00:11:49] Speaker A: Well, well, $3,293. And the famous saying that comes from our colleague Erin Merritt.
[00:11:56] Speaker C: Yes, it does.
[00:11:56] Speaker A: What does?
[00:11:58] Speaker C: Date the rate.
[00:12:00] Speaker A: I just love that for some reason that means, you know, go for the home that you like, one that'll work for you. Pay more attention to the Fact that you love the home and look towards that all valuable home appreciation that historically has been something that you've been rewarded with through your home ownership in the San Francisco Bay Area. So it's, it's really back on the loan mortgage rates. It's really about qualifying for the loan, then affording the payment thereafter once you have the loan. But once you're into the home, you're also getting other values such as your tax values, tax help that you will get as part of home ownership. So you know, it's just crazy. Find the home that you want and go for it and get it. That's my thoughts right now. They will not get much, you know, less expensive in the future, especially in the San Francisco Bay area. Sure, you'll have your ups and your downs and your cycles, but I don't see them getting tremendously less expensive in the near future. And I do see that we're going to have more people come to the market with the decrease in the mortgage rate. So that's what I'm thinking.
[00:13:13] Speaker C: So sometimes it's just diving in and making it happen for you and your family.
[00:13:18] Speaker A: And I had a young man, first time home buyer, say to me, he says, you know, you did say you have to stretch just a little bit in the beginning and it's probably out of your comfort zone. But you do what you got to do in order to make yourself your home, yours and get your foot in the door with homeownership, especially in the San Francisco Bay area.
[00:13:37] Speaker C: Absolutely, yeah.
[00:13:38] Speaker A: Now, interestingly, I had a lady asked me to repeat what we did a couple shows ago. We were talking about the difference between having an increase in a mortgage rate, paying more or paying more for a mortgage loan than you would you would like to. So, you know, I'm looking at, at two different graphs. One graph is a graph of the 30 year fixed mortgage rate since June of 2020. And the second graph is a graph of the average home values, all types for the last five years in the Bay Area. The first graph of the 30 year fixed rates show historic 3% mortgage rate from June of 2020 through February of 2022. And that's June of 2020 through about February of 2022. Then, then there was a steady climb of rates through 5%, 6%, some small cycles and then actually above 6% and as high as 7% and a little bit more since July of 2022. Rates have been 6 to 7% in a range roughly since July of 2022. The second graph is one of home values in the San Francisco Bay Area and it shows how they have climbed steadily through a rough average. Let's just say a home is $600,000 in 2020. In 2024, that value is $200,000 greater. It's at $800,000. This is a typical example that we' appreciation in the San Francisco Bay Area. So just to comment, if I owned a home, I would hope to see appreciation of $200,000 costing me on a 7% mortgage as opposed to a 6% mortgage. It would cost me another $15,312 in interest over that period of time. But in home appreciation it would be $200,000. So what is more important, $200,000 in home appreciation, if you can afford it, to pay the 15,312 you're getting back roughly 200,000 you hope in historical appreciation. Buy the home.
[00:16:09] Speaker C: Where Michael and Nancy Hatfield experience stages who enthusiastically represent buyers and sellers wishing to buy or sell their home. 2025 could be your year in the marketplace to buy or even to sell.
[00:16:23] Speaker A: You ask why? The number of sellers and buyers in our current housing market is somewhat limited. Therefore, any lowering of mortgage rates or reduced taxes or reduced inflation or an economic improvement will drive this market in home prices even higher, possibly creating a lost opportunity for buyers. It is time to move on your dreams and take action before your housing quest is left behind.
[00:16:50] Speaker C: If you or anyone you know is interested in buying or selling a home, please contact us at 925-322-7775 and let's talk about your housing dreams.
[00:17:08] Speaker A: Now back to our show.
[00:17:12] Speaker C: Definitely, there's no question.
[00:17:14] Speaker A: Yeah. If you're thinking about selling your home or finding your dream property, call us at the Michael Hatfield ReMax team. We'd be happy to help you and guide you through every step of the way.
[00:17:25] Speaker C: We would. Let's talk about some statistics now. Realtor.com reports the real estate market appears to be cranking up for spring. Inventory keeps growing, giving buyers more options versus last year. That's encouraging.
[00:17:41] Speaker A: Yeah, we're getting more coming on the.
[00:17:42] Speaker C: Market and prices are moderating nationally down year over year, 16 weeks in a row.
[00:17:49] Speaker A: That's nationally, not the San Francisco Bay area. Remember, there's some 50,000 different markets in the San Francisco in the nation. But the San Francisco Bay area is very unique. It doesn't drop out of the sky. The values hold pretty solid here.
[00:18:04] Speaker C: It is unique. The Mortgage Bankers association reports mortgage credit availability increase start increased to start 2025 rising to its highest level since June of 2022, calling it a positive development for the spring home buying season. And that's right around the corner. A national online real estate database found that at the start of February there were five months of for sale inventory near a six year high, a key point. Economists seek a four to six month supply as a balanced market. So that's how they view it.
[00:18:45] Speaker A: So we have homes staying on the market longer, but the values are holding up there in the San Francisco Bay Area, at least that's how it appears to be at this point in time. And you know, we've been saying that all along is that we've had an equilibrium of homes on the market, the number of homes on the market to the number of potential buyers. And it's been that way for months and months and months and perhaps even a year, almost two years and a limited number of transactions, saying that if anything changes, if the economy improves, mortgage interest rates improve, what we're going to have at that point in time is much more active market and will also likely make the prices in the San Francisco Bay Area homes go upward.
[00:19:31] Speaker C: Sure.
[00:19:31] Speaker A: Yeah. So let's what goes into a FICO score? Why don't you help me out on this, Nance? What's here, a lot of people are interested. You know, we've heard a lot about FICO scores and credit reports and such a credit report is something that a mortgage lender will look at and say, okay, well is Nancy and Michael qualified to make this home purchase? And then of course, according to the income that's also taken, they put all of that into their magic database and up it comes. Yes, they are, we hope, and that will be it. Well, back to the FICO score. That's a score that the credit reporting agencies develop for you. And it's a little bit different process on each One of the three credit reporting agencies, TransUnion, Equifax and Asperion, each one of them have a little bit different formula, but essentially what goes into them, nance.
[00:20:25] Speaker C: So the five categories. Right, right. Payment history is 35% of a FICO score based on whether someone pays their bills or not or whether they pay them on time, I guess.
Yep. And amounts owed. 30% of a FICO score is based on how much debt someone has and length of credit history. So 15% of a FICO score is based on how long someone has had credit. And number four, new credit accounts. 10% of a FICO score is based on how recently someone opened new credit accounts. And then there's what a credit mix that's number five credit mix. 10% of a FICO score is based on the types of credit someone has.
[00:21:12] Speaker A: You know, interestingly, credit reports include include information about potential bankruptcies, collections, late or missed payments and they adhere to consumer rules that are put out by the consumer protection and such. Different FICO scoring models and credit bureaus can result in different credit scores. And interestingly, if you go to get a mortgage loan, most all of the lenders require what they call a tri merge which means that there is a report from each one of the major three credit reporting agencies and then they, they decide if they take the average of those or the lowest of those or what they use in order to make their their, their credit decisions.
[00:21:55] Speaker C: We're going to take a short break. We'll be right back.
[00:22:00] Speaker B: There's a shortage of Bay Area homes for sale and you've been watching home prices rise year after year and now your home is worth a great deal more and you're thinking time for something new. Why not sell before interest rates and market conditions change everything? You'd like experts who can help you get the best deal possible. Negotiate on your behalf and work hard to ensure a smooth transition. List your home with us if you're buying or selling a home, call us now.
[00:22:27] Speaker C: Working with Michael and Nancy. I was a first time home buyer and I was very nervous about the process. I didn't really know what to expect. Michael and Nancy were able to take that fear away from me and answered all of my questions. They were right by my side the entire time and they really helped me find the perfect home for me and.
[00:22:44] Speaker D: I'm so thankful for excellence in real estate. Call the Michael Hatfield ReMax team at 925-322-7775 or go to michaelhatfieldhomes.com now back to our show.
[00:23:00] Speaker C: Got it.
So to recap, the main categories considered for a FICO score are a person's payment history 35%, amounts owed 30%, length of credit history 15%, new credit accounts 10% and types of credit used 10%. FICO scores are available from each of the three major credit bureaus which you mentioned and they're based on information contained in the Consumers Credit Reports.
[00:23:30] Speaker A: And for a mortgage loan, a lender typically requires, as I said before, three of the credit reporting agency reports. Credit decisions are made upon those. That's called a tri merge.
[00:23:42] Speaker C: Again, if you are ready to make a move in the real estate market, get in touch with the Michael Hatfield ReMax team at 925-322-7775. We're dedicated to helping you buy or sell with confidence.
[00:23:57] Speaker A: Wow. You know, I want to talk about inflation. In January, inflation was up. Now, inflation typically does not encompass two very important things where middle class people like myself tend to feel it because the inflation reports, generally speaking, do not include inflation energy like fuel oil, diesel fuel, or they don't include food. And these are the first places we feel if inflation is really at work is in food and in energy. So, you know, I've been kind of fascinated by that because food and energy are somewhat connected together. Meaning that if you're going to the grocery store and you're going to buy eggs, let's just say eggs, and the price of eggs is high and the price of bread is high, it's generally speaking because the people that have delivered it from the manufacturer, the eggs and the loaves of bread are having to pay high amounts for their diesel fuel to deliver it. So if the price of diesel fuel and energy goes down, then the price of your eggs, the price of your loafs of bread are going to go down. So the two are somewhat connected together in my view.
In January it surged the headline Consumer Price index rose by 0.5% month over month and 3% year over year. And one last point that I would like to make, and I'd like to talk about the trust owned homes that are not showing additional insured either trusts or LLCs which may be on the deed as being part of the listed ownership and insurance declaration pages. So I can probably say that a little bit better. On your declaration page for your home, you want to make sure that as an additional insured that it shows your trust if you are deeded. In fact, in a trust, you don't want to leave that out. And your insurance company should be very willing to put your trust or your LLC on the additional insured portion of your declaration, your insurance homeowner declaration page. That's important because came to light down in the Los Angeles region after the fires.
One last thing let's talk about is who's the home buyer today? Let's talk about the buyers only. Nancy, let's rip through this, please.
[00:26:48] Speaker C: So first time buyer facts, is that what you're thinking about?
[00:26:51] Speaker A: Yes.
[00:26:52] Speaker C: Yes. First time buyers made up 32% of all home buyers in 2024 and that was up 20 from 26% in 2023. 75% of young millennials, which I believe is 27 to 35 years of age and 54% of Gen Xers that age groups 46 to 60ish were first time home buyers. And 44% of older millennials ages 60, 36 to 45 years were also first time home buyers. So that's kind of interesting, Michael, how that is showing in the marketplace.
[00:27:33] Speaker A: Yes.
[00:27:33] Speaker C: You know, buying homes.
[00:27:35] Speaker A: Now, as far as sellers, the biggest group of sellers are the younger boomers. Those are people that were born 1955 through 1964. They are 61 through 70 years of age and they make up 26% of the home sellers in the market. Gen X, which are the people that are 46 through 60 years old, make up 23% and then it drops down to 19% which are the older boomers? 71 through 79. Those could be trust estate sales. So wow, what a, what a interesting time that we live in. You know, one thing I'd really like to point out is a proposition 19. Let's go to that one and talk about that for a minute. Proposition 19 took effect in April of 2021. It allows a homeowner, when they sell, to transfer their tax basis for capital gains purposes to the new home in another county within California. Yeah, you want to. Who qualifies for that?
[00:28:38] Speaker C: Who qualifies that? Okay, for that you have to be 55 years of age or older. Right. You must be severely disabled or be a victim of a natural disaster or wildfire.
[00:28:52] Speaker A: Key benefits, you can transfer to any county in California, unlike previous laws which limited transfers from specific counties. So you could, maybe Alameda county would, would honor a transfer in from somewhere else. Maybe they wouldn't. But now any county, if you qualify, will allow that transfer of your tax basis in regards to capital gains anywhere any counties in California. How do you apply, Nance?
[00:29:20] Speaker C: That can be highly beneficial. So how do you apply? You either purchase or identify your new home within two years of selling your previous home. You complete the required forms with your county assessor's office. You submit documents, documentation proving your eligibility, your age verification, etc. And you await confirmation from the county assessor's office regarding your adjusted tax basis.
[00:29:45] Speaker A: Ah, very good. Really a lot of information in the show today. I hope everyone was sitting there and actually paying attention so that when they go to use these things in their home, buyer their home sell or just nice to know that they actually do it. So, hey, a lot of great information. Thank you for being on the show, Nance.
[00:30:02] Speaker C: Thanks, Michael.
[00:30:03] Speaker A: It's all good information.
So buying or selling a home is one of life's biggest financial decisions. It can be a bit overwhelming or it can be exciting and a rewarding journey. Buyers navigate the challenges of making a home feel like a home, managing the payments and staying on top of the maintenance, while sellers focus on presenting their property in the most attractive way to maximize maximize its value. Thus the proceeds from the sale. No matter which side of the transaction you're on, having the right team by your side makes all the difference. Contact us with the Michael Hatfield ReMax team at 925-322-7775. Let's talk about your real estate needs, goals and dreams. We'll be back next week and I do hope you'll join us. Have a blessed week.
[00:30:56] Speaker C: Have a blessed week.
[00:30:58] Speaker B: Please remember to go to our new YouTube handle, My Real Talk Show. That's
[email protected] and touch that subscribe button. You can also find past aired shows at our handle myrealtalkshow on YouTube dot com.
