CYA Advice won't cut it

The last time we had a window of a buyers’ market, I was too early in my career. I don’t mean I missed the financial opportunity, I did great. It was actually not the best way to start in the industry because it was very misleading about what this career would actually be like. What I mean is I didn’t push my clients hard enough and I let some of them make a bad decision…I’m going to be very real with you now. 

I let them wait. 

In the beginning of my career, when people told me they wanted to “wait this market out” - I didn’t want to come off as salesy. If they said they wanted to wait until interest rates came down because they didn’t want to have too high of a mortgage payment, I nodded supportively. I told them, “I completely understand. You don’t want your mortgage payment to impact your lifestyle.”  I thought well maybe it’s responsible for them to be conservative. 

If they told me they were waiting for prices to come down, I could relate. I graduated from college during the Great Recession. I saw what inflated home prices did to our entire economy. My friends and I couldn’t find jobs. Many of my friends’ parents were working through short sales or foreclosures. My older brothers were in the mortgage industry and were sharing firsthand with me what was happening, how it started in housing and filtered out to the rest of the economy. I didn’t want to tell someone to buy a home and then have that home become a curse! 

I didn’t want the liability. 

I was wrong though. 

You know how I found out? 

There were people who did buy. There were clients who didn’t try to time the market and bought because they were financially ready, and it was the right time for their family. I wanted them to build equity. I also watched them change as people because of the security homeownership gave them. I saw them make big moves in their careers and grow their families. I saw the trajectories of their lives change and many times I’ve gotten to help those families who purchased their first home at the beginning of my career, move up to their dream homes several years later. 

I was also in touch with the clients who were waiting. 

Spoiler Alert: Prices didn’t come down. 

I wish I could go back in time and have the confidence I do now. I don’t mince my words now. I’m not uncertain that buying a home is a smart financial move – even if the mortgage payment cramps your lifestyle. There are not a lot of mortgage lenders who will tell you that, but I’ll reiterate. Americans, especially my generation and younger have spending problems. A forced savings account in the form of a mortgage is actually not a bad idea because those music festivals and “like to know it” purchases are not getting you any return on investment. 

I also run the numbers often on appreciation vs the cost of homeownership. I’m well versed in affordability and against my natural interests, the economy and even politics. I am confident in my ability to give financial advice and now, when my clients tell me they want to wait – I respectfully begin a very thoughtful argument rooted in data but not without my personal opinion. Because long story short, and with a disclaimer that I’m not the lender for everyone, I’m no longer a cover your ass kind of advisor. I will tell you what I think you should do after listening with the skills of a clinically trained professional on not just your finances but your life goals and life challenges. 

And the other side of that coin is, I’m a real estate investor and content creator and now a Chief Performance Officer. While every loan officer has a fiduciary responsibility to their clients – that means they have to act in your financial best interests – many of them also very much need a paycheck next week. That might impact their ability to be objective about what’s right for the client. I still need to pay my bills but I’m a built a strong financial foundation for myself. If it’s not the best move for you to buy that house, I’ll tell you. 

I know this blog is supposed to help you sound smart at happy hour, and I’ll get you up to speed on the economic news here in a second. I want to give you a mini assignment. Spend a few minutes this weekend thinking about what kind of real estate advisor you are. Are you worried about telling people what to do in case you’re wrong? If so, study the market harder so it’s less likely you’ll be wrong. Are you too bossy? Like if you don’t like the buy your friend is dating, your friend isn’t your friend until they stop dating? That’s not good either – we have to be supportive of the client’s choice. We need to educate them enough – and with the right amount of confidence - to make a smart choice.  

Here's the latest news your friends are going to ask you about over the weekend: 

Government Shut Down – I covered it last week, so go check it out. I’ll add that we’re missing jobs data and other key economic markers, and it’s leading to volatility with interest rates. Prepare for potential closing delays with USDA loans, reverse mortgage purchases, properties requiring flood insurance…FHA and VA should be mostly fine. 

The luxury real estate market is showing some cracks. Sales have dipped, inventory is up, and price growth is slowing slightly. This is a major opportunity zone for buyers shopping at higher price points and also an important consideration for sellers. Be the competitively priced luxury listing if you don’t want to sit for months – and pricing competitively to start will likely help you net a higher amount. It seems counterintuitive but just think about it. If you get a lot of interest right off the bat, you might get a bidding war. If you sit for months, no one wants to pay top dollar for the house that’s been on the market for 60+ days. They smell blood. 

Before I wrap this up – big news! I’ve secured my dream speaker for the Future is Female in Reno. Save the date for November 18^th from 2-6pm. And save these dates too: 

This Sunday! The Mill x Future is Female – Donation classes for The Women and Children’s Center of the Sierra 

If you’re east coast, The Future is Female Annapolis next week on Thursday. 

Mortgage and Mimosas RSVP’s open October 16^th. Event is October 30^th at 10am at 18 on Lakeside.