Venture With Joe and Cody
Venture with Joe and Cody is a captivating journey into the lives and stories of business leaders, entrepreneurs, and pivotal community figures, revealing the essence of success through candid conversations. Tune in to discover the setbacks, triumphs, and invaluable lessons learned on the path to making a mark in the business world and beyond.
Venture With Joe and Cody
Tech Tools and Mortgage Terms Decoded
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Joe and Cody explore tech tools revolutionizing real estate content creation and demystify common mortgage terminology that often confuses homebuyers. They share practical insights on leveraging AI for business efficiency while breaking down complex financing concepts in simple, actionable terms.
• Captions app automates video editing for real estate professionals, saving hours of work while creating professional-looking content
• ChatGPT and AI assistants have evolved beyond search engines to become comprehensive business tools for everything from content creation to visualization
• PITI (Principal, Interest, Taxes, Insurance) represents your true monthly payment, often hundreds more than the advertised mortgage rate
• Loan-to-Value (LTV) ratios determine how much of your home you're financing versus owning outright
• Home Equity Lines of Credit (HELOCs) provide financial flexibility with minimal setup costs, functioning as low-interest emergency funds
• Mortgage lender competitiveness varies based on business models and margins rather than simply institution size
• Multiple Listing Service (MLS) provides the data that feeds all real estate sites, though platforms like Zillow add their own estimates and calculations
Check out the Captions app to streamline your social media content creation, and consider setting up a HELOC as a financial safety net even if you don't need the funds immediately.
Hey guys, welcome to Venture with Joe and Cody. I am Joe Skipper with Skipper Realty Group, brokered by eXp. I'm with my friend, Cody Wilhelm with Residential Mortgage. As always, how's it going bud?
Speaker 2I'm doing pretty good. You did, I'm so sorry, it's an endearing term.
Speaker 1I think. No, I actually think that I tried to do a different intro and that is what I chose but to say, but it's like I'm sorry, like we should start again like, yeah, and no one should ever see this.
Speaker 2Yes, you know what's funny I I find myself, because I call our both of our boys like bud and buddy.
Speaker 1Yeah um, and just always have, since we're little and I I find myself calling their friends that too but or like any kids? I'm like hey, bud, how you doing? I know and I don't even think twice about it but well, calling you bud is a little bit.
Speaker 1I'm like, okay, we've that was. It was almost to the point of inappropriate. I'm sorry, hey pal, you're not bud, there's a gosh. What's the term? There was a, it's it. I I'm gonna over stereotype this, but boss like a lot of prisoners. Or when I was a cop, former prisoners would say boss like you know, and I don't. I don't know exactly where it stemmed from. Maybe it was from you know, in the in the prison system they called the corrections officer boss or something like that.
Speaker 1I never really cared to find out. But I know that boss was kind of a thing that they said. So when we met someone like a little sketchy on the street or we were kind of that had a criminal history, they always said boss, so it so it was just one of those things. So when people say boss, I'm like have you served time? Which maybe is not the right way to go about it, but boss has always triggered me to be like oh yeah, okay cool, you've been in prison so yeah, so anyways sorry, bud, sorry, that's okay, pal, we're going to be, we're going to go over, we're going to jump all over the place a little bit today.
Speaker 1I kind of go over some questions and terms and stuff, but I wanted to cover a new app that I found for anyone that's interested including you, Cody, who is a real estate social media guy that you need to edit your stuff easily. It's called.
Speaker 1Captions. So Captions is the app that you can get. I saw it online. I get a lot of the marketing and maybe you do the same. Use this AI and use this ai and half of it works, half of it doesn't. Well, captions is an awesome app. So far like there's a limit on how much you can do time wise on the length of the video, but you can basically put a rough draft video like of you just recording, put it in there and it will edit it in the theme that you want. It will edit in the. You know it'll zoom in, make sounds, enter the captions, do background, do B-roll.
Speaker 2Oh, wow.
Speaker 1All on its own and you can start for free. I know it does cost money but relatively speaking to the time it saves and the ability for it to edit, so far I love it. The latest video I did with buying and selling if you check out my Instagram, buying and selling, at the same time I roughed copy, shoved it into captions. They ask you what you want to edit it like, what theme you want, and then it just processes and it's done. You have to do some editing of like if you do have like spaces or if you messed up and you you know you're still recording and you messed up a statement and you need to go back like you may need to kind of like audit that. But man it's impressive.
Speaker 1So if you, if you have issues with editing anyone out there that has issues with editing like your reels or you want something to look like it's professionally done, captions has been so far a really awesome, really awesome program.
Speaker 2So that's good to know, cause I have been looking, I've been, I've been doing a little bit of digging on that too, cause I I feel like I want to get past the just the basic version of videos, which is essentially what I do, so adding more stuff in there, but I realized that I just don't have the. I I'm sure I could make the time for it, it's just I don't necessarily have the want to learn it all and figure it out and then put in that time for a 60 second video.
Speaker 2It's like for sure at this point, I'll just do something basic, and then I'll find something that will do that for me, because I would love to add more to them, but I get in my own way. So this is great. I'll have to try it out.
Speaker 1Yeah, you should, it's. It's really cool I'm looking for I'm constantly for the same reasons as looking for that sort of stuff, because it it takes a lot of time and I currently hire out my YouTube design or my YouTube editing and stuff. But I just like, if I could I can't find yet a YouTube like a long form throw your stuff in, edits it all out I'm looking currently for a thumbnail. So if anyone has any thumbnail generators that like make a good thumbnail for YouTube, um, that's what I'm currently looking.
Speaker 1But captions is a cool app you should check it out, and I can't wait to see your next video when you do it and you put it in.
Speaker 2I'm going to do one today, so I'll use captions for it yes, love it, love it.
ChatGPT as a Daily Assistant
Speaker 1Yes, well, um, that's my tech. You have any other tech that you're like hey, I use this all the time, like this is super helpful for me. Or are you like, no, I don't.
Speaker 2No, I'm. I'm still kind of probably similar to like a 50, 60 year old person when it comes to tech. I'm like I find out how cool things are. Once it's not cool anymore. I'm like, wow, have you guys heard of this before? Have you ever used this? They're like have you ever used this? Like yeah, that was like that was the first version. We're on to version 10 now, but with that I have been using chat gpt more um like.
Speaker 2Initially when I was using it, I was using it for more of like. I think I was using it the wrong way of more of like a internet search yeah, type yeah, as opposed to using it like yeah, it's, it's great for it, but using it as more of an an assistant and research tool and even helping me with, I mean shoot.
Speaker 2Sometimes I use it for stuff that's not even business related, where you just like asking questions and and figuring out different possibilities or how to structure something, how to put something together, so using it a little bit more probably how it's supposed to be used, as as more of an assistant than just like an internet tool.
Speaker 1Yeah, so it's been kind of fun it is and it's kind of endless with that and I've been looking at other. I know ChatGPT is great but like Perplexity is another one where you can ask.
Speaker 2I've heard of that one.
Speaker 1They're just starting to come out and it's man, I've had friends that are like you. You can basically have, you can you can separate chat, gpt into different things so you can go to this section and basically say I need you to be my assistant, here's my responsibilities, here's your responsive, like all this stuff, and you can make it that, like I had a friend like try to use it as a travel agent and say I need to go here, I need to go the best route, I want cheapest, cheapest, I want most expensive, you know, whatever you do Like. So there's just like so many opportunities and that probably is just going to continue to expand and continue to expand to be they can be your assistant, they can be your, you know, like travel agent, they can be your marketing rep, all sorts of stuff.
Speaker 1It's it's intimidating to get into because you know it's sure it it. You say it's endless until you actually see that man, it is endless.
Speaker 2What it is.
Speaker 1I know crazy what I do so I I used it as a search engine. I'm starting to use it more as, like my assistant or starting to say like, hey, I need this, I need that, you know, but even the search engine stuff I just had a hot tub issue how to replace something rather than me, google, it find eight thing, 18 videos. Which one's the best video like?
Speaker 1Like I just asked it and said here, I need you to research this. I need you to research this art, find out what's wrong with it and how to fix it. And it's just like boom gives you everything you know. So, yeah, super cool. Chatgbt perplexities one I haven't looked at, though like yet I've heard a lot about it, I think that's more of the research one.
Speaker 1According to what I have been looking into, it's more of the internet search. You know kind of it searches the internet to give you the best results of whatever you're asking, but I don't think it can be as functional as your assistant. But I don't know yet. Sure, anyways, okay, chatgpt is a daily, daily thing for me and probably the same for you.
Speaker 2It really is and I, like I said, figuring out how to use it a little bit better, you know, finding different prompts and ways to get the best out of what it is, rather than going back and forth a handful of times just like telling it like here are the things, ask me questions, blah, blah, blah blah, blah.
Speaker 1The cool thing is it memorizes you and you can tell it to remember it and kind of like all the historical stuff you've asked it to do, and so you can start to kind of hone in what it does, you know, and how it knows you, you know.
Speaker 2Yeah, I was considering like changing out the grill on my truck because it's currently the same color as the rest of the truck, kind of like a charcoal gray, and I was like I wonder what a black one would look like in there. So I uploaded a picture in there and said make the grill on this black and would look like in there. So I uploaded a picture in there and said make the grill on this black. And it did, and so then it's like I don't even have to, just I can, I can see it, just yeah, as it is for sure, and it's just like simple, stupid things like that too. That I think just from a everyday perspective.
Speaker 1You can, if you want, to use it for stuff, and it's simple, easy I still use google for a lot, but I feel like I could probably just go chat gpt for everything. Probably, yeah, or a perplexity or a combination of both. I feel like you know google does have. I think google's tapped into some ai I can't remember, but yeah, you sometimes get that first box of when you have a question yeah, so I don't know if that's gemini or whatever, but I'm getting too nerdy now.
Speaker 1I think it is now that you say it.
Speaker 1Well I wanted to go into. There's a lot of questions. A lot of the market right now is crazy. The interest rates are going up and down and daily left and right, and so I kind of did my own research and chat GPT's research and to find out kind of what people are looking at and I kind of went into a rabbit hole of kind of questions they have for lenders and kind of different things. But I think that what hit me the most is some of the key real estate terms that we use on a regular daily basis. You and I use, and you know, between business to business, type of terms that we kind of take for granted and just think clients know it and they don't.
Decoding PITI: Your Real Mortgage Payment
Speaker 1And so I wanted to go over some of the terms, and so I got a bunch of terms and I get just as confused as everyone else on some of these things. So I'm going to throw some at you and I want you to kind of help. Yes, the first one is P-I-T-I principal tax and insurance. So what is that and what does that all mean when someone hears your PITI?
Speaker 2Yes. So PITI is really important. A lot of times you'll get, if you're looking, say, on Zillow or any online payment calculator, sometimes they will put your it will just say principal and interest, but the big, bold number is the payment of that. So the reason that it's really important to get the PITI is the taxes and insurance for that home. That could be another $800 a month.
Speaker 2So I get people all the time that are like oh yeah, I saw this place and the payment's only 2,100. And I'm thinking there is no way that payment is 2,100. And then you go look at it all and you find out that yeah, no, it's not actually 2,100. That technically, your mortgage payment, your principal and interest, is that amount, but your taxes and insurance and maybe mortgage insurance too, all those factor in to give you your total payment. If you're ever looking at something, you want to look at the PITI. So the main thing that you'll probably see is it'll just say principal and interest and then it might have something that's labeled escrows or taxes, insurance, mortgage insurance, but that's going to make up a good chunk of your payment. So PITI, property or, excuse me, principal, interest, taxes, insurance so that's going to, that's going to essentially give you your real payment that you're going to be making each month. So so it is important to see.
Speaker 1Is it? Why do people, then, or whoever's, advertising mortgage? You know what your mortgage is. How are they? Why are they advertising that? And is that legal for them to advertise that? Because, honestly, that isn't your mortgage. When you are told you're 2,100, except for the thousand dollar extra month payment with everything else. So what's the rule with that? Why do people do that? I assume they do it because it makes it look better.
Speaker 2Yeah, that's the only reason. It's super deceptive and I don't know if it's necessarily illegal, if there's some type of disclaimer maybe that says this is.
Speaker 2This is just your principal and interest and taxes and insurance. Very blah, blah, blah blah, but it's super deceptive and it's, I feel like, if anything, it just hurts you. Why would I want somebody to think that this payment on this house is 2100 when it's actually 3100? For sure, baiting you in and getting you interested, you're just letting them down, so you might as well give them the full payment of everything. I think that the only other thing that I could think of is their perspective, which I don't agree with, to be clear, is well, this is just the mortgage portion, so this is all we're telling you that is due, it's the county, it's the amount that you put down, it's all these other factors that tell you you have to pay these other things.
Speaker 2But technically, your mortgage, your principal and interest payment is this Outside of that, we don't know. Maybe you're putting 20% down, maybe you waived your escrow account, maybe blah, blah, blah. But the reality is, even when those things do happen, you're still paying taxes and insurance, whether you have them escrowed or not you're still liable for that that amount.
Speaker 2So it's still is deceptive in my opinion, because it's just not, it's just not true. It's like, yeah, it's everything that none of us as consumers like. Like you go to buy a ticket to a game and it's like, oh sweet, I can get this ticket for 60 bucks, and then there's $35 more for processing fees and everything else and you're like I wish they would just put the full price on there.
Speaker 1Yeah, and just that way I know I'm buying a $95 ticket instead of thinking.
Speaker 2So it's the same same concept. I think it's like just a way of trying to get people in, but I don't. I don't like it because I don't like it as a consumer either. Like feeling, like, oh sweet, that's a good deal, and then you find out that shipping is the same price as the part that you're buying.
Speaker 1Yeah, I know, that's annoying. Yeah Well, one that confuses me all the time because not necessarily the term, because the term makes sense, but LTV More or less the term and what it means, but more when you start factoring in HELOCs and what you can get and all this stuff like that's where it gets like super confusing when you're like 80% of LTV and you know all that. So start with load to value and then we'll kind of dive into a maybe a deeper bit of that.
Speaker 2Sure, so if it makes you feel any better. When I first got into the business, I could not wrap my head around LTV, and I don't know why, because now that I obviously have understood it for a while, but it's not.
Speaker 1when you're saying it in verbally, it's like no, that doesn't make any sense.
Speaker 2Well, because it's it's like backwards. You know, I think if people understand equity and how much equity you have in a home, it's simple to think it. But then, and how much equity you have in a home, it's simple to think it, but then the number is actually reversed. So loan to value. Let's see if I can explain this after so many years.
Speaker 1I know, I know Finally okay.
Speaker 2So your loan, you have your value of your home. We're going to say 500,000. That's what your house appraised for and you put down 5%. So you're financing 95% of that home's value. So your loan to value would be 95%, because your loan is 95% of the value of the home. So it's really just the number is how much of your loan equals.
Speaker 2you know how much of your loan is eating up that percentage of the value Exactly, if you had 50% loan to value, that means your mortgage is 50% of the value of your home into like HELOCs or second loans, anything like that, where there's an additional loan that is going to be labeled as CLTV, which is combined loan to value. So you saw it and we have seen it over the years, and I know it was way more popular, you know, pre 2009, where they would do first second combos, where it would be you'd have an 80% and then a 20% loan, right. So your your one loan is 80% loan to value and the other loan is 20% loan to value. So you're still financing the whole thing, but for for the purpose of your first loan, you've put 20% down, so you don't have mortgage insurance, and then your second loan is only 20% of the value combined. They equal a hundred percent, but it's not. They won't do say something like mortgage insurance based on your combined loan to value. It's just on that single loan.
Speaker 2So, there were ways where people would kind of work their way around having mortgage insurance or maybe just putting 5% down. But they didn't want mortgage insurance so they did an 80, you know 80, 15 kind of thing. Where it's, they're still putting some money down. But the CLTV is really important when it comes to like getting a HELOC or getting a second Cause. Usually, once you have a second or a HELOC, it's really kind of tough to get a third lien. Not a lot of lenders want to be in third lien position because if you file bankruptcy or you lose your house, they're pretty much guaranteed they're not going to get their money.
Understanding Loan-to-Value Ratios
Speaker 2Second place, might not even get their money. So you got to find the right situation for that. But a lot of times they will have a cap on what the CLTB is. For example, your mortgage, it's 50% loan to value. So you've paid that thing down 50% and you want to take out a second loan. Well, they might only let your combined loan to value go up to 80% or maybe 90%. So you've got your 50% and then you can essentially add in another 30, maybe 40% for that second loan to where your combined loan to value is now 90% or less. So it's all just like a safety precaution that people aren't overextending.
Speaker 2And I don't think any bank really wants people financing 100% of their house. I don't think any bank really wants people financing a hundred percent of their house. You know, I think it's been, it's proven over the last you know what 10, 12, 15 years or however long it's been. Now that it's the, the market has continued to increase. But I think there there's always that risk of what, if they start to go backwards, home values start to decline. And now you know you went into it with a hundred percent financing and now your home is worth 30,000 less than what you owe. Okay, some people are just going to say, hey, I don't even want to deal with this, I'm just going to throw my hands up. Or do I wait 10 more years and hope that it rebounds? But yeah, ltv, that's really the biggest part of it is just how much you're putting down or how much equity you have in contrast with your.
Speaker 1yeah, I think the the the issue that I always have and it just requires a calculation that's maybe over my head, cause I don't do it is. You know, we have been, we have a HELOC, and so you know Christina will talk about, oh, they'll go up to 85% LTV, ltv, and I'm like, okay, what do we have? Like what?
Speaker 2does that mean? And?
Speaker 1I'm sure it's just a calculation, because I'm like I don't have a clue of what 80% loan-to-value is, when we already have some loan-to-value and then you know, doing that difference of the loan-to-value they'll give you, I'm like okay, just, but I'm sure if I have this issue and I'm in the industry, like I'm sure everyone's- like everyone else is like I don't know what you're talking about.
Speaker 2Like yeah, tell me what I'm allowed to get a haylock for and that's it.
Speaker 1But yeah, the loan to value is easy when you think of just yeah, that initial purchase or whatever. But when you start getting into like okay, we have X loan to value and now we're going to ask for a HELOC and they'll go up to X loan to value, so notes that you know what's that difference, and so that's where it's confusing to me at least.
Speaker 2Sure, if you want a simple calculation for that, just take whatever your home's value is. So we'll say, with, stick with the easy number of 500. And you, so you go, 500 times 0.85. And that's going to tell you what 85% of that is. So then that's going to tell you what 85% of that is.
Speaker 2So then that's going to spit out I don't know the number, but it's going to spit out a number and then that's what that's. Then at that point, if 85% was the max loan to value, then you would know all right. If that number comes out at four I don't know 400, just say it would be a little more than 400, but say 425. Then you know that all of your loans combined can't exceed 425.
Speaker 1Then you know that all of your loans combined can't exceed 425,000.
Speaker 2Okay, I can't go up to that. Okay, cool, I know I don't remember the calculation for figuring out what your, you know, your, your appraised value and then how much you owe. I think it's. I think you take the balance and you divide it by the home value, or you take the value and you divide it by the it'll it'll tell you what your loan to value is, as well with that, but okay, I never remember, just like I don't know what's going on here.
Speaker 1Yeah, like I don't know and I don't care. Well, we're on that note and uh, it's not one of the terms that was brought up, but uh, in my search, but I think it's important is a heloc. What is it? Yeah, and that has to do with all this loan to value crap. So I have a few different questions with that. But what is a HELOC? Just in general.
HELOC Benefits and Flexibility
Speaker 2Yeah. So a HELOC is an acronym. There's a million acronyms in the mortgage industry. Heloc stands for home equity line of credit. So that just means that you're taking out a second line of credit or a loan on your home, taking out a second line of credit or a loan on your home, and it is treated like a credit card essentially. So if you take out a $50,000 home equity line of credit or HELOC, then they've given you, they've said okay, you have $50,000 that you can use in this equity and then you can just use it as you want. You can write checks through that account, you can transfer money. It is essentially a $50,000 revolving like a credit card, and then your payments are based on how much you owe. So if you get a $50,000 line of credit and you've drawn out $1,000, your payment is based on $1,000.
Speaker 2Just because you have the line of credit doesn't mean that you just owe on it. There are home equity liens like a second lien Instead of a line of credit. They just do a home equity loan and in that case they would give you $50,000. And then you're just making additionally, essentially a second mortgage payment on $50,000. And you have the full lump sum.
Speaker 2So I personally like the line of credit better, because then you're only paying on what you're using, as opposed to you know, if you just, maybe you just need the full $50,000, but yeah, home equity line of credit, it's a second loan. So, instead of you know, a lot of people right now and in the last handful of years because maybe they have a three and a half percent interest rate they don't want to. They want to take out equity in their home but they don't want to get rid of that good rate, so they don't want to do a cash out refi. So they want to take out a second loan, which is usually a HELOC, to where they can access that equity because they've built up so much of it but they don't want it just to be locked in there and never touched.
Speaker 1Yeah, and I don't know if you've you tell your clients this or anyone. I tell my clients. Maybe I'm wrong, tell me if I am, but I'm like you should get a HELOC. Just, you should always have a HELOC with any house you buy. You can use it as leverage for different things, you can use it as all sorts of things, and if you never use it, it's never there. It's like getting a credit card but it's leveraged on your home. So one of the cool things is that, say, you use that $50,000 of your HELOC, you sell your home three years later and the HELOC's paid for with the profits of the sale, you know, as long as your home sells for more than what you know what you have owed. But it's nice because it's not like a credit card one, because credit cards can be upwards of 20, 30 percent yeah, uh, interest rates, whereas a heloc is what more? What's?
Speaker 2a heloc 10.
Speaker 1Okay, so probably between that range yeah, um, but it's a great like. We use them as our emergency fund in the event that anything happens, like, yeah, it's just there and it sits there. I don't. There is no reason why people shouldn't get one. What would be the downside like from a truthful? What would be the downside Like from a truthful standpoint? What would be a downside? Is there more money involved? Do you have to get another appraisal on the home? That's going to cost thousands, or what.
Speaker 2Yeah, no, because we don't do HELOCs. We're supposed to be getting them here soon, but I've never been at a position, in the years that I've done mortgage where I've had access to a HELOC.
Speaker 2We've been able to do like standalone second loans. But I do refer a lot of HELOCs out and it's super minimal costs, like a lot of times their closing costs are really really low, like $500, and then you pay for an appraisal. So it's super minimal and, like you said, it's a great emergency fund. It can be for whatever and if you don't need to use it, you're not paying interest on that You're not.
Speaker 1it's not like you're just there.
Speaker 2Yeah, yeah, it's not like you just took out this loan and you're like antsy to get rid of the money, or how do we use this? For sure it's there. It's an emergency house repairs. Interest is significantly lower than a credit card. So, yeah, there's really no harm. No harm in doing it, and especially if you've put down a decent amount, either from the get-go or maybe have a bunch of equity you're going to be able to get yourself a decent line.
Speaker 1You got to get you going they're, they're working on it, we're supposed to have it out with them, or after this podcast, and just talk to the boss I'm gonna say you know what joe really got on me about this, so let's get it going we gotta get it moving, buddy yeah, yeah, no, we're supposed to have it here.
Speaker 2I want to say it's within the next couple months, which will be really nice. Yeah, because it's. I mean we're probably a little late to the party. I think helox were like a really popular option when rates started going up. You know, 22, 23, maybe early 24. I mean there were tons of people that were looking to take out equity, but they didn't want to bother with their good rate. So yeah.
How Lenders Compete on Rates
Speaker 1So this is going to go off topic a little, not off topic necessarily, but with your speaking of your mortgage company. When people shop around, how flexible are you? Maybe this is something that you don't want to get into, but I guess, like, how flexible are you if someone comes and competes Like we always tell people to compete with different lenders, see who can offer what. And you can say in general, like what's the flexibility with mortgage lenders in general that you see, from a small one to a credit union, to a big bank like Bank of America, when someone says, hey, cody, this place can do X, where is that flexibility with mortgage lenders? And maybe, if we can get to it, maybe without taking a ton of time, it's like why are they different? Sure.
Speaker 2Yeah, no, it's a good question. There's a handful of different variables with it, but ultimately it just comes down to margin. How much does it cost for that company to run their business and if they have more wiggle room in the margins where they can take a hit?
Speaker 1essentially, on a particular mortgage to gain that business.
Speaker 2They will. If they just don't have any margin. Say, for example, they've put out the best rate that they can, or everything is more or less tapped out, and if they go below that, then they're losing money or they're below what they need to be to be profitable to you know if they're a publicly traded company.
Speaker 1Blah, blah blah blah, blah.
Speaker 2So some companies there might not be a whole lot of wiggle room because they're just like we put out our best and we're sticking with that and if, if it beats us, then you know, sorry, you're just going to have to go somewhere else. And then others they might. They might pad it a little bit more to where they have some more wiggle room in there. But I think it really just comes down to company to company, because, as back when everything crashed I don't know what year it was exactly, but they changed lender compensation to where you can no longer, as the lender, I can't, I can't gain more income from a type of loan that you do or a rate that you choose, and I can't lose any income.
Speaker 2If, say, somebody shopping me and they say, hey, this company is giving me a better rate, Can you beat that? And I take it to my company and they say, yeah, we can beat that, that doesn't come out of my compensation, it only comes from the business. So it's it's part of it depends on on what the business will allow, because it's not as if the loan officer can say, like there's a part of me that I wish that there was an option.
Speaker 1Yeah, that you could say I'll take something yeah.
Speaker 2Say you couldn't gain anymore, right? So that's good, I think. I think that's a good thing. We don't want to be steering people based on yeah.
Speaker 1I make more money going with this loan option. Yeah.
Speaker 2But I do think and I don't know, I haven't dove into it to find out why but I do think that it should be realistic that a loan officer can say hey, I'm willing to cut my pay to compete and match this. You know, hey, company, I will cut some of my pay and you jump into and collectively we we beat this and we make this happen because I think everybody would agree that getting a loan and and making less money on it is better than not getting not getting at all.
Speaker 1That's what's the real estate agents, do you know?
Speaker 2yeah, exactly so. I think it's a lot of it is is just margin related. I've talked to people from different companies and they their company is very firm on we are not giving pricing exceptions. You need to sell that for what it is. And that can be hard because when you're going up against something and they're like say a lot better than what you're offering, it's really hard to convince somebody like, hey, you, I know, you're getting a better deal over there, but like you should stick with me, with me.
Speaker 2Yeah, you know, and it's like I think you're probably in the same boat where any salesperson is in the same boat of like delivering value and reasons why maybe you're worth it. Um, but there are people out there and there's nothing wrong with it. But there are people out there where it's like I, I honestly don't really care what you're doing for me, I care about that extra money that I'm saving and that's more worth it to me. So it makes it hard. But our company, you know, toot our little horn here. They are more than willing to win when it comes to competing offers. So they're not going to say hey, just, you know, go out there and and gouge the market and try to get this.
Speaker 2If it's something where I, you know, somebody comes to me and they say, hey, you know you sent me this and I got this from this other lender. Awesome, Like, send it over, I'll send it up and I can. You know, I can't use the word guarantee, but I can feel really confident knowing that our company, like they, don't like to lose, and especially if it has something to do with rate or fee, because you know everybody has to charge what they charge to run their business. But they're also in the same wavelength of, like we also need to to beat who we can and be competitive and we can't just not win.
Speaker 1Yeah, do you find. Do you find and maybe this is over generic, but do you find like bigger banks are less likely, or is it credit unions are more likely to flex, or is it just truly based on the business model that that business has?
Speaker 2I think it's a lot of the business model. I think that when it comes to bigger banks and I've never really worked at a bigger bank or even a credit union to know, but just talking to people that do work in those spaces it seems that there's a little less flexibility, and sometimes it's just because that's not really what their primary business source is.
Speaker 1They're not solely on mortgage.
Speaker 2A part of our business is mortgage. So if it fits our box, great. If it doesn't, we're okay telling them hey sorry, you're welcome to go over there we're going to have our billions of dollars in deposits and auto loans and everything else that really keeps the machine going. So I think you're probably going to get it the most with mortgage companies and and brokers and people that are just like mortgage specific, like that is all they do because that makes sense.
Speaker 2That is the only way for them to continue to make money. So they're probably going to be a little bit more aggressive when it comes to that and they are likely going to have more opportunities to go through different options, as opposed to say, maybe a bigger bank or a credit union where they might just funnel everything through themselves. Yeah, and then it's like well, we don't really have a ton of flexibility here. You're dealing with other investors and other companies that are going to be buying that loan and they have to price it accordingly and attractive, and so it's kind of just like the market almost, where it's like you pull up all the different rates and those are different investors and it's all for the same type of loan. But hey, this investor clearly wants more business because they're pricing it more attractively, for sure.
Speaker 1Yeah, okay, okay, that makes sense. Yeah, just a couple that I'll go over MLS, that's our multiple listing service. We talk about the MLS all the time. That's basically what we have to formally put our homes in for listing and then that is when Zillow the Redfins all grab that information from the MLS to all the stuff you see on Zillow and Redfin are from the MLS.
MLS vs Zillow: Where Data Comes From
Speaker 2Ultimately, I think that's the thing that a lot of people don't quite realize, that they think that by going to Redfin they're going to find different houses and Zillow and this person For sure, it all funnels from there, right. So, like I know, there are different results. Say, zillow sometimes I know has been known for having stuff that's maybe not 100 accurate yeah, but in theory it should all be pulling from there, right?
Speaker 1yeah, it pulls all the data from there and then zillow has their own stuff, like you know, their little fluff that they put on the mortgage calculator, the yeah, there's estimate and those sort of things. So that's not coming from the agent. The data for the home is coming from the agent the description, the bedroom, bath, the square footage, all the stuff, all the pictures. But Zillow then adds their own fluff to. You know, here's what we Zestimated at and that is based on their own algorithms. That's not based on the agent, that's based on their own algorithms. That they do and it really is computer generated. So in a residential neighborhood that had eight sales in the last six months and they were all pretty similar homes, zillow, can be more or less accurate with their estimates.
Speaker 1A home that especially like your home, that that is out as property and has those sorts of things. They still just pull from a certain area around you and say, well, these all sold around you with a two-bedroom, two-bath or three-bedroom two-bath, whatever your home is and they don't factor in the different things or the remodels or the upgrades you did or the fact that it could be a disaster of a home.
Speaker 1Yeah, the MLS gets the data gets pulled, but then Zillow does their own stuff with it. And that's where I think people get kind of pushed inaccurately with Zillow and those sorts of sites to say, well, zillow says it's worth this. It's like, well, zillow is a computer that just looked around their area on Google Maps and said this is what sold recently. But we have this program. That's cool, it'll put in. We do our own research, we figure out our market analysis and then put it in and it'll tell. It'll go compare what Zillow estimated it at and what the home actually sold for.
Speaker 1So it'll show how close or how inaccurate Zillow was with that particular home. Oh, that's cool. So it's kind of cool, cause it kind of helps people see like, okay, zillow was 14% off, like, of what they estimated all these homes at and what they actually sold for.
Speaker 2Sure.
Speaker 1Yeah, so kind of cool, Interesting, okay, anyways. Well, we're always long-winded and we're already towards the end of the podcast, so, yeah, we could have gone on forever. We always are like yeah, let's see what you talk about today, and then we end up always just blabbing forever.
Speaker 2We can fill the gap pretty quick yes, exactly, so well, that was good.
Speaker 1Um, I think next week maybe we talk about some questions, current questions and things that people have regarding the, the current market, and kind of maybe our thoughts on that and what your thoughts are with lending and stuff like that. So, yeah, but yeah I guess, that's all I got man. Well, until next week, let's do it. Okay, we'll talk to you later. All right, man? Okay, see, ya, see ya.
