As part of the series on mortgages, Lynne Jarman-Johnson is joined by Josh Summerfield, Consumers’ mortgage sales manager, and David Pendley, Consumers’ vice president of mortgage, to discuss the hot housing market and some creative ways to navigate it if you’re hesitating to list your home.

 

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0:00:06.7 Lynne Jarman-Johnson (LJJ): Money, I’m home. Welcome in. I’m Lynne Jarman-Johnson, with Consumers Credit Union. From finance to fitness, and homes, we have it all. Yes, your mortgage your way, we’ve got it. Josh Summerfield, and David Pendley have been joining us in our series, on mortgages to try to help you get into that dream home. Guys, thank you so much. Josh is our mortgage sales manager, and David Pendley is our vice president here in our mortgage department, and I’ll tell you what, we have been working so hard, we’re hiring such great team members, but let’s be clear, it just feels like people are still afraid of that house-buying market because of the inventory. David, let’s start with you. Tell us a little bit, have you ever seen times like this before? You’ve got such a stellar career.

0:00:51.7 David Pendley (DP): I can honestly say I have not. It’s more of a tight market than it was even last year, and there’s a variety of factors beyond the causes of the last year. Even this year, we’re having some weather issues, and things like that, but man, oh, man, if you are considering doing something, it’s a great year to sell your house, but it’s a tight market. The inventory is highly limited, but boy, oh, boy, there are buyers. Every house is selling for a premium above ask, and there’s a line of buyers to buy every single house.

0:01:31.0 LJJ: Now, Josh, when you’re thinking about buying a house though, what everybody’s scared about is, well, what if I can’t get into another one? Have you been finding that to be true, and what are some of your suggestions?

0:01:43.2 Josh Summerfield: Yeah, it’s interesting. There’s a lot of sellers that are kind of sitting on the sidelines, not selling their house because they’re afraid they can’t get into the next house, because things are so competitive with so many buyers, such limited inventory on the market. Right now, I think there’s just over one month of inventory on the market, in comparison to 2009, obviously a much different market, but there was over 13 months of inventory on the market. That tells you [chuckle] a little bit of a difference.

0:02:09.3 LJJ: Wow!

0:02:10.2 JS: What can people do to prepare themselves? So, they don’t have to be afraid that they can’t find a place, it’s just be prepared, be diligent upfront, get your pre-approvals, get your ducks in a row. When you go in to make an offer, and you can show that you do have a solid pre-approval, that a lender’s looked at all your financials, and can say that, yes, this person’s approved to buy this house, you’re going to get a lot better chance of getting an accepted offer that way.

0:02:38.8 LJJ: David, when you look at inventory, some people have talked about construction, maybe now is the time to start constructing, and building homes. I know there was a little blip for a little bit with lumber, it seems to have calmed down a little. Is that perhaps a route that many should look at?

0:02:55.1 DP: Yes, it is a strong consideration to build a house. I will say this, it’s not for the faint of heart in 2022 because there’s a lot of dynamics going on right now in the world, where we don’t know what supply chains are going to be like, and so if you did go that route, those are serious questions that you want to ask your builder, and I would utilize a real estate attorney as you engage in that process, just so you can know what questions to ask.

0:03:24.9 DP: To Josh’s point, as far as selling a house right now in this market, one thing I’ll say is sometimes it’s a buyer’s market, sometimes it’s a seller’s market, and I would say, “Mr, and Mrs. Seller, you hold the cards. You hold the power right now.” If you wanted to sell your house today, and say we’re not willing to close until on, or before, July 1st, give yourself five, six months, you’ve got your house sold, now casually go find it, and if you won’t need to close sooner, yeah, yeah, we got our house, and do it, but you’re in control of that. It is a great time though to sell your house. You’ll be surprised on the quality of offer, and the numbers of buyers, and then obviously, the bottom dollar that you’re going to get.

0:04:09.2 DP: And we need sellers. We need people to step up. And Josh knows this, there’s plenty of sellers who would love to do it right now, they’re just afraid, knowing it’s going to sell fairly quick. You don’t have to close quick though.

0:04:21.1 LJJ: Well, see, and I think that’s a really good point, Josh, it’s all about transparency. How can the mortgage loan officer that you have, the realtor that you have help you calm your fears, and really put into play the important points that you can make as a seller so you could sleep at night?

0:04:38.8 JS: It’s a good point. Getting a solid team around you, with your lender and your realtor all working together to kind of come up with creative solutions on putting yourself in a good position to sell comfortably, and be ready to buy, like David mentioned, coming up with creative closing timelines, there’s other things that you could put into your contract that will create some kind of safeguards for you to be able to go and find that next house, give you some timelines for it, contingent upon you finding a house, you can do those types of things. So having that team, a qualified loan officer, or somebody that you know, and can trust that’s going to put you in the right product, and give you good guidance, along with your realtor. That’s important. Especially in times like this, that it’s just a little bit more difficult, but it doesn’t have to be crazy difficult, but you just got to get the right team.

0:05:28.9 LJJ: A friend of mine told me about searching in the neighborhood that they wanted, and putting out personal flyers to the homeowners to try to see if there’s anything that is budging in that neighborhood prior to it going onto the market. Is that something that you recommend, that you’ve seen? What are your thoughts, David?

0:05:48.9 DP: It’s funny you say that. I bought a property… Not a residential, but I bought a property a little over a year ago doing the exact same thing. I just… I wasn’t hearing about properties for sale, put together flyers, and somebody called me, and we worked an agreement that day. So yeah, I think it’s a viable strategy. There’s kind of an interesting dynamic going on right now in the industry, it’s called pocket listings. And so sometimes, let’s say at a big, whatever, 100-person real estate office, Mary will have a listing, and before they turn it to the MLS for everybody to go after, they give it to just their office. So, a lot more exclusivity. They kind of feel like they got this special thing, everybody needs a listing these days because they need to sell. Yeah, sometimes you need to come up with your own strategy to try to find your house, and that’s a very fair strategy. And somebody asked me, “Is it awkward or is it weird for me to put a flyer?” And I’m like, “I’d be flattered if somebody put a flyer and said ‘Hey, we’d love to buy your house. We love your house.'” Because we love it, and so we just ignore it if we’re not ready to dialogue on something like that.

0:06:53.6 JS: I’ve seen a lot of postings on social media stuff of “Hey, I’m looking in this area, do you know of anything?” That’s how we sold our house in Grand Rapids, was somebody posted “Hey, I’m looking in your neighborhood”, and we were getting ready to list it, so we sold it before it ever hit the market, just because of that exact thing. Social media can kind of be powerful in this too, to maybe find something before it hits the open market, and you got a little bit advantage that way.

0:07:21.4 LJJ: So really, the opportunities are here, it’s just knowing that it’s okay to be bold. Right, David?

0:07:28.2 DP: Absolutely. It’s okay to be bold. It’s interesting… I don’t know, six or seven years ago, I sold another property to a friend, and I never want to underestimate or undervalue the expertise of a realtor. And selling it to a friend, he said, “Do you mind if I bring in my realtor for representation for me?” And I said, “Absolutely. Definitely.” But deep down, I was like, “Why is he doing that?” That realtor was so helpful. It calmed me down when I got weird and stuff, and it helped him emotionally deal with inspection issues or whatever, at the end of the day, that realtor kept the entire deal together, so we both got what we wanted. He wanted to buy my house and I wanted to sell it. There’s a lot of emotions in a real estate transaction, and so there’s more than one way to do this, but to be proactive on your own to find your house, I have no problems with that, I actually love it.

0:08:23.8 LJJ: Josh, I think David brought up one of the most important things that we forget, and that is how emotionally attached we get in this journey. It is the largest purchase you’re probably going to make, and so when that happens, your heart just goes there. I clearly remember the appraisal, the inspection, and you’re just not sleeping at night. What is it? How is it that we can make this easier, or do we just have to all say, “Okay guys, these are the steps, know the steps are coming, let’s get going.”

0:08:53.6 JS: Yeah, it definitely goes back to just having the right partner in your corner, somebody that you’re comfortable with that’s going to walk you through the whole process. We talk a lot about really guiding our members through the process. Start to finish, these are the things you can expect throughout, these are the timelines you can expect, that way you’re not having those surprises, you’re not having that uncertainty at night [chuckle] when you’re lying awake at 11:00, 12:00 at night thinking, “I got to ask my lender this or I got to ask my realtor this,” no we’ve already covered that, we’ve talked about it, so you can kind of sleep easy and know what’s laying ahead for you.

0:09:30.1 LJJ: That is awesome. So as a buyer or a seller, communication is key, and make sure your partner is as strong on communication as you need. And it could be more or less, each person’s different, right David?

0:09:42.4 DP: Yeah, it sure is. And having your team together and your strategy, identify exactly what you’re looking for in a house. You want three bedrooms, you want two baths and you want a basement, don’t compromise. Because this intensity in the market, their short inventory will not last but you’re going to be in this house the next 10 years or X number of years, get what you want. If you have to wait a little while, you wait a little while. We’ve seen people buy houses they didn’t even like that much, but they won the bid, and then they get a house where they’re not overly excited about it. The end game is not to win the bid, the end game is to find your home.

0:10:20.2 LJJ: Oh, I love that. That is awesome. Well David and Josh, thank you so much. We’ll continue our series, and the next time we chat we’re going to talk a little bit about all of the different ways you can purchase that house. You might think you can’t, but I bet there’s a way we could pull that off at Consumers Credit Union. David and Josh, thanks so much for being with us today.

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0:10:39.3 JS: And thanks for having us.

0:10:40.7 LJJ: Hey, thank you for listening. If you have a topic that you would like, just share it with us. And thank you, Jake Esselink for your production skills. And I just want you to know it’s time to have a great week, spring is here, the hot market’s going to stay here and we’ll get you in that house. I’m Lynne Jarman-Johnson with Consumers Credit Union. Money, I’m home.

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