Latest / The Jon Sanchez Show / Are You Asking The Right Questions Before Buying A Home?
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- Jon G. Sanchez: Good Tuesday afternoon too. Welcome to the John Sanchez Show on News Talk seven eighty K which pleasure to be with you and a pleasure to be with my co hosts. That's right, around the horn we shall go. Mr Cory Edge of Hidrillity, how you doing, Big C? Very good. Very good. No complaints whatsoever. Dwight Millard on Q Home Loans, how are you? Cory: I'm doing great. How are you? Love it. Nice. Dwight Millard: doing fantastic, John. Every time I see the three of us, I think the boys are back in town, you know? The Finn Lizzie song, right? Boys are back in town. Yeah. Jon G. Sanchez: There you go, that song. Yeah. The boys are back. Yeah, exactly. Exactly. But I understand so it's you and I just on Thursday, Dwight, right? That's the that's the schedule for Thursday, speaking of which. Okay. Perfect. Very good. Very good. Glad to hear it. Corey, the heck's a real estate market doing right now? Dwight Millard: Correct. Yes, yes, it's you and me. Rock and roll. Cory: It it's holding in there. It'll be interesting to see. I'll pull the numbers maybe at the end of this week just to get an idea because it it feels like things have slowed down a tad just with interest rates and all that and the time of year, but we'll see if that's if true or not. ⁓ and it just goes back to, you know, I harp on this all the time. If you price it right, it'll sell. If it doesn't like I'm seeing a lot of stuff that's just sitting there and just of my shot across about. Jon G. Sanchez: The data? Yeah. Sure, sure. So on the data. Yeah. Cory: If you've been on the market for the last sixty to ninety days, you haven't done anything with your pricing, it doesn't get better from here forward. If you didn't sell it in May or June at that price, you're not going to sell it in July, August, September, October, November, or December. Jon G. Sanchez: Mm-hmm. Mm-hmm. Right. I'm glad you brought that up. glad you brought that up. Right. Cause like you said, we've peaked out ⁓ seasonally, right? Your fourth of July. Yeah, your fourth of July. Perfect. Very good. Well, this ties in perfectly with our topic. Let me tell you everybody what we have lined up for you this afternoon after I go through the stock market recap. know, we all know this, of course, that when we buy a home, we've done a few shows recently about this, the emotions can really get involved, ⁓ right? We've made that mistake, and yours truly absolutely has. Cory: Seasonally. Sure. Yeah. Jon G. Sanchez: Obviously, one of the biggest financial decisions you were ever going to make is making that decision to purchase that next home. before you sign on that dotted line, before you sign that contract, we have put together a great list of the correct, correct, let me repeat that, the correct questions that need to be asking yourself as well as the whole process. So today we're going to discuss about 10 of these questions that every single home buyer should answer ⁓ before of the largest investments is ever made in their lifetime. ⁓ Corey Dwight, just real quick poll out of both of you because I haven't had a chance to ask you. Out of these ten questions that you guys have put together, how many of these do you think I mean, give me a percentage. How many of these do people really ask themselves? ten percent, fifty, eighty? What Corey, I'll start with you. What do you think the percentage is? Cory: I would say at least percent. I mean and and and maybe they do it between themselves, maybe they do with their lender. I mean the a lot of this will go into, you know, you're asking yourself, can I afford it? Can I budget it? You know, all those those questions. And then there are a lot of times, at least in my world, where I'm gonna show a property and then they're gonna go talk about it for a night or an hour or a minute, depending on the market. and so I'm sure those kind of questions come up because it's Jon G. Sanchez: Really, that high? Okay. Yeah, yeah. Ha ha ha. Cory: Nobody ever gets exactly what they want, so they're trying to barter with themselves as, you know, can I live with what is in front of me? Jon G. Sanchez: Yes. Yes. Okay. It's higher than I thought. Dwight, how about you? Dwight Millard: Yeah, I I I agree with Corey ⁓ in terms of justifying. Well, here's what I think. I think Corey's correct that. But I think that if you were to take maybe eight out of the ten or seven out of ten, that number shrinks dramatically. I mean, I think it's now you're probably 40%. you know, asking a lot. Well, I'm I'm saying that everybody will ask, gosh, can I afford this? I mean, some of these questions, I think it's 70, 80 percent, like Corey said, but to go through some of these that we're going through. Jon G. Sanchez: What what do you mean you lost me there? Yeah. But some of these others Right. Okay. Dwight Millard: The I I think that number, some of the stuff, where am I gonna be five years? My estate, have it you know, have I budgeted for I think that number goes down, but I think overall the the the basic questions that you should be asking, I think it's a high it's like Corey said, seven is not highway. But you start to get in some deep deeper we're we're gonna go in a deeper dive, which I do believe that starts to minimize. I don't think people are thinking about ⁓ of this, and that's the hence the reason we've talked in the past that people run into problems. You know, they didn't think of some of these, yeah. Jon G. Sanchez: Right. Yeah, yeah, yeah, right. Absolutely. Yep. Yep. That's right. Yep. And and as you'll find out, folks, some of these questions can really get you into trouble if you don't ask them. And most importantly, you don't answer them because you didn't ask them. So it's a very comprehensive list, and ⁓ it's gonna be gonna be great to go ⁓ to go through that. So we'll title today's show, Are You Asking the Right Questions Before Buying a Home? All we're gonna get to it quickly here because we got a lot to talk about. ⁓ And stock market side was pretty simple today. Not a lot of activity, good solid session across the board. Specifically on the Dow side of things. Struggle a little bit on the NASDAQ has been the theme here for the last couple days. But the Dow best level we're up over 600. Didn't close too far off that. Finished with a gain of 537 on the Dow, 1.03% to a close of 52,747. NASDAQ lost 55 or 0.22%. the SP was up 16 points or 0.21%. again, not a lot of real major movements. The the the the gains on the Dow side really were driven by ⁓ ⁓ couple of Dow components that had very good earnings numbers. First one that led the pack all day was Sheridan Williams, the the paint ⁓ manufacturer. Eight and a quarter percent gain up twenty-seven bucks to three fifty-four twenty-seven. Again, very strong quarterly numbers, much better than expected. another Dow component, not a real influential stock because it's a low-price stock. I'm talking Coca-Cola. finished at $88.27, but up four dollars and twenty cents, five percent higher. that's a big move for that stock. It usually doesn't move that much. ⁓ but then we turn over to the negative side on the memory stocks again. That SK Heinex I've been talking about, that South Korean company that IPO'd a few weeks ago. everyone seems to be looking at that as a barometer. ⁓ they sold off heavily in the Asian markets on the specifically on the memory stock side of things. And then that just carried forward to our numbers. I mean, we were down over three hundred in the pre market session, guys. And ⁓ like I said, to finish the day with, you know, fifty five point loss, not too bad, but ⁓ that ⁓ Heinex Finished the day down eight point nine eight percent, twelve dollars and eighty five cent loss to one thirty seventeen. pretty good strength in Apple. It's continuing it to another record high. Yesterday was a record, today was another record. ⁓ up three dollars and seventeen cents, point nine four percent to three forty ⁓ eight. ⁓ up about four dollars and twenty-five cents. you the latest on the on the war situation, this was another factor. We had a nice pullback in oil down three dollars and thirty-three cents. We broke eighty bucks finally. ⁓ Finished at seventy-nine thirty-two. And what kind of drove us ⁓ the oil was weak overnight, and then it kind of continued during the ⁓ equity ⁓ trading hours. but again, largest decline in crude that we've ⁓ seen in quite some time. ⁓ Reuters that Oman had presented Iran with a proposal for voluntary transit fees to the Strait of Hormuz that has full backing of the Gulf State, supposedly. ⁓ While a Reuters report ⁓ said that China held direct discussions with the Houthis ⁓ regarding safe through the Red Sea. So yeah, it's interesting to see the Chinese Chinese involvement now. So those developments ⁓ help send the oil prices down. Dwight Millard: But John, who's gonna pay a voluntary transit fee? Jon G. Sanchez: That's my point. That's why you heard the sarcasm in my voice. Yeah. Here I ran. Let me give you a couple million dollars just for the yeah. Because remember, you know, when we, you know, for the what 24 hour period or whatever it was, where we said we were gonna charge it w what it would I did the numbers, it was gonna end up 30 million dollars for it would have cost this a super tanker because it was based upon how many ⁓ barrels of oil, we were gonna charge them 30 million dollars for a super tanker to go through the strait. Just one way. Not not not a round trip, but just one way. ⁓ Dwight Millard: Does it just sound does it just sound good? Yeah, yeah. Yeah, I yeah. Jon G. Sanchez: And then of course the world came together and said, Trump, you can't do this, and he backed out, like I said, twenty four hours later or so. But before that, remember Iran said, We charge two million dollars. You know, ours is a much better deal. I mean, that's what they said. So yeah, what's gonna be the voluntary charge to I to your point? Yeah, I don't know. I mean, what are they gonna do? You know, hand hand around a ⁓ a pickle jar ⁓ you know at the at the opening of the strait or something and you just deposit some money in there like you do at church or something? I don't know. Dwight Millard: Yeah. Jon G. Sanchez: They the whole thing is a crazy. I don't believe one bit of it whatsoever. and especially with China being involved with it. So yeah, we'll see. But hey, market thinks oil's going down. Oil goes down, stock market goes up. That's all I care about. real quickly, guys, before we go to break, let's talk about the the big event of tomorrow. Of course, gonna be the Fed interest rate decision, the CME Fed Watch tool currently employing a thirty one point five percent probability of a rate hike tomorrow. That's you know, that's a little bit higher than what we've normally seen. ⁓ ⁓ so we'll just round it up 32% probability. there that that number is really starting to climb, and I didn't I didn't want to give you a number, but it's significantly higher than this for a September interest rate increase. I think the last one I saw was about 65, 70 percent as of early this morning. so we'll see. But of course, Corey, what's the most important thing of the Fed decision? It's what happens afterwards, right? ⁓ The QA, exactly. ⁓ Cory: Do you have a QA? But but that's like see, because Walsh, you know, he's not very forthcoming with information. So we'll see how the QA goes. And I was listening to all this today and it's like going into this meeting essentially blind, right? There's no ⁓ why you've got thirty two percent saying yes. But then a lot of these guys were saying some of the bond trade are saying if he does raise it, the bond market tenure will probably come down because they'll call the markets bluff. So it's gonna be very interesting to see what he does. And I Jon G. Sanchez: No, no, very quiet. Yeah. Yeah. Yeah, well. Cory: I can't I is my personal opinion. If the rate goes up tomorrow, it's not gonna be with a Walsh vote. I gotta believe he votes no and the committee goes against him, which would create a whole nother set of issues. So yeah. Jon G. Sanchez: ⁓ yeah, no, I agree. I agree. Yeah. Yeah. Yes. ⁓ can you imagine if the committee went against a brand new Fed Sherman? ⁓ my gosh. to White? That'd be a whole nother mess that we have ⁓ seen in a long time. So ⁓ I think you both are absolutely spot on. I think it'll just be again, no interest rate change tomorrow. They'll talk about I think it's gonna be very similar to the ⁓ to the previous meeting. I can't believe the meeting's already here. It seems like it was just here the previous month's meeting. but I think Dwight Millard: Yeah. Yeah, yeah, yeah, yeah. Jon G. Sanchez: I think it's just gonna be worse just saying more of the same, you know, inflation's a problem. We're watching it. I think if he is thinking that he we he wants to get in an interest rate increase before the end of the year, September's probably the best time to do it. But they what they're saying right now is September interest rate increase and then a cut in the October or November or December meeting. So just to kinda ⁓ to your analogy, a shot across the bow saying, Hey, I'm in control. I'm the new sheriff in town and see happens there. But Yeah, it'll be interesting. Like said, the the Q and A is always gonna be it, but we'll see. You know, we'll see what the market reaction is of it. But at this point, ⁓ are the number one factor. You know, oil prices coming down. That's the other thing he's building up nicely is this little war chest of oil. You know, now that we broke eighty, that's a very significant number. ⁓ that we broke eighty, seventy nine thirty two barrel. Like I said, that's very much in the favor of the Fed not having to raise rates. So, yeah, we'll have a good time tomorrow on the show. I promise you that. All right, come back, you're caught up to date. We'll hit the ⁓ Interest rate side, we're gonna hit the commodity, ⁓ specifically. Dwight will bring us up to date on the mortgage side ⁓ then we will get into our topic once again. Are you asking the right questions before buying a home? Welcome back to the John Sanchez show on News Talk 780 KOH with Dwight Millard of On Q Home Loans and of Corey Edge of Adrility. again, ⁓ great day on the Dow side. Struggled a bit on the NASDAQ. We finished with a gain of 537 on the Dow. NASDAQ lost 55 SP up 16. All to the commodity side, then we'll give into get into the real estate. again, down $3.33 on oil, $79.32 a barrel, $38.50 loss in gold, $4,037.90 an ounce. And Mr. Millard of four basis point decline on the 10-year yield close $460. How did we do in the 30-year mortgage world? Dwight Millard: Well, Johnny, we're we're still stuck in this high six range, but you know, you got a little relief today. What was amazing is the mortgage backed securities opened up really, really strong this morning and stayed there. Basically, to your point, all about the ⁓ oil. ⁓ you know, the mortgage backed securities were up twenty-eight basis points. So that transferred over to a six point seven six, down four basis points on a thirty-year fix according to mortgage news daily. So you can just see, I mean, the the word of the day is stubborn. It's just Jon G. Sanchez: Yeah yeah. Stuck in the mud, stubborn. Dwight Millard: Stubborn stubbornly high. Yeah, I mean, and and you're you know, we were used to brag about the and VAs being in, you know, in the fives. Well, they're at six point three two and six point three four. So and your fifteen years six three one. So we are again uncomfortably in the sixes, you know, and so ⁓ I I I noticed a pullback in the probably ten days. ⁓ Jon G. Sanchez: Yeah, yeah. Dwight Millard: ⁓ ever since we restarted that campaign and oil went up, pullback in in activity. Yeah. Just people are just get, you know, and then and they're negotiating. What's interesting is they're negotiating a a price, new construction are negotiating a price, ⁓ and then they to see these rates go up and they've they've paused it. So it's not everybody, but it's enough out there that these people are paying attention to these rates right now. They are ⁓ Jon G. Sanchez: Interesting. Interesting. Yeah. Yeah. Feeling with the pain. Well, I I think I think I think psychologically too, when you're saying six and three quarters percent, the mind automatically goes to seven percent, right? And then e though it's pretty significant difference between, you know, six point seven six and and ⁓ But I think that's that's the other thing that's weighing on people right now. It's like, man, they they think they can't stay at these levels. They gotta come down. I'm gonna get jump on them then. Go ahead. Dwight Millard: Paying attention to it. Yeah. Yeah. Okay. Yeah, yeah. Well we were talking a several weeks ago about how the concessions were so high. Remember? And then as the rates come down a little bit, the concessions can kind of pull back a little bit, either from sales price or from you know buying down the rate and closing costs. But now that we just had this run up, now I'm seeing the concessions back up there. I've got a client today who wants to knock 60,000 off the sales price and 25,000 in concessions. Jon G. Sanchez: Right, right. Wow. Dwight Millard: You know, I mean that's an eighty-five thousand dollar you know, I mean, you know, it's but I'm just saying these concessions, these builders are dying for these concessions to go away. You know, to not have not just to have to keep paying but you know, you get a run up again in rates. It that doesn't go away. A matter of fact, the concessions amount increased, John. ⁓ So lot of them were doing fifteen and twenty, and now they're doing twenty-five and thirty. Jon G. Sanchez: I bet they are. Yeah. Yes. Well speaking of concessions and and publicly traded builders, Corey, you wanted to ⁓ chime in regarding an interview you saw with Polte. I I I was in a meeting, I saw him up on my screen, but I didn't get a chance to listen. So bring us up to date on that, as well as your conversation with the local developer. Cory: Yeah, no. It wasn't ⁓ it wasn't Mr. Poulty because he's running the intelligent intelligence agencies, I think. But the CEO, and I I just caught it, I was listening to it, and some of the numbers he was saying caught me off guard. So I went back to the report and read through their earnings report. There, like we were talking about off air, he said on this interview, which I did a double take and had to check with it, their cost, their average cost to build a house, sticks and bricks, not land, not anything else, just sticks and bricks, $75 a square foot. Dwight Millard: Yeah. Jon G. Sanchez: Exactly. Amazing. Cory: Which to me sounded insanely low. Like almost did he for did he forget to put a two or a three in front of that? Because that makes sense. But when you read their earnings report, that's that is what it is. And so I went back ten years and looked at it, and it I think in twenty sixteen I went from about forty-five bucks a foot to a high during COVID of ninety-five bucks a foot, and has since come down to seventy-five bucks a foot. Which is crazy coming from Jon G. Sanchez: Yeah, that's what I yeah. ⁓ Exactly. But it's so so the first Dwight Millard: But they gotta be squeezing the subs then, right? They gotta be squeezing the subs. Cory: Well, you gotta imagine the amount of scale that they have to buy their lumber and all their stuff. Now, all their other costs, their land, their development, their sidewalks, all other stuff is ninety five bucks. So they're in the house, the finished product, a hundred and seventy bucks a foot, which is still incredibly low. I I was Dwight Millard: Yeah. Yeah. Jon G. Sanchez: Well, when we do our when we do our local report, we're at what three eighty a foot? Yeah. Yeah. Right around there. And those are that's my point. I was just gonna say that. For those are for used homes. Now, could it it could this last follow up on that that's an average corporate wide, so around the country. So that would take in account for high end markets like a California and maybe a low end market somewhere in the Midwest, et cetera, right? So on average, yeah. Cory: 350, 380, 400, yeah. And those are for used homes. And I was with the gentleman the s ⁓ go ahead. Correct. Correct. Correct. But still, it just seemed like a an incredibly low number. But it's it's you know, unless they're lying to Wall Street, which I'm sure they're not, like. Jon G. Sanchez: I did. Can I can I ask both of you this question? And I honestly don't know it, so I don't know what your answer is gonna be. just you just said something a second ago. you said, you know, lumber prices and all that stuff. That we the how they're able to buy in quantity. But unless something changed from when I was in the construction trade when I was a very young man, they hire a, let's say on the framing, they hire a framing contractor who then is responsible for buying the lumber. Has that changed? Are you saying that the home builder goes out and uses the negotiation power and and strength, balance sheet strength, to say buy the lumber and then they just hire the framing contractor for the we'll call it the labor side of it. Cory: Well, I don't want to pretend like I know how all these big boys work, but my assumption is yes, they use their guerrilla power, strength, and balance sheet to get the lowest price possible and then bring in the subs to do it. Correct. Yep. That's that's the other thing. But some of these some of these numbers are interesting. So they're speaking of concessions, their average concession for Q two was ten point four percent, which equated to fifty-six Jon G. Sanchez: Okay. Okay. Which would make sense. Yeah. Yeah. Dwight Millard: Well they may might even own part of ⁓ you know. I mean the lumber you just don't yeah. Yeah, you just don't even know. Yeah, yeah. Jon G. Sanchez: Yeah, no kidding. Yeah. Good point, Dwight. That's a very good point. Cory: thousand dollars per house. Other than and that has been there for about the last three years. On par over the last 15 years, it's three percent. So as Dwight mentioned, this is you know a seven percent increase just to deal with what's happening in the mortgage market right now. to keep the and like we've talked about these builders need to keep the cash spinning. So their net profit margin is at at least with these guys, 10% Jon G. Sanchez: What do I was saying? Yep. Amazing. Gee was wow. Yeah, yeah. Yes. Cory: ⁓ nine percent somewhere in there. But it's more important to keep the wheels turning and keep the dollars spinning. So they'll let that fluctuate a little bit. Jon G. Sanchez: So hasn't the Trump administration done something? Especially when you have a a Pulte running r ⁓ the right? Running it for the government, running the housing unit for the government. I just don't understand why why we haven't heard anything out of the Trump administration as far as, you know, anything major with with teeth to sink into. Cory: Sure. But what's he gonna do? He's already tried to fire the Fed officials and the Fed, you know, governor. And if they go against Walsh tomorrow and raise a rate, he'll probably fire the entire Fed and just take it over himself and battle it out in the Supreme Court. What is he gonna do? Jon G. Sanchez: Right. Right, right. Yeah, but I'm talking deeper. I mean, why why isn't the administration coming up with with some type of creative idea to make housing more affordable and and obviously, you know, get more people moving because it's the benefit of everybody, you know. Cory: I mean the only thing I can think about off top of my head is to get rid of the capital gains tax on the house the sale of the house just completely do away with it so they can get some inventory flown. But that'll I mean I think if you flood it with inventory, that'll bring the prices down, but it may bring it may bring the builders like a Pulti their costs down. So their their net margins might widen even though their sales price comes down. or a government backstop, but Jon G. Sanchez: Yeah. Yeah. Right. Dwight Millard: Yeah. Jon G. Sanchez: Sure, you have to balance it. Right. Dwight Millard: Well, I you know, John, I mean you you John, you could go we've talked about this, you can go deep into the agencies of why is Fanny and Freddie still start charging level loan price adjusters, right? Just add ons. I mean, to make seventeen billion a year. I mean, you're right. I don't know if that would be the end all be all cure. You know, why is FHA still charging one point seven five up front mortgage and you know, those are little things, but I just don't it's like Yes, yeah, yeah. Jon G. Sanchez: Right, right. Right. Well, they're all of those are ATMs for the government. They're a printing machine. Cory: Correct. Dwight Millard: And I just don't know that it makes a big dent in the overall scheme, but to your point, it's just what but that what what Jon G. Sanchez: Yeah, but what if what if you took what if you took I don't know, let's say the government's making fifty billion between all the different agencies a year. What if you took that plowed it back into programs, right? Loan subsidy programs, point subsidy, whatever your allows you. Bottom line, you're plowing it back in to get that activity. Dwight Millard: But John, we we already've done that. And it it doesn't, it doesn't really move the needle. Unfortunately, it doesn't move the needle because typically with those, they put a lot of restrictions on those, John. You're so you're right. I mean you'd have to reduce the restrictions. Hey, what's the income limitations of sales price? There's all those kind of things on there that prevent that from being very successful. But the problem, the bigger problem is if you take a Pulti at 100 and whatever it was, 75 or whatever it was, a square foot to build. Jon G. Sanchez: Yeah. Dwight Millard: How does a regional or local builder compete? Because you to believe DR Horton's kind of still a Lenard's probably still kinda I I don't know what their numbers are, but they gotta be similar. And so how does how does our friends in, you know, in the local ⁓ marketplace even compete? Or even a hundred? You're you're compete with the they can they can give the concession and still make money. These guys give concessions, they lose money. Jon G. Sanchez: Sure. ⁓ yeah. Yeah. The guy building five houses a year or something. Yeah. Yeah. Yeah, yeah. No? Cory: That's what I'm saying. He the this guy, I mean, he was talking about how great the market is, how much money that like he was not complaining. He was happy. And the problem if you start doing government handouts, if you do some kind of stipend to help these builders so that they don't have to cost as much, they're not gonna lower the price of the house. They're not gonna you know what I mean? It's sure. Jon G. Sanchez: No, I'm not I'm not saying put money in the builder's pocket. I'm saying help help the consumer. Help the consumer. Yeah. Dwight Millard: The consumer. Cory: Well, the builder's already helping the consumer, so the consumer's just fine, you know what I mean? Just let was happy. Again, they were it was a very good interview, a very upbeat, like this market's fantasti you know, not fantastic, but he was not complaining. Jon G. Sanchez: Shh. Dwight Millard: Yeah. Jon G. Sanchez: Yeah. Right. Yeah. Very very few C CEOs that go on CNBC do complain. It's always it's always you know, rainbows and butterflies, is I like to fascinating. That's fascinating. ⁓ Real Corey, when we come back, ⁓ had a great discussion with a local of high end developer. I want you to share that information with the audience, then we'll get into our topic. Are you asking the right questions before you buy a home? Welcome back to the John Sanchez show on New Stock 780K OEIT Corey Edge of Vidge Reality and Owen Millard of Uncle Home Loans. All right, boys, let's get down to it. But Corey, you had a very interesting interview today, or not interview, but a conversation with a local developer. I I want you to share that, then we're gonna get to our topic. Cory: Yeah, really nice guy. I've known him for a while, builds very high-end homes and not just one at a time, multiple, multiple at a time. I ran into him last year and we had a conversation and it was not going well. He had two very expensive spec homes that have been sitting there, hadn't sold anything else. I talked to him for quite a while this morning, just ran into him again. both the spec homes sold, the land is selling, and these are multi-million dollar properties. And he goes, I don't know what's happened in the last 90, 120 days, but everybody wants them. And so I don't know. I mean, this goes back to your world. I don't know if this is all this AI money, these lockups on like some somebody's buying all this stuff. But to give you an idea, we were talking about Polte, 75 bucks a home, sticks and bricks on average. His sticks and bricks cost are roughly 600, 600 to 700 bucks, to give you an idea of it costs to build here in Reno for for high-end things. Jon G. Sanchez: Mm-hmm. Of course. Of course it is. Yeah. So three thousand square foot house, you're two point one million starting. upgrades, probably. Yeah. ⁓ Cory: Yeah, that does that doesn't count all the other stuff. But it's it's kinda it kinda is like we've been saying the high end of this market is doing incredibly well and it's pulling that price up. Jon G. Sanchez: Yes. I I just I I've shared this with you guys and then we'll get to our topic. I for some reason I just got this gut feeling we've like been discovered. Right. I know that sounds so stupid, right? We've always been on this side of the Sierras. California's always been on the other side. But I think because of the Democratic programs, ⁓ i.e. the you know, trying to push for the billionaires tax, so on and so forth, these these wealthy, and I'm not talking just billionaires, I'm talking, you know, multimillionaires and things, they're like, Cory: Sure. Jon G. Sanchez: Why am I here? Why am I here? I'll I shared a story with you guys. I had a client we I've worked with him for gosh, probably the last year, trying time selling his incline home. They've been there a long time, pretty good size home, 30,000 square feet or so. Finally, we to the point. Helped him with everything, got a great agent up there. Sucker sold in two days. Full cash offer, everything. People coming in from out of town. Cory: Nice. Yep. Jon G. Sanchez: Coast come in. When they were doing their walkthroughs, they show up with a architect, an interior designer, and basically are gonna rip this thing like down to nothing and start all over. And he said, They're probably gonna be looking at another two to four million dollars besides the, you know, I'll say between two to three million that he sold the house for. So these people are coming in ready to spend five million dollars to live in incline, but they're the east coast taxes are considerably higher. But we're hearing all this, right? But then I think it's it's obviously a low little bit lower level of wealth is then finding it here in in Reno and you know, our area. because it's nothing for these people now to go spend one and a half, two million dollars, right? Where that used to be. I remember Corey years ago when you used to do the reports like, ⁓ my God, we sold a million dollar house. You know, it's just ⁓ was so far now. It's like almost like some of your reports is like, geez, are we selling more of those than we are the, you know, the medium six, seven hundred thousand dollar ones. Cory: Mm-hmm. Jon G. Sanchez: So I I think it's just I think it's to your point, it's just a demographic shift. I think people are finally starting to realize what a gem of a place that we live at. and especially for those up at the lake. I I I see I see Tahoe is ⁓ know, I know where those prices are gonna stop up there. I really don't, but it's been discovered. Dwight Millard: But John, you know, your point, i it when people think of Nevada, especially on the East Coast, you can even get in the mid Midwest, ⁓ think Vegas, and I don't know if you saw the report today, Vegas Vegas has the biggest adjustment downward in pricing. That's what they think of. And you're right. Maybe now they're discovering, hey, not everything is Vegas. And you know, that this is a quality place to live. Jon G. Sanchez: Yeah. Yeah, I agree. Yeah. Yeah. Yeah. Well, I I'll I'll I'll I'll real real quickly I'll share a conversation I had yesterday. I was I was speaking with a with a ⁓ future client of of specialized trust he moved out from New York, ⁓ moved Northwest Reno, one of the higher end retirement communities there, moved out from York and and the guys in in the world of tech. And he's he's about fifty-five years old, so he still has a lot of work and years left. But he's like, I finally woke up one day and I'm like, Who why am I in New York? What what am I doing here? Shut down his business there. He's self employed. Shut down his business there. Came out here. He's like, look at, at what I bought. Look I have no state income tax now. And he's he's on cloud nine. So how many hundreds or thousands of people are like that where the words get you out? I mean, I don't remember, maybe you guys do. I don't ever remember people moving out here from New York, right? Now ⁓ we're seeing and more of it. It's you you're getting lot of big money managers that are moving up to the Tahoe area. Cory: No. Jon G. Sanchez: you know, obviously they can afford it. it's it's fascinating to see for the good and for the bad, right? For the good and the bad. But I I'd I'd don't I won't be surprised if Corey if we, you know, in the next three, four years we're not when we talk ⁓ when we do our report, we're saying median price, ⁓ not six nineteen, you know, eight nineteen, nine nineteen. I mean, I think I think it's just a matter of time. I really do. 'Cause California's chasing everybody away. So this is easy to come over here and like he said, he goes, Look at he goes, ⁓ Cory: Sure. Jon G. Sanchez: You know, right over the mountain from Silicon Valley, where he does a lot of work and so on and so forth. So finally been discovered, unfortunately. ⁓ for those of us that have been raised here. All right, let's get to our topic. Are you asking the right questions before you buy a home? So first one, ⁓ we don't need to spend a lot of time because this is what the boys were referring to earlier. This is one of the most ⁓ you know basic ones, right? Do I can I comfortably afford this home? You're gonna say, Can you officially afford this home? They're gonna say, Can I comfortably talk on that one? Cory: Yeah, I hear you. Yeah. Dwight Millard: Yeah, first of all, John, I'm gonna ask a question of a question. What does your budget tell you, right? Number one. But the the other thing is that what I qualify qualify you for and what you actually can afford month in, month out are two different things. So be comfortable, have some disposable income. You know, you've got to be very careful. We've talked about homeowners insurance. It's a very wild card these days. dues, they seem to be everywhere now. So you gotta kind of plan for that in the market and maintenance. ⁓ Jon G. Sanchez: Yeah. Dwight Millard: that's the unexpected, right? I mean, everybody knows maintenance, I gotta mow on or whatever, but you know, a pipe bust in or something like that, it gets into big, you know. So those are just things. If you're not saving now renting, you think you're gonna be able to save when you're buying a house. I I don't know, especially you know, your new payment versus your old, you know. So yeah, yeah. So ⁓ yeah, just just do the just do the litmus test. Do the litmus, be real with yourself. Jon G. Sanchez: It is. Yeah, good looking. Yeah. It's it's almost like you're gonna save money when you have a kid. Yeah, right. Yeah. Yeah, we covered that last week. Yeah. And Dwight, you've said it every time. Let's hit it one time. The budget. Very few people have a budget. How many people do you do you do you meet with Dwight that that truly say they have a budget? Yeah, me too. I'd I'd say maybe ten percent if I'm lucky. Ten percent. And those will yeah, those are yeah, the real one. And those are the ones that I see that have the biggest amount of wealth. Dwight Millard: Yes. Yeah. Zero. A real budget, you know, maybe they might say, yeah. Most people don't know what they make, John. Most people I talk to don't know what they make. Jon G. Sanchez: No, I know. I know. That's right. right, Corey, next one's you. I love this point you made up. Am I buying the right house or it just the house that I fell on? Cory: Yeah, and this goes back to those conversations where, for instance, in my world we'll be showing houses or I'll showing a house, something that if I've got a couple, they both like, but then they're gonna go away and talk about it for an hour or a day or how however long they need to talk. ⁓ And are always the discussions. I went through this last month with some dear friends of mine, looked at house, they wanted to think about it for the night. because it wasn't in the future it could have everything they wanted, but it didn't have it now, so they had to debate over. You know, do we want to go through the hassle of turning this into the house? And we have a nice house now, so do we want to uproot ourselves? But we're going to have more kids and you know, all these discussions. I think it breaks down, John, buyer by buyer by buyer. Some people, you know, they have a list. If it crosses off 85% of their list, they're in. Or some people need to sit back and think because they do look more long term. You know, how many kids are we going to have? What schools do we want to be in? What Jon G. Sanchez: Mm. Yeah. Cory: Where are you going to work? Like all these different things. So Jon G. Sanchez: Sure, sure. Love it. right. Let's squeeze in number three before we go to break. Corey, is back to you also. How long do I plan to live here? Right? That's something I I never thought about that before. yeah in the real estate I've bought, but what a great question. Cory: Yeah. No, and it's usually I think on average it used to be seven years. I don't know what it is now at the low interest rates, but I'm sure it's much longer. But that's where you get especially I don't want to say first time buyers, but the younger generation where they're starting a family or maybe they have a small family, they start thinking about school district and transportation. And if we have more than one child, we don't want them him or her to ride the bus. So how are gonna, you know, break up and get everybody to school? that seems to be the discussion. ⁓ Jon G. Sanchez: Yeah, yeah. Cory: that everybody has because work is pretty easy now. Everybody can get around. Hospitals aren't a big deal at that point. ⁓ but school is a big thing. So most people I talk to in the beginning stages of families always anticipate they'll look at the elementary school, the middle school, and the high school, anticipating that they're going to be there for the lifespan, correct. So call it eighteen years or more. that's always the plan. I you know, who knows if it works out that way. Jon G. Sanchez: Yeah. From elementary through high school, yeah. Yeah. And then of course the flip side for those that are retirees or soon to be, they start thinking about the healthcare, right? They're looking down the road. Geez, does this thing have stairs, right? Do I or not? You know, and close am I to to healthcare? And ⁓ yeah, a lot of those different factors. But yeah, take the time. How long do I plan to live here? No one knows what the future is, but try to approximate. All when we come back, just right down ⁓ Dwight's alley. You don't want to miss someone this miss this one. How much do I put down? There's a big misconception out there. Question you absolutely have to ask. Cory: Exactly. Jon G. Sanchez: Welcome back to the John Sanchez Show on New Stock Seven Eighty K H Mr Coriage Vegrility Fun Nabasa. Cory: six seven three six seven zero zero. Jon G. Sanchez: Do I Millard on Q Hall homes for Navasaur? Dwight Millard: Yes, sir. two hundred four zero two zero two two. Jon G. Sanchez: Beautiful. And as a quick reminder, I want you to join me for my webinar tomorrow evening. Cannot wait. Count down the hours. Is your trust outdated? right. It's not just about the date. We're going to reflect on does it still have your family's wishes? Is it up to date with the current tax laws? Your financial situation? You're going to learn the warning signs that your trust may need a review, restatement, or just start the whole thing fresh. I ⁓ had the other day, Corey, that was I thought you because you you you do do a lot of estate planning stuff. So old and and the guy's like, I don't care about the name anymore. I don't care about anything. Just start it over because it's a disaster. And like you come across that once in a while. this is again one of the biggest issues we're finding right now. People think their trust is all up to date. When in in reality, after we review it and we we put it into our AI models, it's there's all kinds of problems. And these are things we're gonna highlight tomorrow. Again, free educational webinar tomorrow night, six o'clock. just go to our website, specialized trust dot com, click on the Step Learning Institute, and you'll see the sign up for the ⁓ Cory: Sure. Sometimes it's easier. Jon G. Sanchez: webinar tomorrow evening again, six to seven. And again, as a reminder, I haven't counted yet, so I don't know the number, but as I made the offer to all of you on Friday, I guess it was, for those of you that do have an existing trust and you sign up for the webinar, the first 25 people, ⁓ I'm gonna a free trust review for you. It's usually a twelve hundred dollar value, ⁓ but that's way of saying thanks for joining the webinar and and ⁓ let's how many of you we can help. So just go to specialized trust dot com. All right, back to topic, guys. again, we got just a couple minutes here. But we need to ⁓ to really get this one down. Dwight, speaking of down, how much should I put down? So much misconception on this. Major question you need to ask yourself. Dwight Millard: Yeah, yeah, John. So the quick answer is if you got high credit scores, 5% down on conventional, keep your cash. not going to make a whole lot of difference in your payment. I know that people like to get rid of MI, but if you got high credit scores, the MI is insignificant. you don't have great credit scores, three and a half FHA, if you're still in the loan limits, an automatic VA if you're if you've earned it, you know, then use it. If you're a veteran, zero down, you know. I just I like lower down, John. They can get further with their cash somewhere else than in a locked up in a house. Jon G. Sanchez: You're not gonna find too many mortgage professionals that give that advice. job, Dwight. Good job. Corey, next question. Have I budgeted for the hidden cost? Let I think we kind of covered this one, but let's just hit some of the high points that you see where people really, you know, once they move in, they call you up and go, ⁓ my God, I didn't know it was gonna cost this much for utilities or window coverings or brand new home and landscaping, right? All these things that I mean, nothing's cheap anymore. Nothing. Cory: Mm-hmm. Dwight Millard: Yeah. Yeah. Cory: Well th those are all the costs that you kinda hopefully know about. The window coverings and I got a landscape and this and that. It's a stuff you don't think about. Like you're so used to calling the landlord to take care of it and you have no idea what it costs because the landlord always took care of it. But if you have a roof problem, if you get a plumbing leak, if you were I helped my neighbor on Saturday because his pl main plumbing line going into his house somewhere out in the yard. So we had to get the tractor out and dig a big old hole until we could find it. Like just all these things I Jon G. Sanchez: Take away. Cory: I mentioned this on the show a few years ago, but somebody told me I thought, man, that's a great thing. When you are a tenant, the rent is the most you'll ever pay for a living expense. Whatever your rent is, that's the max. When you become an owner, whatever your mortgage is, that's the least amount you'll pay. It will always go up. There's always gonna be more. So I don't have an exact number like what you should budget for, 10% a month, 20%, whatever. Just have some kind of Jon G. Sanchez: That's a great analogy. That's a great analogy. Yeah. Yeah. Cory: rainy day account 'cause something will go wrong and it usually happens in threes, so be ready for it. Jon G. Sanchez: Yes, I will. Yeah, yeah, right. That's true. go to question Dwight Millard: Well, that just ties into the lower down payment, John, for those because otherwise, like we talked about earlier, it you're gonna use credit cards and then you can't get out of that mess either. Cory: Yeah. Jon G. Sanchez: Yeah, you're right. You're right. Keep keep the cash reserves. Yep. Yep. You're right. All right, guys, let's go to question number six. Should I keep my current home as a rental, Corey? Cory: It depends on the house, right? It if you have a if you have a current house, you're going to move in, you don't need to pull all the equity out of it to get the new one. And this is my opinion, the house sets up as a decent rental, then yeah, what's the harm? If you have a big beautiful house, you've taken immaculate care of it, you're out there cutting the grass every two days to make it look beautiful, you it may not be the best canon as a rental. I was with a client a couple months ago and he asked me that question and his uncle happened to be standing next to me and goes, Are you freaking crazy? Why would you want to be a landlord? Like sell it, take the money and so it's not an automatic rule, but if you have, you know, the traditional little rental house, it's not the worst thing. Jon G. Sanchez: Take the money and run. Right, exactly. right, I'll handle the the next one, which is does this home support my retirement goals? And it's very important to understand this because again, ⁓ you to look at the expenses that you're gonna have in retirement. maintaining your your maybe your current one of a big home, four bedroom, you got you know three out of the four bedrooms, the doors are closed all the time. So you need again, this is where we get into on the retirement plan. We get into the monthly cash flow, the retirement savings. What's the opportunity cost of the money? People fail to remember that side of it. And again, flexibility. Corey, I love your analogy. You you say over and over again, how nice is it to be able to just you know, let's say you had a condo, shut the door and go on your ⁓ on your month cruise and not worry about a doggone thing. Can't really do that with a house. Something like a condo or something you can. question number eight. I'm just gonna run through the rest of these guys. Question number eight, is my emergency fund still intact after moving in? next question is my estate plan ready? Well, we can talk all day about that one. And number 10, where do you see yourself five years from now? Right, Dwight? Dwight Millard: Absolutely. Absolutely. You know, John, ask a lot of questions 'cause the answers will reveal what you need to do. Jon G. Sanchez: Indeed. All right, boys. Excellent job as always. We will do it again tomorrow on the John Sanchez show. Fed interest rate decision. Don't miss it. Estate planning Wednesday. Also, I'll be adding all that into it. God bless. Have a great day. See you tomorrow. All right. flew by. Holy shit. Yeah, no kidding. So you're here for a week, Dwight? Dwight Millard: And that went fast. That one Cory: Ha ha Dwight Millard: Yeah, but I only go back for two days and we're back for like three weeks. So it's a a complicated it's a complicated ⁓ ⁓ it's a complicated it's a complicated August. September mellows out a little bit. October, November, you know, I don't know. But ⁓ before n we'll you know, next year'll be here before we know it and we'll we'll figure it out from there. Jon G. Sanchez: Right. Life you live, yes. Yeah, yeah. ⁓ heck yeah. I I look at the calendar today I'm like even though I write the date down a million times like holy shit July's over. was July's over. Corey, you're ⁓ Corey, you're gonna be fighting the snow over Donner Summit before you know it. Cory: Yeah, yeah. Dwight Millard: It is crazy. Crazy crazy. Cory: I'm gonna be watching Christmas movies soon. Hallmark. Dwight Millard: Hey, so hey, so I I think I can t I think I can tell you guys. So I'm gonna be a grandpa. Jon G. Sanchez: You kidding? Congratulations. ⁓ wh yeah, which sign? No kidding. Cory: ⁓ nice. On which side? Who? Cader. ⁓ nice. Dwight Millard: Yeah, yeah, yeah, yeah. ⁓ Caden, not trend, she's back in school. Yeah, so she's about a little over a month along. it was interesting because we had Father's Day, you know, and they gave me a little gift. Well, they came over for dinner and they go, ⁓ yeah, we had another Father's Day come in for you, and I get it. ⁓ And you open it, it was a shirt and it said Popo, ⁓ you it, ⁓ you know. So yeah, yeah, ⁓ yeah. Well, they they came up and told her parents and Cory: no. ⁓ Jon G. Sanchez: ⁓ yeah. ⁓ do you start crying? Yeah. Cory: Yeah. Dwight Millard: And then and then I think Gina ⁓ Gina got married last weekend. No, I I didn't even put two plus two because I'm just kind of dense. I'm just in my own world. I took all four of them to the airport and I just thought one of them would have volunteered. I was wondering why they were all going. And then Emma, ⁓ wife, posted a picture on Facebook and he had a bouton ear on. And then my sister told me, Yeah, what do you think about Gina getting married? I go, ⁓ didn't think about I haven't thought about her in a couple of years. I don't care. Jon G. Sanchez: You're kidding. Yeah. Yeah. Cory: ⁓ geez. Jon G. Sanchez: ⁓ sh kids didn't even tell you. Yeah, right. Right. Do you know anything about the guy? Dwight Millard: You know? y well it's a guy that she liked, you know, liked b you know, early on in the yeah, so it's ⁓ it good for her, you know, if that's what makes her happy, he's he yeah, I don't know. But yeah, I don't Jon G. Sanchez: okay. Yeah, yeah. Cory: Is it the same is it the same guy from Transgraduation?