Episode Transcript
Speaker 1 (00:01):
This is channel 2 53, move to
Speaker 2 (00:03):
Tacoma on this episode of move to Tacoma.
Speaker 3 (00:06):
But when you're preparing to buy a house, you really have to be intentional. You have to make a plan. You have to save because in 2018, we could ask the seller for stuff. Yeah. Now we are. We have to offer the seller more money.
Speaker 2 (00:21):
Channel 2 53 is supported by Microsoft. Microsoft is committed to civic conversations like those on channel 2 53 that inform and empower Washington communities to learn more. Visit aka.ms. Slash Microsoft in Washington, where back
Speaker 1 (00:41):
I'm Margarite. And I want you to move to Tacoma, move
Speaker 4 (00:44):
To Tacoma, move to Tacoma, move to Tacoma.
Speaker 5 (00:48):
Don't like it.
Speaker 4 (00:49):
Move to Tacoma, move to Tacoma, move to tacoma.com.
Speaker 1 (00:55):
Hi, welcome to move to Tacoma. This is Margarite and I am here today with Sharon Chambers Gordon. Welcome Sharon.
Speaker 3 (01:03):
Thank you for having me. Good to see you again. Yes.
Speaker 1 (01:06):
Good to see you. As we begin to slowly ease out of the pandemic waters, how are you feeling about that?
Speaker 3 (01:14):
Ready? Ready? Ready to ease out of the waters and to see some sunshine and some long evenings
Speaker 1 (01:21):
Yes. Bring on the summer is so I'm so excited that you're here. Sharon Sharon is. I mean, I don't even know how to describe you. You're a realtor extraordinaire. You're one of my favorite buyers agents in Tacoma. Uh, you are just like a fierce advocate for your clients. And it's one of the things that I love most about you. You're also the, uh, executive director, CEO of raising and girls, which is a nonprofit that helps get hygiene products to girls in Tacoma and beyond. Um, yes. Did I describe you? Well
Speaker 3 (01:51):
Enough? Yes. Founder and CEO of raising girls and we provide hygiene bags for both boys and girls. Oh,
Speaker 1 (01:58):
I did not realize that. Yes. That's amazing. You're also the mother of an amazing daughter. I
Speaker 3 (02:04):
Am. She's amazing. Have to agree.
Speaker 1 (02:07):
So I ask everybody these questions. So my first question for you is when did you move to Tacoma and why? I feel like you've been here forever, but you're not from Tacoma,
Speaker 3 (02:14):
Not from Tacoma. I am from Jamaica, the beautiful Caribbean island. You
Speaker 1 (02:19):
Are a first Caribbean guest. All
Speaker 3 (02:21):
Right, I'll take that. I'll take that. And moved here from Tuscaloosa, Alabama in 2002. And we came to the university of Puget sound. I worked there for 15 years. Oh my gosh. As the director for the fellowships and scholarships office there. However, when my daughter Amara was five years old, I made a plan that when she went off to college, I was gonna do something different because I wanted to launch my nonprofit organization, serve my community and run a business with my own schedule. So I did exactly that.
Speaker 1 (02:55):
Well done, Sharon, I didn't realize you were at ups for 15 years. You got into real estate. That's amazing.
Speaker 3 (03:00):
From 2002 to 2017.
Speaker 1 (03:02):
That's incredible. Yeah. Well, okay. So what neighborhood do you live in and what do you like about it?
Speaker 3 (03:10):
Currently? I live in fer. I downsize last year and moved into a condo community out of a, a bigger home. I didn't need that much space and it is working very well for me. I love Forres. Uh, remember it's 25 miles an hour folks. Yeah. Through Forrest. Like
Speaker 1 (03:28):
I have, you don't remember. They will remind you.
Speaker 3 (03:30):
I have been stopped by the officer rush into a home inspection maam, please slow down, but he didn't not give me a ticket. So that was awesome. So I moved to a, Chris had been living there for March 16 would be one year. And before that I lived in Tacoma for nine years. And before that we lived in gig Harbor.
Speaker 1 (03:47):
Wow. So out of everywhere you've lived. What's your favorite spot?
Speaker 3 (03:52):
Oh,
Speaker 1 (03:54):
Choose your favorite child.
Speaker 3 (03:56):
Oh my goodness. You know, I think about the area as the greater Tacoma area. That's how I describe when I do community tours for my clients. Yeah. I say this is the greater Tacoma, uh, area. So I try not to pick out a favorite. Um, I describe this area as one of the most navigatable places I've ever lived. Yeah. 20 minutes from anything pharmacy hospital. Yeah. You know, everything is very much there. So I love for Chris. I love Tacoma. And most of all, my neighbors made gig Harbor. One of the most wonderful places to raise my daughter cause they had kids and my daughter lived at home and she was like, she was a part of a family of 10. It was awesome.
Speaker 1 (04:35):
Oh, that's cool. So it's not just the neighborhood, but the community of people you have around you. Definitely the
Speaker 3 (04:40):
Definitely.
Speaker 1 (04:41):
Well that's awesome. Well, uh, Sharon, uh, the reason I asked you to come in today is, uh, you know, we, we don't talk about real estate on the move Tacoma podcast. Typically, like I am a real estate agent. You're a real estate agent, but uh, we try to talk about community and neighborhoods, but it has gotten so outta control the last few years, like I think appreciation for Pierce county last year was 18% the year before it was 15%. And I talk to people all the time, either in private messages, on Instagram or on the chat, on my website, like people saying like, can I even buy a house? Is it even possible? And the truth is if you're buying a house under $650,000 in Tacoma, it's hard, right? Yes.
Speaker 3 (05:26):
Very
Speaker 1 (05:26):
Hard. But it's not impossible. And since you are, like I said, one of my favorite buyers agents, you make magic happen for my clients when I send them to you, like, I just wanted to get your perspective on, you know, what can people do to where do you even begin if you live in Tacoma and you wanna buy a house things, being what they are, what's your advice for folks?
Speaker 3 (05:48):
Well, one of the things that I am sure to do with my clients is to educate them. We talk a lot and look at numbers for the numbers to make sense to them, for where they are choosing to live. So a lot of folks come and, you know, they want to do north end. They want to do Proctor. And we ended up buying in south Tacoma because the budget was stretched enough for there. And they could find a home that they love. So I have been advocating of people to look around, look at different areas. Don't get really set on just one area and then feel disappointed. Let's kind of look around and look at other homes. And that has really helped my clients. We, we, we start in the north end and then we end up in central Tacoma. Then we drift out and they're very, very happy with homes and that they have purchased elsewhere.
Speaker 1 (06:39):
I think it's important for the uninitiated, for people who are not paying attention to the median home price by neighborhood and Tacoma, to recognize that, you know, our most affordable neighborhood, which I think right now is south Tacoma. Um, and our most expensive neighborhood, which is the stadium district in, in the city of Tacoma. Obviously Pierce county is another beast, but in the city, those are a mile apart. They are very close to each other. This isn't like Seattle, where you go from one neighbor, the most expensive neighborhood to the most affordable neighborhood. And it's a 45 minute drive. We're talking 10 minutes. So I think the median home, I mean, this is this podcast. We're recording this in March of 2022. Yes. So grain salt for whenever you're listening. But you know, it's just under 400,000 to buy a house in south Tacoma and it's almost a million to buy a house in stadium. That is correct. So more than double. So I, I think that idea of like drifting people are like, oh my God, but I have, I have my gym, I have my grocery store. Like you probably don't have to change any of those things. If you're moving from the north to the south or from the west of the east or whatever your path might be. And
Speaker 3 (07:41):
That is just the magic of Tacoma. Everybody wants to come here. I have so many clients who are coming, you know, we're moving from Portland, California, Arizona. The place is an awesome place to be. And it is 20 minutes within of anything that you want, whether it's gym, pharmacy, restaurant, hospital, and you know, it's just a great place. So I agree with you that one mile, that five mile difference will not make a huge difference when you purchase in a location because you can get to where you want to go.
Speaker 1 (08:09):
I think one of the things that's hardest to explain to people even, I mean, uh, you know, we talk about people moving here from California or Portland or Seattle, like people who are really outside, but even people who are moving to Tacoma, south hill or Graham, or, you know, from the peninsula or something like, they're like, oh, Tacoma the traffic. And it's like, okay, our freeway has traffic. It has terrible. I'm not gonna, I'm not caping for I five or I, five traffic is terrible, but within the city, we're really lucky. It's not trafficy to move around. The city
Speaker 3 (08:40):
Are so lucky and there are four or five ways to get home, you know, which I love about this place. And they can turn this way this way and you can get home. And yeah, it's a very navigatable city, very friendly and people don't have to go far. You don't have to hit the highway to get to anything. And that's the beauty of here. Get into the water, get into the restaurant on the water. You don't heat have to hit the highway at all. Not even highway 16 sometimes.
Speaker 1 (09:05):
All right. Well, I think we've sold everybody on Tacoma and I think if they're listening, they, they probably already live here or sold on it anyway. So let's talk about how to get in. So you're talking about educating yourself. So the first piece of education you have is be flexible on the where. Yes. Right? So if, if, what is the next piece of advice that you have to, someone like keep an open mind and then,
Speaker 3 (09:25):
And then let's look at the dollars. Let's make a plan. Yeah. For the money that you have. So when I meet with my clients, we are taking out our, now it's on the phone. We're taking out our calculators because we are, I'm making them write things down. So if we have $450,000, then we are going to look at what extra do you have if you're qualified for 450, how much cash on hand do you have? Because
Speaker 1 (09:51):
Can we pause at 450? Yes. Just because I know there are people listening that, that are not involved in the home ownership process yet. And they're just like 400 had to watch Sharon, like how much is $450,000? Like in a monthly payment? Obviously it varies by how much you're putting down. But what does that really mean to someone like month to month?
Speaker 3 (10:11):
If, if you're looking at a four $50,000 home, maybe about 300, which includes taxes and insurance cool for one, 450.
Speaker 1 (10:21):
All right. So that's a good thing to keep in mind. So when she says four 50, that means 2300 a month, ish ish, please consult your mortgage
Speaker 3 (10:27):
Profession. Please do. And so we are looking at the numbers because we want to see if you're qualified for that, how much extra cash have you seen saved and that savings that cash of cash is going to make the difference in how you can bid on a house. So I always encourage, uh, especially first time home buyers to save, save, save, I mean, save, save, save. So I do, when I teach, I used to teach home buyers classes in person. Now they take them online, but I used to teach a about the roary chicken. Oh, and how do you stretch your budget using a 4 99 rotiserie chicken? Whether from, you know, big boss, big box or local store,
Speaker 1 (11:07):
You are quite granular. When you talk about saving.
Speaker 3 (11:10):
I am, I am, because I said, I say, no extra coffees, no, nothing. We are saving for home and extra, uh, roar chicken will give you 10 meals. And let me show you how you want me to tell you how yeah. Are you interested in knowing how,
Speaker 1 (11:24):
I mean I'm a vegetarian, but like for the people at home
Speaker 3 (11:26):
For the people at home, yes. We can do that with veggies too. For sure. We can. How
Speaker 1 (11:30):
To stretch
Speaker 3 (11:30):
A tofu. Well, we can stretch a cabbage. Oh. In many different ways. And I can teach you how to, this is very
Speaker 1 (11:36):
Valuable,
Speaker 3 (11:38):
But yeah, but it's talking about how we do. We cut off all the dark meat. We put that aside, we then cut the chicken breast and we cut that up into different by size pieces. Then we have the bones you saute in your favorite sauce, the dark meat. Then you chop up your, uh, chicken breast with your favorite veggies and make a stir fry. That's different meals already. And then you put the bones in a pot of water with your favorite veggies and you make a soup. And then you have 10 different meals from one roti, chicken. That's very now, when it comes on to vegetarians, you go get some cabbage, it, get some carrots and onions. I
Speaker 1 (12:13):
Don't know that I've ever bought a cabbage my whole life. Do you? I know I,
Speaker 3 (12:17):
I need to teach you. I used to do teaching class. I'll help you. I'll help you. But it's how you stretch that budget. Because when you are purchasing a home, you have to change a, some of what you do in terms of how you're looking at your monies. Right? We don't need to spend the $50 at, you know, the green, whatever, um, store coffee store. You just need to focus in on the extras, buy the coffee and have it at home just because you're looking to save for a house.
Speaker 1 (12:50):
Okay. But like, again, I'm imagining the folks at home.
Speaker 3 (12:52):
Yes.
Speaker 1 (12:53):
$450,000. Okay. So if I need 20% down, you're telling me you have to save $90,000 share. And I only make $75,000 a year. There's no roti chicken in the world. That's gonna get me $90,000 share. Well, you
Speaker 3 (13:06):
Do
Speaker 1 (13:06):
Not
Speaker 3 (13:06):
Do you don't need 20% down. What? Yes, you can do 3% down. You can do 3.5 sent down for an FHA. You can do 5% down for a conventional loan.
Speaker 1 (13:18):
Okay. So I think a lot of people just do not know that. Yes. And if you're in the military, you might even be able to do zero
Speaker 3 (13:24):
Down, zero down on a BA loan. Yes.
Speaker 1 (13:26):
So can, can we talk a little bit about how that's possible and how I, I think the one thing I'd like to say, sometimes people are like, oh yeah, but then I have to pay mortgage insurance. And like, that's like your granddaddy bought his first house using an FHA loan. Like this is like the, the most first time my very first home was FHA. I don't know about your insurance.
Speaker 3 (13:48):
I do. Yes.
Speaker 1 (13:48):
It is normal. There is like no shame in the FHA game. And there's no shame in the private mortgage insurance game, especially not when homes are appreciating it 15% a year. So if you paid, you know, $3,000 in a year in private mortgage insurance, you probably made more than that in appreciation on your home. So, anyway, sorry. That was a little editorial.
Speaker 3 (14:08):
I had the, I had the same conversation with my clients just yesterday. Oh, about what they're putting down in a house and you know, it was like, oh, what? We don't have 20%. Don't worry about 20% guys make a plan because of the appreciation in equity, you make that back. Yeah. Year and a half, two years. You can perhaps call your mortgage company to take off the PMI off there.
Speaker 1 (14:30):
Well, and just to pause you there, like what you mean by that? So when she said PMI, that's the mortgage insurance and the mortgage insurance isn't for you. That's not of like your homeowner's insurance, the mortgage insurance is a policy. They make you buy for your bank in case you default, because you're putting less money down. That is right. So the, the idea of paying a little bit extra in order to have that privilege of keeping more of your cash, um, you know, we used to say like, when you said you could refinance out like it's, is it like 80% once you're,
Speaker 3 (14:56):
Once you're at 80%, once you have 20% equity in your home,
Speaker 1 (15:00):
You can refinance it and get rid of that
Speaker 3 (15:01):
Monthly. You don't have to refinance it. You call your mortgage company and ask them to take off. They'll just streamline it. Yes. They will take it off. Awesome. Your loan. And so educating your selves, you know, keeping in touch with your lender when you own is a very good idea.
Speaker 1 (15:14):
Awesome. Okay. So no shame in the less than 20% down game, you gotta do it. Um, so, okay. Let's say you're putting, um, let's say, let's say you have, if it's a $450,000 house and, uh, let's say you have, uh, 5% down. So that's uh, what would that be? Sharon that's like 20, 20, 20, $2,000. Over
Speaker 3 (15:33):
22,000. Yeah.
Speaker 1 (15:34):
So four 45,000 divided by two would be 10 would be 5%. Is that right? Yeah. So 20. So you got, you got $22,000 already sent in your bank account. Are you good to go? You have your 5%. Is that enough to buy a house?
Speaker 3 (15:47):
No, it's not. Oh,
Speaker 1 (15:48):
Sharon,
Speaker 3 (15:49):
Because then you have to factor in closing cost. Oh. Which is about 1% to 1.5% of the purchase price. So when you're doing your numbers, you need to write those things down.
Speaker 1 (16:00):
So, okay. So you're looking at a $450,000 house and you have 22,000 ish saved, but you're also gonna need your closing costs, which is how much,
Speaker 3 (16:09):
1.5% of, of that to weigh about 7,000 or so.
Speaker 1 (16:14):
So what if this buyer's parents is like, oh, don't worry. The seller will pay your closing costs. Just tell your realtor to have the seller pay your closing costs for
Speaker 3 (16:20):
Not in this market. Okay.
Speaker 1 (16:21):
That used to be a thing used, used to be your mom is right. Your dad is right. That used to happen all the time, but no harm anymore. Up, very
Speaker 3 (16:28):
Rare up to 2018. We could do that. Yeah. We could write it in, into our offer price and ask the seller back for those funds, but it is not like that anymore.
Speaker 1 (16:39):
So. Okay. So if it's, you said two and a half percentish
Speaker 3 (16:42):
1.5%,
Speaker 1 (16:43):
1.5%. So that would be like another $7,000 basically. Okay. So we got 22 plus seven. So we're, we're basically at $30,000. Is that enough to buy the house, Sharon? Yeah.
Speaker 3 (16:53):
It could be enough to buy the house, but we have to factor in some other costs. Oh, like what? Like a home inspection. Oh, right. And if you lose out on a first or second home, then you may have to put some money aside. Home inspections are going anywhere between four 50 and $700 where you're making sure that they're not only looking at the house, but you're also doing your sewer scope because
Speaker 1 (17:12):
It's so important
Speaker 3 (17:13):
In Tacoma with all those trees and those tree rules, you want to make sure that you have a side sewer scope to see what's going on with the plumbing underneath
Speaker 1 (17:21):
The house until you become a homeowner. Most people don't even know. And sometimes even when you become a homeowner, people don't know that you own your sewer from your house to the street and if it breaks it's on. Yeah. So you definitely wanna know if there's anything weird about your sewer before you buy it. Yes.
Speaker 3 (17:36):
And, um, in this market, can we talk about home inspections? Yeah. And in this market, a lot of competition, a lot of buyers are saying, we want to wave our home inspections.
Speaker 1 (17:49):
Okay. This is not Seattle Sharon what's happening. So, okay. It used to be in the olden days, you had 10 days to inspect the house, to inspect the sewer. Every, you know, dad's at the inspection knocking on everything, double checking stuff. That's if, if people can't do that, what can they do instead?
Speaker 3 (18:05):
So I have a story for you just happened last week. Can, uh, clients put a, they've said that Sharon, we found her dream home. It's in Lakewood. And they put an offer in on that home. I got a call from the listed agent one night and she said, we have X amount of offers on the table. You guys are the only ones who are not waving your home inspection. All the other offers are waving their home inspections
Speaker 1 (18:37):
And so much pressure.
Speaker 3 (18:38):
And
Speaker 1 (18:39):
Were these first time buyers
Speaker 3 (18:40):
First time home buyers. Oh my God. And I didn't bat an eyelid. I said to her, and we will not wave our home inspection. Here's what we can do. We can do a pass, fail inspection. Oh, a pass fail inspection is one where you get a chance to get your home inspector in there, learn about the house, but you will not ask the seller for any repairs
Speaker 1 (19:05):
That is like we're in, or we're out.
Speaker 3 (19:06):
That is correct. Pass or fail. But that gives your client a way to learn about the house to buy a home in this market is very, very tough, but there are ways to figure out how you can get in there. So that's what we negotiated. I called my, uh, my clients. We had talked about pass fail before. Um, so they're familiar with that. And they gave me the go ahead to say, yes, we'll do pass, fail. Okay. Are you listening to still? So we get an opportunity to do the pass field. They asked us to take off the five days to three days. And so we got a home inspector in there.
Speaker 1 (19:38):
You were able to get a home inspector out in three days.
Speaker 3 (19:40):
Yes. Well, in a day,
Speaker 1 (19:42):
The power of Sharon Chambers crime.
Speaker 3 (19:45):
So got a home inspector out there on the Monday. What happened last week? Monday Del huge off her rain. Oh man, the rain was pouring so badly in Tacoma. Yeah. And Lakewood where the house is. Burgy the roof was leaking like a SI oh my God. In
Speaker 1 (20:02):
The rain. What if your clients had waved? Oh
Speaker 3 (20:04):
Crap. And that is why. Yeah. As a buyer's agent representing my clients, I never recommend not having a home inspection and you can do the pass fail. And what happened was we knew there were some significant things that were good about the house. Furnace was newer water heater was newer. Yeah. The electrical panel was updated, but we didn't know anything about the roof nor the crawl space, not the attic. And those were important for us to learn about. Right. Yeah. And so that roof was leaking like a safe lady. So I called, I texted the listen agent and I said, um, things are looking so good over here. And she said, how are things, um, what's going on? I took the opportunity to say the roof is a, is an issue. And, um, she, I called her and we spoke and I asked if she would talk to the seller about replacing the roof. And you know, sometimes you, the stars align and you get that right seller who is willing to negotiate, even though we were pass fail. Yeah. And we negotiate a brand new roof. Wow. That was, is completed today and passed by the city of Le liquid four. By first time home buyers who would have been left with a roof, like a C if we have waived our home inspection.
Speaker 1 (21:18):
Well, and that's the thing, you know, you're already stretching like on this hypothetical $450,000 house where we've come up with $30,000 just to get 3,200 to inspect it and all of that. And now you own it. You've cleaned out your savings and you have a roof problem that can really happen when you buy a house. Yes. So, okay. Let's say the pass fail thing. Doesn't work. There are some other things that are happening in the marketplace. Sometimes the sellers do a pre-inspection the, sometimes they let the buyers reinspect the home. Like what does that mean? And how, how does that show up for your clients?
Speaker 3 (21:49):
Okay. So on the listing side, I have tended to have, uh, my sellers do a pre-inspection, so there are no surprises with the sewer or the roof or anything like that. So,
Speaker 1 (22:00):
So in this case, the seller's paying the $700 to have someone come out. And that is correct. Do all of that in advance.
Speaker 3 (22:04):
Yes. The, so this a seller seller procured inspection, and the seller will do that. And, uh, you know, everyone advises their sellers differently, but I usually advise my sellers to do that. Then we're able to know what's going on, uh, with the house. Uh, oftentimes we'll do the repairs, um, that are called out the major things. And then we're able to offer that home inspection to prospective buyers highlighting the, of things that were repaired. And that makes a buyer feel much better about putting an offer on a house. I just did that in north Tacoma and it worked very well. Awesome. And then there are opportunities for pre-inspection. Now the timeline of that may be challenging if you list on Thursday and you're reviewing offers on Sunday, but I've been there seven an am in the morning for pre-inspection. I
Speaker 1 (22:51):
Believe Sharon, I believe you,
Speaker 3 (22:53):
Because we try to squeeze in there a little bit just to get that pre-inspection so we can know, because when it is so competitive and there's so many, uh, buyers, you know, who are looking at the homes, it's hard to, uh, squeeze a little time, but we always try to see if we can get a home inspection very, very quickly so that my buyers will know in a competitive market, because sometimes you have to do that to be very competitive, to get the home. Yeah.
Speaker 1 (23:16):
So I think this is something that buyers, when they're talking about budgeting for their home inspection, there is the potential that they could be writing, doing a home, a pre-inspection writing an offer, then losing the multiple offer and then having to go out and do it again. Yes. And maybe again and again. Yes. Especially, you know, right now we're at the early, early part of spring. This is where we always have more buyers than listings, even in a normal year and in a frenzy year, it's just totally outta balance. So how do you, how do you sort of prepare your buyers to sort of decide when to reinspect and when not to reinspect? How do you know if you're competitive or not?
Speaker 3 (23:50):
Well, it's hard to gauge when you're competitive, but I have my buyers follow their hearts. I said to them, if, if when you walk in this house, you'll feel something, okay. Let's throw a pre-inspection in there. Yeah. And, but we all also look at the numbers to how competitive we can be. So we will look at what extra monies do you have to be able to offer more for a, a, an appraisal gap. So if they feel that tug, they love this house, just like those, uh, those, um, uh, uh, clients who say we found your dream home, I would encourage them to do a pre inspection. So when we make our offer, we have already done the pre inspection and we know what's wrong with the house. Also that pre inspection form allows you to ask the seller for major repairs. Oh. So it's not like you, you do the pre inspection. You have to take the house as is you make a strong offer. And then you're able to ask the seller there. I think there are four lines on that form that ask, you can ask the seller to if, if you roof is, if the roof is bad, you know, if the electrical panel is replacing. Yeah. So that there can be some negotiations. Um, there
Speaker 1 (24:51):
That's really good to know. All right. I see Doug giving me a significant look. So we're gonna take a little break and come right back.
Speaker 1 (25:00):
Hello friends. This is Margarite Martin creator of move to tacoma.com and co-founder of channels 2 53. It's bad out there. Folks. Home prices in Pierce county are up 15% year over year while it's no secret that the market is hot. You may not know that Tacoma has been the hottest housing market in the country. For several years, there is an extreme shortage of homes for buyers to buy, having a local Tacoma buyers agent that specializes in the neighborhood and price range you're after can mean the difference between losing or winning the bid on your dream home. If you're looking to sell your current home and find something that meets your needs better, having a neighborhood expert handle your listing will impact how much money you net off of your sale, the right agent market, and sell a home on the west. Slope might not be the same person who has the expertise and connections to find you an income generating duplex somewhere else. All agents have specialties, and I know the players for every niche, best of all, it doesn't cost you anything. Great. Local agents are happy to pay me a finder speed. If you end up buying or selling and you can rest easy, you're gonna get a great agent who specializes in exactly what you're looking for. If you wanna learn more, visit, move tacoma.com and use the contact form. Thanks for listening to channel 2 53
Speaker 1 (26:23):
And we're back. And I am supposed to remind everyone that move to Tacoma is coming to you from channel 2 53, which is a member supported podcast network of Tacoma podcasts. Sharon, I don't know if you know about channel 2 53, but you can be a member for $40 a year.
Speaker 3 (26:40):
I'll pay a hundred. You would, well,
Speaker 1 (26:41):
Then you would be a VIP member and you would get to hang out with producer Doug, whenever you wanted. That
Speaker 3 (26:46):
Sounds good to me.
Speaker 1 (26:47):
Yeah. So, uh, being a member means you also get access to the channel 2 53 slack channel. And if you've ever been, uh, for those of those of you that are members, when things are going down in Tacoma, that is the place you wanna be to get all the inside scoops. So consider membership if you haven't already. All right, Sharon. So we've been talking about how to get, how to be competitive, how to buy a house in Tacoma, how much money you need to save, how inspections work, how financing works. Uh, and you just dropped a word that I think a lot of people are not familiar with even real estate agents five years ago, probably wouldn't have really known what it was, appraisal gap. What is that?
Speaker 3 (27:29):
That is the way of the market right now. Oh God. So the appraisal gap, the form is called a 22 ad additional down payment for low appraisal and that appraisal gap represe in. So the amount of money that you need to have on hand as extra cash, if you make an offer, that's over asking price to offer to the seller. So I can talk some numbers with you.
Speaker 1 (27:55):
Yeah. So, okay. We've got our person that's preapproved to four 50 and they, they they're, they're being prudent. So they're mostly looking at houses under 400 because they know they're gonna get bid up. Yes. So they find a house for 3 99 and they're offering four 50, but what's the appraisal gap
Speaker 3 (28:10):
For? So the 3 99 minus four 50 is $51,000. Yes. And so sometimes if you offer four 50, you may not have 51,000. You may have 20,000, but finding a way to have some funds available to the seller just in case.
Speaker 1 (28:30):
So I think we need to start with what the appraisal is. So if you, the problem with offering $450,000 on a $399,000 house is there might not be any sales in the neighborhood at four 50 yet. Right? Cuz the market goes up so quickly into Tacoma that sometimes the market price outstrips
Speaker 3 (28:47):
The sold.
Speaker 1 (28:47):
Yeah. So what you're saying, when you put the appraisal gap, addendum in is like, if the bank says it's worth less than I offered, don't worry. I'll make up the cash difference.
Speaker 3 (28:58):
I'd make up the cash difference. And
Speaker 1 (28:59):
Does that literally mean if I have saved, you know, $30,000 for my down payment and my closing costs that I actually that other 20 or that other 50 or whatever, it ends up being in order to, I need that in my pocket. Yes.
Speaker 3 (29:11):
You need to have that in your pocket and the way the market is going now. And that is why, when I'm talking to my clients, we are talking about just eating cabbage or RO chicken, because you have to save, you have to save some extra money. Sometimes family members who are willing to give you a gift of funds. And that's also helpful, you know? So a parent and auntie may be willing to give you the $20,000, right? That's not the norm for many folks. Yeah. But that's sometimes a possibility. But when you're preparing to buy a house, you really have to be intentional. You have to make a plan. You have to save because in 2018 we could ask the seller for stuff. Yeah. Now we are, we have to offer the seller more money to fill in. If a home is sold for 3 99, we say, we offer three 20 and the house Aras for the 3 99, then we need $21,000 to fill that gap for the seller. Sometimes you don't have to fill the full gap, but offer the seller something yeah. To make them feel better about.
Speaker 1 (30:17):
So for example, if the house was 3 99 and it got bit up to four 50 and you only had $20,000, you could maybe renegotiate with the seller down to four 30. If it didn't appraise
Speaker 3 (30:27):
Or something like that, it is reading the contract. Okay. And whatever you promised the seller is what you expect it to have. So it's not like a renegotiation. When your, you have the transaction, you have your forms in your offer. And that's what we are green too.
Speaker 1 (30:43):
That's wild. Oh Sharon, these are hard times for buyers right now. It is appraisal gap and addendums. Yes. That probably came from Seattle. I know it came from Seattle. Okay. So you get through the appraisal. You're sorted out there and it's time to, to close on the house. What do people need to be expecting as that, that, that closing process happens. What's involved
Speaker 3 (31:09):
The time between finishing up your home inspection and getting your appraisal to close in is between appraisal and closing are the quiet time where sometimes the buyer buyer saying a, oh, what's going on, but then wasn't
Speaker 1 (31:24):
Anyone calling me? No one is calling me. You were calling me every day. That is
Speaker 3 (31:27):
Correct. But the lender is working their magic on our behalf. Yeah. To make sure that all the paperwork has been received to make sure that any debt against the house, those payoffs are in place. But
Speaker 1 (31:39):
This is where you get that call from your lender. That's like, yeah, we need a lender, a lender explaining what this transaction was two months ago. And you're like, what? Why didn't you ask for this at the beginning? That is correct. Someone else is looking
Speaker 3 (31:49):
At it. Somebody else is looking at it. Right? So you have your lender, then you have your processor, right. And you have your underwriter. So there are other layers of people in, there's not just your lender. That's working on that. Loan goes from lender to processor, to underwriter, double,
Speaker 1 (32:02):
Triple checking
Speaker 3 (32:03):
Up, but chipper check in everything. And sometimes you do get that call to provide some evidence as to why is this on your credit report? You know, what explanations do you have so that they can feel that you can afford to pay that mortgage without defaulting. And that's our goal that when we get a buyer in, into a home that they will not default. And so we are making sure that of these steps are covered. Awesome.
Speaker 1 (32:27):
So, um, one of the things I'm sort of imagining someone listening, like an average person, a normal normal person that makes normal money, sadly doesn't have generational wealth from the family coming. You know, they've been working that rotiserie chicken situation for a couple years. They've been saving their pennies. Maybe they're living in a place that's, you know, not totally what they could afford, cuz they're saving money every month saving with a partner. But sometimes it doesn't feel like it's gonna be enough. What are some creative ways that you've seen people save or, um, I'm thinking of, um, I, I had a client once that, um, she got in a car accident, you know, she was saving, but she kind of didn't think she was gonna be able to buy a house. She got rear-ended, she got a accident settlement. Suddenly she had enough money to buy. Like these things do happen in life. Hopefully it's not a car accident, you know? But like how do you prepare? How do you, how do you see people sourcing the money that they need to buy a home when that's a significant amount of money?
Speaker 3 (33:22):
Well, some people get another job. Oh, you know, get an exercise gig just to beef up the, those savings. One of the things though that I also don't want us leave here and I not talk about, about that in terms of people getting, uh, into house is setting expectations for what the buyer are looking for. Mm. So right now we are into the list on Thursday, Friday review offers on Monday. Yeah. And if my buyers only have a certain amount of money and cannot go any higher has very little or nothing for appraisal gap, then I'm counseling them differently in this crazy market. I am not encouraged them to go look at the homes that have offer review dates. Oh, I'm encouraging them to look at homes that have been on the market longer.
Speaker 1 (34:08):
Okay. Sharon, I think we're driven into your secret sauce. Are you sure other realtors could listen to this? Are you sure you wanna talk about this?
Speaker 3 (34:16):
I live with an attitude of abundance. All right. Let's do I can share. And I know that there's no problem. Tell us your
Speaker 1 (34:23):
Tricks,
Speaker 3 (34:23):
Sharon, but we are not going to be looking at those homes that have offer review dates because we know in this market gonna be so many offers.
Speaker 1 (34:34):
I mean, what I'm hearing right now from clients is there were eight offers on that house. There were nine offers. How
Speaker 3 (34:38):
About 22? What, how about 25 on that one house
Speaker 1 (34:42):
25 says you should have priced it higher. Okay.
Speaker 3 (34:45):
The market is crazy. Right. But I am encouraging my clients in and, and we do this. We talk about setting expectations of looking at homes that have been on the market a little bit longer, have motivated sellers who will take usually you the offer price, the one that is there and do not expect to have an appraisal, um, gap for that. And so we are just kind of recalibrating expectations. And I always encourage, especially my first time home buyers, this is not your forever home. Yeah. It's your first purchase homes to build wealth and to, you can move up, you can do lateral, you can do different. You live in the home five to seven years. So we are looking at what I call that 85% home,
Speaker 1 (35:32):
Another thought, um, that I'm thinking of for how to get in. Um, my boyfriend just bought his first house and uh, he is not American. So he didn't know all the tricks. And I was, I was feeling very SMU getting to tell him all my secrets. And one of the things he said was, well, I just, I can't buy a house right now. Cause I haven't saved yet. And I'm like, don't you have like retirement. Yes. And he was like, oh yeah, I've got lots in retirement. Good point. You can, you can use some of that. How do you advise clients? I know it probably gives people the, he B GV that are listening. They're like, no, my retirement is sacred, but let's say it's not, uh, how would you use it?
Speaker 3 (36:05):
Excellent point for retirement. And several of my clients have pulled out some funds from their retirement to make up for what they have. And what I say to them is if you take some funds out of your retirement, say you need to be competitive. You have access to 80,000, your retirement, I'm saying let's do 35 so that we have some funds that is the benefit of working and having a retirement account. Yes. Is to make it work for you when it comes on to home ownership. Absolutely. And to, because in a year with how this market is going, you have built that equity in your home for that.
Speaker 1 (36:42):
And for those listening every time Sharon and I say like, something like for how this market's going and 18%, 15% appreciation, obviously we don't wanna be breathlessly promising 15% a year in perpetuity. Cuz I mean, I, I freaking hoped it doesn't have happen. Like that is absolutely unsustainable historically. You know, we used to say like plan for 3% a year, that's right. You know, plan 5% a year, plan something conservative. Um, and that's, you know, not that far off from what a managed fund is gonna get you, that your employers invested your retirement. And so even very, very, very conservatively the housing, I mean the housing market usually beats the start market in our region, but it's, it's a good if you're still thinking of this money as investment money investing for your future, a home's a good place, a
Speaker 3 (37:26):
Home to put that place. Yes. And that the retirement, uh, companies are willing to really increase the money. Right. Because there's some retirement company, um, that will not have you do loan on there, but they're willing to give you the money if you're purchasing a home.
Speaker 1 (37:43):
Yeah. Yeah. And of course you'll want to consult your tax professionals because like sometimes you have to pay taxes. Sometimes you don't, there's like little chips and tricks, but that's for the tax professionals to talk to you about. But it's, it's a, it's a source. Yes. So car accident is not the only way to home ownership. Um, there's also like any money you I'd have saved in retirement. Um, when I bought my first house, uh, it was in 2005 in the olden days and rates were 6.8%. So it was a little bit of a different time except that housing prices were spiking, then the way they are now. And I think the median home price in Pierce county was like $280,000. And I was only pre-approved to hundred and 50. And I looked at the three houses in Pierce county that were 150,000, which I think is the equivalent of probably like 2 75 today.
Speaker 1 (38:28):
If you were gonna look at $275,000 houses in Pierce county, there would probably just be a few. They would probably be in terrible shape. Your bank probably won't wanna loan on them. And it was just devastating. Like I cried and uh, my realtor at the time, shout out to Craig Bergstrom. Um, he, you know, he gave me a lot of support in that time. And one of the things that we talked about was a duplex and that's what I ended up doing. We found a duplex for 200. So my, my payment at 150 was like $1,500 a month. But my payment on the $225,000 house, uh, duplex was only 1600 a month. So it's not like, you know, adding a hundred thousand dollars to the price meant doubling the mortgage payment or something. It didn't. And then we had renters that paid half the mortgage every month. So have you ever had a client do this week? What, what do you think, what is your advice for clients to try multi family and how does that work?
Speaker 3 (39:16):
Yes. And yes, I have had clients, uh, do that and that's one way to really manage the money and get help to pay your mortgage. Not only get help to pay your mortgage, but then sometimes maybe you're able to put something aside, even from what you, um, you get those price points, which are lower, have to do some work on these on the, on the home, some renovations, maybe it's, Spoo up the kitchen. You know, maybe it's doing some things when you, when you actually move into the home, but to get it, give yourself a chance on a lower price point, you know, plan to put some sweat equity in there to put the house together.
Speaker 1 (39:53):
Well, and if we're thinking about things like, okay, so we have a $450,000 homeowner first time buyer with a $2,300 a month mortgage payment. Maybe they find a duplex, uh, in somewhere in Tacoma for 650,000. Well that's like a $3,500 a month mortgage payment. Yes. Yes. So how are they qualifying for that? I think they still give you credit like 70% of the rent, what the renter or is paying, right? Yes. Yes. So you have a duplex where the rent on each side is like $2,000 per side. So you get credit for $1,600, that's added to your income. So now you does qualify for the $650,000 duplex. So yeah, now you have this $3,600 mortgage payment instead of the $2,300 mortgage payment, because the person on the other side's paying $2,000 a month, you are now paying 16, 1600, but you own a $650,000 duplex, which is going to appreciate, you know, more than the $450,000 house.
Speaker 1 (40:46):
Most likely, I mean depends on the neighborhood. Yes. But like, that's the kind of, I mean, and, and I, if I, my, my brain is breaking, I don't love math. That is correct. You know, but the what, I'm what I guess I'm trying to say is I get so sad for people when they see the raw numbers of a house. Oh my gosh, $450,000 23, how am I gonna do this? Where am I gonna find $40,000, $30,000? Like there are solutions. And I guess this brings me to like, I'm, I'm setting you up, Sharon, what is like the, the, the real first thing that someone needs to do when they're thinking in this direction,
Speaker 3 (41:17):
Talk to their lender
Speaker 1 (41:19):
And their realtor. Right. And
Speaker 3 (41:20):
Talk to their realtor
Speaker 1 (41:21):
Because their realtors probably gonna introduce them to the really amazing lender. Yes. More often than
Speaker 3 (41:25):
Not, but definitely seek out the advisor for professional, for a realtor, knowing the market is very, very important. And looking at the numbers realistically yeah. Will make a huge difference for your stress level too, because buying a home is very stressful. Any, anyway, you take it. We can keep that stress level down by being informed and having that information that will definitely help.
Speaker 1 (41:46):
Well, and I think what people don't know is that like, you're not bothering a realtor. Yeah. When you reach out to them, like, we want to hear from you and we wanna hear from you a year before, two years before you're ready. We want to be the ones to educate you to help you set you on that right path. Right. It's not, you don't, you don't feel like someone's bothering you when they reach out early. Right.
Speaker 3 (42:06):
Never, never, never. It is better to plan early, making a plan and really having intentional structure to that will be very, very helpful. So yep. You can reach out to lend, uh, realtors as soon as you are thinking about it and then they can help you to make a plan. Cause making that plan will help you get into a home. Yeah.
Speaker 1 (42:28):
Well, Sharon, I just, I so appreciate you coming and talking about this with, with me today. Is there anything else you wanna make sure to say before we go?
Speaker 3 (42:39):
Well, one of the things that come to mind for first time, home buyers, especially is not to be discouraged. It's easy to be discouraged in this market and the plan to make a plan. And to really, when you talk to your realtor, tell them everything. Mm. You know, don't, don't hide anything so that we can see the full picture of what is going on. And then we can help you. Cuz there are some lenders who are willing to call a credit, uh, bureau on your behalf. Mm. And a lot of when I taught home, uh, first time home buyers class, I learned that from a lender that if you go in and you talk to your realtor, your real, it refers you to a lender to you share the scenario with them. Sometimes if you have credit issues or any challenges, they can help you, um, sort that out and get some kind of resolution,
Speaker 1 (43:26):
The right team behind you makes all the difference.
Speaker 3 (43:28):
Right. Socially does.
Speaker 1 (43:30):
One of the things that I've been saying a lot lately is like, I mean, it's easy for us as realtors to be like, you should work with a local specialist, you know, you should work with an expert. Like don't use that friend. You kind of know, or your ex-brother-in-law who lives two counties away just cuz you know, them like use a local expert. But at the end of the day, like first of all, having someone that has great expertise, second of all, someone that you really like, someone that you really trust because I know, you know, Sharon, like you are, you're asking people, we are talking about appraisal gaps. Yes. We're talking about, you know, reinspecting your agent is gonna be asking you to do some wild stuff. If you want to win the house. And if you don't believe them, if you don't trust them, it's gonna be agony. Right? Like to take the time to connect with a person that you really trust is the key point. That
Speaker 3 (44:12):
Is a key point. And you know, having that clarity about out what you want is helpful, but the, or your agent can also help you come to that clarity. Cause sometimes you don't know what you want, but an agent that you like and trust will help you and you get along well and make the process fun.
Speaker 1 (44:30):
Yes. So you think it can still be fun? Yes.
Speaker 3 (44:33):
Yes.
Speaker 1 (44:34):
I might have used the word agony, like, but it can be fun.
Speaker 3 (44:37):
It can be fun. You know, it can be fun. We share homes, you know, talk about that. We go look at homes, tour homes and you know, but once you get preapproved, then they, the funds starts. I think, you know, gathering all the papers, talking to an and all that. It's a bit of a slot that yes. But then once you get there and yeah, and am a lot of fun,
Speaker 1 (44:57):
Sharon is indeed a lot of fun. Well, awesome. Well thank you so much for coming on and for sharing all of your secrets with us today, Sharon, and we will go ahead and put links in the show notes to Sharon's website. If you wanna scope her out, she has some cute video. Keep in touch.
Speaker 3 (45:12):
Thank you for having me. It's wonderful to see you.
Speaker 1 (45:14):
Yes, you too. Sharon. Wanna learn more about life in Tacoma. Visit, move to tacoma.com.
Speaker 2 (45:23):
Channel 2 53 is supported by Microsoft. Microsoft is committed to civic conversations like those on channel 2 53 that inform and power Washington communities to learn more. Visit aka.ms. Slash Microsoft in Washington.
Speaker 1 (45:40):
I feel like you were giving me a look,
Speaker 2 (45:44):
Move to Tacoma as part of the channel 2 53 network, check out our other shows. Nerd farmer interchangeable, white ladies, citizen crossing division. We are Tacoma flounders B team. And what a you, this is channel 2 53.