The human connection, a vulnerable conversation about the roller coaster of purchasing and selling a home, that everyone goes through.
Erin Hello everyone! Episode 2. Coffee & Jam with Alexandra Ross and Erin Finke. It’s a beautiful Monday afternoon. Getting a little warmer here in the DMV.
Alex I know. Maybe we’ll have to change it to margaritas and jam!
HOME BUYING IS EMOTIONAL
Erin That’s a great idea. Margaritas & Jam, I love it. Today we’re talking about having a real conversation about how this experience in buying real estate can be daunting.
Erin Real emotional. We as professionals can be desensitized, because we have this conversation every single day. I think about that a lot. We talked about how I talk fast. Sometimes I find myself in a conversation with a borrower and go, let me just slow down. I forget that I have the same conversation every day and you don’t.
Alex Do you ever feel like it’s easy to tell people what to do. In the sense that it’s like the same thing over and over? I think that’s why it takes the emotion out.
Erin Exactly. But that’s a good thing, right? It’s a good thing to know that you’re working with a professional that’s not emotional regarding to each step of the transaction. However, it doesn’t humanize you. And you need to relate to your client, understand and empathize with your client and know what they’re going through. I know you’ve experienced and I’ve experienced. The human connection.
CASE STUDY – ERIN BUYS A NEW HOME
Alex Tell about when you got your house and how long ago that was.
Erin So I bought my very first house in 2011. Living with my parents before that, so just buying. I did buy a short sale, so it took a while.
Alex By choice? You just found this house and all of a sudden you’re like this is the one.
Erin We looked at a lot of houses and the one that we wanted ended up being a short sale. Not a huge deal. For those of you who don’t know what a short sale is, it’s when a property is being sold for less than what is currently owed on it. So the bank that owns the mortgage currently has to agree to take less. So that takes time. Attorneys are involved and they have to negotiate. [RESOURCES]
“A Short Sale is when a property is being sold for less that what is currently owned on it.”
Alex And this is in 2011? Before or after September?
Erin After. I went under contract in May and we didn’t close until the day before Thanksgiving.
Alex I feel like everything holds it then.
Erin There were a lot of short sales and foreclosures back then. I remember being a little intimidated by the process but I had been in the business for 2 years by then already and I wasn’t juggling anything else at that time. Fast forward to 2017 when I bought our current home and we sold and bought at the same time. Holy crap! I was completely unaware of everything.
Alex Did you have settlement the same day?
Erin I didn’t. Fortunately I did have a rent back. So the timing worked out perfectly. I will, every person I talk to about when we sold our first home and bought our second home it could not have gone better, the timing. We did new construction. We went under contract in October and it wasn’t delivered until May. 2016 I went under contract. 2017 in May it was delivered. But I put our house on the market the first week of March. Literally this week 2 years ago. So the first week and half of March.
Alex Were you anxious?
Erin I was terribly anxious because I didn’t have to sell my home to buy my next one, but I didn’t want 2 mortgages. And I also had an 18 month old at the time.
Alex So you had a lot going on at the time.
Erin A lot of layers. And I remember feeling incredibly uncomfortable when here I am in the mortgage business for so long. And why am I uncomfortable, I should know. Because it’s emotional! It’s an emotional thing!
Alex It is! I don’t care what price point you’re buying by the way. It doesn’t matter.
Erin It doesn’t matter. So whether you’re buying your first home, or your juggling selling your first home and buying your second home, it’s important to be reminded that this is an emotional thing. Investing in real estate is great as an investment, but it is where you’re going to live. We’re talking about a primary residence. So yes, I remember being humbled by that, and thinking, damn, this is what I talk our clients through every day.
Alex Who is talking you through it?
Erin I don’t know. Happy hour? I think it was Clyde’s Tower Oaks talking me through it.
Alex What pep talk did you give yourself?
Erin There was a lot of wine and a lot of vodka.
Alex Did you cry?
Erin I cried a lot.
Alex I feel like I can relate. For those of you who don’t know Chong, we’ll have to put up a photo of Chong and what he does.
Erin I’ll have to put up a picture.
Alex Haha! He’s running away! We’re in a conference room and it’s glass doors and glass walls. He’s gone.
THE LARGEST PURCHASE YOU’LL EVER MAKE
Erin To the point of having a real conversation on real estate, it’s not just facts. It’s not just what loan programs are out there. How much can I afford? How much down payment do I need? Lets talk about you emotional state. And what to expect through the process and what is normal. Guys, this is normal to feel this way. Any large purchase is exciting.
Alex It’s usually the largest purchase you’ll ever make.
Erin It’s more than likely the largest indebtedness that anyone will ever make. It’s not just a car, it’s your home! It’s an appreciating asset. There’s all these layers to it. But it’s a really interesting thing to be reminded of. It’s a lot easier to give someone direction than to take direction.
A home purchase is “more than likely the largest indebtedness anyone will ever make.”
CASE STUDY – ALEX BUILDS HER FINANCIAL STANDING
Alex How many times have I told people what to do? And how to do it? And here I am, I basically did the opposite of what. For me, Erin and Chong are doing my loan. I’m a first time home buyer.
Erin Which I completely forgot. It’s a stigma of being in the business that you own so much.
Alex That I own so much. That’s a whole other topic. It’s the persona I give out there. You would think I own multiple properties. Now I’ve done transactions with multiple properties and my name is on it. But we never end up buying it, we’re flipping the contract. So I never had any emotion attached to it. What started to get me wasn’t the actual purchase, it was the “okay now I have to give you all of the paperwork”. It was the bullshit that everyone has to go through. And then I started to relate to my buyers on it.
Erin Why is it taking so long to get me your bank statements?! It’s a pain in the neck, I get it.
Alex I was just having this strange Friday. And then I got everything in to you, and your underwriter emailed me 10 things I wanted to cry. I was like “why”? And then I have this fear which I’m sure is normal, that it won’t get approved.
Erin It’s funny that you say that Alex, because I’ve been in this business for 10 years now and that’s how I felt. I’m like, this is what’s going to happen and my loan is going to be declined. I know everything that can go wrong. I was telling myself that something was going to happen.
Alex I know! I already have a back up plan in my head because that’s the kind of agent I am. If something doesn’t happen for a client then I already know how I’m going to help them. So I was talking to Josh, “if we don’t get approved, what’s going to happen”? He said, “you’ll be approved”.
Erin To your point, it’s totally natural to feel that way. It makes you a human. It doesn’t matter how long, maybe it has to do with the fact that I’m a woman and I worry a lot, because my husband was like, “huh? You’re worried”?
Alex Has he bought a house? See, Josh has already bought a place before. But he’s never bought a place of this caliber.
Erin But he’s been through the process.
Alex Right, he’s been through the process. But he went through the process before the market crashed.
Erin Oooh! It was loosey goosey back then.
Alex And then he ended up short selling his place.
Erin For market conditions. It’s scary! You have to put your neck out there.
Alex I’m not even scared about the payment. That doesn’t even scare me. What bothers me is the process of someone saying you’re approved. What the heck? I’m seeking validation.
Erin You are approved. I ran you through desktop underwriter. You’re approved. I’m not worried about it. I get it. When I was negotiating with the builder and I was worried, what’s going to happen. I don’t know that side. I don’t know what’s acceptable. I rely on my real estate agent at the time to handle that. I didn’t know. Just like you’re coming to me, “so am I saying this correctly? I don’t want to put any words in here that could mess things up”.
Alex It’s so funny that we’re in this position. Because I understand negotiations very well with builders, and how we negotiated our sale. We went under contract a year ago and we were able to negotiate with them to release just that house in that block of homes. And they said, “okay that’s fine. But we can’t publicly release until October.” So that was fine. I gave them money. That was another problem. I thought, “oh my god I have to source all these checks!”
Erin It’s not a problem, it’s just more homework.
Alex More homework, I’m like, wait, where did that come from? And then here I am a year later doing all this. To me, what you just said is very easy to negotiate with the builder.
Erin And to me the loan process is very easy.
Alex And here we are together talking to listeners about what we think is easy.
Erin It’s all relative.
Alex What you think is stressful is easy to me.
Erin And when you’re calling me, I’m like Alex it’s fine. It’s work history. Just fill it in. That’s so telling. Why are you asking me this question? Are you looking for there to be a problem?
Alex Here’s the other thing. I haven’t dealt with a loan in over a year. All my buyers have been cash. I’ve only been dealing with sellers and buyers. I forgot about this process all together. And I was like, what? I had no idea and then w hen you were sending Josh the updated stuff, he was like, you haven’t seen one? I was like, dude it’s been over a year.
FEELING VULNERABLE IS PART OF THE HUMAN CONNECTION
Erin I remember we talked about this a year ago. To the listeners, it’s a great thing to buy real estate, but it’s going to feel a little uncomfortable. It’s going to! If you’re human, you’re going to feel some degree of emotion and/or discomfort in something that’s unfamiliar to you. It’s a human connection.
Alex I think people are going to feel a lot more discomfort too, because you have to share, you have to be vulnerable. You have to open up your finances. And you’re thinking, you’ve probably heard this before, Oh they’re going to judge me. And I tell borrowers all the time, I don’t care if you can afford $50,000 or $50 million. I just don’t care. You just have to be honest.
Erin That is such a good point. You’re right. There are people who are fearful of being judged. Therefore they try to puff up a little bit. And I understand why. Self preservation. People feel like they have to put on this show. And this is such an important piece: for me to do my job best, I need to know it all. I need to know your insecurities. I need to know your pain points. I joke that it’s like we have to start dating because I need to know everything about you for me to meet the needs that you are expecting. I would imagine the same thing is for you on the sales side.
“For me to do my job best, I need to know it all…I need to know everything about you for me to meet the needs that you are expecting.”
Alex On the sales side they can hide it a little more. We don’t need to go in depth with their finances.
Erin They can hide the details. They can say, “eh, I can’t look at that house because I’m not approved. Some people I’m sure go anyway.
Alex Mmmmm? Usually we try to get them completely pre-approved so I have all the info. I know where I can push the limits on certain things. What most people don’t realize is that around here taxes vary. So we can place you in Chevy Chase MD or we can place you in DC and the tax difference.
Erin Around here you can buy two houses right next to each other and the taxes are different.
Alex Same thing with condos. Not everyone realizes that. For a condo, you also have to factor in your condo fee and a bunch of other things.
Erin Especially if someone is approved to a certain point and then they didn’t take into consideration the condo fee. Down in Bethesda a condo fee can be $700-$1000. So they say “I can afford a $500,000 condo” and I say great! Great! Are you going to get a second mortgage for the condo fee?
Alex For you, the buyers have to be more vulnerable because you’re meeting them or you’re having a conversation over the phone. I think that’s where unfortunately Rocket Mortgage succeeds, because like dating, it’s like online dating, you can hide behind. But at the end of the day you still need to share. You need that human connection.
BUYING A HOME IS JUST LIKE DATING
Erin Yeah, about the “spaceship mortgage” company that will remain nameless. This is not an ad sponsored by Rocket Mortgage.
Alex We had that conversation that people were like that is a walking lawsuit right there. I think there is always going to be a need for a real lender that you have to meet with and the same thing with an agent. You need a human connection.
“You need a human connection”
Erin You want to. There are people like you have described don’t want to sit in front of me, who don’t want to take the advice I can give them, who don’t trust me. That’s fine. I don’t want to work with them anyway. They don’t value the advocacy that we offer our clients.
Alex I also think that you guys, to touch on it, you may not be pre-approved today. You COULD be a year later. That’s what Erin and I were talking about before we started. Where I was a year ago I would not have been able to purchase the home that I’m building today. It has nothing to do with me working harder. It had to do with me making the right moves, with the right advice from The Yi Team on how to put myself in a better financial position. That’s the difference in an online agent or lender, versus someone that you meet.
Erin It’s a relationship, right? So, to your point earlier, this is the largest indebtedness, it’s also a huge for the sake of purchasing real estate, I don’t know if you watched Chong’s show this morning (Mortgage Monday on Great Day Washington, WUSA9), he made a great point that you can acquire a $600,000 asset by only putting down 5%. People don’t look at it like that. They look at it like, “how much is my payment going to be?” And that’s important too, there’s lots of different layers.
Erin The point is, with real estate you can get this huge asset and only put a little bit into it. If you go to a car dealership, you can get a loan for a car, but can you buy anything else for a tiny bit and that asset appreciate year after year? A car doesn’t.
Erin The example is that when it comes to having a conversation about what’s going to work for you, it’s specific to you. 100% to you, to no one else. There are guidelines that mortgage lenders have to follow across the board. But your story is your story and without all of your little intricacies and goals and timeline, you can’t put a square peg into a round hole. We have to figure out what it is that is important to you. What is in the way, if anything? Right? And identify all the steps that you need to take, sometimes it’s only a couple. Some people are just scared. They need the human connection.
Alex A couple could take months. Or a year. Or more.
Erin Or more. It just depends. But you set a really high goal for yourself.
Alex Extremely high.
Erin You knocked out each step and here you are. That’s a testament to how, if you’re not wanting to buy a house today, you need to identify what it is that you need to do in order to be ready when the time is right for you. Not just fiscally, but also emotionally. Because you could be ready emotionally but not ready financially. And you could be ready financially and not emotionally!
Alex You have to be both. You have to be at least a little bit of both.
Erin There’s not always going to be a perfect balance. It’s about talking it out. This is why there will always be a need for real people, not just robots. That’s the human connection.
Alex I think anything with finances there will always be a need for a real person.
Erin Yeah, I agree. Good stuff!
Alex Yeah, it was vulnerable. I like it.
RELATIONSHIPS AND ADVOCACY
Erin I think this was important. This was the reason you wanted to start having these (podcasts). This is why we started having these conversations. It was about making this literally obtainable to anyone who wants to, if they want to take that step.
Alex And we talked about in the beginning is humanizing what we do. The Human Connection. For us it’s a process. Steps 1 through 10. Whatever steps. But then we forget along the way that there are actual people.
Erin Which is a great reminder. That’s what makes us good at what we do, is creating the relationship and advocacy, again, is so big. How do I represent you? It’s only by knowing all about you that I’m going to represent and advocate for what it is that you’re looking to achieve. That goes both ways. It’s not just on the loan side, it’s also on the sales side too.
Alex Love it! All right you guys, tune in next week.
Erin We’ll have lots more fun stuff to talk about. We’re going to start doing a mail bag sort of thing, where we’ll get some Q&A out there. What are some real questions you all have?
Alex I think we said last week that we’re going to Instagram this, so.
Erin Maybe next time.
Alex We’ll have to figure out the Facebook live and put questions out there.
Erin Definitely. Maybe a poll or two.
Alex Yeah, I definitely think so. And last week you answered the question, how do you take your coffee?
HOW DO YOU TAKE YOUR COFFEE?
Erin Oh, Alex! It’s your turn!
Alex That’s right! I just thought about that. Our whole purpose.
Erin Alex, how do you take your coffee?
Alex Oooh! Okay, so I did a video of how I take my coffee. I did a video like a year ago, MTV Crib Style. I’m going to get to the point here. And I was showing my fridge. And I was showing my favorite coffee. I pronounced the coffee and I had people trolling me saying that I’m pronouncing it wrong.
Erin Oh Lord.
Alex So I was like, I think it’s pronounced “Stoke”. It’s S-T-O-K with the two dots over the O. I think? I think it’s Stok. [ www.Stok.com ]
Erin Whatever you want to call it, I agree.
Alex So it’s cold brewed coffee. It’s like this 10 hour process. It’s in a container. I get it from Harris Teeter. It’s unsweetened. So I pour it over ice in the morning, into my cup. I like to use, Califia Farms makes this coconut creamer. [ www.califiafarms.com ]
Erin This is fancy! This is real fancy! I’m like Coffee Mate, hazelnut, sugarfree.
Alex I drink cold brewed iced coffee with Califia Farms coconut creamer unsweetened. And I put that in there and I stir it up and sometimes…
Erin Even on a cold day?
Alex Oh I love it! It’s like my favorite.
Erin This is the time of year that I’m going to GO to iced coffee.
Alex I just love it. It’s not bitter. It’s the perfect aroma.
Erin We need to get Stok to sponsor our podcast.
Alex It’s the perfect amount of sweet and bitter at the same time. But then when I’m feeling fancy…
Erin When?! Alex, you’re always fancy.
Alex This is really long and drawn out. You should hear me order a drink. Do you know Laird, the professional surfer? [ www.lairdhamilton.com ]
Alex He created this coffee creamer. Found it in Hawaii when we were on our honeymoon.
Erin Ha! She’s not fancy ya’ll.
Alex No! And this is like coconut shreds, super fine. So I add it to the top. It’s like what you would put your hazelnut or whatever.
Erin Do you put your pinkie out when you pick up your glass cup?
Alex No! This is how bad it is. It’s not even in a glass. I use, they are plastic cups but they’re made out of corn. I use corn straws, so they’re eco friendly.
Erin Oh my god.
Alex Because I drink eco friendly coffee so I need an eco friendly cup to put it in!
Erin Tune in next week for more on how we’re serving our planet as well as we’re serving our local real estate market. Thanks for listening guys!
Alex Thanks! Have a good day! I hope you enjoyed the Human Connection podcast!
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