Why Rate Shopping Might Be A Bum Steer: Real Lending Insights From Brady Thomas - #72

The smartest edge in a choppy market isn’t a flashy rate quote, it’s certainty. We sat down with Brady Thomas, owner of LaSalle Mortgage, to map how real buyers win: a fully underwritten pre-approval, a lender who calls the listing agent, and a plan that balances affordability with speed to close. Along the way, we translate rate noise into plain English: the Fed doesn’t set mortgages, the 10-year Treasury and risk spread do, and trust in institutions shapes bond demand. If jobs cool, rates can fall, and housing can heat up, even as the broader economy softens.

We also go deep on ADUs, the East Bay’s favorite form of quiet density. Permitted ADUs with a kitchen, bath, and separate entrance can now count toward qualifying income on homes with up to four total dwelling units. Single-family parcels may support multiple ADUs, and appraisers can use rent surveys so lenders can include 75% of fair market rent. The catch: the ADU must exist and be permitted. Bonus rooms and low-ceiling would-be In-Laws won’t count for rental income, though they can still add appraised value. For financing builds, most owners lean on cash, family help, cash-out refis, or HELOCs; renovation loans exist but come with guardrails because half-finished projects spook lenders.

Brady also previews his new Field Report, a hyperlocal survey of the top Inner East Bay agents that reveals what actually worked in 2025 and where the 2026 market is heading. The throughline is clear: buyers are pickier, preparation matters, and positioning beats passive listing. 

Enjoy the conversation, grab the Field Report from the show notes, and if this helped you, share it with a friend. Subscribe for more hyperlocal insights, and leave a review with your biggest question about rates or ADUs, we’ll tackle it all on a future show!

Brady Thomas is a licensed Mortgage Lender NMLS# 396946

Click this link to receive your copy of The Field Report

Follow Brady on Instagram @peptalkmortgage

Declan Spring is a licensed CA REALTOR® DRE#01398898

Transcript

Opening, Guest Intro, Listener Ask

Declan 0:00

This is Declan Spring. Welcome to the Mostly Real Estate Podcast. My guest today is Brady Thomas. And Brady owns LaSalle Mortgage. And that's actually something I learned in our conversation. It was purely serendipitous, but my reach out to Brady for a chat just happens to coincide with the fruition of a personal project of his. Brady's got some really useful, new and probably proprietary info for the real estate community. And it's going to be useful for homeowners too. So that's all in the conversation. And I'm really happy that I can play some small part in spreading the word about this work that he's been invested in over the last few months. But before we get to the conversation, I just want to mention a podcast that I listened to this week and that you might enjoy. So many of us in real estate are just naturally relational and inclined kind of toward community building. Now, Ezra Klein's podcast from February 3rd is an absolute must listen. It's titled, Is Your Social Life Missing Something? It's highly worth bookmarking and listening to for ideas and for some really good just feel-good inspiration for 2026. Okay. So now here's my conversation with Brady Thomas. Enjoy. Oh, can I ask you a favor? If you enjoy the work I do here and you like the podcast, can you please share the podcast and uh do the things that help, you know, boost it? Uh like, share, subscribe, that kind of thing. And please, please, do feel free to reach out to 415-446-8591 if you have any suggestions for the show or comments. That's 415-446-8591. Okay. I'm here with Brady Thomas, LaSalle Mortgage, and thank you so much, Brady, for coming on the show. It's yeah, you're uh you're a you're a guy I've been looking forward to chatting with for a while. You're you're somewhat masterful at your uh marketing and your media, and I know I know you're proud of that, and you should be. You're you're very well known to all the local realtors, I guess maybe even Bay Area-wide. You pop up on our Instagram feeds with uh amazing stories, and and they're not always like the the best stories, uh, but they're honest stories, you know, and and uh I think that's that's really what what makes you different because you're candid about you know where the wins are and also sometimes where you suffer. And and uh that makes a difference, you know. It makes you extremely uh believable and real. So I I know you're we can talk about I'd love to talk about your marketing strategy. We're gonna talk about all kinds of mortgage-related stuff. I want to talk about the market and you speculate about you know the year, uh, not predictions. I don't I I don't do predictions, but we can talk about things based on what we know currently. And I got lucky as well with this, um, with the timing of this conversation today, because you and I are chatting today is January 29th, but I'm gonna, you know, hopefully nothing crazy will happen in the mortgage world or in the world in general in the next week. And I'm gonna drop this episode on February 6th. So folks should be listening to this on February 6th. And where I got lucky is because February 6th, the reason is today you're dropping uh an a local of like an industry report. You just told me about this, so I'm very excited. We'll talk a little bit more about it, but just uh at the toward the end of the conversation, just give me a flavor of what people should be able to find if they click on the website in the show notes.

Brady 3:44

Yeah, so we decided to put some put together something we're calling the field report, and it's basically what the top 100 inner East Bay agents saw, said, and did in 2025 and what they expect for 2026. So um about two months ago, I decided I was gonna reach out to the top 100 inner East Bay agents based on production that we found in the bridge MLS.

Declan 4:05

Yeah.

Brady 4:06

And I texted, I emailed, I called, I voice noted, I DM'd, and we got 66 of the top 100 to respond. Yeah. Um, they completed a survey, we turned it into what I think is a pretty aesthetically beautiful report with infographics, some of the main lessons, um, what worked and what didn't.

Declan 4:25

Yeah.

Brady 4:25

Uh things buyers and sellers use to be successful. And we've kind of turned it into it's like a 25-page document that we're gonna release um on February 6th. So it's something I'm I'm I'm excited about, and um that's really, really cool.

Declan 4:40

I I I applaud you for that because so many, so many of the things we we report on uh or or that consumers here are like uh the national level or state level, right? And it's just woefully uh misaligned with what's going on in the inner e-space. So well well done. I also want to go through a bio about you, and I want to talk about the market in general. So I you're you own LaSalle Mortgage. Let's talk about where did you begin your career in real estate if you segued from something else into real estate like so many people do, and how you got to LaSalle and and beyond that, how you became the owner.

Brady 5:17

So I grew up in Oakland, yeah. Um, went to Bishop O'Doubt High School, and I went to college back east. After graduating college, I moved back to the Bay and I worked for four years selling commercial real estate.

Declan 5:29

Commercial.

Brady 5:30

You were a you were a a a sales agent. Yeah, I worked at Colliers International in Oakland.

Declan 5:34

Wow.

Brady 5:35

Um, and I sold warehouse industrial property, sales and leasing. And it was one of those terrible cold calling jobs where I come in in the morning, 7 a.m., I'd clear email, and then I'd go down to my territory, which was Hayward, San Leandro, Union City, yeah, and I'd bang doors for four or five hours. Wow. Um, you know, f dealing with trying to get past the secretary to find the decision maker when leases were rolling. I just would walk through people's roll-up doors, and I figured whoever stopped me was the manager, and therefore I should talk to that person.

Declan 6:05

Yeah.

Brady 6:06

So I I really ended up disdaining um that job because it was such cold calling and I didn't want to interrupt people as my career.

Declan 6:16

Yeah.

Brady 6:16

Um, but I learned how to face rejection. I learned how to sell. I learned how to follow up with people, how to manage uh leads. And so in 2008, when the whole world changed because of the Great Recession, I was looking at this job that I hated and I decided I was gonna quit.

Declan 6:31

Yeah.

Brady 6:31

And so I ended up traveling. Um, I traveled through Central America and I ended up getting a job teaching English in Costa Rica and um in Nicaragua and did that for two years. Um, and then my dad got sick. So although I loved living and teaching English in Central America, my dad got ill. I moved home to help my mom with his care. And my mom was a mortgage lender. Uh-huh. And I had never ever thought anything about going into the world that she was in.

Declan 7:00

Yeah.

Brady 7:00

Um, but I decided I was gonna work with her for six months. Yeah, I was living with her to care for my father. And I remember maybe I was helping her with her social media. It wasn't even social media, it was like her Facebook page and her website.

Declan 7:14

Yeah.

Taking Over LaSalle Mortgage

Brady 7:14

Um, and I remember maybe two or three months into it, I saw a deal go from start to finish. And I remember being like, wait, wait, wait, hold on. You mean to tell me this real estate agent referred you this deal and then we closed it and they're gonna refer you more deals? Like, you don't have to go knock doors or find your clients yourself, you just have to provide amazing service to the buyers. And she's like, Yeah, I I guess I think that's right. And I was like, Oh, I can do this. Yeah, and that was my aha moment. So um 2012, my dad passed, yeah, and my mom retired.

Declan 7:49

Okay.

Brady 7:50

And so I didn't know what I was doing. I'd just gotten my license, I'd maybe done four or five months worth of the mortgage business, but my mom was over it, she did not want to work anymore.

Declan 8:00

Yeah.

Brady 8:00

And so her assistant, Nakia, who's still with me today, yeah, we were like, okay, let's try this. So Nikia knew everything. I knew nothing, but Nikia wouldn't talk to clients. Um, she would only review files. And she, you know, Nakia, she's tough. She's like a sister to me, but she doesn't give me any rope. And so her rule was you have three questions a day. You're not gonna sit here and ask me questions all day long. You're gonna figure this out on your own. So if I walked in in the morning and I said, Hey Nikia, how are you doing? She'd say, Is that one of your questions? And I said, No, it's not. So I learned by working with her.

Declan 8:32

Yeah.

Brady 8:33

And, you know, just by being thrown into it, you know, I learned more in six months. It would have taken me 10 years on my own because we had deals. Like Nakia had these relationships through my mom, and my mom was still with kind of feeding me some business. And so after about a year, I I kind of figured it out, and I was like, okay, I think I can I can do this.

Declan 8:51

Yeah, yeah, yeah. You learned, you learned in the in the market, in transactions, best way to learn, right? Exactly. Yeah.

Brady 8:58

And my mom, she was great. I mean, she's, you know, a little bit of a um, she knows everybody and all the players. And so even after she quote unquote retired, I would still bring her in once a week. Yeah, we'd do a coffee and a lunch, and we'd sit down with agents. And yeah, um, the idea was hey, if you get the same service out of Brady that you got out of Sue, we hope you'll continue to send us deals. And so some of them did, some of them didn't, but that's how I kind of built my business. I had that platform from being able to kind of come in and work with her for a few years. Nice. So your mom is Sue Thomas. Yeah. How's she doing? She's great. She's great. She's down in LA. And my sister has twin um six-year-olds, and that she lives in Los Angeles. So my mom's down there, and she's yeah, she's loving it.

Declan 9:38

Oh, well, uh hey Sue, how are you doing? Everyone's very impressed with uh what Brady's doing, by the way. So well done for raising a good son. Yeah, yeah. So um, so then you're a year in, you're like you're ready to go, you're fired up, you're good on your own, you feel like you have enough transactions under your belt, and you and you're and you're feeling like this is my career.

Brady 9:58

Well, I mean, I think you it's the same, I feel like it takes five or six years in the business before you really know what you're doing. After a year, I kind of knew what a loan was. Yeah, but I certainly didn't know how to respond in every situation. And I think it took me so I started in 2010.

Declan 10:12

Yeah.

Brady 10:13

By 2016, yeah, I was I felt good. And 2016 was like the first year I made president's club, and then we really took off from there. Um, I brought in, so now my team, there's myself plus six other people. So I've kind of grown my team over time.

Declan 10:28

Okay.

Brady 10:29

Um, because I think it's more fun to do it with folks, you know, this job's hard enough as it is. Yes. Um agreed. Lonely and hard. Yeah. So I started in the business just kind of belly to belly, coffees, lunches, nice, showing up at Broker Opens, really just earning people's trust, doing what I said I was gonna do, performing on time. Um, and then in 2020, uh with everything going on with COVID, I also got married that year. My wife got a job as a tenure track professor at Tufts University in Boston or in Medford, Massachusetts. Amazing. Um, amazing opportunity, but it created a situation where now my business is in California and we are living during the school year in Massachusetts. Right. You're bicoastal. I'm bicoastal and have been for several years. Wow.

Declan 11:19

And what age and you have one child?

Brady 11:21

Yeah, I have a four-year-old.

Declan 11:23

Okay, where's your where's your is your child by coastal, I guess?

Brady 11:25

Um during the school year, he's so he's in preschool in Boston. Yeah. So it's actually uh preschool at on campus at Tufts. Wow. Um, and so he's there, and like I'm the one that comes back. So I'll come back once a month. Right. I'll usually fly in on a Sunday, take meetings, see clients, meet with my team, yeah, do an event, and then I'll fly back on Friday night, and I do that once a month. And then we're here over the holidays and summer together as a family, but there is a little bit of this back and forth thing that I have.

Rates, Politics, And The Bond Market

Declan 11:57

Yeah, but uh, but you've got this support of this six-person team. Yeah. And so, you know, I no, I it can work. I mean, nowadays we have the tech and you're absolutely you're very much clued into the market. I I it's a lot of work, but uh it sounds sounds amazing. How's your wife with all of this? She's good.

Brady 12:16

I mean, she's just I just tell people she's a badass. Like the academic job market is so tough. Yeah, 180 people applied for this position. She got the job. And so, of course, we had to go and make this work.

Declan 12:28

Yes.

Brady 12:28

Um, and so she's, you know, it's tough. It's getting it's it's actually getting harder as our little guy gets bigger, yeah, because it's just harder to be away.

Declan 12:36

Yeah.

Brady 12:36

Um, but we're, you know, we're making it happen. It's kind of an adventure that we're doing as a family, and we'll see how long it lasts. But you know, thankfully, with like you said, the technology and just the expectation after COVID that everything doesn't get done in person.

Declan 12:49

Right.

Brady 12:50

Um, so I, you know, yeah, I'll I'll do five or six Zoom calls in a day with clients to to talk through things. And there's no expectation, like it used to be I want to come in, shake your hand, look you in the eye before you even look at my taxes.

Declan 13:02

Right.

Brady 13:03

Now it's like, where do I upload this thing? I don't even know. I'll send it to you, just tell me what we qualify for.

Declan 13:08

Yeah, there there is a thing that's happened since COVID where, on the one hand, you know, we are very relational people, we want to maintain that, and but systems have become a little more transactional in in how they feel or work, and and we're constantly trying to make sure that they're efficient, transactional, but we keep that sense of relationship too. It's it's a careful, it's a careful balance, in my opinion. So I uh kudos to you for pulling all of that off. And and uh I'm sure that uh just being away from from your child's probably the hardest. I mean, obviously your wife as well, but your child's probably less able to understand where you know so I I feel for you.

Brady 13:48

Yeah. Well, he thinks it's cool because he has in his mind he has two houses.

Declan 13:52

Yeah.

Brady 13:52

So he's like, Oh, where you know, my we're in our he thinks he's vacant, he summers in Oakland, as if that's a thing. So he he kind of likes it when I'm here, he'll be like, Can you go in my room and show me this toy so he can look at it? Um so yeah, it it you know, he's he gets it enough.

Declan 14:07

Yeah, yeah, that's cool. And uh, and I'm sure so so, especially in the academic world, as you said, it's really tough. And yeah, uh, you know, I'll just kind of speculate that the political climate has not made that easier, and uh that political climate's also not made your job as a uh as a lender or loan agent broker easier either. I mean, that's that's giving a lot of us uh, you know, I was kind of seasick in the last few weeks. I know, you know, uh watching rates go up and down, you know, depending on what came out of Trump's mouth one day from day. So um, you know, all of those things are are very hard to manage. So let's so let's talk about uh LaSalle mortgage though. How'd you become when did you get into LaSalle? How'd you become an owner there?

Brady 14:50

I've always been at LaSalle. Oh, okay. Um I I started my career there and um have seen a lot of people come and go. Yeah but basically I was just a head-down originator. I just did loans, I thought I did a good job, and was able to get some success um doing that. And so the company that owned LaSalle Mortgage back in 2022, yeah, American Pacific Mortgage, um our the LaSalle Mortgage Branch Manager was retiring. And so the owners of American Pacific Mortgage came to me and they said, Hey, look, we own LaSalle, but we don't own you, Brady. And if your branch manager is retiring, like what do you want to do? Do you want to just continue to originate? Do you want to be the branch manager? Do you want to buy the branch from us? Yeah. Um, and I said, Well, first of all, thank you. I have no clue, I have no idea what any of this means. Let me get back to you. So I just finally, that was the first time I ever returned any of those um calls about from headhunters. And so I just went around and had a bunch of conversations. One of them was with a friend of mine, Phil, who was a really high up VP at uh guaranteed rate.

Declan 16:05

Yeah. Okay.

Brady 16:06

He and I talked for three hours. On that call, he gave me a bunch of suggestions about what I would what I should do if I decide to take over the branch. And I remember getting off that call and I told my wife, I said, gosh, Phil told me so much. I wish he would just come and do this stuff for me. Like it's, you know, I don't even know where to start. And I was like, but I can't ask him because he's high up where he is at guaranteed rate. Um, and then two days later, Phil called me and he was like, Hey man, I can't, I keep thinking about what if we just did this together? And so I was like, perfect. So I brought Phil on. He's the branch manager, he does all of the stuff that's outside of my wheelhouse so that I can focus on sales and marketing and helping to grow production and uh mentoring the agents that we have at LaSalle. Um, so we've kind of created a partnership and we ended up taking over the branch that was three years, a little more than three years ago. Yeah, and yeah, of course, as soon as we took over, it was the end of 2022.

Declan 17:00

Yeah.

Brady 17:01

So literally the month after we took over, rates doubled and volume halved, and we had to figure it out.

Declan 17:07

Yeah.

Brady 17:08

Um, but we made it work. We like several rough months. We were immediately $250,000 in the hole, but we fought our way back out, and it we learned how to do this in in you know very slim times. And so I feel like we're well positioned now to, you know, as things pick up, hopefully.

Declan 17:25

Yeah, I agree. I totally agree. I think you're in really good position. You survived that. That was vicious.

Brady 17:30

Yes.

Declan 17:31

We went from what three to eight percent over about six to seven months. Yeah. Wow. So congratulations on weathering that incredibly cruel storm, you know, when you're starting a business.

Brady 17:41

It was I I'll tell you, so we had a month in February of 2023 where we did one loan as a branch for $400,000. And I'm talking like, you know, my production was $10 to $20 million a month. We did one loan for $400,000. I remember calling Phil and I was like, I think you made a mistake. Like, I don't, I don't know what's happening. Right. Did I lose my touch? Are we are we screwed? And he's like, no, it's just that it's an aberration, we'll be fine. And then it finally started to pick back up. But that was the one time I really doubted this whole thing. I was like, of course, as soon as I take over the branch, yeah, the industry's cratering and we're all gonna, you know, lose our shirt. But you made it.

How To Talk Rates With Buyers

Declan 18:17

You made it. Well, congratulations on your successful ownership of LaSalle at this point. Well done. You weathered it. Let's get up to speed with some of my concerns about the market in general. I want to talk, let's see. I'm just so I'm gonna let you riff. But here let me throw out a few a few pieces here. What's gonna happen with the Fed when Jerome has to set step down as as Fed chair? Now, I will he stay as you know a board member? He probably will, I don't know. How are you know how's the political climate affecting the bond market, which informs us as to what rates are gonna do day to day? Wow. What have you found to be the most problematic problematic aspects of of the political climate currently? Uh love to hear your thoughts on those. Uh I think the popular idea currently is that we'll see rates from 5.9 to 6.3-ish, or maybe 6.5, but somewhere around there for the remainder of the year. But we've seen it go up and down uh within a week. And how do you handle conversations like this, in other words, with clients who are talking to you about timing for the year?

Brady 19:28

So something that we started doing in 2023 with every single pre-approved buyer.

Declan 19:34

Yeah.

Brady 19:34

Is you know, initially we have an initial conversation with them where we understand their situation, try to get a sense for both objective qualification, how high that specific buyer could go if they were to stretch their absolute limit, and then subjective affordability. So we give them some worksheets so that they can use to play around with different down payments, purchase rights, really get a sense for what they can qualify for and what that means as far as payment.

Declan 19:56

Yeah.

Brady 19:57

That's half the battle now, because the other part is making sure that when the client gets in contract, they don't totally freak out, right? And so I get on a call, we call it our pre-approval success call. We've been been doing this for about two and a half years.

Declan 20:09

Yeah.

Brady 20:10

Um, and it's something that has really worked for us to send clients back to real estate agents, having a clear understanding of not only what they qualify for, what it looks like as far as payment, but should they be doing this? And so on that call, we talk about rates and how they move.

Declan 20:24

Yeah.

Brady 20:24

We talk about um what goes into their pricing, how points work. So I'm constantly explaining this to clients because I think it's important for them to understand. Um, you know this, but many don't, which is that the common misconception is that the Fed sets mortgage rates. Right. Well, the Fed doesn't set mortgage rates, they set um short-term rates that they lend money to big banks and institutions in the overnight window. And the mortgage rate you end up with is really determined by how the bond market moves and the spread on top of the 10-year treasury, which is kind of like the profit or the risk that is applied to mortgages because they are more risky than just taking out a 10-year bond. So what we've seen is that inflation was driving everything related to the bond market for several years. Well, that's less the case now because inflation, although it's not at the Fed's target, it seems to be sticking right between 2 and 3%. They want 2%, they're getting something closer to 3%, they seem to be happy with it.

Declan 21:26

Yeah.

Brady 21:27

Everyone right now, aside from watching the White House and what antics are going on over there, everyone right now who's thinking about how rates are going to move, mortgage rates specifically, is looking at the job market.

Declan 21:38

Yeah.

Brady 21:39

Right? Because the Fed has two mandates. They want um full employment and they want stable prices. Well, right now, price stability is about where they expect it to be, or they're happy with it. And so everything's focusing on the job market. If we continue to see higher unemployment, weak hiring, and potentially a job loss recession. That will lead to a lower rate. Now, it's been difficult to gauge because we've had this shutdown that threw off data for about 60 days. Right. There's been some meddling with firing the Bureau and Labor Statistics head.

Declan 22:16

Yeah.

Brady 22:16

So it's unclear right now which direction we're heading. I think we're going to get a lot more information on that over the next few months.

Declan 22:24

Yeah. Does that tinkering behind the scenes with just sort of uh upset the appetite for bonds or or in other words, does it undermine the institutions that have always held in place people's trust in the U.S.?

Brady 22:39

Yeah, I think there's two things. Um yes, it certainly does.

Declan 22:43

Yeah.

Brady 22:44

What results in better mortgage rates is when bond yields are positively influenced by people's desire to purchase bonds.

Declan 22:56

Yeah.

Brady 22:56

So when Trump fires the BLS head, when Trump does things that make people less likely to purchase US bonds, that has a negative impact on mortgage rates. Right. So we're seeing some of that. There's let there's trust that has eroded in the stability and the strength of the US dollar.

Declan 23:15

Right.

Brady 23:15

Um, and so we're seeing a little bit of a dilution of the US dollar and I mean at a level we haven't seen in a long time. So that's part of this. Um the other part that we need to really be paying close attention to is this idea that um the Fed is somehow going to be their impartiality is going to be affected by Trump. I don't necessarily buy into that.

Declan 23:44

Right.

Winning Offers And Lender Strategy

Brady 23:44

Um the markets seem to give Trump uh uh wide berth, like they respond less to what he says, and even some of the things that would have been disastrous for other presidents seems to get away with because they're they don't always necessarily think he's gonna take it to the logical extreme. For example, firing the head of the BLS would have been a disastrous move. Yeah, but there was no follow-up, there's no purge of the bureaucracy behind that. The way they still do business has not changed. And so the numbers are likely still just as trustworthy as they were before, but he just wanted to lash out at somebody, and so he fired, you know, there was somebody who was a scapegoat. So I think, you know, the investors right now, globally, are still seeing the value in the US dollar and still believe in the US dollar and the in the bond market going forward, but it has been impacted, and we probably are gonna see some of that coming down the line.

Declan 24:39

Right, but but they're generally kind of accommodating, they're they're they're they're somewhat becoming normalized to to the ups and downs, you know, uh of his utterances on a weekly basis or whatever his little fiat uh tantrums are. Right. And and but there's kind of an irony here that I'm hearing, correct me if I'm wrong, but it it seems that if we do see rates go a little bit lower than let's say five, nine this year, it could it could be that that's although it's a yay for you know for for for us in the industry, because mortgage applications will go up, uh it's also maybe pointing towards uh some weakness in the economy and the job market. So that's a boo kind of overall. So it's a short, it's a win for some, but but it generally could point to something a little more negative and concerning. Yeah?

Brady 25:31

So yeah, I here's what I say, here's what I tell people is we, you and I in the real estate business, we've already had our recession.

Declan 25:37

Yeah.

Brady 25:38

That was 2020, the end of 2022, 2023, 24. When the recession comes for everybody else, that will actually be positive for housing. Because what happens when when we when we enter a recession, we're gonna see monetary policy shift to promote lower rates, right, higher spending, and that will result in lower mortgage rates, which will likely have the housing market heat up. And so, you know, what's bad for the economy is good for mortgage rates, and that's really a perverse thing to be saying. Yeah. Um, but yeah, a weaker job market will likely have the impact on rates that we've quote unquote been waiting for.

Declan 26:19

Right. Right. Right, right. That's that's all super interesting. It's uh the nuances in this, it's just the plot thickens all the time. Uh I really appreciate it. I don't think I'll press on this too much more because it's so unpredictable. The you know what we're about to step through in 2026 is so unpredictable that I I think that's probably enough on that. Here's just a quick question for you in case there's consumers listing, because I'd love to know. I I you know, I figure you guys get this question all the time. How do you handle the rate conversation? You know, that because you and I both know that I could call you in the morning and rates will be wherever they are, and then I could call you in the afternoon and rates could be somewhere else. And I always think in my mind, what if a client's calling one you know originator one one moment and then the next day calling another one and saying, Oh, those rates are so much better? And like, how do you handle the rate conversation? Pretend I'm a consumer.

Brady 27:14

Yeah, so what I would what I usually tell clients is that you know, it is your job to find a lender that you want to work with. Yeah, it's our job to find the right rate, loan program, and product for your situation. We cannot lock in your interest rate until you're you are in contract to purchase a home, meaning you have a signed purchase agreement and an address with a close of escrow date. Until then, we're at the whim of the market.

Declan 27:38

Yeah.

Brady 27:38

So I think it makes sense. If you are wanting to have multiple conversations with lenders, go ahead and do that. But you shouldn't be asking them about rate because there's two things. One, rates constantly move and change. And two, lenders know that you are not necessarily in contract to purchase a home. So if you call 10 lenders, some of them might tell you the rate they could offer you today. Some of them might try to hit you with the bait and switch and give you a lower rate quote to try to turn your head. And then you reveal later that it's very much the same rates that everybody else had.

Declan 28:10

Yeah.

Brady 28:10

So I usually tell clients, look, find somebody you want to work with. We're gonna spend a significant amount of time on your file. You're gonna spend time producing paperwork for us. Once you're actually in contract, or as you get closer, you know, you're writing an offer on Friday, maybe check in with your top two or three people Thursday and get a sense. And then you can make a determination on um which way you go. But it's hard to do the rate shopping before you've actually gone far enough in the process to really have a clear understanding of what they're quoting you because you know, rate is just one aspect of a good offer. I tend to, you know, I tend to explain to people like the best loan is the is the loan on the house you can actually buy, right? So if you get at this low rate from a discount lender but you can't get your offer accepted and you miss out on the home you really want to buy, is that the right approach?

Declan 28:59

Yeah.

Brady 28:59

Um, so it's just about educating them around how we actually lock in rates so that they know it's not at the time they're calling to shop, but actually at the time they buy the home, which could be weeks or months later.

Declan 29:10

What do you think are the most painful things buyers go through that they could have avoided had they talked to a good local lender? And I put the emphasis on local lender because I think they could avoid a lot of trouble by simply working with a local lender in the first place. But what what are the what are the things you see routinely where you're like, oh, that again?

Brady 29:29

Like so here's what here's I try to anchor my buyers in an understanding of what the seller is actually looking for.

Declan 29:38

Yeah.

ADUs: Rules, Income, And Financing

Brady 29:39

The seller is looking for two things when they're reviewing offers. One is the best price, clearly. They want the best price, they want to net the most amount of money. But almost as important, or sometimes more important, is the likelihood of assured performance. How likely how likely is that buyer to actually close the transaction at the price laid out without needing a you know extension or a change in terms? And so if you have an offer that you're putting in, but the sellers do not believe your lender's ability to get it done, they may take your offer and go to this person who's in second position and say, hey, here's the best offer we have. If you come up and match this, we'll give it to you. And so what we try to do with our clients is make sure we get them fully pre-approved, underwritten, and ready to go.

Declan 30:22

Yeah.

Brady 30:23

So that I can get on the phone with the listing agent to sing their praises and let them know if they accept the offer, we're gonna get this done.

Declan 30:28

Right.

Brady 30:29

And that allows them to negotiate a bit on price because the the purchase, the the purchase has no, there's no doubts about our ability to close.

Declan 30:37

Yeah.

Brady 30:37

Um, and so we have our five elements of a winning offer. These are the things we do on every single offer to make sure our clients stand apart from competition and try to get their offer accepted.

Declan 30:45

Yeah.

Brady 30:46

And we just kind of walk them through that because rate matters for sure.

Declan 30:50

Yeah.

Brady 30:51

Um, your experience matters. We have a scripted process, but what really matters at the end of the day is getting the right house at the right price. And that's where I feel like a good lender can add value rather than somebody who's just selling a mortgage.

Declan 31:04

Yeah.

Brady 31:05

So, you know, when we get somebody, and I typically say once you have two signals of interest, not that you're 100% gonna make an offer on a home, but maybe you saw the home on Sunday and now you're driving the neighborhood at night to get a sense, that's a second signal of interest.

Declan 31:17

Right.

Brady 31:18

Reach out to us.

Declan 31:19

Right.

Brady 31:19

Or maybe you have seen the home and now you're reading through the disclosures and the inspection report. Second signal of interest. You're not 100% sure, but you're spending some time on that property. Reach out to us. Well, the first thing we'll do is we'll go through and quality control the file, make sure everything's the same, same income, debts, et cetera.

Declan 31:35

Yeah.

Brady 31:36

Um, we'll then give them an updated look at rates and payments, as we talked about before, so they know exactly what the rate would be if their offer is accepted tomorrow.

Declan 31:42

Yeah.

Brady 31:43

Um, we'll give them a new pre-approval letter so everything matches. It looks really buttoned up. The price and the down payment match the date so that the sellers realize they're looking at an offer that was generated just today or the day before, not 90 days ago. Right. Um, and then we'll confirm how quickly we can close. And then the fifth thing that we do is we get on the phone with the listing agent to sing their praises. This is something I always offer to do because, you know, I want most of the time I know the agents and they trust us, but if they don't, I want them to hear from me. And I also want to, you know, ask them is there something my buyers can do to make their offer stronger? And and oftentimes they'll share stuff with us that they might not share with the agent that helps can get it, you know, can help get a deal done. So um, that to me is the biggest thing. We get hyper fixated on are you gonna pull my credit? Is it a hard pull? Do you know how when does my pre-approval expire? All of these things that if you Google what ask a lender, yeah, you're gonna see. But in reality, what you want is a lender who can be so well respected, have such a strong process, make you so comfortable that you're gonna get it done, that you can go negotiate on price and not have to give it away because there's some fear that you your loan is you know not fully underwritten and ready to rock.

Declan 32:55

Right, right. But yeah, I get your point, and I'm fully aligned with that. That's that's really nicely uh said. Let's let's talk about this uh ADU thing because I I uh I really genuinely am not properly schooled uh in in the changes and how they might benefit people locally. But so tell me where I'm disconnected or where I'm you know on point. But um ADUs are definitely being um being pushed as as a solution, as one one small path toward more housing, right? And and a good one. And they do increase property value. But there's there's been a challenge to financing. How do how do I as a homeowner access funds to build an ADU to create more housing, etc. etc. Um, and so Fanny and Freddie, there there have been changes made. Tell me where it tell me what the changes are and where there might where they might be useful here. Now locally, you know, tell me everything you know about this in in a common sense way that's easy on me.

Brady 34:00

So an ADU is an accessory dwelling unit. It is a separate living space that is gonna be apart from the main home. Um, you'll often see them as converted basements or garages. They can be attached or detached from the main house, but they need to have a kitchen, a bathroom, a separate entrance. Um, and in this case, let's assume we're talking about a permitted ADU for everything we're gonna say, because that's gonna be a big part of what this discussion. Okay. Okay, it's permitted, it's reviewed by the city, it's signed off, it's it's all good to go. We have recently gotten some changes that will come into play at the end of March that will make it easier for ADUs in general to help increase the value of a home. So, you know, I feel like for a real estate agent, um, what you bring with a good real estate agent, someone like you who actually gets results for their clients, what you bring is this appreciation and understanding of misaligned value, right? You can identify where a seller might be missing out on the fact that there's additional value in the home they're selling, and you bring it forward by rehabbing the home or doing work. Or you might realize for your buyer that there's an opportunity for them to get into a home and maybe create some rental income by house hacking or doing something else. It's that, it's that, you know, you you don't need to open doors. ChatGPT can write the contracts, everything's on Zillow, but it's that understanding of the market in a deep way, yeah, and and recognizing where value is misaligned, where you really help clients. And so here is another place this is gonna play out. In the last few years, we have finally started to be able to give rental income from ADUs to help buyers qualify and or owners qualify for a mortgage, which was which was a change because previous an ADU is not technically a duplex, it's a single family home with one ADU, it's not two units. Right. And so lenders took the position that, well, since it's not a separate rentable unit, we won't allow you to give rental income even if you are renting it or it has been rented. Well, that changed recently, so that's helped. Um, the second and third changes are actually pretty drastic. So the one change now is you can have an ADU on a two, three or two or three unit property, which used to not be allowed. Okay. If you had a multi-unit property, you used to not be able to have an ADU.

Declan 36:22

Okay.

Brady 36:23

So it created these weird scenarios where there might be an ADU, but we couldn't call it an ADU. We had to call it a bonus space that was connected to one of the other units, and if there was a tenant in there, it created a whole issue. That's no more. Right. We're okay with ADUs on multifamily property as long as the total number of dwelling units is not more than four.

Declan 36:40

Okay. So we're talking about just the distinction between residential property versus commercial. So residential is one to four units, and then past that you're in commercial land, which I don't do. So you can have a one to four residential with and so with single family homes, you can have up to two ADUs on the parcel, right?

Brady 37:00

So now yeah, so now that's the second change that we're gonna see. On a single family home, you can have up to three ADUs. As long as the total number of dwelling units is not more than four. Okay. So if you had a duplex, you could add two. If you had a triplex, you could add one. If you have a single family property, you can add three.

Declan 37:17

So a four-plex, you're done.

Brady 37:18

Fourplex, yeah, you can't add an ADU and and still qualify for conventional financing through Fannie Mae, which is the government clearinghouse that does most of the rulemaking.

Declan 37:27

Okay, gotcha. Okay. Okay, that's super interesting. Wow. That's see, all I'm already.

Brady 37:32

Yeah, so I mean what it will what it will do is it will create properties that can be marketed slightly differently than in the past.

Declan 37:39

Yeah.

Brady 37:40

A big house or a house with a lot of vacant land that might be perfect for adding multiple ADUs is something that an agent can talk to their client about and a mortgage lender can underwrite with that hypothetical income.

Declan 37:52

No way.

Brady 37:52

So we don't have to well, excuse me, excuse me. The the ADUs, if we're gonna use the income, the ADUs have to be there. Okay. Right? So thank you. So not vacant land that we can add. But okay. If there are if there are ADUs, even if they're um not presently rented, yeah, if they are permitted, they have kitchen, uh, bathroom, separate entrance, we can do a rent survey, the appraiser will tell us what it would likely rent, where what fair market rent would be, and then we can include that for helping them qualify. I see. 75% of whatever the rent would be.

Field Report Launch And Community

Declan 38:24

Okay, okay. So that that is very useful. Yeah, that's very useful. I want to talk about our you know, homeowners. So I let's say I have a house, I you know, I'm I'm thinking of putting together an ADU. You know, there's a lot of these houses on the hills, for example, where where uh you will see bonus spaces under right because you you've got all this room under the house on a hillside. So we see those all. So let's say I'm thinking of building an ADU or um, you know, excavating under the house, putting an ADU separate entrance, but I'm I I'm trying to figure out okay, it's gonna cost X hundred thousand dollars. How am I gonna get financing for this? Is there any benefit in any of the changes upcoming that could help offset or help with construction costs for the ADU? That's that's kind of a question that I think would be super useful.

Brady 39:19

There's been a lot of chatter. I haven't seen anything here here's the reality the only thing worse from a bank's perspective than getting a home back in foreclosure is getting a half constructed, half-remodeled, half rehabbed home back in foreclosure.

Declan 39:35

Okay.

Brady 39:36

So there are not many banks, institutions, or lending arms that are excited about doing rehab and renovation projects because what happens if it goes way over budget and now they're upside down and every and they walk away? Now they not only do they get the home back, but they can't even sell it until they've done the work or so that is really tricky. There are some rehab and renovation loans that are out there.

Declan 39:58

Uh-huh.

Brady 39:59

Fannie Mae has one. It's called Home Style. There's a 203K loan that you can use either to purchase or even after you own to do work.

Declan 40:07

Okay.

Brady 40:08

But they have real, there's real limitations there.

Declan 40:11

Okay.

Brady 40:11

Most of the time when we see people financing ADUs, they're either using their own funds, um, money from family members or friends, or they're reaching into the equity of their current home to pull cash out either through a refinance or a home equity line of credit. So that's absolutely acceptable.

Declan 40:27

Yeah.

Brady 40:28

But like separate financing for just ADUs is tricky.

Declan 40:31

Okay.

Brady 40:31

Um, I do know that there are some like modular ADU companies where they'll come in and you know plop it on your on your house into your house that will have their own financing arms that they will work with buyer uh owners towards getting done, but that's not really a traditional mortgage zone.

Declan 40:48

Got it. So I understand. So then for people, so we do you know we have uh so thank you for for clarifying. That's that's really helpful. We we see a lot in the East Bay, we see a lot of as you referred to it earlier, like a bonus space where people will have a uh a kitchenette, for example. They're they're not um technically ADUs, and let's just say, oh gosh, the ceiling heights maybe five inches shorter than it really needs to be to be livable square footage, and you might run into appraisal issues. These are not spaces that are ever going to work as far as projected income and helping people get financing for that property because the rental income won't be considered, right? Because this is not an ADU. Yeah, let's just clarify.

Brady 41:34

Yeah, it's it's not gonna be cons we wouldn't be able to give it rental income.

Declan 41:38

Okay.

Brady 41:38

Now the appraiser can still give it value because that same home without that bonus space might be worth less, and they can usually point to the comps to support it. So it can certainly be included in you know how you are financing the property, but not uh as a commercial rental receipt income.

Declan 41:56

Right.

Brady 41:57

Um, Brenda Wyatt, who's in uh our office at LaSalle Mortgage, yeah, she had a scenario last year I've never seen before and never and haven't seen since, but we ran into an issue because the ADU on the property was larger than the actual home.

Declan 42:12

Yeah.

Brady 42:12

And apparently that is not allowed, so that's one other weird quirk. Um the ADU can't be larger than the main home. Okay, okay. I think that probably happens very rarely, but in this case it was something that created a major issue. So that's still in the books.

Declan 42:26

Wow, okay. And uh and one of the nice aspects for homeowners about putting in uh, you know, accessory dwelling units is that um there's no real community involvement. In other words, NIMBYism isn't a feature of you know what you can anticipate when you try and move ahead with a project like this. And I wonder if that's gonna be true when they increase to the possibility of three units, because that's you know, that's interesting. I'm not asking for you to have the answer on that because the so these changes are coming in in March, right? You said March 31st. Okay.

Brady 43:04

So I mean, prior to this, if local ordinance and zoning allowed for it, you could have multiple ADUs on a property. Yeah, that the only real change here is not that it's now allowable on some state or county or city level, it's just that now the government agencies that set the rules for mortgage lending will allow them on financed properties, whereas before you would have a a difficult time getting a mortgage for a property that had an unpermissible amount of ADUs. Okay. Um and you certainly couldn't use the income from them if there were more than one. Now, now we have a way to still get you the best possible pricing on your mortgage, which will help. Yes. Which will, I think, um incent people to create density and hopefully even help values um when with resale too. I think it's a good change for both.

Wrap-Up, Contacts, And Credits

Declan 43:53

I think it's fantastic, and I appreciate you pointing out, you know, again, that you're you're just staying in your lane as a lender. I'll need to do I'll need To do a longer or another podcast just about ADUs in general, perhaps with a local architect, is what I'm thinking, because you know there's local governmental stuff, they tend to know. So we'll do that. So I'm not asking you to answer any of those questions. Well, listen, this has been really helpful and really useful. I'm not going to keep too much more of your time here, uh, to be honest with you. But what I do want to do is if people have enjoyed listening to the conversation with you, and you're you're uh you're really, really helpful. Um let's just circle back to what we were talking about at the top of the conversation about this field report. Uh tell me how excited you are about this. And as I said, people will be able to find it. We're releasing this episode today, February 6th. Um people be able to find this by just clicking the show notes and you'll go straight to Brady's uh website for LaSalle Mortgage. You should be able to find the report there. Brady, tell me how excited you are about this.

Brady 45:02

Oh, I'm I'm extremely excited. I mean, one of the things I realized um when I was taking over LaSalle Mortgage is that we have a pretty interesting space that we occupy in the East Bay real estate market. Um, we get to be kind of the neutral third party in the middle of these transactions and um can bring brokerages and agents together in a way that might not be as simple because each one of these brokerages is their own brand, they have their own universe, they don't collaborate as much. And so we've done some big events. We did an industry awards night, we've done that twice. We called it the crafties.

Speaker 45:41

Yes.

Brady 45:41

Um, we've had some, you know, we do holiday parties, we try to get the community together. And so, in thinking about ways to take that a step further, I am just really interested in the market and how things actually appear to buyers and sellers versus the narratives we're seeing out there. Yes. And so the whole idea of the field report was to go to the people who are doing the transactions and ask them, what are you seeing?

Declan 46:07

Yeah.

Brady 46:07

Um, and so that's been a lot of fun to put together. Um, Tiffany and Laura, who work with me, have just been spent a ton of time just uh brainstorming with me on how we present this because none of us are, you know, um, we've never created an industry report, but we we feel like it's been we've come up with something that will be both useful um and you know actionable for for folks, both consumers and real estate agents. And it's just been nice to be able to connect with the agents that are involved and and just try to provide a little something to give back.

Declan 46:41

What what is say just one thing that's in the field report that that uh that you think is useful? Just one thing.

Brady 46:47

One thing that keep keeps coming up is just how hyperlocal it can be. From street to street, neighborhood to neighborhood, homes that m sellers might have expected to sell quickly and well above didn't sell because of a myriad of um different challenges from appraisal, excuse me, from insurance to updates, and that buyers are much more picky and specific in this market.

Declan 47:14

Yeah.

Brady 47:14

And they'll walk away for things that they would have stayed in the deal over before. And so it's just it's been certain, it's so interesting to see the top agents constantly come back to positioning and feel and touch and management as just over-indexing part of success rather than just throwing a sign up and walking away. Like there's a lot that goes into it right now, right? Um, in prepping homes and in dealing with sellers and making sure they have reasonable expectations.

Declan 47:45

Yeah. I mean, have you seen the 2026 updated uh purchase agreement addendum for Berkeley? No. Oh my gosh. I mean, you know, I I uh uh Chat GPT is gonna have a hard time with this one. I mean, it's it's a lot. So to your point, yeah, if you're not local, if you're not doing this locally, I God forbid an outside agent's trying to work locally and deal with that at the last minute's not gonna be fun. You know, so um are you doing the crafties this year? They're usually held what at El Salido?

Brady 48:14

So we did so the crafties are basically an industry awards night. Um, and it's not you know biggest sale or most transactions, it's fun stuff. So we would give 10 awards from um best social media account, yeah, uh the agent that hosts the best broker opens. We've done, you know, hidden talent, yeah, um, best team. So it's fun stuff, and it's just an opportunity to get the community together. We've done them for two years. Yeah. Um, this would be our third, and we're trying to figure out. We're trying to figure out what we're gonna do with the crafties to either take it to the next level or somehow innovate and make it just fun for people. Because that's how it started. It started as a fun way to get together. And we want to make sure we keep that, especially right now when um I feel like we all could benefit from some community, just making sure we keep that element of it and it doesn't turn into like a popularity contest or anything beyond that. Because it's really just about fun and getting together.

Declan 49:07

I love, I I love it. I I you know I haven't made it to the craftys. But when when are they uh when are you guys holding the craft?

Brady 49:13

So we've done them in March the last two years. We're trying, we're in the process. I'll I'll tease this. If you if you go and follow LaSalle Mortgage or my Insta uh social media is Pep Talk Mortgage, um we'll be releasing some info on that shortly. We haven't quite set the date yet.

Declan 49:28

Okay, perfect. Pep Talk Mortgage uh on Instagram and that's gonna be in the show notes. What's the website?

Brady 49:35

We're www.laSalleMortgage.com.

Declan 49:38

L-A-S-A-L-L-E LasalleMortgage.com. That's in the show notes. Did you want to give out your phone number if anybody wants to just give you a call?

Brady 49:46

Yeah, I'm at 510-501-0504.

Declan 49:50

Okay.

Brady 49:50

And you can call or text.

Declan 49:52

Um Okay, Brady Thomas, LaSalle Mortgage. It's been a great, great pleasure finally catch up with you and giving us this really useful information. Yeah, thank you, Brady. All right, best of luck being by coastal this year. Appreciate you.

Brady 50:06

Okay.

Declan 50:12

Let's do the credits. Uh, the episode was edited by me with original music by Chuck Lindo and graphics by Lisa Mazer. The podcast is brought to you by the Home Factor Realtors, thehomefactor.com. To catch up on the latest news from the East Bay market in their weekly substack published every Sunday, go to the HomeFactor.com to subscribe.