.jpg)
REality
Welcome to the REality podcast--the best podcast for real estate agents. Join us each episode as we talk with industry experts and top producing real estate agents to peel back the curtain and reveal what it takes to make it in today's ultra competitive real estate business. This is real life, in real time, sharing real experiences of industry professionals to help both new and seasoned agents achieve their goals and realize their potential. Are you ready to take your real estate business to the next level? Let's get started now. Sign up for Gary's weekly FOCUS newsletter, delivered right to your inbox each Monday morning: https://mailchi.mp/e3771e6a2516/focus-email
REality
Mastering Mortgage Synergy: Mark McGoldrick and Duffy Hanna on Innovative Real Estate Solutions and Market Trends
Unlock the secrets to seamless real estate transactions with insights from mortgage experts, Mark McGoldrick and Duffy Hanna of Howard Hanna Mortgage Services.
In this episode, we'll navigate the diverse world of mortgage products designed to break down financial barriers and make homeownership accessible to everyone. From minimal down payment options and veteran programs to down payment assistance initiatives, we explore strategies to leverage these tools for both buyers and sellers. Learn why involving loan officers early in the listing process can provide clarity, reduce uncertainty, and give real estate agents a competitive edge in securing listings in a crowded market.
Stay ahead of the curve with our discussion on current market trends, including interest rates and real estate forecasts. Programs like Loyalty Lend offer significant benefits such as assistance with closing costs and refinancing incentives. This episode is packed with invaluable insights, making it a must-listen.
Welcome to Reality Podcast Gary Scott. Today, two incredibly special guests, Mark McGoldrick and Duffy Hanna. Gentlemen, how are you today? Great.
Speaker 2:How are you doing?
Speaker 1:Gary, I am good. I am good. I've had a great week. So I got to tell our audience, Duffy and Mark, that this is the first week ever I've recorded four podcasts in one week. So let me just set the stage for the lineup, because the two of you guys are batting cleanup. So, batting first in center field Matthew Ferrara. Now let me just tell you, Matthew hit a home run like a leadoff home run, crushed it. Second, Brian Kegel, regional vice president of the Asheville Mountain region. I hope he's listening, but I hope he's not listening. Brian did not hit a home run, he didn't get out Solid double in the gap Yesterday. Yesterday, we had Jared James and Jared James. You, Jared James, kind of hit a triple. So batting cleanup for this week of Reality Podcast. We are going to turn the mortgage business into an exciting conversation.
Speaker 3:Wow that's a lot of pressure there, gary. You got a couple of professionals and then we're batting cleanup. So, mark, you better be on of pressure there. Gary, you got a couple of professionals and then we're batting cleanup. So, mark, you better be on your A game buddy.
Speaker 2:Hey, jared's standing on. Third, I think we need a pop fly.
Speaker 3:That's all we need.
Speaker 2:Bring them in. Bring them in.
Speaker 1:So anyway, in all seriousness, really really appreciate you guys being with us today. You know what an important time for us to share with the real estate community what's happening in the mortgage business, and so you know we've got about 45 minutes and we're going to jump right into it. You know I've got two great guests. Duffy, why don't you just take one minute and share with the audience kind of your role and responsibility and kind of the part you play in the Howard Hanna enterprise?
Speaker 3:Sure, no problem. So I am lucky enough to work with great guys like Mark McGoldrick and the other leaders of our mortgage company to try to direct Howard Hanna Mortgage Services throughout the Howard Hanna footprint, howard Hanna Mortgage Services throughout the Howard Hanna footprint, and I have fun every day doing it. It has been a challenging time over the past couple of years. Well, more than that, it's been challenging for different reasons in the past couple of years. But I tell you I work with some of the greatest people in the country and couldn't be prouder to work alongside them.
Speaker 1:Awesome. Well, we appreciate having you here. For sure it's great to have you as a guest. Mark has been on once or twice and I'm just going on the record that the first time he got on Duffy, he had some technical difficulties and so you know, just in case some of us might have had a few difficulties as we tried to log in today. Mark McGoldrick, take just a couple minutes on your role and responsibility within Howard Hanna Mortgage and also specifically to the family of company Allentate Company.
Speaker 2:Yeah, sure, gary. So I was fortunate enough to be invited back to the organization later in 2023 after a bit of a hiatus, but this is quite the family for me. So I get to lead a team of loan officers in the North Carolina and South Carolina region, blessed with some very talented people, and get to play on Duffy's team on the mortgage side. Get to play on Duffy's team on the mortgage side. Get to play a bit on your team on the real estate side. Man, just a great intersection of everything that's going on in this business. So I feel very fortunate to be here and amongst just some of the smartest people I've seen in the industry.
Speaker 1:A perfect segue, everything going on in this business, so we're going to jump right into it. We're going to go to Duffy first. You know, let's talk about some of the unique mortgage offerings. I think it's so important that our real estate professional, our trusted advisors, have a total understanding of all of the products that are available to facilitate transactions during this time, so I want to commit some time today for both of you to share you know, what are some of these programs, what are their benefits and how do we leverage them to create transactions. Duffy, yeah.
Speaker 3:So I'll kick it off, gary, and then Mark, feel free to jump in, because I'm sure there's products that I won't mention, that are on the top of your head. But what I'd like to say is that how we differentiate ourselves amongst other mortgage companies out there in the world is we are a real estate company that owns a mortgage company, and I can't say that enough and loud enough that that is our differentiator. We are a real estate company that owns a mortgage company. We're a real estate company that owns a mortgage company. We're a real estate company first in a mortgage company, title company, insurance company, that sort of bolts on to that real estate business, and everything we do as a company revolves around the real estate agent and the real estate brokerage business. And so when we create products and we deliver products to our agents, we don't deliver them because we feel like this is going to be great for the mortgage business or the title business or anything like that. We say how is this going to improve the life of the real estate agent working for a Howard Hanna brand, an Allentate brand? Right, and that has delivered. That has been the reason why a lot of these products exist.
Speaker 3:The first one I'll mention the buy before you sell mortgage product. Some people in some markets call it the advanced equity buy before you sell and it's simply a bridge loan and we'll take 70% of your combined loan value of the current home you're in and allow you to advance that to you so you can buy the home of your dreams. And that mortgage product, that is all in-house, it's underwritten fully by us. It's our cash. We're not selling that in the secondary market or getting anybody else's approval. We're underwriting and approving that loan and it's only again offered for Alan Tate Howard Hanna real estate agents. Nobody else can participate in that product because the product was designed for a real estate company in mind. Other products like our cash guarantee program.
Speaker 3:When cash buyers became such a big thing in our industry a couple of years ago, we sat down and said what's the issue? So many Howard Hanna Allentate real estate agents were losing their buys, were losing deals because they couldn't buy a cash deal. They're competing against all these other cash deals. What did we do? We came in and we created what I believe is stronger than a cash deal. It's better than a cash deal the Howard Hanna Cash Advantage. We underwrite the client before they go in. They come in there and they make a cash offer with our backing. The seller knows that these people are going to get a mortgage, but there is no mortgage contingency because we're backing the deal. If that buyer, for whatever reason, flakes and can't buy the house, we'll buy it for them at that price or we'll buy it from the seller at that price. So those are just two great things.
Speaker 3:Another is I don't think it's anywhere else we have in the market. We call it the 15 is the new 20 product Mark. I'm doing enough talk. Do you want to talk about the 15 is the new 20 product Mark? I'm doing enough talk. Do you want to talk about the 15 is the new 20?
Speaker 2:So you know, the 15 is the new 20. What we've been able to negotiate and Duffy's Capital Markets team is to allow people to put 15% down and not have mortgage insurance. So their entire interest payment is tax deductible, different than what happens with mortgage insurance, and it just lowers the cost and it allows for people to have more flexibility. So what I think about is it leaves some cash in their pocket, and where that may show up is after they move in and they make 15 runs to Lowe's or Home Depot and they put that on a credit card that's not there anymore. I think it provides them some flexibility to do some things to their house if they've bought a house that they need to make a little bit of improvement on and it just makes it cheaper and easier for them to walk in there without having to pick up that extra cost of mortgage insurance. So really a nice differentiator for those folks who are in that sweet spot.
Speaker 1:Mark any other products. Duffy, thanks for sharing those two and so much to take from your comments. Clearly these are advantages to the buyer and I know Duffy and I had a chance to chat this morning. One of the other messages we want to share today is we got to remember that mortgage products can be leveraged when we're out on a listing, and I think we'll talk about that in a little bit, because so often it's all about the buyer. But I think, as we think about this marketplace, what are the programs offered by Howard Hanna Mortgage when an Alan Tate agent or Howard Hanna agent goes out to get a listing? Let's put those mortgage products in our tool belt as a listing agent. So, mark, two questions. One, other products that come to your mind that are out there in the marketplace. And the number two is let's shift gears to how do we leverage these products on the listing side of the equation, not just the buy side.
Speaker 2:So hitting the first question, gary, I think you know we design these mortgage programs and teach people about them because it solves problems and probably the biggest partly misconception, partly concern people have is I don't have enough money to buy a house. You know, I need 20% down, 25% down, whatever it might be, and that is either a mental barrier or a real barrier for folks. So there's a lot of work that we do to make sure people can buy houses with little and in some cases no money to put down and some of them are just your standard blocking and tackling type mortgages. But it's really about coaching and talking people through it. Not everybody knows that most veterans can buy a house with no money down. That we can regularly do 3% down across the board. We've got some really really good down payment assistance programs through North and South Carolina housing in other geographies that Duffy covers up in the Northeast same type of programs going up there. We've got some programs where we contribute towards the closing costs. We help people negotiate into houses where sellers pick up some of the closing costs to both the seller and the buyer's advantage. So this is the kind of coaching and advisory work that we do every day to put people in a place to be the most competitive buyers that they can be, which saves them money, saves them time and just wins in a market where sometimes it's just not easy to win the deal. We don't have a ton of inventory. It is getting better, which is pretty exciting, a little bit by a little bit every day. But you want to be as strong as you can be when you walk out there. So when you've talked to a lender and talked to one of our loan officers and gotten prepared and gotten yourself ready to be the strongest possible buyer, it gives you the best chance of A winning the deal and B getting the best deal out there. So I think that it's really just getting to somebody who's got a wide product array that they can tap into to help their buyers. And I think the same goes to your second question, which is how do we help our sellers?
Speaker 2:At time of listing and I think you know we read a lot of headlines and they can be inflammatory. You're not sure where the truth lies, and it puts people in a place of uncertainty, I think. And when you think about a seller, they want to get excited about the next house, for whatever reason. Maybe it's a relocation, maybe it's time to move up, maybe it's time to move down. But they want to get excited about the house, but they also have some uncertainty about the financial picture.
Speaker 2:What does my next payment look like? I heard interest rates are way up. What's that going to do to my monthly payment and monthly budget? How much am I going to have to put down? I'm sitting on some credit card debt or home equity line debt. What do I do? How do I restructure that when I move into a new house? And I think that if we can talk to our listers or even our potential sellers maybe I'm not even there yet about what that looks like, and just bring clarity, I think it helps the whole process. It helps our listing agents get listings, helps our seller see through the next moment. It may help with timing in terms of you know, maybe if it's not today, but I've got a real solid plan that puts me in a place where I want to be in six months. So, whatever that customer needs, we want to be able to talk them through that so they can have that certainty in terms of what their next move is.
Speaker 1:Excellent, excellent.
Speaker 1:Yeah, I think that's a really important takeaway.
Speaker 1:You know, I think about back when I was in the business and I don't remember any time, duffy and Mark where I went out on a listing and said, before we put this property on the market, before you even determine where and when you want to buy, you know let's bring the loan officer in right then and there, because of all of the factors that Mark just brought in, and particularly in today's highly competitive marketplace. Mark mentioned VA. I'm going to throw it back over to Duffy. You know, as our Matthew Ferrara called the future of our business, the new approach, not the new normal, not any, which I kind of like the new approach. So, as we evaluate the new approach to our business, the brokerage business and I do want to shout out to Duffy and you know, for the belief in the strategy of our mortgage company, knowing that we're a real estate company first and I just think that's critical to be a reminder that you know, the mortgage piece, the title piece, the insurance piece, is a compliment to this brokerage business that is so strong.
Speaker 3:And before we get into the VA, because there's some exciting news out there. But I just want to tap into both of those points. I mean, we've always been a company that's been a strong listing company. It's believed that listings is where it starts and where it ends. If you have the inventory, you'll win, know you'll, you'll win the day um, and we still still believe that strongly. And all these products um were developed for, yeah, for our buyers, but it was for you know ages to go on listing appointments and differentiate themselves. I mean, gary, you said it the the competitive, you know nature out there, more real real estate agents now than there maybe have ever been. Um, and we have to differentiate ourselves and we can differentiate ourselves in so many different ways, but one of the ways is the support you have behind you as an agent.
Speaker 3:You not only have Gary Scott, mark Goldrick, but you have a loan officer in your office. You have all these products and you may say to yourself, well, these are for buyers. But sellers want to hear it. When you go on your property and you're listing a house and you say we have a cash guarantee so we can bring someone who maybe can't afford maybe there's a better buyer for your house, but they can't, they can't, they don't have the cash to buy it You're going to cause, you're going to have competitive offers, but they may be the best buyer for your house, we'll stand behind them.
Speaker 3:We have a product that will stand behind them. So you don't have to worry about comparing those two offers and offer that's maybe more money at in more favorable terms versus one that you think is better because it's cash. So many people do that. We have the advanced equity, we have the bridge loan, we have so many other products that I think when I talk to sellers that they're excited I'm going with that agent and that company because that company has more to offer, they're more creative, they have better ideas to get my house sold. So I think it's very important when you're listening, excellent.
Speaker 1:Well, I think that's a big takeaway for us. Let's go to VA. Some exciting news this week I think a lot of people have been waiting for kind of the response of the mortgage industry to the new approach to the brokerage business.
Speaker 3:The VA gave us some really exciting news. I believe it was on Friday, right, mark, friday. They gave us some really exciting news without a lot of detail. They came out and said we hear you, we're going to allow our veterans to contribute to commissions. Prior to this point, commissions weren't allowed to be, were not allowed to be a charge to the veteran. And they said, knowing that, what is it the new? Not the new, it was a new opportunity.
Speaker 3:New approach, new approach and the new approach. We have to figure out a way for buyers, particularly our veterans, to be able to compete out there. So the VA said that they're going to allow contributions to pay for commissions and they didn't say, sort of like, what the details are behind that. But I think it relieved a lot of us in the industry, like phew, like OK, they've got that, they've heard us and they've got it figured out, um, um, and they're going to come out on June 12th with uh, with all the details. So stay tuned.
Speaker 3:We'll be the first to let you all know what it all means.
Speaker 1:Excellent. I think that's uh, that's critical. It's a great step in the right direction. So I don't know, duffy, if June 12th will be the final announcement of another exciting program that we're putting together in response to the marketplace, and you've used some phrases today, like creative solutions. You know how do we take this opportunity in front of us and leverage that, and I think this is a great opportunity. While all of the details haven't been totally buttoned down, I think it's certainly an opportunity to talk about this unique proposition that we're going to be offering here in the not too distant future. So, duffy, I'm going to kind of let you take a run at that from your perspective. You've been one of the key ingredients to putting this together. Why don't you share with everybody kind of what's happening from that end?
Speaker 3:Sure, as we all know, in the coming months buyers are going to be required to list their buyers Kind of what we've been saying around here list the buyer Kind of what we've been saying around here.
Speaker 3:List the buyer. So we've got, if you're going out and showing homes, you've got to make sure you have a contract in place to show that home and that contract has to have your charge, what you're going to charge for that, for the representation of the buyer. This is a new, new world we're entering into. We recognize that will be a challenge for some to meet Mr and Mrs Buyer and say I want to show you homes all day today, but you have to sign this piece of paper that acknowledges my representation and how much I'm going to charge you once you close for the representation. Again, we realize that's going to be a new thing, it's going to be difficult. What we're trying to do is give buyers as much value that they can share with those buyers, because we all know how much value you, as real estate agents, give to your buyers out there.
Speaker 3:So you know our team, our team's education, is preparing. We'll have all our agents totally prepared, ready to go, and that will be no problem. But one of the things we want to add is we are different. We've said it from the very beginning of this call and we've said it for years and years and years we're different. We are different from others and we're excited about our difference and we're proud of our difference. And one of the great differences we have is we have a team of professionals behind you, a real estate agent, and we call it.
Speaker 3:We sort of deemed it essential services a few months ago and we call it. You know, we sort of deemed it essential services a few months ago. And why? Because they are essential.
Speaker 3:You're not going to buy a home Most likely you're not going to buy a home without a mortgage it's essential. Most likely you're not going to buy a home without title insurance it's essential. And you're not going to buy a home without homeowner's insurance Clearly essential. And we provide all those services for our buyers. So why not go out there and tell them, in addition to all the great stuff I'm going to be providing to you. These are items that are available to you One-stop shopping and you don't have to go anywhere. They're here for you. They're not here for anybody else other than Alan Tate and Howard Hanna agents. So we're offering a discount for the services. We're going to give a lender discount and we haven't figured out the details, whether it's going to be half a point the loan amount or something else, but it'll be a lender discount up to the cap. I think we decided it was $10,000 on each purchase. So it's about the discount, but it's really mostly about showing those buyers all the support you have with your essential services group.
Speaker 1:Awesome, Great stuff. Mark McGoldrick, weigh in on that a little bit from your perspective you see it hitting the marketplace here in the not-too-distant future and how you see it being a real leverage point for our folks.
Speaker 2:You know how you see it being a real leverage point for our folks.
Speaker 2:You know this industry is always one that's been pretty fractured.
Speaker 2:It's a low margin industry and what Duffy just described is really hard to do.
Speaker 2:The industry has been talking about doing it for 30 plus years and it doesn't do a great job of making that happen.
Speaker 2:So this was a moment in time and I think you know, we know we can do so much good for our customers even beyond just a discount in terms of coaching and skills and developing a plan, when you add that discount in there as a call to action, bringing the cost of home ownership down, and at a time like now where one in three buyers are first-time home buyers, and it's really meaningful for those folks At a time where people are trying to think about exiting a house with a lower mortgage rate potentially than they might have in their new house. So what we're really trying to do is make this more affordable in what has been a very inflationary world and I think that that's going to resonate for all the people inside of the Howard Hanna and Alan Tate organization as a way to make an impact and just do a better job for our teammates and our customers just do a better job for our teammates and our customers.
Speaker 1:Yeah, I think it's that all-important concept of adding value to the experience that the consumer has, and value can be the service you get, but value can be the money you save. And I think we're bundling that into an opportunity that says you sign a buyer agency contract with us and you use our mortgage company and we're going to help you in your homeownership journey, and I think that's really important. So, duffy and Mark, thanks for sharing that. Mark, you made a comment about one in three first time homebuyers three first-time homebuyers and I'll share with you a couple stats that I read and then I'm going to turn it over to you guys to talk about the unique opportunities that we have to take advantage of as it relates to first-time homebuyers. So I read recently that 38% of renters have said I'm not going to buy a property. Then I saw another one, mark, that you and I shared at our investment program we held a couple of weeks ago, where they gave. It was like 48 percent because of interest rates, 37 percent because they didn't have the money and 28 percent because they want to be flexible. And I probably don't have those numbers exactly right, but we could argue that have those numbers exactly right. But we could argue that so if we say one in three or first time, but we say 38%, you know aren't going to rent.
Speaker 1:One of the things that we believe so passionately is that home ownership is the engine to generational wealth. And we've got. We, the brokerage side, have to educate these renters about the American dream and generational wealth. But we have to also partner with our mortgage partner to make sure you know what are some of the things we can do, you can do from the mortgage perspective to help facilitate the first time home buyer. And are there some programs that we can? Could be the ones we've already discussed, and how do we leverage them. But I think it's critical at this juncture to mobilize renters and first timetime homebuyers into the marketplace. Duffy.
Speaker 3:First-time homebuyers. I mean, they're the key to this business. You know they're the ones who come in and replace and let people move up and break the engine, put the gasoline in the engine engine, put the gasoline in the engine and we've been great at it, you know, over the years we have Mark mentioned, we have, you know, the state bond programs North Carolina, south Carolina and all the northern states of the world, many states. We're the largest provider of those bond programs, mostly first-time homebuyers, low money down education. Our loan officers take, I think, great pride, just like our real estate agents do take great pride in educating first-time homebuyers on what the process is, not only how to buy the home but what's going to happen after you buy the home you know for a first-time homebuyer.
Speaker 3:when that water tank breaks or your air conditioning breaks, no landlord to call, you know. That's why I think we do a great job of protecting our first-time homebuyers with home warranties, Another program that we haven't mentioned, but one that we're so proud of. So I think, working hand-in-hand, our loan officers and our agents do a fantastic job with first-time homebuyers.
Speaker 1:Duffy, one of the questions that you know that people ask. You know, we we talk about interest rates and we'll come back to that a little bit in terms of what you guys uh predict, uh the future. But you know, I think one of the reasons people are staying out of it is, uh, interest rates and the other is I don't have the down payment. So, uh, before I go to you on on kind of interest rate and kind of how that conversation goes, I'm going to take a page out of Pat Riley's book. You know, pat goes on his circuit and he talks about and I read the other day I think Mark shared with me what percentage of first-time homebuyers are getting a gift from a parent or a grandparent, and Pat really, really espouses this opportunity. Let's not leave our kids and our grandkids money. Let's give them money to begin this homeownership generational wealth journey. So let's answer the question about not enough money, right.
Speaker 1:And then the other piece of it is whether interest rates are seven and a quarter today or six, eight, seven, five, whatever they may be, they feel higher than they were a couple of years ago, but they're lower than they've been historically, you know, for the last 30 years. And so I think we just have to continue. You talked about it we got to continue to educate these first-time homebuyers. So what are some of the solutions from an interest rate? Either practical technical solutions or mindset, because I do think a lot of it's the mindset of the first-time homebuyer Either one of you guys want to take a shot at. You know how can we be better together at convincing is not the right word, but educating these first-time homebuyers that it is the right time.
Speaker 3:Mark, I'll let you go, and then I'll jump in.
Speaker 2:I think there's two pieces of housing. There's that investment piece where we buy a house and it appreciates 3%, 4%, 5%, 6%, 10% in a year and voila, 10, 15 years down the road we've got real wealth there. And I think about Gary you talking about the gifts that people give. So much of that comes from that generational wealth that got generated way back when mom and dad bought the house in the 70s. And now when somebody buys a house and they've got a two-year-old, well, somewhere in that next 25 years that two-year-old might want to buy a house and that wealth really got created the day those people bought a house. So it is a game changer for generations to come if we can just help them see the value of real estate. We talked about it a couple of minutes ago.
Speaker 2:I think helping people through the down payment is something that we focus on a lot Coaching and helping people understand their credit and how to maximize that, because credit does two things. One is if the right credit allows you to buy a house. The second is the agencies Fannie Mae, freddie Mac. They price their risk partly based on people's credit. So helping coach people up in credit saves them money because they may have an interest rate that's a half percent lower than they would have with their credit score that they had three months ago, six months ago, whatever it might be. So we've got so many things we can do to help make real estate affordable in an unaffordable time. Affordability has gotten more challenging, but what seems to be really critical is appreciation in homes is really projectable. We look at the fact that there's 83 million millennials biggest housing generation ever until you get to Gen Z, which is 87 million, who hasn't even started but for the most part, buying a house yet. So we're in a place where builders aren't making product to keep up with the population that's coming in. And with every 1% in interest rate that the rates go down, another 5 million homeowners, potential homeowners the rates go down. Another 5 million homeowners, potential homeowners, qualify for a mortgage. So buying now at a relative time of scarcity, if you can afford it, is going to get you a price that's better that you're going to see down the road the interest rate, and we'll talk about this in a few minutes.
Speaker 2:I think it's harder to tell when interest rates will come down than the fact that they will come down. So at the right moment, there'll be a time to refinance, but what you will have is that house price that you bought in. I think about somebody who's now living in a $600,000 house that bought a $300,000 house 10 years ago. How great is it? So now you're living in a six hundred thousand dollar house at the cost of a three hundred thousand dollar house. The next person in doesn't get that, but they buy that house for six hundred and then when that house is worth a million dollars and eventually it will be they get the advantage of still paying as if they're they're half of that. So moving sooner rather than later seems to be the best financial opportunity.
Speaker 2:And the second piece of housing is it's a house and you're going to live somewhere. So you think about what rents costs. Rents have gone up. They will continue to go up, whereas once you buy a house, a lot of that becomes fixed. So there's some real reasons to think about now as opposed to later. And one of the products we didn't talk about, which isn't really a product as much as it is an offering, is our loyalty lend program. And what we're really trying to do is encourage people to see the value in the cost of housing today, to buy a house today and then we will contribute to your closing costs when we refinance you down the road. Three months, six months, a year later, two years later, whatever it might be, when that opportunity hits, we're going to participate in your closing costs because we appreciate that you got out in front a little bit at a quieter time in the market and took advantage of that, and we're going to help you down the road with it.
Speaker 1:Excellent, Duff. What do you got?
Speaker 3:I'm going to sound like my father or like generations above me. I think we need to look at perspective. I mean, I think we as an industry kind of did it to ourselves. We were playing around with those rates at three and a half percent that were kind of silly, right. And when rates spiked at historic speed and got up to the eights, we all just kept saying, well, they're going to be back down to five next month. We were doing it to ourselves with wishful thinking. And I'm looking at our block sheet from yesterday, all the rates we locked yesterday. You know, I bet you, the average, just looking at it, is about 6.75.
Speaker 3:I bought my first house in 2000. My wife and I just got married. We bought a townhouse in Pittsburgh and I remember calling our CFO at the time, david Lloyd. I said, dave, I'm getting a you know, sure, it was a sweetheart deal from Howard Hand Mortgage Services, mark Steele, but it was 7%. And I said, you know, should we, should I lock it in, or should I take this, this adjustable rate? And he said rates will never be this low again, you know. So it's perspective. It's perspective. And did I do a great job in that house? I did. You know that home appreciated. We started having kids. We sold that house. We made money. We bought something bigger. We did what the American dream is. You know. You know rates are still historically low and we're at, you know, just a fast appreciation of homes. So I think you're, you know, get in now. I don't understand these articles about people continuing to rent because they don't have a three and a half percent mortgage. I think now's the time.
Speaker 1:Well, mark McGoldrick, I have a great quote from him a couple months ago, duffy, and that is it will be more expensive tomorrow. The house you buy will be more expensive tomorrow. Now I'm going to date myself a little bit. I'm going to show the difference in our ages of Mark Duffy and Gary. So, duffy again, I think your point about perspective is spot on. I sold real estate 86 to 89. And the average interest rate during those years was 10.28%. My first house I got nine and seven eighths. I broke double digits and in that moment in time I thought I had won the lottery Right. And then, when I refinanced at seven and a half percent, I was told by somebody near and dear to me, might have been my father I'm not sure they're going to go any lower.
Speaker 1:It's to your point Fast forward, september of 2020, I buy a house and I got two and a half percent interest rate. That's the anomaly, like that's the perspective, and Mark and I have talked about this a lot. You know, I think they call this the interest rate lockdown, where people bought homes in the fewer time, or the fury time of COVID at these incredibly low interest rates, and we kind of wake up and maybe it's not the right house for me, maybe it doesn't have what I need today, up, and maybe it's not the right house for me, maybe it doesn't have what I need today, but I got this interest rate and so you know, I do think that. You know, we all believe that, whether it's in 24 or 25, we're going to get 5 million. You know homes sold in this country. You know 5.4 counting new construction, and I think that's all hugely advantageous.
Speaker 3:So and Gary, let me just touch base. Mark mentioned the Low Wealthy Lend program. I just want to reiterate what that is, and again it goes back to my original point about being a real estate company that owns a mortgage company. So we want to help spur these buyers or sellers, for that matter who need to sell their home but they're sitting on this 3.5 or 3% mortgage rate and they don't want to move to a 6 or 7, even though it's the right thing to do for the family that if you finance, if you buy that house right now with Howard and Hannah, it's 6.875, 6.75, whatever the rate is, and a year from now or a year and a half from now, rates drop to some magical number that you're interested in, we'll refinance you and give you $1,000. We'll take $1,000 and give you know. I hope our agents are using that to their you know, in their you know, with their you know, as a tool to help get people to buy and sell real estate.
Speaker 1:Excellent. Hey Duffy, let me ask a question theoretical. So as we introduce our new partnership, if you will, with essential services, we'll call it the bundle for the purposes of today. So, if I think I hear you right, I sign a buyer agency contract Howard Hanna Allentate Company, I get a value add slash discount on the mortgage piece. Two years from now I go to refinance and I do the loyalty program and I get another thousand. I'm just making sure that those two things are not mutually exclusive. But it's really about we want you as the consumer to be our customer for life and we're going to continue to provide and gosh only knows, in two years we may have three or four other creative solutions to help people move up, move down, expand right-size. Just make sure I'm correct that I can take advantage of both of those at this moment or as soon as we officially introduce the bundle product.
Speaker 3:Yeah, listen. Every product we have, we're looking for the customer for life, so in those situations, you should be able to qualify for both.
Speaker 1:Awesome. I think that's really critically important as we think about maintaining a partnership as a consumer, not only with my agent, but with my loan officer, but that's my housing team that I want to keep in my ecosystem as I continue to proceed. As all of us did. We all have the same story we bought the townhouse, we bought the next house, we bought the next house, and during each of those transactions, we gained some wealth, which has been great. Let's take a little moment and open up the crystal ball. So everybody wants to know about interest rates. Everybody wants to know what we think 2024. So, mr McGaldrick, your crystal ball, as it relates to interest rate prediction, says what.
Speaker 2:I got to go first. Huh, all right. So you know we started off the year and I think the call was for eight or nine Fed rate cuts, depending on who you talk to. Now you're probably at two or one or zero.
Speaker 2:I was reading some papers. I saw Neil Kashkari, who's the Minnesota Fed governor, said he needs to see a few more months of data, and he means consistently lower inflation data to make even to just make a call. You had Raphael Bostic, who's the Atlanta Fed, say the labor market is resilient and there's been a lot of chatter about the labor market being resilient and if you think about that, it's kind of like political speak for the opposite, which is, hey, we at the Fed think we have to destabilize the labor market before inflation will stick at a lower place. I don't know that I buy that, but I think their words are saying they buy that and the labor market does seem pretty resilient. So you know, all of that taken together, I think maybe a rate cut by towards the end of the year and the market can do a lot of things in the meantime.
Speaker 2:But I think if we seem to have been bouncing around somewhere between the six and three quarter and seven and a quarter space. For months now and because of conflicting information, you get one good inflation report, but then the consumer confidence comes in higher, so we just keep bouncing. Based on these short-term pieces of information, we're going to get the biggest news we get on inflation monthly. It comes out Friday with the personal consumption expenditures. We'll see where that goes, but we seem to be a little up, a little down.
Speaker 2:We made a great march from 9% inflation down to 4% and now we've kind of stutter-stepped. So with that, you know, in my mind, I'm preparing for rates around high sixes to low sevens for the foreseeable future and as we get into the fourth quarter, if we just start to see a little weakness, if there's a canary in the coal mine, to me it's jobs. So if the unemployment rate starts to cross 4%, starts to push towards 5%, and also in an election year, I suspect you'll see some Fed rate cuts. So that's what I'm watching is the jobs report to see lower, but kind of business as usual for now.
Speaker 1:Awesome.
Speaker 3:Thank you, duffy, hanna, what Mark said yeah, no, I mean I couldn't agree more. He's spot on. I mean I think that it's going to be relatively like it is. You know, are the mortgage interest rates are going to be relatively like they are right now. Don't get super excited if on Friday, the jobs report comes back. I know it's, it's the antithesis of how you're supposed to feel, right, but if the job reports, if the unemployment goes up, rates will come down a few ticks and then, like Mark said, then we'll get some sort of like some other report early next week that says people are confident or something, and then rates will go up a little bit. So I think we're going and rates go up a little bit. So I think we're going to be here for a little bit.
Speaker 3:Again, I wouldn't have people. I hope people aren't sitting there thinking something's going to happen. So I'm not going to list my house until it does, because I think that's a mistake. But I am foolish that on the market I believe we're going to have, we're having a strong quarter right now and I believe that the year will go likewise. Normally in election years. It's good for the housing economy. So I still think that and then I think, I think we'll be.
Speaker 3:I think 25 will be will be a fabulous year, but 24, we should have no issue and I think it's going to be robust going into the fall.
Speaker 1:Yeah, so. So I agree with both of you wholeheartedly across the board and I think the takeaway is, you know, let us not let interest rate tick up or tick down. Define our home, ownership, needs, dreams and wants. Allow that to even come into the equation. Think about all the other things and all the other reasons that I'm starting a family or I'm adding to my family, or somebody like me might want to right size and take advantage of the emptiness. Don't wait for an interest rate to dictate and define the things that I need to or want to, or you need to or want to do so. A couple of quick questions as we put a bow around today's episode. Duffy question how long have you been in the business?
Speaker 3:Since 2000,. Well, really I was in private practice as an attorney in 2000, 2004, 2005,. Then came into the business and the title one mortgage business since then.
Speaker 1:So Duffy in and around the business his whole life, specifically for 20 years. Mr McGoldrick, how long have you been in the mortgage business?
Speaker 2:I'm going to call it more than 30. It's getting to be quite a bit more than 30, but I like to stop my number 30.
Speaker 1:And so you know it's funny, there's 100 years of experience with the three of us. There's 100 years, which means we've seen a lot, which means we saw the hip hop years of 04 to 06, which means we all experienced, unfortunately, 9-11. Private practice, but certainly impacted and impacted and affected from his family, from the family business. We, we navigated, COVID, we've navigated recessions.
Speaker 3:We've navigated all those things. My favorite question Don't forget 2008, 2009,. Those were fun times.
Speaker 1:So I decided to forget that. So, duffy, it's like the great quarterback you forget the last interception, right, max? And so here's my favorite last question, one bit of advice from each of you to our listeners, the one thing that you just recommend can't miss. If you do this, or you believe that, what is your one piece of advice? That you're going to leave our episode of Reality Podcast today with our listeners, I'm going to go McGoldrick and then I'm going to let Duffy clean up Mark McGoldrick. One thing.
Speaker 2:You know I won't get this quote exactly right, but Warren Buffett said something like be aggressive when people are fearful, be fearful when people are aggressive. And I think that you know we've got this interesting moment where the buyer side has really dropped. I mean, we've gone from six and a half million to what? Four-ish million homebuyers, because some of the costs and some of the other things that are involved and if you can see through that, the opportunity, I think, to purchase a home at what will historically look like a very, very good price and reset that mortgage some point down the road and start building wealth and equity in a way that changes your family, or build additional wealth and equity through investment properties or second homes, I think we're going to look at this moment and go why didn't I do that? And so you know, I think it's time when others are fearful which keeps people on the sidelines, and if you can see your way through that, I think you're going to really have an economic lift from that.
Speaker 1:Excellent, excellent, duffy one thing yeah.
Speaker 3:So my father raised his five children and built this company on two words pride and enthusiasm. And no matter what you do in life, you do it with pride and enthusiasm and you will be widely successful. Whether that's going to get the mail in the morning or doing your job, or listing a house, or selling a house, or doing whatever you do with pride and enthusiasm, it will be an effect, you'll be successful and people will be attracted to you.
Speaker 1:Love it, pride and enthusiasm and, as Mark McGoldrick said, while everyone else or other people are sitting on the sideline, stay in the game. And so I'll leave with my final thoughts. One is be confident and be prepared. And if you do what Duffy just shared and Mark shared and I just shared and you package that in a way that that works for you it's our belief that the sky is the limit Be totally educated about the mortgage business and the products. Go out and educate consumers on the opportunities that are in front of them, and I just want to say thanks to Duffy and Mark for being with us today. Duffy, hannah, thanks for making time for us. Mark McGoldrick, thank you, thank you. All right, everybody stay. Thanks, buddy, take care, thanks, see you.
