Think YOU cannot buy a home?? So did she... and she was WRONG!!

In today's episode, we are so happy to chat about our newest success story! First time homebuyer at 40, low credit, single mother, no savings... It takes a village to make dreams come true, and in this story we explain how we took her from not even wanting to reach out because she thought there was NO way she would ever be a homeowner, to making her dream of NEVER signing a lease again come true!! 

Transcript

SPEAKER_01 0:00

Hello everyone and welcome. Thank you for joining us. This is Bed Bath and Banter, Arizona Real Estate Edition, and I'm your host, Amy Batten with Waterstone Market.

SPEAKER_00 0:09

And I'm Ryan Batten with West USA Realty and the Batten Home Group.

SPEAKER_01 0:13

Yes, so uh May was a crazy busy month, so we weren't able to um uh touch base with you guys, but uh we're into June now, and summer is in full swing and things are definitely picking up. Um I have a fantastic success story that I cannot wait to share with you today. But Ryan, let's just do a little bit of an interest rate update.

SPEAKER_00 0:36

An interest rate update.

SPEAKER_01 0:37

Yeah.

SPEAKER_00 0:38

It's real expensive. That's the update, right?

SPEAKER_01 0:41

So uh in mid-May um we had a really, really terrible inflation report. Uh, and I say terrible for my own per selfish purposes, and the interest rates went up half a percent overnight, and it was uh pretty frustrating. Uh we are still uh solidly in the sixes for almost every loan program. Um, but unfortunately, you know, conventional is is really towards the high sixes, government loans are towards the low sixes. So uh things are unfortunately not trending downward as we had hoped by this point.

SPEAKER_00 1:15

Yeah, and then the jobs report came out. Uh it was 170 some thousand uh jobs. Uh in my opinion, there's a big chunk of that. It was government jobs, like a very sizable chunk. So I'm not a huge fan of that. I'd much rather see the corporate world producing jobs. Um nonetheless, it was significantly higher than they anticipated it to be, which of course is bad news for rate cuts. Um and honestly, uh, if if it continues to trend that way is actually, you know, something that could lead for sure to potential rate hikes.

SPEAKER_01 1:47

So yes, by the Fed. Uh so we're just gonna cross our fingers and toes and see what happens in the next couple of months. Um, people are still buying, people are still borrowing money. Uh interest rates are not in the 8%, so don't let this scare you away. Uh, a lot of people think that they're actually rate shoppers, but they're not their payment shoppers. So, you know, if you uh see a home that you love, uh maybe just take a look at what a payment might be on that before you decide now is not the time to buy strictly because of interest rates. Because you can always change the rate, you can always refinance when rates do come down. Um, it's just right now we're kind of in a holding pattern.

SPEAKER_00 2:21

It's funny, that's the same reason why, you know, you go to a dealership to buy a vehicle. They don't talk to you about how much you're spending on the vehicle. No, they only do it. No, they only a if it's in your budget payment-wise, right? That's exactly where they go to want to get you fixated on that.

SPEAKER_01 2:33

So and then they bring out that four-square thing that literally boils my blood. Literally. Car dealerships do not like the finance guys, do not like me at all. I am a nitpicker when it comes to that.

SPEAKER_00 2:43

She's a bit of a pit bull.

SPEAKER_01 2:44

I know, I love it. I at least I am in some part of my life. Um, so I want to tell you about our massive success story. Um, I'm not gonna say for the full year, but um, I'm pretty proud of this one. So we had a young lady contact us, uh 39 years old, never owned a home, had some significant health issues, and you know, her mom uh listens to our radio show on KTAR and told her, you need to call these people. And she said, I will absolutely never be able to buy a home, mom. Like, I'm not even gonna bother calling them. So in February, she finally took the steps to like just reach out and say, you know what, what can it hurt? The worst thing they can say is no. So uh we had a conversation and did an initial pre-qualification, and she was not well qualified. She had a 580 credit score. She had no money for a down payment. Um, she had some uh, you know, spotty credit in the recent years uh during COVID. And, you know, it was really going to be a really tough task. She also had a very tight budget and she didn't know where she wanted to live. So Ryan.

SPEAKER_00 3:53

Yeah, that's in my opinion, not real conducive to buying a house. No, right?

SPEAKER_01 3:57

I mean, you were running her all over the place.

SPEAKER_00 3:59

Yeah, I was it was all over um her her she wanted to have her daughter go to Greenway High School, right? So we were looking in and around that area. Um just any well, honestly, we went anywhere where there may have potentially been affordable housing for her, right? So um that really is all along the fringe of the greater uh Phoenix area. So um even to the point where uh you know we were looking at homes in counties, different counties of Maricopa, right? So uh she ultimately ended up in Apache Junction, though.

SPEAKER_01 4:29

Yeah, so she went, started in Glendale, then was looking out in Buckeye and Goodyear, and then moved way out east to Apache Junction. We found the perfect home for her, like this complex. We've sold a couple in this community, and it is adorable. So I was I was so excited that she finally found a home. So um, this is after, you know, two months of, you know, just kind of randomly searching, kind of talking about the pre-qualification. Um, in February, I had given her some steps to improve her credit. Um, and just like a lot of other people, she didn't do anything I asked her to do. So then she's coming up on being homeless. She absolutely has to move. She does not have a choice, she does not want to sign another lease. Her 40th birthday came uh during our process. And I'm like, you know what? Um I'm gonna do whatever I can to make you a homeowner. Right. Even though now my job is a lot harder because when we had the time to prepare and do things, you didn't do any of the items that I had asked. So now we still have a low credit score and we have no money. So it became a uh quite a bit of a task, uh, an undertaking, if you will. Um one thing I can say about her is she was a hundred percent invested in making this happen for herself. Now it did become more difficult because of the fact that she didn't improve her credit score and she didn't save any money and blah, blah, blah. But she was, you know, when she finally found this home and Ryan got her under contract and negotiated a fantastic deal for her. Uh, the purchase price was $275 for this newer, adorable home. Um, so we, you know, were able to negotiate the contract to her most benefit. Um, and I had to come to Jesus with her and said, look, like I'm not gonna promise this is gonna work. Um, one thing I am kind of brutally honest, so I don't mean to be negative, but I just want to make sure I'm not setting anyone up to fail. But I say, unfortunately, we're kind of behind the eight ball now because all the things I asked you to do, you didn't do. So now it's going to be very difficult to get you into this home. But if you're willing to work with me and you're willing to do, you know, put in the effort and get what we need for your loan, I am absolutely willing to work for you as well. And it was a doozy. I'm pretty sure I cried multiple times during that process.

SPEAKER_00 6:45

No, no, I'm sure you did. I know I did. So, you know, and it honestly it also didn't hurt that uh we uh from a previous interaction uh knew the listing agent. So we did some groundwork ahead of time, kind of told them, hey, look, we know this is definitely not a seller's market. You're probably watching tumbleweeds going by your listings as opposed to actual buyers coming in and seeing them. Um but we have one that we think we might be able to fit, right? And it just got to be patient with us and know that we might need an extension or you know, some assistance. Um, but it was great. I think everybody kind of rode in the same direction to put it all together for them.

SPEAKER_01 7:20

Uh being honest and having that conversation up front, which a lot of people won't do, it's very hard to um go into a transaction saying, I'm not sure if this is gonna actually close. But if you work with me um and she knows that I'm a hustler and I will do whatever I can to make a transaction happen, she trusted me and thank goodness. Um, it did only take 35 days. It wasn't like a two-month process. Um it took exactly the amount of time I expected it to take. Um, and we were able to get this first-time home buyer, a single mother of two teenage girls, with significant health issues, no money saved at all. We got her into a home.

SPEAKER_00 7:58

And little credit. She got all of it. Yeah.

SPEAKER_01 8:00

Yep, she got a really fantastic grant because her income was on the lower end. So she qualified for this really great grant. Um, it covered her entire down payment. And Ryan negotiated uh between himself and the seller, they covered all of her closing costs. She was able to buy a home with $1,000. Uh, I can tell you right now, in mid-February, she never would have anticipated that by the beginning of June she would be moving into her own home.

SPEAKER_00 8:26

Right. And I think honestly, from our perspective, the biggest lesson to learn from this is when you do chat with Amy, and she does tell you, hey, we can get you there, and you've got a little bit of runway, some time to plan and coordinate, just do it. Because it would have made things quite a bit easier. Yes. Had she had a higher higher credit score, if she had had even just not all the money, maybe, but uh some money to work with saved up. Um, you know, and I and I get it. I mean, you know, it's it's it can be tough to save, but I think for most of us, if we're really honest with ourselves and you really sit down, there's quite a bit of money that each and every one of us wastes on a monthly basis. Oh, 100%. Um, that we could otherwise allocate, right? So yeah, you definitely want to, you know, follow the steps. It wouldn't be as nitty-gritty, but it we what she even you left this out. She ended up um because we had to do an extension, what, for additional four or five days, something like that. She was actually living with a friend in their RV the last four or five days, just this little interim period before she could get into her home. Um, and I think all that could have been avoided.

SPEAKER_01 9:31

Oh, it absolutely could have been. Um, and I love having those initial consultations. And I always say it's never too early. I don't care if you're buying in three months, a year, or two years, just having the blueprint together and following the steps and preparing yourself, she will be the first to tell you, I wish I had listened and I wish I'd prepared a little bit. But I think when you live like a lot of us do, in survival mode for so long that you just don't know how to get out of that. And uh I this was a really big eye-opener for her. But, you know, in her life, like she literally has never owned anything of any substance and she's 40 years old. Yeah. Um, we definitely, you know, shared tears uh when we gave her the keys. It was one of my favorite outcomes because I really was uh really worried. Like it could have turned at any moment. And, you know, thanks to you know, my knowledge and my expertise of being in the business for so long and knowing my loan programs and her uh just following with everything. And it was, it was pretty nitpicky. You know, she had a lot of um, you know, different accounts we had to verify. Uh we had to do significant explanation letters just because of all of her derogatory accounts. Um it was a uh it was a nail biter. So not all of them are super easy and fun and you know, painless. Some of them can't, you know, you're borrowing hundreds of thousands of dollars. Some of them can be, some of the processes can be pretty painful, but it's absolutely worth it.

SPEAKER_00 10:59

So what did you learn about uh, which is a very popular thing for a lot of folks to uh to borrow money, really at really significant interest rates, too. Like not just a little bit, like these are 30 plus percent interest rates. Um in a lot of cases, you've much higher even than credit cards, um, for like small tiny baby amounts, right? Just to bridge gaps.

SPEAKER_01 11:23

All right, so what he's talking about is the new buy now pay later program. So the affirms, the Klarnas, I think PayPal has one. Um, you know, they're becoming increasingly popular. Okay, so that's actually one of the reasons we had so many issues with her loan, is she utilized that like credit. Okay, so she would do these uh affirm for her payments. And um we it used to be in the mortgage world that if it didn't show on your credit report, we didn't care about the debt. It we used to not have to verify, like even bank statements weren't nitpicked as much as they are today. Now, when you apply for a mortgage, if you provide a bank statement, there's a lot more questions that are going to be asked that were never asked in the past. So this is kind of a learning curve for us because this just became a uh requirement uh earlier this year. Um so the affirm and the Karna, the buy now pay later are short-term loans that you take out that do not usually show on your credit, um, that help you pay for certain expenses. Like you see, you can do them on vacations, you can do them with Airbnb, uh, Amazon, they give you the option of, oh, make, you know, 12 monthly installments or 10 monthly installments at $12. Um, I I guess it can be beneficial. If you read the fine print, it comes with a 36% interest rate. Okay. At least hers did. So I'm not that familiar with them, but um, they are not 0%. So she ends up spending quite a bit more on that product than she would than she would have if she just paid it off. Um, so that's where we actually got into a lot of trouble was on our bank account. She had all these payment payments for our firm. And we ended up having to qualify her with those payments, which made her no longer qualify. So we had to do a lot of uh shucking and jiving and a lot of negotiation and and we had to spend a lot of money to get her interest rate down in order to get her to qualify. And it was because of these accounts. And uh, you know, unfortunately, uh this particular client didn't have the money to pay off the account. It was only a thousand dollars and she didn't even have that. So we really, it really caused us a lot of grief. Um, and uh, you know, it's just totally avoidable. So if you're getting in a position to get a home loan, um, maybe don't utilize those products until after you purchase. Between that and don't buy a car, don't get any major expenses. If you know you want to buy a home, that needs to come first. Uh these little uh extra spending habits probably can be put on hold for a little bit.

SPEAKER_00 13:57

With with hers in particular, like, you know, if you you say $1,000, okay. Well, maybe, you know, and I think there's you find quite a few folks who don't just have a thousand dollars laying around, right? Um, but it it wasn't really like that. It was, I mean, she had a hundred here, a hundred there.

SPEAKER_01 14:11

There were 11 accounts that amounted to a thousand dollars that she was paying 36% interest on. You know, and again, when you're in survival mode, I completely understand that. We've all been there, done that, and they make it so easy to get credit now that everybody, you know, it's a click of a button and you're approved. You know, you could have $100,000 in credit card debt and you're still getting um offers every single day to get more credit card debt. So they're really putting us in a pickle with allowing so much credit to be accessible to people who really don't have the means to pay it back.

SPEAKER_00 14:43

Or or aren't uh honestly, quite to be frank, financially literate enough to be able to manage it properly. Yeah. Um, you know, we all know people who are not good with money and people who are good with money. Yeah. Um they're usually married to each other. Yeah, yeah, no, for sure. Now, another thing I wanted to bring up to that happened in this transaction, that if any of our viewers are, you know, you're thinking about the potential of buying a home uh in the next several months and you bank with an outfit like Chime.

SPEAKER_01 15:11

There was another problem. Uh Chime is uh, you know, their biggest draw is they will pay you on your auto deposits five days prior to you getting paid. So uh this particular client utilized that process every single month. Um, and that's why she started banking with Chime because that was easy to, you know, have easy earlier access to your paycheck. Um that was also a problem. Uh Chime is not a traditional banking institution.

SPEAKER_00 15:38

No brick and mortar.

SPEAKER_01 15:39

Um yeah, and they it it was just it was just very difficult.

SPEAKER_00 15:42

What blew my mind was that they're so they're an online banking, right? Like they're electronic. But guess what they can't do? They can't electronically wire funds.

SPEAKER_01 15:50

Yeah, they don't do certified funds in any way.

SPEAKER_00 15:53

How can you be that and then not do a fully electronic transaction?

SPEAKER_01 15:57

Yeah, and while we're going through this uh fairly stressful process, um, you know, I had to make her go open a traditional bank account because even at her age, she just didn't have one. And it does um, you know, I think we did a lot of positive things to change her uh financial knowledge, if you will. Um, you know, I'm just I'm so proud of her. And she just didn't know any of this stuff. And uncore, of course, when you're not buying a home, a lot of this stuff is not applicable, you know. But now it's become more and more difficult with regards to the underwriting process to hide anything or get away with anything. So now we just have to be more diligent in, you know, looking at these things before they become a problem, like going back to the affirm the buy now pay later, those have canceled transactions. Yeah. Uh without even realizing they're there and knowing, or, you know, let's say we're halfway through the process and we get an updated bank statement and there's payments on there for a firm and it's a larger purchase and the borrower can't pay it off and now they can't qualify with that payment. It's kind of um, it's been a little bit of a take off. Yeah. Yeah. Yeah. So um, so my point in all of this is saying when you think I will absolutely never own a home, don't let yourself, don't let yourself talk yourself out of making the biggest investment of your life. Get advice from a professional before you make that decision. Um, had I gotten my hands on her five years earlier, she would have been in a much better financial position or six years ago, I'm sorry, um, in order to buy something because, you know, prices were lower and interest rates were lower. But she always told herself, I'll never be able to buy anything. So she didn't.

SPEAKER_00 17:35

She just didn't try.

SPEAKER_01 17:36

Yeah. And um I'm very thankful we were able to get her um all in. Her mortgage payment was around $1,900 a month, which is really great in this economy without having any money to put down.

SPEAKER_00 17:47

Yeah, there's tons of people who would sign up for that right now.

SPEAKER_01 17:49

Absolutely. So, I mean, it really was such a wonderful success story. But just don't talk yourself out of it. Get advice from someone who does this every day for a living and see if it's possible. And if you don't have someone that you trust or know and love, we would absolutely love to help you and give you that information. Um, you can find us on our website at keeping it realistate with amb.com. You can make an appointment on my calendar and just have a really casual chat to see if this is something that's even remotely in your future. Uh, I can tell you right now, our wonderful client would have told you never in a million years. And together we made it happen, all three of us, um, because of our grit and our knowledge and just wanting it badly enough. And I can't tell you how happy I am about that.

SPEAKER_00 18:36

Well, and and honestly, just to see her face. Yes, oh my goodness. Like she was so excited, so happy, so thrilled.

SPEAKER_01 18:43

And her daughters were too.

SPEAKER_00 18:45

Yeah, you could see the stress just melt away. Um, because she, you know, she she didn't know where she was gonna live, what she was gonna do.

SPEAKER_01 18:52

Yeah, you know, it's in her adult life. I think they've always only lived in apartments. I don't think she's ever lived in a home home. So this will definitely, I told her this will change your whole life. Like once you're a homeowner, you never want to go backwards. You know, it's just it's yours. I mean, uh essentially the bank owns it, but really, um, it's your home. Like you could do whatever you want to it.

SPEAKER_00 19:12

You can, you know, you don't have to worry about a landlord not wanting to renew a lease because they're gonna sell the property. You don't have to worry about a landlord raising the the rent up. You know, none of that exists. You're you're the owner of the home, right? As long as you're paying your bills on time, it's your home. You can do whatever you want with it.

SPEAKER_01 19:29

Absolutely. And um, you know, people work really hard to get to this point because it's important and it's worth it. Um, and especially when you have the right team to really guide you and hold your hand and and educate you and really work hard to make it happen. I can tell you um a lot of other, you know, even agents would have said, no, this isn't worth my time.

SPEAKER_00 19:50

It wasn't worth the effort. Yeah. Um but you know, it's we feel that there is more than enough money to be made in real estate, period, lending, if you will, as well, that uh just do the right by people, right? Treat them fairly. Um if you know, and if you can if okay, think about it this way. If you can help somebody out, like in our situation, and and I had to uh credit some of my my pay, my commission, right? To make this make this deal work. Yes. Well okay, so that sucks for me on this deal, but what are the chances that France sorry, uh Francis says anything to anyone else about, hey, you got to use these folks, right, as referrals. Um it's a it's a really big deal, right? Because those are potential deals that I can have, and I'm not doing it for that purpose, but nonetheless, it you need to have a I guess in business in general, you'd have a kind of a bigger view, bigger bigger view of the overall landscape and not get so myopic and focused on just the one thing.

SPEAKER_01 20:54

Well, and you know when you're dealing with people who you're just a number and you're not like emotionally involved with the team, um, it's very easy to just walk away and say, I'm not gonna help you, this is too hard, this is too expensive, this isn't gonna work. Um, we get I probably get a little too emotionally involved in my clients. Um, but that's the way you want it. You want it to be, you want someone to go to bat for you and to to know that they're always going to work hard for you and have your best interest at heart. Um, you know, I'm so thankful that I have you as a partner in that because uh a lot of other agents would have never allowed um that transaction to close. And now she's a homeowner. We forever changed her life and it was a team effort. So I'm really, I'm really happy. So congratulations. And, you know, these are stories we have all the time. This one is just fresh. And, you know, it was one of those to where she just had a great attitude and she was just like, Whatever you need, I'll give you. And I needed it all. It was uh like short of a blood draw. I needed it all. Um, hers was definitely a more difficult situation, and I did get to a point. Where I was like, oh, well, you know what? She's just not meant to be a homeowner. And I talked to her and she's like, Yes, I want to be a homeowner. I will do this. Even if it comes down to the end and I don't close, I want to do this. And once she said that, I was never gonna let it not close.

SPEAKER_00 22:14

Yeah. It was funny. I remember having conversations with you, and you're like, I'm not sure if she's just gonna be a renter or if she'll be a homeowner, you know, because uh it it was razor thin. It really was. But but we were able to make that happen. We're able to give them a stable situation where they don't have to have to worry about sleeping on someone's couch or whatever. None of that, right? Yeah. So it was a really, really good feel, good story. Um super thrilled for them. And uh, you know, it's it's it's what we do. I mean, we focus on first-time homebuyers. Um, some are gonna be in a little bit better position, maybe, uh, than she was. But but nonetheless, uh the vast majority of first-time homebuyers, honestly, they have no earthly idea what to do, where to start, how to how to, you know.

SPEAKER_01 23:01

Therefore, they don't start.

SPEAKER_00 23:02

Point, yeah, point in that direction. It's not their language, they don't speak it. Um but we we make it very uh easy to understand. It's kind of like a honestly like a coffee table conversation, right? And we will sit down and find out what is it that you want, right? How do and how do we get there? We'll kind of custom tailor that plan. Um, we'll give you some options, ultimately, ultimately, we'll let you decide uh on which route to pursue. But we're always there to hold your hand, guide you through the process, answer whatever questions you have, make sure that when you're entering into a situation, your eyes are wide open when you're doing so.

SPEAKER_01 23:36

Yeah, and one more piece of advice I have is if you're in the market and you have the chance to work with a team, husband and wife team, um, I actually say do it because you have two people that are double invested in making this work. And if they're a husband and wife team, hopefully they get along. The transaction becomes so much nicer. You know, I've had situations where, you know, people have gone to Zillow and gotten an agent and I don't know the agent. Um, I had three last month, all three of them canceled because it was a transaction for the realtor, even though it wasn't for me. The people did not move forward and buy the home because of the agent treating them like a number. I can tell you if they had a different agent or if they worked with you, uh probably none of those would have canceled. The because the buyers would not have gotten this icky feeling of I just don't matter. That's exactly what happened. It's a numbers game for a lot of these agents. But if you can find a team, like it doesn't even have to be husband and wife, but people who are like really invested with their team and and they refer you to someone who they know is gonna treat you well, yeah. Um, you know, it just makes everything go so much smoother. Uh it when I see like I have an agent like that, it does seem a little disconnected because again, it you're just a number.

SPEAKER_00 24:48

Well, you know, and honestly, and this is maybe getting a little bit into the weeds, but we see it on our end. Um, and I think clients probably see it as well. But uh, you know, when you are dealing with uh, you know, you have a realtor, you have a lender, they don't really know each other, they don't work together, um, and maybe you have a hiccup here or there, uh, it's this one saying it was that one's fault, that one saying it was that one's fault. You don't need any of that. And and even if it was one or the other's fault, you don't need to be blaming anybody. Yeah, let's just fix it and move forward. Yeah.

SPEAKER_01 25:15

So I agree with that completely. So in any case, thank you so much for joining us and listening to our wonderful success story. Um, you can find us online anytime at keeping it realistate with ameb.com. And don't forget to tune into our show, Keeping It Real Estate with Amy B on K T A R 923 FM every Saturday at 5 p.m.