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Real(ty) Talk
Real(ty) Talk
The Good, The Bad, and The Hilarious in Home Buying
A lively discussion about the current state of the real estate market, emphasizing the emotional aspects of home buying, the importance of perseverance, and practical tips for buyers in today’s market. We also share entertaining anecdotes that illustrate the unique nature of real estate transactions.
• Overview of the real estate market and its challenges
• Importance of embracing a positive growth mindset
• Emotional connections tied to purchasing a home
• Discussion of red flags to look out for when home buying
• Insightful anecdotes about unexpected real estate experiences
• Updates on the rental market in light of recent events
• Call for agents to foster positive workplace cultures for success
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Suzanne Seini:
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Paul Hanson:
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Stephen Couig:
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You're trying to sell this house.
Speaker 2:It is a one out of five. How are you going to sell that?
Speaker 1:It's just so crazy in this industry the things that we come across. Yeah.
Speaker 2:You have to find a reason, or your why gets you super fired up?
Speaker 1:I think that one thing that we're doing is we're focusing on the positives and we're focusing on growth.
Speaker 2:Welcome back to your favorite podcast on the planet Realty Talk podcast. We've kind of gotten away from nicknames.
Speaker 1:I was just thinking that we haven't done that in so long. We've got to bring the nicknames back.
Speaker 2:The queen of the closing team.
Speaker 1:I had a list of like 30 for you, so I need to revive that list. I'm going to have it by next podcast, but a solid 30 options.
Speaker 2:So did you have a nickname growing up?
Speaker 1:No, but you know everyone goes with the Susie Q when I was growing up because you know that movie back then that was popular.
Speaker 2:Don't date yourself.
Speaker 1:Yeah, I did, but um, but, yeah, no, that's.
Speaker 2:You didn't.
Speaker 1:That was pretty much it, yeah yeah.
Speaker 2:My family called me Conan the Barbarian.
Speaker 1:That's an interesting one. Yeah, because I was just a menace, basically A little monster, yeah, yeah. Playing with dirt and like, yeah, I can imagine from your stories I think I could see it.
Speaker 2:Yeah, childhood photos are mostly me in like cowboy boots, cut off jean shorts and a mullet.
Speaker 1:Can we clip to any of these photos? I?
Speaker 2:refuse. That's like. The one thing I'm going to do is ensure that that photo never gets out.
Speaker 1:Okay, got it, got it.
Speaker 2:So what's new? I mean, we've had a lot of really interesting guests on yeah, and this is the first podcast back where it's a couple weeks, we get to catch up a little bit.
Speaker 1:Yeah, what's going on? It's raining in California, which yeah, Currently Downpour. Currently raining, hence the hat. Yeah, but yeah, so we're seeing some mudslides potentially. Yeah, yeah so we're seeing some mudslides potentially. I feel like we're just constantly talking about natural disasters that are happening every time we hop on the podcast which is every week.
Speaker 2:Yeah, I mean, I think we're forecasted to get one inch of rain in the greater LA basins today which. I would not normally be worried about mudslides. With one inch of rain, I mean that's a lot of rain, but after those fires and the Palisades it could be ugly.
Speaker 1:Yeah, so we'll see what happens there. The sad thing is that, even with all this rain, big Bear is not getting any snow. So skiers, snowboarders, no such luck.
Speaker 2:Yeah.
Speaker 1:But yeah, so crazy things happen in the rain. Honestly, Things get a little hectic.
Speaker 2:I've actually, you know, I've never skied Big Bear, I've never skied California in general.
Speaker 1:Yeah, that's crazy.
Speaker 2:It's hard. I'm like a ski snob.
Speaker 1:Got it.
Speaker 2:Growing up in Utah. The snow is so amazing, the terrain is good. It's an hour and a half flight from here.
Speaker 1:Yeah, that feels fair, especially like the past few years, because Big Bear has been getting like nothing. So I kind of get it. And that's an hour and a half drive from here, so it's like if you can just pop on a flight and be with the best snow ever.
Speaker 2:I kind of get it. So current events are rain. California seems crazy. What about for the brokerage for you. What's new? Are you adopting any new dogs?
Speaker 1:No new dogs. I have my hands full with what I got going on, especially with rain.
Speaker 1:Like any any dog owner knows that when it, when it rains like it, is tough times with your animals. So, um, so, fun mornings for me, but, um but no, with the brokerage it's actually really good, I think. Um, you know we went through our planning sessions this year and I think you know what's really cool at the brokerage is we've got a really great team that I think contributes with. You know, everyone is on the same page where they want to see the success of the brokerage. So I'd say, exciting new initiatives and I think everyone's kind of pumped up.
Speaker 1:I think, you know it's easy in any industry at any time to really focus on the negatives, and I think that one thing that we're doing is we're focusing on the positives and we're focusing on growth, and I think we've always, you know, as a brokerage, we've always operated that way. You know, not everything is perfect, but things are good. And you know, I think the market in general I mean we talk about it every week it hasn't been easy for real estate agents, but we're seeing some really big wins for some of our agents, which excites me and you know it drives me to help facilitate more of those wins.
Speaker 2:Yeah, I think related to market. We should probably talk about that a little bit. I mean, the political climate is very interesting. I'm getting fully. I'm very intrigued I guess is the way I would explain it about the new initiatives that are being pushed Doge with Elon is pretty interesting. The way I view that stuff. I always go back and look at history and understand. Okay, so if things like this have happened in the past, what were the outcomes? And um, reagan essentially put the us economy into a recession for two years to right side spend and to do all these things. I think that's like the last time at least that I've been able to research. I might be wrong, but um, you know that that I've seen something like what's happening today occur. But on the backside of that, two year recession was one of the biggest booms in the U S economy that's ever been in here.
Speaker 2:Um, so yeah, I mean it's interesting. My opinion, you know opinion, with what's happening in today's market globally, not just in the real estate sector, is that there's this huge political focus on cutting costs, cutting inefficient expenditures, getting efficient right, and I think there's a really strong argument that interest rates I know we're going to talk about that a little bit today, but they might not go down, they may stay flat, go up for a long period of time 18 months, 24 months and it may feel harder in certain industries than easier there's an interesting tricklele down effect with these tariffs and everything I mean, and with massive deportation, you know, labor costs are going to go through the roof, material costs might, you know, substantially increase and when those things happen, obviously it's going to be hard to get a handle on inflation and then rates. And so you know, I'm just really, really sensitive to what's happening because, you know, it is a generally.
Speaker 2:I mean you can look at it two ways. It could be really painful for a long period of time, but the people that make it through that painful period, are going to have a massive opportunity, and so that's what I've been thinking about a lot at the innovate level, which is how do you inspire agents to take the small actions that differentiate themselves from other agents, to continue doing good business and not focus on the byproduct of the good business like continue cold calling, continue, you know holding open houses.
Speaker 2:Yeah, and and and. Less focused on my total GCI at the end of this year, more focused on am I taking the right steps, am I putting myself in the right positions? And then you know if they, if they are able to make it through that, then obviously on the backend, it's going to be a really exciting opportunity. Yeah, I don't hear a lot of people talking about that yet.
Speaker 1:Yeah, Well, I think, I think at Innovate.
Speaker 2:I do Sorry.
Speaker 1:Yeah, no, and I think that I think that people are talking about headlines and, you know, fed things one way or another. But I think what you're saying is, if we dissect that a little bit, it's very realistic that interest rates are probably going to either stay the same or go up, and I think that a lot of people were anticipating that that wasn't going to be the case. And so what does the preparation look like and how do you hold the course? And then you know and potentially not make what you anticipated to make this year, and I guess I would say, you know, I had a conversation right before this with one of our top agents at the brokerage and I thought it was a really interesting take, because one thing she was talking about was the emotional side of real estate and that a lot of people don't talk about that aspect where, you know, yes, interest rates are a little higher, yes, home prices are higher, like and this is something that we're experiencing and having conversations on a day-to-day basis but also, you know what she was kind of driving home is there's still an emotional piece to real estate to entice people to buy, which is a fresh new change and that feeling that you get when you buy something new. So we talk about the feelings a lot, but that does impact and sway consumers that are in the market.
Speaker 1:So it's not always about what current interest rates are and what the current home values are, but it's about the feeling and then also about what that looks like when you're gonna resell the home. If you're planning on living in your home for five plus years, why do you care right now you don't, you get your new for you know five plus years like why do you care right now? You don't. Like you get your new home. You're feeling good and ultimately all that matters is long term, like you don't lose money on your property. So there's still a decent argument to you know moving forward and keeping things moving in our market. And I think it's just you know being the person that is able to explain those points you know and and help educate your buyers based off of what they really need or want. And and some of that might just be no, like with interest rate, and that's okay, like that that might be what they decide, but I think understanding that there's more to it than just rates.
Speaker 2:Yeah, yeah, the way I think about that is it comes down to two data points Buyer confidence, right, or consumer confidence, and then affordability. And if affordability is really easy and everything's good but you're unconfident in the future, then you don't buy. If confidence is really high but affordability or whatnot is really low, then you don't buy. So there's like this area where kind of the two cross and that's where transactions occur and that's where transactions occur and I think what we've seen in the last 18 months is that there's a lack of confidence that was stemming from an unclear political environment and there was a lack of affordability, or I would say, I guess, perceived affordability, because they also anticipated that there was going to be a change. So instead of really a affordability issue, it was. I think they're going to get better and so I'm going to wait. And now people I believe this year will go oh, it's not going to change and that's fine. My confidence is there now and affordability is still there.
Speaker 2:7% mortgages actually. I mean it sounds high to a lot of people, but it's not that bad, Relatively yeah.
Speaker 2:Yeah, you may not be buying that $1.5 million house. Maybe you're buying it $1.2 or $1.25. So you're buying a different product. But I don't think that you can argue and this is people I don't hear talking about it enough. I don't think you can argue the fact that boomers are selling yeah it enough.
Speaker 2:I don't think you can argue the fact that boomers are selling and we're going to see an increase of baby boomers selling single family homes for the next 20 years, so somebody's going to buy that. And that would be my call of action, like if I was on CNN tonight or Fox News or whatever and they asked my opinion. I would basically be arguing look, are you going to rent or are you going to own something? And go out and fucking buy, because boomers are going to be selling. And if you don't buy, if you don't find a way to have confidence, you may not be getting what you want in the long run, but if you don't buy today, you're going to lose all of that equity and you're never going to be able to get what you want in the long run.
Speaker 1:Yeah, you're just paying someone else's mortgage.
Speaker 2:That's right.
Speaker 1:So, yeah, it's so funny because I agree, I think when Trump got elected, I got multiple text messages that were like so excited for rates to go down. And I'm like I don't know if you guys have looked at the full picture here with these. I mean, experts were saying with the tariffs that like this, this, you should not anticipate that rates are going to go down. But I think there was that you know misconception that it was like automatic rates were going to go down. And even my neighbor approached me a couple days ago and she's like is the market improving? Because I think people are really excited now that Trump's in office and you know things are getting better, and I could just feel it and I'm like I don't, I actually don't think that that's, and you know things are getting better and I can just feel it and I'm like I don't.
Speaker 1:I actually don't think that that's accurate, you know, but I I understand that that is the perception right now and I think, as time, you know, unfolds, I think people are going to realize you can't keep waiting, you know, if you want to buy, you got to buy.
Speaker 1:Like stop waiting for either the crash, which we hear, or rates to go down, because you know you got to get creative with the programs that are already out there Because there are great options to actually buy with higher interest rates. You know there's the buy down programs and interest only Like there are options to if you can. You know if you want to buy, you can buy, yep.
Speaker 2:So yeah, I think the the on the on the real estate agent side, what I see happening at innovate you know and, and you know full disclosure. I think everyone knows like I'm a, I'm a partner there, but and so this will sound extremely biased, but uh, and and I I guess the other caveat is I do a lot of research because I want to win in the businesses that I'm a part of. What I see other brokerages doing is talking a lot about market. They're saying, hey, when the market gets better, you're going to make more money, so just wait. What I see us doing at Innovate, or you doing at Innovate, which is really inspiring, is saying, okay, as an agent, the market's going to do what it's doing. Don't allow the market to affect your ability to be successful.
Speaker 2:Look at the actions that you can take on a daily basis to be successful, because most of the time, people get really wealthy in a down market and it's the people that put in a little bit more grit, that focus a little more and take actions that other people aren't willing to do, and that's when you can go and reap the benefits Right and so yeah, and that opportunity is now like.
Speaker 2:That is what we are experiencing so it's an unpopular opinion though, so I think it's a tough like it. This is kind of a statement and a question, but what I see you doing is really inspiring, because you're you're beating that drum every day. It's not an easy message to deliver. So if you are a real estate agent, regardless of where you're at, if you are interested in kind of putting it on cruise control, or you're not really interested in accountability and you're not really interested in getting a little bit better, you don't want to hear that message. So how are you wrestling with that at Innovate? Because I mean and I think all the agents at Innovate are great, but I'm sure we have some percentage of Innovate agents that are like oh man, that's like you know like going out and calling, or you know waking up at 7am and you know refreshing my list to go and you know cold call or knock on doors or whatever.
Speaker 2:That doesn't sound like a thing I want to go and do.
Speaker 1:How do you wrestle with that as a leader and how do you inspire people to go and do it? Yeah, I, you know, for what I've experienced is I'm I and I. I actually love this about you too, but I, um am willing to help anyone if they don't know or they need a path to focus on Um, but they have to want it for themselves, you know. And so there, I can't. You know, we have 150 agents at Innovate and I can't spin my wheels with the same people that don't want it, you know you always say like I can't want it more than them, and that's honestly how I feel.
Speaker 1:I think you know when we're not going to sugarcoat it when things are challenging I can openly admit that when the market's a difficult market but there are still things that you can do to be successful. I think one thing that we do well at Innovate is we do kind of open up, give you a take all the time in the world for that person, but they have to want it, and if they don't want it, then I will focus on someone that does.
Speaker 2:Yeah, yeah, I mean generally when you do that, though if the leader of an organization is doing that, you know everyone kind of wants to follow suit. So if there's 10 people on a team and eight people are really inspired and switched on, the two that aren't are either going to get switched on and be excited, or they're going to leave because it's uncomfortable to be in an environment with top producers that are taking uncomfortable action and not taking it.
Speaker 1:And I and you know, ultimately I think that's okay, like I think I think everyone has to follow their path and and that's okay. Like, I think, I think everyone has to follow their path and and you know, maybe, specifically, real estate isn't for that person, and and that's okay. I think you know everyone has their thing and and I'm a big believer, you know, I I mentioned it in a meeting that I hosted this morning, where we were talking about changing your surroundings.
Speaker 1:It's like if you are surrounded by people that are like doom and gloom and you know everything um is awful like you are not going to be succeeding. I promise you that, like you're, the people that you surround yourself with are so important, and that's the same way for us, too, and the brokerage, and so you know, for me, that culture, the positive culture, and you know, yes, we are realistic and not perfect, for sure, but we all support each other and we know that in a difficult market, it's important to be surrounded by that, because you know who's trying. Real estate is hard enough I was saying it earlier, like a transaction is hard enough, so don't spend any more time on anything else that is not going to be bringing you joy, because you know your job's already hard enough.
Speaker 2:Yeah, I think that's the same in most industries. You just have to. You know you have to find a reason or your why. You know that gets you super fired up and gets you inspired to take action. That is uncomfortable, but you brought up an amazing point. I mean, I think the five people you spend the most time with are ultimately who you become. The five people you spend the most time with are ultimately who you become, and you know that that is not a popular opinion, you know.
Speaker 2:So, if you are one of our listeners right now and you're in a position in your life where you're not satisfied right, and satisfied is a scary word because you know it. Maybe it alludes to the fact that you're comfortable, but I mean, you're not. You're not happy with your current production, whether that's income or whatever. You're not happy with your current production, whether that's income or whatever. I think the challenge is go and find five people that align with what you're looking for and spend time with them. Right, because you will naturally gravitate towards that right. Right, but that's really uncomfortable.
Speaker 1:Yeah, with inventory being low, I think it's important to talk through maybe what consumers should look for when they are purchasing a home. I wanted to talk about red flags. So what are some red flags that consumers should be looking for when inventory is low like this, so they don't have a lot of options, and making sure that they're purchasing the right home? Like, what are some things that you've come across that are just right away red flags that kind of either cancel out for that property or potentially, you know, warrant maybe a price reduction?
Speaker 2:As a consumer like me, as an individual, or as an investor, as a buyer.
Speaker 1:A buyer, not as an investment buyer, but just as a buyer. Not as an investment buyer, no.
Speaker 2:Yeah, I mean, for me it's really I call them negative characteristics and when there becomes, I'm usually pretty comfortable buying something if there's one negative characteristic. But if you start to see stacking negative characteristics then it's pretty much a no. So you know, when you look at the layout of a home, for example, that that's not really a negative characteristics. You know cause you, you can change it.
Speaker 1:Right, so you may not be able to change it in that moment. Yeah, yeah.
Speaker 2:You may not be able to change it in that moment. Yeah, yeah, you may not be able to change it in that exact moment, but over time you might be able to. But I think it's really the for me personally. It's where I'm at. So the people that I'm living by I use the word intensity, it's probably not the right word, but are they interested in maintaining a nice residence?
Speaker 1:And are they going to put gargoyles on top of their roof like one day out of nowhere, so that every room in the house you can stare out the window at gargoyles on the neighbor's roof?
Speaker 2:Yes, that is a story. We bought a house not personally, this was an investment property in LA and our neighbor put eight foot gargoyles on the roof.
Speaker 1:It's been really fun selling that, because what do you say there? I mean, it's like everything else in the home is honestly perfect and yeah. So anyway, that's a whole other story for a whole other day. We have more stories to talk about today. But I guess you know, for when I'm talking with my buyers, I think you know you're not as scared, I would say, of most things that pop up in inspections, because you know, like, how to fix it For the average buyer. Typically they get really concerned about foundation issues. But you know, oftentimes that's actually not a deal breaker. You really need to dig in and see, you know what, what is actually wrong and what needs to be done. So I always recommend them digging in a little deeper and getting a foundation report but and and really like, what do we have to do to fix this?
Speaker 1:Because actually I think sometimes it's a positive where you can get a really good deal on a house and it's not a difficult fix.
Speaker 2:It's kind of what I was getting at. The negative characteristics that are uncontrollable are the community the road that it's on if you're underneath an airport. Those are things you can't ever change. Those are things you can't ever change. Right, you know to me, if I'm going to buy something personally and I do an inspection and a found there's a crack in the foundation or there's, you know, the sewer line is jammed up or something. That's great.
Speaker 1:Yeah, you're excited.
Speaker 2:Yeah, I mean you know, because it's like even a major foundation problem, like unless there's, you know, I guess let's nail that one Right. So if there's a major foundation problem, like unless there's, you know, I guess, well, let's nail that one right. So if there's a major foundation problem, something caused it. Is it a tree? Is it you know? Was there a big tree that had to get removed? Or was it expansive soil? That might be a complete non-stuck, I'm just not buying that Right.
Speaker 2:But that goes back to kind of the geography. Is it hillside Like? Is this thing falling off a hill, you know? And so there's just like risk there. But if it's a normal situation, there's just a cracked foundation due to an old tree or something. I mean, the perspective I have is that seller is going to have to go and repair it anyways, or somebody is going to come in and pay a lot less and then they're going to repair it.
Speaker 2:Definitely less, and then they're going to repair it Definitely, and so if all of the other characteristics meet your desire. Like the layout works or the location's amazing. Then get a really strong opinion maybe three opinions of what it would be to repair it and then work a deal out with the seller and you don't even have to go and repair it. You could counter that in. They could go and fix it on their dollar and you transact and move into the house you wanted Right. So I think people get really freaked out about inspections.
Speaker 1:Yeah.
Speaker 2:And it's really not. I mean the stuff that the negative characteristics that I'm talking about, that turn me off. You should already be able to see those before an inspection occurs.
Speaker 1:Totally.
Speaker 2:So this is the community you're living in the street that the house is on the schools that your kids are going to go to, Like I think, for example, in our local market, Dover Shores it's a beautiful neighborhood. The houses are amazing, community is awesome, but there's a shitload of airplane noise. It's right underneath the runway for John Wayne Airport. So that's just a characteristic, you can't change.
Speaker 1:So are you okay with it or not, exactly.
Speaker 2:Exactly.
Speaker 1:Yep, I have to agree. Okay, on that note, I am excited to jump into one of our stories because I think it's time for Homes Gone Wild, so I'm going to turn it over to you. Okay, our listeners love your expressions and your input here, so take it away.
Speaker 2:So this is for newer listeners.
Speaker 2:And I think we should reference that we're getting new listeners every week, which is great, and we appreciate you tuning in and listening to our messaging. We have a segment we do most weeks called Homes Gone Wild. This is a story I'm going to read. I've not seen this story yet, so I'm excited to read it. But I'm going to read it and we're going to react to it. So here we go. My first showing so this is an agent was at a duplex top and bottom, with a buyer and their family. It was a distressed property. The lower unit was fine, though very old, dirty and smelled unpleasant. Okay, Uh-oh.
Speaker 2:We went upstairs and found a woman sleeping on the couch in the upper unit, Okay, which reeked of weed cigarettes and was in terrible condition. Sounds like a good time.
Speaker 1:Okay.
Speaker 2:We tried calling her out, or we tried calling out to her, but she didn't respond. No, so we started exploring the unit with all five of us plus me, as we were looking around the living room where she was sleeping, she finally woke up. Okay, so she's not dead.
Speaker 1:I was like she's dead for sure. This is the smell.
Speaker 2:And screamed in shock at seeing us all there. She had no teeth and appeared to have a pipe on the coffee table I know what kind of pipe, like a Gandalf pipe or like a meth pipe. After a brief conversation we went into the bedroom which looked like something straight out of a hoarder's TV show. The trash was piled up five feet high and cockroaches everywhere. Sounds like they need smart pest control. The smell was unbearable. We quickly left and I remember thinking what kind of career have I gotten myself into?
Speaker 1:but thankfully everything has worked out since then oh, okay, okay, well, um, just just saying that would have been a great opportunity for her to call one of her investors yes, like bye-, bye-bye house. That's. You love that house, you want that house.
Speaker 2:Yes, it reminds me of, uh, man, it's like a depressing story, but I mean probably the, probably the, the worst feelings like the, the, the most negative emotions I've ever had in a real estate transaction. This is early in the business cycle of buy, buy house, like a year into it. So we're advertising on TV, getting direct to consumer leads, and we get this lead in like a pretty tough neighborhood in Los Angeles and, um, you know, we, we, actually it was a really bizarre scenario they wanted to negotiate the contract over the phone and uh, so we, we, you know, spent our time looking at the comps and everything we're like. Okay, you know, we obviously need to see this but if it meets kind of the criteria that we're looking for.
Speaker 2:We can buy it for this number and I, you know, I remember thinking that was a little weird. It would pop up every once in a while with distressed sellers. But so anyways, long story short. I go to this house on a Saturday morning. So anyways, long story short. I go to this house on a Saturday morning, knock on the door and it's probably like a four or five-year-old little kid in just a diaper.
Speaker 2:Oh no, and it's like a four or five-year-old kid, like should be potty trained, but it was like super saggy. Like you could tell the diaper had been on the kid for like a couple of days, oh no. So I walked through the property with the seller. The seller leased it back to cousins and hadn't been in the home for like eight years. But there was a stack of dirty diapers from the floor to the ceiling in one of the rooms and when I walked in there's like a little two-year-old baby on a mattress on the floor and rats were like running around near the diapers.
Speaker 2:I called CPS and I'm like I don, I don't. I mean I I'm going to buy this house, but I feel like I have to report this because it was just a terrible environment I actually like. At the time I had a young daughter that was like a year old and I got in my truck and it was just like super emotional to see that people live that way, you know.
Speaker 2:but, uh, you know, I think like in the end it was a really positive outcome. We, uh, we, we renegotiated the deal, so and this is probably an unpopular thing to do, but we, we forced the seller to give the tenants money to go and move into an apartment because he was going to take all the proceeds and they were going to be basically homeless.
Speaker 1:Yeah.
Speaker 2:And it was like look, you know, I don't know what's going to happen with the kids, but I'm not buying this unless you give them 50 grand to go and put them in a better situation. Yeah, and good luck, because here's all of our inspections and go find somebody else that will buy it.
Speaker 1:Yeah.
Speaker 2:But we ended up buying the house and they got into a place and the family ended up moving out to Palm Springs and kind of restarting their life. So I hope they're doing well. I've never stayed in touch with them.
Speaker 1:Yeah, fingers crossed, yeah, I mean I think it's. It's just so crazy in this industry the things that we come across Like. That's why I mean some of these stories are comical, but we come across like real life stuff you know, and I think it's so important to share, because because the things that are shared are like selling sunset. That is not like, yes, I do luxury real estate, but that is not like 95% of my time is not that.
Speaker 2:It's the wrong. I shouldn't even say it, but I call that real estate porn. Like the TV shows are like pizzazzy and everyone likes to watch it. You know, but it's like actually, when you're in the industry, you're like I probably shouldn't watch this, you know. It's like you know something's wrong, because it's not really what it is, I feel guilty watching it, like I.
Speaker 1:I actually don't watch them, to be honest, because I'm like it's just so cringy that it's so not realistic and not it's so far away from like what life actually is that you know, I always find it really important to share the real stories of what's actually happening.
Speaker 1:But it's so funny. Even when I was in this like small town in Spain and at this little tiny hut beach bar they're called I'm going to say it wrong, but it's called a chiringuito and it's basically like that. It's a little hut, but they actually serve amazing food. Always. These are lined all down the beach and it's a tradition for fishermen back in the day. They would catch their fish and they would bring it up. Anyway, so it's this tiny little nothing, and I'm, you know, doing my best to communicate with the girl that works there.
Speaker 2:We're chatting Uno cerveza, por favor.
Speaker 1:Yes, and you know she asks at some point, like what I do and where I live. And I told her Orange County and I'm in real estate, and she's like oh, selling Sunset.
Speaker 2:Oh no, I'm like just like that.
Speaker 1:Yes, that's exactly what it is. Yeah, got it.
Speaker 2:What I took away from your story is that I probably need to spend more time in the brokerage, because, while is that, I probably need to spend more time in the brokerage, because, while I'm out, like being emotionally distressed, trying to help families in dire need, you're like at this beach bar in Spain. Sounds like I need to change careers. Yeah, yeah, you can do it too. You can do it too Cool.
Speaker 1:Okay, so moving on, I think we wanted to talk about the rental market a little bit in. La with the fires and really just maybe the fires in general, because it's been a couple of weeks since we we've touched on that and what things are looking like and what can people expect in that market right now.
Speaker 2:I don't know I mean, we have, yeah, we have ideas, you know when I say I don't know, it's kind of a wrong statement, but you know we so, if you're a new listener, we lost one house, which, very lucky, you know. Between all the platforms, like you know, we have Innovate, which represents buyers and sellers Buy Buy House owns inventory, and then Center Street Lending, we lend capital to fix and flip investors, ground up developers Across all platforms. Three houses were burned, one we owned at Buy Buy House, and so I think we dodged a major bullet, and that's. It's tough to say all those things, especially with how much emotional stress people are in after losing their personal belongings. But, um, I don't know it's. It's a really bizarre like related to the fires. I was able to go in to the Pacific Palisades, not last Monday but the Monday before, and you had to check into a staging area on PCH in Santa Monica. They verify that you own a house in that area. They give you like this disclosure saying, hey, you're going into a hazardous waste zone, oh gosh.
Speaker 2:I mean they have like full on, you know, white kits with masks and everything if people want them, and they're like saying, hey, you know you're taking all the responsibility and risk you might die going in and breathing this air and all this shit and I'm like oh fuck, but I mean it's it's crazy to walk into it and see the destruction.
Speaker 2:I mean it's it's wild to see what, what's happened. I mean it was just crazy. Um, but you know, I've and I've just subsequently been on, you know, countless hours with legal, with, you know local officials, with other people that own real estate. I'm in five or six WhatsApp chats with hundreds of homeowners that are trying to figure everything out, and what I'm seeing right now is that the political side of this and the utility side of this and the environmental side of this are all kind of at a standstill because, you know, trump came out two weeks ago and said give them their permits, let them go and build it. But what's happening is, you know, environmentalists are saying and I think it's true that you know, there were a tremendous number of cars, you know EV charging cars, battery you know battery powered cars that melted.
Speaker 2:So those lithium ion batteries melted into the soil. Most of these homes were built in the 50s, 60s. They still had asbestos in their joint compounds, so the tape and mud that's holding up drywall, the HVAC systems like the register boots, the transit pipes, flue pipes that would take venting from a water or a it's called a CVA like a combustible. A water or a you know it's called a CVA like a combustible. A gas utility would take that air, you know, out of the house and that's still asbestos. And so those things are all now in the air and in the dirt.
Speaker 2:And the other thing that's kind of tricky is that you know the electricity was provided to the Palisades above ground and you know it doesn't make sense to go back above ground. The utilities shouldn't be putting those subterranean. But they're trying to figure all that out. And so the question getting back to rentals in just a second, the question I have is what happens actually to all of that real estate? Because nobody's going to go back and rebuild until there's infrastructure. There will be no infrastructure until they start giving permits and they're not going to start issuing permits until they have a plan for utility Right.
Speaker 2:And so I don't know. It's a really complicated issue and today's not going to make it any better.
Speaker 1:Yeah.
Speaker 2:I mean, if this rain washes everything into the ocean, I could see politicians having just a complete heyday.
Speaker 1:Yeah.
Speaker 2:You know, and stopping like putting a bunch of red tape around, not being able to go back and build and whatever, so I don't know what's going to happen with our transaction, but you know, what I think it's going to do in a big way is impact inventory and it's going to impact rental, the rental market, in a massive way in, you know, greater Los Angeles. Yeah, a couple basic antidotes. Like we have a borrower at CSL. I also, every once in a while, do some JV deals with him. You know him I'm not going to say his name, but he had a transaction in Santa Monica that was very strained.
Speaker 2:It was what I would say leading into the fire. It's a $5 million house and they were having a hell of a time getting it sold. It's a $5 million house and they were having a hell of a time getting it sold Post-fire. I mean, they had like 15 offers. So there's people that have enough liquidity, that lived in the Palisades that are saying, hey, I'm going to go and buy a $5 million house or I'll pay 5.5 just to have a fully move-in ready place. So we're already starting to see that. We're seeing some of it in Orange County too. I mean, we have listings that we're bringing back to market or in the South Bay. You know, they're like kind of luxury-ish transactions and we're seeing a tremendous amount of interest from people that are thinking, hey, let's just get out of LA.
Speaker 1:This is a good reason to get out. Yeah, even people that weren't in the Palisades, like I, I feel there are people. There's a feeling of, just you know, leaving LA in general.
Speaker 2:Yeah, the neighborhood chats that I'm on and I'm on one for the Palisades and one for Altadena, and the word that keeps getting thrown around is gross negligence. They feel like there was just a tremendous amount of negligence in the way that the local authorities responded to the issue, or a lack of preparedness for the issue and so maybe move and just move out of that area.
Speaker 2:So I think. But the rental market's going to be kind of interesting. The reason I say I don't know what's going to happen with that is that the person that lives in the Pacific Palisades I mean, these are like the cheapest house you could possibly buy probably is like a $2.5 million house, maybe in the Palisades. I mean there are $20, $30 million houses that burn down. That person's not going to go and rent an apartment.
Speaker 1:I agree.
Speaker 2:That person's also not going to go and rent a small single family house. Like they're going to try to go and purchase something else or just move.
Speaker 1:I, think temporarily you know we might see something while people are trying to find the house that they want. But I completely agree. Like it's you know they're, they are wanting the house.
Speaker 2:Yeah, I heard another argument, I think two or three nights ago, and I haven't. I haven't mentioned this to you, but the number of people I mean there was there's extreme wealth in the Palisades and the number of people that support those wealthy people, like the house cleaners, the tutors, the nannies they're out of a job now.
Speaker 1:Right, right.
Speaker 2:And so, and generally that working class person is probably renting you know in a more of a rural area. So I mean there is an argument there that I've heard too, that we're going to see a lot of availability in the rental side yeah. So I've heard both arguments like rents are going to go up in a big way because inventory rental side. So I've heard both arguments like rents are going to go up in a big way because inventory is down.
Speaker 2:I've also heard that the workforce is getting impacted and maybe those rents are going to be flat or even come back a little bit for entry level rents. But I don't know.
Speaker 1:Yeah, so I guess we will see. Stay tuned.
Speaker 2:Yes.
Speaker 1:I love that. You have the play-by-plays on all of this. You have an insurance claim that you're filing. You have the neighborhood apps. You have um. We have real estate agents and people that we know that have properties Like. We've got all bases covered. If you need to know about the fires, realty talk podcast is your stop.
Speaker 2:Yeah, I mean all humbleness, like we're getting invited to a lot of crazy stuff because of the businesses. We have that round table they had when Trump flew out. We got an invite to go and listen into that. I just didn't want to drive to LA, but I think we have access to some information. Unfortunately, the information is just not there. Yeah, you know, that's the reality. It's like it's kind of a waiting game for everybody.
Speaker 1:Yeah, everyone's kind of guessing right now.
Speaker 2:Yeah, so.
Speaker 1:Okay, well, we have to close with our last segment, which is rate this listing. So, for our listeners that are unfamiliar, we are going to pop up some photos and Paul and I are going to take a look at the listing. We get location, price of home, number of bedrooms and bath and square footage. And then we have to rate the listing based off of this. So diving in Okay, tempe, we both know Arizona, I like that, so $890. Okay, four bedroom Seems kind of Okay, tempe, we both know Arizona, I like that, so $890.
Speaker 2:Okay four bedroom Seems kind of expensive in Tempe.
Speaker 1:It does feel a little high. Four bedroom, three bath, 1815 square feet, okay, all right.
Speaker 2:So we've got like kind of a.
Speaker 1:Desert-y.
Speaker 2:This was probably a rambler and there was an addition, because there's like a second story on the left-hand side of the house.
Speaker 1:Yeah, yeah, okay.
Speaker 2:But those windows on the first floor on the left-hand side look kind of low, so maybe it's a split level.
Speaker 1:All right, not bad Interesting.
Speaker 2:You know, it's probably like an early 2010s renovation.
Speaker 1:What's going on in the?
Speaker 2:backyard there. What is that? What is? Is that a bird, or it's like a teal wall?
Speaker 1:It's easy to get distracted and just look at that and be like, oh, that's pretty nice, like okay, they threw in a pop of color. But then there's like legs coming out of a martini glass on the wall, which kind of threw me.
Speaker 2:Yeah, the bar stools are like, you know the red carpet, you know gold post red carpet, red velvet. Yeah, like we're about to get into something here. Yeah, I can feel it.
Speaker 1:Okay.
Speaker 2:Okay.
Speaker 1:All right, what is Okay, so another neon sign.
Speaker 2:It's like a cowgirl with a pistol.
Speaker 1:And here's the thing. Like, this is where it gets upsetting to me, because it's like you know, this could probably be staged pretty well. Yeah, like I think. Uh, I mean this is a clean there's a disco ball.
Speaker 2:How did we miss the disco ball in the corner?
Speaker 1:but like, wouldn't you just take the disco ball down? Like I don't know, everything else looks, looks. Okay, right now hey, okay.
Speaker 2:so if you're just listening and you're not watching, there is a woman, there's a painting of a woman.
Speaker 1:She's flipping us off. I love you describing this, by the way.
Speaker 2:She's flipping us off finger down.
Speaker 1:It's like the most professional way possible. You're like there is a woman.
Speaker 2:It is a lot of ass. Basically, there is a woman with no pants on.
Speaker 1:Yeah, flipping us off. Yeah, okay, all right, this is swinger house, the pineapple upside down pineapple. Yeah, how do you know that, paul?
Speaker 2:funny, you should ask.
Speaker 1:Funny, you should ask like that was way too fast for you to identify that I, I, uh, this is the I.
Speaker 2:It's a great story. I actually, you know my wife, she uh, neither of us had heard of this. I can't remember the setting, but we're out to dinner and somebody told us that that's what it was. She's like I go to this target and I'm like shopping around or whatever. And and I've been to the target three different times and people come up to me and my husband and like oh, you know, it's just so glad to meet you guys. And like do you want to come hang out after? And there's an upside down pineapple in their cart. And she's like I hadn't really thought through it. But she's like this target is just really weird. And then she looked it up and it's like that's like the international sign of we're swingers.
Speaker 2:Oh, wow, yeah, Okay, so Rach told me this story and I'm like, holy shit, I should stop putting upside down pineapples in my cart. It's the only way I buy pineapples. I'm joking, of course.
Speaker 1:Oh, okay. Well, now we know, this all makes a lot more sense, it's like a tropical room.
Speaker 1:And I will say I don't know if you've heard this, but I do know there is a very big swinger community out there, like it's a thing. I didn't think it was tempe, but it was like in a in, definitely in scottsdale, like in that whole area I have. I have spoken to a lot of people that like that is their lifestyle and I I'm positive that there's a big community there's a tiger on the wall with pink glasses okay, oh okay, getting a little, getting a little racier in the bathroom yeah, the battle.
Speaker 2:It's like a shark jaw right and then a a woman behind it. I'll say a scantily clad woman. Thank you, but if you look at the finishes, holy toledo. If you go back, though, and look at the finishes in the last the finishes are good.
Speaker 1:This isn't just. This is like where they're having the parties.
Speaker 2:I think this is ground floor yeah.
Speaker 1:This is where the parties are happening. This isn't just like oh, we live here and we're swingers. This is like. This is where the parties are. There's three beds next to each other.
Speaker 2:Three beds next to each other with like a curtain. Yeah, there's neon signs that are very uh. If you're watching, you get to see these. If you're listening, it's uh, there are. There are hand gestures that are extremely suggestive. Yeah and um. So they're asking 890 because they think that they have like something really cool. This is like ground zero for Swingerville. Oh, this is an astronaut room. There's astronauts playing beer pong.
Speaker 1:Okay, all right, this is for the kids, this one's for the kids.
Speaker 2:How do we always have stripper polls on all of our Rate? That listings?
Speaker 1:Yeah, I feel like whoever's choosing this.
Speaker 2:Our producers.
Speaker 1:Junior is really into the pole, that is yeah All right. Well, outside looks awesome. All right, that looks like a fun time.
Speaker 2:A little bar walk-up, bar gazebo.
Speaker 1:Yeah, they're having a good time at that place.
Speaker 2:Yeah.
Speaker 1:Okay.
Speaker 2:So this was like a. So this was like a. This is either like a swinger Airbnb. I mean, that's the way it was set up.
Speaker 1:It was it reminds me of? Like the houses in Palm Springs with, like all the like the girl. What is it Like the bachelorette?
Speaker 2:Yeah.
Speaker 1:Like you would go there for a bachelorette, I would. I feel like that would be fun for a bachelorette to be in that house, that house. But I mean like, not me personally, but I could see why people would.
Speaker 2:I was like uh, you the cleaning crew?
Speaker 1:no, that's what I was just gonna say I personally would never be able to yeah, probably walk into that house but if you're trying to, see where, like the girl you know, maybe that would be funny.
Speaker 2:They could market to that genre if I have to rate this, it's like if you're actually so going back to the listing, like if you're trying to sell this house, it is a one out of five, how are you gonna sell that?
Speaker 1:no, it actually makes me mad because it's like the house is actually in decent shape, like you can make that such a cool property yeah and like move that place and sell it and and, but again it just goes down to like, I think that some agents because we we kind of talk about this every week where it's like you had such a great opportunity to uh do something, and in this one is different because it's like the house is still in good shape, it's not like the house was ruined, like some of the other ones.
Speaker 2:It's like they did an alien wall Like okay, like I know that that's going to be nice, nice cabinets, quartz countertops, you didn't just take down the neon signs and like call it a day, Like why would you do that to yourself? Well, so where my mind is headed is headed is is when, and, if you're listening, if you're the agent that listed this, please call or email. I want to talk to you what was the what? Was the listing appointment, like you're like oh, great, I have this new lead.
Speaker 2:I can't wait to meet this seller. And then you walk in. You're like holy shit, and they don't want to restage it, they don't want to take out the my feeling is they are part of the network. Oh, it's their house.
Speaker 1:Could be their house or part of that group, like that is like they've been to that house before. That is my feeling, because like I'm not walking in that house and saying, like this is great, like we should totally leave this. Yeah, like this is going to move in a heartbeat.
Speaker 2:So I gave it a one out of five. What do you get?
Speaker 1:Yeah, same, I can't.
Speaker 2:Yeah, so, agent, shit the bed on this one.
Speaker 1:Yeah, Again, you know I, I'm telling you agents, let's all work together.
Speaker 2:Yeah.
Speaker 1:Let's uh I I know sometimes it's it's hard with the seller. There are opportunities. We're really lucky. I'm really lucky because a lot of times you're the seller, so I get to have like much easier conversations. But but sometimes you have a seller that, um, you know, really feel strongly about what is left and what is showing in the house. But it's up to you as an agent to challenge that and educate them and, um, really hold firm about you know what it's. It's what's best for them in the long run and and listing that property like that is not what's best for them.
Speaker 2:Client control right, Like you've got to have client control on the scenario.
Speaker 1:It's funny you say that, Like I was talking to an agent today where she actually had another agent that called her with his client on the phone. So she represented the seller, he represented the buyer and he called her to talk, to have her talk to his buyer.
Speaker 2:Isn't that an ethics issue?
Speaker 1:It is Not only that, but it's I mean, it tells me that you can't handle your buyer you know, and that you are afraid to have the hard conversation with your buyer, to make the listing agent have the hard conversation with your buyer, like it's, it's crazy. So, um, you know, maybe if you need some extra training, we've got, uh, we've got, mentorical, we've got a lot of options and, um, you know, bringing it full circle, got a lot of options and, you know, bringing it full circle. We were happy to help wherever we can.
Speaker 2:Got it All right, so our team is throwing up the explanation of this one. Grab your pineapples and start your engines. Told you this won't last long, holy shit.
Speaker 1:See, it's just minutes away from Old Town, scottsdale. Why go out at night when you can bring the nightlife to you? So they're just embracing it.
Speaker 2:I think you know it. This is the agent's house, yeah.
Speaker 1:But you have cut off officially. You've cut off like 90% of buyers.
Speaker 2:Yeah, they're not 95% of buyers. If I walked in that house I'd be like I gotta. I mean, I'm not, I can't walk in.
Speaker 1:I would like immediately go take a shower. Yeah, that's what I would have to do. Yeah, okay, very interesting.
Speaker 2:Well, in closing, what, uh? I have some thoughts.
Speaker 1:Oh, give us your closing thoughts, paul.
Speaker 2:I feel like the you know, the conversation was really intriguing today. I just feel like if you're an agent in Southern California and you're not currently inspired by your brokerage or the people that you're working with, you have to call Innovate right now, because the business itself is growing rapidly. We have amazing new agents joining the team and I think the actions that our agents are taking are separating them from the. You know the competition in the market, and I would use like a couple of data points. You know, in our new year planning sessions that you and I talked or you referenced at the beginning, one of the things that I was really intrigued to understand is our market share with, you know, per team, per, and that's really more of a. It's probably the best indicator to understand if we're doing a really good job and if your market share is decreasing, obviously I think your team is either shrinking or you're doing a bad job.
Speaker 2:If your market share is increasing, you're probably doing a bang up job, or if you're flat, you know it's probably good, and I think, across the board, our market share is increasing in all the major markets that we're operating in, and so it's easy if you're an agent to look at yourself and say, man, this year was just really tough financially.
Speaker 2:Maybe I made half what I made you know three years ago. But if your market share is actually increasing, that's a really strong data point. Like this is just kind of the normal for a minute and if you stay in the game long enough, you take the right actions, there's going to be a boom at some point and you're going to reap the benefits from that and that will be uncomfortable during the hard time. But if you are an agent in Southern California right now and your market share is decreasing like you're doing less on average on an annual basis than you were previously pro rata then you're at the wrong place. Like your team is inspiring you to take the wrong actions. You should be increasing market share in a tough market. So yeah, I mean it's a guilty call out Like I'm just saying, hey, come to our brokerage.
Speaker 1:It's just so clear right, it feels that way yeah. Sometimes you just got to say it.
Speaker 2:Like.
Speaker 1:I'm just saying hey, come come, come to our brokerage.
Speaker 2:It's just so clear, right Like yeah you get.
Speaker 1:Sometimes you just got to say it Like it's, it's clear. Yeah, I had to do it.
Speaker 2:It's an innovate plug. We'll take it. We did a smart pest plug yes.
Speaker 1:Innovate plug yeah, yeah.
Speaker 2:Yeah, shameless, go for it why?
Speaker 1:not. Okay, that's all I have, all right. Anything else from you? No, I think we covered it. I thank you for the conversation today. I hope our listeners subscribe, if you haven't already.
Speaker 2:Yeah, helps a lot.
Speaker 1:Yeah, and we'll see you next time, yay.