– Good morning everyone. This is Tom Cronkright from CertifID and Son Title. We’re doing a joint webinar, super excited about today’s content. Wanted to mix things up. Have a group of people on the panel today that I’ll introduce in a minute that are just rock stars here in the West Michigan market to bring us a fresh perspective on what real estate is looking like on a going forward basis. So we’re calling this the real estate reboot. They have national experience. We’re looking for insights and perspective on how real estate is changing and frankly, the ways that we can take advantage of this very disruptive time in the industry. I think disruption brings friction and I think in all cases, friction if looked at in a positive way, really challenges us to grow as either, you know, we have a whole group of 500 plus people now on the webinar, some of you are agents, some of you are brokers, some of you are law firms, you’re running title agencies, builders, developers, underwriters. I’m hoping there’s something for all of you. I am one of the owners of Son Title CertifID I’m a licensed attorney in Michigan. I’m gonna be moderating and keeping us on track as best we can today. Just a quick overview of CertifID for those of you that don’t know, we provide wire fraud protection for funds transfer in and out of the escrow account. We actually guarantee each wire up to a million dollars. We’re integrated with most of the title production platforms and I would just encourage you, if you’re not using the platform, let’s have a conversation after to see what we can do for your business to provide a next level of security. Okay, housekeeping, everyone’s on mute, but we want this to be a fully engaging conversation. So put your questions in the questions panel here of the session. I’ll be getting fed those in a monitor that is in front of me in real time and we’ll try to weave those in. From a polling perspective, we’re actually gonna have live polling so that we can provide fresh feedback and get into what you’re experiencing in your market relative to some of the topics that we’re gonna run to talk about today. Please participate. A copy of today’s recording will be available after the session. So if you wanna use this for internal or external training, feel free to do that. And as always, come back to next month’s webinar, always packed with good feedback and possibly another panel discussion on another trending topic. And we’re giving away swag. So Katie’s on the line with us. Katie is gonna be helping with polling. Katie also sends out our swag. We got t-shirts, yetis and mugs. If you ask a question, you’ll be able to win some of the swag that we have here. So, all right, let’s do this. Real estate reboot starts now. Let me introduce our all star panel of speakers today. Starting off with the informant Jason Jenkins, who’s sales manager, loan officer of Union Home Mortgage. He’s been serving West Michigan market for 24 years. I’ve watched him grow in the industry personally, very impressive. Number one producer for many different types of loans over the last five years and really is kind of a get it done guy. So Jason, thanks for thanks for joining this morning, I appreciate it. Next off, Ryan Ogle. Ryan’s a broker of Blue House Properties. Both residential and commercial real estate sales, based again out of West Michigan here. 15 years experience, past president of the Grand Rapids Association. I’ve known Ryan for a long time, forward-looking thinker and leader and looking forward to his feedback. So Ryan, thanks again for joining this morning.
– [Ryan] Thank you.
– Mark brace. Mark is principal of Brace Homes, Berkshire Hathaway home services. Number one real estate team in West Michigan for sales volume. He’s a wall street journal, real estate trends recipient. 16 years in the real estate industry and serves on the Forbes real estate council. So Mark, thanks again for you joining looking forward to your perspective on some of these things as well. Last but certainly not least, Gerald Feenstra, another top producing agent for Remax of Grand Rapids and has led his team to be one of the top producing teams in this area as well. I’ve seen Gerald navigate the housing crisis and building his team up. So Gerald, thanks again for joining today. All right, so what are we talking about? We’re gonna go through as best we can in 45 minutes. Some hard hitting topics that are trending first. What’s been the impact that Covid has made directly on the real estate market? I wanna spend quite a bit of time on consumer sentiment and how buyers and sellers are thinking about the process of either listing or going out and buying a home. How are we advising the customer on the timing? Jason’s gonna walk us through what’s the state of the union as far as mortgage markets, what’s happening, what can we expect? And then we’re gonna get into some blocking and tackling of just how business is being done. Social distancing with the home buying process, remote closings, and how that expectation is changing now that we have executive orders and proclamations around the country for social distancing. And then we’re gonna end with the top five strategies to make 2020 a success. So we’re gonna use the polling platform and Katie, we’re gonna start off with our first polling question. And Katie is gonna load this up to you. You can guide me on your timing, but I wanted to start with how you’re viewing from where you’re sitting. What is your outlook on the next 90 days in real estate transactions? So is this gonna be a fast and immediate recovery, a steady recovery, a slow recovery or I think it’s gonna take much longer than what we expect. So Katie, I just wanna verify they can see what I’m seeing right now where we’re hovering pretty steady into the steady recovery zone, right?
– [Katie] Yup, exactly. Got about 77 responses give them a couple more seconds, but a study recovery is definitely, you’re a strong winner there.
– Got it. And Katie is gonna put into the chat feature or graph to kick this next section off on Covid impact in real estate. So Michigan is an interesting state in the sense that we were one of the hardest hit with our shelter in place requirements, real estate so that the practice of listing and selling property was not carved out as an essential service. So just as recently as last Thursday, the real estate community was able to go back to work and start servicing home buyers and sellers. So she’s gonna put a graph in that shows how that impacted the actual listing, pending and canceled sales activity in our market and when at the bottom of kind of the trough, we were down 70% on our listing activity. So to roll through the full responses, it looks like 60% of everyone on the session said we’re gonna have a steady recovery. And then it’s kinda steady to tiltering towards a more conservative outlook that it could be a slow recovery. So thanks everyone for participating in that. All right, Ryan, I’m gonna have you lead off with this idea of how Covid has impacted the real estate market here locally and what you’re hearing on more of a national scene.
– Yeah, the impact has been evolving, right? Like it first hits and you gotta quick figure out how your staff can work from home. And then you get another update or another rule from local government or state and then you have to adapt to that. So, I mean the biggest thing has been adaptation, but then you can quickly overcome that and then you have to implement it. And then honestly for me, when I thought about this question, I don’t wanna call it a negative impact, but it’s just, the having the, what’s the word looking for? But the endurance to just make it through this. Lots of meetings, lots of conversations, lots of zoom calls, it gets tired. And honestly, it’s just been an endurance thing. And other than that, making those quick adaptations, which we’re able to do, we’ve all been in this well, it’s been positive impacts for us. And I’ve talked to a lot of agents around the country who this was a chance to slow down. You were forced, you could lower expenses, you could increase the efficiency, you had to quick adapt to technology. And I think a lot of people have looked at this and said, this has been a positive impact. Not at the expense of anybody that is really hurt ’cause we know it has, but it’s been good for business.
– Got it. That’s a great perspective. Mark, any other texture to add on to Ryan’s thoughts there?
– Yeah, yeah. Well in Michigan, you know, we got shut down. So it was kinda the way I viewed it, is it was a once in a lifetime gift to take some time to a focus on working on the business and not in the business. We’ve never had an opportunity to kinda like pause and say, all right hey, I’m gonna take care of a lot of stuff now that I’ve always wanted to do that had been on these long to do list for years. So we just use it as a time to work on the business. Like Ryan said, absolutely adaptability was huge. We learned quickly how to show homes on zoom calls and there’s people that had to move that kinda got caught with their pants down. Like they sold their home in Kansas and they need to buy something in Grand Rapids and we had to make it happen through zoom calls. So yeah, we got better at technology. I think my team, is gonna be a lot better with video conferencing, even with just our clients moving forward. I think the personal touch of video is great. I’ve always been an advocate of like bomb bomb and stuff, but now you can just jump on a quick zoom with people that are relocating into town and it’s a much better touch.
– No, I think you bring an interesting perspective that I didn’t think about is that as the customer’s been forced to adapt to technology in their own professional life, you layering in and having that same medium exchange of interactions made it that much easier. You didn’t have to convince somebody to say, hey, let’s jump on a Skype or a zoom or whatever. Jason or Gerald anything to add onto this? Otherwise we’re gonna launch the next polling question on consumer sentiment.
– I think I’m good on that. I think Ryan brought up a really good point of adapting. That’s certainly what everybody’s at do, not just in our business, but in every business out there and with everything changing everyone has to come up with a different strategy, different plan in every line of work. So I think that’s across the board. But yeah, nothing more to add on my end.
– Awesome. Yeah, I’ll add one thing in Lawrence and I, both on the CertifID project and the title operations here in Michigan. Same thing, we found ourselves, you’re in crisis mode, it’s like, okay, where’s the footing and when does it come under this disruptive moment? The title industry has been historically slow to adopt technology but I can tell you that I’m predicting it’s adopting about two years of what would otherwise take two years of tech adoption into about four months right now. So all right, next polling question. And this is really gonna be related to those that are on the real estate side or the lending side on the call. How are sellers feeling about listing their homes? So, Katie, I’m gonna have you launch this and it’s either, hey, I’m good to go, let’s get the listing up on the MLS. I’m just waiting to see, so I need a little more time. And then the other two are like, look, I’m gonna sideline this right now. I’m not feeling it for one reason or another. That could be a health reason. That could be a financial reason. So we’re starting to see the trend lines and thanks everyone for responding. We can’t see your name in the response, but this data helps us and we’ll share this out in our blog and in other media of how the group is thinking about it. So looks like we’re gonna come in that we’re either ready or we need a little bit more time. So that’s on the seller side. So Katie, why don’t we close that poll out and I wanna frame the other half of the transaction and ask a similar question on what are buyers feeling? So how does it change? We said that a vast majority of sellers are ready to go. How are buyers feeling? And the reason why I ask, and I’m not surprised to see this early stats, we’ve heard that millennials that are in apartments, so they’re living in metro areas are recognizing, hey, I need a little space, I need a deck, I need to be able to walk around, I’m feeling cramped, I’ve been couch surfing for the last two months and I wanna put a stake in the ground, so not surprising there. So that’s a good indication though. I mean this makes me feel as an industry participant that there’s a potential light at the end of this that will carry us through the rest of the year. So it looks like based on the poll results, the sellers are a little more hesitant, might need a little more time. The buyers by contrast, almost by a flip of the statistics there on how you responded are more ready to go. So let’s jump into consumer sentiment. In the head of the buyer or seller, how are they approaching the listing and the sale of real estate? So, Gerald, I’m gonna put you on the spot to walk us through the mindset of a buyer seller. Let’s start with sellers right now. What are you hearing in real time from the field?
– Yeah, it’s a mixture. I’ve got one agent but what I was seeing the most of is people asking questions because frankly people don’t know what’s gonna happen. We can see a statistics as they go and we look at that to make decisions and give advice and recommendations to sellers, and to buyers for that matter. However from what I’ve seen the most of is people are asking can we still move forward? Is it smart to put our home on the market? And they’re asking for the professional’s advice. So, more than ever I think right now it’s good to stay up on what’s happening, what statistics are to give that sound advice. And what I’ve seen and what I’ve talked to sellers about, is that they are ready. They want to know exactly when they can go on, when it’s gonna make sense to go on market. And is there buyers out there ready to go? And has the market dropped, I guess the market up and down is a matter of opinion. But from what I’m seeing from the statistics that there’s still a very large demand and that’s not just in West Michigan, that’s around the country. A large demand for housing. So I’ve given the advice that now’s the time. Let’s not wait. In fact, let’s be fairly quick about it because we don’t know what the future is gonna be. We don’t know what six to nine months from now is gonna look like. What we do know right now is that the market is strong. We have had eight weeks of downtime, let’s call it, and let’s do it safely obviously we’re getting that in a minute, but let’s not hold off. And we stay pretty positive about the real estate market and overall real estate market has responded that way as well. I think it was more from what I’m seeing a delay in the market more than a drop. Sales drops, obviously there’s a drop in sales, and that can be attributed to a stay at home order. It’s naturally gonna happen. I believe that the poll probably called it right. It will be a steady recovery back. And I think it might not be a spike up, but certainly over the course of the next a couple of weeks there should be a frenzy of people that have been wanting to make a move.
– You know, it’s interesting Grand Rapids has been on the top, hottest real estate market, whatever list you track for the last five years, typically in the top 10, if not top five recently before we went into this crisis. Our inventory has been hovering around a month of supply which means just a few weeks a good supply or two weeks. We’ve had double digit sales increases or average value increases since the great recession. So a question came in and Mark, I’ll address this to you. That possibly 30% of consumers may be willing to purchase over some type of a virtual tour. Are you seeing this? Is that something that, you know, and I want to frame it this way. Are they concerned about where they’re gonna repurchase? So I can put my house on the market, but there’s always been this tension line that yeah, I could get top dollar, but where am I going to go? And I’m just wondering if you’re hearing that technology is gonna interface how properties are shown.
– Yeah, well, I mean there’s no question that technology is gonna be an important part of selling houses from now through the future. I would say the listings that have the best media, matter port, virtual tours fore plans, professional pictures. A lot of buyers have a less hesitation about making a move when they have that type of quality information online. They’re not gonna be so likely if it’s cell phone pictures or something like that or only like a couple pictures. But I mean, I can’t say how many properties, we sold a lot when you couldn’t even tour homes. And we would get on zoom calls. So it’s definitely something that’s gonna be happening moving into the future. I don’t know if I completely answered your question. I kinda felt like there was–
– No, I get it. Ryan, what are you seeing on the buyer side? And then I wanna talk to Jason about just the qualification from a lending side, but what are you seeing on the buyer side that has kinda perked yours up or made you more curious on how this could be a trend going forward?
– Yeah, buyers who need to buy wanna buy. And so those ones are moving. There’s probably some buyers who are a little timid, but for the most part, buyers, specifically first time home buyers or buyers who were already in the process before this hit are jumping right back in, right into the deep end, no questions asked, no reservations. My gut tells me though that might be part of a temporary 60, 90 day boom and then reality that’s sets in.
– Got it. All right Jason, I know we’re gonna talk about… Oh yeah, go ahead Mark.
– Yeah, I was just gonna say something. I agree with Ryan, one of the things that this whole thing has felt like in Michigan is like the real estate market’s been dammed up. Gerald said, put on pause. Life is a linear path and everyone has reasons why they need to sell or buy. And a lot of times can’t put that on pause. Like you’re relocating for work, you had a job loss, a job relocation, you had a death, you’re getting married, you’re having kids. Like all that stuff just is continuing to happen. At least in our area, there’s not enough housing and supply and demand controls all markets. So, I mean, I can’t speak to the coastlines and other areas, but it’s gonna be super strong here for a very long time just based on supply and demand and the fact that life goes on.
– That’s a good point. Yeah, the other thing that we’re gonna feel the effect of an inventory is that we haven’t been building homes. So we missed the start to a spring market and there were a lot of starts that were permitted. And again, for those of you not in Michigan, that construction was also deemed a nonessential service and was shut down and now is just starting to get their crews back. And then the complexity of having to call somebody back with these massively large unemployment benefits to swing a hammer at 40 grand a year or unemployment at 50, these are the struggles that we’re hearing from some of our customers in the home building space just to trade. So that’s a good point. Jason all right, how are borrowers feeling? And I wanna address like first time home buyer borrowers that haven’t been through the process yet. What changes to the conversation have come up, over the last call it month, month and a half?
– Yeah, ell it means a lot of it’s asking me to predict the market. Is there gonna be a crash, what’s gonna happen? And I share the sentiment of these gentleman at least here in West Michigan. I just say, I can’t see anything like that happening. At least not a crash, where have you. But to Ryan’s point, most of these first time home buyers are just going home. I’m chomping at the bit to get in. They’re waiting for listens to come up, they’re irritated, they can’t see more. And early on there was some people said, whoa, maybe we need to step back and wait a year or so because they want to stop purchase and see what is coming. But for the most part they’ve been going home back at it. And it’s just having to treat their approvals a little bit because I think we’re gonna get into it but some tightening of the underwriting guidelines is good for us. But we haven’t seen a slowdown whatsoever. A mirror fortunate we were deemed essential. We’ve been working the whole time. Nothing’s changed, I’ve been coming to my office, getting stuff done. Obviously interest rates are historically low. So a lot of refinances going on too. But I agree with what Mark said. The dams are gonna open and it’s gonna be a blood bath. It’s gonna be extremely busy here shortly.
– Got it. Now, great discussion guys. This is a really important topic. I think what we’re seeing at the closing table, it’s, I dunno, it’s just more cautious. It’s just a different vibe at the closing. I mean, everyone’s excited to get it close, but there’s just this cautiousness towards the closing ceremony. We’ve removed too. And I think a lot of people on the call have seen some type of a remote digital type signing experience so that we’re not bringing folks in. Some people wanna come in and sign pen to paper and we created protocols for that, but at the end of the day, just more caution and in protocol around it. So, all right, next question. The big question of the day. The $64,000 question. Is it the right time to buy or sell? Ryan, I wanna punt this one back to you and then we’ll run down through the group. And just if yes or no, why? So you’re advising a seller right now. I wanna list my property. What are the reasons, either good, bad or indifferent. And how would that advice work from your perspective?
– I might give an answer to people don’t wanna hear ’cause the answer is yes and no. Yes, if you need to sell or buy, you should. Deals are happening and we have not seen a dip in prices or a reason to say not do it. If you need to liquidate or have more cash or if your place is too big or you didn’t like quarantining at your home or your spouse gave you too many projects while you were home for eight weeks, you might wanna sell and get something else and you should. If you’re happy with your house and you don’t have to sell and there isn’t much out there to buy, then you shouldn’t, right? And so it really has been depending on the person and the situation is where we advise. But from just a peer standpoint of is it a good time to sell? Yes. In our area, West Michigan values are still high. What I’ve seen around the country, this was not a housing led recession and housing should be just fine coming out of it. And there was low inventory and it was a sellers market and pent up demand. And it seems like that still rings true. So if you wanna sell it right now is a great time and we don’t know what the future holds. So from that standpoint, maybe you do it now and not gamble or you stay put and you see what happens.
– Do you think the deciding factor right now, Ryan, is more life circumstance based than them trying to obviously use the word kinda time in the market from a value that they could get for the property?
– Yeah, You know what, Mark, you’ve got a lot of new listings going up more than me. I’d let you answer it ’cause I really have had a little bit of both on that. So I’m like, hey I started building a new place. I already bought a place. Is now the right time? Can I time it for money? And then other ones is I need to move. This house is way too big. I was planning on moving. I waited too long. Mark, do you have anything?
– Yeah, I mean I’m gonna kind of go back to the comment I made last time. Life is linear and some people have to move and need to sell and in some people might be just like, well, I guess I’m not interested in living in my home anymore. I wanna downsize or up-size, quarantine kind of gave it to them. But if you could even go back to the polling statistic, you said buyers are ready. Like their buyers are out there, they want homes. We are short on homes here. So it doesn’t particularly matter in the circumstance, like I’ve got so many buyers that are anxious and just like Jason said, buyers are anxious. So I don’t think there’s any reason to delay, if you’re thinking about selling. What I would say even higher than that is know your numbers. Like as a real estate professional, you need to know your numbers, like what’s happening. I don’t know how many of the realtors in my market went to the national association of realtors and looked at the quarterly economic update on what’s happening with volume, home prices and everything else even from a national perspective. And then even if I dial into our market, I’ve got the seven day pendings, I got the 30 day pendings, I get the 30 day new listings. If you know those numbers and you’re advising people, like there’s no reason to not put your home on the market right now. Interest rates are super low and buyers are anxious.
– Yup, Gerald, I’m gonna frame this up to more of a buyer. So I’m a buyer coming to you and your team. How are you advising buyers on the timing of the market right now?
– Yeah, I just had that question this morning from a buyer as well. I’ve actually had a couple buyers call me over the course of the last 30 days asking when the market falls off the face of the earth and everything goes to foreclosure again, we wanna be able to take advantage of that and buy really low. And it’s hard to respond to that because that’s just not reality. It’s not a real thing. Like Mark said, and I’m sure he’s had those same calls. Rates are low, so it’s affordable to purchase for a buyer. There’s 35 offers on a home this past weekend, that’s 34 losers on that home that are still out there looking for another home. There’s so many homes out there. So I would say yes, move forward on the buyer side of it, you got to put yourself in the best position possible. You gotta be persistent, you gotta be patient. There’s a lot of buyers out there for every home right now in our markets and across the nation as a whole. Is really is fast paced. So you gotta be on top of things, be ready and be patient. And don’t move into a house until you do have that accepted offer and pass the specialist. But it’s tough out there, but it still can be done. I’m staying very positive with buyers in this market. And inventory should increase over the course of the next 30 days naturally, as we’ve had major decrease over the last 60 days. So it’s really good positive thing to hear as a buyer that we should have more options coming up here in the upcoming weeks. I don’t have a crystal ball, I can tell you that for sure but that’s what I’m seeing.
– No, but I think a crystal ball is the blend of what we’re seeing, right? I mean there’s a consensus on what we’re trying to bubble out of this conversation is are we getting towards some center line of consensus of how most people are feeling? There’s education to the left until the right. But a question came in and Gerald I wanna have you book on this and then we’ll move over to the mortgage industry in the current state of that. The question was basically, so what I’m hearing, I’m not seeing, like you’re not suggesting that the pool of buyers has been somehow reduced or effected by job loss or insecurity of the current times. Is that a fair summary?
– Yes. Well, the pool of buyers has only increased based on the timing and from what I’ve seen. However, there is a, in my experience, there was three different qualified buyers that were not able to purchase and move forward during our stay at home and while we’re in currently until they go back to work. So there has been a decline from that perspective. However, from what I’m seeing, the pool of buyers has grown definitely over the course of the last 60 days. So there’s even more buyers out there looking and competition for each of them. Did I answer the question?
– Yes, no, very good. Very good, I know these are pretty wide questions you guys doing great. Mark, you’re leaning into your camera, so let me give you an opportunity. You have a rebuttal?
– Yeah, I agree with Gerald. I was gonna say, yeah this whole event is obviously unfortunate and some people have definitely been affected and there’s no way around that. And the other reality is that we’re getting infused with more buyers now that are don’t wanna be in an apartment that weren’t actually looking before. So I think there’s sort of this balancing act that’s kinda taken place. And so yeah, as far as like the amount of buyers in the marketplace, it really feels like it, you know, and even just looking at the numbers, it’s pretty much about what exactly what it was, if not a little bit about it.
– Good perspective, thank you. All right, Jason, you’re on the hot seat. State of the mortgage industry and I know we could spend a whole afternoon on this topic. Really wanted you to pinpoint if you could just some of the big changes you’ve seen with regard to either programs underwriting, qualification. I’ll lead off by something that we started to notice about four weeks ago in our closing room. And that was a VOE being presented at the time of closing. So not the day before as the closing package and final docs were being approved. But okay, we’re binding this note, we’re binding this mortgage. Are you still employed? So why don’t you walk us all through what you’re seeing.
– Yeah, so that’s something that a lot of mortgage companies, banks, guardians have gone to. Is that just for the risk of, is this person back to being employed? So that’s been one of the main… Not really even changed was unemployment before Covid 19 as you’re on unemployment, we can’t use it as a lender. You have to be employed. And sometimes you had to have gainful employment for a year after you’ve had unemployment. So what they’ve done is the governing bodies of Fannie, Freddie, Ginnie, they haven’t really laxed on that, but for most programs they just have to be back to work. And we need that BUA that says they are back full time ’cause that’s the wage we’re using. Some of the government programs , and I can’t speak for all lenders. I’m just speaking for what we do. But for on the government programs we are requiring because they’re requiring that the customer is back to work and has a paycheck. So on the conventional we’re okay with the VOE. They’re back to work. We can verify they’re back to work at closing, but still verify with okay we’re good, we’re okay. And that’s where some of those guys are talking about earlier is we have a couple of closings that are delayed because we can’t close it until buyer has gainfully re-employed or got their employment back and can prove that with a paycheck. The other big things is just, there has definitely been a tightening of underwriting guidelines. I would say the marginal buyer, so someone with a credit score below I’d say say 640 or below it maybe not a lot of reserves or a big down payment is definitely seen. harsh reality of what would their approval will be if they can even get approved. You’ve seen some of the big banks like Chase has gone to 20% down. I think it’s a 680 credit score. Wells Fargo won’t do a cash out refinance. So that has probably been a little bit of a deterrent to some buyers, is that they hear that public news and you think, oh my gosh, I can’t buy a house unless I put 20% down, which is not truthful. Again, just particular institutions are doing that. You know, some of the lenders like ourselves, we haven’t really made a ton of changes. I can say one big one was, and I think FHA or RD or a VA loan, we are a 600 credit score was our minimum requirement post or pre Covid 19 and now we’re 640. A lot of it had to do with the forbearance, it’s out there, and I don’t want to go too long winded, but for lenders like ourselves who service when you go into forbearance, if it’s not through Fannie or Freddie, we as a lender have no protection. So if that customer doesn’t make their payment, guess what? We’re still on the hook for making those payments. So FHA, you know, the gumby loans, the bond products, like another change for us was we are currently not doing the mister program because if that goes into forbearance, we’re on the hook for all of that and it has a server so that’s a big hit. So there’s been some changes there. I think we’ll get back to normal once we’re normal is a relative term these days, but when we’re post pass this stuff. But other than that, I mean it hasn’t been that extremely different. I mean personally, we’ve had record months through March, April, May will be for my company, the biggest month we’ve ever had for closings nationwide. So it’s just being sensitive to our borrowers, making sure we’re, like you mentioned earlier with the title stuff, making sure we’re not rushing into something where we are not comfortable, adhering to their needs and just making sure we’re communicating more than ever on how the process is gonna work. The other thing I’ll just touch on quickly as appraisals. That’s been a touchy subject we’ve had. Customers are like, you are not coming into my house. and Fannie and Freddie came out and made some adjustments, where a lot of appraisers could do an exterior only report as opposed to an interior. It wasn’t everyone, so you still had to get into some but they were trying to adjust with the times, say, hey look, we’ve got to make sure we’re getting a solid value but we don’t wanna put anybody at risk. And you also had appraisers who didn’t wanna go into homes. So I mean we were juggling all those balls still trying to get things done for the consumer. But overall, I mean it’s still business as usual other than some minor tweaks.
– No, that’s a great summary. And like you mentioned before, there’s a ton of purchasing power because we’re getting the advantage of a full point, point and a half, a lower rates than what we saw this time last year if not more. One follow up question Jason, and this dovetails into a question that came in from someone on the session, is there’s a lot of talk about forbearance. There was talk early on about service or liquidity and having to have the fed or somebody step in to your point, ’cause they can’t make that payment to the ultimate investor. How do you see forbearance kind of coming in? So we have a stop gap right now and I’m calling it this Covid hangover. Are we gonna have a hangover on forbearance and are we gonna have a hangover as unemployment? I mean the stats will come out tomorrow again on weekly unemployment. We could be scratching, we’re approaching 20%, which by the way, this is historic. We’ve never even had this even close during the great recession. But what are your thoughts on those two areas of impact that could negatively create some drag on the mortgage lending market?
– Yeah, the forbearance thing is a big thing and I think we are gonna have a little bit of a hangover because your average consumer thinks, oh, free money. I’m not making a payment. And that’s not how it goes. If they’re delaying three payments, the mortgage company is stacking that up and depending upon who has your loan, there’s various ways they’re attacking that. Some are, hey, your payments a thousand bucks a month, you was $3,000 plus the fourth payment all in one lump sum. Some of we’re trying to stack it on the back end where they’re gonna make, all right, we’re gonna make an adjustment to your note. We’ll make a principal adjustment. We’ll add that up so you’re not stuck because obviously if people are struggling to make the payment now making a lump sum of four payments one time isn’t gonna work very well and especially their still on unemployment. So I mean that is definitely gonna have some effects. And I think now we’re talking a foreclosure issue. Like someone like Gerald said, these buyers are waiting for that. I don’t think we’re seeing that. It’s just servicers are gonna have to rethink how they do things ’cause they don’t wanna buy it back, they don’t want it. So just how we adjust that and that’s something that’s ongoing. Like we have conversations here at Union and Mortgage every day about how we’re trying to do that and make it work. And on the unemployment piece, I mean, it definitely affects things, but I’ll tell you a spin to that has been, I have personally have at least 3% home buyers who were not in the market to buy pre Covid 19 but after being unemployment, making some good money, getting their stimulus cheque, they saved up about 10 grand and they’re like, I’m back to work now, let’s roll. I don’t wanna wait a year. I’ve got the extra funds and then got half, let’s go. So, that’s the other spin on it is we’ve seen that with a lot of clients and it’s kinda a positive thing come out of this.
– Wow, that’s amazing. And thank you for that ender, ’cause I hadn’t heard that perspective. So there could be a little lining there. All right, we’re fast approaching the end here. So I’m gonna speed things up. Ryan, if you could walk us through in 60 seconds, what does it look like on the ground for showing a house and having buyers walk through under what are now national and then possibly even more restrictive state shelter in place requirements. How has that world changed right now? Let’s take the video technology out. We wanna do a physical showing. And then Gerald, I’m gonna ask you to hit on the due diligence issue once we have it under contract. So Ryan walk us through that if you would.
– Yeah, well if you’re a good professional realtor who follows the rules, you’re going to follow each state’s or townships guidelines, which here you can’t have more than four adults in a property. You’re supposed to still practice social distancing and then you should use your best PPE practices that either yourself as a buyer’s agent and broker put forth. But then also each seller is allowed to dictate the terms for showing their home. So if someone asks for gloves, booties on their shoes and a mask, you have to do that. And we just had a report from a neighbor sending in a photo license plate number of people hugging in the yard, not wearing anything going in and out of a house. So people are watching. So best practices be smart and use those things that are out there. It’s very cheap to get gloves and mask and booties for your shoes.
– Mark, is this a marketing opportunity? If you position yourself as being kind of on the more compliant end of social distancing and walking, alleviating the anxiety that we talked about earlier of somebody having a stranger walk through their home. Is there a sales angle to this? Oh, Mark, you’re on mute.
– Yeah, sorry. I mean I don’t mean that there’s specifically maybe a sales angle to being a professional and being compliant with PPE. Every realtor needs to do that. It’s just sort of a requirement. So I think just saying like, hey, I’ve got masks and gloves doesn’t make like a marketing opportunity, I don’t think. But yeah, I mean people are gonna worry about the virus and stuff and they wanna be safe. So I guess more than anything, just reassure the consumers that we’re being safe and we’re using gloves, we’re using masks and hand sanitizer and booties.
– Yup, that’s a good point. Gerald, we have the property under contract. How’s the due diligence going? You’ve got a home inspector, you got maybe well and septic and you’ve got appraisal and possibly surveyors obviously aren’t in the property, but how is it affecting the due diligence inspection side of the transaction right now?
– Yeah, I think it’s all very similar. The reality is we have to keep everyone separate as much as possible. So definitely for appraisals for inspections, everyone, sellers need to be gone. They can’t be at the property. Everyone’s got to use just like when you’re showing a home, you just not touching anything to the best of your ability and then sanitizing afterwards for whatever you do touch just to protect everyone as much as possible. Inspectors still need to get in to do their job. Everybody’s, like Mark said, everybody’s just got to be a professional hand and work together to keep everybody safe and healthy. If that’s the goal, there’s certainly ways to do that, and still continue on through the due diligence process. Inspections, appraisals, well and septic. All of those things can be done just like showings, without harming the sellers or getting people sick, yup.
– No, agreed. Great discussion guys. All right, last polling question and then we’re gonna talk about remote closings and then we’ll bookend, we’ll wrap with the top five strategies. So, Katie, if you can fire up the next polling session, we’re gonna pivot to the closing process. So we just kinda did a continuum of buyers and sellers and the showing and due diligence and trying to walk through the timeline of when you hear the words ron or remote closing, digital closing, what comes to mind? Either I have no idea what you’re talking about. I like that old school like face to face, let’s high five and share coffee and swap a pen back and forth. Or those that are really more excited, about this new kinda movement that’s taking place across the country to comply with executive orders or others that are on the fence. This is great. So there’s a great balance here, a nice peak based on these early results that I’m excited and I can’t wait. Katie, if you can end this pool or you can keep it up for a second. Shelter in place around the country. So I’ll take lead on this just quickly and then, Jason, have you helped me backfill this from a lender perspective. Has really driven this change where under governor orders or proclamations, the executive power of most states, they stepped in to say, okay, we are going to basically waive the in-person requirement for a notary act and whatever you were doing in the presence of somebody, you’re going to be allowed to do in a recorded online web session with some rules attached. And every state came up with kind of a nuance of what that looks like. I can tell you in our business that it has changed radically. The expectation and I would just say this convenience factor that we’re able to bring into the conversation. We just closed two doctors on the East side of the state, that recently had their first child. And those types of examples like we just like Mark and the others were mentioning like, we have to be sensitive to what people are going through. Everyone is on the spectrum right now of what this impact has meant for their life. And if anything in the title settlement space, we’re seeing this kind of rush to adopt or at least consider some type of remote closing that involves the technology where either we never see the people full round or remote online notarization or if we do it’s almost like a a contact list type closing that takes place in. And Jason, just curious from your perspective, I guess what your expectation is from a lender speaking to the title and settlement industry participants on the phone or on the discussion today and what you feel how your buyers are reacting?
– Yeah, well, I mean this is something I think a lot of us been pushing for even before all this nonsense or not nonsense, but the Covid 19 hit in. But I think it’s the way we have to go. I think it’s kinda humorous where they can meet with a realtor and do that loop. They can get a disclosures from me for all the mortgage documentation and when they have to go in and sign 68 pages at a closing, it just seems backwards to me. But in this heightened time, I mean, people need to be sensitive as well. I mean, we’ve had some really bad experiences and it was not Son Title. With some customers who got literally thrown into a closing room. The closure wouldn’t walk in, just gave him a packet and said, sign it. I mean, that’s ridiculous. And I think, anyone listening to this or anybody who thinks that things are gonna go back to normal here quickly, I think you’re sorely mistaken. I think we have to have this heightened sensitivity for awhile. So going to this type of a closing has to happen. I know personally our company has taken the steps where we’re a occasion refinances. We’re allowing all that stuff. We’re doing electronic closings. A lot of them are people just sign ahead of time and there is none of that personal touch. I am old school, I do like that part of it. I love going to closings, but I also realist that hey, this is the way business is gonna get done and it’s probably gonna be the wave of the future. And I just think how mortgage companies, title companies, like you said an earlier time, I think mortgage companies and title companies are typically behind the curve a bit with adapting to technology and some of the stuff. And I think we all need to get on board with that because I just think that’s the way it’s gonna go. And if you keep trying to kick it old school, you’re gonna fall behind and it’ll just become obsolete.
– No, I agree with that. I think also on what we were really focused on doing before we went to a contact with solution is having the ability to invite all of you to participate in that signing along with the customer. So the one thing that that Lawrence and I on the title side, we’re really sensitive to is this kind of relational moment that you do have in the closing room, right? It’s a celebration and we all work behind the scenes. It could have been a total dumpster fire for the last 30 days, but when you show up to the closing, everything’s ready to go, right? The rate and the term are there, the deed looks good, settlement statement balances and everyone high fives and the garage door and the keys and that are exchanged. And one of the things that we didn’t want to dilute, I mean this idea of hey, you know, from a distance I’m gonna, here grab this 70 page stack and start signing it to me that’s unacceptable. We should have the ability to put an exclamation point with the customer on the work that was done in the transaction ’cause it’s a lot of work that that not aware of. And I think with all of us, I know all of you guys are relationship based as are we. We gotta keep that texture as we move towards this balance between convenience and relational equity. So, Mark, I know you have something to say, let’s go.
– Well, I was just gonna say, I’m had a ton of virtual closings over the last couple months and it feels super transactional to me doing all this debt virtually and I hate it because it is a celebration. You wanna be there, you wanna help, and be there to celebrate. Like we did it and in the great occasion of selling the house or the buyers getting their new house and it’s always a fun moment and when you’re not there, it’s just sorta like, what’s like texting. It’s like, yay, congrats. And it’s just a different feel. I don’t know how we’re gonna overcome that. I miss it. I don’t know if Ryan and Gerald feel the same way, but it’s definitely been different.
– Gerald, do you miss the closing room? I mean, just as an agent?
– Absolutely, I agree a hundred percent with Mark. I think the future might look different as far as what could possibly happen with remote closings. However, I agree with Mark that I like to be there. I like to be able to high-five the client and it’s a lot of times the last time I personally will see them for awhile and maybe haven’t seen him for the past couple of weeks while we were going through the due diligence. So, I would rather in-person closings myself.
– I think that’s an opportunity for all of us, right? In the respective industries to backfill, right? I don’t think we have a total solve for that right now, but I think there’s a real opportunity, ’cause I’ll agree whole-heartedly with Jason is that whatever new normal looks like or however you want to phrase it, this is going to be a component that will be offered on the closing experience. And how do we keep that, again, that relational texture while adding it on more of a digital format like we’re doing today. So, Katie, any questions you wanna call out? I know we’re running a little long, but this has been a great conversation. I do wanna make sure that we have time for these guys to impact their wisdom on everyone that has spent the last 50 minutes now with us. Any questions Katie?
– [Katie] I think one interesting one that I saw come through a little late is the impact on the rental market and whether it would be similar to buying as well?
– Ryan, you’re involved in the rental space quite a bit. What are you seeing or hearing?
– It’s actually been mirroring the real estate market. We’ve got lots of people applying and actually when this hit, we had such an increase in rental inquiries and people wanting to see places and apply that. Maybe they didn’t have their shelters to shelter in place, right? Where it picked up. So, I read that question. It will be interesting to see if colleges allow kids back or not. What will that do with the off campus investment properties where kids rent or will those investors wanna sell and will that help alleviate? And that was a great question by Hannah. I’d never thought about that. So we will have to see. Sorry, I got lights here that are in timers. So yeah, rental market’s hot. Seems like it’s mirroring. Not sure what’s going to happen though after that.
– Got it. All right guys, rapid fire. Let’s end with some parts of wisdom for everyone on the session today. And I do wanna thank everyone for the time thought this was a very good conversation. Just some strategies, takeaways that they should be thinking about. Ryan, I’ll start with you and then we’ll run down the list here. What parting advice would you give to make 2020 a real success in real estate?
– Yeah, so this would be for any career and not just real estate. Like Mark said, this was a once in a lifetime gift. Make sure that you made changes and make sure that they’re long lasting, not just temporary changes. These are things you need to implement for the longterm and your business. You had a chance right now to reduce expenses, become more efficient, better use of technology, better communication, and that will set you up for a future and you’ll survive.
– I love it, Mark.
– Yeah, I’m gonna say, there’s never been a time more than now to over communicate, so over communicate with people, clients and when you’re talking about over communicating, you’re gonna be on social media and stuff too. I just have a small soap box about being on social media. I see a lot of agents, even top agents post things like the real estate market is hot, sold a home in eight hours with eight offers. When a consumer reads that, they kinda think, oh, well why do I need a realtor then? It’s kinda like saying, hey, I can just do this for sale by owner. So as an agent you need to put context in any of your postings specifically like what events occurred, how much preparation did you put into listing the home? Did you give them advice on fixing things up? So your posts should be something more like huge congratulations to Joe and Jane. We listed their home at eight hours. We got eight offers. They made all the right decisions. They made all the cosmetic changes we recommended. They put their trust and confidence in our process and in faith in our process and it worked out. If you’re looking to sell, talk to us. Just put a lot of context behind it instead of just like blah, it’s a hot market.
– No, hundred percent. And there’s just so much noise now that we’re not having the face to face. We’re just bombarded with all these digital impressions. That’s sage advice. Gerald, how about how about from end?
– Yeah, that was fantastic, Mark. I love that idea. Thanks for, you can do that, So bucks anytime. I think there’s never a better time to establish yourself as the expert. The professional stake current on statistics inform the public, people care what’s going on and you can stand out pretty quickly, as the professional by being the expert and telling people what’s going on. So many people own a home. So many people wanna own a home and so it’s something that people are interested in. So continue to be that person that can give proper advice. Going on social media, talking with clients about a potential negative, potential positive, any of that stuff. Let’s just be experts on what’s happening and inform people and do stay positive. I think positivity is always very important. Also with being realistic.
– Yeah, that’s great, Jason.
– Mark took mine. Mine was, I wrote down the word communicate three times in a row ’cause I think that is the key and I think we have to change the way we communicate because this is now the face to face meeting. I know all these guys were well on the panel, but I mean a lot of us win at that face to face. That’s when we build our rapport when we’re doing that in person. And that’s gonna change for awhile. So my suggestion would just be to adapt to that, adapt to script that you use because I now instead of being able to sit with someone and go talk about mortgage documents, we’re doing this. So I’ve had to change how I talk about the documents ’cause I can’t physically overstep with those. So, I think all the guys’ points are great and I think communication is redundant as a sound. It’s just gonna be a key because we are in a new world where technology is how we’re doing most of that communication. I mean most of my clients want to text me and it’s fine. So I’ve had to adapt to being a text guy ’cause I am not very techie, but I just think over-communicating and just adapting to what’s going on, you’re gonna have to, ’cause again, as we talked about earlier, if you think it’s gonna go back to the way it was, you’re incorrect and you need to make the necessary adjustment.
– No, I agree. I mean for us, I mean we’re staying humble, we’re staying very curious because there’s so much movement in the market and we’re trying to find those just little soft tissue areas, those small ways to drive an extra ordinary experience right now for the customers. It doesn’t have to be the big thing. A lot of the things to you guys as point is those small things that you do consistently or the way that we approach things could have a different impact. So, well everyone that’s a wrap. I know we’re a few minutes over. I can’t thank the panelists enough for taking an hour out of their extremely busy days to help us navigate some of these tufts and I think very relevant questions. So guys, thank you again. We will share this recording out and I hope to see everyone on next month’s webinar here at certifID. Until then, safe and take care. See ya.