good morning good afternoon

good evening

wherever you are and whenever you're listening

I want to congratulate you

on taking steps towards bettering yourself

this is Hunter Boyd

I am the director of sales for the Share

Rihanna Mortgage team

and today we have Share Rihanna herself in with us

oh yeah we're gonna have some fun today

that's it I'm excited

so today we are going to be talking about

how to best utilize seller credits

we get this question a lot

pretty much from anybody

we get it from a first time home buyer

we get it from someone on their second

third home we also get it from agents uh

and even occasionally we'll get it on

you know just how to buy down on points on a refinance

so you know a seller credit is really beneficial

when it comes to negotiating

as well as how to lower your monthly payment

and we kind of want to go down that path with you

and break that down with you today

so let's jump right in

paying closing costs for versus paying down points

Sherry what is your

what is your general point of view on this

and what do you see helps the client most

general point of view is right now

where rates are today

zero reason to be paying down points

we know we're gonna hit a refi boom

when it will come I don't know

but we know it's coming right

rates have been high for quite a long time

at least for the last what 18 months

that's exactly right okay

so we know they're gonna go down rights always go up

they go down it's gonna happen right

so I wouldn't pay down points because your

your break even point seven years

that's right don't make sense

just doesn't

so use that money to apply the closing cost

pay all the third party closing cost

and keep that money in your pocket right

to me that always makes more sense

is for you to keep your money

that's right you can always take

if you've got extra money

and apply it to the mortgage

and get the mortgage paid down

which a lot of times

makes way more sense in buying points

but as a general rule

loan officers don't talk about that with clients

and so they really don't understand

the importance of what they can do

for them as far as time wise yeah yeah

I agree I think paying down points right now

it's just it's not a long term when you know

we have the discussion with every client where hey

I'll do whatever you want

if maybe you are sensitive to a certain amount

mortgage payment

and you want to have that mortgage payment

no higher don't really care about break even points

absolutely at least

do me the benefit of

the courtesy of having that conversation

let me be able to say we discussed this beforehand

because I want to at least

educate you on how long it's going to take

to break even but the end of the day

the buyer's comfort is key

and it's about having options

that's right

options and education will take you everywhere

that's right someone just telling you oh

it's 30 year fix and oh yeah

you've got to buy down points and well why right

ask them why if you're talking to a loan officer

and they can't explain to you why

they're sending you in a direction

or encouraging you into a direction

instead of giving you options

yeah that's kind of scary to me

it's not our job right

we're not to lead people into something

we are to educate them so they can make the decision

that's right and I think a lot of times in our business

it's a lot easier just to go

here's this product and this is why you need it

and it's all there is

and a lot of ellos fall right into the

either it's a 30 year fixed conventional

or it's a 30 year fixed FHA or VA

and that's the end of the conversation

yeah well

it could be that we might need to look at a 20 year

or we might want to look at a 25 year or

you know we need

there are reasons to look at different things

for clients and just not saddling them down

with one specific product

and especially

if the seller is giving them closing cost

yeah and I think that's the biggest thing

is it like you know

even how do we get there um

because you know say you're already under contract

and you've agreed on seller concessions great

but in the days leading up to that

in the hours leading up to that contract

you know what was the negotiation like

um did you discuss going in

let's just say going in at least

and getting a 5,000 dollar seller credit

or a 5,000 dollar reduction on your

on your purchase price uh huh

well just going back to the break even point there

your break even point

with getting a 5,000 dollar concession

and keeping that purchase price a little higher is

once again six

seven years down the line

because you're never gonna recoup that 5,000

in the time that you refinance yeah

and it's $34 difference that's right $34

that's right I can keep $5,000 and

not necessarily have to pay

or I do have to pay $34 more right

but if I took that $5,000

and applied it to the mortgage

where would that get me yeah

you know what would that get me

or in a lot of times

I tell people a lot of times to you get a new house

now this is true you're married

you know it's true I know what you're about to say

cause I've heard you say it 100 times and I'm guilty

of it too my poor husband

God bless him we get a new house

I'm getting a new fridge

I'm getting some I gotta have a fence

I gotta have this

I gotta have something ain't gonna fit

I gotta have something ain't gonna fit oh

you know it ain't gonna fit yeah

yeah my um

God bless me my I love my husband

he just like oh God always like that

we won't get anything he's like

oh yeah we are just a matter of time it's true

and I mean having that access to that cash

I mean it it makes a world of difference I mean

just going into it

I mean I remember I tell the story all the time um

my first house ever bought

um primary residents moved in

and the grass was almost a foot tall

and I completely forgot

cause I lived in apartments up to that point

I've completely forgot that was my job now

like I was to cut that grass

and I had an acre of grass nice

and uh and so the day after clothes

I had to go buy like a riding lawn mower

cause I was not gonna push an acre plus

and I mean I would need a bush hog anyways

to get through the first cut

so true um

so I bought my tractor but I mean not having

you know

if I had really poured everything in that mortgage

and not had anything held back um

just for reserves and for stuff like that I mean

I would have been up a creek yep

and and you need to think about that I mean again

we go back to talking with clients you know

how much savings do you have

and a lot of people go

I'll just put it on my credit card okay

at 18% yeah 18% is going to cost you more than that $34

you can say please 72 years yeah

please don't do that

just have a have a good conversation

you know if you're at your loan officer of record

you don't feel that

you can have that kind of conversation

you need what we call at the SRT team a second look

that's right call us

we'll be happy to help you

cause I don't mind doing it

and I do it for clients all the time

I had a client um

past client call me today

he's got a really good friend

he wants to refer to me and he said

you know it just doesn't seem like

they're getting their questions answered

and I had such a great you know experience with you

yeah and I work with this guy seven years ago um

and he's like come on can you help them

and I'm like absolutely and he said

I know that if it's you know

if they do have a great deal

you're gonna tell them

but if you can do something better

you're gonna help them and I said absolutely

that's what we do here that's right

you know

if you ever have a long officer that's offended

cause you're taking a second look

then your radar should go off

that's right right

that's right what what do you know

where is it that you feel threatened right

if you're confident in what you're doing

and educating the client

then I think the true value comes out in that

and so if you need to shop shop

that's right and if you bring it back to us

especially and there's something we can't do

cause

there are some products for everybody in the market

some of us have access to some

some of us don't there you go

and you know just because somebody has a better product

if I'm really doing right by you and it's a better deal

I need to say that yeah

I mean we see this a lot with new construction

oh gosh

seller credits and they are sometimes where I will say

yes they're giving you 5,000 $6,000

but they're charging you eight for it over here

and I so you mean it ain't really helping baby

there are times of that conversation happens

but there are times multiple times I will tell you

be honest that I will say that's a heck of a deal yeah

take it and run at the end of the day is I

I can at least provide some

education during that conversation

to help my realtor partner

and say hey look

if I had that 8 9,000 dollar credit

this is how I would apply it

you do what you want to

but take this bad information and

and go back to that lender and say

this is where I wanna put it

don't put it towards your points and buying down

because it's not gonna help you long term

keep that cash in your pocket right now and

and be there if nothing else

I've given them an honest

uh loan officer in the area they can send business to

and I have really made my agent partner shine

because they had a partner

and they had a resource that could help their client

no matter what correct

and that's gonna bring more business back

every single time and

how many times

have we actually gone through a builders deal

worked it up our rate is better

we give him still give him a credit

they may not get the full credit

cause I mean honestly

there are some builders out here and let me tell you

please don't call me

if they've given you $30,000 in the plaza

I can't do that

that's really an honest to goodness though

that is a good good thing to look at

but it's still good to get a second look

on the mortgage piece of it

you know art

you know just like hunter said a few minutes ago

are you paying you know

being charged 8 to get a credit of 5

yeah well

let's let's look at that piece of it

but um

I can tell you

if they are giving you any kind of concession

where it becomes appliance and stuff

that is a very good on if anybody's been

and bought a refrigerator or dishwasher lately

woo that's a whole new experience

inflation is really taking it

it's it's whole

I mean you can't even go to grocery store without going

good Lord I think I'm buying a refrigerator

yeah um

but so

just think about those things

when you're out there shopping

yep and

one last point I want to make is this

our opinion on seller concessions

it's so market specific right

like you know

we've watched more the

the rates for the past two years go up

and we've started to see it decline already

and we I mean

we look at the 10 year bond

that's my check

that

before I check Facebook and Instagram every morning so

so you know

like I know what kind of day I'm gonna have

depending on what the bonds doing at 6:30 um

but I think you know

it's important to note that this is not a

a one size fits all mentality right now

because two years from now

we could be talking about how

I would use every bit of points to buy down

because if rates are averaging five and a half percent

two years from now

and you can use the seller credit to buy

down to four and a/2

take that because you may not ever see that again baby

that is true so true I

I think that's just really important to know is

is

making sure you continue to have those conversations

whether you're an agent just

want to provide a little more guidance to your clients

or whether you're a buyer now and you're a buyer two

two years ago again

you've appreciated and want to turn that into new

new equity and something else

and with this new NAR thing that we're looking at yeah

you know potentially coming in July 1st and you know

potentially we know what he is coming you know

you gotta think about that um

Fannie Mae Freddie Mac and FHA have all said that hey

we're gonna let the seller pay the buyers

agents commission

and not affect the seller concessions to the bar

the bar were which is great right

so that's something else

you need to be thinking about in the future too

you know

as you are a buyers agent out there beating the street

you know it's gonna be a different world

you're not gonna get in the car with somebody

without signing an agency

because if you are you're breaking the law

and I know that all of my great agents don't do that

and I'm sure there's plenty of you out there

that don't either

but just just something to think about I mean

it's we're going into a new world

but I will talk about being in 2008

we survived 2008

we've provided so much value since then um

and you guys as far as buyers agents

let me assure you guys gonna do just fine out there um

the ones that are skilled

and they understand their value

this is just another day for them

it's just another form

that needs to be executed quickly

and one thing that I've heard you say before

in the past and even with when rates started to go up

you really preach this to the team was

it's not just you that's experiencing these rights

I'm not the only one out there selling 7%

8% rates

that's where everybody's selling and the you know

NARS gonna be a reality for every buyers

agent out there

it's not just you on this team or that team

or you as the individual solo agent

so everyone is figuring this out together

eventually

there will be a cultural norm to come to the table

again

it will and everything will evolve like it always has

and we will continue doing mortgages

you guys are gonna continue selling real estate

and we're gonna go out here and have a good time yep

well thanks for joining us today

this has been mortgage mindset

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