Business Innovators Radio - Interview with Brad Hancock, Associate Broker with You 1st Realty

Episode Date: April 19, 2024

Nothing is more exciting to Brad than the gratifying feeling of helping people meet their real estate needs. People can count on Brad to always do what’s in their best interest. He prides himself on being honest, trustworthy, and knowledgeable in the real estate market. He knows how important it is to find their dream home or get the best offer for your property. Therefore Brad makes it his responsibility to help people achieve those goals.Brad offers professional service, reliable information, and sensible advice regarding acquisition, selling, contract management, marketing, and financial strategy. He works with several types of clients and is personally an active investor in residential real estate in various parts of the country. Valuation and negotiation skills are used to protect his client’s interests. As a member of the South Metro Denver Realtor Association, Colorado Association of Realtors, and National Association of Realtors, Brad adheres to a code of ethics.He first received his license in 1999 and earned his Certified Residential Specialist (CRS) in 2004 and GRI in 2021. These designations require advanced training and at least 75 transactions (He has 400+). Brad holds a degree in Finance and follows economic reports and trends closely. As a long-time Douglas/Arapahoe County resident, he has experienced the cycles of the real estate market. Blessed to have found a good wife, he is a father, brother, skier, golfer, investor, homeowner, landlord, and traveler.Whether people are experienced investors or first-time buyers, Brad can help people find the property of their dreams. Please feel free to browse his website or let him guide them every step of the way.Learn more:https://bradhancockrealestate.com/Elite Real Estate Leaders Podcasthttps://businessinnovatorsradio.com/elite-real-estate-leaders-podcastSource: https://businessinnovatorsradio.com/interview-with-brad-hancock-associate-broker-with-you-1st-realty

Welcome to the Elite Real Estate Leaders Podcast, brought to you by Trailstone Insurance Group, bringing you interviews with the best real estate and mortgage professionals, empowering you to understand the current trends in the housing market so that you make the American dream your reality. Enjoy today's episode. Welcome to the Elite Real Estate Leaders podcast. Today we have with us Brad Hancock, who's an associate broker with the U-First Realty. Brad, welcome to the program. Thank you, Mike.

Hey, I'm excited to talk with you because it's always fun to hear different people's perspectives on the industry. And before we dive into what you do and how you do it and why you do it, give us a little bit of your story and background. And how did you get into the real estate business in the first place? Yeah, sure. I started out as a part-time realtor. I was always kind of interested in real estate. And I got a license back in 1999. It did a part-time for a while.

Finally moved to full-time in about 2005, right before the big crash, the big recession, and saw all that go through. And actually got out of real estate for a few years. During that time, I had corporate opportunities. The timing was right. So I thought it would be good to jump back in to the corporate world. Did my stint on that. And when the market and industry got back, better. I came back in 2017 and I've been to full-time realtor since that time.

You know, we could tell all kinds of stories about those years of the recession and the craziness and the housing market implosion, but anyone that made it through that industry can look back. Boy, you've got some battle scars and really a powerful learning lessons that you picked up through that, huh? Absolutely. I think when I height of that, I had something like 34 listings at one time. And I mean, I'd be lucky to get three or four showings that were a weekend. It was incredible.

And can you converse at what happened here in the last two years ago, let's say. Yeah, big difference between a buyer's market and seller's market. Yeah. So what are you seeing market conditions wise currently? Because I know that, you know, you pretty much look year to year or quarter to quarter and things change. You know, so, you know, it's not really the big, huge things. things like the crisis we mentioned from, you know, 10, 15 years ago. But even now, from quarter to quarter, you'll see things kind of heat up a little bit and turn from buyer's

market to sellers market. Talk a little bit about how market conditions are and how you are serving your clients through that. Sure. Well, you know, during the big upside, if you will, we peaked out in, I think it was April of 22, was when prices peaked out in my market. And And then with that, and that was a crazy time because we had, you know, low inventory, homes are going way over list price. People were paying, you know, 10, 15% over list price, waiving appraisals, waiving inspections. It was really kind of a crazy time. And that was, like, I was only like about two years ago.

And then about that time, interest rates started going up. And with those interest rates going up, the activity. really started to settle down a little bit. And then we peaked in interest rates in October of 23. And actually, I had a great statistic to share with the audience here. In 2019, according to the National Mortgage Association, there were six million new loans across the country that kept going up and it peaked, like I said, like 21, at 14 million units. And by 2023, it was down to four million units. So it shows a big spike in an intracrate for low. And then when intertrades came, start going up, obviously the mortgage, people getting new homes went way down. But we're

starting to see that stabilizing a little bit right now. Intergrates have ticked down a little bit. we're back into what I would call more of a normal market in my life, whatever that is. Yeah. I'd say the mortgage is a little more imbalance on what it was. You still, good list, you still go quick. We don't see in five or six offers on it. You might see two or three offers on a property. That's hot.

You know, you're always going to have people that remember the old days of double-digit mortgage interest rates, you know, and when you compare, compared to that, you, whatever the rates are today, that sounds great. You can't compare it to the bottom, rock bottom, low, low, low. You've got to kind take, you know, the average and kind of go, you know, we need to buy a house for whatever reason, or we need to sell our house for whatever reason. And you make the best of it no matter what the conditions are. You make wise decisions in that time frame. Absolutely. It's all cyclical. Well, go ahead. I'm sorry, do you go ahead. I was going to say, yeah, it's all cyclical. right? You know, it's a lot of, you know, a lot of people don't have that hindsight at this point.

I bought my first property in 1985 and I paid 14% interest. Wow. Absolutely. Yep. So compare that to, you know, what we saw here, which I never thought we'd see those type of loads. But to your point, yes, 14% was, you know, that was, it didn't know any better, right? Yep. And so that was just the going rate. as time went on, industry starts going down, you just refinanced into a lower and the lower, the lower,

the lower, and that's just what, that'll happen in this, too, of this cycle. Of course. We've been teased with this 2%, so I think a lot of

people are holding on to that, thinking it'll come back, but the reality is, is if that came back, we should be very worried. Economy. You are, you had something very important there

because I, um, this is about, maybe four months ago when I read something that 90% of current mortgages are at 5% or under. Wow. So people are, unless you have to sell,

you know, like you're moving out of state or, or, you know, your family's expanding. You have to get a bigger house or whatever. Or you're downsizing. Um,

it's hard to give up that low rate. Exactly. And so that's, contributing to a low inventory right now. Even though our inventory is better and it was a year ago, it is contributing to, I'm going to say historical lows, but on the low side of our inventory right now. Now, are you heavier on buyers or listings? I'm about 60% buyers, 40% sellers. So are you hearing that objection a lot with your listings?

Do you hear, you know, clients kind of, I'm not ready to get rid of my rate. Is that kind of a big objection? I've heard that, yes. But except most of the ones that are out there doing most of my clientele, honestly, yeah, I've been doing this for a long time. I get a lot of referrals. So, either not first-time homebuyers. So they have equity in their house. And they can, you know, they're.

they can pay a little bit higher interest rate on that. So I'm really not here to a lot on that right now. Yeah, I'm not hearing that feedback. I'm curious. So let's talk a little bit about your process when you get that referral for, let's say, a first-time home buyer. How are you helping to educate them on what to expect each step moving forward? Because once you clarify and get their mindset right on what the rates are,

are and it might be hired than they've heard and what we've been talking about. What does the next step past that? Well, the first step is getting qualified for the loan. You don't want to look for a property you can't afford. So the first step is, you know, if you have a lender, great. Obviously, I've got my preferred lenders that I like to use because I know they'll close those properties and know that when they tell me this person, I can qualify for this amount, it's going to close.

And that's really important because I've worked with other lenders where the communications maybe not as good because I don't know. I've never, didn't have history with them. But after you get that mortgage amount that you can afford comfortably, then next step is the fun part, and that's going out and looking at houses. Yeah.

And it could take, go ahead. I was just going to say, and then within that, You're showing them things that are fitting into that budget that they've already qualified for so that they're confident to go, okay, when Brad's showing me these set of houses, any of these are going to fit into our budget. So it helps them to relax because you've done the hard work up front. Absolutely. You want to do that up front because, like I say, there's nothing more disappointing than somebody fall in love with the house and then realize they came up on. Yeah. You know, even if they can afford it, right?

like there is a budget that most people have, and it might be you can afford this, but what's comfortable? And then you're going to have to say this house fits within this price range. So it's really important that you partner with a lender. I completely agree. Yeah. And it kind of lost my train of thought there. Go ahead. Sorry.

Next question. Well, after they're pre-approved and you start looking for houses, what are some of the strategies that you're advising the buyer to be thinking about through that process of making the offer and then moving through to closing. Yeah, the, after we find the properties that we want to zero in on, you know, that's really when my job really picks up to a different level. And that is making sure, once you're approved for that loan or pre-approved that loan, that home is going to have to appraise for the value on that. So I've got to make sure I'm good on my numbers to make sure that that house is going to appraise for that amount that they're asking for.

Like I was telling you earlier, those crazy days a couple years ago, homes were purchase price were going over appraisal. And you had to come up with the difference between the appraisal and the purchase price. And they called that the appraisal gap. And you had to come up with that cash. And that's, you know, that's, well, some people probably will upside down on homes right now that bought. a couple years ago. But getting back to today's world, my job, as I say, is get the appraisal, make sure that the home will appraise for the purchase price. And then we go into a negotiation with the seller's agent. And with the new law coming in effect here, it's going to change

a little bit, but not a whole lot, I don't think, on this part of it. But once we go through the negotiation and we get a accepted contract, then we're going to be about 30 days, 45 days doing our due diligence, doing inspections, making sure the appraisal comes in and you're in my state in 45 days or less. You're going to be at the closing table and more than like to get the keys right then and there and you're ready to go home that night. Yeah. Well, let's talk a little bit about that new law you were mentioning because, A,

I think people are a little confused about it, but B, it might have different ramifications throughout the process where it impacts it more at this stage versus the other stage. Yeah. People, I know it's been on the news a lot. But so the National Association of Realtors was in a lawsuit. It's pending now the settlement on that. And it was to, basically it was, they were being charged with collusion on brokers' commissions. And it was suggested that the National Association, Realtors, NAR, had previously set or guided commissions to a standard rate of 6%. I was, when I was talking to my broker, all this came down, I said, wow, 6%.

I can't remember last time I did, 6%. Exactly. I was thinking the same thing. You know, it was like 6%, that would be great. And the way that broke down, it usually is, you know, that's between the buyer's agent and the seller's agent, that's 6%. So say 3 and 3 on both of those. And then, but, you know, as a realtor,

NAR never set commissions or had any type of guidelines on that. I mean, I've been real estate for 25 years, and in my mind, and the way I conduct my business, commissions have always been negotiable long before the settlement. And I think they, you know, they are and will remain entirely negotiable between agents and clients from going on forward. Now, the settlement, which must be approved by a judge, provide the passport for realtors and brokers and NLFs because they're in this as well. And it's approved the new law goes in effect, I think July 1st. And it preserves cooperative compensation as an option for consumers looking to buy or sell a home.

As long as such offers of compensation occur off the MLF. So in my 25 years, there was always a community. mission offered on the MLF. Well, that's not going to be allowed anymore. So that will go away. However, that's just from an advertising standpoint. I don't think the amount or, you know, once again, it's going to be negotiable, but, you know, I'm not doing this for charity work. I know I do like a lot, both to my clients. You know, we were out there on it and as a seller. I actually had a seller asking this the other day, he says, well, do we have to pay compensation to the buyer's agent? I said, well, technically no, we don't have to do that at all. But bear in mind,

the buyer's agent, if they're not going to, they're going to be talking with the buyer and say, look, I'm going to charge this amount. We're going to ask the seller's agent, but if not, you're going to have to pay me on it. Well, most buyers, especially first time buyers, aren't in a position to do that. So it will go to the sellers to pay those commissions or compensations or concessions, I think, is going to be the new buzzword on that now because we're not going to work for free. And I think buyers do need representation out there and sellers too for that matter. Do you think that has this changed your strategy as a buyer or listing agent at all? or are you just kind of, you know, still business as usual?

Well, our brokerage is start to do those things that are coming effect. And there is one thing that I really like on this new law. Besides the MLF compensation, which I think, those are the two big ones. That one and the one I'm about ready to address is there's a new rule that requires that we have to have a buyer's agreement before we even show any. houses and I've always been on the impression that I'm going to meet somebody at a property or showing some homes and if we get along and we both agree with then we talk about doing a buyer's agreement as a as their representative that will no longer occur you'll have that conversation right up front which for me that's

probably a good thing because that was one of those things I is what those conversations, a little tougher conversation, but now it's a law, so it's not going to be a tough conversation. So in my opinion, all of this, I mean, the changes will be minimal. There'll be different words and phrases, I think we use. But I think realtors will settle into a new normal. And like I said, commissions have always been negotiable. And I think they will continue to be that way. And when the dust settles, isn't all of this meant to make sure that the buyer, and the seller and everybody involved just understands the process and is protected. Yeah, I mean, that's ostensibly what this lawsuit was about, although I have other reason for me thinking something different.

But yes, I, like I said, I've been a realtor for 25 years. I think the National States Association has done very well. State Associations has done very well in transparency and looking out for the for the consumer, frankly. And, you know, as a realtor, we do have a code of ethics. I think, you know, 99% of the agents I've dealt with have been that way. So, like I say, I don't think it would be a whole lot different when the dust settles. You're right.

I don't think, I don't feel a big difference. Putting people's best interest in the forefront, you can never go wrong there. Well, I tell you, Brad, it's been interesting hearing your story and your approach to serving your clients. If someone is interested in reaching out and connecting with you, what's the best way they can do that and learn more? Sure. My cell number, I would encourage you 303-5-2-2-0-293. And my email is Brad, B-R-A-D at U-First.com.

That's Brad at Y-O-U-1st.com. Excellent. Well, Brad, thank you so much for coming on today. It's been a real pleasure talking with you. Thank you, Mike. Thank you. Thank you, Mike. Thank you for listening to the Elite Real Estate Leaders podcast.

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