The I Love CVille Show With Jerry Miller! - Woody Fincham And Jay Domenic Joined Keith Smith & Jerry Miller On "Real Talk With Keith Smith!"

Episode Date: April 25, 2025

Woody Fincham, Owner of Fincham & Associates, Inc., and Jay Domenic, Loan Officer at Towne Mortgage, joined Keith Smith & Jerry Miller on “Real Talk With Keith Smith” powered by YES Realty Partners and Yonna Smith! “Real Talk” airs every Friday from 10:15 am – 11 am on The I Love CVille Network! “Real Talk With Keith Smith” is presented by Charlottesville Settlement Company, LLC, El Mariachi Mexican Bar & Grill, Fincham & Associates, Inc., Free Enterprise Forum, Intrastate Service Co, Mejicali and YES Realty Partners.

Good Friday morning, guys. My name is Jerry Miller, and thank you kindly for joining us on Real Talk with Keith Smith. It's an absolute pleasure to connect with you guys on a show that's seven plus years and counting. Real Talk with Keith Smith. Think about that. Seven straight years of talking real estate, of talking trends, of talking the trials and tribulations of real estate, not just in Charlottesville, Amar County, and central Virginia, but beyond. And today's show, I've been all excited, very excited all week long,

as Keith let us know early in the week that Woody Fincham was gonna be in studio, Jay Dominic was gonna be in studio, and today's panel is the pros pros. That's what we like to call a panel like this, the pros pros, that's what we like to call a panel like this. The pros pros. Keith, Woody and Jay have collectively 102 years of experience.

Go ahead, Jay, say it. In real estate, 102 years. So there's likely something these gentlemen have not seen in real estate. So if you have a question, put it in the feed and we will relay it live on air. Judah Wittkower, if you could go to the studio camera and then a four shot as we highlight Keith Smith, the namesake of Real Talk with Keith Smith. My friend, hell of a panel today.

It is a hell of a panel and I'm excited to hear that we've got questions in the feed because that's really what I wanted today to be about is to have folks watching and listening ask these two pros pros questions. You know, my appraisal side of the house and then the loan side of the house. And I think last weekend, Jay just give you a little bit of heads up. Last Friday, we were talking a little bit

about 15 year versus 30 years. So kind of get your head ready for that. But I do want to kind of kick off. Last week we were talking about did inventory start to finally start to tick up? And Drew, if you don't mind putting that infographic up. So those who have been watching the show for a while know I do a week over week.

Somebody taught me about seven years ago how to take a screenshot picture and save it on my phone phone and search it and that gentleman's name is Jerry Miller. So seven days ending back of 2024 for the same seven days, excuse me, 2025 from yesterday backwards for the same year in 2024, we're at 128 new listings. What's important here is we're up almost 27% versus year over year. We're a little light on contracts, week over year for the same week, negative 8.3%. I think that's a lot of transitional contracts going through. But closed sales were up 33%. And just to put it in perspective, the same day, same week in 2021,

there was 87 new that came on, 96 pending. So the pending was a little bit high. But we've been waiting for inventory to pick up for a while and I'll let these two gentlemen talk a little bit about what are they seeing here in the last few weeks is tempo picking up, but we get more phone calls for loan applications and your appraisal picking up. But just to follow what we started last week, inventory is starting to climb and we've been talking about it for a while and it looks like it's happening. So gentlemen, jump in. I mean, we've been busy, but we're always busy. We're getting more secondary and tertiary clients that we don't work with on the regular basis are reaching out to us, I guess, because other appraisers are getting busy too. So I mean, and what someone on Facebook yesterday

and one of my appraisal groups had announced that the floodgates have opened. So a lot of appraisers across the country haven't been busy. And all of them are getting busy again, which is a good thing. Well, when you're a rock star like you are, you're always busy, right? But you're starting to hear from your fellow appraisers around the country. So this is more not necessarily located to our market. They've seen this picking up across the board.

Yeah, across the board. And it's a spring market, I guess. We were expecting it to some extent, I think. We're also seeing more pre-foreclosure work, too, than we've seen in a while. What are you seeing there, my friend? Well, I can tell you, just from a field standpoint, I've certainly been busier this year, as compared

to last year at this time. I don't know if the regular numbers bear that out, but I can tell you that from January on it's been more people looking to get preapproved, more people looking to buy houses, that kind of stuff. I think people have kind of settled into this is what the rate picture is now. Bingo. So, which in the grand scheme of things is more normal, but when there's volatility and rates are going up like they were, you know, last year zooming up or something like that, then people are pausing. But now it's kind of like if I'm starting the process, this is what the payments are and this is what the rates are.

That's okay. It'll fluctuate around that range a little bit. But are rates moving up and down too drastically or are they kind of balancing pretty close around? They've been moving back and forth. I think last week was the highest rate structure, what, since February of this year? Yeah, yeah. So, but before that they had dropped a little bit. So we just can't seem to get the momentum to kind of push them below certain levels

of support. It will go through some but not too badly. But, you know, we had a horrible week and then we had a good week. You know, and when I say a good week in the market, I'm always talking about the pricing on mortgage-backed securities because that's what drives the interest rates. People will call me up and say, hey, the stock market's up, the rate's going down. It's like, you know, that's not the way it works. Well, talk about that. Take a deeper dive into that, right? Like, everybody talks about what the Fed's doing, everybody talks about, you know, what the stock market is doing.

What impacts mortgage rates? Mortgage rates are impacted by the pricing on mortgage-backed securities. That's what the pricing comes from. So if I'm looking at it today and I'm looking at what the markets are doing, I can see where it's at and whether it's up or down on a given day. So last check, we were up 16 basis points. So what that means is the equivalent of about an eighth of a point. So if the rate was cost one point yesterday, that same rate, if this holds, and it won't,

might cost an eighth of a point less. And what drives this, it's a market, just like the stock market. So people will want to put money into mortgage-backed securities and bonds, and that drives the rates lower. So for a long time, the Fed was doing that. The Fed was buying, buying, buying, buying, and that was driving the price, which caused the interest rates to go down.

So they were buying no different than Keith and Yoner would want to buy in that. So mortgage-backed securities are no different than Keith and Yoner would want to buy in that. So mortgage-backed securities are no different than, God forbid I say, the Tesla stock, right? Just threw that out there, see if anybody can push back on that. I just figured I'd threw that out there. I don't know. I'm going to push back on that one because that's a whole different thing. I was just trying to have a little fun. It would be like any kind of bond that you might buy.

Correct. Because that's what they are. So when lenders lend money and then they package these loans, sell them to Fannie Mae, Freddie Mac, whomever, Ginny Mae, they're packaged up as mortgage backed securities and then the circle of life, then those people will buy those, invest in those things. So you can buy, essentially you are buying mortgage stuff. Well, that's what kind of that mortgage backed securities was that 2007 snafu, right?

That was kind of what drove. Yes, it was. Yeah. I mean, there was a whole lot of things driving back in 2007, not to digress too much, but ‑‑ Well, somebody will on the floor. I'm always digressing. Back in 2007, you know, we had a thing where the consensus was everybody needed to buy a house. Everybody had to find a way to buy a house. And some of the common‑sense guidelines on mortgage lending went out the window. So there was a time when you had to verify everybody's income and that's the way it was.

The no‑doc, interest‑only. Yeah. And then it became, well, you're self‑employed, you're putting 25% down and your credit is good. We're going to just trust that you can manage your fair. No dock loans, right? Right. You forgot the most important thing they always check, could you fog a mirror? That's really what it was for a lot of those things. I remember there were loan programs because people were always looking for higher yields. So if this is what a regular mortgage will pay me,

what if I put in this feature where I verify income and assets? Now the rate's gonna be higher, I can make money off that. And it was risk. So the risk came back to buy people. We get gentlemen, and Woody jump in on this, we get asked all the time on this show by certain folks,

are we gonna see a repeat of 2007? My opinion on it is we have the systems in place for the reason why 2007 happened. We may have another balloon or some other reason down the road, but talk a little bit about the difference, Woody, between what was going on there and the appraisals, where we are now, and I believe there's some new things on the horizon that I've been reading that has me a little concerned. So I'd love you to dive in on that.

Yeah, I mean, the appraisal stuff's really changed. I mean, Jay and I were just talking about this before the show started, you know, back in the old days, we'll call them, before everything went to hell in 2009. Time of great unpleasantness. You know, it was not uncommon for loan officers and appraisers to speak to one another. I speak to Jay when I see him and things like this, but I never get to talk to him and I work for his company all of the time. So I can't pick up the phone and call them, they can't pick up the phone and call me. There's always these, like in Jay's case, they have

a whole department that does nothing but order and handle appraisal stuff. And so we deal directly with that department. We can't deal with anybody on the commission side. And a lot of the big companies like Wells and Bank of America and all of them, they've all gone to appraisal management companies. And what that is is a third party who is between us and them. So they completely outsource the entire procurement and review of quality for appraisals

outside of the company. But I can, as a real estate agent, talk to you. Oh, thousand percent. And it's funny, because some appraisers that we bump into on, because Yonah and I are always present at appraisals, because if there's any questions about the property, we're always there. That's a great thing to do. But we get told to go away by a good fair amount

There are a lot of folks that do what I do for a living that are not great with people They don't have good customer or public facing skills They want to just deal with numbers and deal with what they have to do One of the problems that we run into as appraisers were on a property though is sometimes folks are they hover too closely And that's I'm in my office when I'm there I'm collecting information about the property. And I love to ‑‑ you know me well enough. I love to have chit‑chat and talk.

But I have to be respectful and keep ‑‑ Yeah. And there are some agents out there that are ‑‑ they're doing things they shouldn't be doing. Like, hey, we'll make this worth your while down the road if you can make this happen. It still happens. Hold it. My hearing aid just picked that up? Really? Oh, wow. Look the other way. I have to take a picture of the house. The popping peeling paint is there. I can't change that. It happens all the time.

Wow. You just rocked my boat today. In perspective, Woody, what happened at this seminar that you were at? You spent hours. Yes. So I just got done doing two half days with the Fannie Mae and Freddie Mac folks. There's a brand new appraisal format coming out that goes into like beta production in September. It changes the entire way the appraisal process is going to work as far as the reporting goes.

I'll throw out some stuff here. It may make sense to some people, it's not going to make sense to some others, but there are multiple types of appraisal forms that we use. If I'm doing a two to four family, that's a 1025 Fannie Mae form. If I'm doing a single family, it's a 1004. If I'm doing a condo, it's a 1073. All that's going away. It's going to be one type of report that basically in the digital portion of it will ‑‑ it changes as whatever you're appraising. So like if I'm doing a single family home and it has an accessory dwelling unit on it, if I click a box that says ADU, accessory dwelling unit, then an entire other section of the report opens up and I have to put all my appraisal stuff in there.

It's called UAD 3.6 and it is, I was taking the classes because I'm going to be instructing it for the appraisal institute and those classes are going to be happening all over the country and appraisers are going to be flocking these things. And it's seven hours of training for the appraisers and continuing education, but it's all about what's going on because the format is changing so much. I expect a lot of the older appraisers that are getting ready to retire to go ahead and start retiring. That's not good because you guys are short period, right?

Well, we're down to about 40,000 residential appraisers now. Nationwide. Nationwide and then about that many with commercial as well. So there's 70 to 80,000 appraisers give or take right now. Which is not the ‑‑ I think we're like 110 at the peak. So we've never been a large profession like realtors. There's almost 2 million realtors out there that sell and buy. But I think that's 1.5 and I think we're going down.

Yeah. Well, the car stats are staying steady. Yeah. We'll talk about that a little later. Yeah, but it's gonna be a big change. All the classes I've been teaching at CAR over the last couple of years for agents to come in and learn about what appraisers do

and we're gonna have to revamp all of that because y'all are not gonna know what you're looking at the first few reports you see. And it's a big, big change. So the format that we receive, assuming we read them all, usually we just look at that one number. Just look at that number. See the value and whether it's subject to any repairs. That number matches. We're good, right?

So is this a good thing, bad thing? In my opinion it's going to ultimately be a good thing. And I'm going to have some appraisers start to mate at me later. But the good part about it is that what we do as a profession is we are analysts and we're professional writers. And unfortunately, we do have a lot of folks out there, not a lot, but there are some appraisers who just check boxes. And what I usually will, and what I'm teaching, the analogy I'll use is that if you need a problem solved and you're working with a tax professional, you're going to get a CPA.

I run a business, I've got to itemize all my expenses, I'm going to a CPA. I'm not going to Liberty Tax or Jackson Cue or something like that. There are appraisers out there that want to work in that form area where it's more like liberty tax kind of thing where a firm like mine, we work more like a CPA. So if you're making major life decisions, you want that CPA helping. Sure. But the difference is, you know, we may charge three or four times what those other appraisers are charging because they're just checking boxes. So. Yeah. So good thing, you think, long term? Yeah. Right. It's going to force appraisers to write more. And it probably

impacts most of the transactions, right? Yeah. It's a large percentage of the transactions are going to fall within this purview for loans that are not, right? Do they have to follow this format or they do a different format? So anything going to the secondary market for the twins, Fannie and Freddie, will have to go this way. And because banks like everything to be kind of round peg, round hole, most banks, even when they're not going to go to the secondary, will hole, but most banks, even when they're not going to go to the secondary, will use this format because it's just what they're used to.

So that's going to be the new format across the board? Pretty much. I mean, there will be some holdouts. I mean, there are still people, I mean, the last time Fannie changed the forms was in 2005. And we still have folks, appraisers that are still wanting to work on the old legacy forms that existed before that because it's what they knew. But they were already 20 years in the field in 2005. So they just don't like change. That's the big thing for my profession is it's a tremendous amount of change and it's all got to happen in a very short period of time. It goes into beta in September. By January it's going to be in broad production and then by 20 to 27 they will have sunset the entire 2.6. So in your profession

Do you know what the average age of an appraiser is? Well, SRA designates like myself with the appraisal Institute the median age is 63. Wow. Yeah, I'm still a baby and we're 57 How about your field? About 57 initial so I think it's lower. Yeah So they'll burn you out fast What's your feel? About 57 or so? I think it's lower. Yeah. So. They'll burn you out fast. Yeah. Your profession, my profession, a lot of times it's a second or third career for folks too

though. Yeah. Well, to your point is, if you're at that age point, close knocking on retirement, and they don't want to go through this, I think your ranks are going to. Yeah, can't teach an old dog new tricks. Yeah, I mean, you know, if all you do is mortgage work, thankfully our firm has a mixture of everything. It keeps it interesting for us.

But if all you do is mortgage work, you're constantly in that hamster wheel. You're always having to worry about competing with other appraisers. And the way most appraisers compete is they just lower their prices. They don't do anything. I mean, there are some really, really good appraisers who just aren't really good business people. They just take

the shortest cuts they can. Welcome to my world. Hey, that's why you got Yonah, right? Keeps you straight. On many, many, many levels, my friend. My son keeps me straight most of the time. You can't do that. Why? What do you think there, my friend? Well, as he alluded to earlier, the appraisal thing, I'm not involved in it as much as I used to, because they used to come to me, I used to review them for an underwriter would see them, I used to order the appraisal, I used to talk to the appraisers,

but you know, in the category of one bet, Apple spoils a whole bunch or a bunch of Apple spoils for everybody, back in those mid‑2000s, the problem is he alluded to where people were doing that, including lenders, and I know where I've had an appraisal done and somebody would say, the agent would say, I've got an appraiser, he'll make the value work. It's like, okay, I'm never gonna call an appraiser, I could say, can you give me this value? But I might call an appraiser before a deal and say, hey, look, here's some things with the property,

is this gonna be okay? Or in the case of refinance, it's like, do we have any shot at this? Are we even in the ballpark? You know, that kind of thing. So even when we represent buyers and sellers, we leave a binder. Yes, you do.

If we can't, right? You've, okay, let me rephrase that. Mrs. Smith leaves a binder there. I figured it was her because her handwriting is kind of a little more flowing than yours. But we leave a binder of what has been added to the house since the last transact, you know, whatever improvement list, whatever we can do. It's not that we're trying to tell you how to do your job. the house since the last transact, you know, whatever improvement list, whatever we can do. It's not that we're trying to tell you how to do your job.

We're just offering, hey, look, this is information you may not have to help get the property. It's great information to have. I'm going to spend, unless I'm doing a big luxury estate, then I'm going to be there for four hours looking at, you know, the ones that have multiple homes and stuff on them. I'm at a normal, you know, middle class home, maybe 45 minutes to an hour at most. You're going to have been in there four or five times. You've talked to the buyer, to the seller many times. So you know all about it. And an itemized sheet of what they've done over the last few years and even giving us some, you know, not, I

don't need receipt level stuff, but I mean an itemization of costs and things like that. Rookies replaced two years ago, HVAC system two years ago. I mean just common stuff that we should be doing on our side of the line. Particularly things I'm not going to see. If I'm walking through a piece of property and they've just done a lot of foundation repair or they've encapsulated it, they've conditioned it, I may not see that just casually walking through the property. So pointing those things out to me.

Because you're not going underneath the crawl space. Yeah, I'm too fat and old to get into a crawl space anymore. Comments coming in. This is from Cully Baggett. He said, Woody Fincham did a hypothetical appraisal on my custom log home a few months back. And I was thoroughly impressed with his knowledge and professionalism. Ten

out of ten recommend Woody Fincham. Oh, thank you. From Cully Baggett and his custom log home. This is a question for Woody. Then we have questions for Jay him from Cully Baggett and his custom log home. This is a question for Woody. Then we have questions for Jay and Woody coming in. This is from Earliesville in Vanessa. How does one become an appraiser?

What's the degree requirements? What are the hours and the field requirements? Give some insight into somebody how it becomes you. Oh, wow. You guys want me to go on and on today. So it's a very long process. You have to have a four-year degree to become a certified residential appraiser. No, it's a two-year degree and a four-year degree to become a certified general. Certified residential

can do any type of residential property and then commercial property up to $250,000 for transaction value. A CG or certified general is an appraiser who can appraise anything. Those are typically what people call commercial appraisers. It's about 2,000 hours, 1,500 hours or so of actual experience time. It's 1,500 hours for certified residential, and then you've got to take 200 hours or so of actual education accredited through the Appraisal Foundation, which would be the Appraisal Institute and some other folks out there who teach that stuff. It's a long process. The most difficult part of it, though, is

getting an appraiser to actually allow you to train with them because it's an old mercantile apprenticeship kind of model, which I honestly I think is outdated. Big time. I mean, I think that's going to change. I mean, particularly with these new rules? No, I don't. I think what's happened is banks have, and no offense to Jake, because Jake, this is way on the other side of what you do. I'm not offensive. You know, retail and compliance are two different things in banks. But you know, basically what has happened is they've conditioned the Appraisal Foundation

into saying, okay, we want to break up all the firms. So you don't see appraisal firms nationally anymore on a large scale like you used to. Usually they were regional firms where they would have a dozen or more appraisers working for them. That's so rare anymore. What's happened is they've just beat us down individually and then people have gone out on their own.

And because they go out on their own, they don't wanna train their competition. I've come to the point where I don't want to train anybody anymore because the last two trainees I had they left me before my agreement with them was hey if it takes you three years to get certified I want you to stay with me for three years. It's fair you know I've put myself and my company at risk to do this because it slows you down to train people and we just made a decision you know, if people aren't going to be honorable and do that, it wasn't, I can't make them stay because in Virginia you can't do a non-compete.

It's just a gentleman's agreement. And then in the end, if you're not going to honor that, I'm just like, you know. So if that was removed, would the quality remain the same? I think what would end up happening is the market would eventually normalize to going back to appraisal firms because what did most attorneys do when they come out of law school? You have your bar you can hang your shingle out right? You're probably not gonna go hang your shingle out immediately out of law school unless you have a special circumstance you're gonna go work for a

firm and you're gonna learn from that firm so that's what I would imagine would happen is that you would you'd be able to come in and work with a firm for a while and if you want to go out and do your own thing, that's fine. So the age is up there, retirement. We're changing the system to be more technical, let's say, more technical. And they've got this apprenticeship program. I see your ranks dwindling, not increasing, which on my side of the boat and Jay's side of the boat is now going to make transactions a little slower, right?

So if there's less of you. Well, Fannie and Freddie are positioning themselves in a different direction. COVID changed a lot of things. They went to a hybrid model. And what that means is that you could have someone else go out and inspect the property and then provide that information as a property data collector is what they're calling these folks.

Uber drivers moonlighting. A lot of it is. They take two hours of online training and go out with an iPhone and a tripod and they think they're doing what they need to do. They're not. But what's happened also is the waivers have come up. You know, if you've got really good credit, you're in a good loan-to-value position with a loan. It's already a property that's already in Fannie and Freddie's system as far as having been appraised previously. There's a good chance you can get what's called an appraisal waiver, which means you can, and Jay, I don't know how often you all do that, but I know it's been picking up over the last few years.

I know the volume of it's way more now than it was even two years ago. They change. I'm seeing two right now. Yeah, I've got one right now. But he made a good point. So a lot of people think like, well, I'm putting 50% down. You don't need an appraisal.

And that has nothing to do with it. If Fannie Mae or Framac doesn't have a previous appraisal in that system, it doesn't matter if you put 95% down. You will not get the waiver. So sometimes you get a waiver with 10% down. And sometimes it's 20. It depends on different factors and what data they have in there.

So I'm representing a client. You're the loan officer on it. I'm trying to negotiate in a multiple offer. Is there any way for you to look out of home quickly and figure out if there will be an appraisal waiver on that? Not till I run it through the automated underwriting system. That's what tells me whether or not the waiver is granted. And can I do that before I start showing houses?

No. OK. Because I have to fill out an application, I have to have a contract. Right. And the problem with that is, is when I'm pre-approving somebody, I have them in my system, I've got everything in there but a property address.

But as soon as I populate that property address, now it triggers a lot of compliance things. So now I've got disclosed application documents. So I need to pull that trigger, I need a contract. Right. Got it. Okay. Tom, it's coming in quickly. Why don't we take the conversation to our local market here. application documents. To pull that trigger, I need a contract. Right. Got it. Okay.

Comments coming in quickly. Why don't we take the conversation to our local market here. Roughly a third of all transactions are cash transactions in the Charlottesville Area Association of Realtors footprint. Jay, you've been in business since 1987. How or when was the last time you've seen a third of transactions cash? I don't think I've ever seen it until we came COVID. I would have thought it was more like 20% overall back in the day.

But once that hit and the competition got intense, then everybody was trying to figure out a way to offer cash because that's going to get you a better chance of winning that offer. So people were getting pre-inheritance, if you want to call it that. They were delving into retirement plans to come up with cash. Sometimes they'd write an offer on cash knowing that they were going to get financing because they didn't want to liquidate all that stuff and that was okay, fine too. I know some people wrote cash even though they didn't have the ability to make cash

and shame on the realtor for not getting proof of that. Because if you write it off on the other side, not requiring proof of funds before ratification. Yes, yes, exactly. Or shame on everyone who knew that was happening and didn't care, which is probably what it was. And then, right. Right. Let's cut to the chase.

That's probably what it was. Let's pretend we're paying cash, nobody asked us for it. I'm still reeling from his comment, but that only makes it worse. About the- Well, we knew that was going on. Oh, of course. That's going on with not just appraisers, that's going on with inspectors,

that's going on with everyone in the supply chain. And speak to that, that's why- I'm the guy from Brooklyn that grew up in an Italian Jewish neighborhood that everything was done with a- Everything was like that, that's right. Well, it's never not been that way here. It's just we're sweet and we're very polite with how we talk.

Right, right, right. It's the yes, dear, and the iced tea and the apple pie. If we think you're crazy, we say bless your heart. Right, right, right. Finish your train of thought. He's making a good point here. Jay Dominic. What was that?

You were talking about the cash, you were talking about the proof of funds, you were talking about how things started COVID, it's kind of Wild West mentality. Right, right. Yeah. So we all know that if you have an offer, similar offer, and one of them has 10% down financing versus something that's cash, even a little bit less, that the cash is going to win nine times out of 10. And the reason is they don't have to worry about, well, we don't have to worry about

appraisal problems. It's been escalated up. They're concerned about that already. We try to, if we're escalating, we try to have some appraisal gap waiver in there to assure the seller that we're okay if the appraisal comes in in there to assure the seller that we're okay if the appraisal comes in at the original listing price. But yeah, there's a lot of people like that,

and I've got one right now that's like, well, we made a cash offer, we're prepared to do it if we have to, but we really wanna get the financing. Well, I'm very curious of a third of the transactions are cash transactions, which is what you see one in Paragon. I'm working on it right now. I'm going to give you a check. How many of those third are then transitioning into some kind of mortgage vehicle?

It happens. I would bet it's a good chunk of that. We oftentimes will come in and someone have cash have cash out their 401K or whatever they've done. They'll borrow against it and then three months later we're appraising the property. Best comp ever because it just sold. As long as it was an arms link transaction. Sometimes cash buyers will overpay.

But what they're doing is they're getting a loan so they can put their money back into their 401K or whatever it is they took it from. That happens a lot. I closed one last month where the same thing, a guy paid cash for the house, they wanted to refinance it. It took a couple of years because the rates jumped on them after that. He didn't have to, but he just wanted to replenish some of that cash. Cash reserved.

Let's make sure we get out there to do that correctly. You need to have proof of funds that you actually can do that and let's talk about the contract for a second. You're allowed to pivot from cash to something else but you cannot change the original terms, right? So the risk that the buyer takes is if something falls apart on the finance end they still need to close on time with cash. So if you're out there ‑‑

Exactly. You can change, but you can't say, hey, oh, by the way, now the appraisal came in low and messed up my finances. You can't go back to that. You could go back. You're just going to lose your escrow. If you're going to fall ‑‑ I doubt there's going to be someone that's going to take you to court to enforce the contract. The exposure you have is the earnest money right there. Still, we're not going to try to create a weasel way out to you. Right. You can't weasel out. I'm just saying you can't say I've got a problem with the financing. Now can you do this or that? And the other thing, you can't get out of the

contract because of the financing contingency. That's not as easy as you think it is, particularly if it's beyond the financing terms, which if it's a cash, it's not going to happen. But just to make it simple ‑‑ Don't do it. Don't do it. Don't do it. It's a slippery slope. You've said you were going to do something, then you do it. And there are mortgage rules about you paid cash for the house and now you want to get financing. Because if there's no lien on the property, then it's deemed a cash out refinance. And by the way, cash out refinances typically carry a higher interest rate.

I was just going to ask you about that. Highlight the pros and cons of a cash out refinance. This is not all rainbows and sunshines for people. I don't think they realize that. Right. So you'll pay a little bit extra on interest rate but also there's a problem because you can't the next day after you close on the house with cash say now I want to do a cash out refinance. You've got to wait. Except there's a thing called a delayed financing exception that's designed for that which will allow you to do that but you have to show that you paid cash if you borrowed that from something else you should have to show that that money goes to that parent or... That's also not practical, right? Because you're paying closing costs to pay it on cash and then you're refinancing it

for closed closing. Well, the reason it's practical is you want to win the deal. Right. Because the whole means something to you. It's not the best financial thing to do. It's an emotional move. I get that. I do this all the time, other than my client knows that we're closing it one way or the

other. And if we go into the contract, we talk to Jay right away, and if he makes the loan happen in the closing period, it's cash to the seller anyway. The really bananas one is when people are taking out of like a 401K or some kind of retirement account and they get penalized big time for it. I'm like, what the hell are you doing here? It's just emotion. of like a 401k or some kind of retirement account and they get penalized big time for it. Yeah, we advise again. I'm like, what the hell are you doing here? But it's just a motion.

To answer your question, last 30 days, car footprint, 30.39% were cash. Closed cash, what they did after that's a different story. But these are actual closed cash. They didn't convert from cash to something else because they would have shown up as, you know, conventional or something. So it's 30.39% in the last 30 days from today going fast. So a third, right?

Basically a third. Pretty darn close. Yeah, so this is another conversation that came up with one of my family members in a very competitive market, not in this market, Northeastern market. They don't watch the program. I don't want to put too much color on the conversation here. But I want to relay it to the viewers and listeners. This particular family member may get some kind of gift from parents. And I mentioned to them over cocktails, talking to both, I'm like, well, are you familiar with seizing

the money? And we, you know, talk about this, the about this. The value of ‑‑ there's two different ways you can structure this. Gift, loan, season money. Put that in perspective for that. Okay. So first of all, most programs will allow you to receive a gift for your down payment closing cost. That's not an issue. I will say that there's a subtle difference in the automated underring system, especially on FHA, but it looks as your hard earned safe money a little bit differently than a gift for all the money. You've got less ‑‑ Depending on which threshold of time.

Right. Right. Well, no. It has to do with risk. So it's looked at as you've got 20,000 of your own hard earned money into the transaction. That's less risk than I got a gift for $20,000 because I had no money. Because you potentially may have to pay that back. Could pay it back or you just have less skin in the game. Less skin in the game. It's not only that, but you raise your $20,000 based on your income to have that extra money come in, it just looks differently on the account.

But that's fine. You typically aren't allowed to borrow funds for down payment and closing costs unless it's secured by something. So a 401K loan is fine. If you're borrowing against your stock, that's fine. If you're borrowing against 401K, it doesn't even affect your qualifying that payment doesn't count. So they answer the seasoning question a little bit. The only time I've run into that is when money is coming from overseas. Right? Or from ‑‑

That or you can't verify it. So if somebody says I got this guy, I loaned him $20,000 a few years back, he's going to pay me back. Okay. So there's a check from a guy for $20,000 a few years back, he's going to pay me back. Okay. So there's a check from a guy for $20,000. We look at your bank statements the last two months, sometimes one, but mostly the last two months. If there's a large deposit in there, they're going to say where did that money come from? And it has to be from an eligible source. So if it's cash that you had laying around the house, $10,000, or if it's ‑‑ Under the mattress kind of thing? under the mattress type of thing, or somebody's giving you money that's a friend of yours that may not be eligible, then it's a problem.

So how long do I have to? So that would be the, well, if it doesn't show up on two months bank statements, then I don't know anything about it. I understand that. But in order for it to be effective, how long does it have to be a season? 90 days? 60 days? As long as it doesn't show up on the last two months bank statements. So it could be somewhere close to that.

So you get the last two months bank statements. So if I'm getting the last two months bank statements for somebody that's applying today, it might be March and February. So it's nearly 90 days. So when I sit down and have this conversation with people, I tell tell them it's got to be on your nine ninety days So I've given them an extra 30 days Now buddy slash client I'll throw this to you by a commercial building and he had a vast Sports card collection. I'm talking hundreds of thousands of dollars in sports card collections

And he's very wealthy guy wanted to buy this building. He does not collect watches. That's not what I'm thinking about. He sold sports cards, significant amount, took the money from selling sports cards, put them in a bank account wanted to go forward with this process. And the hell that he went through with like $75,000 deposit from selling these sports cards. The underwriting team did not understand the concept of selling $75,000 in baseball, basketball,

and football cards and putting it in a bank account. Say, what do you mean? Are you paying taxes? He had to go through so many hoops for this. Yeah, oftentimes tracking the money is one of the more difficult things I do in transactions because sometimes people are moving money all over the place. It makes you crazy. So if there's a deposit in there, you have to source it. Now, you can sell something and use those funds, but if somebody says to me, look, I

want to sell this extra truck I have, okay, one, I have to have proof that you owned a truck, okay, that you had an asset, two, I have to have proof that you sold it to somebody, so bill of sale, and three, I have to show the funds. I prefer that somebody pay a check, but if it's done quickly enough, you can sometimes do cash. So just I understand the logic behind it because it has to go with risk and the source of funds. That is all important. It's not a question to the lender, do you have enough money? It's where did that money come from? So why is that? Why do they do that? Risk. It's risk. Risk Risk. It's risk.

Risk exposure. It's risk. It's not any other reason other than risk. Sure. If you're a responsible person and you've saved your money and you've been a steward to your finances, you are seen as a less risky borrower. But if you're just getting money willy-nilly from someplace, they're going, oh, this person's not as balanced as they

should be. More risky for us, we charge more money for that. So it's no nefarious reason, right? Yeah, it doesn't have to be nefarious. Sometimes it's just a matter of you can't document it. In that case, then you better season those funds. If you can't document it and you just went to Bolivia, they're probably not going to use it. Yeah, I understand. Good day. Comments coming in. Woody Fincham, how about this one for you? How many of the homes on they're probably gonna use you. Comments coming in, Woody Finchum, how about this one for you? How many of the homes are not checking out at appraised value that's coming across your desk?

I've had two in six months that we couldn't support contract on so not many as far as my transactions have been involvement have been. I am aware that there are more out there. I mean sometimes we get calls from agents and folks that are dealing with a situation where the appraiser is not supporting contract and we'll help them out with it. Give them a look and take a look at the report or walk them through and give them some ideas that they can go back and talk to the lender about and see if they can get something going for them. So that means sellers are getting the numbers right, buyers are getting the numbers right, real estate agents are helping them navigate that, and you're not seeing a lot. I know on my end of it, I don't see a lot of it. The two times in the last six months were out in rural areas. When you get into the metro area here, it's so competitive, I don't think it matters. How about you, Jay? I've had two so far this year.

That wasn't the two we did, was it? No. No, it wasn't. So yeah, and neither one were to the point where it wrecked the deal. It was able to be renegotiated. So it was close enough. Close enough it could work out. Just had one actually worked out yesterday. It came in, it was like $9,000 loan. It was a double wide home. And everybody thought it was overpriced to begin with. We went to 310 and it came in at 306. So went back to the seller and said hey. They adjusted the price and we moved on. Bounced it down. Real quickly, Karen Pape who's an appraiser that's here. She just mentioned you and I

both on my page Jay. She said that we are two of her faves. Karen's a great appraiser. She's now semi-retired and when I got to Charlottesville it was Karen and Ivo were the appraisers that everybody looked up to and Karen I hope you're doing well in your retirement. This one's come in for Woody specifically. Asked for some anonymity. She said, Jerry, relay this to me, relay this to Woody as Fifeville friend instead of my actual name. She says, ask Woody about how long it's currently taking to schedule appraisals and also ask the panel to explain physician mortgages. I just heard many of them have no PMI and little to money down.

That's VIP loan stuff there. As far as scheduling, we cover a large rural area so my scheduling can be, I can get out and see property sometimes the next day. It just depends on where they are. I live at Lake Monticello. If it's a property at Lake Monticello, I can probably get in there in a day or two.

If it's a property up in Timberville, because we handle the valley too for the VA, it might take me a week to get out there because I try to get other appointments in that area so I can make it worth driving. Because what we can charge for one appraisal on a mortgage situation or something like that, it just doesn't make any sense to drive that far. But if I've got two or three other things going on over there, then we'll just lump them together. So if you're in a rural area, it's probably going to take you a little longer. But if you're in a metro area or suburban area or a large subdivision,

probably shouldn't be more than a week or so. Want to touch on the physician loans, fellas? I'll dive in if nobody else wants to. Go ahead, Keith. Yeah, because I know you don't do them, right? I don't, but the reason I don't do them is because I'm tied with a bank and I'm outside the bank footprint. But my bank does have a physician's loan program, and in general, they are, yes, you could put

little or no money down. And no PMI. And no mortgage insurance. Oftentimes... These are loans tied to earning potential, viewers and listeners. Yes and no. You still have to qualify for them. But what they will do is one, they'll exclude student loans or deferment.

So that's a big thing for physicians. Oftentimes they're adjustable rates. They're a bank product. They're designed primarily to get the physician in the hopes that they get all the other businesses. That's exactly what it is. Yeah. It's just something to get in there. It's not a money maker. It's not a program that they want to do 8 million of, but as banks go, they want to favor those types of people. And typically they're physicians, dentists, sometimes PAs. Sports athletes, professional athletes?

Well that would be a different program. They like to get them on those programs because these folks usually have a lot of money to also invest. So their wealth management division of the bank will come in and want to handle it. We do a lot of what I call black bank value work where it's the very top of the echelon as far as the lending goes. And they give them such low rates on their mortgages because they want to handle all their other instruments that they've got.

So they'll keep all that in house and they give them a special rate because of it. Yeah. If you're a high roller and you've got lots of money in the bank, you make a difference to that bank and they will roll over a whole lot of different things to make you happy versus the average person that says, like, I've got my check in bank America, I'm sure they're going to take care of me. It's like they don't care about your $20,000 in your checking account. You're a number in a system in that situation. Exactly. You're so far removed. The mortgage company in the bank is a separate entity. So that's the important thing to point out here is you represent a mortgage broker. You

have multiple sources, right, that you tap into. No. No. Okay. I'm doing great. Yes and no. I'm a mortgage banker which means we're funding our own loans. Got it. Now those may be sold. We have a plethora of investors that may buy those loans. The mortgage broker says I got no money but I'm gonna hook you up with somebody that does and you're gonna close in their name. We're not funding the loan and then selling it afterwards. That's the major difference.

Thank you for clarifying that. That's what I was thinking. Oftentimes they're used interchangeably, but there is a little bit of a difference. Why did you pursue mortgage banking versus mortgage broking? Well, I've done a lot of it over time, but here's what it comes down to. And even when in different companies where I was a mortgage banker, we still have the ability to broker some loans, as I do now. But I started out as solely a mortgage broker, and here's the problem with me. I'm a super control freak.

Now, if I've got something that's an issue or a time crunch or something like that, I can call up my company and my ops center or my head of underwriting and say, I have to have this done today, and it will get done. If I have a loan that I've sent off to a broker, they don't care. They don't care about me. And sometimes we have to do that for like some jumbo loans. They want to underwrite the appraisal. They want to underwrite the package.

And that just drives me crazy. I just can't take it anymore. And when you give me a pre-approval letter or a pre-qualification letter, it's a little bit higher than something else. Because you've gone through a little bit more in-depth review prior, right, when I asked for a... Well, I would hope so.

Let me try it this way. What's the difference between a pre-approval and a pre-qualification letter? Well, and then a follow-up to that is, what's the difference between a pre-approval and a pre-qualification letter? Well, and then a follow-up to that is what's the difference between a pre-approval and pre-qualification letter, one originating from a mortgage broker and another from a mortgage banker? That's a better way of asking it. Okay, that's a good question.

First, let me differentiate between the two. Pre-qual is I talk to somebody on the phone and they say, I make $10,000 a month, family, and you have this much in debt, and my credit's good. They say, OK, fine. You're pre-qualified for about this much. It doesn't mean anything. As a matter of fact, sometimes I walk in with some realtors. I'll give everybody a pre-qualification letter.

Say, congratulations. You're pre-qualified. Just to show that there's a subject. It's cracked. Yeah. Basically, that's what you're doing, right? Yeah. It's subject to adequate income, adequate credit,

adequate assets, okay? As is a preapproval letter, by the way. So a preapproval letter is only as good as the person writing it. So I get lots of calls from people that say, I was preapproved and now I'm a week before closing and now they can't do my loan. It's because somebody didn't ask the right questions

or look at the right stuff or anticipate this type of problem. So the short answer is a pre-approval should be, I pulled up your credit. It should be a tri-merge credit report because sometimes pulling one is not going to give you the answer or get you in a lot of trouble. It should be, I've looked at your income documents.

I've looked at your asset documents, and I've run you through an automated under rank system now. I've got a pre-approval So that's the difference right then and it's much more in depth and much more It should be and then the broker of banker difference The broker is just more detailed. No, I don't want to cast this verse because I'm broken plain loans. Or bankers more detailed, yeah. No, I don't even want to say that because I've got plenty of friends in town that are mortgage brokers currently and they're as good as anybody. So once again, they have to know the guidelines and know the questions to ask. So I wouldn't even say that, you know, unless you're going fly by night internet or something like that, but that's true.

Well, that's true. We never do that. That's a whole different thing altogether. But there are mortgage brokers in this town that I know of that I would feel perfectly comfortable with them pre-qualifying or pre-approving my daughter. A lot of it comes down to how comfortable the agents and brokers are on the real estate side out there. I know a lot of agents, I hear them talk because I'm always around them. I teach classes for them and I sit on the cardboard as well. So I hear things. I think a lot of agents appreciate any mortgage professional,

whether broker or banker, as long as they can do what you're talking about doing. I can have direct conversations with the people I need to talk to and I can make things happen. What they don't like are the broker situations where it takes them three days to get something that you could get done in a day. They want to control their transaction as much as you want to control their transaction. So let me put it a little bit clearer. If I am on a seller's side, representing a seller, and I have two exact offers, one is from an internet mortgage company, the other one is from all the rest of the terms and conditions are the same, that's the one

I'm going to suggest to my client to go with. Because when it happens, because it always does, something goes sideways, I can pick up the phone and call Jay and say, we've got a problem. Or Jay calls me and says, we've got a problem and we need to fix it, instead of doing a phone tree and finding somebody to talk to. So it's always better, right? Trusted advisors, local matters, right? To go ahead and use a local. I could tell a story about internet versus local lender. Well, anybody who watches this show knows that that's not a good thing to do.

Yeah, well, and by the way, it puts you a disadvantage in the negotiation process, as you mentioned. You know, I've had offers accepted over cash. Because of you. Right. Because they know me and they say, well, if Jay's writing a pre-approval letter, then it's as good as cash. Yeah. And I tell people, it's like, you know, I've been doing this for a long time,

and the number of times I've written a pre-approval letter where the people can't get approved is zero because I'm super OCD. So real estate is right. Location, price, features, condition, timing, and who's on the other side matters. That comment makes a difference because I've beaten out cash offers

by having who matters on the other side, meaning the loan officer or so forth and so on, for that very explanation, well, hold it. We know we're going to get across the line. And sometimes cash may not, right? You have a proof of funds and all of a sudden halfway through it, the proof of funds goes away, or something weird happens. So cash isn't all puppies and rainbows and stuff

like that. It could go sideways. Ms. Parkhill says, Jay, where are you from? She's from Pittsburgh. Oh, my gosh. And she did a Pittsburgh accent with you talking. I don't think I have a Pittsburgh accent, but my wife says I do. And the more time I spend up there, the more it comes into play. But she's right. I'm from southwestern Pennsylvania. I'm actually from Latrobe, which is a little bit east of Pittsburgh.

Second person in two days, I've talked to this from Latrobe. Really? She picked up on your accent from the show. What's the beer from Latrobe? Excuse me? Rolling Rock, right? It was Rolling Rock, but they sold the brewery to Anheuser-Busch and moved the production to New Jersey, and I've not had a Rolling Rock since. And I grew up on it.

I hate to say that. What's your beer now? I drink Yingling. It's about as close. It's what I keep at home. You can't call it Yingling. It's a lager. If you go to Pennsylvania and order a Yingling, they look at you like you have three heads.

You just ask for a lager, and that's what they hand you. William Kittlestad is giving Woody some props. Lane Duption. John Baker, Michael Coyle watching the program right now. Michael's from up in Pennsylvania. He's an appraiser in Philadelphia. Good ear there, Ms. Parkhill. We respect your ear. Pockets that are hot, this comment is coming in the feed here. Keith always talks about micro markets matter. Can the panel talk pockets that are hot and pockets that are cold?

Anything between $100,000 and $400,000 is gone like that. That's hot as it gets. Yes and no, right? As long as it's in good shape and priced correctly. There you go. And, you know, location, location, location. That's number one. Yeah. The property in the right place, it's going to sell fast. Property in the middle of Louisa or down in Buckingham County, it might be a perfectly nice house, but it's not going to sell as fast. We've got multiple offers on it, probably.

You've got something to say? We've got more coming in. Well, we're getting close on time. We don't have a lot to go into it, but take a look at my Facebook page. I ran the numbers for the other side of the hill for the first quarter. And when you take a look at it, it's a little surprising. Unit counts are down, prices are down, quarter over quarter, you know, between Waynesboro, Augusta, and Stanton. So — It's getting soft over on that side.

It's getting soft. And I think that's going to be — we'll save that for next Friday for Jerry and I, because I've got some thoughts on why that is. We know why that is. Yep. Waynesboro is down 12% in the number of units sold. This is quarter over quarter. This is everything, right?

This is attached, detached, new construction. 12, the price has dropped 12.8%. Uh, Augusta County is the opposite. It's up 90 percent, had a huge jump in units from 21 units sold in 24 versus 40, but the sales price is down 7.4 percent. And in Staunton, or Staunton, depending on how you want to say it, we're down 27, 28 percent in number of units and it's up by 8 percent. But that's like a jump between, to your point, between 250 and 24 versus 270. So it's at that kind of sweet spot and that number jumped a little bit. But Waynesboro and Augusta County sort of jumps, sort of drops both in number of units and price,. That's not the case on this side of the hill.

Well Keith, you know, I'm a come hither as well, but it's Stanton, don't call it Staunton. Sorry? It's McGaggiesville, don't call it McGaysville. Got it. And what is it, Rio versus Rio. That's confused me so much when I first moved here. Well you know, I can't even say Rio de Rosel. Don't say Monticello. Yeah, Monticello.

Well when I grew up in Norfolk, it's Monticello Boulevard. You get up here, it's Monticello. Neil Williamson says big time props to Latrobe J. Dominic. His wife is from Latrobe. Went to high school with her. Ms. Parkhill says that's fantastic, Jay. I'm from a small town outside the Berk, northeast corner of Allegheny County. When I visit for a while and return back to Virginia, I can hear the accent in myself.

Then she gives you a ghost stealers, Jay Dominic. You've got the tattoo, right? The stealers tattoo? You don't strike me as a tattoo guy, Jay. I have no tattoos. But you're a stealer fan, though, right? Oh, yes. Tried and true.

Stealers, penguins, pirates. Yeah, it's a religion. Yeah, a religion. Steelers is not bad. You're just getting leveraged and Aaron Rodgers has you buy the Short and Curly's right now. Move on from Aaron Rodgers. Move on from the coach. I like Tomlin. You don't like Tomlin? I like him as a human but I don't like him as a coach.

It's time. From Mike Tomlin? Wow. Okay. Viewers and listeners, we hope you appreciated the show. Why don't we close with some thoughts from Woody Fincham, Jay and Keith. As always, thanks for having me on, guys. It's always fun to come in here and talk real estate.

If Fincham and Associates is here to help anybody who has any questions about real estate one way or the other, we do all kinds of work and here to help anybody who has any questions about real estate one way or the other. We do all kinds of work and happy to help you with it. J.Domic. My words of advice are always when you start thinking about you want to buy a house, is it time to start talking to a lender and get your ducks in the road? Don't wait until you go out and see the house that you have to have on Sunday afternoon and now you have to throw in a preapproval letter. That's how problems are made and that's how you lose houses

But you really want to get a real pre-approval letter that that's got right. Don't do the internet Thing is like I got because it'll come back. I I can tell you I can't tell you how many times I've had that Markets picking up tempos picking up but multiple offers are also picking up and you want to position yourself in strength. Keith Smith. Guys, looking at 1118, I can't believe we buzzed through over an hour that quickly. So thank you. I enjoy having you two gentlemen here and learning. Every time I walk away from this, I get a little bit smarter.

But those who know me, that doesn't take much, but I get a little bit smarter. So thank you, gentlemen. Do you retain any of it? Huh? Huh? We talking about retaining water? What are we talking about? Oh.

No, no. Guys, Jay Dominic and Woody Fincham are the best. And you guys are tailor-made for a panel in a show like this. Excellent work. Keith Smith, guys, is on the marquee, Real Talk with Keith Smith, online at realtalkwithkeithsmith.com. Click that partners tab and you'll see the trusted advisors to get you through closing and beyond the partners tab of Real Talk with Keith Smith.

Good luck on your bike, Ryan. Thank you. Thank you. We're raising money to fight diabetes. So I'm not quite some, if you want wanna donate a little bit of money, check my Facebook page out. I'm a couple hundred bucks short of 500 bucks, but I'm gonna do my 102 miles tomorrow, apparently in the rain. And I'll leave the details why that's a problem off our show, but it's gonna be wet and tough, but'm going to get out there and do it.

Jamie Turner says great to see Woody Finch and back on set and Katie Perl I missed your comment I apologize about that. That is the episode that's the show time flies. Judah Wickhauer behind the camera and the I love Seville show guys up at 1230. So long everybody. Thanks. Thanks gentlemen. Thank you.