The I Love CVille Show With Jerry Miller! - Woody Fincham, Candice Van Der Linde & Jerry Miller Were Live On "Real Talk With Keith Smith!"

Episode Date: December 6, 2024

Woody Fincham, Owner of Fincham & Associates, Inc., Candice van der Linde, Owner of Buy And Sell Cville & Jerry Miller were live on “Real Talk With Keith Smith” powered by YES Realty Partners and Yonna Smith! “Real Talk” airs every Wednesday and 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 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. Today's program is going to be festive. It's going to be fantastic, and it's going to be fun. We have Candice and Woody Fincham in the house. We will highlight them on camera soon. We do want to let you know where Keith Smith is. He's with his beautiful wife, Yona Smith, on a warm beach. Maybe, I guess it's 5 o'clock somewhere, I could say maybe drinking a pina colada, and they're planning their 2025 business strategies for their team at Yes Realty Partners

and a fantastic brokerage where Candice is a key partner within. So Keith will be back in 2025, but have no fear, we have a fantastic lineup today and the following week. Next week, Ned Galloway and Neil Williamson in the show. So mark your calendars for that one. Judah Wick Howard behind the camera. If we can go to the studio camera, then the three shot and welcome our stars today. Candice and Woody.

We were highlighting Christmas magic, guys. Before we get into real estate and an industry that's changing rapidly how about we talk some of the christmas magic or the traditions in your house maybe ladies first i would love to hear what is going on with the magic in your casa candace oh my casa esta bien it yeah so love love love christmas um Really, Thanksgiving starts it all off. Same. And my bubba, I used to just sit in the kitchen with her cooking. Obviously, Woody and I had both gone through culinary school in our past lives.

And I would just cook with my bubba, my family, and then I would obviously eat continuously throughout the entire next day and my most valuable possessions I'd say or things that I have are really from um you know passed down through generations so I have this knife it's about yay big now it's been sharpened probably eight million times over the last 50 years. So it's about that big. It originally started about that big. And my father had it all growing up when he was a kid, my sister and I when we were little. And it is the absolute best butter knife ever.

But apparently it started as a really big carving knife that was serrated. And now it is duller than this table. But so I was showing my kids that, and I told them how they would get it eventually passed down. And I just love doing the Christmas lights, taking the kids and the dog out for looking at Christmas lights. And yeah, just eating and having time together watching the grinch it's always a favorite we've seen it probably three times this week already same yeah yeah same i love it um woody

we'll get you in the mix here you know and i'll throw this to you guys my favorite day and this is maybe um me getting a little sappy with my older age we do a very similar tradition to you on friday we get the christmas tree after after Thanksgiving. And we got the Christmas tree this year, I think from what's it called? Ivy Nursery. We put it up in the living room and we get the ornaments from the cardboard box. And ornament day is my absolute favorite. I am the sappy dad that's taking the ornaments out of the box. I'm like, this ornament is 43 years old. This ornament is 37 years old. My six-year-old just rolls his eyes. My wife absolutely loves it because she sees the joy in it. But the older I've gotten, the more I find these ornaments as our most precious possessions

because they make me remember something that I didn't think of until I'm holding that ornament that time. One of my favorite times, Woody. I'm just curious of some of the traditions in your house for Christmas. Like Candice was saying, our family is very food-oriented, so gastronomy is important. So we continue a lot of my mother's traditions with the types of food that we cook. Although with Christmas, I'm more of a Grinch than I am anything else. My wife likes to call me Mr. Finch.

Most of the decorating and all of that is left to her, but our two teenagers at home, Zach especially, our boy, he really enjoys it. He was very happy to get some of our yard ornaments out, our porch decorations. We threw out our Christmas tree last year because we use our officials. and Lori decided this year rather than putting up a full-size tree we have a little four-foot tree now on top of a stand nice so it's different shoot but they like it and that's that's all that matters really you know it didn't you know some of our ornaments we've got some my parents are no longer with us and Lori's grandfather's no longer with us so it's always special when we put

we have ornaments with their pictures on it and we always put those up every year and it's always that's special to me to you know see my mom and dad on the tree so yeah i find too you know ornaments really do bring back so many memories and um not only like you know who gave them to you or where you got them. Bita, last year, my kid's nanny became grandma. And just wonderful family members. She made these ornaments with the kids' pictures in it. And then going through Montessori school, one of the teachers, Miss Khadija, a few years ago, she drew, actually

hand drew portraits of every kid that was in her class. And so whenever the kids are putting them up, they're like, oh, you know, I have the ones that I've had my whole life. And then now they actually have ones that mean something to them. So when we're putting them up, it's really just the act of going through those memories and going through those really special people and occasions. And yeah, that's definitely one of my favorite things as well, as we're eating and putting them up and trying to get the cats from destroying everything. All right, there we go.

There we go. She's got cats. I got a German shepherd. He's got Australian shepherds over there. We're animal lovers here on Real Talk with Keith Smith. All right, my friends, I will follow your lead here. Maybe Woody Fincham, the real estate market and what is closing 2024. I mean, goodness gracious, we are what, three weeks away from the close of 2024. I mean, think about that. That's bananas. The year's flown.

So the market now, some commentary from you, and then maybe we'll talk the market, what we can expect next year. Show us yours, Woody Finch. We're doing a lot of pre-listing appraisals right now for brokers and agents who are getting into some more complicated property, more complex stuff, which is, it's up from where it was last year, which means that, you know, the agents out there want to list their properties at a competitive amount, but not over-list them. I think a lot of the consumers are still thinking that their properties are worth a whole lot more maybe than they really are. So we're bringing a little bit of common sense to that

and trying to help our agent partners get things priced correctly. But when the market kind of, it's not cooling really, but it's still a very strong seller market at this point. But we are starting to see some of those properties set a little bit longer than they have been. So I think that's making a few people a little nervous with it, expectedly so. A lot of estate work right now. Conservation easement work is starting to pick up big time.

Folks are wanting to take advantage of the tax credits that come along with the conservation easements. And that's always fun work to do because it's complex stuff. Candice, the show is absolutely yours. Lori says, Woody makes the best cinnamon rolls for Christmas morning. She wants to highlight that your cinnamon rolls are great. Oh, I forgot about that. Yeah, I have to do that every year. I love some cinnamon rolls. Oh, I forgot about that. Yeah, I have to do that every year. I love some cinnamon rolls. Amy

Lynn Fincham, Rich Blackman III as well, giving you some props. Candice, where are we going to go? Great, great questions. And shout out to Amy Fincham, too. So, you know, this actually I'm going to segue a little bit. Taking the valuation and taking perspective from the professionals in the area that they have expertise is critical. So Amy, for example, I have clients that just absolutely love me, of course, and they're in an area that is not in my backyard. So, you know, of course I want to help them. Of course I want to do what's best for them. So I called on other professionals in the area, and Amy was amazing.

She jumped right on it. It's great to have this networking opportunity. And I actually, so Michael Guthrie was leading our fair housing training the other day, and he said it again. We really need to, when times are tight and listings or buyers are a little bit sparse, a lot of people will go outside of where they actually should be working.

Now myself, I know a couple other people within Yes Realty Partners are very proficient in all six counties. I'm really, really knowledgeable in a wide range of properties and types of properties. I'll do commercial, I'll do residential, farms, lands, developing. However, not everybody should do that. And if I'm going to Northern Virginia, I'm going to call an agent in Northern Virginia who is a professional there, and I know they will do the best for my clients,

and my clients are going to get the best from their realtor. Same thing if it's somebody in Richmond or someone doing a renovation and you're not really that skilled in that department, reach out to the pros. So as far as, you know, segueing back to appraisal and valuation, it's really critical that the professionals are doing things the right way so that the domino effect can really, really be upheld. And that is critical. So I'll just throw some talking points to you guys. As Woody said, I'm seeing the DOMs get a little longer, the days on market get a little longer. I'm seeing the, what is it, price cuts, price adjustments, modifications,

whatever we want to call them, those are happening. And I'm curious of the mindset with the seller and has that mindset, maybe the word has shifted or adjusted to a market that is rapidly changing. Should we go with the friend's pivot? Pivot. Pivot. Yeah, pivot is another one. That's a great one right there. Is the mindset pivoting in a rapidly changing market, or is it still a mindset that might be, oh, my friend got this during COVID.

I can get the same. It's a year, 18 months later. We are seeing that. I've got a project that we just bid on over near natural bridge, a very unique piece of property. Uh, buyers want to do it. Um, you know, they're going to pay cash for it, but the, this property has sat on the market for a while. It's a, it's a big double dome property. Uh, that's connected together with like an interior breezeway, uh, sits on, you know, almost 30 acres has a solar PV array on array on it, views of the Allegheny Mountains.

I mean, it's about as complex a piece of property as you'll see. And if anyone's ever seen geodesic domes, they're a different kind of piece of property. And not every appraiser or every agent is going to be comfortable working with something like that because those things have a very unique marketability. So properties like that, we get calls on all the time. And that's a buyer wanting to do it just for diligence. But sellers are doing it too. I mean, anything that's somewhat complex anymore, listing agents are, thankfully, they're referring us a lot of work saying, hey, this is something we want to make sure we price correctly when we put it on. So let's get an appraisal to do it. And it seems to be a tool that a lot of agents seem to like to use.

I'll highlight some of the realtors watching the program. Logan Wells-Claylow, we love you. Thank you for watching our shows. Katie Pearl, we appreciate you. Thank you for watching the program. I see some folks watching at Nest, Real Estate 3, Keller Williams, watching the program right now as well. Candice, my friend, I will adapt to you. I certainly want to talk 2025 and what your predictions are for where the market's going, but maybe the mindset answer for you. Yes. So thank you.

Yeah. So as far as pivoting in the mindset, it's still, you know, I talk with buyers who are, well, both buyers and sellers, who have kind of stayed in this mindset of, well, the interest rates are going to come down, or, oh, you know, we'll wait for the next thing. The next thing isn't there if if the house the location the layout if those things are right you should go for it because it's not going to be sitting around days on market are definitely up and what i've seen since really july of this year is that there is a sweet spot in there when it's priced at a certain price there there's no activity, no one's interested, maybe a few, you know, tire kickers will come through the door. But then when we find that

sweet spot over the last six months or so, then, you know, there's like the herd blowing over the door and rushing through. And then sometimes it even becomes a bidding war. Like, where were these people a week ago? So there definitely is a mindset shift in that where buyers go, okay, now it's at a price that I feel confident in. You know, the ERP's are amazing as well. And looking at the interest rates are not coming down. 3% was horrible for the economy overall. I think that was just an absolutely not good long-term thing that had happened when it did. And that's not realistic. So 6.7%, even 7%, you know, in that range, it's where it should be. And it's a healthier market.

I have investors as well as buyers that are constantly going oh well when when it comes out it's not and if anything changes within the the financing portion of the industry then the prices are going to go up and people are going to be bidding again so if you see something if you're involved in something if the price is right you like the location the floor plan go for it because it's not going to be waiting around for you. And then alternatively, with the mindset for sellers, pricing inappropriately or thinking that, you know, they don't have anywhere to go and this and that. You know, the reality is anything's

only ever worth what a buyer is willing to pay and a seller is willing to sell. And I've seen a lot of sellers not take lower offers and sit for months on end. Or while the house is sitting, they're not doing the critical improvements for maintaining, you know, maintaining, power washing, fixing the deck, clearing things out of clutter. And, you know, heaven forbid you have an HVAC tech come in and like clean your ducks, you know, heaven forbid you have an HVAC tech come in and like clean your ducts, you know, like call some people and get this work done. If your house isn't being shown or if it isn't moving, there's a reason for it. And if it's location or the floor plan, maybe you can't really do much about that. But if it's condition, maintenance, you know, having a pro come in and do staging or better pictures.

There's a lot of creativity that your professional realtor or having an appraisal evaluation or inspection, there's a lot of creativity we can do to find that sweet spot. Angus Arrington giving you some props right now. More realtors jumping in the mix as we speak. Woody Fincham, your thoughts on what Candice had to say about rates and, hey, if you're waiting for rates to drop, prices are just going to escalate. And what you're going to gain with a rate drop, you're going to lose even more on a price escalation. That's a very possible scenario. What I don't know about what's going to happen over the

next several months with the administration change coming in. They're already talking about dismantling the CFPB. Explain that, CFPB. That's the Consumer Finance Protection Bureau. They're basically a government entity that has been set up to look after consumers and what's going on in the financing world, mortgages and that type of thing. And the new administration has already said that they're very candid about the fact that they want to dismantle it because they just see it as an unnecessary government organization, among other government organizations that want to pull apart. I'm not saying it's

good or bad. We don't know. But there's a lot of talk about this tariff stuff. That may create some instability because my basic you know, my basic understanding of economics says if we start doing a lot of tariffs, it's going to start raising issues in the economy, not actually making them better. But I don't know. A lot of the economists that I trust and follow are saying that they're looking very positively at the administration change. But it's one of those things. I mean, had you asked me if right after COVID, if rates doubling would have slowed the market down, I would have said absolutely, but it didn't. I mean, it remained on steroids. Unbelievably that you double interest rates and demand did not shift

really at all once consumers got used to it, which took what, 90 days maybe. So, I mean, I don't know. I mean, every indication that we have right now is that it's going to stay positive. But, you know, again, my track record after COVID has been a little bit off just because forecasting off of what we think is typical is not typical because our new normal is different than it used to be. Stephanie Wells-Rhodes giving props to everyone, especially Candice over here. We love Stephanie Wells-Rhodes of the Interstate Service Company family. She says, good, good morning, Candice. Good morning to you, too. We love you, Stephanie Wells-Rhodes.

We've been talking about the rate piece for so long, and the crystal balls have been so murky about rates dropping, and I loved your take. Guys, just do it. You can always refinance later. We thought rates were going to drop in the second half of this year. Now people are talking rates could drop next year. It could be summertime. You watch CNBC today and some forecasters are now saying we're going to be in this interest rate environment

for much of 2025. So all those folks that have been waiting for rates to drop to get into the game, they're just losing because the prices continue to go up. Anywhere you want to go on this commentary, I also want to talk to you about what we need to do to get inventory, for-sale inventory, available inventory uptick as well. Because let's cut to that chase. Let's cut to the chase.

The market is a bit throttled right now because there's just not a lot of stuff for sale. Yeah, And it's a really weird dynamic because when talking with the public or with consumers, you say, oh, inventory is down, but there's a lot of homes with high days on market. So where's the sweet spot? I had a great conversation with Nancy from Southern Development Homes the other day. They are up significantly in their sales, in their sale volume, compared to what other realtors are. And I was saying, well, you know, are you getting a lot of people that are coming in unrepresented? And she said, no,

most everybody is represented. And anyone who isn't, she's like, wow, if you don't buy this new construction, you are making a mistake by not having a professional represent you. The five Ds. Talk about the five Ds again. Divorce. What is it? Divorce, death, diamonds, downsizing. Diapers.

Diapers. Oh, my God. So family changes, family dynamic, reasons that somebody has to do a move. You know, having to bring family members into the fold, having to get rid of people out of the fold. You know, there are many reasons that people have to make a move. Similarly, the car reference was, you know, you're not going to buy the new car until yours keels over, and then whoops, you've got to do something. So the pivot in the mindset of people just going in and doing what they need to do, I definitely see that's become much stronger.

The crystal ball said, you know what, literally within two days after the election, it doesn't matter who won or what happened or what your side is, it initiated the phone to ring. Buyers were calling, potential sellers were calling about, you know, looking at listings. What I would love to talk to Woody also about is this concept of, you know, appraisal waivers and going from potentially 20% down with a lot of appraisal waivers happening now to 10% down getting appraisal waivers and having property valuation programs with lenders versus what they are now. I think, again, that's a creative way for a shift to happen. Yeah, for sure. I mean, what you were just talking about, I was just thinking about Jurassic Park, the movie. Dr. Malcolm, Jeff Goldblum's

character in there, life finds a way, you know, and that happens with real estate. I mean, life events happen and you're going to continue to do it. Looking at it pragmatically, just to finish up what you were talking about, you know, as life things happen, we are historically still at really good interest rates. So, I mean, you know, if you're looking at the time value of money, you'll still be able to borrow at a very good rate. It's, you know, it's not a horrible rate. It's just different than what we had a few years ago. And I think people just got used to that. We're not going to see 3% again. At least I don't think in my career, but again, my crystal ball is about as murky as they get. Jumping over to appraisal waivers. It's an interesting time in mortgage lending.

FHA, not FHA, but Fannie Mae and Freddie Mac, we refer to them as the twins, they control about 70%, 75% of the market as far as mortgages go, and they are going to be increasing appraisal waivers. Their artificial intelligence, the algorithms that they use for doing their own in-house valuations, they feel like are good enough now that if you've got great credit, you're putting enough down. There's a previous appraisal on the property, which a lot of, because of all the refinancing and all of the sales of property of the last four or five years, a lot of properties have already had appraisals done in that time

period. So they feel like with the information they have on hand that they're able to do that. And we're seeing all kinds of stuff in that realm from you're putting enough down and you've got enough and you've got a perfect credit score. They're not even requiring a property inspection, but they will do what's called a property data collector. Well, they'll have an agent or even an appraiser. And in some cases, which this is, I think, very dangerous, uncredentialed people like Uber drivers and things going out to do a property data collection on a piece of property, they may not be very well trained. And I can say that with some expertise because I know a few folks have gone through the training to do property data collection, and it's like a three- or four four hour little seminar that you do online.

And if you don't have any background in inspecting a property and looking at a property, that can be a little bit dangerous for consumers. We are seeing a lot of consumers that are getting property inspection waivers or appraisal waivers, and they're still getting appraisals anyway on their own dime because they want to do the diligence to make sure that they're not getting themselves in a bad position because algorithms do fail. I mean, Zillow, a major player in the real estate space, a couple years ago shut down their iBuyer program

because their algorithms just wasn't producing any type of profit for them and it was actually putting them in a very risky position. So, you know, I still think you need to have a human being involved. If you combine artificial intelligence and algorithms with a human being who knows how to look at that data, I think you get a perfect storm. But if you're going to rely on just one piece of technology or two pieces of technology with no human interaction, I don't know that it's necessarily the most reliable and risk-free environment. Well, you know, it's interesting, too.

Obviously, human interaction, that's what we're here for. That's what the professionals are here to do as well. And opening inventory, helping consumers, helping buyers, you know, all of these algorithms and all of this AI and all of this tech has really put a different spin on the consumer's mindset. So again, talking about mindset and pivoting, you know, again, so many people, I get calls, you know, oh, I want to see this, and we're not working with a realtor, but we've done it before, and we know stats, and we use these other, you know, we'll say the big Z, you know, we use these other things things and we're knowledgeable. And I'm like, okay, well, that's great.

However, who's going to help you through the inspection? Who's going to help you if you do want an appraisal and you have an appraisal waiver? You know, is that really going to be of good value for you? Or are you going to lose the contract because what seller is going to want to, you know, contingent on an appraisal whenever you're putting 20% down or maybe 10% down next year? So really, the terms of the contract are still multifaceted. And the public perception of, oh, I've done this, oh, there's no inventory, oh, it's a buyer or a seller market, really, there's so much more involved than that. And human interaction and, you know, like with the appraisers,

I know from different conversations we've had, you know, through the years, it is such a challenging industry to get into and to be a professional with. So, you know, the twins, Fannie and Freddie, what happens if, you know, there's potential talk about it being publicized and not being – Well, my bigger question is why is FHFA allowing Fannie and Freddie to do this? I mean that's their oversight organization, and they're still in conservatorship from the Dodd-Frank years. I mean they didn't make great – when you allow retail and mortgage to lead what's going on, compliance goes out the window, unfortunately. And, I mean, we had to bail them out last time.

Are we going to have to do that again because of this type of thing? It is a concern. Yeah. Well, why are they allowing it? Why do you speculate for us here? So, I mean, obviously I'm pro-appraiser because of what I do for a living. But, I mean, just looking at it, I try to do it. It seems absolutely insane.

To me, it is. I mean, when the bottom line is the GSEs with the twins, Fannie and Freddie, they are led by their retail division and their compliance division kind of, they try to keep them towing the line as best they can. But they're always trying, it's capitalism, right? You always try to figure out the environment and you're trying to make the most profit that you can. A lot of times they're looking at appraisers as a hurdle or a speed bump in the whole thing, because you have to remember appraisers are the only entity in the entire mortgage process that

are not advocating for one side or the other. We're there, we're supposed to be free of bias. We're supposed to be there to be objective and to help the lender understand if this is a risk worth taking at the collateral. But the GSE shifted several years ago away from collateral base to credit base. So what they're looking at is, okay, if you've got great credit, good repayment history, you're worth taking a risk on. So what they don't tell us, because these algorithms and things that they use to make their decisions are all proprietary, so we're not allowed to see how they're making these decisions. So, I mean, are they pushing them upwards? Are they pushing them downwards?

Are they going in the middle? We don't know. But, I mean, I would say that, you know, looking at the fact that they want to continue to grow their shareholder value and things like that, they're going to go risky, as risky as they're allowed to go anyway, to make these decisions. And I don't know, it may not be the best decisions in the end. Well, it's unfortunate because not everybody is a pro like you. Not all the appraisers are actually staffed and diligent and professional.

And similarly, you know, in any industry, whenever you have a lot of people who are hungry for anything and will take on anything, even if they're not appropriate to do so, they're just going to look, you know, there's a lot, especially with the twins, the government doesn't put the cart, you know, after the horse. They're looking at, oh, we need to save money. Let's make this change. Whereas if they actually backed up for a minute and instead of saying, you know, when they have a property that needs an evaluation and they send an appraiser out who has, you know, was an Uber driver three hours ago and they send an appraiser out who has you know was an uber driver three hours ago and they just happen to be delivering food that day and they walk you

ride by a house oh it should be this i mean they take that valuation versus a professional a bpo or a realtor who says hey you're you know the the appraiser who isn't a pro like Woody and goes out and values something 100K less than what it should be. And now the listing agent's got 5,000 phone calls a day because the property is valued less than what the actual earth is. I mean, it's ridiculous. And then they wonder why they're losing money and they want to put changes into place that really if they just were to step back and see where it is falling apart at the seams, then they would actually save more money, they would do better for the consumers, and they wouldn't have to be so volatile with these drastic and dramatic changes. Well, I'm going to jump in for a sec.

You know, the current administration with the PAVE Act,VE Act, they attacked the appraisal industry as soon as the administration came in. And overall, I don't have a lot of criticism of the current administration, but I do have a criticism of what they did to the appraisal profession. There's not been one founded complaint yet on bias in the appraisal sphere. And they really went after appraisers saying that there you know, there's racial bias here, this, that, or the other. I think they were doing it. And I think, you know, a lot of the twins maybe even were a little, they kind of stayed out of it other than saying that, hey, we're going to make sure that this kind of stuff doesn't happen. But, you know, there's no real strong data out

there other than some arbitrary studies that were done by some professors here and there that were using Zillow as a basis to say that, hey, the values are off. Well, I'm sorry, Zillow, like I mentioned earlier, I mean, they had to get out of the iBuyer program because their data didn't help them make any money. And so there's been an attack on them in that way, and there's been an impetus on the mortgage companies out there, from the mortgage companies rather, they're using these third parties called appraisal management companies,

and these appraisal management companies make money off of hiring the cheapest and the fastest appraisers. So going back to what you're talking about, bringing in agents or appraisers from other markets that are not familiar. But if you're an appraiser who only does lending work, you've got to make sure that you don't upset anybody. So you do have a bias there where you're trying to make sure that you don't torpedo any deals. We don't want to under appraise anything because, and let's face it, I mean, over the last several years, there have been several instances where people were willing to pay more than the property was really worth, you know, and

that doesn't put them in a good position at all. But, you know, there are appraisers who, you know, an appraiser coming to Charlottesville from four hours away that is charging half the normal rate in Charlottesville to do the appraisal, I don't know how they're making money. You know, and they can't be spending the amount of time that a professional is spending on it. I mean, it takes us, you know, 8 to 12 hours to prepare and do a complete appraisal from inspection to getting the report out the door. And some folks on social media, they'll say, well, I can get them done in a couple of hours. That's scary to me. I mean, are they really doing anything? And I think the GSEs are looking at that kind of thing and going, you know, they're not as reliable as they should be. And so

there's not a lot of impetus from the mortgage companies and the appraisal management companies to hire the best. They're hiring the cheapest. And you get what you pay for sometimes. Well said. You know, and the industry, the appraisal industry as a whole, you've highlighted this on previous shows. It's an industry that is aging. Yes. And it's an industry that's not only aging toward retirement. It's an industry where the new talent is not as prevalent as it once was.

It's hard to get into the business. We should go down this road on how this could impact everything we're talking about. Well, Fannie and Freddie have adopted a new format for appraising that goes into effect the latter part of next year. A lot of appraisers who've been doing this for 20, 30, 40 years, they're actually going to be getting out of the business. They don't want to, this new format is scary to them because it's going to be much more time and much more time is going to be required to do it. I actually like the new formats because

we like to write. We're report writers. So, you know, we're actually welcoming in the change. But in the end, we're going to have a lot of folks get out of the business. And getting into the business is very difficult because there's still an old like mercantile style apprenticeship that's required to get into the business. So, I mean, if an appraiser is not willing to take you in and let you mentor under them, they're not going to be able to get in. And a lot of appraisers, you know, the GSEs a couple years ago, they will tell you that they're okay with having training appraisers come in, but, you know, they're gladly welcoming these property data collectors who are not trained to do what we do, but they won't allow us to utilize people that we've trained to go out and do the inspections.

So they're talking out of both sides of their head, unfortunately. I think it's intentional. I think they really want to cut back on the number of appraisals that they're having to order from human beings and rely more on technology. The Appraisal Institute, which is the largest professional organization out there for appraisers in North America, they've created a program through the Appraisal Foundation, which is like the federal, they're not technically federal,

they're kind of a quasi-private public entity, but they're the ones that Congress established to oversee credentialing in our profession. They created a program called PARIA. It's the practical appraisal real estate application. It's a practical training so appraisers don't actually have to go work under a mentor to get credentialed. It's a really good program. I think we've got something like 700 people working through the program right now. To give you numbers, there's about 40,000 appraisers on the residential side,

total of 75,000 if you count the non-residential appraisers that do commercial and industrial work out there. So we're not a very... And that's the entire U.S.? That's the U.S., yeah. I mean, that's nothing. How many people do we have in this town alone? I mean, look at realtors. I mean, if you look at NAR, there's well over a million and a half of them, or us, because I'm a realtor as well. But in the end, I mean, very small profession. And so, you know, we don't have the treasure chest to fight this stuff the way that, I mean, if the twins were going after NAR agents the way they're going after appraisers right now, you know, there'd be a big fight because, you know, they've got millions of dollars to fight Twins were going after NAR agents the way they're going after appraisers right now,

there'd be a big fight because they've got millions of dollars to fight that. We don't. I mean, we have a very small lobbying treasure chest, unfortunately. 75,000 appraisers in the United States? Yeah. And there's, according to NAR, I'm looking at it right now, February 2024, NAR folks, the National Association of Realtors, 1,515,837 licensed realtors in the U.S. Folks, if you wanted to get in the real estate game, maybe you look at it from the

appraiser's side right there instead of the realtor's side. We have folks that are asking on the feed for their thoughts on both your thoughts on 2025 and what it's going to take to get some more stuff to look at on on the websites for sale i mean i'm seeing this everywhere on the feed right i mean how many times do you get that question you get that all the time but you know what here's the thing you know because i i asked myself that question where where can i've got buyers looking calling me what's going on hey i guess it's a slow time I'm like no let me reach out you know as a professional too I mean I'm calling people I'm calling my clients I'm calling my friends

and family and saying hey I know you guys have a few places are you interested in selling you never know what might be coming around the corner and or people you know over the last few years expireds withdrawals you know go in and and look at inventory that hadn't closed in the past. I do, so in answering that question too, I do, you know, getting professionals to get in, encouraging Interstate and encouraging Pearl and encouraging the different companies and businesses to come in and do the upkeep, do the maintenance, do the things,

not saying renovations per se, but just make sure your systems are working properly. Get a power wash for heaven's sake. Do some landscaping. Doing some of this stuff ahead of time before you're going, why is nobody seeing my house? The pictures look great and photographers can do a great job, but when people show up and things are outdated or not maintained, that really makes a difference. So appraisals and the condition of the home really make a big difference. And the thing that I'm seeing that really I think is keeping buyer mentality in the dinosaur ages of 2021 to 2023 is that, and I don't know how appraisers are doing it, because looking at what happened in the last four years, really, really in the last two years, it's unrealistic. So I have, you know, different clients or different people that are

looking at doing development or building or, mindset of, oh, well, this home is worth this because of a home that sold two years ago. That's not relevant. Even in February of this year, it's not relevant what the market was to then evaluate from a seller perspective or a buyer perspective, oh, it should be this. Well, it's not. You're not getting knocks on the door. We're not getting offers.

It's obviously condition, price, or location. One of those are a reason the place isn't selling or a buyer isn't buying. You know, we got to be realistic about that. And looking for years ago, it's not relevant. What do you think, Woody? I mean, real estate's real time. I mean, you know, real estate's extremely hyperlocal.

What's going on in your neighborhood matters. What happened a couple years ago may or may not be. I mean, if I'm in Farmington or in Keswick or someplace like that, we do look at older transactions because those are very high-value properties. And those types of properties are a very small percentage of the overall market. I mean, I've got agents that reach out to me. I've had nine or 10 over the last couple of years. We live at like Monticello and a colonial, you know, and it's at a very attractive price point. You know, you could buy our property at market value for less than 400,000. And it's a nice neighborhood to live in. Right. But, you know, I'm not I'm not selling

because then I have to go buy and I'm not giving up a two point nine percent interest rate. I think my wife and I'll probably be there until we're old people. But I just don't you know, it's a crazy market anymore. And you're right. I mean, you know, when we're out doing appraisals on mortgage transactions, I'm surprised at how many properties are not really prepped to sell. You know, they don't power wash, they don't stage, they don't do anything. But when you're in the internal part of Charlottesville and around the suburban core of Albemarle County, you know, that's a location thing. You know, you don't have to prep those properties, I guess, as much as you would otherwise. A lot of agents still very much will stage and have the properties ready to go,

and they sell very quickly. But it's amazing. I mean, between an average quality or condition home and a very good condition home, we're not seeing as big a delta between those two as we would have five, six, seven years ago. You know, condition really mattered then. Now when you're in a very hot market, if you're around downtown or, again, the suburban ring around the city, you don't have to do a lot of prep for it. So people are willing to pay almost the same prices for them.

But if the property has a lot of deferred maintenance, that does matter. It really does. Well, I'd say, too, you know, the days on the market really do tell. Even being in a location that is really hot and really happening, if a seller is pricing it, thinking that it's going to be what it was in 2021, have that hard conversation up front and set the expectations. I've had a number of people actually who didn't use me because they had another realtor or what have you, and they asked my opinion or why has the property not been selling. I'm like, well, because you priced it too high to begin with. You had an expectation that was in a market that doesn't exist now, and even though you're in a location that may be really desirable,

the buyer's perspective and the buyer confidence is like my reference is if there's a light plate cover for a light switch and it needs to be screwed in, a buyer's like, i don't want to have to deal with that you know so i mean and you know but then at a sweet spot in the price and condition and location they're like oh we'll we'll redo the entire kitchen it'll be fine because there's nothing else available the other thing is cleaning your baseboards you got to clean your baseboards uh stephen roach is inviting himself to the Citibunds, uh, breakfast on Christmas that you're making. He says he's 2,551 miles away. What time are the Citibunds served? Lori says 7am. He says, okay, I'll start out tomorrow,

uh, for your house. Uh, Megan Johnson, John, who I believe is watching in Orlando, Florida. That's where Megan is. Yeah. Um, she says, Woody made a fantastic point about the interest rates. Having a low interest rate is worth too much for most sellers to want to sell and then re-up on a new property at a rate that's more than twice what they already have. I'm hearing that constantly. John, what's John, how do you say, John Copulus? Is that his last name? Cope is what we call him. Cope is watching the program right now. He's an appraiser. He says, when appraising unique homes, it's very common for us to use older sales to get an idea on value. A money comp from down the street that sold three years ago to me is considered a great indicator. If values have dropped 10% since then, that is how we adjust for it.

I want to get back to Megan's comment, and Stephen is just in love with the sit-and-bun concept. He continues to talk about the sit-and-bun concept. Stephen's welcome. We've got a spare room. Steve, we've got a spare room. As long as you don't mind Australian shepherds, you're welcome to come stay, man. They sound fantastic, Woody. The interest rate, what do you guys call it, the golden handcuffs?

Yeah, that's a good way to say it. Where you won't get off the rate despite having significant equity in the home. That's a mindset that continues to be out there. Yeah, well, I mean, like with the VA assumables, that's something that a lot of the instructors at the Appraisal Institute have been talking about, that teach on this stuff, and I'm lucky to be in that group and part of that conversation. You know, if you've got a VA that has a 2.9 or 3% interest rate and you're getting ready to sell it, that is an assumable rate as long as that person can qualify for it. And you don't have to be a veteran to qualify for it. So that's something that appraisers

are, we're getting back to like in 1980s, we were making cash equivalency adjustments because of how high the interest rates are. But if you're buying a piece of property that has an interest rate like that, and you can assume it, that's a very positive leverage position for you to be in. And yes, it does have a value to it. I mean, appraisers should be adjusting for that if they're dealing with it. We're not seeing it a lot right now. Because again, like you said, Jerry, a lot of folks are kind of they have that golden handcuff, they're strapped to it, they're not going to sell. But if they're in a situation where life happens and they have to sell, what is it, the 5Ds you said? So if that's the case, they have to sell it for whatever reason. If the buyer's in a good position to take advantage of that, I mean, you know, that property is going to probably sell at a high premium in the market because, you know,

you're going to save a bunch of money over the course of a 30-year mortgage. What do you make of that, Candice? No, I agree. I agree. One of the things, too, I wanted to bring up is the appraiser perspective. So, again, for example, new construction has a lot of creativity and their offerings for some lenders or some new construction lenders will actually take your down payment or your deposits and give you interest back on it for, you know, waiting through the, you know, four months or

six months or however long it takes to build. So I've seen also a lot of, you know, there are older, you know, people are going, I want new home. I want a new home. I don't want it past a certain age, you know, nothing, you know, that's, you know, 10 years going, I want new home. I want a new home. I don't want it past a certain age. You know, nothing, you know, that's, you know, 10 years or older. But there's a home, you know, a property on a really nice established lot, beautiful place that's from, like, the 50s or 60s that's been completely renovated. New everything. It's beautiful. It's beautiful. It's wonderful. The evaluation and perspective from an appraiser's standpoint on going new construction versus a little more land, a little more established location, and a little older home, that's been totally renovated and updated.

Well, if I understand what you're asking, how do the two compare to one another? Yeah. how do the two compare to one another? Yeah, because I know from a buyer perspective, or from a seller, from a buyer perspective, they go, well, it's still an old home, even though it's new. That's true. And from a seller perspective, they go, it's a new freaking home. It should be priced like the one in the neighborhood down the street. We're doing a private assignment right now where it's a very unique piece of property.

It's on like 20 acres. It's kind of a little bit rural, but just outside of the suburban ring around the city. It's in Albemarle County. And that's what they're thinking is they're like, well, if you're taking this 20 acre piece of property, that's, it's a super huge home sitting on this thing. And they're like, well, you know, new homes on little tiny quarter acre lots are selling for seven figures. We should be able to do that. What I would tell people to do is pause and think for a second, particularly real estate professionals. What makes one property comparable to another? And that really comes down to, is the consumers looking at those properties, comparing these properties together? Most of the time, an older property on acreage is not going to be the same consumer base as someone wanting to live

in like uh you know a quarter acre subdivision i'm trying to think about some of the stuff down along uh lynchburg road uh fifth street what redfields uh you're talking about valley farm well some of the new ones that are mostly and okil farm yeah down through there i mean if you're wanting to live in a subdivision like that you you're likely not looking at acreage because, you know, there's a, you know, I think there's an age barrier to some of those properties, right? I mean, if you're older and you don't want to take care of a lot of land. The maintenance. Yeah, there's a lot that goes into stuff to that. So, I mean, if you can get into a brand new property with no upkeep at all, no deferred maintenance on it, that's better off.

But if you buy 20 acres, you've got to manage the 20 acres. And even if it's all treed and you think you don't have to, trees fall down. You got to take care of them, right? So, I mean, I don't know that necessarily we have the same consumer base looking at the same two types of property. So I wouldn't comp them together, to be honest with you. I mean, I think you're going to get into a problem with your client if you're trying to comp it that way. Exactly. That's exactly what I was expecting to hear. Because, again, the public perception and the consumer perception from a person selling that 20 acres with the big farmhouse going, oh, wow, mine should be worth X because, you know, Oak Hill is worth Y. It really,

you said it exactly right. It is not the same. And so from a real estate professional standpoint, talking with our sellers, talking with our buyers about those evaluations and going into communities that are already established versus new construction or new homes. Like, yes, the more new construction that closes, the more they're available, it will open up or should be opening up inventory of resale homes. And at the same time, people who are sitting there going, you know what, we're in our home, we have all this equity, we're just going to renovate, you're really probably going to overbuild and not ever get that back. So it's really an advantage to sell, even if the interest rate is

double, you know, you went from 2% to 6% or, you know, triple in that case, it still is a better advantage in the long run to sell that property that no longer fits your family's needs, the five Ds again, and buy something different because a lot of people will end up overbuilding, overspending, overmodifying, and then in four or five years when something does happen and they now need to sell, they go, wait, we overbuilt, we overspent. Why are we not getting our investment back? Well, you should have called a professional before, and they'd have told you you're better off to sell and move. We did that this summer.

Yeah. My wife was spending two and a half hours a day in the car driving our boys around. It was just entirely too much. And we shifted spots. Sometimes when folks are getting ready to renovate, it's a good idea to hire an appraiser. I mean, do what's called a feasibility analysis. He did that for our house. It was fantastic. Look at what types of improvements

you're thinking that you want to do, and then have a professional help you figure out what's going to be the most return on your money. Because I see it all the time. People will put 200 grand into a piece of property, and they might recapture 100, 150 of it. So they're going to lose money in that situation. It's worth the $600 to $1,000 to have an appraiser run some scenarios for you, which is something that I wish more people would actually take advantage of because nothing makes me happier than to help people get good information to make good decisions because that's all we're trying to do is help people make a good decision. John says, what's the five Ds again? Death, divorce, diamonds, diapers, downsizing.

Yeah. The 5Ds right there, Cobb. Brent Johnson, know and understand the property and market segments. Woody Fincham does. He's giving you some props. Thanks, Brent. Mark from On the Mark Appraisal Services is watching the program. Sounds like you've got another Cinnabon guest with Mark,

and he's going to hop a ride with Steven over there. Come on. The appraisers love the Cinnabons on the feet over here he's going to hop a ride with Steven over there. Come on. The appraisers love the Cinnabons on the feet over here. You're welcome, John. You're welcome. All right, so comments are coming in here. Do you see the units sold in 2025 surpassing 2024, being on par with 2024, or being less than 2024? I would gander that it's going to be less because there's just not enough inventory to keep up to that level. I'll say it better be more.

One of my lender friends had sent me a thing the other day. Overall, now this is nationwide, transaction count is down 65% from last year. And last year was down from the previous year. Well, what a lot of people don't understand, in 2023, there were more released contracts. Yeah, maybe things were going in bidding wars, maybe things were going quickly under contract.

However, what percentage of those actually closed and went to closing on the first try? There were more released contracts overall in 2023 than there had been in a decade contiguously. So the released contracts in 2023 that then ended up adjusting, going back under contract, and then closing, people don't really, the public don't look at that or see that, whereas the professionals do. And then this year in 2024, the number of actual transactions closed is down significantly. So talking about low inventory, it really, I see that pivot in the mindset of the consumer going, okay, it's time where the interest rates aren't going back down.

We need to make a move for whatever family reasons or structure or, you know, driving two hours one direction, sitting in traffic, grocery prices are going up, just functional life obsolescence, either in your home functionality, in your location, or in your own private family needs. It's got to make a shift. And with new construction being as booming as it is, I really am counting on and I'm hopeful that that phone is going to keep on ringing and we'll have more inventory on the market this year. So you're taking the over on 2025? Yes.

You're saying you're taking the under? Yeah, but I'll caveat with I think that professionals like Candice and, you know, like Keith and folks like that, I think their transactions are probably going to go up because they're the professionals in the market. We've got, you know, with real estate agents and brokers, there's a lot of folks in the business that might do one transaction a year. And, you know, those folks I think are probably going to be hit harder than the folks that are the mainstays for any market across the country. If you're well-known and your clients love you, they're going to continue to come to you. Nine percent of agents do 90 percent of the business. Yes. I mean, it's a relationship business, right?

So if you've got a good client base, I think you're going to continue to be the power swingers in the market. I get this. I hear this statement all the time. Cops put this in the feed. I hear it constantly. If rates get down to the 5-5 range, the market. I get this. I hear this statement all the time. Cops put this in the feed. I hear it constantly. If rates get down to the 5-5 range, the market will pop, will boom. But then it's not good. It really is not healthy. Why have a market boom? And like the Earpies say, if your sale price is up here,

it doesn't matter what your interest rate is. If you buy into the sale price and it's affordable, it's the right location, it's the right floor plan, it's the right setting for your family and your family's needs, then the interest rate is really not going to make that big of an effect and change versus the bidding wars and the price gouging and the increase and all that. It's horrible. When you drop to such an advantageous rate, if it goes to five and a half, what really gets hurt are the workforce folks. The people that are hourly wage, they get priced out of the market quickly because their buying power is just not there. I think those folks may be priced out of Charlottesville, not Marquette right now.

They are. Well, that's where it's beautiful. We have so many wonderful surrounding counties and communities, Waynesboro, Fishersville, Stannardsville. I mean, Stannardsville, there's how much, 500 homes coming out there? Now, what they're going to do about water and sewer, I don, really just, again, being communicative, being professional, going through, you know, I work with so many amazing professional realtors and it is fantastic. Shout out to anyone in Pat Jensen Leadership Academy and anyone doing, you know, FS, the full service professional real estate with Buffini. You know, there are just professional realtors out there on the other side that make it really fantastic for our clients, for our consumers, and for the public. And then they understand it doesn't really matter.

You know, we're not at an 18% interest rate like in the 80s. We're at a 6 or 7. I mean, come on, people. It's not going to be 3 or 4 or five even again, and that's okay. Let's keep the price of the actual acquisition lower, and over 30 years, you can afford it. You might be able to refinance in a few years, but, you know, the lower the arms in the 15-year, the 5 and 7 arms are not that attractive. So go in at a 30-year. Why not?

You know, get the house, get the location, get now what your family needs so that you're not on the road for two hours every day driving kids back and forth. There it is. You know, enjoy your time, enjoy the Cinnabons, and enjoy every day to the fullest. We have a good family friend that, you know, he's a master carpenter, very good at what he does. He had to buy in Buckingham. I mean, he's got an hour commute every day because, I mean,

his price point had to be somewhere in the $250 or less just because of his personal situation. Great credit, just paid off all the student loans, you know, but, you know, he's down in Buckingham. Nothing wrong with Buckingham, but, I mean but if your center of business is Charlottesville, that's a long ways we have to drive every day. Which Janice, give her a shout-out if you're going to Buckingham. She's a great realtor.

Oh, yeah, Janice, definitely, definitely. You guys are the best. The show flies. How about, Candice and Woody, some closing thoughts for the viewers and listeners? Candice, you want to go first? Well, definitely save me some Cinnabons. My only question was, is it iced or not iced? Definitely got to have the icing melt all over. Okay, good. Perfect. Yeah, no, closing statements, you know, if you have questions, if you're interested in learning, knowledge is power. The unasked question is never answered. Give me a call. Give a professional realtor a call.

If you would like appraisal and evaluation, give Woody's company a call. I mean, you know, this is when the people who do it day in and day out are here for you. We love what we do, and we're here to help. So, you know, pick up the phone and give us a shout. For sure. Yeah, we're here to help. So, you know, pick up the phone and give us a shout. Yeah, we're here to help any way that we can. You know, again, our firm specializes in kind of the more complex stuff. If you've got something strange, unusual, atypical, we're happy to help you with it. Dome homes, that's on my mind because we have one we're getting ready to do, but large estates, conservation easement work. You know, we love workingement work. We love lending work, but we love

working in the non-lending world as well. We do a lot of work for attorneys. I've spent more time in court as a witness this year than I ever have, and I'm hoping that we continue to grow that. So if you're an attorney out there and need someone to help you with a valuation, we're very happy to do that. Woody Fincham and Candice, they're pros. This was easy. Well done, guys. You make it easy. An hour and five minutes flies by right there, right? You guys got to come back. Always. Hope to. Keith Smith, for those who are asking, guys, is on an island? Is it in the Caribbean? Saint Martin. Saint Martin. Loving the beautiful Caribbean, the blue waters, and no Wi-Fi right now, apparently. That's right. That's what he said to us.

Although he emailed us. He did. Oh, yeah, yeah. He definitely is micromanaging from 2,000 miles away. But you mentioned Keith. You've got to mention Yona because Yona is such a professional. And they both are. I love working with both of them.

Absolutely. Absolutely. They're back in 2025, guys. The show is archived on RealTalkWithKeithSmith.com or wherever you get your social media and podcasting content. The I Love Civo show, ladies and gentlemen, is up at 1230. Thank you kindly for joining us and so long. Very nicely done. Thanks so much.

Thank you.