The I Love CVille Show With Jerry Miller! - Woody Fincham, Scott Morris & John Ralston Joined Keith & Jerry On "Real Talk With Keith Smith!"

Episode Date: June 26, 2026

Woody Fincham, Owner of Fincham & Associates, Inc., Scott Morris, Branch Manager at Envoy Mortgage, & John Ralston, Associate Attorney at Ralston Law Group, 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 El Mariachi Mexican Bar & Grill, Fincham & Associates, Inc., Free Enterprise Forum, Intrastate Service Co, Mejicali, Tailored Closet, Premier Garage, Budget Blinds and YES Realty Partners.

Who knew? Scott's killing it. If we don't get it right the first time, I'll get it right the second time. Are we going to go out on that show? Good Friday morning, guys. My name is Jerry Miller, and thank you kindly for joining us on Real Talk with Keith Smith. It's a pleasure to connect with you guys through the I Love Seabill Network and a show presented today by Yes, Realty Partners.

Today's show, like all our programs, are airing live on 27 social media and podcasting platforms, where we encourage you, the viewer, and listener to ask questions and shape the discussion. We have a panel of experts today. This is the best of the best in real estate law and lending, financing real estate transactions, and valuing and appraising real estate. And, of course, in selling real estate. We have Keith Smith, John Ralston, Scott Morris, and Woody Fincham. So brokers and agents, realtors, residential and commercial,

appraisers, inspectors, photographers, get your notepads out and get ready to have a master class on what it's what it's like to be a professional in this business here in Central Virginia. Judah Wickcower is behind the camera. He is the Elmer's glue of the team. We don't get

to Victory Lane without guys like Judah Wickcower. I sincerely mean that. Judah, if we can go to the studio camera and then I think you're going to rock it. Is it a five shot today? You got a five shot? It's Friday Judah. He's got something cold in his future. because of this right here.

Keith Smith, my friend, the show is yours. Cold, huh? What are we talking about, Judah? Oh, look at it. You don't have a microphone because you've got five on set. You got five on set. Look, this is, thank you for the kind words. I'm not so sure I fit into the level of the rock stars of these three gentlemen,

gentlemen here. But, you know, I wanted to kind of kick the show off with, you know, it looks like Congress actually did something about housing. or didn't. And I've coined this term, we're currently in a Trump timeout. So, you know, I've got very specific opinions about if this is really going to make a difference. But I kind of wanted to go around the table real quick on what everybody thought about this. And is this really going to move the needle?

Because later on on the show, we're going to talk about what the market's really doing out there with a mid-year, market report. So Woody, you're one of the geniuses on the panel, so I'm going to start with you. So is this moving the needle, my friend? Well, I hope I can live up to all those accolades. I don't think it's going to move the needle much at all. There's been so much a grandiose, lot of Tory stuff going on in the media about it, and I don't know that there's anything, any provisions in the bill that's going to really help housing in any meaningful way, maybe over time, but immediately we're not going to see anything. Because, I mean, what we're dealing with is a supply issue.

And supply doesn't have anything really to do with what the bill's about. We'll talk about some more of the details when we dig into it. But I just don't see it moving a lot, particularly here in Central Virginia. Well, simply put, we should set the stage what the bill's about first. Yeah, maybe. Yeah. Good idea. Yeah.

That's a good idea. So, in essence, the House and the Senate passed a bill that is supposed to make, housing more affordable and we're going to go into some of the details on it I'm just to automatically assumed everybody like me was geeking out on it phone so thank you Jerry for asking me to set the stage for it so there's parts of this bill that may or may not work but as far as the current stage goes right now it's actually in limbo because it's the bill is sitting on Trump's desk but he hasn't signed it and it's in the middle of or the beginning

of this little 10-day timeout, as I call it. So just a little paraphrasing right now, if Trump does not take action or veto it within 10 days, it automatically becomes, as long as Congress is in session, it automatically becomes a bill. So I don't really know what the theater is all about because it doesn't have much of a thing at the end of it. But, you know, Scott, there's a couple of things in here.

And one is I just don't understand there's a provision there about they're making $100,000 mortgages easier. How does that help anybody? Well, again, I think so Woody says he doesn't think that it's going to help anything. I don't think anything is the answer. I think it's it will help where municipalities are proactive about creating new housing. So if you're in an area that's created a moratorium on new builds like Central Virginia, for the most part, it's not going to help much. However, if you look at areas of Maryland, Baltimore, surrounding huge parts of the Midwest,

it opens up, so parts of the bill, so there's a lot of different stuff in here. One of the big parts of the bill is it opens up funding for grants for municipalities to then push that downstream into first-time home buyer help. It allows builders to build apartment buildings. That's a part of it. There's all sort of, it's not a turnkey,

but it is a facilitator for municipalities who want to see growth in their area. In areas that have already seen explosive growth and are trying to stamp that down, which is kind of like what we are to appoint, it's not going to do much.

But nationally, over time, let's say the next five years. I think it is advantageous. So it's all about the purse string, which is really what this bill's all. Yeah, it's all about, it opens up different channels of money to people who want to see growth in their area. So before we get to you, John, on this, there's two, there's three big things about this bill that I think could be impactful. One is this whole redefinition of modular, right, and modular homes and still chassis thing. 100%. So that'll impact your world from an appraisal perspective. It'll also impact your world as far as a lender perspective because they're going to redefine what that is and make lending a little bit simpler. The two other things about this, and this is an acronym word salad, it's about the CBBG, which is the community block development block grants.

And I'll let you chime in here in a second, John. But to Scott's point, That's the 10-ton sledge habit that the feds are going to be able to use at the state and local level, because that money is for infrastructure improvement. And what they're going to say at some way, shape, or form, if you play ball state or locality, you'll get more CDB, CDBG grant money. And I just know this real well because of coming off the Thomas SEPA's Appendix District Commission after 15 years, we manage that block of money for the region. So that is going to be hugely impactful for it.

And the second thing is the home program that the feds do, which is money for down payment assistance and so forth and so on in that. What do you see, John? Nothing immediate. I know in the headlines I've seen a lot of it's about banning institutional investors, but they define that as a company that owns, what, like 350 units or more? and in some basic research I did that they're not the largest issue

or at least they were localized to metropolitan areas. So I've seen a lot of the headlines, but I don't think that's a primary push because it's a 377 to 400 page bill. I think what I can appreciate about it is it's trying to develop a lot of different options. like there's an innovation fund, it did that CBD block grant, it's trying to help with mortgage costs. So on that end, I can appreciate that it's trying to do a broad approach.

But, you know, another way is, like, I think they're just throwing a lot of different ideas at the wall and hoping one sticks. Another one they're trying to do is streamline zoning and push. I'd say push because I don't want to say the word in force, but like, promote higher density, accessory dwelling units. But we're a Dillon Rule State, right? Yes. So unless the state is willing to do that, none of that's going to flow back down. So again, they're facilitating growth in areas that want to commit to that.

If you are an area that wants to commit to a plan, you have more money available to do so. A great example of one of the things that's going on in Maryland, right now they've been doing this for several years, is in some areas that have been run down similar to what Detroit did several years ago where you could buy a home for a dollar. This actually incentivizes builders and investors to come in and buy blocks of homes and then resell them. They get an upfront benefit on the cost of ownership, and then they also get incentivized for the sale of the building as well. So if it hasn't been inhabited in three years, they go in and flip it, and the buyer gets like a zero down advantage getting in as well. So I've seen some really nice, like condo style, townhouse, multi-unit type sold there that are, that hadn't been inhabited in an area that was completely run down and devastated, that somebody's gone in, rehabilitated, and sold. It's about creating more units in the areas that have them to create more housing. We're talking about blight areas, right?

For that specifically, but this is more than just that. This covers some of that. It also, for somebody who wants to cut the red tape that they have in their own footprint in order to help facilitate growth, this monetarily incentivizes that to happen. One of the key problems, though, that they're not, this bill doesn't really address is the migration issue. And what I mean by migration is that people are leaving big MSAs. places like California, places like Baltimore. I mean, we have a lot of people coming to Charlottesville

because they love what we have here, but they're coming from larger MSAs. And the problem is that they're going to put all these incentive programs in place, but are you actually going to get developers, they're going to actually have people that want to buy these things? I mean, I think there'll be some interest on it, but I don't know. I mean, people are leaving these areas

because they don't want to live there anymore. What about areas like Danville? What about these smaller, more rural populations that are getting more manufacturing or data center development that is creating the migration of industry into those areas? This is allowing for more money for housing in those areas. It is an overall plus over a long-term. The key to that, yes, but the key to that is how this money flows and how it flows from the feds, to Danville, right? It has to go through, for instance, like, for sure. Right. And we're, and, and, and this money will be doled out over multiple administrations.

This is, somebody, somebody will put, look, somebody's going to wet their finger and put it in the bag between, between here and there five years from now. This is not over with. This is just something. I think everybody at this table knows that this isn't, again, I have to pay five bucks to my buddy, Robert Liberty. this is not the silver bullet it's not even the silver buckshot right it's a it's a tool you know i think personally uh and i very rarely get political on the show i think this was a low-hanging fruit easy to get past right makes everybody look like it's an add-a-boy that ad boy it's it's presidential election season coming very soon and the people that are sponsoring this bill are trying to put themselves in a position to where they can say we did bicaramo bipartisan

and bills and we actually work together. This bill doesn't really accomplish what they're trying to say. Well, it looks good on paper and looks good in the media. But there's some appraisal stuff buried in there. Did you get a chance to take a... So you want to talk... Because I think that's impactful, right? I think some of that could be impactful about some of the modernization of the language and stuff like that.

Yeah, Congress, for whatever reason, is really starting to push on the VA panel. They're wanting to basically dismantle the VA panel and open it up to any appraiser. out there. The VA panel has been one of the benchmarks, I think, of the appraisal profession for decades now. And it's there specifically to assist veteran buyers and treat them well. And the appraisers that get on the panel are vetted very carefully. They spend years getting on to it. And now they're talking about just opening up the same way they opened up FHA about 15 years ago. And, you know, while it's not really going to accomplish much, I don't think, for helping out the veteran borrower.

I think it's just going to take one small part of the whole process and just they're trying to streamline it. And I mean, they would be happy tomorrow, not Congress, but the people that are interested in pushing stuff through if they could just do computer appraisals and not have an appraiser on property at all. And I see that that seems to be the architecture they're starting to set up where it becomes more of a desktop scenario and you don't have boots on the ground. Are you seeing the language written that way that might impact? That's kind of way, it's in between the lines. I think that's where we're going on. And if that happens, how does that impact everybody at this table and the market?

Well, the largest GDP in the country will no longer be looked after by human beings will be looked after by algorithms. It'll work okay for the first generation of it because the appraisers that are doing the desktops will have been in the field, in the neighborhoods, they know the markets really well. But our appraisal profession has a meaning age of 63. So, you know, people are going to be dying off and retiring soon. Real estate agents is 57. Yeah. What about mortgage loan offices? I don't know how old most of them are.

I could not answer. Thanks, Scott. No problem. I will say... I want to ask about attorneys. Thank you. So the aviative valuation is already something model is already well into effect. when it comes to home equity lines of credit and things of that nature.

So its usage depends very much so on where it's being used. The risk profile. The risk profile. Like when you get into a more rural area, they may not allow an AVM at all, and they call for an actual appraiser because it isn't built around a neighborhood of, this is not one in 1,000 of the same cookie cutter house that it's applying value to. So depending on the area, for the foreseeable future, There will be areas where it becomes more prominent and there will be areas like where we are where largely they're probably going to be a continued fallback on the actual individual appraisers themselves.

So how's the ratio AVM versus reality? Like I know when you take a look at our AVM system that we have on our MLS system versus what I know the market is very rarely they are even close. even close. Scott actually gets to see traditional appraisals and aviums because y'all run avioms on just about everything you do anyway regardless of traditional or not. So I mean how close are they together usually? It again depends on the area. That's what makes the difference. I you know I always Lakes or Holly Meade. They're really close. Yeah, they're real close like Monticello really close like Monticello is a bit of a it can not homogeneous market. We talked about our home market here a little while. It's getting a little wild out there. I think it has a hard time differentiating in like your 1980s stick built vinyl siding ranch at the lake versus something that was built in the last 20 years.

That's where you get to, that's where it may give that 40, 50 year old 1,800 square foot or less property more value than it necessarily deserves and it'll write down some of it. Like there's at the lake that it can be a little wishy washing. So I'm going to pivot on you a little bit, John. We had a show a little couple of, about a month or so ago, talking about time is of the assets and the contracts. And I'm curious from your Scott and Scott in your perspective, has it impacted it at all or everybody's figured it out and we're working through it? I promise myself once I got you back on the show is to ask a little bit how that process is going.

I can tell you from an agent's perspective. Well, I don't want to say it's figured out. I mean, it's kind of added a little more gravity to the deadline, obviously, but I think in the last month I've had maybe two, three cases just about, all right, we missed a deadline, now what? I would say two weeks ago had a lady call out another jurisdiction where she was a seller, and there was some animosity between the parties, which I'm going to emphasize, which I feel like is the red flag for when the check.

But the closing agent, or I should say the settlement agent missed the deadline. Like the lender wasn't ready by a week. And her agent didn't know what to do because it was new to them. And so they recommended she reached out to an attorney. She called me. I said, well, it's in default and you have two choices. you can take the deposit and walk, or you can give them an amendment or an extension,

but at your terms. So you renegotiate? Yeah, I told her you can renegotiate, and I told her, let's, you know, you're within reason to say, wave the final walk-through, and I told her that a phrase saying that she's fully performed on the contract,

so there's no way the buyer could come back. So this was a missed closing date, not a miss anything else in the contract. Yeah, and I said, look, if you have caring costs, That's also for her game. And she told me a few days later. Yeah, she got what she wanted and they closed.

But that's just it. It's sort of, I think there's still some, I don't even want to say it's realtors, but I still think there's some like outfits, settlement agent or otherwise, where it's just they need to adjust to that reality. And it's just going to take a little while longer to catch up. Scott, you've seen anything with this new contract?

I haven't. But like an incident like that is, communication, communication, communication. Had the lender communicated to the byside agent that, hey, this borrower is not going to close on time, when they probably knew they were not going to close on time

and got an addendum out to get in place, everybody could have been ahead of that. You know, you're right, that's exactly what happened. There was no communication. Like the closing date came and went, seller didn't hear anything. And again, there was some animosity between the parties.

To me, that's the... Yeah. But that's why. Well, we talked that length at that show about, and it just blows my mind, how it's so hard to get somebody actually to pick a phone up and talk to you in this business. Oh, my God, it's impossible anymore. Yeah, and is that impacting you and how you do business? And keep in mind appraisers are a different breed.

Yeah, we're in a different part of the transaction. But what I will say, this is, in 27 years, on Wednesday, I had three no shows, because people don't know how to use their text messages, answer emails, or do voicemails. So explain that? I just, I had to re-dose. I had ghosted them. Yeah, I mean, I show up to the property. Lockbox is missing.

Someone took it off the property. Another one sent me the wrong lockbox code completely. Not available by phone or by text. This is the agent. This is Buckingham, too, by the way. So it was quite a day for me. Somebody's getting the bill, I would imagine. Well, yeah, we don't go for free.

But I hate doing it because they end up inadvertently putting it in the borrower's costs. And it's not the borrower's. So set the stage on this. Thank you, Jerry, for giving me that term. So set the stage on this. So tell people how this works, right? I'm the listing agent. Right.

I have a listing in Buckingham County. Tell me how this works, how you get to go in the house. So I'm going to reach out to you either via phone, text or whatever. We usually try all three. phone, email, and text, and then just say, hey, look, I'm going to be in the area on this day. Can we set up an appointment for this time range? Generally speaking, most agents get back to me within minutes, if not seconds. Because if you don't get in here to do this, we don't...

Because of a problem, right? Scott can't close, and John can't do the closing, and therefore I can't get paid. So I'm a little motivated. Yeah, and so we'll put that out there, and then sometimes agents are not very responsive, And it can be for various reasons. I mean, people take vacations, they do whatever. But, you know, once you've communicated with the appraiser and you've set a time, then you should do everything you can to make the house available to them.

I will say in one of the three that we dealt with on Wednesday is totally not the agent's fault. The homeowner decided to take the lockbox in the house and didn't figure that we needed to get into it. That wasn't the agent's fault. But it still adds more time to it because I can't immediately reschedule to go back out to a remote area the next day. Because we do a lot of rural work, we have to structure it geographically. So it can add days, maybe even a week to the whole process. You want to get on a soapbox on people actually picking the phone up and talking to you? I mean, no, I don't.

But, you know, there's some appraisers that you can't get on the phone. You can't get there, you know, even you'll get, like, their wife who runs the desk at their house, who then sends a message. I mean, it just depends on, and then you get some that will respond by text, hey, I'm out at a property, what's going on, and then maybe a call later in the evening. But you get some agents that, you know, listing agents with people actively trying to purchase their properties that don't respond to people. I hear other agents talking about this all of the time.

It's insane. And nothing gets done. It's a soapbox for me. I just, I don't get. why, I mean, last time I checked we're in the business of communication, but I don't know. I do want to go back to the bill because I just don't want to leave hanging this CDBD, this community block grant development grant money. Because what's going to happen here?

Because I've seen this on the operational side of it. I know how this money works when it comes to locality of it. What they're going to do here, and it's pretty much, in my opinion, buried into it, if a local, certain local government, let's take Clavanna County, is receiving that money for some infrastructure project, they're going to require housing to be attached to it. Otherwise, you're not going to get the money. That's where the teeth is going to be in this thing. They're going to say, great, yeah, we'll give you $2 million to run.

Well, he who controls the treasure box controls everything, right? And that is where the two big teeth in this agreement is that. Plus, I can't overstate the impact of what modular, changing the rules on modular construction and how you can lend it and how you can appraise it is going to matter in this process. Scott knows this. I live in a modular home. I've got six boxes, and if you walk through my home, you wouldn't know it's a modular. I walked through your home recently. I didn't know it was a modular.

You did not know it was a modular? Yeah, it's a modular. Good. Thank you. So how did I do? It looks pretty good. Thank you. Your ADE looks great.

Oh, that's right, you went down to my ADU? Yeah, that's right, you have to do all that. Yeah, yeah. I'm an idiot. They do all that stuff. Yeah, yeah, that's good. Got the mom and dad downstairs. They're doing great.

So anyway, I think that's the two big 10 ton elephants in room, and you've got this. I mean, I think the wording around manufactured housing specific to metal frame, metal frames, that probably matters. I don't know, I don't see an issue with the actual modular house in an appraisal process, especially at new construction, become an issue now. So I'll tell you, I know a little bit about this from the land trust side and where I think this will make a difference in John,

jump in it when you can. we had a modular, a mobile home that we were selling, right? But I'm trying to distinct between the two. Why don't we, why don't we, want you to take a second and define what the difference is? So a modular home would be brought in with pieces of the home already built,

no vehicular DOT frame attached to it, and then that would be placed together like a box together to create the home. Legos. Legos. A mobile home, manufactured home, comes already built on a trailer. There are pieces

of the trailer itself that are disassembled and that title is surrendered to the Department of Motor Vehicles, changing it from mobile to real property. And there's a very complicated process to do that. And it usually happens at the local

level. Yes. And this streamlines that process, right? From what I understand that, that's part of it. You can get two mobile homes, two halves, put them together, put them on a foundation, until this law got changed, until this stuff works through it, it is now a, that's still a mobile home, that is still a DOT thing.

This language, as I interpret it and read it and others read it, that will go away. So you'll be able to take two mobile homes put them together and all of a sudden make a real so-called real problem. Sir Clayton and Oakwood are out there just jumping for joy right now over this. I can tell you, on the backstory on this, the manufactured module of home company, was lobbyists was all over this. Of course they were. They want to sell more units and they also want to get restrictions out of the way. But I mean, the main difference between a manufactured home and a modular home

is that manufacturer homes are built to FHA code and that's very specific stuff and it like everyone's talking about it converts from chattel or personal property over to real property through a process and has to for most loans. And then a modular home is built to local code, meaning that it has to meet whatever the local codes require. It's framed. It's in boxes. It has two by ten joists. A lot of times a modular, if they're like in your example, with your home, it's a very high-end modular. I didn't realize you didn't know that. I didn't know. Usually you can tell from the marriage wall where the two walls come together for the sections, but I just didn't notice it. It's a very big, big.

home. So back in 2000 when we had certain employees working and we were redoing stuff two or three times, said let me give Modula home a break. That's a little bit of a dig at Scott. I know. So chime in on this, John. Anything before we go to the market

or we're seeing anything happening that's going to impact our role here? Well, circling to the manufacturer at home, if there's anything that can help ease the process on the closing end, that would be fantastic because they can just be

unduly painful just having to figure out about the title and has it been surrendered and sometimes I'll have a manufactured home that has been there for decades. No one has any paperwork. No one's done any of the due diligence prior to that point.

And just making up for lost time, there's extra affidavits, title or otherwise. It's just, you know, you would expect those to be the most straightforward, and those can be the most hectic trying to gather all that last minute. So anything that eases that is a win in my book. If you own a home and you're putting one in new, keep all of your paperwork, don't remove the tags off of the home, don't remove any of the paperwork that's glued to your closet wall or under your kitchen safe. It's all there for a reason. Otherwise, It creates a whole new process for everybody who's involved with it because, you know, as the appraiser, I have to take pictures of all that.

I have to track all of it. You helped us in that. You helped us in that land trust and standards. Ruckersville. Yeah. Rutgersville. And we were able to actually get that to close because through relationships, we got Virginia housing to say, okay, we will fund this. Good.

So it actually ended up closing. So thank you for your help. So with the bill or without the bill. There's a piece of this that's not being talked about, and there's still an investor risk appetite. And so there are cash transactions where this bill may just completely open up people to move forward doing certain things. There's individual investor overlays that may not change during this process, or at least not initially change right away, and it may take years before there's a shift in lending on these properties overall. Credit health is really important to a lender because of the risk aspect of it, right?

I mean, you know, manufactured homes run a different default ratio than normal conventional homes. And that's another reason why lenders and investors are typically a little more risk adverse with these types of property. That's why there's so much overlay with them from the regulatory side. It's going great. Yeah. Shevery's quiet today. No, I'm enjoying. I'm learning here.

I'm learning. So do we want to get into a little bit of market stuff? Some of those questions on the feed are on the market. Yeah. Yeah. So a number of comments about price reductions that folks are seeing on the market. Yeah, so we want to tackle that, or do we want to kind of go into where I just wrapped up to six-month things? So, you know, are we starting to see price reductions? Are you seeing that on the legal side, you know, halfway through our closing as people are trying to change numbers at the last minute?

Are you seen any of that happening? Not so much on the residential. No commercial for sure. Yes. Why is the difference? I think on the commercial side of it, there's a lot more accounting and questioning of the numbers and what is the valuation,

especially if there is a seasonal aspect to it or, say, with gas prices, that can change what the expenditure line. or sorry, expense line is. So I feel like it's a lot more critical of those changes in the market. Whereas with a house or a residential house, it's like, okay, you're going to live there. I think there's just that difference of what is the value. The money flows different in how you find it, put it together.

But I will tell you general real estate's transactions right now from like an MLS perspective. So it's acting way more like commercial is than it has. has in the past one time to chime in before I So NBC 29 did a thing I saw that Most expensive market in Virginia

Is that what you're talking about? That is the most expensive market in Virginia Go us Well done Actually the headline I believe was the least Affordable market in Virginia is the Charlottesville market That sounds about right

And so let's just take a quick look at numbers 25 versus 26 So I, last night while I was watching football, soccer, worked on the six-month market. Do we want to talk soccer? My heart's broken from watching. Tough loss. How do you say, is it Turkey or Turkey? Turkey, I, yeah.

They're confusing. I just call it Turkey. It's Turkey. That was a beautiful last second goal. Wasn't it? Well, I actually, we're going to get me off on football. It's World Cup time. It's okay.

I actually think that was probably the best thing ever happened to the U.S. team. Yeah, they needed a little bit of a reality check. Wake up call. But that also wasn't first string either for the most of the match. No, that group had never played together as a whole. And when they put Poooslick in, or how even pronounce his name, in the second half. The game really opened up for that. It really changed.

That guy is the catalyst for that team. But we shall see on the 32 knockout range who we're going to actually pay, play. I don't think it's been set yet. It's been set. It's been set. It's been set. Well, I know the date, but I wasn't sure the team yet. That's going to be a challenge.

Yeah. Well, they got to show up and play. They're going to have a chip on their shoulder. That's for sure. Didn't mean to take you down a rabbit, right? No, no, no, no. I'm a huge World Cup fan. Usually I am blessed to be in the islands this time of the year in June,

and I get to watch France, play in France, I get to watch the Netherlands play Netherlands, and I get to watch the Brits play in England, because the islands are so close. But look, I'm going to disagree with their number. Their number that they put on there is way lower than what the market really is showing from the car footprint. So a very smart guy once told me it's how you put these numbers together can kind of impact it a little bit. but our average price, so what I do is I did up to the 25th because we're not at the end of the month, right? So I'm calling that to the six months. 2025 in the car footprint, which is Charlottesville, Alamara, Favana, Nelson, Louisa, and Green. 2025, our average sales price was 642.

We're now down to 617. That's a 3.8% drop. So we're still at the 600K mark as far as average. Our median's dropped a little bit. Our median's dropped from 495 in 225 and 479 in 206. That's the 3% drop. But our overall sales volume is up 6%. So the tempo of the market is up, right?

And our total sales volume is up to 2.7 million. But look, we've been talking about this on the show for the longest time. I think we've been the most expensive market for a lot longer than the last year. Anybody want to chime in on that? Migration. I mean, what I was talking about earlier. We have so many people coming from other places

to hear, to enjoy. I mean, we have a wonderful place to live here. And I'm so proud of where we are, but it's attracting people from other areas. And they are coming with big pocketbooks. And they have driven the market up. I mean, and COVID just magnified that. So Scott, cash has dropped.

2025. We're 30.9% of all the transactions were cash. We're now down to 25.4. So let's just call it a 5% drop. So right now, buyers are starting to do the math a little bit better. We're seeing, at least from my market assessment, we're seeing a little bit of a softening in the middle range, right? Because I think rates are impacting that a little bit.

So are you starting to see a greater increase of folks looking for mortgages? What is your tempo looking? like so we've been on an uptick all year long but and we're you know we think we came off of you know last month when I look year over year for like the past five years our closing in August are some of the the highest months of the year and then June and July are a little softer so I think that's just seasonality of what we've seen with schools close like ending their year earlier and the beginning of kind of a summer break and then as people

gear up to where are we going to be when these kids go into school or our kids are going off to college and we're going to make a move I think a lot of that begins to execute in in August and we're seeing an uptick generally we're a little bit this week but usually right after July 4th is where we see things kind of pick up again but one of the things that back to this bill and back to this report and back to the 29 article is that the average median income. So, like, looking at this, you know, in this area, you're saying,

buying a $600,000 house, that means that's a family or a single individual that's making $120,000 a year with no other debt making a 5% down payment. No car, no nothing. Not a $120,000, no other debt at minimum making a 5% down payment to qualify to purchase. The area median income is $140, and that's where I take... Family, for a family. family. I take exception to the article that 29 did because I don't think

they're using the right set of numbers. They use the numbers for an individual at 70. Yeah. And most of your buyers are two people, right? Because you almost got to be. Yeah, to make that happen. Comments coming in here.

The comment is consistent and Lori pushes back, bitch him slightly, about some wise being really good at returning calls in the office to Scott over there. It was an example. It's an example. Something I see. I see.

I'm going to show here. Tereth Collins, Michael Coyle, watching the program here. William McChesney, Vanessa Parkhill, watching the program. You have a handful of brokerages watching the show here. The price reduction is on multiple pages. I'll just offer a synopsis of what is being said. Are they missed-priced homes out of the gate, or is it the market cooling is what folks are asking? So I'm going to change around a little bit in,

and speak to both Scott and Woody. Are we starting to see appraisals match contracts? Are we starting to see appraisals mismatch contracts? So the reason I'm asking that price reduction question, by the time it gets the contract, did the buyer and seller get the market right? And did they put it on too high and adjusted it down to the point, which I think is the case?

But how are we doing? Are you seeing a lot of appraisals coming in? that don't match the contract or a little bit higher than the contract? What are you guys seeing? We're typically right now a little bit over contract. The market is normalizing to some extent. So you're saying your appraisal checks in an evaluation that's slightly higher than what the deal is predicated upon.

In many cases, yes. I'm not seeing short appraisals in Central Virginia. That's why this is important about the price reductions. What is happening here, and I don't know if this impact, your world, John, but what's happening here is folks are just going in too high, right? They're not pricing the homes right. If homes are in the right location. I mean, Keith, but my neighbor and my cousin's brother for year over year have gotten 20% more than they got the year before.

Why can't we get 20% more than what he sold his house for? So he did too long. So, John, how is our time machine working out? Do we get that finished yet? I know you've been working on that. That's it. Yeah, it's always off. So it weighs off.

It's timing. And also's real estate professionals, right? You know, that's the hard conversation. Well, you know, hold it. That is not what the market is saying for your home right now. I can tell you right now if you put your home on the market and if we do our work and we're saying this is where it's at, at today, at this very moment, you should be at it or just a hair under it. And you will, you know, as long as it's in the right,

location, right? It's got the right features. The house isn't falling down because nobody wants to do renovation work anymore. It moves. I mean, the fact that we're up, hold on a second, seven percent, we're up six point six point seven percent in sales versus last year. We're selling more homes, more of a stable, stable price, and the total sales volume, in other words, the total volume of transaction is up roughly three percent. So we're selling almost 7% more homes. The total sales volume is roughly 3% more is when you start getting into these micro locations where it makes a difference. So you've got to have an honest conversation with yourself. We bring a condition. You know, Manny and Freddie are just in November, we switch over to a brand new format for appraisals.

And we are required to put every single blemish of the hospital. into a condition section on there. So if there's a stain on the wall, it could be an old thing. That never used to be that way. It is now. They want, if you explain that a little bit more. Are putting a lot of emphasis now on the condition and reporting of the condition of the property. So they call them detrimental conditions, defects, and damages.

And as long as they don't affect the safety or health of the property, it shouldn't be an issue. Like, you know, having a, you're on a six foot tall porch, you don't have a rail. That's a safety issue for children. people. That's always been a thing and will always be a thing. But now, if I walk into our room and we've got some discoloration on the wall, it could just be from, you know, doing paint smudges or something like that trying to be color. It's going to be flagged. It has to be flagged by the way that we're required to do it. So underwriters now are going to be getting very picky about that, I think. And it will really depend on the loan program that they're

working on. I mean, it doesn't change FHA, VA, or USDA by any means. They have their own guiding policies but the conventional market's going to change a little bit I think and so let's let's say that again one more time so you're saying the conventional market appraisals are going to start looking at condition which is we have to report it differently we should have already if you're a good appraiser all this stuff should already been the appraisal anyway but now it's going to be in a very specified location and we're going to have to have images of every single little thing so if there's carpet that's loose we have to take a picture of it and then we have to put it in a little report and we're going to have to report. How does that impact your role? So when it comes to

underwriters making issues of photos or notes in the appraisal, it would depend on the significance of whatever the item is. For a conventional appraisal, some of these may not be issues, but it will probably trigger some instances where it calls for an additional professional to go out and give guidance on what caused the condition to exist. Is the discoloration an issue with the roof because there's water getting in, something to that effect? That's most likely the outcome that comes from this. And it will cause realtors to go, but I've never had this happen on a conventional appraisal before.

And we're saying that's potential? You know, it depends on the loan program and the actual lender you're working with. And the condition. And the condition of like whatever the thing is. The thing is going to matter more than anything else. Well, I think that's important is how that duff tails into the new time as of the essence. For example, the appraisal itself is to protect the investor. It is not to protect the buyer.

So that's why it could become an issue depending on the thing. It's kind of like title insurance. Unless you get owner's title insurance, it's really protecting the lender. It's not correct. The other thing with time of the essence that it's an elephant in a room that no one is talking about right now, is that 99% of the appraisers out there, 80% of the software companies that they all use, and most of the underwriting departments across the country and most major lenders are not ready for this switch. I talked to one of my correspondent lenders last week to their chief underwriter,

had no clue this was coming out of the pipe. This is going to back up appraisals for weeks, because we also have a lot of appraisers who are saying they're not going to be doing this in the format because they don't want to accept any additional liability. I think you're also going to see a lot of appraisers get out of the business altogether, You have an aging workforce that is opposed to change and is certainly not software savvy, new software savvy. It's the quintessential old dog new tricks that's coming down the pipeline here. Yeah, I believe you're right.

And a diminished labor pool of appraiser is going to mean you can charge more, but it's also going to mean deals are going to get slowed down. Yeah, I think the biggest impact of the market would be the fact of how slow everything is going to start moving at least for the first few months. it's happening in November, which is kind of usually the slower time of the year. I know about that. It's better than having an April, May, or June. Yeah, I would agree with that. August would have been a good month to do it. Yeah, I mean, getting, the twins is a call.

I'm planning for any of Freddie to agree on anything like that above my pay grade. So this is going to involve you so much more now at this point. Yeah, at least, I mean, Scott, I think you're right. It's mainly to protect the investor, but where I see that coming into play is the Hercca, but also the final walkthrough. So as of, I think July 1, there's yet another change to the contract coming

where I think it's Section 4E, someone correct me if I'm wrong. It now reads like, okay, the condition of the house shall be the same as of contract or the appraisal date. And now we're going to have even more information potentially for

the buyer agent to review in terms of pictures and blemishes, but also they're removing used to be that look, if something was different, off, or defective, there's like three options. It's like the buyer could, seller could fix it, buyer could walk, or there'd be some negotiation. They're striking that line, so it must be the same as of the contract date or the appraisal date. And now the implication that if something's different, it's default. It's automatic default.

So I think there's going to be a lot greater pressure on the appraisers on what do they state in that report. And if something was found or not inadvertently, because now it's for e-default. So this is the first, like I'm hearing of these major changes. But I will say this. I think in theory that this could also be a backstop to protect against the generalization of, the automated valuation. So in the instance where a previous appraiser had flagged the condition of a property, it'll get a score from that. And as it gets scored, which it already does, and collateral underwriter, it then down the road could trigger to be disqualified for an AVM

on a future purchase and require a physical appraisal due to the previous condition. It's almost like a Carfax. Sure, 100%. Yeah. It's like the busted bumper that shows up, that's been remodeled in the body shop. It's still follows the car. It's to prevent AVMs from rolling over and a property that's in terrible condition to have this new applied value

with no work. Boots in the house. Yeah, with nothing done to amend the problem. There's also a hybrid here that's going to come about, which they're already parted with. But what can happen is the appraisers, some appraisers may not even be doing inspections anymore. Some of the

lenders out there are going to go with what's called an alternative product, which means they're sending out someone to inspect the property that's not the appraiser, or maybe even having a different appraiser to the inspection and then another appraiser to the valuation. You saw that with the drive-by photos and the, what you call them, basically the Uber drivers that were moot and lighting with taking curbside photography. Yeah, that's the biggest concern I have with it is because they literally could be putting, you know, I have to be credentialed, fingerprinted, have a background check. Yeah, you're legit. They're going to be bringing people into this as inexpensively as they can. And

If you're dealing on a piece of property, it's got a lot of defects on it. Can you trust somebody who was not doing this two weeks ago? So why this information that you just shared does is so important and how it ties into the price reductions into it and how it ties into my six rights I do, if you're looking to sell your home with this about happening in November-ish or so on conventional loans, your condition better be spot on when it hits the mark. I'm also curious about the insurance piece.

if it shows up with this perhaps more vetted appraisal or more stringent appraisal, how does that impact the insurance piece and the willingness of companies to insure or the cost, the escalation cost of insurance? So they typically don't see the appraisal. Some will request it in certain circumstances. However, they send an individual estimator out. And a lot of times what will end up happening is, policies get written, they close, the borrower closes on the purchase of the property, the

estimator goes out to see it within 30 days of purchase and then their homeowner insurance gets canceled post-closing. And we're not talking about interest rates, but we're just not going to do that, but at some point, they're probably going to slide down a little bit closer to six, God only knows when that's going to do. God willing, the creek don't rise. That's right. But when that happened...

Where are they for good crap profile? on a 30 fixed? What are you at? Six and a half? Made tissues. When you get, when you, when it's, when that slide starts going backwards, does anybody see the market tempo picking up or do you see us staying in kind of about the tempo we are moving? I think that's more of the Scott question.

I mean, I think depends on the, the move. Like, I've got a guy who calls me once a month. He's like, I'm at five and a half with what's happening. I'm like, you just keep on. Even on. And, but we get back to sub six. I mean, think, look. If it has a five handle.

Look, we were March 27th before I ran kicked off. We were in the fives. And maybe not for everything, every product, all. But it was there. And we were already, we've got oil, we've got WTI, we've got West Texas, that's sub 70. We got crude that's floating around 74. We get crude down below 70. I do think the biggest struggle is what we see because this took as this whole Iran situation took as long as it did.

It created some inflation that was out there for longer than expected. It does a couple things, however. I think it gives Kevin Warsh the ability to make a hike in the third quarter, one, like 25 basis point hike. and that gives him enough credibility with the board to then forecast or negotiate a series of cuts going into 20, into 20, 6, 7. Into next year, it gives him enough credibility with his peers after the hike. We've got, we see a deflationary scenario with coming into a lower will cost, and then into next spring and summer, we're back into the five. I think if I was, this was the end of December beginning of January, I just would take my six months and just mirror it. Because I think we're going to, exactly what the first six months has been performing.

We're going to see the second half of the year perform, to your point. That would be an ideal scenario for me. I mean, you just had what, core inflation was at three, four in May? That's the highest it's been since October, 2023. I would expect what he just said to happen, that you're going to get a pop with the FAC fund rate. I'm talking about the real estate market, right? So I think you're going to see the real estate market kind of just repeat the first half into the second half. Unless all of a sudden, magically, that rate starts diving towards six.

And I do not see that happening in the second half of the year. But, you know, if we all had 50 bucks, every time somebody predicted mortgage rates, we'd all be very wealthy, wealthy people. I do want to go back to the times of the essence thing, because now that I got Woody sitting here and Scott, so there's a provision in the contract that upon ratification, application needs to be made with you within five business days of ratification, and that includes the paying of the, it's very specific in the language. I have to now pay for my appraisal, right?

I have to do all that stuff has to be done within five business days. Is that a realistic thing? Do people actually do that? If I hand you a contract today within five days, business days, that we have applications made, appraisals, ordered, et cetera? And are you seeing that happen? So typically pre-approval is going to give us, if that had already been done. You hand me a contract today at 1117, we walk out of the show.

I set this up, send initial disclosure. out by 2 p.m., the borrower receives the disclosures, e-signs the disclosures, I send a link for appraisal payment, and by 4 p.m., the borrower has signed his initial disclosures and paid for the appraisal. It can happen that fast. So the answer is, yes, it can happen that fast. It can't happen. Unless the buyer wants to shop, continue to shop, and then that's where it gets a little. That could be an issue. or they, let's say they completed, they signed their disclosures, they didn't, or they got

disclosures from somebody, they didn't like the disclosures, they didn't order the appraisal, then they started shopping, like they could get convoluted depending on the individual in the situation, but can it happen that fast? Absolutely. But if it doesn't, that is it the fault, right, under the current contract? Yeah, I think you're going to circle that, because I know there's also that provision where I'm trying to remember the section where it's like you can get more time where a seller needs to call them out and there's like a few day period where they can cure it. Well, I'm trying to set this up is all of a sudden this contract stays the same and it doesn't get changed that much. All of a sudden we're in January, February and we got a five handle and the tempo of the market goes back to what it used to be.

Things like this is going to matter. If somebody wants to get out of a deal and accept a better offer, I think it's a better offer, I think it's a better. that's where you're going to start seeing. And this is a positive for Scott's company, too. They don't work with an appraisal management company. And what you guys are talking about right now can get thrown completely in the weeds because you're working with a retail lender

who works with appraisal management companies. That's a third party who orders appraisals on behalf of the lender. And they go out and try to shop these things. And it can take time. So that's going to extend the time out. So when you're looking at your lenders, it's not just important to look at giving you a good rate,

but is everything else about their service package going to be good for you. I mean, if you're working with someone who's dealing with an appraisal management company, I've seen it take five and six weeks to get an appraiser hired. And we're looking at closing in and four. Yeah. Right. So do me a high level difference between appraisal management company and not,

and why are we doing this for? How did we get here and why we're doing? So when Dodd-Frank went through, a lot of lenders decided to outsource their appraisal procurement and these appraisal management companies. And so AMCs, and Scott, you've worked with companies that do it and don't do it, you can probably explain it a little better on the lunder side. But on the appraisal side, you know,

we're dealing with a company that just wants to hire commoditized service representatives. They don't want experts. They just want someone who will meet their minimum fee and a turn time that they think is acceptable. Beyond that, they really don't shop appraisers. And I can tell you as a practitioner on our end, sometimes they don't know the market. They're coming from way outside. Oh, they don't. They don't. How can you? I mean, how could you know every single local market in 50 states? So when we send direct, as I do hear it on-boy, we go direct to what he receives the order, he decides he wants to take it, there you go. With an AMC, it goes out into a pool, someone in the pool claims the appraisal.

And I still do have access to AMCs because there's areas if we get into significantly more rural parts of the state or other states where we may not have somebody to go directly to. and I've talked to realtors in some of these areas and the first thing that they tell me is the appraisal is going to be a problem and they know that they don't have appraisers in these areas specific to do that. So that's where an AMC could be a benefit

and draw someone from their pool who's going to go out there and handle that area. So John, I just looked at the clock. We're at 1121. Are we having fun yet? Time flies. Always. Always having fun.

I can sit next I can just see the wheels turning in the conversation. I know you're the lawyer in the room, and God bless you for being here as a lawyer, right? Anything you want to share in the conversation that's popped into that head and seen the wheels turning? Well, it's just what he said about the appraisal evaluation

is changing as a November. I just kind of were seeing some of the arguments. I'm also just thinking about, and apples and oranges with respect to commercial versus residential, but I'm just thinking back to like how contentious the commercial appraisers were I've been asked to wade into or deal with the appraiser rather than the client and the back and forth I've been kind of pushed into having with appraisers about what they reported or what they're looking at and I don't think it's ever going to get that extreme with

the residential but I could just gears are turning about like okay what's stated there like how much I may have to weed into just the residential reporting because I could just see that playing out. I wish VAR had spent a little more time talking to appraisers about this. The new contract.

I think the attorneys feel the same way. I think they feel the same way. I'll answer it for John because I don't want to put them in a bad spot. Just quick market overview before we wrap up because I know we're beyond our time. Interesting. What we're calling the lifestyle market, which is $1 million and up in our footprint,

actually dropped year over year by 6.7%. So we're selling 6.7% less million plus homes. I think that's the impact of the other jurisdictions. Alvamar County is still kind of a 10-ton elephant as far as million and up on it. Are you seeing any change on the upper end of the market? Not really. That market doesn't change very. much over time. I mean it's you're dealing with people of means that have the resources to pay cash for basically whatever they want.

And new construction's been an uptick which I when I ran the numbers today I didn't expect to see. Builders are putting extremely good incentive packages together to attract people on. They're doing incentive packages. I think what's happening is locally projects that have been in the site plan approval pipeline are starting to come out of the ground. And I think you're going to see that tempo pick up a little bit. But what the, if you really want to know what the real estate market is doing, watch the builders. I've been saying that for years. And they're starting to put product in the ground that is smaller. We're, I think it's about 2,200 square feet versus about 3,000 square feet pre-COVID per unit.

And they're pricing them at a point that the building, to meet the price point, to hit that first time home buyer. But keep an eye on new construction. Great show, guys. Keith Smith, John Ralston, Scott Morrison, Woody Fitchin. Multiple folks are asking where the show is archived. It's archived at Real Talk at Key Smith and wherever you get your podcasting and social media content.

Sarah Hill Buchensky, who's a broker and a realtor, she says, a word of advice. Buyers more than ever need to do their homework before looking at properties, including shopping lenders. Mike Plecker has this suggestion. He's a realtor. Might want to go ahead and get that appraisal up front on the seller side to prevent tragic delays.

If you do, Woody Fincham, someone who you call Finchman Associates, Scott Morris and Envoy are absolutely fantastic. Scott is very communicative, so is Woody. And as someone who's done deals with John Ralston cannot speak highly enough about John Ralston and his practice. He is one who picks up the phone,

He's extremely experienced and very, very diligent with his work. Keith Smith, of course, since 1987, he's been in real estate. Not 1887. So a 40-year anniversary on the Near Horizon for Keith, Keith Smith. Keith, well, wasn't like playing with Moses when you were a kid. That's when they had the MLS and a book that they carried around with them. I've seen it. It was a chisel, man.

I've seen it as well. You know, I've been waiting the whole show for you to do a singer, so thank you very much. You made my day. That's what you're paying me for. Thank you for joining us on the program, and Judah Wickhauer. You guys have a good weekend. The I Love Seville shows up in one hour. So long, everybody.

Thanks, gentlemen. Done.