JASON BRAMBLETT REAL ESTATE RADIO SHOW PODCAST
JB: Good morning and welcome to Triad Real Estate 911 with your host Jason Bramblett. I’m JB and for the next half hour, we are going to be talking all things real estate, and we are live in the studio as we always are on Saturday mornings. We invite your participation. If you have a comment or question or just want to talk to Jason, our phone lines are open, (336) 553-0796, 553-0796. And with that, we say good morning to the man with the plan, Mr. Jason Bramblett. Good morning.
Jason: Good morning. Everybody is good?
JB: We are good, man. How are you?
Jason: It is December.
JB: Well, it is isn’t it? The first day.
Jason: Just like that. Bam.
JB: Wow. Three weeks from Christmas Eve, I believe, today.
Jason: That sounds good.
JB: Something like that. Let me look.
Jason: And it is warm.
JB: Yeah, it is.
Jason: It is warm out. That is a good thing.
JB: We will keep that.
Jason: Oh, we will keep that warm stuff.
JB: Keep that one, yes sir.
Jason: So most of you guys that are in sales, well if you have a sales cycle like we do, you are looking at well, pretty much you got this week to do business to close it up by the end of the year. And after that, you are working on 2019.
JB: A lot of people are starting to pack it up this week.
Jason: This is true. This is true. It is funny how that is a real deal.
JB: First week or two, I am closing shop for the year. It is funny how it works out sometimes.
Jason: They go on this hiatus, if you will. We are going to finish the year strong here. We are going to finish the year strong. We are going to talk about divorce today. That is exciting.
JB: Well, yeah.
Jason: There is nothing more festive on December first than divorce.
JB: I was down in the dumps until you told me that. Let’s move ahead.
Jason: Absolutely. It is a real thing.
JB: It is.
Jason: It is a real thing and it is something we need to talk about because I have been doing this for over twenty years now. I have seen a lot of stuff.
Jason: A lot of stuff.
JB: I understand that.
Jason: Some of you all should clean up some stuff before you have people over to the house. That is all I am going to say. Okay? I said this quote if you want to know how the water is do not ask the fish.
JB: That is right.
Jason: Some of you all need to have your best friend over before you invite people over, so they can maybe be truthful with you about yeah, you need to clean this up a little bit.
Jason: Anyway. Ladies, specifically, if you are going through a divorce –
Jason: Or it may be something that may be happening, you especially need to listen to the show today because what I have found in 20 plus years of real estate is unfortunately, Mama is the one that usually gets the raw end of the deal.
Jason: So, we are going to dig into that a little bit. Plus, all your happy questions, too. You can always call in with those. It is (336)553-0796. Shoot us an email. We will be happy to answer that. You can also go to JasonBramblett.com. Shoot an email over and I’ll do my best to share as many of those on the air as we can because that is how everybody learns.
JB: There you go.
Jason: You guys have got great questions. We just need some more of them. Send them over.
JB: All right. Well, I tell you what, Jason. I am just going to go ahead and rip the band-aid off. Does that sound like a winner?
Jason: There is no way to get into this.
JB: Let’s just get it done. I am just going to rip the band-aid off. How to deal with a house when you are going through a divorce. Like you said, it is unfortunate. We are not trying to make light of it, but it is a real situation, and people more so than often, find themselves in this situation and do not know what to do.
Jason: That is right. It is messy. It is ugly.
JB: It is not pretty.
Jason: Never say never. The older I get I learn never say never. We go through these big, old, huge celebrations to get married and all that. There are not a lot of people peddling divorce parties out there. Right?
JB: There must be a market for that.
Jason: There probably is. Somebody has probably thought of it.
Jason: It is just that there is probably no money. That is why. There is no money in it. But it is a big deal to get married and we set that date, but divorce is not celebrated.
JB: It is kind of quiet.
Jason: It is kind of quiet. I have dealt with that. I have dealt with the secret divorce. Do not tell anybody. Shhh. And I have dealt with I am going to get mine.
JB: Get it while the getting is good.
Jason: I have dealt with the white trash throw down. Go over to the listing appointment and all the furniture is on the front lawn.
JB: Is that right? Oh yeah.
Jason: Oh yeah. Just turn around and leave. Oh, that is the wrong house. I am leaving now. It is unbelievable.
JB: Ugly. Ugly.
Jason: It has been something else. Or the I just do not care.
JB: I am done with this.
Jason: Yeah, and they all have their challenges and usually it is just one spouse that is like I do not care. They can have everything. Well, that doesn’t work really well because you still have to have to participate. Everybody has got to participate to a certain degree.
Jason: I guess unless you are incarcerated or something. You did your participation. Right? Here is the thing. All of them, whether it is the white trash divorce, it is the secret divorce, or I am going to get mine, they all have similarities. They all have things in common. The biggest thing they have in common is hurting people. And when people are hurting, people do not make good decisions.
Jason: So, this is where a professional can help you walk through this and be an advocate to help you see things that you do not see. A fish out of the water can tell you better about the water, if you will.
Jason: And this is where hiring a professional, hiring a real estate person that has, one, has sold a few of these. You do not want to hire the guy that got in last week and you are his first deal.
Jason: That is probably not –
JB: You do not want to be the guinea pig.
Jason: Right. Everybody was somebody’s first deal, and I am so sorry to all you folks that met me 20-something years ago, and we learned the hard way together. I apologize. They are all still living. I promise you.
JB: But it worked out good for you though.
Jason: It worked out good for them, too. They are still out there, but yeah, you want to get somebody with a little bit of experience. Somebody that has walked through. Especially if there are kids involved and there is just stuff. There are just lots of moving parts. So, make sure that you get there. And Mom, like I said especially, but any attorney that is listening that is representing Mom, you need to listen too, because unfortunately, we go to attorneys to get what we feel is advice. I will give you an example.
Jason: I sold a property one time. There was a trustee involved. Okay? There are five brothers and there is an attorney who is a trustee. Specifically, in the documentation it had said that this guy is the trustee because I know these five idiots will not be able to agree on anything. Right? Five brothers. And it is true. Three or more and it is a train wreck. And then the trustee is like well, I will just do whatever you all want. That is 100% the opposite of the will of Mom and Dad.
Jason: You are here because they knew these boys could not get together and make a decision.
Jason: It is your job. Same with the attorney. You are here to help them work through that. Not just, do not ask the client for advice. Well, what do you want? What they want may not be reasonable.
Jason: And here is one thing that we see over, again, 20 years of just observation. If there is debt on the house and Mom gets it, it is a lose. Almost 100, I will not say it again. 100, 99.9% of the time when I have dealt with Mom and the kids selling the house two or three years after the divorce, it is usually always a train wreck. Typically, because there was no equity in the property and now we have a problem. Now we have got this big, huge issue. Here is the thing. The settlement of the distribution of equity is determined by an appraisal. Well, okay, an appraisal is fine, but almost 100% of them, they are too high because it is not what we call a purchase appraisal. Okay?
Jason: So, there are different levels of scrutiny done to every type of appraisal. Like a refinance, a cash-out equity, all these different types of appraisals have different underlying stipulations with them. The most conservative of all is a purchase money appraisal. When you go to buy the house, the bank approaches that as if hey, they may never not make another payment. They may never make one payment.
Jason: If we get this thing back, what is this going to look like?
Jason: Okay. To some degree. That has changed a little bit over the years, but that was the intention of it. Okay? Where the equity, you are living there, they are just looking for a reason to justify doing the loan. Is the risk, their credit, they have been here for 15 years, they have been here 5 years, they have been here however long, what is the likelihood of them going to default? They have paid on time all this time. They want to take some equity out. They are take this cash and do something. So, they look at all this stuff. Okay. But what we find, especially with these type of divorce-type situations is sometimes these appraisals are 10% too high. Well, 10% on two hundred grand, you are $20,000 out of balance.
Jason: Plus, the cost of selling, which feels a lot like 10%. So now we have a $30,000 swag in this thing. It can be a $30-40,000 swag. Here is, I guess, the best way. Examples, and I know it is hard to do numbers on the radio, but we will do the best we can. You have got Bill and Sue that are getting divorced and Sue wants the house.
Jason: All right. Of course, she wants the house because her attorney said I am going to get you the house.
JB: I am going to get you that house.
Jason: I am going to get you that house. And this is something that I have heard over and over and over. It seems like that is the battle, that is the trophy –
JB: That is the trophy. The house.
Jason: If there are kids involved, Mama gets the house. Well, sometimes the house gets Mama.
Jason: And it does depend on certain things, and this is where you have got to ask all the right questions outside of just getting the house because the house can get you. Dave Ramsey says you buy a house you are not ready for, Murphy moves in the extra bedroom. Right? And then suddenly, Murphy’s Law kicks in and owning a house is not so much fun anymore. Right?
Jason: So, in my opinion, divorce attorneys specifically, it is not a trophy for Mama to get the house, and it rarely is. Part of the reason is because we are dealing with perfect world situations without finality. Pulling equity out of a house is done, it is hypothetical.
Jason: There is no buyer there. The market is not determining that. The value of that house. It is an opinion by an appraiser, and so when there is opinion like that then there is room for error. Right? And what if they are high? And typically, they are because of the purpose of the loan. So, we have got this over-valued property. Mama thinks she has got equity in it. Mama thinks she won. She thinks she did the best thing with the kids, and here what happens is oh Deadbeat Bill quits paying child support, and then the payments get a little tough and they get harder to make. Now it is straining Mama’s budget because Bill is not quite swinging from the ropes like he used to. So now, his cash has got to help him up with his new relationships, if you will. Do you know what I mean?
JB: Yeah, right.
Jason: He has got a new lady friend, but she is sucking up all his money.
JB: Oh, sweet thing. A new sweet thing.
Jason: Exactly. Let’s just face it. Bill is not what Bill used to be. But Bill is using Benjamin Franklin to make up for his shortcomings, if you will.
JB: I got you.
Jason: We see priorities change. Right? It is not that Bill does not want to take care of his kids. But he has just got his attention in the wrong direction. Right?
Jason: He gets a little slowing paying and then suddenly, they call somebody like me and say hey, I want to sell the house. Here is what it appraised for. I need to get this, and we are like not even in the ballpark. It is three years later.
Jason: Not only do they think wow, three years. My house should have gone up in value. I had all this equity. Here is what we find out. One, the appraisal was way wrong. The market may not improve where you are at. You have got nothing. We are going to be lucky if we can just sell the house and get you to zero. That is not a good place to be.
Jason: Here is what you want. Sell the house. Because here is what a buyer in the market determines. 100% is what I know. When we sign those papers and I get my check and you get your check, we know 100% how much money we have.
Jason: We can budget from that. That is real dollars.
Jason: It is real money. It is final. It is over. I can look at that and say hey, this is what I have got as a reserve. This is what I have got to put down on another house or whatever the case. Now, if the house is paid for –
Jason: -- well, that is a whole different ball game.
JB: Sure, it is.
Jason: I am talking about where, and typically it is not when we deal with these type of divorce situations. It is we are dealing with the fact that there is that debt there, and most of the time, Mama is the one that is going to take the brunt of that and really deal with it.
Jason: Bill got what he wanted. He got his equitable distribution. With the refinance, he got his money. He took off. Mama thought she had her money, but it was just still sitting in the house. The down-side now is we have got problems.
Jason: We have got issues. Here is what we know. Sometimes you cannot fix it. We can get it sold, but the great thing about selling the home is again you get that finality. You get to know that real dollars.
Jason: Whereas with refinance, you do not. One spouse gets burned. The other one seems to come out clear, but let’s be real. It is divorce. Nobody is winning in this deal.
JB: Yeah. It is kind of a lose-lose.
Jason: It is. We are going to dig into this a little deeper. We are going to take a break, go pay some bills. Not going to pay any divorce attorneys, but we are going to take care of some other stuff. But if you have got a question, you can give us a call. It is (336) 553-0796 or go to the website. And some of these questions you just do not want to talk about on the air. I get it. Shoot me an email. We are open for conversation. We will do everything we can do to help you.
JB: All right, folks. Stay with us. You are listening to Triad Real Estate 911 with your host Jason Bramblett. We will be right back. Stay with us. (in/out music) And welcome back. You are listening to Triad Real Estate 911 with your host Jason Bramblett. I am JB, and before the break there, Jason, we were talking about working through a divorce when a house is involved. Never a fun thing.
Jason: Never a fun thing. It is a thing that happens.
Jason: It is just something that we deal with. So, what is a good rule of thumb? Always sell the house.
JB: Sell the house.
Jason: Sell the house. Some people are saying well, of course, you are a sales guy. Well, if I could burn it down, I would do that, too, but I cannot legally. It is the right, from a financial responsibility, if you do not like that advice, do not hire me to do it. Hire somebody else.
Jason: But sell the house. It is the correct thing to do when debt is involved.
JB: That is right.
Jason: Because there is just, there are a lot of reasons that we hear, and I get this. You do not want the kids to be affected, and you want them to stay in the same school. Okay? Well, rent a house. Rent an apartment.
Jason: There are rental options out there. Okay? Well, renting is stupid. Do not do that. We need to own. Well, not necessarily. Not when you are going through a divorce.
Jason: Because when you buy something else, it is harder to get rid of. The great thing about renting an apartment is I know 100% exactly how much it is going to cost me. So, if I am going through a divorce and we end up renting an apartment because they want to keep the kids in the same school and it is $1000 a month, my worse-case scenario is it is going to cost me $12,000. If I buy a house down the road, and suddenly, well, one, I may have stuff happen because Murphy moved in because I am having such a great year already. Right? So, Murphy moves in, the HVAC goes out. There is $6,000. Whatever.
Jason: And insurance does not cover it and you end up with more expense and then you find out oh, I was emotional. I just wanted the kids to be in the right school, and I did not want all the pressure on them, so I overpaid for the house. So, I am three to four thousand over that, and now I go to sell it and now the value has gone down and suddenly it is looking like $20,000 for me to get rid of this house because I made an emotional decision.
JB: And I just blew up the engine in the car.
Jason: Yeah, right.
JB: Then what are you going to do?
Jason: Exactly. Because I forgot it had this stuff called oil. What is that? So, things happen. You need to just slow down. Here is the thing. The kids do not live in a bubble anyway. I promise you. They are a lot smarter than we give them credit.
Jason: Absolutely. You are not going to sneak through a divorce. Eventually they are going to look up and say hey why isn’t mom or dad staying here? They are going to figure it out. The other thing, too, is sometimes keeping the house sends the wrong message to the kids. Everything is not going to be the way it has been.
Jason: Your whole world just changed.
JB: Fresh start.
Jason: Fresh start.
JB: Something new.
Jason: Absolutely. Being that I came, mom and dad got divorced when I was in school. I can tell you. You can keep the house. It still is not the same. It does not matter. It would be better just to move. Like you said, fresh start is a good thing. 100% believe though from a financial standpoint, responsibility, it is going to be best for everybody to sell the house. Because here is what we know. When we have that buyer in the market, we have real numbers. Buyer says hey, I am going to give you this much cash. You give me your house. That is finality. I can budget on that.
Jason: I can look at that and say okay, well, you are going to buy it for 200, we have $100,000 that we owe, that is another 100,000. Depending on how good your attorney was, depending on how much is left over, I guess. But let’s just assume you could work it out yourself. It could be $50,000 each. But here is what we know. You know what the number is.
JB: You have got the number.
Jason: As opposed to basing it off an equitable distribution from an appraisal that is an opinion that is not final.
Jason: And things change. Here is the other thing I see. Let’s just say, because this really did happen, some people got divorced in 2006. Okay? And they did an equitable distribution, and then Mama decides, who got stuck with the house, who had the big loan on it, she wants to move in 2009. Is there a difference in real estate value between 2006 and 2009? Just a little bit.
JB: Just a bit.
Jason: Just a little bit. In some places like half.
Jason: Did anybody predict it? No. Is it just the way things go? Poor, poor pitiful me. Yeah, but here is the thing. You could have done the finality. You could have got it sold and you would have known specifically exactly how much cash you had. Right? Now if there are no kids involved and you want to keep the house, do whatever you want. These are just my observations that I am sharing with you where I see, it is kind of like when you see the car going in the ditch, this is just some advice to keep you out of the ditch.
JB: There you go.
Jason: That is all.
JB: All right.
Jason: If you like driving in the ditch, just do like everybody else because it is repetitive. This is something that we see over and repeatedly. Here is the thing. If Mom knows how much money she has, she can buy another house, or she can go rent something, and she knows, and again, it is an emotional time.
JB: It is.
Jason: So, this is a smart thing to do. Get your money, sit on it. Do not do anything yet. Just chill.
Jason: Rent something. It is okay. I promise you. Dave Ramsey will not get that mad at you. I will take it to the bank that Dave will not get mad at you. It is patience money he will say.
JB: There you go.
Jason: All right.
JB: Well, I tell you what. We have just got a few minutes left but let me ask you about this. Looking ahead. What are you seeing, predicting for the real estate market for next year?
Jason: 2019. All right. I tell you what. 2019 is going to be fun. I am excited because we have got a couple things. We have got a lot of new people coming on board, which is awesome.
JB: That is great.
Jason: We have got the ramp up to the election coming.
Jason: Even better, so you cannot even do crazier than that. Right?
Jason: We have got our, I do not know. Do we have an opponent for Trump yet?
JB: Not that I have seen anybody serious.
Jason: I have not heard anything. Half the world does not care. Just anybody. It does not matter.
JB: Mickey Mouse.
Jason: Mickey Mouse okay. You have got that kind of fun stuff. Usually, so 2020 is just forget it. Right?
Jason: But this year is, there will be a lot of movement. It is going to be interesting. What I am seeing is though the market is going to slow down. We are starting to see some of the cities around the US that are having some issues. They are starting to collapse. They are starting to crash a little bit. I heard a statistic, and I have not verified if it is true. It was on the internet, so I am going to go with yes. Right?
Jason: But I saw something that said Houston, Texas built more homes in 2018 than the entire state of California.
JB: Wow. Just in Houston.
Jason: Just in Houston. So, it is going to be interesting to see. I am going to fact check that.
JB: That is crazy.
Jason: But it is growing like crazy down there. So, we are going to see some correction. We are going to see some pullback. Now here is the good news for the Triad. We are not going to see major movement. What we get is the rubbernecker traffic. They start talking about it on all the news channels, all the radio channels, and then we slow down to watch and see what happens. It was just like when I was driving home the other day. There was a wreck on the other side of the highway, but my lane was slow too because everybody had to see what was going on.
JB: They want to see, too.
Jason: Absolutely. So that is what we are going to get. It is still a great time to buy. It is a great time to own real estate right now. It really is. If you are thinking about doing that, if you are going through a divorce and you need some help, give us a call. Get in touch with us at (336) 553-0796 or shoot me an email and go to JasonBramblett.com. WE will be back next week right here. Live in the studio.
JB: All right. Sounds great. Thanks for joining us today, folks, and have a great weekend. Talk to you next Saturday morning.