Ask the Colorado Dream House Team with broker/owner Dan Polimino. Dan discusses the state of customer service, buying down your rate, and getting the best interest rate. 

 Episode Highlights

  • The state of customer service
  • Are interest rates rising?
  • How do I get a better interest rate?
  • Buying down your rate and how to do it
  • How does seller financing work?

Full Transcript

Welcome to the Thursday edition of Ask the Colorado Dream House Team. I’m your host Dan Polimino coming to you live from Denver, Colorado. I hope you’re enjoying your summer. Can you believe it? It’s already the middle of July. Man, the summer selling season is just flying by.

Well, welcome to the show. If you’re new, we talk everything that is real estate here every Tuesday and Thursday afternoon. Again, you don’t have to be living in Denver, Colorado. You can be anywhere in the country and the information we give you comes from years of experience and thousands of transactions. It’s good database-driven information. Two things we like to accomplish every show. We like to talk about what’s happening in the market and we also like to answer your questions.

All right, so let’s get to today’s topic of what’s happening in the market and it’s really, to be honest with you, a little bit more of a commentary than it is to be necessarily real estate related. But I’m starting to really wonder what is the state of customer service in the United States? Do people even care about having customer service? Is it important for people to have customer service? I’ve always built this business, this real estate business on customer service because it was always important to me and I figured it was important to the people that we were serving, but I may be wrong and here’s why I may be wrong. Here’s what happened to me.

I sold my car and I had to go buy a new car, and so I headed out to go look to see what I wanted to buy. I’m not bashful. I’ll tell you where I went. I went to a BMW dealership and I walked that BMW dealership for 20, 25, 30 minutes, and the whole time I was there not one salesperson or anyone in the organization came out to talk to me. They didn’t ask me if I needed anything, if I had any questions. They didn’t ask me if I wanted to drive something or see someone. Nothing, and finally after 30 minutes I left. I had another experience just like that at a Jaguar dealership. I called the salesperson, I asked about a particular car. I asked if they get could me some lease rates. No answer.

Now, I called at 6:00 and they close at 7:00. He said to me over the phone, “I’ll get you this information tomorrow.” You know, in my world that doesn’t happen. When somebody calls us and asks for something, some information about a house or wants to see a house, we’re out that hour. This guy wasn’t with anybody when I called him. I asked. He wasn’t tied up. I asked. He could’ve clearly run some numbers and called me back within 30 minutes but he’s, “I’ll call you the next day.” And then the next day didn’t come.

So I start scratching my head and thinking, “Is this the state of customer service everywhere in the United States? Have we as a people just become accustomed to really poor customer service, that we think that’s the norm and we’re okay with it?” I’m just wondering because we build our business around helping people, being Johnny on the spot and providing customer service. But if it really doesn’t matter to the majority of Americans, maybe we’re doing something wrong. So let me know what you think. Leave a comment here on Facebook. Call us, email us, let us know because if price and fees are all the only thing that matter to people and customer service is thrown out the door, maybe it’s time to change the business model in the United States, right? Just a thought.

Here are some of the questions for this week.

Dear Colorado Dream House Team: I heard interest rates are rising. Is that true?

I don’t know and I don’t think anyone else knows because there’s a lot of conflicting messages. It wasn’t too long ago that Janet Yellen came out and said, “You know, the economy’s doing great. We’re going to have to raise interest rates,” and we really didn’t see that. In fact, interest rates went down. Then yesterday she came out and she said, “You know, the economy is a bit puzzling because it seems to be moving along at a good clip, however inflation is not a factor. In fact, we’re not seeing any inflation indicators,” and she said that even she was puzzled by that and since inflation is not a factor, she doesn’t believe that we’re going to have to raise interest rates any time soon.

So for those of you trying to play about what you’re going to do on a home loan, the average 30-year fix is somewhere sitting in around 4.25. I’ve seen them as low as 3 and 3.875 and I’ve seen them as high as 4.4. It just depends. I’ll tell you there are some lenders out there that are actually hurting for business and are eager to get any business because there is no REFI business right now in the United States. REFIs are down, down, down. All they have is purchase business and so they are floating some pretty incredible rates out there in order to earn your business. If you want to know who they are, give me a call at the Colorado Dream House Team.

Dear Colorado Dream House Team: What are some ways I can get a better interest rate for my home loan?

So on the topic of interest rates, well, number one, you can shop around. Don’t talk to just one lender. Talk to a couple of lenders, all right. Number two, there’s a thing called buying down your rate, right? You can actually throw more money at the lender and ask for them to buy down your rate from say 4.2 to 4.1 or 4.2 to 4%. Ask the lender how much money you’re going to have to come up out of pocket to buy down the rate. Again, outside of those two ways of getting a better interest rate, you don’t obviously watch what’s happening in the market, what’s happening in the bond market, what’s happening in the stock market. Start taking a look at one, rates are low. Got to be a student of the game.

Dear Colorado Dream House Team: Can you tell me how seller financing works?

Yeah, it goes like this. The seller of the particular home or property may be offering to carry the note or carry the loan for the buyer, so the buyer might be getting a traditional loan with a bank but needs a little bit help, and maybe the seller is going to provide that secondary help. The seller agrees to subordinate or take second position to the bank that’s in first position, or maybe the bank’s not even involved. Maybe it’s a 100% seller financing where me as the seller, I’m going to give you the buyer the loan, and I’m going to finance it over a short period of time at probably a higher interest rate.

There’s a number of ways that seller financing works, however, I will tell you this. The reason why seller financing doesn’t work in most of the cases is because seller financing is usually in second position, meaning the buyer has some type of bank loan in first position, seller financing in second position, and the seller doesn’t want to be in second position because if something goes wrong, the bank gets the property and the person in second position is left with nothing. Too much risk, all right?

Hey, don’t forget about our $250 marketing guarantee. If you’re thinking about selling your home, interview the Colorado Dream House Team, let us show you our marketing plan. Then you can interview our competition. If their marketing plan is better than ours, you can hire them and we’ll give you $250. We don’t think that’s going to happen because we think our marketing plan is heads and tails better than anyone you’re going to meet with. So try it out, test it out. You have absolutely nothing to lose.

 All right, that’s this week’s show. Thanks, everybody. Have a great weekend and we’ll see you on Tuesday.