Hello everyone
and welcome to another episode of Selling Greenville
your favorite real estate podcast here in Greenville
South Carolina I'm your host as always
Stan McCune Realtor here in the Greenville area
and you can find all of my contact information
in the show notes
if you need to reach out to me
for any of your real estate needs
in the upstate of South Carolina
and please if you like this content
even if you're never gonna use me as your realtor
for whatever reason maybe you are a realtor
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any of those things I would really appreciate it
today I have a special guest on the show
Chris Ryba who is a former
current future
whatever client of mine and we had a very interesting
real estate experience
dealing with a mortgage Assumption
Chris has the honor of being my first ever
client to assume a mortgage
which is a great strategy for getting lower rates
so we want to talk about that among some other things
but Chris thank you so much for coming on the show
thanks for having me Stan
excited to talk about real estate
yeah awesome
and I just went to top golf with Chris
so this is kind of
this is kind of fun to see Chris and my wife too
yeah and and Chris's wife and she beat us both I
I wasn't gonna bring that up
but yes that did
all of that is factual
but
but by the way if you're listening to this I
I've got the top golf summer pass
I'm taking past clients former clients
future clients whatever
and just about anyone else
now if you're a lender
hmm
I'm I'm being picky with my lenders okay
so just
every lender in Greenville
would want to go to top golf
with me if
if I let them
but but the rest of you guys let me know
some of you have already reached out to me
I've got it for about 45 more days as of this recording
which is the middle of July
I've
I've got it through basically Labor Day so
hit me up if you wanna meet up at top golf
but alright
Chris
interesting experience but I feel like the whole thing
how we
how we got to the mortgage Assumption and all of that
is kind of tied to your story
of how you ended up at Greenville
so why don't you tell the listeners
kind of a little bit about your story how
how you guys ended up in the Greenville area
yeah certainly
so
I grew up in Detroit my wife is from Florida
we met in Savannah where we lived for a couple years
before living abroad for a year in Costa Rica
and that was ultimately
where I started doing some research about
real estate investing getting more into real estate
and thinking about where we wanted to move
once we moved back to the US
and so it was during that year abroad
that I actually just googled Greenville
Real Estate Podcast
just on the off chance maybe someone made one
and lo and behold I found you
someone does make one and they
he you did and
from there I just started devouring all that content
and researching Greenville and
you know talking to my wife about the potential there
both real estate and just lifestyle wise
and yeah
part of your content really influenced me to
to really think hey
this is a good place to put down some roots and invest
that's awesome but so
so prior to that well
you reach out to me your
your email to me
didn't come through at first
I believe it was flagged to spam
if I remember correctly
because you guys were like in Costa Rica
or like somewhere on a VPN in a foreign country
and yeah yeah exactly
which is a reminder to those of you listening
if you ever send me an email
and I don't respond right away
I have not gotten the email
lot of spam filters that my company has
we've had some pretty malicious spam come through
that's messed up some people so
so just be aware
my phone number is in the show notes
if you need to contact me on WhatsApp
it's tied to my my phone number as well
but
but but just real quick on
on the Greenville thing
like what specifically was it that you were just like
this this
I can go anywhere in the US but I'm choosing Greenville
yeah so we had previously lived in Savannah
so we had some you know
experience of being in the southeast
and I had visited both
my wife and I
had independently visited Greenville once before maybe
maybe just a weekend
so we at least had been here
we had some some friends who had
I used to live here and work in the area and
and just said you know
this is back in 2015 they said oh
the West End is really happening
it's really coming up and
and now it's now it's
you know
West Greenville and it's all these other neighborhoods
but
you know they loved the Swamp Rabbit Trail
they loved how active the city was and I thought
alright you know
let's let's take a closer look at Greenville
and it's about the right size for us
it's not too big not too small
my wife had previously lived in Miami and that was a
that was too big of an experience
so Atlanta and Charlotte were out
but we were looking for something
that was a little bit more
of what I'd call a medisized city
and yeah
you know we
we gave it a closer look and listening to your podcast
just hearing about the real estate potential there
also in 2022 and 2023
I think that statistic came out that said
South Carolina was percentage wise
the fastest growing state
and I think Greenville was the fastest growing county
so from a real estate perspective
it's hard to beat those kind of tailwinds of wow
this this is a place that people wanna be
yep interestingly
that I mean
this is gonna be only interesting to probably very
a very small group of people
but the Greater Greenville Association of Realtors
recently
became deemed by the National Association of Realtors
a large association hmm
so we
we are now considered right up there with the Miamis
and the Houston's and the New York's as
as a large association because of
of how many realtors we have
which is reflective of the
the population the
the amount of real estate
transactions that are happening here
is that purely just a number of realtor thing or is it
no no
I think I so
I believe that they're baking in a lot of transaction
volume into that
as well
and so it's like
looking at the count
of just how many are in the association
but honestly we don't have
substantively more than we had a few years ago
so I think they're kind of
extrapolating
based on transaction counts and other things
don't quote me on that if someone from
NAR is listening to this and is not happy with me
I'm sorry but
but anyway I
I
I believe that there's a few things baked into that
pivoting to the the mortgage Assumption thing
so I feel like I need to explain this to
to some people before we
we really get into the nuts and bolts of it
some people may have not even listening this
may have not even heard of a mortgage Assumption
but a mortgage Assumption is essentially
you've got a seller that they have a mortgage
let's just say it's for $200,000 right
they
they started at 2:50 they paid it down to to $200,000
it's
they got it a few years ago when rates were super low
it's a 3% loan
which obviously you can't get now
in some cases that mortgage can be assumable okay
now if you've ever heard of
subject to the mortgage purchases
that's not what we're talking about okay
subject to the mortgage
the mortgage continues to be in the name of the seller
it's just the deed
that gets transferred over to the buyer
in a mortgage Assumption
everything gets transferred over to the new buyer
the buyer takes over not just the mortgage payments
but the very mortgage itself the
the name on the mortgage is replaced
from the seller to the buyer
so the buyer has to be approved by the new lender
you can't just go in willy nilly
and just assume the mortgage
it's not a unilateral sort of thing
the lender has to agree to it as well
and one thing that's really unique
about mortgage assumptions is that
you know in a normal real estate transaction
me as a realtor
I'm handling the vast majority of of what's happening
yes
there's always gonna be the lender and my buyer client
if I'm representing the buyer
having kind of their own little conversations
I have no control over
and sometimes that that goes very poorly
has
has been the case when when
when sometimes my buyer clients have done
done financial things without telling me
that mess up a transaction
but that's that's neither here nor there
but in the case of the the mortgage Assumption
there's not a whole lot that I can control right
when when I have a buyer client that comes on
or a potential buyer client
the first thing I can do is connect them with one of my
lender contacts and they can pre approve them
and I can trust that
that pre approval is trustworthy when it comes to and
and and
and with that I can assume that when I do a financing
contingency on a contract
that pretty much that it's gonna work out
unless the buyer you know goes out and buys a boat
and messes up their credit or something
on the mortgage Assumption side of things
I have zero control they won't talk to me by and large
I mean in
in this transaction they had
very little communication with me until the very
very end
and so Chris and his wife
they were handling everything
so this is a unique situation where actually
I have textbook knowledge of
of mortgage assumptions but Chris is actually the
the subject expert even though Chris is not a realtor
because he actually went through
the Assumption process so all of that said
Chris what exactly was your experience
and I'll start with this explain the process
whereby you just found the home
that you would eventually buy
knowing that the
the mortgage Assumption was an option there
from the very beginning for sure
and great explanation yeah
hopefully I didn't go on to
I went on a little bit longer than I planned to
so sorry about that that was a great explanation
so specifically I had a app called Deal Machine
which a lot of investors might be familiar with
it is just a really
strong aggregator of data that allows investors
to market to potential properties
in this case I was really just using it for reference
to know a little bit more about the house
any debt that was on the house
and I did discover it was an FHA loan
which I knew from
you know some reading that that those are
those government backed loans are typically
I don't know if it's always
but are typically assumable
and so really
that was just the one thing that tipped me off
if I didn't have that you could
you know just simply ask the buyer
once that conversation starts
but for me I had that that knowledge in ahead of time
unfortunately yeah
unfortunately there are
and we were talking about this before
we started recording a lot of sellers don't even
know if their mortgage is assumable or not
that's a question I frequently ask sellers
and they have to go try to dig up their paperwork
or call their lender to even
get the answer to that question
now the the
the appeal obviously
of an assumable loan is getting a loan at 3% versus
currently Mortgage
News Daily has mortgage rates around like 6.8%
so in case you're wondering
why the heck would someone do this
that's the reason and then if you're wondering well
why the heck doesn't everyone do this
well there's a catch to it so if
if the seller bought the house for two
50 and now they paid it down to 200
you have to factor in that the seller
and the subject property has appreciated
so it might be worth 300,000 now
so you've got a gap between 300,000 and 200,000
that you have to bridge how do you bridge
that well
you're not gonna get another loan that that's almost
almost goes without saying
at least not when you purchase it right
you can maybe get a home equity line
you know after the fact or something like that
but you're gonna have to put that hundred k down
so that rules out
people pretty
but that rules out the the majority of the population
especially people that are can only put down 5%
Chris and his wife were in a unique situation where
they had made some good financial decisions
and were in a good position
to be able to make up the down payment
and then you know again
potential options for home equity
lines of credit and what not
can pull that equity back out if need be
now Chris
I know at one point you and I talked about Rome
did you utilize that Rome
that that's a website that like aggregates some
some of these mortgage Assumption details
I've had some
some of my seller clients get reached out to by
by Rome
but I've also seen some bad information on there
did did you use that at all
I did use it just to confirm that you know
it just to see if their sources were also indicating
it was assumable
yeah
for anyone listening that one is that one's more open
you know source data
I guess or more open to the public
I also while doing some research for the show
found that assumable dot Io sounds like another hmm
potential company okay
yeah
I had looked into Rome but you know
specifically using their service it
it they actually want you to work with them
and pay them a 1% fee at the transaction
so you know
in the end we kind of opted for the DIY route
which is which is DIY
except that you had a realtor
like if if I can't exactly
if I can't figure that out
then what's the what's
what am I actually doing what good are you
yeah yeah
I shouldn't have you
I shouldn't have to have you pay me
and also pay another service to assist with this
sure and I should say for everyone listening
when I brought this up to Stan
he was not at all hesitant about oh
I don't know I've never done one of those
which I think was true you had never no
I hadn't worked one of those
and his thing was just yeah
let's do it like I wanna learn how to do this
I wanna put that feather in my cap
and so I really appreciated that
yeah
no hesitation to like I'll
I'll do whatever you know
I need to do to figure out the
the contract and and all that well
I've done subject to the mortgage purchases before
and I didn't I was like
it can't possibly be harder than that
cause those can be a pain
but
but yeah I'm always excited
I I do not shy away from from new
new things as long as I feel confident to do it
one of the challenges specifically with this one
was the different paperwork that was required
so when I when I went into this
you know the first thing I looked for was okay
you know we use in Greenville
the state of South Carolina
the South Carolina Association of Realtors
contracts is is typically what we use in this area
that's not actually used
that's not actually how it works in the entire state
there are some parts of the state
that have local contracts
that they use
but in in Greenville generally speaking
it's on state contracts and so
the state had a mortgage Assumption contract that was
hadn't been updated in like 10 years
which is brutal
because all the other contracts have been updated
so many times so there were
there were so many things that were out of date
and I'm pleased to say that they have since
since updated it oh really
oh wow
yes okay
now we have a nice crisp
brand new mortgage Assumption contract that is
up with the times and comparable to the normal
contract
but functionally we ended up make and
and this was a conversation between me and Chris and
and his wife we had a conversation with okay
do are there two two options here whereby
you know we buy it with a mortgage Assumption
or we buy it without the mortgage Assumption
what would be attractive
in in
in either of those scenarios
so
without
without going into too much more detail on my end Chris
do you what do you feel what what
what was that process like
and like how did you guys kind of
crunch numbers to kind of figure out okay
if we get the mortgage Assumption
this is the price that would work
if we don't this is the price that would work yeah
so when we came across this property we
we really did like the property
and we were prepared to buy it
whether we had to assume you know
the mortgage or not no
I I need to clarify
these mortgage assumptions are only for owner occupied
it you have to be an owner occupant in order to
to assume that mortgage that's a very important detail
yeah I guess just like any VA or FHA loan you
you need to be primary resident
so technically VA I think does now allow
does now allow rental properties to be purchased via VA
I believe that may be a change
but FHA FHA has not updated that yet interesting
so yeah
we we knew we were gonna be living in this house
and so the question was
how do we put an offer together that is attractive
that
that really kind of persuades the seller to consider
and hopefully go with an Assumption
so in stance example right
if you have a 300,000 dollar house listed on the market
you know
they pay down the mortgage to 200,000 dollars
so you got this hundred thousand dollar gap
you gotta bring in equity and you gotta figure out
do I wanna offer 300,000 on this
do I want to offer a little bit less and say hey
I'll I'll come in under
like a lot of people probably will say okay
we'll offer 2 80 conventionally
I'll go to the bank I'll put down 20% or 10%
I'll get a a mortgage at today's rate
well then
you somehow need to make that
Assumption more attractive right
I mean technically
you're able to bite off a little more
cause you're getting such a better rate
I mean that's how you know
we kind of thought about it
so we were willing to go a little bit higher
so in that example maybe you
you give the seller exactly what they're asking for
the 300 or maybe even say hey
we'll give you three 10
really consider this option A lot of people
like we had been talking about before the show
there's a huge education gap
so not only did we have to make the offer
but you also had to help the agent and the seller
who probably didn't even know if their mortgage
was assumable understand hey
how is this transaction gonna work
you know a lot of sellers
they see
they see the bigger number
and that's obviously quite attractive to them so
in this case
it worked out where you know
they saw that as hey
you know I'm willing to go through this process
I think it'll be worth it
one thing I'll say is you might be thinking well
of course why wouldn't somebody just take
take the higher offer
sometimes assumptions
can take longer
so when we originally went through this process
we were given about two months to close
not a more standard 30 days
when I've been doing research on Reddit
specifically with the mortgage company that
that was holding the mortgage for the seller
you know I read some horror stories
so I was a little uncertain
well also they
they they
you don't know like
you just don't know how long it's gonna take
whereas if you're working with one of my lenders
getting a conventional loan
I can tell you beyond the shadow of a doubt
we can get this closed
most of them minim28 days and a lot of them 21 days
if you're if you really need to be aggressive yeah
mortgage Assumption is just this big like well
it might be two months it might be three months
who knows right
so that's a hard sell yeah
it takes your you
some of your decision making like is
is removed
because I can't go pick the lender of my choosing
someone who I have a good relationship with
I'm just gonna
by default be working with whoever is servicing the
the owner's mortgage
and so you don't know how good is their Assumption team
is it a small outfit
do they do these do they do 10 a year or 10 a week
so it
it's a huge wild card
it's just a big unknown before we made the offer though
I think I did go on the mortgage servicers website
and saw that they had an assumptions
department and they had
some brochures
that you could actually give to a potential seller
and say hey
here's what we're trying to do
we're not trying to pull the wool over anyone's eyes
this is a real thing
and it would be a huge benefit for them
to sell the house yeah
in that way yeah absolutely
so to summarize
we made two offers one was a lesser offer
with just a standard
conventional loan that you were pre approved for or
or conventional
I don't remember if it was conventional or FHA
but a standard
government backed loan that you were pre approved for
and then a higher offer and
and an important detail here
cause you mentioned possibly going above the list price
a lot
that's not necessarily a recommendation in this market
but if the home has just come on the market
that might be the the strategy right
you have to take into account
you know
if a home has been on the market for two months
you've got a lot more leverage
than if a home has been on the market for 24 hours
so you made you made those two offers
one that was higher with the mortgage Assumption
one that was lower with just
with just standard financing
have you
have you thought through how you would feel now
and with your knowledge of what you're paying
and all of that
how would you feel if they hadn't accepted the mortgage
Assumption 1 but had accepted the lower offer with the
with the conventional loan
I have thought about that
I think we probably would have it
it would have
really sucked to have missed out on that Assumption
so I almost want to go I want to make a
a lower offer actually for that more conventional buy
but then again I mean
like you said you know
you kind of gotta take the property
what it would have priced for into account
you know how long it's been on the market
in our case we made that offer
I think a day or two after it was listed so
you know we had to think okay yeah
I can go low but
if there's five other people that have seen this house
and it's attractive to potential buyers
we might just lose out on the deal altogether
that's right
so you know
we could have made either work
you know certainly financially and
you know but it just
it would have been a lot cooler to get the Assumption
so and
and luckily
I think like I had mentioned
you know sellers see a larger number and sometimes on
on market transactions off market transactions
bigger number
almost can cloud out any other thought about oh
well I'm just gonna go with the largest one
I would say
about 50% of my seller clients over the years don't
if I send them an offer all they look at is
is the headline number sure
and and sometimes they'll be like
well also
they're asking
you to pay $10,000 of their closing cost
and they're like wait a minute
what page is that so yeah
and and in this case
you know that was a
the risk that the seller was taking was just hey
I you know this
this company's been servicing my loan
I've been paying them every month
now I'm gonna go through a process of
getting them to qualify
somebody to take over my mortgage
how long is it gonna take
do I have any control over the situation
so that can feel probably like a risk for some people
yeah yeah
absolutely and I think
you know part of my job in
in this was to reach
out to that listing agent and just explain to him
you know how we were going to approach it
that
that it wasn't gonna be a risky situation where we were
you know gonna let it fall to the wayside or I
I I knew
I could vouch for you as my client that you were gonna
that you were gonna stay on top of things
and and so I I
I did a hard sell with that
and thankfully the other agent
who is an experienced agent
had also never done a mortgage Assumption
he was very much a yeah I'd
I'd love to I'd love to do something like this
so it was
it was a great meeting of the minds where everyone
everyone was cool with it and the seller was happy to
to have you know
two offers and just take the higher one and just
he was flexible on on his time frame for
for moving out and well
he was already moved out but in terms of
of cashing out
so it just worked out so so once we got all
all the
all that paperwork squared away went under contract
now we're in the the
the meat and potatoes part of
of the mortgage Assumption right
how did you like start the
the process with the lender
yeah so
it was actually pretty well established the process
I mean they had reached out the
this would be a
I think they were called an Assumption coordinator
so they actually had someone assigned to
probably a handful of assumptions all over the US
and she was on my case with my wife and I
and you know
she reached out and said hey
start filling out this application pretty standard
if anyone's filled out
you know any mortgage application
you're pretty much going through the same process
but with the idea that you're assuming a mortgage
rather than applying for a new one
so they're just gonna qualify you in a different way
but all that paperwork
I mean we it took us probably four hours
we sat down we knocked it out and submitted it
and within a couple days you know
they they had process that and started to
you know gather more information financials
run the credit checks and and start to
you know verify some of our rent
you know rent numbers and and just income and what not
I think you had to
didn't you pull money from a few different sources
in order to to pull together the down payment
did they have any any issues with any of that or
or did that present any no
no now that was all pretty standard
I had kind of we had cash
but I had also considered
do I take a loan out of my 401k
do I pull some Roth IRA money
I kind of kicked around a few different ideas because
when I originally brought this up to Stan
I don't think I was totally thinking about like
how much money we would have to come up with
and then when you start to see those numbers
you're like okay wow
I'm gonna have to you know
figure out where to to put this all together
and I wasn't exactly sure we didn't have enough cash
I was like yeah
I don't know how to how to make this all work
but in the end you know
I I took some money out of my
my Roth IRA and as far as the Assumption goes
I'm sure this is probably similar with
with other transactions
but as long as they just see the wire
you have a documentation hey
it goes from account a to account B
that was as complicated as it needed to be
and so they said yeah
that's that's no problem
you usually just wait until you're closer to closing
which I'm sure is true for most transactions yeah
for sure
so after initial contact was made with the lender
what were kind of your expectations for
for further communication from them
like did they initiate conversation
did you have to how frequently was that happening
et cetera et cetera yeah
so I would say the
these folks are probably people who get
blown up on email and and their phones all the time
so they're kind of behind close doors in a way
there's like a general email
you can kind of throw your email into this bin and oh
I hope they get back to me
otherwise if you call them
you know a lot of times it just goes right to voicemail
I did find it a little tricky
usually having to call in a couple times hey
did you you know
do you need anything from me
and were you getting a different person every time or
or the same person
typically if I was calling in the general number yeah
it would be just somebody
who would take a message and say
oh yeah I'll have your coordinator follow up with you
OK
I think this is a good time to mention that
you know just anyone who's buying real estate
whether you're an investor
just a retail buyer you know
having this concept of extreme ownership
is what I kind of went into this with
is I have extreme ownership of this transaction
nobody
is looking out for for anybody more than myself
so I just need to stay on top of these people
you know
be polite but persistent was kind of my mentality
because I didn't want you know
I knew time was a factor with this type of transaction
I had read some stories on Reddit
of this mortgage company taking three to four months
you know was it just the mortgage company
or was it also the individual applying
were they dragging their feet
you don't really know but
you know after four months the
the deal fell out of contract and the sellers
and the sellers were just like listen
this is taking too long and they took another offer
not your deal obviously not
not my deal you're saying the Reddit deal
yeah just
I had read like okay
that's a risk you know
you need to stay on top of this
and so
I was pretty much following up with them
about every 48 hours hey
do you need anything from us
what are you waiting on
there's so much paperwork you gotta submit
as anyone knows who's bought a house
for us the
a thing that was a little complicated
was just the number of rentals that we had lived in
in the previous two years including
you know ones in Costa Rica
and so that became
just a challenge of trying to run down all these
verifications which
was really just because of our personal situation
but well
I mean we have to discuss that for a second
because that was
like the most stressful part of the entire transaction
right wouldn't you say that
that getting some of those records was like
the most stressful part of the whole thing for you
oh sure
yeah I mean
it's like oh
taking out these big you know
writing these big checks or termites
in the crawl space and it's all like oh
that's nothing
compared to what we had to go through with
just trying to get our rent verified
in another language you know
in another language in another country
so what was what what did that take
so specifically
in this case
we had lived in a house in Costa Rica for a whole year
and we rented from a family and
I had reached out to
the landlord and specifically said hey
just so you know
I'm gonna need this documentation complete
it's gonna look very formal
it's for a mortgage I'm just gonna need you to do it
especially with the FHA you know rules and everything
I asked the coordinator hey
can we kind of skirt this
do we need need need this rental verification
can you look past it she said unfortunately no
she said she had dealt with some guy who was like
living on the road for a few years
and he had 20 landlords all over Europe
that she had to get verification from
and it was a nightmare and I just said alright
so that's what we gotta do and
you know this
this individual spoke Spanish exclusively
and so we were communicating on WhatsApp and you know
over the phone and just trying to explain the
you know the gravity of like hey
we really need you to just write your name here
sign this piece of paper
in the end
we did have to rely on some friends down there to
help make the deal go through
which involved buying some pizza and sending
a pizza delivery to a house in Costa Rica
to make sure that this piece of paper got signed
and thankfully in the end it did
but yeah it did slow down the transaction considerably
probably at least a whole week lost on
I'm just trying to get some paperwork done
I would I would sign a a piece of paper for for
for a slice of pizza or for a whole large pizza
I mean I thought it was a good deal yeah
that that sounds like a great deal
how do you do that
do you just like Instacart in Costa Rica
like how do you how do you get pizza delivered
one yeah
one of our friends he owns a pizza shop there
oh that's convenient
so there you go he yeah
we made some some some deals yeah
yeah well
well that's fantastic
what what a process
you know that it reminds me a little bit of
so so back in the day
realtors oftentimes would handle clients earnest money
that pretty much doesn't happen anymore
so like actually what could go wrong there
yeah I know
my company
would actually hold the earnest money in escrow
and there are still some
some real estate firms that do that
even though the vast majority just pawn that off to
to our closing attorneys here
but yeah
you can imagine where this is going
I had I had a
so I had a one time a client that
we were in like a multi day back and forth
where they were trying to buy a house
and so I went ahead and had them
they were about to go on a trip
and they didn't want to wire their earnest money
this is before wiring earnest money was like
the thing that almost everyone does
so
so they actually went ahead and pre
wrote their earnest money check
before they went under contract to give to me
well
guess what
I also was going out of town and not just out of town
out of the country
and I took that earnest check with me
and then they went under contract while I was in
you know and I was handling it
obviously I got them under contract while
while I was in another country
they're out of the country or they're out of
at least traveling
I can't remember if they were out of the country or not
no I think
I think that they were just traveling
and so long story short I realized
way too late
that I was in another country with earnest money and
just a personal check but there was they
they couldn't
there was just nothing else that we could do
they weren't gonna wire the money
and so the only thing I could do was to
send it from my location
because I was there for my 10th anniversary
we were there for 10 days
and we were at the at the beginning of that stay
so I had to send it via DHL
and that was I
I was I had so little confidence
it was gonna make it to its destination
it was just like a guy came on in a bike
no uniform or anything to receive my mail
and this is after I
I spent the entire day in the hotel lobby
mind you now
you know they're giving you
obviously
drinks and snacks and what not the whole time
but literally I had to spend
he was like six hours late from
from when I was told that that he would arrive
so I spent a day in Paradise
waiting to DHL earnest money
that I had accidentally taken to paradise
and thankfully that doesn't happen anymore
because I don't handle clients
earnest money so there's
there's my there's my
overseas real estate story
any other are there any other like
twists and turns that you ran into
honestly no
it it other than that little snafu that caused a delay
just
just maybe not getting
as much of an update as I would have liked from
from the mortgage company and
and getting that good feeling like oh
this is being handled but you know
in the end they gave us about eight weeks out
from when the contract was ratified
to closing and it was just about just shy eight weeks
so when when
when did you finally start to feel like
was it was it like
you weren't hearing anything from them for like
several weeks
it just took a couple weeks to kind of go through
this isn't even underwriting
this is just like verification of yeah
various things and then once it goes to underwriting
it's a few days
then you get the clear to close
but even then they don't you know
necessarily turn it around in a couple days
cause we gotta get all the money handled and sent and
you know arranged it with the attorney so
but no in the end it was
it was a you know
it was a couple months but for that seller
waiting that extra month beyond a normal transaction
you know they
they walked away with I think a pretty good payday
yeah yeah
with with a lot more money
is there anything that you would do differently
if you did another mortgage Assumption
would you handle it differently
I think we had kind of talked about the
potentially offering less on a conventional I
I still like that strategy
you know
the two offer strategy so you know
maybe that
but
otherwise just you know
that extreme ownership
I would probably have bugged them even more than I did
I I just think you
you really have to be persistent
because it's one of those things that
you know you
you you just always want to be top of mind yeah
you know getting the transaction done
time kills all deals
as people will say in the real estate world
and you
you don't wanna be at one point during the process
we did reach back out to them and say hey
are you waiting on anything
and it had been five days that it turned out
they were waiting on something from us
and I didn't know it
and and so that was frustrating
yeah yeah
no doubt and
you know the
the reality is that
if you're a squeaky wheel in a situation like that you
they are gonna pay closer attention
because they're gonna be like alright
we need to get this guy off our
off our list like yeah
you and
and I guess maybe some people might
some workers might just get angry and just like
maybe start ignoring your calls
but I wouldn't think it with a lender that they would
that they would do that knowing
you know what's at stake there
now I know that there are some
like some fees associated with the mortgage Assumption
process did
was the lender pretty upfront
about those fees
but how did how did you find out about that and
and kind of what
what did that end up costing you at the end of the day
yeah so they provided a
you know example
settlement
statement of what they thought our fees would be
like most lenders do
when it comes to Assumption fees
my understanding is it's it's all state law
and it just varies from place to place
in the event in the case of South Carolina
it's actually in
in the law that an Assumption can't be more than
the lesser of 400 dollars
or 1% of that transaction
so in this case
you know we had a 400 dollar Assumption fee
and that's what was charged
so just to give people an idea
you know there was no loan origination fee no points
nothing like that they're not originating a new loan
they're literally taking this loan
which only had 25 years and two months on it
and just putting it in my name
all the same terms all the same
you know stipulations
and it's really just changing one name to the next
so in the end yeah
to be able to look at your settlement sheet
and see that
where I'd normally expect a few thousand dollars
worth of fees for a house of this
you know price
was just 400 bucks
yeah so that
you know if anyone who's
you know bought a house in South Carolina
you know
knows that that typically is what would you say for
you know let's say sub $500,000 house
I mean typically half
half of your money is probably getting paid to
you know just originate the loan and everything
maybe another half to the attorney yeah
it it it's gonna vary from from one person to the next
but I mean often times from one lender to the next
often times
those origination fees and whatnot come in between
like 1,000 and 2,000 for something like that
but then you know
that's just the origination fees
there might be a whole lot of other things
you know
you might have more escrow that you have to put in
because you have a PMI
payment that has to be made
you you yeah
there there's just a
a variety of things like that
that they start to add up
and they would add up to a lot more than $400
that much I can tell you and furthermore too
I mean we didn't get an appraisal on the house
I mean the the lender we could have
I guess optionally we could have
but the lender didn't want one
I mean they're already servicing the loan
and we're putting down such a large down payment
there's just really not a lot of benefit
I think that they don't have any risk
they need to mitigate I mean right
they're
really
just transferring it from one person to the next
that did have its own kind of bumps after we closed
because a lot of times we would just
people would reach out to us
thinking we were the previous owner
from that mortgage company
and then some of the letters went to him
and should have went to us
and there there was a little bit of
you know some confusion there
but sure
you know
probably know more than any other mortgage servicers
maybe so yeah
has that been has that been sorted at this point
yeah yeah
it's all been taken care of okay
yeah
you know lenders have all these different departments
and so
I bet it's a matter of probably every single system
every single department has their own system
they probably have to update every single system
which is I would imagine it's a
probably a pretty anachronistic system
I I could be wrong
if you're a lender listening and you
you wanna get angry at me
go shout at me on social media or something
I don't I don't care people
people are shouting at me on social media all the time
so one thing that you said prior to
prior to us we
when we were just talking before
we started recording for the show
is you were talking about
you made a a great point that because the
the loan has already been paid off
to to for
for not paid off but paid down for the first few years
which in an amortization schedule
is the heaviest interest years
that you're actually also benefiting from
the fact that you're paying your
your monthly payments whereas
they would normally be paying almost all interest
right now you're
you're paying a hefty amount of principal
do you wanna say anything on that
yeah I yeah
I mean I think that that's a huge advantage here
how many year how many years in are you with
with regards to the loan yeah
there's about 25 years left on the loan so yes
did we pay a market price for the house
sure but we got a loan that's 25 years
so it's not even it's not 30 yeah
as you pointed out
those first five years are the heaviest
interest payments of all your payments on the schedule
and you know
saved a lot in closing cost and got a rate sub 3% so
you know at this point
the amount of interest that I'm gonna pay in the next
you know 25 years is is
you know maybe it's quite minimal yeah
and it's a fraction of what it would have been for sure
and the tipping point of the
of the loan is about two years away
so in a couple years I'll be paying more towards my
principle than to interest so you know
that's just a a fantastic advantage to getting these
you know you know
unfortunately
I didn't buy in Greenville at that time to get that
that loan but the next best thing is getting a
a low interest rate loan yeah
absolutely in the future with this
you know for sure Assumption
and you'd also mentioned
that doing this with a lower mortgage rate and what not
like you had been renting for a few years
and a lot of you know
Gen Z is finding that they're having to
and even some millennials to be honest
cause now the
the average first time home buyer is like 38
yeah I'm a
I'm a millennial you know
don't don't
don't
I think so right in the meaty part yeah
yeah you're it OK
alright fair enough
so but regardless Gen Z millennials
we we have a
a situation where I I mean
not me and you we're both homeowners
but our generation is struggling with
with breaking the rent cycle
and prior to 2020 it was very
very straightforward that I could tell people
almost universally your monthly payment
if you buy will be cheaper than it will be if you rent
well that's not been the case since Covid
but based on what we were talking about before the show
it sounds like the mortgage Assumption
kind of made that a possibility again
yeah so one thing
you know that I was looking at was from a
I'm looking at my cash flow every month and saying hey
if I keep renting and I have renters insurance
and I've got pest control and
you know etcetera and every
all the fees that go along with that you know
where where am I shaking out every month
versus say
if I buy this house conventionally
versus if I buy it with the mortgage Assumption
and just from a monthly cash flow standpoint
it was pretty attractive
it it actually saved us money getting into this deal
month to month now obviously
we had to
put a lot of money into the deal to make it go
but from a monthly standpoint
we have a very safe and secure loan where
you know I have a ton of equity in the house
it's a very easy payment to make
and you know of course
a lot of folks are just looking at that single p and I
principal and interest payment versus rent
but obviously owning a home is a lot more than that
taxes insurance
capital expenses and everything
but even all that taken into account
I still feel like we're coming out ahead
so that's awesome
you know
and a lot of that is helped by the fact that a
a large portion almost 50% of my
my mortgage payment itself
the principal and interest
I mean all you know 50% of that is is principal
so that's really going back into my pocket in a way
you know and into my net worth
not going out the door so yeah
and a lot of people aren't really thinking
about it that way they
they they compare the they
they understand
that owning versus renting in the abstract
but they're not thinking about on the monthly
they're spending money towards a land
you know
a landlord's sure expenses and potential profit
versus what you're spending
you can actually break down that
like some of that money is just
functionally going back to you sure
when when it's being spent on principle
it's it's functionally increasing your net worth
because your
your debt is is getting lower every single month
one thing I will say too
speaking of money that's not going back into my pocket
and people might be wondering about this
but PMI on an FHA loan
it does not go away for the life of the loan
so yes I
I am paying PMI on this loan
and I will for 25 years if I hold it
if I don't refi it but even then it's still worth it
you know you can just consider that
you know tax
basically tax is an insurance
and it's just a little bit more insurance
but it it just pales in comparison that you know
paying at 7% loan just pales in comparison to
to assuming yeah
absolutely
do was there anything else you wanted to hit
I feel like we
we covered it from a lot of different angles is
is there anything in particular that you thought would
would be a
a good thing to mention that we haven't covered so far
I mean
I mean I think just a big part of this is
is helping educate people that this is an option
because you know
for before 2020
this just didn't seem like a very attractive thing
if at all you know
why would you no assume a loan with a higher rate
when you can just go to the bank and ask for
for one with a lower rate
that's right well
now we're in a totally different economic landscape
and yeah
getting a loan at 7% on house prices that have gone up
20 30% in the past few years
you know it does make it a lot more challenging
I've got friends who have bought in
great parts of Greenville
really nice
half million dollar plus parts of Greenville
and if they were to buy that same house today their
you know mortgage would triple right
so they are gonna have these golden handcuffs
but if they have an FHA loan or a VA loan
that's assumable you know
that's a huge marketing plus
if they ever do have to let that go where they can say
hey guys look at this
you know I've got an assumable loan
look at this great rate
and people would be willing to pay more for that more
potentially more than than
you know they would get otherwise so
you know
helping people know that this is an option
and that there's a way to buy houses
creatively like that in this
in this market is is great
yeah absolutely
and I try to be as creative as possible
obviously with with all of my clients
and the main thing is that as
as we were talking about earlier
sometimes you just gotta try things even if it's
even if you've never done it before
and I'm
I'm just glad that this was a good experience for you
guys and
and you know
in the end you know
it's it's
it's cliche but it's not cliche
I'm happy when my clients are happy
like I've gotten some I've had
thankfully not a whole lot
but I've had a few situations
where clients are not happy at the closing table and or
or not happy in the aftermath of closing
and honestly I would rather like
give back my commission check then have to like
go to sleep at night thinking about that
like it's just it's just a lousy feeling
so sure
yeah so that that's
that's a that's factual
that sound that might sound crazy but
but I know the I know the
I know the commissions will come
I I never let that bother me
I focused I just focused on
on my client satisfaction
and you guys I'll say this if
if anyone's interested in doing a Super Bowl loan
you should probably talk to Chris and I will put his
information in the show notes
a way to reach out to him
and if you're if you're an investor
Chris wants to do some real estate
investing in the future as well
so I'm sure he'd love to network
particularly if you if you're an investor that
that sometimes sells property below market value
etcetera etcetera
Chris would definitely be interested
in talking to you about that
but
I think
I think we've we've covered just about everything here
and
you know as far as the
the key nuts and bolts oh
I I was going to say
if you're thinking about doing a mortgage Assumption
obviously you you can reach out to Chris
and hopefully you guys can connect
but I'll just say that Chris and his wife were
were the model clients from the standpoint of like
I knew I knew that they were going to get everything
done very quickly cause that was the really
at the end of the day the
the part that would would have been stressful for me
and that could have
caused the transaction to go haywire very quickly
is if you didn't have your foot on the
on the pedal the whole time
and so I
I don't want to understate that you
you made it sound really easy just on this podcast
but I know that there was a lot of I mean
how many phone calls do you think you
you made or had in some total
oh yeah
dozens for sure yeah
with the with these folks
and you know
not to mention the to the WhatsApp calls to Costa Rica
yeah sure exactly
you know
one thing I was gonna say is just that
you know every mortgage servicer is different
and that's what I was told
by some of the people in my network
who are mortgage brokers and they said
you know every mortgage servicer is different some
some servicers originate their own loans
some do not you know
if you have a mortgage servicer who
all they do is service loans
they take in the escrow payments
they pay the taxes but they don't originate a loan
I would be very hesitant
to go through an Assumption process with them
because you're basically
telling that mortgage servicer hey
you gotta now recreate this loan qualify us
I don't even know if they would
you know do it
I'm not sure you know
everyone's gonna have their own policies
but you know in in this case
the the servicer we had did originate loans
they did he locks second mortgages
etcetera so
we were able to have a lot more confidence that it'll
OK
there's an arm of this company that does this so yeah
for sure you know
we we think that this can can go through yep
absolutely well there you guys have it
a little bit about mortgage assumptions
which you know it
it used to be that you only heard about
VA loans getting assumed
but now we're just in a different time
we have to adapt to the times
this is one way that we can
it's not gonna be for everyone
but if you're someone that has
a potential for a large down payment
but you still need to get a loan that is where the
the Venn diagram overlaps
and you have to qualify for FHA
so there's some first time home buyer ish requirements
you don't technically
have to be a first time home buyer
but you have to qualify for FHA if you're assuming FHA
I do believe there's a few conventional loans that
that have become assumable in recent years
although again these are basically not being marketed
hardly ever at all the really
the just about the only time I see
a loan being marketed as assumable is when it's VA
and on the VA front
I'm pretty sure you don't have to be a member of the
the military armed services at all
you can assume a VA loan
without without being so it
and I think that I think that I think that's
that didn't used to be the case
but I do think that they changed it recently
although I'd I'd have to go back and they're
they're constantly changing that program
I would need to verify that to
to be 100%
yeah what was the last thing you were gonna say
and I think some USDA loans too
I mean it's always gonna be a government backed loan
right I mean
a non government just a regular bank is always gonna
wanna take the higher interest
and not let anyone assume it
but mm hmm
us yeah
USDA and FHA are are very
very similar and and VA is too
although it's kind of kind of its own thing
but if you guys have any questions about any of that
let me know I'm happy to talk about it
I'll connect you with a lender
that will try to convince you to not do
a mortgage Assumption cause they don't get paid
if
if you if you do that
but it's you
can't just have all your eggs in the mortgage
Assumption basket right
the likelihood that you're going to successfully assume
alone honestly not very good
but it's one of those things where
if if opportunity meets preparation
or preparation meets opportunity
that's when these sorts of things
can come together so
let me know if you guys are interested
my contact information is in the show notes
I'll put Chris's in there as well
and
you can like rate review subscribe to the show
all of those good things and lastly Chris
thank you so much for coming on because I
I really appreciate you taking the time
and just sharing you know
some of what you went through
I'm sure this is really helpful to a lot of people
yeah absolutely
thanks for having me and thanks for your willingness to
to tackle the mortgage Assumption with us
absolutely
very happy clients and glad it all worked out awesome
thank you guys for listening
we will talk again next time!