Mastering the Art of Appraisals: Insights and Tips from a Certified Instructor

Mike Mills (Host) | 00:00:13 to 00:00:26

Hello. Hello. We are live. My name is Mike Mills and this is the Texas Real Estate and Finance Podcast. And today we are going to talk about appraisal, all things appraisals.

Mike Mills (Host) | 00:00:26 to 00:00:48

I mean, we have a few other things we'll sprinkle in here a little bit as well, but ultimately we're going to go through a lot of nuts and bolts of what the appraiser is thinking, what they're looking at, and in order to help me with that today, I am so lucky to have Lori Solecki with us. There we go. Sorry. Make sure my production value works, right? No worries.

Mike Mills (Host) | 00:00:48 to 00:01:08

So Lori, thank you for joining me today very much. Appreciate you coming in, spending some time with me. So earlier today, Laurie and I sponsored a class together at a local title company here, allegiance Title. Shout out to buyers and Taylor about CMAs. Laurie is a Ce certified instructor.

Mike Mills (Host) | 00:01:08 to 00:01:21

And today we were talking about appraisals. But you also teach all kinds of classes, right? Right. So what all are you teaching these days? So I teach the fun ones, the legal one, legal two, broker responsibility, everybody's favorite.

Lori Solecki (Guest) | 00:01:21 to 00:01:31

Everybody's like you. Yes. The required courses, required contracts. So I teach a lot of subject matter too, negotiating multiple offers. I teach a plethora of classes.

Lori Solecki (Guest) | 00:01:31 to 00:01:36

I love, love, love teach. There's no limit to your class. There is no limit. No limit. If you want something, let me know.

Mike Mills (Host) | 00:01:36 to 00:01:55

Right now you are a broker yourself here in DFW and you're a part of MetroTech, correct? Right. Metrotex association of Realtors. And Metrotex is because here locally we have the Arlington Board of Realtors. And then I think you have like Fort Worth area realtors or something like that.

Lori Solecki (Guest) | 00:01:55 to 00:02:05

Fort Worth, louisville. There are several. And then so Metro Tech, does it cover kind of everything or is it specific to Dallas? Like what's their coverage area? So we have a huge footprint.

Lori Solecki (Guest) | 00:02:05 to 00:02:21

We are the fifth largest in the nation. In the nation. So we are a big we have like probably a lot. I think we have like 24,000 members maybe and growing. And so we are pretty large and we do hit a lot of counties.

Lori Solecki (Guest) | 00:02:22 to 00:02:29

So we go all over the DFW, Metroplex, and we have a couple of Louisiana as well. Oh, wow. Okay. Yeah. Okay.

Lori Solecki (Guest) | 00:02:29 to 00:02:47

So we're part of Nettrus, which covers many areas and Aboras as well. So Arlington board, Fort Worth board, we all subscribe to the same multiple listing system. Got you. Which is our agent network of housing houses available. So obviously as a broker, you sell real estate and you've been active.

Mike Mills (Host) | 00:02:47 to 00:02:54

How long have you been selling now? 29 years this year. So you're brand new to the business. Yeah, I hadn't been in just a little while. Just a little while.

Mike Mills (Host) | 00:02:55 to 00:03:02

You've been through a few ups and downs. I've seen some things. I always feel like that agent, that allstate agent or whatever. We've seen some things, yes. Me too.

Lori Solecki (Guest) | 00:03:02 to 00:03:20

Me too, dude. So when did you decide to get into teaching Ce courses? So that kind of happened as a happy surprise. So I came from a sales management background, so I worked in that before I decided I've had enough and picked up my toys and went home. Where were you?

Lori Solecki (Guest) | 00:03:20 to 00:03:28

I was with sales and Service merchandise. Oh, wow. Sold jewelry. Third generation jeweler. Service merchandise is gone.

Lori Solecki (Guest) | 00:03:29 to 00:03:39

Sales is still around? Oh, yeah, they've been around for years. And so I had my last Christmas, and I was like, okay, I'm out. I'm out, guys. Love you, but I'm gone.

Mike Mills (Host) | 00:03:39 to 00:03:47

Family business, right? Yes. Well, it wasn't family business. My grandmother, my dad, and I all worked for the same corporation. Got you.

Lori Solecki (Guest) | 00:03:47 to 00:03:58

So yes. So I kind of worked with them. And so my mother in law said, why don't you go get your license? Why don't you sell real estate? I was like, Well, I hadn't really thought about that.

Lori Solecki (Guest) | 00:03:58 to 00:04:05

And she's like, Well, I'm a broker, so why don't you sell real estate? I'll pay for your school. You go. I was like, yeah, okay, sure. I'll open up a new chapter.

Lori Solecki (Guest) | 00:04:06 to 00:04:34

So that's kind of how it got started. I've heard a thing. That's how you got into real estate, but then how did you decide you wanted to start teaching classes? So once I got into real estate, I taught classes in my past life, as I call it. And so when I got into real estate and started learning things, I have this gift for taking the big picture and breaking it down into manageable pieces so people understand what's going on.

Lori Solecki (Guest) | 00:04:34 to 00:04:52

And so it was just as I learned something new, I would be like, hey, guys, did you hear about this? Or have you looked at this? Or hey, try this. And so my broker at the time said, hey, have you ever thought about teaching some classes and sharing this with other agents? And I was like, no, but that sounds like a great idea.

Lori Solecki (Guest) | 00:04:52 to 00:05:10

I'd love to do it. So that was kind of the catalyst. And so once that happened, I began to kind of train at offices that I worked for, and then I got involved with the board, and then it just kind of blew up. In 2018, I was honored to be the Educator of the Year for Texas Realtors. There we go.

Lori Solecki (Guest) | 00:05:11 to 00:05:16

All right. And so that was, like, the pinnacle. That's awesome. Yeah, that's great. So that's my claim to fame.

Mike Mills (Host) | 00:05:16 to 00:05:42

Well, it's a challenging thing. I've never been a teacher before as far as a profession is concerned, but I ran a swim school for kids for a number of years, and I taught swim lessons, and I've coached children. I've been highly involved in coaching in a lot of different atmospheres, and so teaching is something I really I enjoy myself a ton now. Shout out to my teachers out there. Unfortunately, they're not paid well enough to make it a career.

Mike Mills (Host) | 00:05:42 to 00:05:58

I don't know, I wish they should be and that we need more funding for that. But I do think it is something that you have to really have a passion for in order to do it and do it effectively. And it's funny that you said your talent is taking that information. I tell people that myself all the time. What do you do?

Mike Mills (Host) | 00:05:58 to 00:06:22

I'm like, well I'm not really a salesperson but what I do is I take complicated information and I break it down to simple forms so other people can understand it. Exactly. And that's kind of the same. And that is the key to education so that people understand that a lot. Of times you're explaining to someone how to look at a problem or a situation in a different way that they wouldn't other it's not like you're going hey, you're a dummy.

Mike Mills (Host) | 00:06:22 to 00:06:29

Let me show you how to do this. It's just like have you ever looked at it from this perspective? And that's really what you're trying to offer. Would you agree? Exactly, totally.

Lori Solecki (Guest) | 00:06:29 to 00:06:56

Yes, I totally agree with that. So let's get into right away on the appraisal side of things because that's where I'll tell you so I sat obviously was in your class today we've never met prior to this we did a funny little video the other day but prior to that but I've been in a lot of ce courses lenders sponsor classes all the time. This is what we do. And I genuinely mean this because if I didn't I just wouldn't say anything about it. It was very entertaining.

Mike Mills (Host) | 00:06:57 to 00:07:36

I was not surprised because we had met previously but I was certainly like I can understand why she does this on a regular basis because it was good. Thank you. You were engaging, there were lots of questions. I think a lot of times when these ce classes happen, it's a give and take but what ends up happening a lot of times is the instructor stands up there and talks for 2 hours and the class you can look out of the class and they're all falling asleep and nodding off, right? They're looking at their phone and it's just like there's so many other things going on but the class was engaged, you were asking questions, trying to get involvement which always makes stuff go by faster, it makes it more enjoyable when there's actual interaction.

Mike Mills (Host) | 00:07:36 to 00:07:46

Have you found that to be the case? Totally, yes. I always want to make sure that I answer questions and I always want to get them engaged. If they're engaged and they're talking, that's a good thing. That's a good thing.

Mike Mills (Host) | 00:07:46 to 00:08:00

So would you say that what's your highest performing or most interested class that you get, where you get the best amount of feedback from that you teach? Is appraisal? Is one of them is it up there? No, it's up there. It's up there because we have a lot of information to share.

Lori Solecki (Guest) | 00:08:01 to 00:08:22

But I would say sometimes our contracts get very lively. Really? Yeah, because when you start talking about the various paragraphs, people are like, Well, I heard, or no, I think blah, blah, blah. And so then you have a chance to kind of have a good debate about, well, that's a great thought, but you might want to look at it like this. Right there's a little bit more discussion that goes back and forth because everybody's got their story, right?

Lori Solecki (Guest) | 00:08:22 to 00:08:40

Totally. Well, this one time what happened? Exactly. And that's always fun too, though. So on the appraisal stuff, so let's start with because obviously I'm a lender, you're a realtor, and we don't hate appraisers, we love appraisers.

Mike Mills (Host) | 00:08:40 to 00:09:08

But we all have to kind of get on the same page. Right. And I will speak from a lender's point of view because I don't know if people realize or not, but we're kind of in the middle. We have to order the appraiser or appraisal from the appraising company and appraiser or whatever, but I don't get to call the guy and talk to him because I'm an interested party in the transaction, so I can't have any real conversation with him. And then the realtor is obviously the one that created the list price or in partnership with the seller.

Mike Mills (Host) | 00:09:08 to 00:09:23

And so when values don't meet up between what the appraiser says and what the owner and the agent think, I get to be the one that gets yelled at. Yes, that's right. We're like, what is this? Yes, we get to play the middleman. So amazingly.

Mike Mills (Host) | 00:09:23 to 00:09:51

I don't know if people realize. A lot of lenders we know appraisals pretty good because I'm looking at them constantly and I'll tell people if they come back and say, hey, we're ten grand under, we really feel like I'll look at it and go, listen, I will send in whatever argument that you want to, additional comps, whatever you want to do. But I'm just telling you from my point of view, looking at it and seeing them all the time, I don't think you're going to win. What I try to tell people is I'm on your side. I want us to get the value.

Mike Mills (Host) | 00:09:51 to 00:10:01

And I'm not going to tell the appraiser anything because I can't talk to them. But I'm just preparing you for the understanding that this may not work out the way you want. Exactly. And so I'm going to give a disclaimer. I am not an appraiser.

Lori Solecki (Guest) | 00:10:01 to 00:10:17

I repeat, not an appraiser, nor do I play one on TV. So I am not an appraiser. I'm simply a real estate broker who likes to work with appraisers in the best way possible. So I think the key is to be proactive. And I think so many realtors, they don't be proactive.

Lori Solecki (Guest) | 00:10:17 to 00:10:33

Like they go, okay, the appraisal is coming. Please, God, please let it make value. And so that's kind of how we do the appraisal experience. And really we would be more beneficial if we would stop checking the box. I mentioned this.

Lori Solecki (Guest) | 00:10:33 to 00:10:51

Stop checking the box in Broker Bay or showing systems that say, yeah, it's totally okay for us to schedule the appraisal. But if you don't answer your phone, don't uncheck the box because the appraiser needs to get a hold of you. But you need to be able to talk to the appraiser. And then here is the deal. You need to send them your packet.

Lori Solecki (Guest) | 00:10:51 to 00:11:07

If you don't have an appraisal packet, reach out to us. We'll get you one. But you need to have information like your comps. So do your CMA, share that CMA with them. Share the 1004 MC report with them because they're going to have to pull that anyway.

Lori Solecki (Guest) | 00:11:07 to 00:11:28

Share information that you know about the subdivision, anything that's going on, any business coming in, coming out, any quirk about the subdivision. Because you are the boots on the ground. You are the eyes and ears for the appraiser. That appraiser may not know the area really well. They may know it some, but they may not know it like extreme like you do because you were showing there all the time.

Lori Solecki (Guest) | 00:11:28 to 00:11:52

Right? And so I think if you take a proactive approach to preparing information for the appraiser, then you will work hand in hand with the appraiser. Now, sometimes we have those seasoned appraisers. They're like, I don't want anything from you. But really, I think most of them are appreciative to kind of see where is your mind at because are we on the same page?

Lori Solecki (Guest) | 00:11:52 to 00:12:06

I think another issue we have with realtors is realtors get emotional about property. You know what I mean? Like, they go, oh, this is so amazing. Oh, you put so much work into this. This looks so great.

Mike Mills (Host) | 00:12:06 to 00:12:31

Yes, that is one of the main things I get. Agents will respond, yeah, they just did these updates and they put so much I understand that, but that doesn't but. It'S not going to add to the bottom line. So I think that we need to understand what does add to the bottom line and what really is going to help itself faster. So when you're talking about preparing something ahead of time for the appraiser, okay, I've heard agents say this before.

Mike Mills (Host) | 00:12:31 to 00:12:51

Absolutely. And we even kind of tell them, hey, look, make sure you have something available to show them your comps. But when you talk about the logistics and the method because it's a fine line, right. And you don't know if this appraiser is going to be and I would say you can tell me, but my guess is that the vast majority of them are appreciative and they're great, no problem. But there will be a couple that will be like, I know what I'm doing.

Lori Solecki (Guest) | 00:12:52 to 00:13:06

I've been in this business 50 years. I know what I'm doing. So in order to provide information but not step on the toes of the few that are going to be jerks about it. What would you say the best method is as a realtor to present these comps? Leave them on the table, show up there, be there at the appraiser.

Lori Solecki (Guest) | 00:13:06 to 00:13:24

How would you so a lot of us are busy, so we really don't have time to meet you at the house. We'd love to, but hey, that's not going to be a visibility. So a lot of times what I do is when I talk to the appraiser, I'm going to say, hey, when did you want to go out? Okay, yeah, that that sounds great. Would you be offended if I sent you some information?

Mike Mills (Host) | 00:13:25 to 00:13:34

Okay. I would love to send you. I'm always trying to price properties like you guys, so I would love any feedback. I want to send you what I have. Yeah, let me help you.

Lori Solecki (Guest) | 00:13:34 to 00:13:46

Help you. Well, and you're saying help me. I want to make sure I do my job right. Help me. Because if I'm doing something crazy or you're like because I've had some appraisers go, hey, look, we really don't care much about your belt anymore.

Lori Solecki (Guest) | 00:13:47 to 00:14:02

If it's in the same neighborhood and it's not like phase one to phase four with a 1015 year spread, then we really aren't going to worry about that. So you don't have to adjust for years or fireplace. Sometimes we adjust, sometimes we don't. Not a big deal in Texas. We really don't need one.

Lori Solecki (Guest) | 00:14:02 to 00:14:04

It's just there.

Mike Mills (Host) | 00:14:06 to 00:14:30

Now that you say this more and more, it really resonates, that whole uncheck the box thing. Right. I tell agents all the time when they're dealing with because when we talk about vendors, whether it's lenders or title companies or roofers, I always tell them, hey, look, when the borrower or buyer or seller calls you and says, hey, is it time for me to refinance my mortgage? Or, hey, what do I need to do about my roof? The immediate answer shouldn't always be, well, I don't know, I'm not a roofer.

Mike Mills (Host) | 00:14:30 to 00:14:45

Call the roof guy. Right. Or, I don't know, I'm not a lender. Call the lender. Well, I'm not saying that you should know everything about it, but what I am saying is that having people within your sphere that you can call and ask questions to and get a little bit of knowledge every single time and pick up a little bit more information exactly.

Mike Mills (Host) | 00:14:45 to 00:14:56

Then you put yourself as the expert. Right. You're the person, you're the trusted advisor is what you are. I don't know who to call, but let me call Mike. Let me call Lori.

Lori Solecki (Guest) | 00:14:56 to 00:15:08

They'll know who to call. Exactly. And even, especially when you have we'll see, I know that this is what it is, but there's also an extra piece to it or whatever. Exactly. But what I would say is that's the same thing I would look at with the appraisers.

Mike Mills (Host) | 00:15:09 to 00:15:16

Right. If you uncheck that box and make sure that that appraiser has to call you in order to schedule. And again, you got to answer your phone. Right. Please do that.

Mike Mills (Host) | 00:15:16 to 00:15:25

Answer your phone. Please answer your phone. But if you do that, then you're going to a establish rapport with that appraiser. Right. Because they're human beings just like the rest of us.

Mike Mills (Host) | 00:15:25 to 00:15:45

You're going to figure out what they want or what they don't want, so you know what to give them or whatnot. And you might even pick up some information that you didn't have before that will help you be a better agent going forward. Absolutely. And here's the thing. One thing I want to share is people have a misconception about talking to the appraiser right before the appraisal is done.

Lori Solecki (Guest) | 00:15:45 to 00:15:55

Guys, you can talk to the appraiser now. Once the appraisal is turned in, that's it. Communication must be through the lender. Correct. It can't be directly with the appraiser.

Mike Mills (Host) | 00:15:55 to 00:16:08

And even we have to have a separate desk. As the loan officer, I cannot talk to the appraiser. You have that arms linked. Correct. I have to have a separate department of my company that is the one that communicates with the appraisal, appraiser that we send the information to.

Lori Solecki (Guest) | 00:16:09 to 00:16:22

Okay, so good to know. So, see, there's some things we're learning today. That's right. Okay, and real quick, one of our listeners here, Mary Anne, she wants to know if you can make the packet available after the podcast. Okay, perfect.

Mike Mills (Host) | 00:16:23 to 00:16:28

All right. Is there a way to contact her, like email or something? Yes, I got Mary Anne. Perfect. Yes.

Mike Mills (Host) | 00:16:29 to 00:16:40

All right. So obviously the rapport and the relationship with the appraiser is important. You want to make sure that you have some contact with them because it's always good to be friends with people, right? That's right. Relationships are important.

Mike Mills (Host) | 00:16:40 to 00:17:05

Okay. So there was a few things that you went through in the class about looking at how to comp stuff, and we may jump all over the place a little bit, but I want you to talk specifically about price per square foot. Okay. Because as a lender, what I get all the time when someone wants to argue value is they will say, well, the price per square foot was this, or the price per square foot was that. And I will tell them I'm not even going to say the words price per square foot to the appraiser because I don't want them to blow a gas it.

Lori Solecki (Guest) | 00:17:05 to 00:17:11

Exactly. So explain why that's an issue. So that tells them that your vocabulary is old school. Yes. Okay.

Lori Solecki (Guest) | 00:17:11 to 00:17:30

When you say price per square foot, it's like okay, so when I first started back in the 90s, before the Internet, guys, you were in before the Internet? 19th century. In the 19th century. That's right. Or the early 20th century when dinosaurs ruled the world, but back in the day, we did it price per square foot.

Lori Solecki (Guest) | 00:17:30 to 00:17:42

Right. I mean, that's the way we did. We were like, okay, so it's $100 a square foot. So this is 1500. So that's kind of the way we used to price, but we don't do that anymore.

Lori Solecki (Guest) | 00:17:43 to 00:18:04

But your client will like your customers and your clients, that's all they know. They just know price per square foot. So they're like, well, this house should only be 150,000 and why is it 275? Right. And so you have to kind of explain, well, we don't do price per square foot anymore because it skews the neighborhood.

Lori Solecki (Guest) | 00:18:04 to 00:18:31

It's like one at 1500 would be 150,000. Across the street you've got 2500. That's way too much of a variance. Well, and I even think earlier on, I don't know how much it's changed, but I think it has changed quite a bit is if you were a builder going into a neighborhood, right, and you were going to build out an area, they weren't all exactly the same, but they were pretty close. Like you have 1500 square foot homes in a neighborhood with 2500 square.

Lori Solecki (Guest) | 00:18:31 to 00:18:46

Exactly. They were pretty close to like you might have a three to 500 square foot variance. Not like we have now. Well, now you have like old neighbors neighborhoods in Fort Worth, for example, that the homes were built in. The house is maybe 1700.

Mike Mills (Host) | 00:18:46 to 00:19:16

It's a little peer and beam wood home, right. But then across the street, somebody ripped out that house that was there and they built a little McMansion over there. And then you're going to have to comp it to the other new McMansions, not necessarily that particular subdivision, but you have to take into account for the fact that its location is not like in brand new, it's in the existing subdivision. So you have to look at it from that aspect as well. So on the price per square foot, then, which is not what the method that we're using.

Mike Mills (Host) | 00:19:17 to 00:19:40

You were talking today about, I guess it was a half and a third. Yeah. So I had an amazing friend of mine and instructor Candy Cook, she's an appraiser and a broker, I'll give her a shout out. So anyway, she taught me the half to one third rule. And basically it says if you are doing things in bulk, you can't give it dollar for dollar.

Lori Solecki (Guest) | 00:19:40 to 00:19:51

So we use the example. If you buy a can of Coke, it's a dollar. If you go to a dollar store, it's a dollar and quarter now, but it's a dollar. And if you buy a 24 pack, that doesn't mean it's going to be $24. Right.

Lori Solecki (Guest) | 00:19:51 to 00:20:04

So why is that? Because you're buying in bulk. And so it's the same with square footage. You have to adjust half to one third for square footage. So that $100 is not going to be $100 per square foot.

Lori Solecki (Guest) | 00:20:04 to 00:20:22

It's going to be 50 to maybe 33. Does that make sense? And depending on the neighborhood you're in, that may be what number you use. You may use the half or the one third, or you may just kind of move it in the middle between the two. So I think that that's kind of something that you have to consider.

Lori Solecki (Guest) | 00:20:22 to 00:20:35

You're not going to give full dollar for dollar. It's just like upgrades. I paid $65,000 for this new pool. Right. They're not going to give you yeah, it's ten years ago, so they're not going to give you 65.

Lori Solecki (Guest) | 00:20:35 to 00:20:48

They're not going to give you 45. Right. And so I hope you enjoyed it. Yes. And those are harsh conversations to have with your seller and your client, but it is what it is, and we don't control that.

Lori Solecki (Guest) | 00:20:48 to 00:21:11

We do not control the market. The market controls what goes on, and buyers control the market. Well, and you mentioned in the class, too, you talked about how when we were going through the whole your spreadsheet on not spreadsheet, but your breakdown of how we were costing everything out with the half in the third or whatnot, and I think one of the comments in the class was, well, that's not the only thing. That's not the only way you do it. Price is not the only thing.

Mike Mills (Host) | 00:21:11 to 00:21:26

Yeah, of course not. No, it's not the only thing. There's adjustments that have to be made, but you have to start somewhere. And I think the biggest challenge that listing agents have right now, more often than not, is that they run into an issue where they go into especially new agents. Right.

Mike Mills (Host) | 00:21:26 to 00:21:49

You show up to someone's house and you do a little bit of homework ahead of time. Hopefully. Hopefully you do a lot of homework, but some do less than more than others. But then you're going to walk in the door and I don't know what the percentage is, but I'm assuming it's in the people that you're walking. They think their house is going to be worth ten to 15% more than what you're about to tell them.

Mike Mills (Host) | 00:21:49 to 00:22:00

Right. Depending on the market. In that circumstance, you have to overcome that preconceived notion, because that's their home. That's where they live. That's where they raise emotional context to them.

Mike Mills (Host) | 00:22:01 to 00:22:15

It's a very personal transaction. Very personal. So when you come in and tell someone their house is not worth what they think it is, and you don't do it in a very kind and gentle and easy way, then you're going to get pushback. And that's why the data is so important. Right?

Lori Solecki (Guest) | 00:22:15 to 00:22:19

Yes. Presenting the data makes a big difference. Exactly. The numbers don't lie. Right.

Lori Solecki (Guest) | 00:22:19 to 00:22:47

I mean, the numbers are what the numbers are, and you have to kind of explain to them as well. There are many pieces to this transaction for me to get you from here to your next home. And part of that is there are many players in this transaction. We have to find a willing, able buyer. Then we have to go through an appraiser, and the appraiser is going to make sure that the house values what the lender is willing to lend to the ready, willing and able buyer.

Lori Solecki (Guest) | 00:22:47 to 00:23:07

Right. And so we have to convince all these people along the way, right? Yeah. Well, and I use that a lot because, again, one of the things as a lender, the agent will call me and says it's usually a newer one. They'll say something along the lines of, well, the buyer is willing to pay this price, so why can't it be sold for that?

Mike Mills (Host) | 00:23:07 to 00:23:26

And I was like, well, if the buyer had $350,000 in cash, they can buy it for whatever they want. Nobody cares. Exactly. However, in this instance, you have a third party that's involved, which is the lender. And so the lender needs to be sure that the value of which the buyer is wanting to pay for it, that it holds that value, and that's why the appraisal is necessary.

Mike Mills (Host) | 00:23:26 to 00:24:00

Now, again, if I wanted to sell you my shoes and you wanted to pay $100,000 for them, hey, you can do it all day long if you got cash. Yeah. But if you're going to borrow money from your mom, she's probably going to be like so you have to take those factors into consideration. And the only thing that I would say sometimes from when if agents are upset with lenders, not they don't get upset, but we get to be the sounding board for their frustration is we all want this deal to close. Yeah.

Mike Mills (Host) | 00:24:00 to 00:24:12

I want it to come in overvalue. Like, I'm not trying to bring it down, but I have to deal with this other human being that doesn't feel the same way that you do. Right. And we all have to play well together, guys. We have to play well together.

Lori Solecki (Guest) | 00:24:12 to 00:24:38

And I think that's the hard thing is we're all looking from a different lens. And therein lies the problem. Therein lies the problem. So if we could look through the eyes of the appraiser, if we could look through the eyes of the lender, if we can understand everybody's side, you're going to have a better opportunity for a transaction and hopefully you'll have better pricing. So you're not going to have these issues come up right.

Mike Mills (Host) | 00:24:38 to 00:25:06

Because you're preparing ahead of time going so speaking of that, you listed off a few software tools that you use or that are available to agents. Can you kind of walk through a few of those and tell me about which ones I think you mentioned like Cloud CMA and what was the other one? Right. So there's a plethora of opportunities for agents to use as far as reporting system to share with their clients regarding price. There's cloud CMA, which is very informative.

Lori Solecki (Guest) | 00:25:06 to 00:25:21

It kind of allows you to have a little bit of a resume with you plus all the information for the comps that you use and then a little four week plan. Me, I prefer RPR. Okay. Love RPR. Realtor property resource.

Lori Solecki (Guest) | 00:25:21 to 00:25:44

And the valuation model. For RPR does exactly what we did in the class with a touch of a button, no math required. And that's good for Lori, but you need to understand what you're doing. Yes, absolutely. But I think that it's not always just the report type that you use it's can you explain how you got there?

Lori Solecki (Guest) | 00:25:45 to 00:25:55

And that's the key thing, is to help the client understand. Listen, I get what you're saying. I'm your partner. I understand that. I'm on your side.

Lori Solecki (Guest) | 00:25:55 to 00:26:11

But here's the reality of the situation, and I would love to get you a million dollars all day long, and if I could, I would. But be great. It's not going to happen. Well, and it's hard. I think that one of the things that comes up a lot with especially listing agents.

Mike Mills (Host) | 00:26:11 to 00:26:23

Right. Because when you're the listing agent, you are the most expensive piece of that person selling their home. Right, true. And the agents in general, like, as a buyer, they're like, yeah, whatever, I don't care. I don't have to pay for them.

Mike Mills (Host) | 00:26:23 to 00:26:40

Right, but as the listing agent, you're kind of setting the stage for the buyer's agent and yourself to some extent, because the seller is about to shell out 6% of their home's value back. Whatever you charge. There's no standard, guys. There's no standard whatever you charge. But we don't want to devalue yourself if you don't have to.

Mike Mills (Host) | 00:26:40 to 00:26:59

But that's where I'm going, is that in order for you to establish why you're the expert, why you understand where the pricing should be? You don't necessarily just because you go in and say, hey, I think you should sell your house for 350 and you go through all the details. You may still list it for 365. Because sometimes they want to try it. Yeah, let's give it a go.

Mike Mills (Host) | 00:26:59 to 00:27:16

And you can give all the reasons why and you can tell them whatever, but at the end of the day, it's their decision. Ultimately, you're their advice. That's correct. But presenting that information and like you said, understanding what's there, that creates the value for what you're offering to the transaction. Right, totally.

Lori Solecki (Guest) | 00:27:16 to 00:27:36

And that's why I really like that 1004 MC report. And, folks, you can get all these on nettress, so this is available at your fingertips. There's nothing I'm paying for or anything like that. It's all free with your memberships. But the 1004 MC report, that absorption that absorption data, is that the one.

Mike Mills (Host) | 00:27:36 to 00:27:47

That you showed today with the three. Over, like, the six months? Oh, yeah, that one was great. Yeah. And I think that kind of helps you to see a trend line, because here's the thing.

Lori Solecki (Guest) | 00:27:47 to 00:28:06

Appraisers don't have the flexibility that we do. Okay? So what I mean by that is they have to go on cold, hard data. That's it. So, like, us, we're working out in the marketplace and we're going, man, we're getting multiple offers, we're getting over list, 50 grand at the time.

Lori Solecki (Guest) | 00:28:06 to 00:28:39

5100 grand over list, and we're seeing this over and over and over again. Look, appraiser properties are climbing. Now, the appraiser can go, Well, I appreciate that, but I have to look at cold, hard past data and the data is not showing that. So here's the thing. The trend line, the 1004 MC can help to kind of substantiate if the appraiser wants to step out in faith, if you will, and say, hey, I'm going to go ahead and allow a little bit of increment because we see this trending happening.

Mike Mills (Host) | 00:28:39 to 00:28:51

Yes. Right. Yes. And so we see that people are paying 103% over list. We see that they're coming this much down on price, or they're not, or they're going over or whatever.

Lori Solecki (Guest) | 00:28:51 to 00:29:14

So it allows them to kind of have a tool. It also allows us as realtors to have a tool to talk to our clients and people that are wondering what's the market doing. Well, that report that you showed, I'd never seen that before, and obviously my wife's a realtor, but I don't see everybody else's. I don't know that people that agents. Are aware of that very they're not.

Mike Mills (Host) | 00:29:14 to 00:29:33

Because when I saw that, I was like, there's so much data in just that one page that you can help especially it was really apropos for now, because we've been in this market for the last twelve months because that's what it runs like. A twelve month. Yes, it's a year list. It's broken into three columns and there's four months. Four months.

Mike Mills (Host) | 00:29:33 to 00:29:46

Four months. Well, it was perfect because, well, it's. The last 90 and then the prior 90 and then the six. Okay, so there you go. That previous six months, that was the first column, right?

Mike Mills (Host) | 00:29:46 to 00:29:56

We were in this environment where as a market, now we were doing Mansfield, so every market is a little different, but as a market, you could see that the time on market was longer.

Mike Mills (Host) | 00:29:59 to 00:30:37

The number of homes available had kind of gone up a little bit, but that was in that window of time where interest rates were at 8% and they had just gone to 8%. So it wasn't like you had a year of everybody being okay with the fact that now we're at seven, this was, hey, we're at eight, and everybody just slams on the brakes, right? And you can see in the numbers, you could tell with the median price and that it was all there. Well, then you move to the next three months, right, the previous 90 days, and that trend starts to change. The values go up a little bit, the time on market comes down a little bit, there's a little bit of an adjustment because now you can start to see people getting more comfortable with where it is.

Mike Mills (Host) | 00:30:37 to 00:30:51

And you have to sell your home. Sometimes you got to move school districts or you get another job. Like you don't have a choice. And then we got to this period of time. And the biggest key on that one was the value starting to go up.

Mike Mills (Host) | 00:30:51 to 00:31:05

So when you're talking to even as a buyer's agent, I would find that because I would go, look, hey, if you're trying to go in under list yes. Right? You're going to lowball, it ain't not going to work. Pins on the house, obviously. Right?

Mike Mills (Host) | 00:31:05 to 00:31:14

But that is such good data to present to people, because you just saying as well, hey, I'm the realtor. This is what you pay me for. Exactly. They're like, Prove it. They're like, okay, great.

Mike Mills (Host) | 00:31:14 to 00:31:22

Yeah, there's 8 million realtors out there. You know what I mean? But when you say, hey, look, here's where I'm getting my data. Here's where it's coming from. They're like, okay, wow, she knows what she's talking about.

Mike Mills (Host) | 00:31:22 to 00:31:39

So we need to listen to her and do what she says. Because I think so many agents spin their wheels constantly on. And I know because I talked to all time of this buyer, they've got to make four offers under price before they'll go in and do what I tell them to do. But if you give them that data, it helps, right? Yes, totally.

Lori Solecki (Guest) | 00:31:39 to 00:31:57

Because then they're like, well, I didn't even know about this. I didn't know that was available. And I was like, well, the good news is this is a good time to buy. Because if you bought like, nine months prior, you'd be paying 106% over list, so you're not going to have to do that now. Maybe, but here's what the data is showing me.

Mike Mills (Host) | 00:31:57 to 00:32:07

It's just good at setting expectations. And I think absolutely, that's our entire job, right? Yes. To set expectations is our entire job. So Marianne wants to know again, 104 NC, that's what it's called, right?

Lori Solecki (Guest) | 00:32:07 to 00:32:29

1004 m as in Mary, c as in Cotrell. Okay, there you go. And then where do you find it? You find it on the reports. So, like, if you go in and you click all in the MLS, you're going to click all of the properties, and then you go to results, and then you go to print then under.

Mike Mills (Host) | 00:32:29 to 00:32:42

The not printing paper, by the way. Yeah, you don't print the paper out. Don't print all those out. But at the print mode, at the bottom, it'll have all the different types of print modes you can do. But then at the bottom it'll say, print a PDF.

Mike Mills (Host) | 00:32:42 to 00:32:56

Yes. And then it'll say ten four M-C-M as in Mary, C as in cat. No, that report, I think that's a helpful report for buyer agents. It's a helpful report for sellers agents. It's good to have an open house.

Mike Mills (Host) | 00:32:56 to 00:33:10

Yes. Because we're nondisclosure state, so don't do that quick CMA, where you're showing everybody what property sold for. You're not supposed to do that. But this will give you an opportunity to talk with them too, because they'll go, what does this mean? What is all this?

Lori Solecki (Guest) | 00:33:10 to 00:33:19

And so now you can kind of explain it a little bit, right, and it tells you what kind of market you're in. Too. Yes, that's what I like. And you're creating. I don't even think the open house thing is brilliant, too.

Mike Mills (Host) | 00:33:20 to 00:33:30

Why would you not have that at your exactly. Right. Exactly what you're trying to do when someone walks in the door, what's the goal of the open house is to communicate. Communicate, exactly. Maybe find a buyer or find a seller or whatever.

Lori Solecki (Guest) | 00:33:30 to 00:33:37

Right. And so if you have data and you have and you understand it, right. You got to understand it. Guys, what does this mean? I don't know.

Lori Solecki (Guest) | 00:33:41 to 00:33:59

Okay, things are going up and down. Yes. So you mentioned something earlier about with using your tools that you have available. Right. So we've got the 1004 MC, we've got the software programs.

Mike Mills (Host) | 00:34:00 to 00:34:32

What else do you feel like is a good resource for agents to be able to find to really kind of put that data together? Because again, the more information you have, the more knowledge you have, the more you create your own value. So what else is available out there that kind of helps drive those? So for me, I always just use the tools that I have provided with my membership, and so I use MLS, obviously, multiple listing service for the layperson that's out there. That's our agent network, where we house all of our potential data for availables, pendings and closed sold houses.

Lori Solecki (Guest) | 00:34:32 to 00:34:59

So the MLS, and then of course, RPR, those are kind of my two big go to. Now, you also said too, I had written this down during the class too, and I don't think this has done enough either, is you talked about the importance of previewing homes. Okay, so talk a little bit about that because you kind of glanced on it a little bit in the class, but it was one of the very first things that you brought up, and it really stuck in my head because I was like, I don't know that enough agents do that. What's the benefits of that? Yeah.

Lori Solecki (Guest) | 00:34:59 to 00:35:23

So I remember again, I'm going to go back in the day, we used to preview every Tuesday. We got in caravans and we went out and looked at listings. And the trainer that I had at the time was really good because she had the MLS sheet, but she would not show it to us. And she'd be like, okay, guys, and I tell you, if you watch selling Sunset, you can do this too. I laugh every time I watch that.

Lori Solecki (Guest) | 00:35:23 to 00:35:48

But what she would do is she'd say, okay, look at the house here's, these specs, what do you think it should sell for? Like, what do you think it should list for? And you get to where you get pricing, you can start going, yeah, it should be that price, that's price range it should be in. Why? Because you know your market, you know what houses are selling for with these amenities, you know what in that price range, what people expect.

Lori Solecki (Guest) | 00:35:49 to 00:36:10

And if your house is lacking, you need to tell people your house is nice and it's clean, but it's lacking. And what buyers are looking for, if your house excels, you can let them know, too. The good thing is this will probably sell fast because you have the things buyers are looking for. But if you're not looking and here's the thing. I know a lot of agents are like, well, I look on the MLS every day.

Lori Solecki (Guest) | 00:36:10 to 00:36:18

I look at the pictures. Okay, can we talk pictures? I mean, pictures do not do it justice. You don't know what it smells like. You don't know.

Mike Mills (Host) | 00:36:18 to 00:36:30

You believe everything you see on the Internet. Everything on the Internet is true, right? We talked about that today. So I think that agents, I know your guys are super busy, and my heart goes out to you. I get it.

Mike Mills (Host) | 00:36:30 to 00:36:39

I mean, are they right? Now, I'm going to be hopeful and say, hey, I bet you're really super busy. But you know what? Guess what? Every weekend, we have open house.

Mike Mills (Host) | 00:36:39 to 00:37:02

Yes. And I guarantee you cannot drive down a street where you don't see an open house sign. Pop in. Yes, pop in. And that way, when I had a top producer in my first office, and she was crazy, but she got a lot of business, but what she would do is we might go have lunch, and she would listen to somebody talking about, hey, I'm trying to find a house, and she would just buddy in.

Lori Solecki (Guest) | 00:37:02 to 00:37:28

I was like, oh, my God. And she'd say, I'm sorry I was eavesdropping, but I'm a local top producer, and actually, what you're telling me, I just saw a house last week that would fit the need, and if you have time, I'll be glad to go show it. And she would go and show and sell it. And so here's the thing. If you don't have that knowledge, you're not going to be I'm not telling you to eavesdrop, but you won't be able to have that authority to say, have I got the house for you?

Lori Solecki (Guest) | 00:37:28 to 00:37:51

Right? Well and I think not only do you get the knowledge base, but I say this all the time about if you want to sell more homes or you want to do more loans or whatever, you have to go out amongst the people. You've got to do things. You can't sit at your home. And I think this has happened within the last couple of years, and this isn't an indictment of anybody.

Mike Mills (Host) | 00:37:51 to 00:38:15

This is just what it is, because I've been guilty of it myself, is we have a lot of part time agents, right? We have people that came into the business that whether they're self employed people or they're stay at home parents or whatever the case may be, they've come into the business, and it's not a full time gig for them necessarily. Right? Yeah. But they made a lot of money over the last couple of years, and now that money is cut back, and they're like, what's going on?

Mike Mills (Host) | 00:38:15 to 00:38:31

And it's like, well, you find time to go get the groceries or clean the house or mow the yard or whatever it is that you need to do. Like, you're working. You're working, but not on your business. But not on your business. Right.

Mike Mills (Host) | 00:38:31 to 00:39:07

And it's like, if you want to go get more business, you have to go out and you've got to do things. And I always say it's amazing, whether you want to call it God or karma, the universe or whatever, is when you're doing real estate related activities, whatever that is, going to classes, going to previewing homes, going to open houses, it's a magical thing that business just kind of shows up. Have you had that experience? Yeah, I think and they talk about the law of attraction and what you think about, you bring about if you put out things into the world, it is going to have a point of return. You get an ROI return on investment.

Lori Solecki (Guest) | 00:39:07 to 00:39:17

And I think yes. When you're out there doing real estate things, if you're going and you drive down a street, there's a first sale by owner. Don't just take the number. Get out. Get out.

Lori Solecki (Guest) | 00:39:17 to 00:39:25

Knock on the door. Hey, I'm a local realtor. What can I do to help you? So I think that those things are important. You've got to be in your business.

Lori Solecki (Guest) | 00:39:25 to 00:39:43

But a side note on that is this. We see this happen a lot. Like, people get into the business when the business is thriving, and then it kind of stabilizes. Well, then they go, oh, my gosh, it ebbs and flows. And then we have a lot of people drop out.

Lori Solecki (Guest) | 00:39:43 to 00:39:48

Yes. And that's okay. No, it's not a bad thing. Not a bad thing. Calling the herd.

Lori Solecki (Guest) | 00:39:48 to 00:40:00

That's right. I call it thinning the herd. Yes. And it's true, because whenever you're out doing stuff and when you talk about the law of attraction, a lot of times people are like, oh, that's kind of woo woo. That's my favorite word.

Lori Solecki (Guest) | 00:40:00 to 00:40:08

Yeah. And I don't want to be woo woo. No, but I think the Lord blesses the Lord blesses activity. When you put it in terms. This is the best way I've heard it.

Mike Mills (Host) | 00:40:08 to 00:40:23

Explain, and I like to explain is a car. Right? If I go and I buy my new car, I've been wanting this new red shiny truck for months, and I can't wait to get one. I've got it. And now the first day I'm on the road driving my new red shiny truck, guess what I see?

Mike Mills (Host) | 00:40:23 to 00:40:36

1800 other red shiny trucks. Okay. Now, does that mean that everybody else on the planet went out and bought a red shiny truck the same day that you did? No, what it means is that now your eyes are particular activator. Yes.

Mike Mills (Host) | 00:40:36 to 00:41:08

Now you're open to it, and now you see it, and now you're going oh, so to your point, if you're doing real estate related activities and you're going to open houses and you're previewing homes and you're learning how to use the software and get better at doing your homework on listings. Then, for whatever reason, those opportunities start presenting themselves a little bit more. You hear the conversation with someone talking about the house that otherwise you didn't hear exactly because you were busy taking the kids to school or you were busy mowing your yard for six and a half hours. You know what I mean? Because you're open, you are open to what you're doing.

Lori Solecki (Guest) | 00:41:08 to 00:41:38

You're open to it. So what have you found is when it comes to appraisal specifically again, what do you think the biggest disconnect between the appraiser and the realtor is when it comes to these valuations? If you were to tell somebody here's the one thing that you need to make sure that you focus on where do you think the biggest disconnect comes into play? I think the reality of what brings value okay. That I think is the biggest disconnect because like I said, people get emotional about their property.

Lori Solecki (Guest) | 00:41:38 to 00:42:01

Buyers buy under emotion realtors. They are involved in emotion as well. When you go out to talk to someone about putting their property on the market and you have the seller telling you oh, we've spent all this money, we've done all these things and you're kind of going OOH and all with them, right. You're empathizing with them. What happens is that cash register begins to ching, right?

Lori Solecki (Guest) | 00:42:01 to 00:42:19

And so then it's like oh, and I think it should be this price but that's okay, hold your ground because numbers are numbers. But I think that that kind of is what happens. The appraiser comes in, the appraiser is not going to OOH an awe, right. The appraiser is going to go yes, it's got a floor. Yes, it's got a sink.

Lori Solecki (Guest) | 00:42:19 to 00:42:36

Yep, it's got you know, got a roof. Good for them, you know. I mean they're not going to be like oh wow, this is like Silstone or this is quartz or this is I mean they might because this looks better than the other house. But again, it's not going to be dollar for dollar. Always remember that.

Lori Solecki (Guest) | 00:42:36 to 00:43:16

But I think that sometimes we get over emotional about what the house has and appraisers, they're not just data, they're just not going to get excited about it. And I think that's what happens. Well, I think that they should give more money because they have yeah, they have this and that's the thing appraisers have to look at it from they are very strict. Yes, the rules they have are way strict and we realtors need to empathize with that and understand we have the luxury of kind of going wherever we want. But when the bottom line comes down to it, they have to abide by the rules.

Mike Mills (Host) | 00:43:16 to 00:43:38

One of my favorite commercials, my Super Bowl commercials, it applies to this. I bring this up all the time. I probably said it on this a couple of times, but I don't know if you remember, it was a Career Builder commercial, and this was probably back in maybe early 2000s, late ninety s. And Career Builder was like the employer monster.com kind of a thing. And there's a room full of chimpanzees, right?

Mike Mills (Host) | 00:43:38 to 00:43:56

And they're all in suits. It's like a boardroom, right? And they're just going bananas and doing backflips and celebrating or whatever. And there's a chart on this little three stanchion thing, and the chart is just the arrows just going straight up, and everybody's like and then, like, the one human being in the room who would be the appraiser in this circumstance. There you go.

Mike Mills (Host) | 00:43:56 to 00:44:07

He comes over the chart, and he turns it, and now the arrow is going down. And then you see all these chimps like, look around, like, what just happened? There's no way. This is crazy. Who's this guy?

Mike Mills (Host) | 00:44:07 to 00:44:19

Why did he just ruin our fun? And then one other walks over and he flips it back up again, and they're all like, yeah, let's go. That's a great analogy. That's kind of what happens with us. You need to add that to your presentation.

Mike Mills (Host) | 00:44:19 to 00:44:33

I'm going to make a meme for you, and I'm going to send it. To you so you can add it perfect. Because that's what it is. It's like you put it perfectly. You're sitting in the kitchen with this seller, right, and they're telling you about their story.

Mike Mills (Host) | 00:44:33 to 00:44:48

And this is what I did to the house, and this is how I improved it. And me and my son put in these flooring, and we put our blood, sweat and tears into it, and we built a new fence and blah, blah, blah. And then you get sucked into that because you're a human being, right? You're like, yeah, you're right. That is a busy street.

Mike Mills (Host) | 00:44:49 to 00:44:58

That neighbor is loud back there. He's a great neighbor or whatever. And so you get sucked into that. And so because you're there, you're both like, yeah, it is. Actually, you know what?

Mike Mills (Host) | 00:44:58 to 00:45:05

You're right. This should be worth more than these numbers. Throw these out the window. Who cares? And then the appraiser shows up and.

Lori Solecki (Guest) | 00:45:05 to 00:45:07

The appraiser brings reality.

Lori Solecki (Guest) | 00:45:09 to 00:45:30

I think that's one thing I would just share, is be honest and hold your ground. Because you know what the numbers say. And yeah, you can try it. Like you said, it's their right to our responsibility is Article 116. It says, we will never mislead you on market price, right?

Lori Solecki (Guest) | 00:45:30 to 00:45:40

Not 116. I think it's one four, but anyway, it may be one three. I'm sorry, don't quote me on that. No, you're gonna we're gonna make we're. Knocking on my sugar's low.

Mike Mills (Host) | 00:45:40 to 00:46:00

Yes. We're knocking off points we're not going to fake points. But anyway, it says that I will never mislead you on market price, right? So that's our job is never to skew numbers and tell them the wrong numbers. But it is their job to decide, am I going to be in agreement with Lori or am I going to ask Lori to put it higher or lower?

Lori Solecki (Guest) | 00:46:00 to 00:46:16

And then Lori has to make a big business decision what she's willing to do, right? And that's another thing. Realtors need to I'm going to get on my soapbox just for 1 second. Soap it up, let's go. So Realtors, you guys need to remember, when you take a listing, it is an investment, okay?

Lori Solecki (Guest) | 00:46:17 to 00:46:38

And sellers need to understand this as well. So I'm talking to the consumer too. When Realtors sign the dotted line and we agree to put your property on the market, we are investing our own money into something that has not transpired yet, right? I always laugh and say, I'm writing hot checks on your house, right? It's not true.

Lori Solecki (Guest) | 00:46:38 to 00:46:56

But I am spending money drone footage, right? I'm paying for pictures, signs, I'm paying to market it. I'm paying for all the things that I have to pay for to put it wherever I have to put it. And that is money I'm spending and investing in hopes that I will sell your property. Yes.

Lori Solecki (Guest) | 00:46:56 to 00:47:10

Okay. So I am stepping out in faith and partnering with you Monetarily, as well as time. And so guys, we have to make a business decision. And is this the right business decision for me? It has nothing to do with you personally.

Lori Solecki (Guest) | 00:47:10 to 00:47:23

I always say this is not personal. I have to make a business decision. Right? I love you to death, but I'm just not your girl. And on the business decision front, we always say in our business, you got to know when to punt.

Lori Solecki (Guest) | 00:47:23 to 00:47:52

Right. Because sometimes the idea of the transaction and the promise of commission is going to damage you in the long run versus realizing up front that sometimes you come across some people, not all the time, that you're not going to win, right? Like, you're just going to lose. And so if you've presented all your data and you've given all the information, you've provided everything you could and you know, because you're the expert, right? You've done the research.

Lori Solecki (Guest) | 00:47:52 to 00:48:05

Exactly. Dug into the numbers, and there's a balance. There is, hey, let's list it where you think, but here's where I'm at, there's that. But then if you get that person, it's like, no, this is what it is, this is what it's going to sell for. You're never going to make that person happy.

Lori Solecki (Guest) | 00:48:05 to 00:48:20

Right? And so you have to be able to look at that situation and go, okay, on this one, I'm going to bow out. And I've had a lot of really experienced agents tell me before that they've done that and they've said, I'm not. Going to list your house. I have said that, too.

Lori Solecki (Guest) | 00:48:20 to 00:48:26

I appreciate your time. Thank you so much. I wish you guys the best. Yes. But I can tell I am just not going to be the one for you, and that's okay.

Lori Solecki (Guest) | 00:48:26 to 00:48:42

I wish you the best. But a good portion, not a good portion, maybe half, because some ego is a hard thing to get over, but not as realtors, but as the seller, but a good amount more than you would think. Either come back and say, okay, yeah. And I write that, too. You were right.

Mike Mills (Host) | 00:48:42 to 00:48:50

All right, let me do it. You knew what you were talking about. And people, it's amazing how well that works, because when you tell somebody, hey, look, I don't want to work with. You, they go, Why not? Wait a minute.

Mike Mills (Host) | 00:48:50 to 00:48:57

You're going to make money. You don't want to make money. And you're like, no, not that way. Hey, I'm not making money. I'm investing money.

Lori Solecki (Guest) | 00:48:57 to 00:49:09

And that's going to be because you're. Going to hate me at the end of this, and I'm going to spend a bunch of money to try to get what I want. I'm not going to do that. And so it's not a bad thing to say, hey, look, here's all the data. If you don't want to follow my advice, I completely understand.

Mike Mills (Host) | 00:49:09 to 00:49:14

It's your home. Home. But I'm going to have to bow out at this point. Exactly. And you get a lot of benefit from that, too.

Lori Solecki (Guest) | 00:49:14 to 00:49:43

Yeah, here's something else, too, is that we as a profession have to never, ever discount the responsibility we have to our clients. Yes. Because I always say this in class, too. We are the catalyst between their dreams. Like, we are the deciding factor, whether they get to make that relocation move, whether they get that wealth building property, whether they get to downsize, or they get an extra room for that new addition to the family.

Lori Solecki (Guest) | 00:49:43 to 00:49:56

We are the catalyst. And if we get it wrong, we ruin their dream. You know what I mean? And so that is a big responsibility and we should never, ever forget that and never discount that. Yeah, you carry a lot of weight.

Lori Solecki (Guest) | 00:49:56 to 00:50:13

We do. And we joke on our side of the deal sometimes that everybody's crazy and upset and it is the case, but that's because it's such a personal transaction, right? This is your home or this is the home you're going to put your family into. This isn't business to business or B to B. Exactly.

Lori Solecki (Guest) | 00:50:13 to 00:50:36

It's not a commodity. That's what I was telling you about that podcast I heard earlier with Lee Brown. And we're not a commodity, folks, but people try to make it as a commodity, but real estate is not. Since you brought that up, tell me a little bit about because you told me this story before and I'm glad you said that about what the GSEs are doing now when it comes to evaluating. Appraisals and what you learned.

Lori Solecki (Guest) | 00:50:36 to 00:51:03

Okay, so Lee Brown is a real estate broker. She's up in the South Carolina area. She has a podcast, and she's on YouTube. And I would encourage you guys to listen to that as well. But she had an appraiser on there, and they were talking about some concerns they have with where the appraisal is moving to, because people you have companies that are tech involved, and tech always wants to get in our pocket.

Lori Solecki (Guest) | 00:51:03 to 00:51:21

And with real estate being billions of dollars every year, everybody wants a piece of the pie. I'm not against tech. Please don't think I'm anti tech. I'm not. But one thing that's been going on is the GSEs, the Fannie Mae, the Fredie Mac on the appraisal end.

Lori Solecki (Guest) | 00:51:21 to 00:51:40

Basically, they are having someone that is not licensed that you don't know who they are. They're not vetted. They come into your house. They have a little tech tool to measure, and they give a measurement, and then they can also call out repairs. Now, who are they to call out repairs?

Lori Solecki (Guest) | 00:51:40 to 00:51:48

Right. No license, no nothing. What are you thinking? And so this is really becoming problematic. It's a danger for the seller.

Lori Solecki (Guest) | 00:51:48 to 00:52:09

Does the seller know that just Joe Blow is coming into the house? In fact, there was one situation where the guy came in to measure, and he was getting ready to be sentenced to a felony going into jail, but he was out for the week, so he decides he's going to go in and measure that he's doing a little work release plan. Hey, I'm glad I'm here. I got a week left. That's kind of scary.

Lori Solecki (Guest) | 00:52:10 to 00:52:34

And that kind of thing needs to really be evaluated. They should at least have a license to do that. But it's all in the name of the almighty dollar. Where is it going to cut cost for me? And so one thing that she pointed out to is your buyers have the right to ask for a certified, licensed appraiser only, and it doesn't cost you any more for the appraisal.

Lori Solecki (Guest) | 00:52:34 to 00:52:49

It's the same amount. So I would encourage people start doing that. Have your buyer ask for a certified appraiser to go out, uncheck the box. That's right. So they have to call you, and then you can say, hey, are you.

Lori Solecki (Guest) | 00:52:49 to 00:53:22

Going to send a certified appraiser, or are you going to send some underlink yes. That doesn't know his tail from a hole in the ground? Well, and that is happening, and it's been kind of an underreported or a little lesser understood situation that's been going on with appraisals for a little while. I mean, I would say, man, at least five to seven years. I've been in the business for almost 13 years, and it's been about half the time that I've been in here is we have a tool, which I brought up today, that every lender has access to if you do conventional loans, and it's called collateral underwriter.

Mike Mills (Host) | 00:53:22 to 00:53:53

And collateral underwriter is just an algorithmic tool that pulls data, public data, or I'm sorry, it does pull actual private data because you're getting into the you have Fannie's database and Freddie's database. Right. So you have an appraisal database now. So they're pulling that data in and they're giving a risk score, and the risk score is going to be anywhere between one to five, one being very low risk, five being very high risk. And so as a lender, we don't have to run it through collateral, but.

Lori Solecki (Guest) | 00:53:53 to 00:54:06

Most lenders do just as a prerequisite. Correct. Because what you don't want to happen is you don't want to then sell that loan to Fanny or Freddie or another investor or whatever, and then them come back and go, well, this appraisal is way out of whack. You know what I mean? Yeah.

Mike Mills (Host) | 00:54:06 to 00:54:34

So lenders are covering themselves because they will come back and say, hey, there's something wrong with this appraisal. We need to understand why you didn't ask these questions, or whatever. So they'll run this in the background. You may not even be aware of it because it's just something that lenders will do, but it's also a tool that agents can use to combat issues with the appraisal. So if you are undervalue, if you come in I had one the other day that I think I told you it came in $4,000 under on a $415,000 house.

Lori Solecki (Guest) | 00:54:34 to 00:54:44

Exactly. Really? Come on. But you can fight it and go, okay, in that particular instance, it was a one it had a one rating score on it. Very low risk.

Mike Mills (Host) | 00:54:44 to 00:54:59

Very low risk. Which means that, okay, there's probably room that we could go up here. What can we use? And what that report will give you is it'll give you 25 comps, 30 comps, depending on the area. Now, it ranks them in order of, hey, here's what we think is the best, and here's at the bottom.

Lori Solecki (Guest) | 00:54:59 to 00:55:10

Right. But what it also does is it ranks the comps that the appraiser used. So if you run that report and the top three comps that it lists are the same ones that the appraiser. Lists, you're pretty much on board. Yeah.

Mike Mills (Host) | 00:55:10 to 00:55:28

There's not much you can do, but if you've got 15 in between of their number one to their number two. You might have kind of like come you didn't use these. Exactly. Now, one thing we talked about earlier, we talked about combating the appraisal. So you get it in and it's low, and you want to try to combat that.

Lori Solecki (Guest) | 00:55:28 to 00:55:41

One thing that I had Candy tell me is, like, when you do that, just be aware that you basically are telling the appraiser, you're dumb, you didn't do your job. Right. That's exactly right. And nobody wants to hear that. Nobody wants to be that person.

Lori Solecki (Guest) | 00:55:42 to 00:55:58

Right. No. So one thing you want to make sure of is you do have really good information, like look and see were your comps the same. And are they really valid comps? Like you said, if you send me a price per square foot, people are going to we're throwing that out.

Mike Mills (Host) | 00:55:58 to 00:56:09

That's not even I won't forward that to the appraiser because I know all you're going to do is make them mad. Exactly. Even if you had a point, even if you had a valid argument, we're not going to win the argument that way. Exactly. Because it's still subjective.

Mike Mills (Host) | 00:56:09 to 00:56:19

They can do whatever they want to do. Yeah, and that's the thing. The appraiser is the final say, and so he has the final word. So why would you upset him? Don't upset the appraiser.

Lori Solecki (Guest) | 00:56:19 to 00:56:30

Don't poke the bear. You got to present the data in a way that you're going to help. Because, again, as a lender, I'm on your side. I want this to come back. I don't want this torpedo the deal, but we have to present facts.

Mike Mills (Host) | 00:56:31 to 00:56:57

And if you give me the 1004 MC and then you also provide your comps and how you came up with the values, and I can give hard data to say, hey, here's what it is. But you know what happens more often than not on those type of situations is when I do actually have an agent that's like, all right, let me dig into this. Let me figure out they will come back and go, yeah, I think we just overpriced it a little bit. There you go.

Mike Mills (Host) | 00:57:00 to 00:57:20

The agents that I work with that really put their time into figuring and I know this happens with every body, right? You've been in the business for 15 years or 20 years or 30 years or whatever it is, and you see this house, you're like, oh, I know these comps. Yeah, this is what it is. Like, here we go, I got that. And maybe you do the data sometimes, but you feel pretty confident in your talents or whatever, and so you just get it out.

Mike Mills (Host) | 00:57:20 to 00:57:29

And then the appraisal comes in short. And then everybody's like, well, wait a minute, what happened? But you told me right now it's your fault. Exactly. And so then I give the appraisal, I'm like, hey, here's what I'm seeing.

Mike Mills (Host) | 00:57:29 to 00:57:39

And then, like I said, the really good ones, which I have, a lot of them will come back and go, no, you're right. He's right. Not me. He was right. And that's another thing, too, guys.

Lori Solecki (Guest) | 00:57:39 to 00:58:00

So remember this, your Real Estate License Act requires you give a CMA for buyers and sellers. It also requires your code of ethics requires you give a CMA in any case, don't just go, hey, I know this area. I'm so good, it's to be 525. So many rules. Why do we have too many damn rules?

Lori Solecki (Guest) | 00:58:00 to 00:58:34

Exactly. One other thing I want you to speak on, just because it happens, too, is this is the other thing that happens, and I have an answer for it, but I'd love to hear yours is they go, okay, I'm listing the house for 350, but we really know it's probably 375. But for whatever reason, whether I'm selling them to them a little bit less or I'm doing whatever, here's what it is. And then the appraiser comes back and the house is at 350, and they're like, Wait a minute, it should be more. Now, first off, it doesn't matter as far as the transaction is concerned because in the transaction, we just needed to hit value.

Lori Solecki (Guest) | 00:58:34 to 00:58:42

Exactly. They're not going to overvalue it. So why would they not do that? It just has to make value. And that's why.

Lori Solecki (Guest) | 00:58:42 to 00:58:53

Because they're like, okay, well, this is good. This is the number it needs to be. So they're not going to go and step out in faith and go, well, that should be four and a quarter, really? Or whatever. Or like you said, 375.

Lori Solecki (Guest) | 00:58:53 to 00:59:05

They're going to go ahead and just say, hey, it made value. This is what you're willing to lend, that's what they're willing to pay. And we're good. Yes, we're good. So you don't have to be offended because the house should have appraised for more.

Mike Mills (Host) | 00:59:05 to 00:59:12

It doesn't matter. You'd be happy that it appraised for what the offer price. Correct. That's what you need. That's what you need.

Mike Mills (Host) | 00:59:12 to 00:59:27

I always relate it back to incentives, and I try to explain that the appraiser does not have an incentive to give you more value. There's no incentive for them to do that now when they do, because it does happen sometimes. Yeah, I've had it happen. Yes, it does happen. It happens.

Mike Mills (Host) | 00:59:27 to 00:59:54

Not often, but I mean, one out of ten, maybe something like that. But when it does happen, I go out of my way to point out to the especially to the buyer, because I'm trying to help my agent out and be like, hey, your agent did a great job because the appraiser has no incentive to give you extra value. But they chose to. And the reason they chose to is because there's probably a lot more value that they could have given you. And they're kind of just saying, hey, I got to give something because I can't weigh underdo it.

Mike Mills (Host) | 00:59:54 to 01:00:15

I got to keep it within a range. That's why I was like, if you were going to turn around and sell this in six months, you'd probably be surprised what you get for it. Because if they're giving you the value when they don't have to, that means there's probably even more in there that they didn't include. I don't know if that's the case. Because they have to go by past data so they can't project the future.

Lori Solecki (Guest) | 01:00:15 to 01:00:38

Unfortunately, we tend to, because we're agents and we're out there and we see what's happening with trend, but they don't have that luxury, just FYI, no. Well, we're already in an hour. That went fast. I know it goes by quick, when you're just rambling and going you're talking. But I just want to say again today, going to that class, I was very impressed with your presentation and how you did it.

Mike Mills (Host) | 01:00:38 to 01:00:51

Because again, anybody that goes to ce classes, which in all of our industry, we all have to do it, it's a necessary evil. But it's so refreshing to have a class to go to. And really, I learned a ton today. Good. I really did.

Mike Mills (Host) | 01:00:51 to 01:01:15

And I was entertained just by the fact that your presentation and how you did the slides and everything, which I think is a big player there, and that's probably why you've been so successful, obviously, in the years. I mean, I'm showing up late to the game on your ability to teach a class, but it was awesome. And honestly, I recommend anybody. If you need Ce, go check out Lori's. Do you have, like, a website where you list your classes at Metro Tech?

Lori Solecki (Guest) | 01:01:15 to 01:01:25

I need to do that. I'm starting to do that. So give me time. Yes, I'm looking at doing that. But, yes, you can reach out to me at instructortoday@gmail.com.

Lori Solecki (Guest) | 01:01:25 to 01:01:44

Very easy to remember. And if you need a broker for any reason, if you're thinking of making a change, laurie is a broker. She's here in DFW. She has a wealth of knowledge. So those agents out there that maybe are not happy with the level of information that you're getting from your current situation I'm not encouraging people to leave or go.

Lori Solecki (Guest) | 01:01:44 to 01:02:00

I'm just saying, either you're not recruiting. Yeah. There's always situations where a better suited fit happens. You should definitely check her out, because the ability to have someone to pick up the phone and call and say, hey, what do I do in this situation? Hey, what do I do in this situation?

Mike Mills (Host) | 01:02:00 to 01:02:18

And there's been brokers that have been in the business for 30 years, 40 years, been doing a long time, but they don't know when you have to stand in front of a class of 30 agents or 50 agents and break down every single aspect of how to sell a home. I think you're going to have a little bit more wealth of knowledge. Would you agree? Thank you. And I'm happy to share.

Lori Solecki (Guest) | 01:02:18 to 01:02:30

Happy to share. Always. She's incredibly helpful. And I want to thank you again, because I said, like in my commercial today, you charge good money for this information, and we got it for free today, so I really appreciate it. Thank you so much having me.

Mike Mills (Host) | 01:02:30 to 01:02:39

Thanks for everybody for sticking around to the end. Again, if you want to reach out to Lori, we'll put her contact information. I'll tag her. She'll be on Facebook on this one, too. You can reach out to her that way.

Mike Mills (Host) | 01:02:39 to 01:02:47

Check her out on LinkedIn. She's got her profile up there. So if you guys have questions or want to check out one of her classes, I highly recommend it. Totally. Thanks for coming and hanging out with me today.

Mike Mills (Host) | 01:02:47 to 01:02:50

And we'll see everybody next week. Thank you. All right. Bye. Have a good one.

Lori Solecki (Guest) | 01:02:51 to 01:02:51

Bye.