Episode 27: Navigating Conflicts with Financial Advice Then Joined by Realtor Amy Patterson

Table of Contents

• Introduction
• Article Summary
• Fee-Based Advisor Discussion
• Social Security Claiming Behaviors
• Mortgages in Retirement
• Interview with Amy Patterson
• Closing

Madison: So, Amy, what are current trends you’re seeing in the real estate market?

Amy: Well, no one in the industry can figure out where all this cash has come from. More than 30% of the transactions last year were cash. That is a crazy stat. We used to, for close to 20 years, you were looking for a buyer that had 20% down, and if you had a buyer that had 20% down, you were solid. You knew you were going to get to the table, you knew it was going to happen. Since COVID, which that’s a whole nother podcast, quite frankly. Somehow people have found money and realized that the way to win is to either use cash, liquidate something that you have, or show cash. And that is something that I think is going to be sticking around for a while, especially since the interest rates are where they are. The people that have cash are not going to finance at 7.25 or whatever it is. They’re just not going to. It’s just not a good business decision for somebody who’s very financially savvy. They’d rather pay cash and figure something out down the road with balancing their portfolio.

Mike: I have a great question for you, though. Like, where are all these people with all this cash? I mean, how do they, how are there so many?

Amy: It’s your next door neighbor that you don’t know about. It’s the guy down the street. It’s, it’s the, the person at the grocery store that you’re passing judgment on, thinking they don’t have any money. It’s every, it’s everywhere. It’s, it’s sort of, um. It’s surprising. When you meet somebody and they say that they’re a cash buyer now, you know, in this particular area that we’re fortunate enough to live in, there are many savvy dual income people. You know, they worked hard. You know, the baby boomers. That’s what they did, they worked hard, they saved money. They were a little bit more frugal than, you know, some of the next generations to come. They didn’t have all the things that they would spend disposable income on, so they are more liquid. So a lot of those buyers are scaling down, let’s say they’re coming out of a, you know, 45, 5,000 square foot house and they’re looking for something let’s say in Lower Makefield, that’s, you know, 2,800. Because they just, they’re ready to scale down. They’re more than happy and willing and capable to show their portfolio. They might not at the end of the day. Now, during COVID people were showing their portfolio and they’re still doing this now, quite frankly, to win the offer. And then as soon as you go under contract, you would actually apply for a loan. So, you can get that loan and come to the table and do a finance transaction. If you couldn’t get the loan, for some reason, you’re under contract to pay cash. So you’d have to explain that risk to some folks who were willing to do that. Some have the stomach to do it, some don’t have the stomach to do it, depending on their job and so forth. Because during COVID there were a lot of jobs that were, that were kind of under the gun and people were losing hours and they were being let go and jobs were vulnerable. And quite frankly, they still are. So, you do have to look at, when you’re looking at offers, you do have to look at the buyers, you know, their employment and if they are in an industry that, you know, is kind of stable. And quite frankly, you know, the lenders always call a couple days prior to settlement to make sure they’re not doing any layoffs and so forth. However, it’s, you know, I worked with somebody recently who, you know, they inherited a bunch of money. You know, in an unfortunate situation. They didn’t intend to spend this money on purchasing a house. However, they thought it was the right thing to do, to just get themselves a place with their young family and then they can refinance, figure it out, kick some money back into, you know, investing somewhere. Maybe I can have a client for you. Who knows, Mike?

Mike: There you go. Good thinking, Amy.

Amy: Always trying. So it’s, it’s interesting, you know, there’s a lot of people out there, of course, people coming from New York as well. And not to say all people from New York have cash, but people are just willing to throw it out there.

Mike: Yep.

Madison: Can you share any memorable or challenging experience you’ve had while helping clients buy or sell a property?

Mike: No, it’s just been easy for 19 years.

Amy: Yeah, it’s been a piece of cake. No problem at all. Well, when I started in the industry, it was kind of like the market we have right now. However, nothing’s like the market we have right now. It was an easier, it was a seller’s market. A couple of years later, I got the reality of the roller coaster of real estate when 2008 hit 2009 came which, you know, 2011, all those years that were financially difficult. Probably, you know, one of my one story that, that sticks out is a friend of mine who lived in his house for a long time. He had refinanced a number of things to help his kids get through some, you know, some situations and through college and so forth. And his timing in real estate just didn’t pan out. He bought at a good time, however, he had to sell at a bad time, and he had taken out, and this is when you could pretty much get a home equity line by just fogging a mirror. Theyd give you anything, and people were spending it not quite on your home, you know, doing other things and so forth. And if you had to sell with all that debt, you have to sell to short sale. So I had to discuss that with this friend of mine. And at the end of the day, what he decided to do was to just bring $55,000 of cash to the table, to not sell short, to have his credit not banged up, and to relocate, because he was relocating his job, and he didn’t want it to follow him for a couple of years. And that was an emotional situation. He had suffered some loss during this transaction. It was very emotional. It was very difficult. And that was not what most people expect to do when you sell a house is to bring cash to the table. Nobody expects that. And that did happen quite a bit during that time, from 2008 to eleven, even into twelve, there were a lot of times that people did have to actually buck up to get rid of their property and move to a different place, which is, you know, those stories are, you don’t even, you forget that they happen because of the market that we’re in right now. You know, on the flip side of that, I just helped a friend of mine sell in Newtown, and we ended up getting $225,000 over asking.

Madison: Wow.

Amy: And he, we constructed it in a way that he was able to close, stay in the house, in his house rent free until his daughter graduates high school, and then they’re going to move on. That’s how willing that buyer was to get that property. And there were multiple people in that same scenario willing to do that. And that is a common trend right now, where buyers are doing anything they can. When they call you, buy the listing, and a buyer’s agent calls me and says, oh, my gosh, we love the property. What can we do? What can we do, what will set us apart from others? So it used to be, you know, during COVID it was like, okay, wave inspections, then it was okay, bring cash wave inspections. Now it’s bring cash wave inspections, close. Let the seller stay in the house for a couple months, give them the money so that then they can move on to their next house or just let them stay there so they can say goodbye to their friends and they can, you know, their kids can finish out school. It is a, it’s a straight up lay down for the seller can pretty much say what they desire and most likely somebody will give it to them. Now I’m just waiting because the pendulum always swings. So the pendulum will swing and I’m not sure if it’s started back down, but it’s coming. It always does.

Mike: Right. People always forget that. So recency bias is something that they talk a lot about in the, in the stock market, but in real life, too, somehow, like, our brains get tricked into thinking, like, how things currently are, is how things like, are always going to be. And forget that you had 2005, which is when we bought our house. It was a difficult time. Not like now, but house we’re in is the 6th house we put an offer on. You know, like in a couple of weeks and just. And we, you know, I knew I was going to be leaving my employer to start this and just couldn’t bid and it was hard. But you know how you said it went to 2008 and a couple of years and how it’s been, it changes. Things change. And we don’t know what will precipitate that or why, but it will change. It won’t always be like, it just seems so crazy to me. Even the waiving inspection you’re making this giant purchase and looking back on it now, I used the home inspector that one of the realtors had recommended. It’s like, I didn’t know that person at all and it worked out fine. But, you know, it’s such a big thing. And I think the time I looked at it as a nuisance, I was going to pay a couple hundred dollars for somebody to look at the house. But in reality, it’s one of the most important contractors you hire. How is this house, actually? It’s important stuff.

Amy: What’s the health of this house? The folks that wave and I tell them, listen, I don’t agree with what’s going on in this industry at all. However, to compete, these are the trends. If they choose to waive, I encourage them to have, to set up the day of or the day after to set up their own home inspection. And I said, then at least you’ll know at that moment the things that you need to address right away, especially moving in with young children or something you know, you want to address. And I said, and be prepared. You’re going to spend thousands of dollars. I go, first off, it’s never going to stop. You’re going to be at Home Depot for the next couple years straight. It’s just the way goes when you buy a house, doesn’t matter if it’s brand new construction, it’s the same way. It’s a big outlay of money up front to get it to your standards of living, whatever that house is. So, people are doing that. And luckily, knock on, nothing has been that traumatic yet. And we have done this on homes that have septic and well, which is really risky because I said, listen, at the end of the day, if the septic has to be replaced, you’re talking the board of health, you’re talking, it could take six months before you get a working septic system. You know, it’s a process. So, knock on wood like I said, haven’t had anything crazy yet.

Madison: Yeah. So, Amy, what advice would you have for first time homebuyers?

Amy: Well, be patient. Save as much as you can. Get out there. Go to as many open houses as you can. If you’re working with me, of course, tell them that you’re working with me. Because when you go into open houses, people don’t understand, especially in, I’ll just as a segue as a new construction. When you go into new construction, if you don’t say that you’re working with a realtor, then they will not allow you to bring a realtor in. And I have a friend that’s going through this right now, and he’s so upset that he doesn’t, that he’s not represented by me, that he’s only being represented by the listing agent who really represents the product, the house. So with first time home buyers, you know, I just have to say, and it’s so bad, but I tell people, I’m like, all right, all right, we’ll write this offer, just prepare yourself now to lose. We’re going to lose, but I’m going to write this up. We’re going to give it our best. I’m going to present in a great fashion, but I’m going to, I’m just going to tell you that most likely we’re going to lose. I just kind of preface it this way so that they’re not calling and thinking all weekend that they have a chance. And then I said, and then, by maybe with the grace of God, we’ll get fortunate. Maybe we’ll be in the top three. Maybe we’ll get a chance. I said, but when you’re going in as a first time home buyer, generally, first time homebuyers don’t have cash. Generally, first homebuyers don’t have 20% down. Those unfortunate situations kind of push your offer down. However, I have had successes in the past. I just had a couple cute couples that I got into, a few home, one in Levittown, one in Bristol, and they’re thrilled. And we did home inspections. So there are pockets. There are pockets of areas where these things are still happening. We did write a few. We did lose a few. And I kept saying, just keep swinging. You know, Bryce Harper doesn’t hit a home run every time he gets up to bat, so you do have to keep swinging. He does strike out. I’ve seen it a couple times this season so far, but, boy, when he hits the ball, he hits it well. So you just have to be patient. Know that it is a, you know, it’s a game of strategy, and it’s a game of, you know, times at bat. Really.

Madison: Absolutely. How do you stay informed about local market conditions and changes in regulations?

Amy: Well, we do have a couple groups at our office so that we get together. We have a top producers meeting once a month. There’s a handful of us that get together, go over anything that has changed. We also talk about things that we’re experiencing in our own business while we’re writing transactions or fielding calls or representing clients so that other people can share some other experiences that might pertain or might come up and might be something that they can utilize. Those things are more tactical. So you learn, when you pass your real estate exam, that’s great. It has nothing to do with how the business works. It’s really, once you get in and learning all that, it’s just like any other job you get in. It’s not until you have time on a task, you learn how things actually work behind the scenes. So talking with a lot of local agents is something that a lot of us, especially the agents around here that have been in business, and there’s agents around here that I love and adore that have been doing the business for 40 years. They know the business. I love going to the people that have that much more experience than I do and asking their advice on things. We also share a lot of information through our MLS. The MLS system always brings topics to us. We also are required to do continuing education. So it’s actually Pennsylvania one year, New Jersey another year. It’s every two years. You have to do continuing education. And I have, oh, I have till the end of May to get it done. So, of course, I’ve paid for my classes a couple weeks ago, thinking, oh, I’ll have a couple slow days this week to get it done. Haven’t opened them up yet, but I’ll get to that.

Madison: So you’re still in New Jersey, too? You still sell in New Jersey?

Amy: Yes. And, you know, it’s because the river’s right there. There’s so many people that A come this way. And there are times, I just helped a young couple buy in Bordentown because really, the houses are a little less expensive, taxes are a little higher, but there’s a lot of opportunity right over the river to help people if that’s where they want to be, as well as those shore points. I’ve helped a lot of people buy places at the shore. I mean, I can go anywhere in New Jersey, anywhere in Pennsylvania. However, I won’t go to places that I’m unfamiliar with because I don’t feel as though I’m representing my client properly. I will try to find them a referral. We have so many people in network. I’ll try and match somebody up if it’s in an area that I’m not comfortable with. But, yeah, we just kind of. If you share a lot of information, I’m sure, Mike, it’s the same situation in your industry, just talking to colleagues and people that you can bounce ideas off of and, you know, for the common good of the industry, you just want everybody to do well and succeed and make it a more reputable.

Mike: Yes. You know, after 25 years, I’m still, like, trying, hoping that this will become, like, actually a real profession and not..

Amy: Not one of those kinds.

Mike: Oh, you’re one of those kinds. But, yeah, like, for us, I go to a handful of conferences each year, talk with people, really try to figure out what best practices are, both for clients and then for running the business. There’s so many things involved, and there’s a lot of smart people out there that are willing to share great ideas.

Amy: Absolutely.

You know, it’s really helpful. You know, really can figure stuff out.

Amy: Yeah, we do have a annual convention. This year I didn’t go because I had some knee surgery, and I don’t think walking around Vegas is really a good idea. Just the Mandalay Bay alone is enough to be daunting when you have a little bit of a knee issue.

Mike: Right. For people who haven’t gone to Vegas, it’s not like, you need to be mobile.

Amy: You need to be. Yes.

Mike: Everything is giant.

Amy: Good shoes and good mobility and a little bit of self control, let’s not forget.

Mike: Yes.

Amy: Or maybe a lot of it is self control.

Mike: Maybe a lot of self control. Yeah. Because you’ll say, oh, it’s only the second building down, but that’s a mile and a quarter. Right. Because the buildings are so big and you can only cross at the corners.

Amy: It’s daunting for sure. But it is interesting. I like to go out there, and then I like to go to some of the other places, like Hoover Dam, which is spectacular, of course, you know, just some sites to get you out of the glitz.

Mike: Yes, that’s a good idea.

Amy: And we also do a, there’s a big convention in Atlantic City every year called triple play that also offers a lot of education. Of course, I’m the, when I go there, I’m the nerd that goes to the classes where most of the people just go for the nighttime icebreaker cocktail events. I’m the one. They’re like, you’re going to the daytime thing? I’m like, I like, we paid for these classes, it’s a good idea to go to them. So there’s lots of different ways to, you know, keep yourself involved, if you want to, and relevant on top of, you know, some of the evolving topics of the industry.

Madison: Yeah, yeah. And even talking about all that, it sounds like there’s a little bit of, like, self discipline, because, I mean, you have to encourage yourself to go to those classes. Like you, in your own way, you’re kind, you kind of are your own boss. So it’s like you want to push yourself to go to those classes and everything, so. I could see how people could struggle with that.

Amy: Yeah. It costs money and takes time and, you know..

Madison: There’s no one there telling you go here, you go there. It’s totally up to you.

Amy: You’re right. That’s the biggest misconception. One of the biggest misconceptions, I should say. When new agents come in, they come into the office and they’re like, okay, well, where are the leads of, where are the leads? And it’s like, nobody gives you leads. This isn’t, this isn’t that. Nobody sits down and hands you, like, five names on a paper and tells you to go. You have to figure it out. And nobody cares if you show up at the office, and nobody cares if you get out of bed. Like, you literally have to be driven enough and disciplined enough so that when you get your first paycheck, which, by the way, is not 2.5% coming to you, that’s going to the broker, you’re getting your percentage, and then you have to save a third of that for taxes, and then another third of that probably goes to some of your marketing and your education and all the other expenses. So at the end of the day, you make a third of that possible percentage to bank. You better make sure that you have some financial discipline, which is why there is such a big turnover in real estate. A lot of people get into it thinking it’s just that, you know, they see the realtor driving the Mercedes. They think, everybody drives a Mercedes. I don’t drive a Mercedes. I would love to drive a Mercedes. You know, it’s just not that. It’s not that simple. It’s not that easy. And it’s very easy to quit.

Madison: Yeah, absolutely.

Amy: But then it is to pursue.

Madison: Can you share any success stories of clients who achieved their real estate goals with your assistance?

Amy: Hmm. Well, I’m going through one right now, which is really sweet. I’ve known these people a long time. They’ve lived in, they live in Yardley, and when I met with them a couple weeks ago, well, probably a couple months ago now, they were debating about what to do because they’ve lived here forever. However, their boys have moved away, ones in Manhattan, and one is Rochester, New York, and the one in Rochester had a baby, so they had their first grandson, and they were debating about what to do, and they said, you know, maybe we should just go up there and spend time, but we’re thinking maybe we should sell and move up there. And find a ranch house, because they’re, I don’t know, they’re probably in their late sixties. They’re like, we know, you know, the time frame that we’re going into, you know, how do we go about this? So, once they had made the decision, okay, we want to do this, we want to spend. Plus, their son is now, not their son, but their son’s wife is now expecting again. So they’ll have their second grand boy on the way. And we just sat down, and we’ve sort of mapped out a good plan. They got contacted with a realtor up there, found a house. They now, once they went up there and they wrote three offers and lost. And I kept saying to them, it might be in your best interest for us to sell this house first. Then you can be a cash buyer. Because now, you see, they’re going up. I mean, who knew in this little town up in Rochester that those houses are going for 40, 60, 80, over asking. I mean, we just think it’s this little sweet pocket of life that we happen to live in. However, apparently there’s lots of sweet pockets of life to live in, and people are really grasping for those products. So after they lost on their third, they came home, they said, you’re right, we need to do it. We need to do it. We’ve lost out. We’ve lost out on a couple. One right down the street from them. So we put their house up. They were very nervous and they didn’t think that they would get the number that I said. I said, listen, I think this is, you know, from comps that I see this is attainable. It’s not super aggressive, I said, but it’s attainable, I said, and it’s a good starting point. It’s a launching point for to see who wants it the most. It ended up going 64 or five, something like that over asking. We will settle and they will be cash buyers, and they are under contract on a place. So, they are thrilled that, you know, they were. They had an idea of what they wanted to do. They just didn’t know how to do it. And they honestly, you know, didn’t believe that it could happen. And they have said, you know, we trusted in you because you kept saying, it’s going to work out. You just have to take that first step. Trust me, I would never do anything. I’ve known them for so long. I would never do anything to harm you in any way. And they knew that. But it’s hard to, in such a, you know, vulnerable situation, to have somebody sink their faith into you and your process. And now their time’s ticking away and they’re getting closer to moving from here. And they had text last night and said, oh, we’re doing our rounds, our final farewell tour, and, you know, they’re trying to make it all happen, but they’re thrilled.

Madison: Yeah, what a process.

Amy: It’s a process. And to me, even though, you know, they keep saying, you’re going to come up to Rochester. Paul and I very well may do that, just knowing that, It’s probably not the back nine It’s probably like the back five holes for them of their lives will be spent with their son and their grandchildren in a wonderful environment. That’s super satisfying.

Madison: Absolutely.

Amy: And that is, I rest on that. The things that I, I’ll tell you, though, probably for me, the biggest, not downfall but let down, I should say, is when you’re working with somebody, you’re working so fast and furiously and you’re texting at all hours, random irrational thoughts, and you’re calming them down and you’re calling them and you’re going through everything and it’s so intimate. And then after settlement, I always hug them and I’m like, don’t forget to text me any weird thought at any time of the day because you kind of break up.

Madison: Yeah, yeah.

Amy: Push them out of the nest and you’re like, goodbye.

Madison: Yeah. You go from texting, like you said, all day, every day to just crickets.

Amy: Very intimate, which I love that. I love that, you know, that it’s very satisfying to be so intimately close with somebody and that is kind of..

Madison: It’s almost bittersweet.

Amy: It is.

Madison: What do you love most about being a realtor and what keeps you motivated in this industry?

Amy: Well, I think the story I just told with my emotions probably fill that. Um, you know, I think, like I said, getting somebody from a to b with the most satisfaction and ease that you can, gets me up knowing that there are people there that are counting on you and that, you know, you have the ability to do it, you know, from a physical standpoint, emotional, all the support, you know, pillars that you need to be able to get people moving in that direction is really the most fulfilling thing that I can do. And I think to keep me moving, you know, I got into the business, really because I wanted to have a career for myself, but I also wanted to show my kids that anything is possible. You know, I didn’t get into this industry till I was 42. It has been a fabulous career. And when I started at 42, I thought I was, I thought it was too late. Everybody’s been. People that I’ve known have been doing it for 20 years already. People I knew got out of high school and were doing it. I thought, oh, I don’t stand a chance. And I think if you’re driven enough and you want to make something for yourself and prove, not prove your, It’s kind of proving it to yourself, but also proving it to my kids. Like, you can do anything at any time in your life. If you want to change, if you want it bad enough, you can make it happen. And, you know, being that you want to start a new career at 30, 40, 50. If you want it, go for it, because it’s all up to you, really, to get it done. So I think that was probably my biggest drive at that time. I wanted my, you know, my boys and my girls to see that I could balance being a mom. However, they will tell me that I was always the last one to pick them up at the soccer fields or the ice cream or wherever, the lacrosse field, the golf matches, whatever. I was always the last one there, but I was there. You know, it’s always about queen of the multitasking, so.

Madison: Yeah, absolutely.

Mike: Hey, Amy, I heard you might be bringing the scholarship foundation, might be making that more active again.

Amy: Thanks for asking, Mike. I was contacted earlier in this year by Wes Emmy, who’s the men’s basketball coach at the moment. Frank Ciola is the female coach. And I’ve known Frank has been involved, he was involved in what was called the RCBM, the Rick and Chris Block Memorial. We started that originally when Rick died, and he died in 94, and he died in a plane crash, unfortunately. Tragic. Total family heartbreak, of course. And then, unfortunately, Chris helped us do it for ten years. And then he died in 2005 in his sleep with hypertrophic cardiomyopathy, an undiagnosed heart condition, which is athletes heart. Anyhow, we ran it for 25, over 25 years. And we gave out hundreds of thousands of dollars in scholarships, as well as we did donate to the Pennsbury Scholarship foundation in perpetuity. So that every year, a student from Pennsbury receives a scholarship from the Pennsbury Scholarship Foundation. Anyhow, Wes wanted to bring it back because Wes is a, he’s kind of a traditional guy for as young as he is. He’s a guy with, you know, young, young family. But he likes traditions, and he wants to, he wants to keep those things instilled in Pennsbury. So he contacted me and asked me if we would be wanting to do it. So we’re going to be bringing it back in some capacity in the fall. We have to work through sort of, you know, the details and the minutiae about who’s doing what, who’s handling what. But he would like to bring it back as a alumni game. He has created a newsletter, he’s got a big database of all the basketball players. And he wants to bring back the game and have a game and have the nighttime event again. So we’ll be.. You’ll have to stay tuned on that as we plan that in the future. But I always enjoyed that community event. I mean, it was. It was. It took time, but it was always a really feel good, bittersweet time. And another reason for my family to get together. Which you’re always looking for. Always looking for a holiday or a celebration or something to get everyone together.

Mike: Alright, we’ll stay tuned for that.

Madison: Where can listeners find more information about you and your services?

Amy: Well, anytime you can call me, reach out to me. My office is in Newtown. It’s ReMax properties, right by the NAC. Realtors most of the time use their cell number for everything. So you can find me anywhere. You can Google me, and you will find me, and I will gladly get back in touch with you with, you know, most likely within minutes, if not seconds. I do have a website. I can, you know, I do, obviously, people reach out to me via email. I’m on social, so I’m not hard to find.

Madison: Perfect.

Mike: Awesome.

Madison: Alright, this has been great. Thanks so much, Amy.

Mike: Thank you so much, Amy.

Amy: We’ll talk soon.

Madison: For more information on Yardley Wealth Management or Yardley Estate Planning, you could visit our website at yardleywealth.net, and yardleyestate.net. You can also follow us on socials at Yardley Wealth Management. This podcast has been produced by Madison Demora and Mike Garry with technical and artistic help from Poe Productions.