(00:00) [Music] Welcome to Deerwood Realty YouTube channel. I'm John Schink, founder and managing broker of Deerwood Realty in St. Louis, Missouri. You ever get this sense that like people will never be happy? Is it like the human condition, like we just can't enjoy things? I came across an article today about someone who had friends who is very, very upset that they have been locked into a 2.75% mortgage. Now, I'm sure it happens, right? Everything happens, but man, of all the things to be upset about, a 2.75% mortgage is not one of them for me. But let's go and see what's up with this.

(00:47) It says, "My friends bought a home at a 2.75% mortgage rate. Here's why they totally regret it." Now, they regret it. Strong regrets for buying a home at 2.75% mortgage rates. It says, "In other words, home buyers who snagged homes during those days of low rates got good deals, sometimes maybe. Actually, it's up for debate. My friends bought a home at a 2.75% mortgage rate, a steal, and they totally regret it for good reason." So, I just feel like this article is meant to provoke, to poke at people because that says for good reason, but then they list four reasons. So, let's get to it.

(01:26) So, the first one is maintenance and property taxes. My friends didn't expect the maintenance costs, everything from roof repairs to gutter cleaning, to be so high, nor do they enjoy property taxes, something every homeowner deals with. So, like, when I work with first-time home buyers, we talk about, you know, you're going to have maintenance. And some of the things we go through when we do the home inspections are like, okay, your furnace is 10 years old, it's likely to need to be replaced at some point soon, you might want to start saving for that. Look at the roof, the roof looks to be more than 20 years old, you're probably going to need a new roof within the next 10 years, good idea to start saving for that. And then property taxes, I totally understand, nobody likes to pay property taxes. And I think what's going to happen to a lot of people in this current market is when they bought their house at 2.75% mortgage, that was based on a tax rate, um, you know, for the value of the home, that by the time the state comes in and reassesses the home, that tax bill could go up thousands of dollars, which, you know, would be a problem, especially if you bought right at the top of your affordability level. But again, the 2.75% mortgage rate isn't the issue there. That's bad financial planning on your part.

(02:54) Zero flexibility, number two. It says planting roots is a beautiful thing when you don't want to wander. Otherwise, it's a trap. A home is one of the deepest, heartiest roots of all. Once you buy one, you lock up thousands of dollars that can only be recouped once the home sells. In other words, you're stuck fast. Renting is better than owning for exploring new neighborhoods. My friends found that out the hard way. And it's like, I don't understand. I mean, it's confusing to me. So, let's like, let's just assume you're a first-time home buyer and you're looking for homes to buy. Well, as a buyer's agent, we start off with number one question is where you want to live. And then if they say they don't know, then it's weird. Sometimes when we make the search wide, they start kind of focusing in on a certain area. I once had a couple of buyers that were looking for places in Leo. They wanted to buy in Leo, uh, but they were always actually, we were always going to see home showings in University City, which, you know, and at some point in time, I said, look, we're, we're not, you guys say you want to live in Leo, but you're always looking at University City. I think that's where you guys want to live. I talk to people even when they're under contract. I say, look, pretend that you live in the house now, get up early, pretend that you're going to work from this house, see if you like the commute. There's ways to understand like your neighborhoods and where you want to live. It's shocking to me that you would make that big of a mistake. And as far as zero flexibility, I mean, you can always sell. You sell to a loss. I, but people worry that they'll never be able to sell a house, and that's just not the case. Houses always sell. It's just a question of price. So, I don't really understand this one.

(04:29) And then noisy neighbors. So, they regret buying a house because of noisy neighbors, but it says day after 4th of July, 3:00 in the morning, baboom, heart pounding, eyes snapping open. I check the window to see what else but fireworks launched by the noisiest neighbors at this side of Los Angeles County. Bye-bye sleep, bye-bye sweet silence, my dear old friend. Now, was he staying at their house at 3:00 in the morning the day after the 4th of July? That's not your neighbors. I mean, it's not your friends. All of a sudden, you're saying you don't like fireworks. It says neighbors can make or break a living experience. Noisy ones can impact the value of your home by becoming part of the landscape like weeds. Can't remove them, can't escape them. So, they regret buying a home because of noisy neighbors that you have. I mean, another, I mean, as a buyer agent, when we go look at houses, if I see a house, like, the only chance you have to buy, like, where you make the decision is when you buy a house as far as your neighbors. The rest of the time, neighbors move and go, and you're still there. But, you know, I always mention to people like, let's look, you know, drive by the house before we, we accept, before the inspection period runs out, see if the neighbors look like terrible people. As far as, you know, do they have like a boat in their front yard, does their house look trashy? You know, like, there was a house, there's a house in the neighborhood down the street where the people, like, the siding caught on fire, the vinyl siding, and it's been like six months to a year since they've decided to do anything with it, and it's just sitting there, and it's like, who wants to live next to that? So, I get the noisy neighbors. I get the bad neighbors thing, but, uh, I also don't see how that relates to this particular story here.

(06:41) And then number four, no way to sell. Buying a home at a low 2.75% rate is fantastic by today's standards, but when you experience buyer's regret and want to sell, you have to deal with current mortgage rates, which are closer to 7%. You might feel stuck if you can't afford to cough up the cash for an outright purchase. My friends should do, they thought moving in at low rates would be possible, but that ship may have sailed. For the first quarter of 2020, the 4th quarter 2023, the median home sale price rose 46% from 329 to 479. Do they sell and move to a better location at more than twice the rates? Do they stay where they are and tough out high costs, noisy neighbors, and buyer's remorse? My friends aren't sure what to do. If they sell, they might even return to renting for the foreseeable future. Well, that would be the dumbest move. I mean, honestly, you're in, I mean, and in the high cost, how much more maintenance are you going to have? I mean, what kind of house did these people buy? It makes no sense. I mean, this doesn't pass the smell test based on my years of helping buyers buy homes. This whole thing sounds really wonky. Like, how bad was your agent, or what were you reading that you thought that these, like, you bought a house next to terrible neighbors, you say, even though it says the writer was, but whatever. And, you know, you didn't expect to have to make, uh, you didn't have to have, uh, expenses for repairs, which, like, anyone would mention that, I would think, any decent buyer agent would mention, hey. And then what was the other one? You have zero flexibility. Well, why did you put down roots now? Like, what was the requirement? It doesn't make any sense. The whole thing doesn't make any sense.

(08:19) It says, "How to handle feeling stuck with your home purchase." It says, "Renting out the property is a way to maintain homeownership, reduce net expenses, and regain some flexibility of living." If you don't like the home you're living in and you want to get out from underneath it, renting your home is going to make it even worse because now when something goes wrong with the house, you have to fix it for the person that's living in your house, plus you're making all the payments and everything else. That's a terrible idea. And then it says, "Selling your home and taking out a loan to buy a new one is an option, albeit not a great one." Well, who are you to decide what's a great one or what isn't? I mean, it just doesn't make any sense. And then finally, "I'd consider consulting with a financial adviser or home planner before deciding how to sell, buy, or refinance a home." Funny story, here's what I think about financial planners and real estate. I had a guy, a nice guy, just graduated college, has a great job, wanted to move out of his apartment and buy a home three years ago. Do you know what his financial planner told him? "You can't buy right now, houses are too expensive." Houses have gone up like 50% since then. The value of homes, this guy's never going to be able to buy a house at current rates, and his financial planner really, really did him help, did him good there. It's just stupid. It's just stupid. If you want to buy a house, buy a house. Like, that's what you want to do, do it. If you don't want to buy a house, don't buy a house, and understand that there's pros and cons on both sides of everything. I just find this to be a silly, a silly [Music] complaint. "Oh, it's so terrible, I bought a house at 2.75% mortgage." It's better than 10%. Better than 10%. It's just, it's just odd. People can't be happy. Look at me, I'm upset because somebody else isn't happy. Anyway, tell me about, I mean, look, you could have a real story. You could have health problems when you bought a house, but that wasn't because of the 2.75% mortgage. That's basically, you regret buying a home, and that's okay. I don't like, I work with my buyers, and I don't like, I mean, I would stay awake at night if they said, "I can't believe I bought this house," and this.

(10:47) That's all I have for tonight. A short and sweet. Thank you for watching. Thank you for listening, and I'll catch you on the next one.