The Expert Podcast

V We have five really good subjects for today's show We're going to talk about. real estate purchasing and why there's a hidden defect a fatal flaw in the real estate market that may prevent. Anything good from happening with real estate in the next four or five years if you're a current homeowner or you want to buy a home there's some things happening behind the scenes that many people haven't realized that might keep and prevent any real estate from really transacting in in any large scale. We're also going to talk about a hidden assets and fraud that may affect your family. from scammers or even people close to you, we're going to talk about.

abandoned vehicles and also abandoned. repair items If you bring it. something in for repairs how you may lose that item. with some new laws that are being passed in certain states where the repair shop can actually keep your item. And last we'll talk about electric vehicle rebates.

also electric vehicle charging stations there's some. misleading information out there about how much capacity there is for charging electric vehicles. Numbers that are thrown around that you might want to dig into the numbers a little deeper So let's talk about real estate. There's a report that about half the number of homes are for sale right now than were for sale. Before the pandemic before 2019.

And. Look the market was pretty stable in 2018 and 19 It was pretty robust A lot of people wanted to buy houses. Interest rates were low…

but there were twice as many homes for sale as there are now And you would think well, gee. We're after pandemic the economy maybe is slowing down. Aren't there. Shouldn't there be more houses for sale…

Well even the fact that there's half as many houses is surprising there probably will be less than that. It's very likely. That the owners of existing real estate. Are unable to sell. Meaning that it's impossible for them to sell.

Because they would become homeless if they sold their house. And you might say well how would a home. Why can't they just buy another one…

Somebody who's selling a house today. May find it impossible to buy another house for several reasons. One of which is they probably couldn't even afford their own house. Let's take a look at some numbers. We're going to use a couple of favorite.

Old friends online One is a mortgage calculator and one is a regular calculator. So let's share a screen and go to mortgage calculator…

And let's take a look at. Some…

Options. So here is a calculation of a mortgage 30 year fixed 7.6% which is about what it is right now, but it has loan amount of two 40. Let's say…

a house that somebody lives in today. Is worth…$600,000 That's kind of at the high end The average right now for a home is about. 450, the average price for a home. But in many markets 600,000 barely gets you into Dallas Actually let's let's dial back a little bit Let's do $550,000. Right…

If the person who owns that house for five 50 bought it even. Four years ago. 2019 or five years ago 2018. They probably paid. About 300,000 for that house maybe less.

Okay. So if they paid 300,000 in 2018, And they put. 20% down…

That would have been…two 40. Right. 300,000, 20% is 60 grand. Minus. subtract that you have two 40 on a 30 year fixed loan but their rate wasn't 7.6 back then it was probably 3.6.

So. Here you have a person…

Who is in the market They have a. Home that's worth five 50. And they have a 30 year fixed that they either bought and got 3.6 or maybe they refinanced it Maybe they had a higher rate when they bought it but they're refinancing their mortgage payments a thousand bucks. It's a cheap payment. Now their house is worth five 50 and they might be thinking we want to move to another house.

Well nobody. Normally buys a house that's…less. Money. Then they have now most people don't downsize Most people want to go to a higher price house. But even a modestly higher price house let's say they go from five 50 to 600…

Well, what is the payment going to be on their new house Well they have some money down right If they sell it for. Let's say. They're current house for five 50, they have some equity. Well not so fast. The five 50.

You have closing costs. You have about 10% and closing costs 6% real estate commission, two or 3% and other costs. So 10% of five 50 is roughly 50 grand. So they're going to maybe net. Net out…

500 grand. After they sell it. If they put all that equity back in the house five 50 or 500 minus the two 40 that they owe gives them about two 60. So if they buy a house for 600 grand. Minus two 60.

Now they're going to be financing. Three 40. Instead of. Four 40. But the rate is going to be 7.6.

So now their payment is going to go from a thousand to 2,400 for basically the same house And that's assuming that they're going to put all their money back into the house They might want to keep some out because their new house might need. Upgrades repairs moving costs. but even if they took all their equity and put it in the house, they're going to go from a thousand dollars a month. To 2,400 a month…

First of all they might not want to do it. They might say well gee for that much money I'll just stay in my house. Even if they want to do it. There's a possibility they don't get approved because…

Banks go by debt to income ratio. And in this case it's not a huge difference right? It's 2,400. You know most people if you make. Even 70 or 80 grand you can qualify for 2,400.

But if it was close on your income…

To be approved for that thousand dollars a month. You might not be able to get approved for 2,400. If your income. At the time in 2018 when you bought that house was maybe 60,000 70,000 household income which back then And it wasn't a lot but it wasn't poor either…

That was a 25% debt to income ratio after taxes. Well, Now for 20, 24 or five you got to be making 110 120 grand to have that same debt to income ratio. Probably income went up. probably there was, you know, increases in, Reported. Tax returns.

But at the same time there were probably expenses that went up to right You probably have higher car payments. You probably have higher insurance. You probably have more credit card debt. So the person selling this house. Or wanting to sell this house might not be able to sell it because they're looking at it and saying I can't get approved for a mortgage or I just don't want it.

Right Is it worth $1,400 more a month to go from a five 50 house to a 600 house? God forbid you want to go up even more If you go to a 700 house. And now you're financing for 40 right. Jumping up more. Now you're at three grand.

You're tripling your mortgage payment. And in that case you may not be able to get approved So this is the hidden flaw in the current real estate market. Where. Potential sellers people who currently own homes look. Every house that gets sold to somebody in the market has to be moved out by somebody else except for new construction which that's a part of the market too But as you know that's slowed down a bit…

So this. This Vapor lock of the market. Could affect us for a while because here's the thing, interest rates aren't going to go down They may go up even more. And. In many cases some of that equity.

Th from that house has been used for other things. If somebody had a house that they owed two 40 on. And all of a sudden. They. Realized I had equity They might've taken out a home equity loan for a hundred grand to buy a boat buy a truck, go on vacation, kids through college whatever it is.

So you might not even have all that equity. So imagine you bought that house for 300. You put down 60 grand. You finance two 40. And then two years later the interest rates are low You finance a hundred thousand out of it…

So now you owe three 40. And you sell it for. 500 or you sell for five 50 minus cost is 500. Now you only have 160,000 to put down. You buy a $700,000 house.

Minus one 60. Now you're financing five 40. When I look at your payment now your payments for grant…

Right. Unless that person had a huge jump in income. They were qualified previously for a mortgage at 1000 Now they're trying to get a mortgage for almost 4,000. They may not. Even…

Tangibly be able to get…financing for that much money. Right. That is why it's important. Too. Take a look at the market If you're a home buyer if you're a home seller.

and see are there opportunities? To purchase a home that's less money The ideal thing is to buy a house for the least amount money is. As you can and still have a house You can be okay Living in. Right…

The home market is likely to be out of whack for many years. Builders are not building new homes New construction is not happening at the rate that it needs to to get, stay caught up and. The people who are in houses now have what's called golden handcuffs They're locked in either because they don't want to sell because they don't want to pay 7% or 8%, or they can't. Even if they would be willing to pay the money…

They may not get approved If their interest rate in mortgage payment monthly payment goes up that much. The only people that are looking to sell or ones that have to sell because they have to move. Next subject we'll talk about is, fraud and hidden assets. Quick message from. ActualHuman.com to tell you about.

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Told you it only be a few seconds. So. One of the things that happens to people that causes financial harm. Is…your defrauded Somehow there are Ponzi schemes or investment schemes There are all kinds of bad actors out there that try to take money from. Good people.

We are a member of the association of certified fraud examiners ACFE, and this organization exists for the purpose of. Helping avoid fraud and recover from frauds. And there. Monthly magazine had a really good article about how to help people avoid frauds that. Are known to you people that are your family or friends.

And to talk. about some of the different types of frauds. We'll take a quick look at. What they're talking about Here's the article. In fraud magazine.

How fraud examiners protect loved ones from fraud So if your fraud examiner I know somebody. this is geared towards you. The CFA didn't think your family would ever confront a scammer but that's what happened when they received a call from someone claiming to be in the IRS Look. There are all kinds of scammers out there They're called to say they're from the IRS They're from the police. There are kidnapper.

there are somebody who, you know they have a relative that's been hurt and they need money and they ask you to send them money. Right In this case, the fraudster said, We're from the IRS and there's something wrong with the taxes. You'll lose your driver's license If you don't pay 3000. Right. And fortunately this person who received the call was related to the CPA the fraud examiner, and they knew that that was not good.

I mean that wasn't real…

so. It had to be a scam. So they were able to tell the relative don't send the money but. That doesn't happen all the time. There's many of these frauds that are very convincing these scammers get on the phone and they know exactly what to say.

And they know exactly how to manipulate the conversation to get you to believe it In fact they go so far. As to create websites and phone numbers So when you call them back it looks good. So here's the thing. This CFE this fraud examiner. One of the call their bluff And they said look, I'm going to call back this fraudster.

And…

I never expected them to answer I thought I get a busy signal a dead number but somebody answered. The voice on the other end said they were an IRS agent and their mother hadn't given the federal agency the right information And now the O 3000, if they didn't wire the money they call the police and they would lose their license…

And it was obviously a scam…

But it's not the only type of scam. There are scams. people who call up and say your granddaughter has been in the car accident We need 3000 for a hospital fee. There are scammers that call up and say we're from the police. And we have a warrant for your arrest for unpaid child support You have to pay.

Right. another type is an investment scam And this is talked about where. somebody will call up and say we have this great…

Opportunity If you put in money. And you. Give us. Certain amount for an investment We'll double it. In.

A month and of course you send some money and then they run off with it or they will send you a fake…

Account statement that shows. That supposedly you doubled your money, but really it's not there They just use it as a way to try to get more money out of you. So these scams are very common Some of them are called pig butchering because they fatten you up like a pig and then they take all your money. If you are. A person who has maybe.

Young…kids and your family maybe 18 20, 21 who are not yet sophisticated with finances or maybe older people, elderly people who maybe don't have the same attention span. You want to warn them about these scams. Because…nobody should be sending money In fact it's gotten so prevalent. I was at home Depot the other day buying something When I was checking out there was a big sign above the cash register or the payout the checkout screen. That said.

Nobody. Should be asking you for a home Depot gift card to pay a bill. Not the utility company, not the phone company not the police not the IRS, nobody And here's why. Because. These scammers frequently.

We'll get you to send them. Gift cards from Walmart home Depot some other store because they can resell those. And it's untraceable. Right. If you send them money through a bank and account.

They can track the funds. If you go to your bank to wire transfer your bank. officer is trained to ask you what is this money for? And they'll try to talk you out of it if it's for some type of scam, but gift cards you walk into. To home Depot and the person tells you to buy $2,000 gift card.

You purchase the gift card, you call them back and you take a picture of it and you send it to them or you give them the number that money is gone. Right. So no legitimate company is going to have you send a Walmart home Depot gift card. To pay a bill. It's so prevalent that Home Depot even has it on their checkout stand…

So these types of frauds these Ponzi schemes are prevalent The FBI talks about them all the time. And. It's something that if you're a responsible person for somebody older than you or younger than you or even just maybe unsophisticated, you want to pass the word. So they're not…

Vulnerable to this kind of a scam…

So…

To quick pause. for our producers to recognize we're at a break. We're going to a different subject. Now we're going to talk about abandoned assets could be a vehicle. Could be a computer.

Could be a. piece of equipment. And. If you have something. That is going to be repaired…

One of the things that could happen is that repair shop unscrupulous…could…use the fact that they're in possession of your asset. To keep the asset. And here's how they can do that. There is a law in many states I…called the labor in storage lien law. Right And this article came from out from an attorney.

I believe it was an Illinois. And the small business owner servicing customers personal property are faced with the dilemma of what to do when a client doesn't pay the bill That's legitimate. If you are a repair shop you fix computers. Yeah somebody brings you their equipment. And they don't pay the bill.

What do you do? Well, what you can do is…

You can…file a labor and storage lane. Small amount act This law gives the business a right to sell the item at a public sale and keep the proceeds…

The law gives the business a possessory lien on a customer's property. Well, this is great for the business and it could be a way to. To make sure you're funded however. What happens if the business takes your item to fix and they. Present you with an outrageous bill more than what you agree to.

And if you don't pay it they keep your property. How's that going to work? So make sure that if you're bringing something in for repair if you're a consumer. You get a written. Estimate signed by that merchant for how much is the repair supposed to be?

Because if it's verbal, they can come back and say, no. It was supposed to be $2,000 not $20. And if you don't pay it we're just going to keep your lawn mower, your computer. Your generator whatever you've given them. Do you want to get it in writing?

This is becoming more and more…

Common that these scams happen because the law is behind them Now with motor vehicles. You have to go through a little bit more of a distinct process. But that abandoned vehicle process can still cause people to lose their vehicles. We see it quite often. In our car title division.

People will have brought their car in for service. They get hit up with a big bill. And the repair shop is going to…tell them…they have to pay this big bill or…they're going to lose their vehicle. And in some cases if there's a lien on the vehicle, It ends up showing us a repo. Because they didn't pay their bill…

You want to make sure you get everything in writing and know your rights as a consumer. If somebody is trying to scam you. Don't fall for it Get good legal advice You might be able to call the police. Because all they have to do to enforce the lien. Is give 30 days notice.

Of when they're going to auction it off. In a newspaper of what's called general circulation What that means is they could put the notice anywhere Maybe you don't see it. How many people were actually read the newspaper anymore. Right. And general circulation just means that it's just not the local shopper paper in the lobby of the diner has to be something pretty decent.

And. If the customer does not redeem the property within 30 days following the notice the business may sell the article at a private sale What does that mean? If you happen to not see that ad. Because you don't read the paper…

After 30 days they can sell it at private sale I mean they can sell it to their buddy in the back road. And keep your whatever phone. Generator. Computer. Whatever property that they have of yours.

So they might be able to just keep blowing you off for more than 30 days. To tell you what they're working on it and unbeknownst to you they sell it behind your back. So this is a big deal…

Very very big deal…

So our last subject we're going to talk about is electric vehicles You've probably been seeing a lot of news about how electric vehicles. Have more charging stations out there, but we're going to look at the actual numbers and see how many charging stations really exist and how many. How many are needed. We back on the other side of this break. See you in about a minute…

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All right So electric vehicles are the hot thing everybody's talking about. the government's trying to push them The factories are making them you may be interested in them or not but one of the biggest things that's happening is people aren't lining up. In droves to buy EVs In fact that exact headline was on one of the money-wise articles Americans are not lining up to buy EVs How come despite 7,500. Rebate. For EVs, what are the reasons Well obviously the reason that most people say is that they're expensive but also.

That there are not a whole lot of…chargers cost and charger conundrum. one of the, of Of factors is availability of charging stations. Right? And the article says there are 53,000 electric charging stations and 145,000 gas stations. Okay.

You might think well that's not too bad It's a third right 53,000 times three is about 150 So there's a third of. stations and there's. More than three times as many gas vehicles, but see that's a misleading number. Because…if you look at some other. Data.

53,000 charging stations. Are the number of individual. Ports. That you can plug into. 145,000 gas stations is the actual gas station They might have 10 gas pumps…

So this is not a comparable number. When you pull into a gas station. You might have eight or 10 or 12 actual pumps nozzles Right? So even if there's 10 I think the average per gas station is, is 10. That means there's actually 1.5 million.

Gas pumps available…

There are 53,000 electric charging stations When they say a charging station they don't mean one parking lot that has a bunch of chargers They mean how many actual plugs. So there's a big difference. 1.5 million plugs, I'm sorry 1.5 million gas pumps versus 53,000 plugs Now to be fair to electric vehicles…

There's not as many electric vehicles. Right. There are…

Single digit percentages I think seven or 8%. So the numbers the percentages aren't that much different, but you're not going to get that many more people buying them. If there's not charging stations In addition to the number of stations. You also have to compare apples and apples. First of all when you pull into a gas station, You put in the nozzle you wait two or three minutes It's full You leave.

When you plug into an electric charging station which there's only 53,000. You have to sit there for an hour or two or three…

To get back on the road. So that's going to take longer. You can't do the turnover of charge. like you can at a gas station Look we've all been to a gas station to have to wait in line. Not that long how long you have to wait in line at the gas station a few minutes, even if there's three four people you're out in 15 minutes.

With an Evie charger if they're all full and you have to sit there. It could be hours In fact it gets worse because the federal government did a survey…

Earlier this year and they found that about a quarter of the Evie plugs weren't even working. They're inoperable. Why does that happen while at a gas station There's an employee there. Making sure everything works If the gas pump goes down they put the little red. Or yellow bag on it and they fix it.

You're not going to know if that Evy plug goes down because there's no employee sitting there all the time They may get a ping notice to their phone, or they may get a notice in the network, but it's not like somebody's right there on site now. Also to be fair to EVs. Some of the charging for electric vehicles can happen at your house In fact, that's where most of the charging is going to happen. At your house. Eons.

That can be done every single day. It can be done overnight. But you still have to charge if you're out to get back or on a long trip…

So there's pros and cons Look we're a big fan of EVs. Driving an electric vehicle actually is a good experience They're more powerful They're quicker They're faster They're quieter They're smoother than a gasoline vehicle. So the day that they make electric vehicle ownership, very appealing because you can take a long trip but don't have to sit for four hours and because they're reliable. And because they're cheap. I'm in, I'd love to have one.

No reason not to. All right I'm not hung up on the fact that I want my gas car electric vehicles are a blast Go to a dealership and test drive one, a pure electric not a hybrid. It's it's a blast They're very quick very fast Quiet smooth. A lot of advantages but if owning one is going to make your life miserable because you can't find the charger or it's broken or what have you. Then that's going to be a problem.

The home charging is also only applicable for people who own their home or live in a single family house If you have a condo or apartment. You might not be able to charge at home. Right If you have to park in the street park in a parking lot at night. You're not gonna be able to do that You have to have a charging station…

So Evie charging is one of the big. downsides Now a lot of people will say well, you know also the battery recycling that's not a big deal We just attended a webinar earlier today where there's companies out there already recycling the batteries. So when the battery wears out when your vehicle. they can take it out recycle it put a new one in it's expensive. But the battery thing eventually will work itself out in terms of…the recycling of batteries repurposing reuse of batteries.

Some of them will be used for…

Power retention in a home. Right You put one in your garage and you let your electrical grid power up and if your power ever goes out or if you have solar or if there's a. You know, thunderstorm that knocks out the power You can draw from your battery for a day or two. So the battery thing will work itself out. The other thing about electric vehicles is right now they're more expensive and they're more expensive to drive because the power costs, whether you pay at a charging station or you pay more power at your home.

If you do the math it ends up being the same If not a little bit more than gas, according to some reports. So. Eventually that'll come down. And the power grid will be able to absorb it but that's going to take awhile and it's like playing chicken. The government agencies state and local are trying to force this to happen by 2030.

It's a mere six seven years away…

Are all of these things going to be worked out by 2030. That's unknown. Right. And in the meantime we're all having to kind of play a game of chicken Should we buy an Evie before this has. You know it's using the same metaphor chicken chicken and the egg which comes first Right.

It's probably a good idea If you have the opportunity for a second vehicle or third vehicle to at least get a plug-in hybrid to start getting used to that plugin lifestyle. And maybe as a second or third vehicle get a pure electric…

Because you'll learn how to mix it into your lifestyle how to use it in certain instances. But if you're going on a long trip cross country, maybe take your gasoline car. Put your comments below let us know what you think. Our next episode coming up is going to talk about some interesting things We're going to talk about lumber prices how it's affecting the real estate market. We're going to talk about why you can't save your way to retirement.

You can't even earn your way to retirement If you're counting on your…salaried income and what you can say from that to fund a comfortable retirement forget it You're going to be in a world of hurt. There's a way to get to a stable financial retirement, but it's not by…just putting money away squirreling money away. we're also going to talk about how to find a. A rental property in a difficult market You know right now if you're a renter, it's hard to find good properties. And the last thing we're going to talk about on our car title side is if you have a vehicle that was financed by a company that is now out of business…

How do you get a lien release How do you get your title if it's out of business So look for that on the next episode. be without within 24 hours make sure to subscribe or watch us on whatever channel you're looking at. And we'll see you on the other side One more. Message from. Actual human I know most of you will probably bail but guess what?

This is something that interested some people so it'll be on here and we'll see you next time…

Are you tired of automated systems and chatbots when you need assistance I…experienced actual human.com and connect with real professionals. not automation. At actual human.com We bring you a network of professionals who are excited to answer your questions and provide guidance. Getting started is easy. Let us show you how.

Here's how it works. Step one. Select the best date and time for your video call. Step two. Describe your situation and the areas you're looking for Advice.

Step three, connect one-on-one with an expert and get the undivided attention that you deserve. Experience the difference. Visit actual human.com today And schedule your professional consultation..