(EP: 141) Buying a Winter-Home in the U.S. - Interview with US REALTOR Debbie Drummond -

Nov 19 Episode

Thu, 11/19 10:17AM • 24:34

SUMMARY KEYWORDS

home, buying, winnipeg, las vegas, condo, market, offer, people, multiple offers, house, sell, buyers, canadians, loan, bo, listing, months, showing, talking, mortgage

SPEAKERS

Announcer, Bo Kauffmann, Debbie Drummond

Bo Kauffmann  00:01

I am really excited about today's episode because I get to talk to a real estate professional in Las Vegas, Nevada, about their market and about the process of buying vacation property in the United States. Welcome to Episode 141 of the Winnipeg Real Estate Podcast.

Announcer  00:20

You're listening to the bone knows real estate podcast tips and advice for home buyers, sellers and owners with award winning REMAX Agent Bo Kauffmann.

Bo Kauffmann  00:35

Like I said, I'm really excited about today's episode. Welcome, everybody. Thank you for spending the time to listen to this. In a little while we're gonna have a phone call with Debbie Drummond, who is a luxury home specialist in Las Vegas, Nevada. gonna ask her a number of questions that have been burning on my mind, what's the market like? Can you really get a $25,000 property down in the states and, and you'll spend your winter vacations, of course once COVID is over. But before we get there, let's take a look at the current Winnipeg real estate market. Last year, this time we had 1600 and 10 houses available in Winnipeg. And this morning, we are short of 900 condos similar picture not as drastic. Last year, we had 641 available this morning 550. And all the while the buyer action the buyer activity is actually hotter than last year there are more buyers buying than last year, same time. So you can see what that means is fewer homes on the market, but more buyer activity that's driving prices in bidding wars through the roof.

Announcer  01:41

And this week on our blog, one of the latest articles is perfect for your cell phone reading. It's in a story format, so it plays really well on vertical screens. And it's 11 insider tips to help sell your home fast. Give an example I'm not going to go through them all here but a top couple of tips are make it easy for buyers to see your house. Don't throw up a bunch of roadblocks if you can avoid it. Don't limit showing hours to let's say a two hour window each day or say no showings after five o'clock have a short window showing window of let's say four or five days. But then open it up the house as much as possible. Because of COVID I in my most recent listings, I've even advised people if they can to vacate the house for those five days. Because it's a lot of in and out and every time you come back into your house your buyers have just left. Now you're going to be wondering what if anything, did they touch? Yes, there are precautions in place. Yes, we can tell buyers to sanitize their hands and wear masks. However, it's still it's still nerve racking to come back into your house and wondering whether they actually did all those things. So if you can make the house easy to see for buyers, that was one tip the other one is pick the right agent. in Winnipeg we have 2000 agents that are now includes some part timers. I'm going to talk with Debbie Drummond later on Las Vegas, which is roughly three times the size of Winnipeg has 14,000 real estate agents. Now a lot of them are part timers. So you know, their main main income might be coming from bagging groceries at the local Piggly Wiggly, and then they take an odd listing here and there, beware, I would say pick a professional, you're going to sell a house maybe three four times in your lifetime. Get it done, get it done, right. There's an old saying that says quality is really cheap, and cheap things are really quality. So make sure you pick the right agent that that's made this a full time career as a dedicated professional and can answer all your questions and come to your aid if and when the time arises. A link to that article that is the 11 insider tips on how to sell your home fast is in the show notes below. You can also go to Bono's dot homes slash stories, str IE s, that'll get you to that whole website where there's nothing but vertical stories that play easily on your cell phone. That's a really neat format. Check it out. And I would like to put a spotlight on the local business again, when you get a mortgage, a lender has to offer you the option of taking mortgage insurance. And that's really life insurance by another name. So when they do that, and like I said they have to offer it to you. Repeat after me. Thank you, but no thanks. Instead, I would advise you to get life insurance, which offers better coverage has fewer hurdles, and is usually cheaper. We talked about this in Episode 119 of this podcast. I spoke with my good friend Thomas Johnson of cascade financial about the benefits of life insurance over mortgage insurance. And the link to that episode is actually in the show notes below as well. So I'm here to recommend the services of my good friend Thomas Johnson caskey financial He can get ahold of him at 204-229-4405 he's located on cordon right near Kennison, I do not charge for these kind of shout outs by the way i don't you know, I don't sell spots here. I'm only recommending people that I've either worked with have recommended and have good feedback in the past. Thomas is one of these people that I would gladly send my my mom to or my sister or as I just did, my niece, Thomas I find is very knowledgeable in the subject of life insurance as well as investments. So give them a call Thomas Johnson cascade financial. We'll be right back after this short announcement.

05:43

Are you looking to buy a house or a condo in Winnipeg work with the agent who takes the time to explain the process to you guiding you through every step for surface beyond the sale book your home buying consultation with Bo Kauffmann A REMAX performance

05:56

today,

05:57

Bo knows real estate.

Announcer  05:59

And now to the main event, our phone call with award winning real estate agent, Las Vegas, luxury home Pro, Debbie Drummond, Debbie and I have been following each other on Twitter for 1010 years at least. We've never spoken in person. It's just been tweeting to and about each other. So I was really pleased. And when she agreed to come on to this podcast, we're going to ask her a number of questions regarding their market, as well as the process of buying vacation property down in the states what what the implications are possible potential tax implications and how the whole process works? Can you get money? Can you get loans from the US banks? Or do you have to come there with your own money, that kind of thing? So let's give her a call and see what she has to say.

06:51

Hello, there.

Announcer  06:52

Hi, Debbie. It's Bo Kauffmann calling from Canada.

Debbie Drummond  06:55

Hi, Bo, how are you doing today?

Announcer  06:57

Good. Excellent. How are you? How are things in Las Vegas?

Bo Kauffmann  07:00

They're good. The weather is very nice, sunny and in the 60s. And business is going like crazy.

Announcer  07:06

Well as a winter picker that makes me really jealous because I think we're gonna hit if we're lucky. We're gonna hit around 20 degrees today Fahrenheit. So I know. I know. I'm so maybe let me start off by addressing like a rumor. It seems like we all as Canadians, we all know a friend who's got a brother in law who's got a niece that has heard of somebody buying a $25,000 condo that's right by the beach. And it's all gorgeous. And everything is is that what the market is like right now, especially in Las Vegas?

Bo Kauffmann  07:37

No Far from it. Okay. We're actually coming back from the recession quite nicely.

Announcer  07:43

Which recession? Are you talking about? 2008? Are you talking about this COVID bubble? Actually both. Okay,

Bo Kauffmann  07:50

we're coming back from 2008 quite nicely before the COVID started. And we got hit especially when we first shut down March and April, there was a slow down. Things have bounced back the last five months in a row, our median home price has been increasing. And the peak of the market in 2006, the median home price reached 315,000. We didn't recover back to 315. until February of this year, we hit 316. Then in March and April, it dipped back a little bit, but started coming back in May. And by June every month we've been increasing and we're now at $340,200 as the median home price. Now that's half the home sell above and half sell below. Much if you're listing something that's a decent house for under 340, you can count on that it's going to go quick. And from my last two that I had in that range that ended up with multiple offers.

Announcer  08:45

Okay, that's that's really interesting, because we have a ton of multiple offers up in Canada. Is your inventory, like the amount of houses that you've got available? Is that lower than normal? Is it above normal? What's it like right now?

Bo Kauffmann  08:56

It's slower. I just did my market update last week, and we're down to like two months of inventory if nothing else came on the market.

Announcer  09:03

Right? Yeah, you and I we've been following each other on how long have you been on Twitter?

Bo Kauffmann  09:08

Oh, geez. Probably, at least probably 10 years. I did a lot with it at first. But then once I really a friend that I met on Google Plus when that network was active, sort of encouraged me to start doing tweets every hour or so. And I started doing it and it's worked,

Announcer  09:26

right? Yeah, no, I've been following you. And you've been following me probably for close to a decade now. So yeah, it's it's, it's great.

Bo Kauffmann  09:32

That's most actually talked to you. That's

Announcer  09:35

right. And one of these days we'll have to do a video. Okay, so your inventory is low and I hear you doing monthly updates. What kind of properties Do you see Canadians buying as vacation properties, houses or condos?

Bo Kauffmann  09:48

I see a mixture of both depending on how much they want to spend and how much time they're planning to spend here. A lot of my Canadian buyers have opted to buy you know, single family homes and guard Gators. Golf Course communities. couple of those. There's one community to Las Vegas country club where I've had Canadians buy townhomes and condos as well, because they do have them there.

Announcer  10:11

Can you give us an example of like, What's 250? Or 300,000? Let's say 300,000. What can you buy with that

Debbie Drummond  10:18

300,000 you can still get a pretty decent home. Actually, I looked at the comps Rhodes Ranch is in the southwest part of town. It's a guard gated golf course community homes there were built in anywhere from early 2000s. until just recently, they finished building out some of the final lots in there. And in fact, they do have a few that they're building right now. Think it's about 30 lots they're selling at the moment, but their prices in there. As of yesterday, the lowest price was 299,000. That was for a 1600 and 50 square foot, two story single family home, three bedrooms, three baths, two car garage that was built in 2004.

Announcer  10:58

And you guys, you guys build without basements. Right to put them on on a slab concrete.

Debbie Drummond  11:02

Yeah, you very seldom find basements here because their soil is so hard to dig into. Okay, I think people in the desert prefer to build up rather than down to take advantage of all those sunny days we have.

Announcer  11:15

You said before that you are getting into like multiple offers. How does that work? So you put a house on the market? And let's say two days in or whatever somebody comes with an offer, how do you manage to get multiple offers?

Debbie Drummond  11:27

Well, first of all, you have to price it right, right? You I always do. You know a really good job of marketing. We get professional photos. I'm an amateur photographer, but I don't take my own. I

Announcer  11:38

totally agree with you. Yes,

Debbie Drummond  11:40

yeah. And I hire a pro to do that. And especially with COVID. I'm doing the 3d Interactive matterport tours, okay, so people will see it before they actually go see it. When you do that sort of thing and you price it right on the money in this market, most likely you will get multiple offers. I've even seen it in the higher price ranges. I've had a couple that has been looking for a single storey pool home. And they want to be in Summerland, which is our most popular area. They've had a couple that got out bid on even though they're highly qualified. And they're not doing 100% cash, but they're putting down like half. And they're in the seven to 800,000 price range. And they're getting into multiple offers.

Announcer  12:19

Logistically and this is really what I'm asking, here's what we do in Winnipeg, this might be completely different to you. I list the house tomorrow. And I say showing star let's say tomorrow's Tuesday, and I say showing start on Thursday, and offers next week Monday so that that means the first person in the door on Thursday. If they love it, they cannot make an offer. They all have to go wait till next week, Monday when they all come in with an offer. That's how we've done things in in Winnipeg for the last 1515 years. Plus,

Debbie Drummond  12:47

I occasionally hear where somebody will put it into the market, we also have a new status we can put listings into that's called coming soon, right. And a lot of agents will use that to announce the listing is coming before they have photos so the agents can be on the lookout for their clients. You do it in that status coming soon. And then you have your first stage showing, say on a Thursday, and you let it be shown all weekend. And then you review the offers on Monday or Tuesday whenever you pick, you can put that into the MLS if that's what the seller wants to do. Okay,

Announcer  13:18

yeah, good. So it's actually it's actually quite similar. So um,

Debbie Drummond  13:21

yeah. But in the lower price ranges, I pretty much know if you're on a low price range. If somebody sees a house they like if it's under 300,000 or under. If they want it, they better make a move before they even see it. You know, now, you

Announcer  13:33

mentioned a couple of these are gated guarded gated Yes, what kind of monthly fees are there in that kind of a home?

Debbie Drummond  13:40

Well, roads match, the one that I just mentioned, I believe is just over 200 a month. Usually, for guard gated, you're looking at at least 200 a month, there are a couple that aren't that much that are more like 151 60. But when you've got to man, a guard gate 24.

Announcer  13:57

Yeah, that's why I was asking because it that's that's an, you know, a costly feature to have, especially if it's like 24 seven. I asked you a couple of weeks ago before we started this to look into what the tax implications are, if somebody sells their house, let's say somebody bought a house in 2012 in Las Vegas, and now they want to sell it. They're Canadians. What kind of tax implications as far as you know, are there?

Debbie Drummond  14:21

Well, actually, I haven't had too many of my Canadian sell their homes, most of them have bought them and continued using them for years as a second home or an investment property. So it was an interesting question that you asked me and I asked around and found a top CPA His name is Randall s. Ben Rican, and he also used to own a real estate school. In fact, a guy who owns my office went to his real estate school in 1995. So he's experienced both with real estate and tax accounting. And he got back to me and he said, it's not just about being taxed and not subject to firpta. Those are two different things. Any Canadian To sell a property here is going to have to have 15% held in escrow until they do a tax return it under guarantees that they will file one. And from what he tells me, I'm not going to go into all the details of his explanation. But he says that he has actually seen most of his clients get at least part if not all of that 15% back over the years, let's go. And I also forwarded it his email to you. So you've got it for your clients. And I've got it for any Canadians that I work with as well.

Announcer  15:29

Okay, that's awesome. And if you have a link to his website, or something like this, I'll put it in the show notes below at the end of this,

Debbie Drummond  15:35

I will see it who's got a website and send it to you

Announcer  15:38

from my perspective, for So first of all, I had a friend who owned a condo down in Tucson, Arizona. So he looked into this and much like what you just said, he had to register with, with the IRS. And they had to make sure that he didn't earn any money from his condo ownership. So for example, he never rented it out. He never earned any income as a rental property. It was just his to live in for a number of years. And I don't recall the exact result. But they look at that differently as if you're using it as a rental income.

Bo Kauffmann  16:12

Yes. It are renting it out, you I suspect would have to file yearly. Right? And that's why I asked my tax specialist here. And the general consensus or the general, the short answer is any profit you make on that condo is going to be what's called capital gains that like I'm talking about the sales price. So if if you buy it for $200,000, and you sell it five years later, for $230,000, you make $30,000 profit, plus or minus whatever the exchange rate has changed, but what he's gonna take all around. And that's right, because I was lucky I bought a condo in Phoenix in 2012, when the dollar was even right now the dollar is about 35% increase. So I stand to make a, you know, 35% profit, even if I sold it for the same money as what I paid for, but then that 35% would be capital gains, and then we're taxed on half of that. So before if anybody is looking to buy a condo in the States, or any kind of a property in the States, for the purpose of making money, talk to your tax accountant before don't take this as gospel truth

Debbie Drummond  17:26

is a lot better all the time to you know, they could come up with something new that they put into law, right six months from now, and this whole conversation would be obsolete.

Bo Kauffmann  17:34

That's right now I remember when I bought a US bank would not give me a mortgage. So it didn't matter. If I was putting half down three quarters, then nothing like they wouldn't give me a dime. So I had to finance it from home by way of either ordering money or saving up money or taking a second mortgage. Do you know if any of that has changed? Can Canadians come now down into the states and get a mortgage on something?

Debbie Drummond  17:58

Yes, it definitely has changed. If you bought in 2012 it was the same situation here. No banks were making loans to foreign nationals at all, I don't think and then gradually they started making them only with Canada. But now pretty much any foreign national can if they're qualified can apply. I actually checked with this on with several lenders on this. Pretty much all of them, they won't do more than a 70% loan to value ratio, right. Even volunteered if they do a refi for a foreign national it has can't be more than 65% loan to value. Nick Callum over at guild mortgage actually got back to me with a breakdown the 70%. And he said they have two different loan types. One of them is a full document loan 70% maximum LTV and they need two years of tax returns, pay stubs, etc. And they can structure the loan one of two ways option one, you pay higher fees and you get a lower rate. So for a 2% origination fee plus 1300 dollar and 10 cents, or 1300 and $10 in fees, your rate options would be a three one arm at 4.25% a five, one arm at 4.375% a seven one arm at 4.625. Now if you go with option two, you have to provide the same documentation but you get lower fees and a higher rate you only pay instead of that 2% origination fee. You only pay 1300 and $10 in fees, but your rate options there a three one arm is 5% five, one arm is 5.1 to 5% and a 70 is seven one arm is 5.375%. They also do a minimum 60 day escrow due to the fact that you need to obtain an itI n as part of the process.

Bo Kauffmann  19:49

All right, good. Yeah, no, that's that is definitely good news to hear. So on a $300,000 house 30% down $90,000 us which is still 3.4 million Canadian. Just kidding. But it's, but that's good. At least there's there's some options there that we definitely didn't have a few years ago. Yeah. Nick also noted if one of the borrowers has a social Rni ti n already, we don't have to wait the 60 days, we can do a more normal 30 day escrow. So what do you see the market heading in Las Vegas in the next six months? Let's say you you guys are entering? Is this a winter time for you? Do you enter a slow period? or Are not we are entering the winter time. But over the years, I've never really it slows down a little bit, but not that much. And it's funny, the timing of this call because just yesterday in our local newspaper, the headline was Las Vegas housing markets streak makes no sense. Are we in a bubble. And they talked about the median price which I mentioned to you, and how it compared to like with 2006. When we reach 315,000? Well, if you adjusted that 350 18 for inflation, and today's dollars, it would be like 400,000. So even though we're back at 340, we're still not equal with what we were at the peak of the market. And this is a totally different market, the lending rules have tightened so much, you don't you know, back in 2006 to 2008 people got along just if they showed up and had a breath,

Debbie Drummond  21:21

you guys probably saw a lot of the same button, you really do have to be qualified to get a mortgage, people are having to put more down, you don't see nearly as many we're starting to see some comeback of the, you know, hundred percent financing, say putting 80% down and doing a second with 10% or something. But for the most part people are putting with a conventional loan, if they don't want to pay PMI, they have to put at least 5% down. But most people are going with 20% down. I'm also doing a j

Bo Kauffmann  21:51

if you have a Canadians that want to come by something in Las Vegas, and they give you a call. What do you what do you do? Like do the tell them hey, book a three day flight trip or come out here and I'll show you a bunch of houses. How does that work? I like to know in advance when they're coming into town so that I can time on my schedule and also in advance so I can start sending them some listings to consider so I can get an idea of what they're looking for. And once they like and everything. And I would say if you're coming in from another country, I would try to plan at least four, maybe five days depends on how well you know our neighborhoods down here you might have one particular place that you're in love with that you would want to be or you may need to spend a little more time deciding whether you want to be in Henderson, Summerlin or North Las Vegas, or which part of town you want to be on.

Debbie Drummond  22:37

And it's not like there's going to be a lack of things to do when you're down there. So

Bo Kauffmann  22:41

now even in COVID, we still have things to do. That's right. And hopefully we'll see the end of that pretty soon. Anyway, I hope so. We're at some shows back on the strip to always All right. I did read this morning that David Copperfield has stopped his show for the time being because one of the crew members tested positive. But I read just last week that Rio is reopening on December 22, at 10am. And Penn and Teller are going to be coming back and doing shows they just haven't announced the dates yet. Awesome. Well, it's been a real pleasure talking to you. And I learned a lot. And what I'll do is I'll put links to your website and your contact information in the show notes as well. And I really appreciate the time. It's been a pleasure, and I look forward to hearing from you again, Bo. Okay. Bye. Bye. Bye. Bye. I really hope you've enjoyed this episode, you found the information here useful if if you do and you don't want to miss any more episodes. Consider downloading my free podcast app. It's available for iOS and for Android. It's super easy. on your phone. Just go to Bono's dot homes slash apps a PPS bonus Bono's dot homes slash apps, you're going to end up on a page where you have the option to download the iOS or the Android podcast app. And that way you never miss another episode. Till next time. Bye bye.

Announcer  24:14

You've been listening to Bo Kauffmann of REMAX performance Realty. Are you thinking of buying or selling a house or condo in Winnipeg call Bo at 204-333-2202 remember Bo knows real estate.