Water Intrusion!

Speaker 1: [0:09] Hello, hello, and welcome to the Awesome in Seattle podcast. This is Christian Awesome with the Awesome and Awesome group here in Seattle, and today I'm I'm with, as always, the beautiful

Speaker 2: [0:20] Sarah Kate Davis

Speaker 3: [0:22] Jason Saldarriaga, as always.

Speaker 2: [0:26] Charlotte Reynolds

Speaker 1: [0:27] And we are the Awesome Nossum Group. We are a group of local Seattle area real estate agents. Woo. And we love Seattle. We love to talk about it. We love to talk about how awesome things are. And today, we love to talk about water intrusion and how you can, uh, really deal with it, manage it, and hopefully prevent it. So that's what this episode is all about. Uh, we also have a very special guest coming in. Uh, we have Mr. Dan Kellar, branch manager at CrossCountry Mortgage in Edmonds. He is gonna tell us all about mortgage rates, uh, kinda give us an update on what the heck is happening with all the coronavirus stuff. It's actually impacted the economy quite a bit, and it's improving real est- or interest rates. Um, so it, it's gonna be interesting to get his take on, on what's going on with that. So, uh, first off, let's kinda go over water intrusion and why it happens. So Sarah Kate, let's- let's kinda go over why this occurs sometimes.

Speaker 4: [1:25] I would say the most common reason are that downspouts empty straight into the foundation, and that's a problem 'cause it wears down your foundation. So the solution for that would be to get, uh, a solution that will push the water down away from your foundation. So extending your downspout. Um, what are those little feet called it?

Speaker 1: [1:49] I don't even know what they're

Speaker 4: [1:49] called. How do you know what they're called either? Oh, I think feet's

Speaker 2: [1:51] a pretty good name for

Speaker 4: [1:54] them. Yeah, foot. I'm gonna call it a- Good job … I'm gonna call it a downspout foot. And that'll push the water-

Speaker 1: [1:57] Yeah … Speaker 4: away from your house. Mm-hmm.

Speaker 4: [1:59] Uh, drains can also get backed up, so that can cause quite a problem, and I heard this happened at your house-

Speaker 1: [2:06] Oh, man … Christian. Tell us a little about it. When we had that, we had that crazy record rain in, was it, like, mid-December right before Christmas? Uh, I don't remember. Do you guys remember how many inches we had in, like, a 24-hour period? It was record-breaking. It was crazy. I don't

Speaker 2: [2:20] know, but I'm pretty sure I didn't get out of bed that entire period that it was raining.

Speaker 1: [2:24] You're lucky.

Speaker 2: [2:24] Why?

Speaker 1: [2:26] Yeah. Meanwhile, I'm shop vac-ing, wet/dry vac-ing water out of my basement, uh, every two hours throughout the night, so yeah. Thanks, Charlotte, for rubbing it in. Gosh.

Speaker 5: [2:38] Sorry.

Speaker 1: [2:38] Anyways, uh, so my house is a '50s level or kinda two-story house. It's got a basement. Um, the driveway from the street angles down to the garage, so basically there's a big giant ramp leading to our garage. Great for rain to flow down. We have a trench drain that was installed before we, uh, bought the house, and it's the entire length of the two-car garage. Um, it's newer. I mean, you, l- just by looking at it you can tell it's newer. For whatever reason, it got backed up. Um, uh, apparently either, this is my theory, either it was never actually connected to the side sewer, or- They did connect it, and the, the concrete pipe broke. Mm. So it started to fail to drain. So we actually went on the little Santa train, uh, for the day. We came back home, looked at our garage, and it was completely flooded, and it was all because of the dang drain. So-

Speaker 4: [3:44] I noticed you guys have, uh, quite the sandbag collection stacked up there now.

Speaker 1: [3:47] Yeah, yeah. So even with… So I immediately went and got a ton of sandbags, put it in front, and even with that, it didn't stop the rain- Oh, wow 'cause it was pulling up so fast. And it, uh… We're remodeling that basement, and it flooded the whole thing, so we had to start over. Um, we had a bunch of… Yeah, it was bad news bears. So-

Speaker 4: [4:05] Well, we will talk about how you can prevent these things from happening- Exactly … later on. I'll tell you what I did-

Speaker 1: [4:10] Stay tuned as well. Yeah.

Speaker 4: [4:11] Uh, other reasons pipes can burst. Uh, so it's great to winterize your pipes You can do this by insulating them with a little foam heat tape and just kind of keeping an eye. If it gets really cold and you're traveling, turn the water supply off. There's, um, there's things you can do for this. Toilet seals can erode. I would say this is a pretty common one, and there's… It's an easy fix. Yeah. You just replace the wax ring under the toilet. And, um- It's like a

Speaker 1: [4:41] $5

Speaker 4: [4:42] part. Yeah. I mean, you don't need to even call or hire anyone to do it. You guys can- Mm … DIY that yourselves. Yeah,

Speaker 1: [4:47] very simple.

Speaker 4: [4:48] Yeah. Uh, natural springs in your backyard.

Speaker 1: [4:51] Mm-hmm.

Speaker 4: [4:52] What do you guys know about natural springs?

Speaker 1: [4:54] I got another story about that. A different, a different house that I owned on North Beacon Hill, obviously a hill- Mm-hmm … 'cause it's North Beacon Hill. Um, and we kept having just a little bit of water coming in on the backside of the foundation in the basement, and couldn't understand why 'cause the downspouts are all pushed away. Everything, we're doing everything right, and I'm like, "Why is this happening?" So I dug a little trench, and I was like, "Okay, there's nothing here." I kept digging. I kept digging, and more and more, like the ground kept getting wetter and wetter. Yeah. About six feet down, found a natural spring that's just going down the hillside. I'm sure geography or geological Jason over here- Jason. What

Speaker 5: [5:39] was your-

Speaker 1: [5:40] Geological Jason. Beth MacArthur. Yeah. What was your degree? Hydrology?

Speaker 5: [5:42] Hydrology, yeah.

Speaker 1: [5:43] Yeah. You probably understand why exactly that happened. I think there was like a layer of clay-

Speaker 5: [5:47] Mm-hmm … Speaker: right before that, so the water was hitting the c- clay, couldn't-

Speaker 4: [5:50] Couldn't go anywhere, so it was- drain, and coming down the- Yeah … Speaker 5: the slope. Yeah.

Speaker 1: [5:53] Yep.

Speaker 4: [5:53] Taking the easiest path.

Speaker 1: [5:55] Exactly. Path of least resistance. Yep. So I had to dig a six-foot deep, uh, trench drain around the back of my house so that the water would stop there around the foundation and go to the sides of the house. Fun times in

Speaker 2: [6:10] real estate. You must be really good at digging trenches by

Speaker 1: [6:10] now. I am so good at digging trenches right now. Nice. Good skill to have. So good that I don't wanna do it ever again.

Speaker 4: [6:18] Uh, water can also come in from the roof, you guys. Mm-hmm. So if we're having a crazy storm like the one Christian described earlier, if it's raining super hard, the wind is whipping, water can seep through ceiling fans. So that's another area to- Yeah, or anything … to look out for. Yeah. Yeah, or anything really. Um, my girlfriend is having this problem at her house at the moment, and it went unnoticed for so long, the water was leaking through the roof, that now it's started to damage the walls, and it's, like, shooting all the way down the walls. Mm-hmm. So they're gonna have to have a big roof project coming up this summer and-

Speaker 1: [6:53] Yeah.

Speaker 5: [6:54] It's like a water feature in

Speaker 4: [6:55] your house. It's a water feature in her house. You turn it on, and it, like,

Speaker 5: [6:56] sprays a fountain with

Speaker 4: [6:59] the ceiling. Not fun. No. Not fun at all.

Speaker 1: [7:03] Speaking of signs of water damage- Mm-hmm … like running down the wall, Charlotte, let's talk about that.

Speaker 2: [7:07] Yeah. So when looking at houses, there's, you know, a few things that you can look for. Um, and actually, sometimes buying in the winter is kind of in your favor. Most people hate to buy in the winter 'cause there's, as Jason says, like, three seconds of daylight on any given day.

Speaker 6: [7:21] In Seattle.

Speaker 2: [7:22] Um, in Seattle, yeah. But there are some advantages to that. Um, you know, you can see if and when water's coming into a house pretty easily. So one of those is, you know, pretty obvious, just water stains.

Speaker 6: [7:33] Mm-hmm.

Speaker 2: [7:34] Um, you can see those, like, if the roof is leaking. You know, pay attention to, like, corners and things like that. Um-

Speaker 4: [7:40] Bubbling.

Speaker 2: [7:41] Yes, bubbling. Like, uh, flooring in particular, like in bathrooms and stuff, it's really easy to tell if there's leaks there. Um, and then another one is efflorescence, which is a white powdery substance that you see generally on the walls, sometimes on the floors as well. Um, and what it is, it's the minerals and salt in the concrete that's being pushed out by water coming in. So when that water evaporates, that is, uh, what's residual from that. Um,

Speaker 1: [8:11] so- That sounded amazing. That was an amazing description.

Speaker 2: [8:13] Thanks. That

Speaker 4: [8:14] was. She's very good at describing things.

Speaker 1: [8:16] I know. You always tell her that. Such a good

Speaker 4: [8:17] teacher, I know.

Speaker 2: [8:18] Thanks a lot. You're welcome. I appreciate the feedback.

Speaker 1: [8:22] Please leave me a comment card. So you usually see that, though, you usually see that, though, like in the basement on a cement foundation wall. Yeah. You're not gonna see that efflorescence on, like, drywall or something like that.

Speaker 2: [8:30] That's right.

Speaker 1: [8:31] Yeah. Yep. There you go.

Speaker 2: [8:32] Um, another big one that people generally notice right away when you walk into a house is smell. Um, so sometimes agents will kinda trick you and put in lots of nice smelly good things and air fresheners. Mm-hmm. Um, so try to pay attention to see, you know, if one room has, like, more so of that- Like a

Speaker 4: [8:51] damp smell … than another. Mm-hmm. Yeah.

Speaker 2: [8:52] Yeah, like really just damp and kinda gross, kinda like mildewy.

Speaker 4: [8:56] Mm-hmm.

Speaker 2: [8:56] Um, so that's a big one.

Speaker 1: [8:58] You'll also sometimes notice, like, there's a product, I think it's called DampX or something like that, and it's like a little plastic container, like, about the size of, like, a margarine container or something like that, and it tries to suck in the moisture in the air.

Speaker 4: [9:14] Mm. Mm. Yep, I've seen- Um- … those at Home Depot.

Speaker 1: [9:15] Yeah, exactly. Yep. So you'll spot those, like, hidden kind of around the basement sometimes. So if you notice that, that's a sign that something- Yeah … might be going on as well. Red flag.

Speaker 5: [9:23] And to be clear, like, you see this, it's not like, "Oh my God, don't buy the house." No. It's, oftentimes it's just a, a homeowner that has not put in the m- sometimes- Not paying attention … very minimal work to-

Speaker 1: [9:34] Exactly … Speaker 5: to fix something, so. Yeah.

Speaker 2: [9:36] And then another one is basement designs that might try to cover up damage. A big one is people painting their basements, which is sure, like, to to the naked eye a good cover-up, but if there is efflorescence down there, you can just, like, you know- You know, rub your hand against the wall and that will just come, like, straight off even if it's painted over.

Speaker 1: [9:53] Mm-hmm.

Speaker 2: [9:54] Um, and I guess, too, like, sometimes staging maybe I would say. You know- Yeah … if they're, like, putting rugs down there in the basement or something, you

Speaker 4: [10:01] know, they might be

Speaker 2: [10:02] trying to cover up.

Speaker 4: [10:03] Yes, it's always good to look underneath-

Speaker 2: [10:04] Yeah … Speaker 4: staging rugs. You never know what you're gonna find. Yeah. Sometimes nothing.

Speaker 1: [10:07] Mm-hmm. Hopefully nothing. Sometimes

Speaker 4: [10:09] nothing. Yeah.

Speaker 1: [10:09] Yeah. Those are good, uh, good signs of how to spot water damage. Um, so let's say that you have water damage. What the heck do you do now, Jason? You freak

Speaker 5: [10:19] out. Ah! You run.

Speaker 4: [10:21] Burn the house down.

Speaker 5: [10:22] Yeah, burn the house-

Speaker 4: [10:23] Start all over. Rebuild.

Speaker 5: [10:25] You ru- you ignore it, you run away, and just don't think about it. Mm-hmm. No. Uh, you know, I, I do wanna say this is a benefit of getting a good agent, because we have a lot of referrals. Um-

Speaker 1: [10:37] And apparently I have a lot of experience.

Speaker 5: [10:38] Yeah. And oftentimes experience. Uh, so we're more than happy to help, so you can always reach out to us. But the… Generally, you wanna deal with the problem before calling somebody. You, you, there's something more immediate that you need to do. So the first thing you wanna do is find the source of the leak. Um, oftentimes, we've discussed some sources already. Other ones are, like, water tanks, water heaters that are… Uh, they can leak ve- they can rupture very slowly or very suddenly. My brother-in-law, he woke up one day and, like, basically his first floor was flooded. Um, his water tank just leaked over, like, a few hours. Water tanks generally last 12 to 15 years-ish. You might see ones longer than that, especially if they're in, like, climate controlled areas, like in, in s- the interior of a house. Um, but after that point, you definitely wanna keep your eyes peeled for, um, any rust or that, signs of wear on the water tank. Yeah. Because again, they can rupture really suddenly and cause a lot of damage.

Speaker 1: [11:35] And they generally do give signs, like indications, hey, something's going on. So if you're not paying attention, you're gonna miss those. But if you pay attention, even just once a year look at your water heater just to see if you see any signs of rust or something, you'll be able to spot it before it happens.

Speaker 5: [11:49] Yep, and you can put, like, a drain pan around the water- Mm-hmm … tank- Water tank. Yeah … that can help. Um, so if, there are- They even have

Speaker 1: [11:56] alarms

Speaker 5: [11:56] that go off if it senses a leak. Yeah, I, I got an alarm. Yeah. They're, they're like, you can get them for less than $50. They connect to Wi-Fi- Mm-hmm … so they not only go off, but they'll text and email you, so it's pretty nice. I have one. Um, another source is, like, a wa- broken water pipe, especially on the exterior of a house. So something that people don't realize, uh, the area in a pipe that ruptures is actually not where the ice is. What happens is the water freezes and it increases the air pressure. So it pushes the air and it's in the, generally where the air is that it bursts. So people always think, oh, it bursts where the water expanded because it froze. That's not actually true generally. Um, there's a lot of videos on YouTube about this.

Speaker 4: [12:39] Jason's watched all of them.

Speaker 5: [12:40] I, I was like, myth? That is a myth. Interesting.

Speaker 1: [12:44] Yeah. I didn't know that.

Speaker 5: [12:44] Yeah.

Speaker 1: [12:44] That's good to know.

Speaker 5: [12:45] All right. So you found the source. Now there's water in your basement or in your house or whatever, so we need to deal with that. This is where you start freaking out. I'm kidding. I'm kidding. You don't freak out. Uh, you wanna make sure y- you know, towels come in, you wanna mop it u- up as quickly as possible, dry it out. The longer the water sits, the higher the chance that there's gonna be mold, there, there's gonna be… It's gonna penetrate farther into the wood and really, like, distort it, and maybe you'll have to replace it entirely instead of rem- uh, remediation in some way. Um, wet/dry vacs are very handy here. Mm-hmm. This is something that, like, a lot of homeowners probably should just have

Speaker 4: [13:22] on hand. They're not that expensive either. As a homeowner- Like 75 bucks, 70 bucks It's, yeah,

Speaker 1: [13:25] even cheaper-

Speaker 4: [13:25] Close … Speaker: than that often, yeah. Just have one. Yeah.

Speaker 1: [13:27] They're, yeah, it can-

Speaker 4: [13:29] Multi-use.

Speaker 1: [13:30] E- exactly. I mean, I literally used that every two hours that night that the rain was just crazy, just vacuuming up water and then dumping it out where it wasn't next to my house.

Speaker 5: [13:42] Have the kids help with their little kid shovels. They

Speaker 1: [13:44] did. They did. They would help with the vacuuming too. Aww. They

Speaker 5: [13:46] loved it. They had

Speaker 1: [13:47] fun with

Speaker 5: [13:47] it. Yeah. Um, if you wanna go a step further, uh, so you can always call a water damage remediation company. We see these, uh- cars all over the city, and you might not know what they actually do. So like ServPro-

Speaker 1: [14:02] Mm-hmm … Speaker 5: Roto-Rooter, like PureDry, these are companies that most of their business is, uh, water re- damage remediation. So they are available 24/7. You call them, they can come out really quickly and provide the tools and the equipment that you, that we're discussing here. So you can buy it yourself. It may be like a wet/dry vac. You might have that on hand. But if you need something like a dehumidifier, which can come in handy for, uh, drying out the area after you remove all the water, or even an industrial fan and whatnot, that can be provided by these companies. You know, if you react quickly, you can definitely slow down the damage. Yeah.

Speaker 5: [14:40] But most of the time people just freak out.

Speaker 1: [14:42] Yeah. And those companies that help with that, they'll usually work with your insurance company, um, for cost and all that stuff. So just something to keep in mind. And then also, like when that happened to my house, I just went to Home Depot and rented one of those big industrial carpet fans. Um, I think it was 25 bucks a day. Uh, and then you can also rent dehumidifiers from them as well. So they're pretty inexpensive for what it is. Um, it's not like you need to buy those, you can just rent them. So, um, anything else about what to do when it happens?

Speaker 5: [15:15] No, that's… Uh, there's a lot more. Each situation's gonna be different. But- Yeah … that's it in a nutshell.

Speaker 1: [15:20] Cool.

Speaker 5: [15:21] You know, don't freak out. Try to get, uh, the da- the water under control as quickly as possible.

Speaker 1: [15:26] Mm-hmm. Try to remove it as- Yeah … quick as possible.

Speaker 5: [15:28] And, uh, move on from there, go on from there.

Speaker 1: [15:31] So let's talk about prevention, because that's what we really should be… You know, if this ever happens to you, then you wanna prevent it. And if it hasn't happened to you, maybe you should take some of these steps to learn what to do so that you don't have to worry about it. So, um, I was just telling the team, I went to a real estate investing meeting a couple weeks ago, and it, it was an interesting meeting because they had a bunch of house flippers slash people that fix up houses and keep them as rentals on a panel discussing their biggest tips and regrets of what they did and didn't do in the past. And one of their biggest ones was, any time a house has a basement, they now always, all four of the people on the panel said this, they now will always add an water- a waterproofing system to the basement. Because they've all had it fail, and then they have to tear everything out and start all over when they finish off a basement. So what a waterproofing system- consists of, and this can vary per house, you don't always have to do all these things, but essentially there is on the wall, you put this, uh, really hard plastic membrane that has little, uh, like almost like little cups or indents in it. You put that along the wall, so if any water comes in through the cement foundation, it hits this hard plastic membrane, it runs down that. At the bottom of the wall where it meets the floor, you can install an interior French drain system. It's usually about six to eight inches wide. It's about six to 12 inches deep, um, and it's essentially a pipe that's a perforated pipe, um, that collects the water and runs it down to a sump pump. And then the sump pump is basically It's like a two to three-foot deep, uh, bucket, and there's a machine in the bottom of it that when, just like in your toilet tank, when the little bubble, uh, is raised up from the water level increasing, once it reaches a certain height, the pump kicks on, it pumps the water out of the bucket where all the water has collected, and pumps it outside the house.

Speaker 5: [17:40] So, uh, I think it's important to observe that what you're saying is not re- preventing the water from entering.

Speaker 1: [17:48] Exactly.

Speaker 5: [17:48] What, what, the, the current state of all of this is, uh, where, where we're currently at right now is actually accepting the water will intrude into the basement and dealing with it. So not encouraging it, but also not stopping it. People in the past, you can put like epoxies and stuff on the basement walls- Mm-hmm … and that sort of thing to prevent the water from coming through. But those often fail. There's shocking amounts of pressure-

Speaker 1: [18:12] Yeah … Speaker 5: uh, forcing that water through. And so I think, you know, a common construction guideline now is to accept the water will come and direct it accordingly. So then- Exactly … you build kind of this, this fake, this false wall within the basement- Mm-hmm … that's like a centimeter wide basically, where the water will drip down and then collect into a sump pump that'll c- it'll then be pumped out. And then lastly, sump pumps, you know, a lot of people think, "Well, that's a great idea." But then a lot of times when you have water damage, it's a bad rainstorm, there's wind, you lose power. These pumps can be battery operated.

Speaker 3: [18:45] Mm-hmm.

Speaker 5: [18:46] So that's very important. Uh, depending on your situation and the capacity of the sump pump, you might wanna invest into something that is, upgrade it to something that is battery operated.

Speaker 1: [18:55] Yeah. I totally agree. That's a great point, Jason. Um, there are companies that will do this all for you obviously. Numerous of those companies actually have lifetime warranties or guarantees, so if it does ever fail, they'll come out and repair it. Um, so just look into that. Uh, like Jason said, there are also chemicals that you can apply. There's one that's hilarious called the Impregnator. Um, it basically- … it's like live crystals that you paint onto the cement, and when water hits it, the crystals grow and fill the gap, uh, between the cement and try to stop the water. That's one method as well. But- Uh, another way you could do it too is, like Charlotte was saying, I believe it was Charlotte saying, um, you know, you want- or maybe it was Sarah Kate saying that you wanna remove the water from even reaching the, the basement wall. So, you push it away as far as you can from the house. Another thing you could do is buy one of those cisterns, the big giant… Usually they're maroon colored, but they're all sorts of different colors. Um, and all the downspouts go into that. Then you can reuse that water in the summer, um, to water your plants, water your yard, whatever you wanna water. Um, but that's another way to assist in stopping the water. Very green. Yeah, very green. Very Seattle. Go green,

Speaker 4: [20:13] Seattle.

Speaker 1: [20:14] So now that you understand how to prevent water intrusion from happening, uh, and you understand why it happens, let's, uh, let's bring in a special guest, the one and only Mr. Dan Keller, CrossCountry Mortgage-

Speaker 6: [20:27] Woo in

Speaker 1: [20:27] Edmonds.

Speaker 6: [20:27] That's it. I do not-

Speaker 1: [20:28] Branch manager.

Speaker 6: [20:30] I do not specialize in water. I specialize in mortgages.

Speaker 1: [20:32] Exactly. Uh, you might as well say your MLO number.

Speaker 6: [20:36] MLO number 115349, 'cause we are gonna be talking about rates. I'm sure that's why I'm here today.

Speaker 1: [20:41] That is why you're here today. Yeah. And you know, after you say your last number, I always say niner.

Speaker 6: [20:46] Breaker, breaker

Speaker 1: [20:48] 1-9er. So if you don't know, Dan and I had a radio show for years called Seattle Real Estate Radio. We were on KKOL. I don't even remember the… Was it 1300 AM?

Speaker 6: [20:57] It… Yeah. Yeah, good, yeah, good memory.

Speaker 1: [20:58] I think that was right. Um, so this is p- actually probably the first time we've been on the mic together on the air. Yeah. We have the TV show, American Dream TV, but that's the first time we've been on the mic since that show, so welcome back. It's good to be back on air with you.

Speaker 6: [21:12] I'm excited. I mean, the, the… I'm gonna tell you, these microphones smell a lot better than they did- Than the ones in the studio … than the radio

Speaker 1: [21:17] studio.

Speaker 6: [21:17] Yes. Yes.

Speaker 1: [21:19] So Dan, let's, uh… The reason I wanted to bring you on, and the reason we all wanted to bring you on, was the mortgage market is kinda crazy right now. Yeah. There's a lot of things going on that are affecting rates, and I would love to understand, you know, the why behind that, and then kinda where we're at.

Speaker 6: [21:37] Yeah. So let's, we'll talk briefly about the traditional markets. Okay. So traditionally speaking, investors invest in stocks and they invest in bonds. Mm-hmm. And they typically work opposite of each other. So when the stock market is doing really well, there's less money flowing into bonds, therefore interest rates are higher. Got it. Okay? Mortgage interest rates are higher. So it's kinda

Speaker 1: [21:59] like a balance-

Speaker 6: [22:00] Yeah … Speaker: between the two. Yeah. And then when the economy's not doing so great and there's less money in stocks, more money is in bonds, therefore making the price of bonds more attractive and interest rates drop. Okay? Mortgage interest rates drop. The other part of that, there's a, the technical that I watch is the 10-year Treasury. Okay. Okay? The 10-year Treasury yields. And typically they're at about 2 to 2 and a quarter. When the market was, when mortgage interest rates in 2012 were really low, at historic lows- Mm-hmm … um, the 10-year Treasury was at about 1.6.

Speaker 1: [22:35] Wow.

Speaker 6: [22:35] Well, today is, what is it, March 2nd? March 3rd. 3rd. March 3rd- Yeah … 2020, and the 10-year is at 1.00.

Speaker 1: [22:45] Wow.

Speaker 6: [22:46] Mm-hmm. So I joke when I say this, that the 10-year Treasury is as low as we've seen it in 200 years. Like, 500 years, whatever you wanna say. A million years. It's the lowest ever, which is-

Speaker 1: [22:57] Since dinosaurs roamed the planet.

Speaker 6: [22:59] Yeah, since they invented the 10-year Treasury, I guess. So what… You know, and so we're in 2020, great economy, great stock market Uh, why?

Speaker 1: [23:09] Yeah

Speaker 6: [23:09] Why- ' Speaker: Cause it seems like it shouldn't be low, it should be higher- Yeah … because stocks are doing so well. Yeah. Got it. So that's why I said traditionally you have stocks and you have bonds.

Speaker 1: [23:19] Mm-hmm. Balancing each other

Speaker 6: [23:20] out. Balancing each other out. Over the past, I would say three years, let's just say four-

Speaker 1: [23:26] Okay … Speaker 6: since there was kind of a whole shift in economics, presidents, all of that stuff- Mm-hmm … you throw out traditional, I guess, not common sense, but just traditional bearings- Yeah … and, and how we advise people. So now it, it really, I think as a, as a mortgage professional, as a real estate professional or as real estate professionals, um, it makes our jobs more valuable. Mm-hmm. I believe it's, it puts more focus on understanding what's going on from a day-to-day standpoint from, hey, we're out in the trenches, this is what's happening in the markets today, and here's the why behind it. Yeah. And I take a lot of pride in my business to explain the why. Yeah. So right now with my clients, without confusing people, um, in our home buyer classes, we're calling this a gift, what we have. Yeah. It's really hard to explain why mortgage rates are really low right now. There are a couple of things that I think everyone needs to understand, uh, might be contributing to it. Uh, the coronavirus- Mm-hmm … um, and the unknowns surrounding that is contributing. Um, the, the other thing is I believe we all can agree at this table right now that the stock market has, is overbought. Yeah. It has been. I mean, what, what'd it hit? Another record, was it a few weeks ago, 30, like near 30,000? Yeah. Just crazy.

Speaker 6: [24:43] Um, great if you're in the stock market, which I'm not complaining, but all good things must come to an end, and I think we're, we're seeing that. And as we see that- Money is now… Well, there's two things we're seeing right now. Money on the sidelines-

Speaker 1: [24:59] Mm-hmm … Speaker 6: big money on the sidelines, and then money pouring into bonds, which is causing rates to, to drop. Interesting. So let's give a recap of where they were, like, maybe over the last year- Yeah … and where they are now. You wanna do that?

Speaker 6: [25:13] Yeah. About nine

Speaker 1: [25:14] months- Some sort of a compare and contrast- Yeah … is kinda what I'm getting at.

Speaker 6: [25:16] Yeah. Nine months, well, Jason and I were talking about this at the last home buyer class. About nine months ago, up on the screen at our home buyer class, we had an example, a budgeting example, and, and we had 5.625.

Speaker 1: [25:28] As the interest rate.

Speaker 6: [25:29] For 30-year fixed rates. Wow. Yeah. And we all thought that, and we were all educating, not out of fear, that this is where mortgage rates were headed. Hey, the- Mm-hmm the glory days, the heydays of low 30-year fixed rates were… You know, and a 5.5, 5.6 30-year fixed is really not that bad, but- It's

Speaker 1: [25:44] still, I mean, when I came in the business in 2005, that would've been a crazy low rate. Yeah. 'Cause that was un- they were like 6, 7, and that was- Mm-hmm … great rate at that point.

Speaker 6: [25:54] Yeah.

Speaker 1: [25:55] So yeah. I mean, and then you look at the late '70s, early '80s, and they were at 18, 19, 20%. Oh, yeah.

Speaker 6: [26:01] Yeah, the teens. Yeah. Yeah.

Speaker 1: [26:03] Mm. Just crazy. Yeah.

Speaker 6: [26:03] So I've been in the mortgage industry, let's say a dozen years, almost a dozen years, and so when you talk about 30-year fixed rates being in the 3s, I, my brain automatically goes back to 2011 and '12. Mm-hmm. All right? Um, economic collapse, housing collapse, recovery, artificial, artificially low interest rates. Mm-hmm. The government bought mortgage-backed securities and, and artificially lowered them. Fast-forward 10, 11 years, and we're seeing rates back down to that level and so right now March of 2020 and this is why I said my MLO number. Mm-hmm. So I'm just giving an example. This is not a rate quote, but I locked not just one rate. We've been locking a lot of rates. It's, you know, refinance is part of my business, is to help past clients- Yeah … that purchased. If they have a higher than a 4% rate, I'm reaching out to them and just saying, "Here, we can save you some money, and here's how."

Speaker 1: [26:55] Yeah.

Speaker 6: [26:56] But we, over the last 24 hours, we've locked, um, about a dozen loans at 3.375, 30-year fixed rate with no points or lower, and one of your clients, we gave a rate quote last night, three and a quarter, 3.25 with .40 discount points. Like- It's just- … insane … Speaker: that's, yeah. And again, this is- It's insane … not a rate quote. We're not going into the technicals that, um, that help qualify for that, but I'm g- we're giving an example here, which is just- Exactly … nine months ago, 5.625. Yeah. I mean, that's a big savings.

Speaker 1: [27:31] That's, yeah, that's huge.

Speaker 6: [27:31] So the listeners listening that are buyers- Mm-hmm … need to understand that that really impacts the total cost of your money over time and your purchasing power right now.

Speaker 1: [27:40] Mm-hmm. Yeah, I mean, it's, uh, even from a week ago to today when, same client that we were talking about last night, interest rate was 3.75- Mm … and today it, or last night it was 3.25 or- Mm … 3.375.

Speaker 6: [27:53] Yeah.

Speaker 1: [27:54] Like, I don't remember how much money that was a month, but that was hundreds of dollars- Yeah … savings a month- Yeah just over a week-

Speaker 6: [28:00] Yep … Speaker: that they didn't have to do anything for. It's just the market- Yeah … interest rates got better. Yep, and unfortunately we will see the flip side of that too- Yep … where someone will be out shopping, and they'll have a 3.25 rate quote for budgeting purposes, and then the market can change overnight. Yeah. It can worsen overnight before it improves. I always warn- Yeah … my clients that it took how many months for rates to drop to three and a quarter. Literally, it could go up to 3.75 overnight. Exactly. So just be caut- ti- times like this, be cautious, be informed, make sure you're working with a pro. That's my best advice right now.

Speaker 1: [28:35] Yeah. Well, uh, you guys have any questions, further questions for Dan?

Speaker 5: [28:38] No, that was awesome though.

Speaker 1: [28:40] Yeah. That all makes sense. Very

Speaker 5: [28:41] helpful, yeah.

Speaker 1: [28:42] Well, thank you very much for coming in, Dan. I really appreciate it. Do you wanna give your MLO number just to be super safe one more time, Dan?

Speaker 6: [28:48] Yeah. It's always, it's always good to, to double down on protection, right Christian?

Speaker 1: [28:53] Yeah.

Speaker 6: [28:54] Um, MLO number 115349.

Speaker 1: [28:57] Niner.

Speaker 6: [28:57] Niner.

Speaker 1: [28:58] I just wanted to say niner. That's the only reason I made you say that, so. Um, so everyone, thank you so much for listening to this episode of the Awesome in Seattle podcast. I hope you learned a lot. If you got any questions, don't hesitate to reach out. Please, if you enjoyed this, like it, uh, follow us or subscribe to us on your favorite platform so that the podcast algorithms know that you enjoy us so we will get bumped up in the rankings.

Speaker 2: [29:22] Tell your friends.

Speaker 1: [29:23] Tell your friends, yes. Thank you very much. We'll see you next time.

Speaker 2: [29:26] Bye.

Speaker 1: [29:26] Bye.