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Welcome back to Goat Gaddis Real Estate Radio, right here on AM nine 20. The Answer. I'm Cleve Gaddis and I'm joined in the studio by. Tammy Slay. Tammy Slay from Dallas, Texas. Yes, she is my girlfriend. She and I do coaching and consulting. Yes. Together for the same firm. That's how we met. And uh, she is the owner of a small boutique independent brokerage.
Mm-hmm. Called Hip Realty Group has the best, excuse me, let me back up. It has the most hip culture of any brokerage I know, and I am. A owner and a managing partner of a team here in Metro Atlantic called Modern Traditions. Yes. Realty Group. And by the way, you were instrumental in helping us come up with that name.
Yeah. You were the catalyst behind all of it. And so you and I join one another on the radio mm-hmm. To talk about real estate, all things real estate. And I hope that you in some ways get a chance to share some of your unique perspectives on things with the audience here in in Metro Atlanta. Again, my name is Cleve Gaddis.
You're listening to Go Gaddis Real Estate Radio, where our main goal is to help you as a listener, go from a real estate novice to as much of an expert as you possibly can, because we don't want home selling or home buying to cause worry for you. We want you to be confident in all of the decisions you make and we want to connect with you and it is easy.
Go to go gais radio.com, G O G A D D I S radio.com. You can ask questions that we answer off air or on air. We have to answer some off air, don't we? Because people, Tammy, they don't want their dirty laundry. Yeah. Aired on the air and we respect that. You can make comments, you can push back, you can share ideas with us.
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Tammy, I'm gonna let you set up the next scenario because we have something important to, to discuss when it comes to. How much does a house really cost over time? Yeah. Can it be overwhelming? Oh, so this came from a listener? Yep. Slash daughter. Daughter. Yep. You and I were standing in my kitchen. Yes, we were.
I think we had just finished dinner or maybe we were eating dinner together. I don't remember with Stacy. And she asked. They questioned. She did. And so she was actually washing the dishes when she said, so explain to me how buying a home really saves money. Because I'm looking at buying a $300,000 home, and after living in it and paying on it for 30 years, I'm gonna spend and actually end up paying $800,000 over those 30 years in interest.
Mm-hmm. So how is that really saving money? And, and by the way, what now? I think that everybody should understand the answer to that. Yeah. But the reality is, When you look at the numbers on the surface, they don't make any sense. Mm-hmm. And now Stacy's situation is a little bit exacerbated because she's getting an FHA loan, so she's gonna have some mortgage insurance premiums that go along with those payments and that's gonna push up.
It's not really interest, but that's gonna push up the amount of money. Yeah. She has to pay over the years. But I would love to give just a couple of little examples and then I think you have uh uh, uh, an even different. Perspective? Mm-hmm. On why it may make sense. Let's say that someone got a $300,000 mortgage and they were getting an FHA loan and only put 3% down, which means the property price is like three 11, something like that.
If they financed $300,000 over 30 years and that very first year, their payment would be $1,996, it would stay 1996 for 30 solid years. That doesn't include Morgan Insurance. In the first year, they would pay $20,903 in interest, 3047 toward principal over a 30 year period. The total interest charged by the lender, the total interest paid by the borrower in that example would be 350 1003 71.
In total, in interest. So take the 310,880. Yeah, almost the three 11. Add to it, the 351,000, which means the total cost would be $662,000 over 30 years. Now what I wanted to do is take a look at, does that make sense, Tammy? Oh, yeah. Okay. Mm-hmm. So what I wanted to do is take a look at it and say, well, if you have to live somewhere Yeah.
Then compare it to the other options that you may have. Mm-hmm. So I did a little research. I looked at $200,000 houses, $300,000 houses. They're renting for a little over $2,000. So I used 2100. So you're paying $1,996 a month for the mortgage, paying $2,100 a month in rent. Yeah. If the rent did not increase over 30 years, which is just not possible for that.
Not possible, but let's just pretend. Yeah. Then instead of paying 662,000 over those 30 years, you would pay as a tenant, 756,000 and have nothing to show for it at the end of 30 years. Now you made an interesting point about home price appreciation and we need to bring that up as well. So if, if I just base on the past 30 years, so if we go back 30 years, The average home price.
So back to 1990. Back to the 1990s. Okay. The pri, the average price of the home was 101,000. Those were the good old days, but also our average income was half what it is today, probably. And today the average price of home is 306, so there was a 300% increase. So someone who bought a home in the 1990s and spent 101.
Thousand on it, lived there, paid their mortgage, can now sell it at 306,000. Yep. So a 300% increase. Now if you look at your three 10, your $310,000 mortgage. Yep. And by the listener Stacy. By the daughter Stacy. Okay. And how much she's paying. If you do 300%, what would be her sale price in 30 years? If we just base it off of history, 300% of three 10 is what?
So wait a minute. So th Oh, so, oh, got it. Okay. So, so let's see here. That would be 900,000. So she's still in 30 years, a $300,000 home could be worth $900,000. Exactly. So you combined both of our, and, and these were, our actual answers to her when we brought this up was one, you gotta pay to live somewhere.
Yep. Yeah. Um, so you can pay to still live in the home, but then two, if you actually stay in that home and live in it, you will not only make how much you. Spent on the sales price, purchase price. But you will also make back all your interest because you're gonna be selling it higher. Yep. Than you actually spent in interest.
So let's say you were trying to be conservative about home price appreciation over 30 years. What percentage would you give it? 20 or 200? No, no, no. 50%. Oh, annually. Just annually. Oh, be conservative. Yeah. 3%. 3%. So if. You started with a house that was 300,000 uhhuh and it appreciated only 3% per year. In 30 years, it'd be worth $728,178.
Mm. Isn't that fascinating? That's fascinating. That like blows my mind. Yeah. I wanna go buy another house. There you go. Buy a house. So number one, and, and by the way, you get all of the pride of home ownership. I know she's not gonna be in that house for 30 years, but she's trying to Sure. But she gets the pride of home ownership.
She gets the stability of living in a home that she owns. She pays less money. Yeah. Than if she rents. And at the end of 30 years, she's paid the. Balance down to zero and the property's worth, whatever I said, $728,100. Yeah. We've only got about two minutes left in the segment, and I would love to talk about the importance of property condition.
Mm-hmm. In the sales price. I think I actually said the wrong thing. I think I said the importance of market condition in my segment, teaser, if you will, but talk about the importance of property condition as it relates to sales price. So in other words, If property is in way better shape, can it really sell for way more money?
Yes. So you have a a, a property you're working on in Dallas right now? Mm-hmm. Yeah. And uh, again, we've only got about two minutes and I need to recognize, in fact, you know what, let me recognize our sponsor and then we can close it up. Uh, this segment of the show. Oh, wait a minute. No, that's not what I'm doing.
Now. I'm gonna tell these listeners if they wanna sell their house for $28,000 more than their neighbor, Then they just need to go to go gaddis radio.com. Click on sell for $28,000 more. Put in a little information. It'll take you less than 30 seconds. It's no bs. And if you don't believe me, try me. We'll give you all the different options for selling your home, including the one that teaches you and shows you exactly how to sell your house for $28,000 more than your neighbor.
So Tammy, is property condition important when it comes to sales price and give. An example that you're working on right now in Dallas? Uh, yes, it is important when it comes to sales price. Um, so a home that I have that I'm preparing to go on market, um, if nothing were done to this house. Yep, absolutely nothing.
Okay. May maybe clean it up. Cut the grass, maybe clean it up. Cut the grass. Okay. Um, so we're looking at a 6 35 list price. 6 35. 6 35, 630 $5,000. Okay. Now can I ask, I'm gonna interrupt your flow of thought. If you Mac daddy fixed that place up and made it look brand spanking new, how much do you think you could sell it for?
And be very conservative. Don't give us a high number. Be something, you know, you could deliver 9 25. Whoa. Mac Daddy, daddy now. But you might spend 200,000 to get it there. I don't know what you'd spend. Um, you, you might, you might, you might not spend that much. Okay. But. Yeah. All right. So for the average, but the community would support it m added out for, for the average seller who is gonna invest 15, $17,000 mm-hmm.
In the house, whatever it might be, what kind of a difference would that make in their sales price if they do things that are desirable for the buyers? Yeah. Was about to say it depends on where they're putting it. Yeah. Yeah. But yeah, if they put it smartly in, they should make back exactly the same amount they put in.
If not, probably another 30% more. Not amazing. Yeah. When, when it's done smartly. When you, when you put the money in and, and that's where you get at when you're talking about your $28,000 more than the competition. Mm-hmm. Is you're talking about property condition. Yeah. You're talking about guiding a homeowner.
Don't tell everybody our secret. Chris. Hey Tammy, we've gotta take a quick break. You gonna be here for the four second? Yes. All right. When we come back in our neighborhood, spotlight Bright Water in Snellville is featured. We're gonna discuss house hacking. Never heard of that. And how can the 1 21 exemption be a key to you building?
Well stick with us. We'll be back.