Why You Need To Work With A Real Estate Agent That DOESN'T Need Your Business, with Mike Sposato

The First Time Home Buyer Podcast - How To Buy A Home

Introduction

Mike Sposato is the Owner and Managing Broker of Carolina Realty Advisors in Charlotte, North Carolina. He has been a Realtor for over 20 years and works with buyers and sellers all over the Greater Charlotte area. When not working Mike loves to travel, go to his beach house, and be on his boat. He is also an avid sports fan.

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Transcript

This is an automatic transcription (sorry for the typos in advance! 😅)

Mike Sposato

Laura Moreno: [00:00:00] First Time Home Buyers Nation I'm Laura Mereno, and I am super excited to bring you our fantastic guest today, Mike ESP Zao.

Mike is the owner and managing broker of Carolina Realty Advisors in Charlotte, North Carolina. He has been a realtor for over 20 years and works with buyers and sellers, all of the greater Charlotte area. When not working, Mike loves to travel, go to his beach house and be on his boat. Mike, are you ready to.

Yeah, let's do it. Great. So you, our community. Just a little insight, Please share more about you personally and then expand upon your business.

Mike Sposato: Um, okay. So I guess if you want to just start out why I became a realtor in the first place. I think it's an interesting story specifically for first time buyers.

Um, When I bought my first couple of properties, actually, um, there was no such thing really as a, a buyer agent at that point in time. And, um, [00:01:00] unfortunately for me, when I went to buy my very first property, I met with a realtor. And after spending time with this realtor, you know, I like the person and began to trust him.

And unfortunately, I told that person. Too many, uh, confidential details about my interest in property, um, my credit, my financial ability to buy, things like that. And, um, what I found out later is after I closed on my property and I moved into it, uh, a couple of months after I moved in, I had a neighbor who had the exact same floor plan.

It was in a town home complex, same floor. Same finishes, same everything. And I said, Hey, do you mind if I ask, how much did you end up paying for your property? Just outta curiosity. And he had paid 185,000 back then. And I was like, What? He's like, Well, how much did you pay? And I said, I paid 203,000. And he said, Well, didn't you have an agent?

And I said, I thought I did. And then h [00:02:00] I didn't, What I had was somebody who instead, Telling me the truth up front about who they represented. They wanted to make a quick sale and they were representing the seller the whole time, and so that's, A big reason why I got into the real estate business and I call our company Carolina Realty Advisors, is because when you're a first time buyer, it's you, You know?

I mean, you can do a lot of research on the internet and listen to podcasts like this, but each state's different. And unless you have somebody working with you and explaining to you who they represent and what their duties are, You know, things could go badly. And in my case, you know, I, I ended up overpaying for a property.

It's worked out now cause that was over 20 years ago. But it, it just left such a bad taste in my mouth that, you know, when I first meet with a, a first time buyer, what I like to do is have a buyer consultation appointment. Sit 'em down, welcome through everything that's involved with, you know, the steps involved in buying a [00:03:00] property, Explain what things cost and make sure that they understand, you know, the role of a buyer agent and what their responsibilities are as well, so that we could formulate a really good working team together.

Laura Moreno: That makes sense. I mean that, How long was that go? How long ago?

Mike Sposato: Oh, I guess it was 1998. So at this point it's almost 25 years. Obviously

Laura Moreno: your property has gone up in value and that's not an issue anymore, but you still are like, Oh my God, why? Like, how do you feel at that point? I mean, where, where were

Mike Sposato: you feeling then?

Well, of course I felt like I was lied to and I, back then, you know, it was, that was a lot of money that that difference, you know, was what, almost $20,000 in what I paid versus what my neighbor paid. And so, um, It's just not a good feeling. It left a bad taste in my mouth about real estate agents and, um, I, I still had a, you know, a corporate job and continued to buy additional [00:04:00] properties, but I was a little bit more careful each time I bought more and more property.

But just generally speaking, we have a hard time as realtors because there are people in our industry who may not go about doing this business the right way. Um, and, and that does, You know, clearly, um, I guess turn off some buyers when they have a, a realtor that's maybe not as honest or maybe a little pushy with 'em, or just trying to make a sale versus trying to represent their best interest about the entire, you know, transaction.

For

Laura Moreno: sure. I mean, That sounds like a really challenging situation, and I really like this disappointing situation because when you're closing a home, you should be the most excited, like you did it. And then you talk to this neighbor and they just disclose the news and you're like, Why was I that person?

Like, you feel like a victim. Like why did they lie to me? And so what are the steps that you take from that moment on to become a realtor? [00:05:00] Because obviously I'm sure you are very angry, upset. Do you call that realtor? Like how do you find out that he was the list in realtor and what do you

Mike Sposato: do from. Well, I mean, I really, I didn't do anything cuz I didn't know that I could do anything, so I just kept on moving forward.

Um, you know, I kept my, I just had my other job and like I said, I started to buy additional property and then once I accumulated a small rental portfolio, I decided that, you know, maybe it was time for me to leave corporate America and to get into real estate. And, you know, my whole angle was, You know, representing the client the best that I could, either on the buy side or the selling side, and, you know, trying to offer exclusive representation versus dual dual agency, um, in order to make sure that all of my clients had a great experience and they felt very strongly that I did the best I could to make sure they got the best price and terms and the [00:06:00] deal worked out as best as it possibly could.

Laura Moreno: And for anyone that is not familiar with that dual agency concept, what is that? How will you explain that to a five year old ? Okay. Because that's how we, that's how we understand things very clearly. .

Mike Sposato: Okay. Yeah. I just explained this yesterday to somebody who's actually taken their North Carolina real estate test.

They were a little bit confused about it. So basically, dual agency, how it normally begins is a buyer. Um, oftentimes it could be a first time buyer that might not know how this works. They may go to like an open house, or they may be driving by a property like and call the for sale sign. And so when they do that, they don't realize up front that that seller or the listing agent, excuse me, or the agent that they've talked to is representing the seller.

And so they come and they look at the property and they're interested in making an offer, but the buyer does not have their own. [00:07:00] And so the agent says, Well, listen, if you're okay with it, I can, you know, help you with the paperwork and help you, you know, buy the property. And in our company, I don't let my agents do dual agency as a side note, because there's too much of a perceived conflict of interest because when that buyer goes to make an offer on that home from the open house or a home that they saw for sale, sign, and scheduled an appointment.

That person who's in the middle is a dual agent, they're representing the seller and they're also representing the buyer at the same time. And you know, there's a right way to do it and there's a lot of wrong ways to do it. And in order to avoid any problems, it's always best to go get your own agent because the commission.

That's being paid out to the real [00:08:00] estate agents has already been negotiated with the seller way in advance. And so people think they might get a deal if they only have one agent involved, and that's just not normally the case.

Laura Moreno: That makes sense. So just everyone, get your own agent, get your own representation because it and, and because you need that.

And actually it's always very, It's always very misleading. Like consumers, we don't know that we don't like a first time home buyer. We have no idea about buying a home. We have rented, which was very straightforward. You sign a contract, very straightforward, and we think buying a home could be something similar, but what you're saying about, you see the, the sign, the for sale sign, and you call, that's the most logical step to take.

You wanna call, you want to ask about the price and what you are not, not, not noticing is that you are enter. A relationship with that agent? Like are you, like, I know in some states this could be a problem, but in your state, do you [00:09:00] have any, If you call an agent directly, at least an agent directly, do you have any kind of like legal relationship now with

Mike Sposato: them?

No, no. In North Carolina, verbal doesn't really mean anything. Everything has to be in writing. So, but you know, if you start talking to that person and they ask a lot of questions and the person and the buyer just unknowingly giving or divulging information about, you know, their motivation or you know, their timeframe, credit score money, they have to do this and all that, then they could.

Putting themselves in a bad position when it comes to negotiations.

Laura Moreno: So yes, go and find yourself, your agent, everyone listening. Go and find yourself a real estate agent that can't present you. So tell me more about your brokerage. Um, how many agents are in your team and how do you work with first time home buyers?

And actually, my favorite question is how do you take care of them after they have closed on a home? Do you break [00:10:00] up or you are still in communication and adding value to their.

Mike Sposato: So, Alright. Um, my team is at this point, I think there's 12 of us, and I'm actually in the hiring process. I usually hire late in the year to do training and make sure everybody's ready for the spring market.

Um, and we also have a, uh, You know, we have a transaction manager who takes care of all of our backend paperwork and files as well as a marketing director. And, um, I'm in the process of hiring a full-time assistant for me just because of my deal volume is so high. Um, in terms of answering the question, like as far as how do we take care of first time buyers, so, um, what.

Done. And I built a really proprietary approach to how we bring on new business. And we of course, get a ton of different leads that come in from places like Zillow and realtor.com and a bunch of other places. And [00:11:00] when these leads come in, oftentimes they are first time buyers because first time buyers tend to use the internet quite a bit for their searches.

And so I would say of all the buy side deals we do in the. Probably at least half are people that are buying the very first property. Um, so what we always do is we do a brief phone interview first in order to check and see, you know, if they're really in the market or not. Um, If they're serious or not.

If they have an agent already, then we can't help 'em. Um, but if we find out enough and it sounds like there might be a good fit for us to continue the conversation, then we invite 'em into the office for a face to face via consultation appointment. Um, and the great thing about these appointments, um, my, in my personal experience, when the meeting ends, And they've already agreed to work with me.

Next time, the buyer agency agreement, nine times out of [00:12:00] 10, the people will say, You know what, Mike? I, I'm really looking forward to this. I trust you. Thank you for taking the time to explain all this to me, because nobody else has everybody else. Wow. Like, . Yeah, Everybody, when I went to realtor.com, they just wanted to run me out to the house and kind of try to pressure me into buying a house, which is like a high pressure sales pitch.

And I, and I just didn't like it. And the way you're doing it just makes so much sense. And so I really, I do appreciate it and, you know, I'm looking forward to this and I, I know we're gonna have a good experience. And so, you know, I, I, I've kind of set it up that way. You know, really, because I think that's the right way to do it.

It's to talk about how this is all gonna work first, so we have a game plan, and then we can start the home shopping phase. The right way. So that's, that's how we do it here. Um, and we've had a lot of luck with it. In fact, the way we do it, um, 95% of the people that come in for the consultation appointments end up agreeing to work with our firm and they end up signing an agreement [00:13:00] that says that they want us to represent them and vice versa.

That, you know, they're gonna get all the, the benefit of all of our knowledge and experience in the market to help 'em through the process.

Laura Moreno: That's amazing. And that really, You have to do things the right way. I, I remember when I was buying a home. No one didn't go through that process. I didn't go through that consultation and what ended up happening is like my husband and as I were, were very stressed the whole way and we didn't know what was coming next.

We didn't know anything and it was a very stressful situation. Compared to what you're talking about where you kind of like, were you saying you're setting up. The game plan, you're maybe introducing to the team. You're telling them, you're telling buyers, How do you work? How is this going to work out? Um, it's a very different experience and maybe if I would have gone to you, uh, the podcast wouldn't exist because I would have been like, everything work out really, really well.

the problem, like I think the problem is. , a big majority of real [00:14:00] estate agents, I don't want to say everyone obviously, because you know, a big majority of real estate agents are there for, uh, the check selling, selling to the property, and moving on, and that creates a not so good home buying experience.

Would you agree with that or?

Mike Sposato: Well, yeah, and, and statistically what's interesting to me is I, I'm in Charlotte, North Carolina. When, you know, when I look at recruiting new agents or trying to hire agents, I look at the numbers and most agents in our market and our, we have a fairly good size city and it's always been one of the top five or 10 places to move to in the country.

Um, so there should be a lot of business. And what I find is that the average agent in our market only does four and a half sales a year. Now that. Brand new agents to people that have been doing it for 30 years, full-time, part-time, et cetera. But where I'm going with this is if you're a first time buyer [00:15:00] and you happen to run into somebody who only does four transactions a year or maybe one every three months, they're hungry, they need to make a sale.

They are gonna do a lot of times what they need to do in order. get the money. Um, and that's risky for a buyer. So, you know, for everybody listening to this podcast, I'd highly recommend that when you start to talk with a realtor, you want to kind of ask questions up front about, you know, how many transactions do you normally do, and how long you've been in the business, and some questions like that.

Because, um, you know, in my situation, you know, I, it's not unusual for me personally to. You know, 50 to 70 transactions in a year. And that's not my team. That's just me. But when you do it, Wow. That many times, Yeah. Over and over and over again. You kind of know the, the steps and the dance, so to speak, and you know what to expect and you can guide people and kind of advise 'em the right way versus.

Somebody [00:16:00] only does it every three months. And in addition to that, I mean, I don't need anybody's business. Mm. I like to help people. Um, and I think it comes across that way that, you know, when you're working with me or someone on my team, you know, it's a, it's gotta be a 50 50. We're gonna help you in, in exchange for that, you're gonna work with us and we're gonna do these great things together and it's gotta be a good collaboration or just not.

Laura Moreno: I, I love that. Like, why you don't need to work. You shouldn't work with someone that needs your business, that needs that paycheck to be able to feed their family because they're going to do things that may not be your best interest. Uh, and, and, but tell me more, Mike, you also invested in properties, right?

Like, could you tell us more about how come you became a real estate investor or like a, how many properties you have are that you renting them out, and how has that helped your own profession? You know, real

Mike Sposato: estate. Um, so yeah, I guess when, [00:17:00] um, when I was a little bit younger, I started watching some of these real estate investing shows before I got my license, and it became clear to me that one of the best ways to accumulate wealth is to become a property owner and have somebody else basically pay the mortgage.

Mm-hmm. ,

Laura Moreno: so our listeners are paying your mortgages, .

Mike Sposato: Yeah. I mean, and I get it. If, if it's, you know, a year or two until you get ready financially, that's, that's just the way it is. But to rent, I mean, I have some clients I talk to that are, you know, they're in their fifties and still are buying their first house, which is just like, Wow.

But to go back and answer your question, I have five properties and. You know, at this point they all cash flow and it's all part of, you know, the, the big, um, wealth plan for, you know, long term for retirement to have, you know, wake up like on January 1st and have all those rental checks come in [00:18:00] and, you know, there you go.

It's, it's my monthly income, so to speak. And so, um, how it's helped me in my career is it's helped me. I don't work with investors. I wanna say that up front. And the reason I don't is because not all investors end. Closing the deal, they may change their mind and wanna invest in gold or silver or stock market or bonds or whatever.

So I stay away from investors unless it's like a really unique situation. That said, um, it's helped me a lot learning everything from, you know, uh, pricing, property for rent, working with the right kinds of tenants, um, being a good landlord because a. Tenants end up using me when it comes time to buy a house because I'm, I'm good to 'em and you know, kind of teach 'em stuff and help 'em out along the way.

So it's, I mean, I don't get a ton of my business that way, but I do from time to time, get a couple of deals a year from previous tenants and that kind of thing too.

Laura Moreno: That's really great. I mean, [00:19:00] that, that talks to your value and how you help them because I, I suppose you go talk to them, it's like, Hey, what, when are you thinking about buying a home?

I mean, uh, it's a win-win situation. I mean, it's what you're saying. You're stay in a property for a few years renting that property, and then usually the next logical step is to buy. Uh, so, but quick question, Mike. How is the market where you are and. Is, is it a good time, for example, home? I used to buy a home right there now, or should they Wait, what are you, what are you seeing in

Mike Sposato: Charlotte?

Okay, so, um, you know, I referenced this earlier that Charlotte's always been one of the best places to move to, and it's still that way. Um, I haven't looked at the stats lately, but if I had to guess, I'd say we're definitely within the top 10 cities that, um, people move to because we have a great economy.

And there's a lot of big universities that are within, you know, 50 to a hundred or 150 miles away from Charlotte. And a lot of the [00:20:00] college grads will move to Charlotte. And it's put a lot of pressure on our, um, supply and demand. And so we're still in a situation where, you know, you get the, if you think.

The recent college grads move in, they move into these expensive rental, like high rise or mid-rise apartments. They're paying, you know, anywhere from, you know, 13, $1,400 a month for a one bedroom all the way up to, you know, three or 4,000 a month for a one bedroom, um, apartment. And then of course, the two bedrooms are a little bit more expensive, but they're paying so much.

It's, it's painful, you know, no one wants to waste their money like that. And even though interest rates are a little bit higher right now, I mean, you can always get an adjustable rate mortgage and get a lower interest rate. And then once the rates drop down, you can refinance it. So our market's still strong.

Um, it's thankfully always has been. Even when [00:21:00] the recession hit, we were one of the last. Go into recession and we were one of the very first to come out of the recession healthy. And again, it has a lot to do with our local economy. Um, you know, we, it's, it's also a great location to the beaches, you know, up and down north and South Carolina coast as well as we have the mountains out in Asheville, like two hours to the.

Great weather, you know, lots of things to do. Big, you know, sports teams and just that there's so much going on here. It's a very vibrant city and people wanna be here and because of that, they need a house. So it's, it's, it's been a, it's been a really good run.

Laura Moreno: Well, that's, that's amazing. Well, um, thank you so much for coming to the, to the podcast and sharing your knowledge.

But one last question I have for you is like, were you able to work again with that agent? Now you've been a real estate agent. Do you see that real estate agent that sold you the property again? And what happened? . . [00:22:00]

Mike Sposato: Um, I have not, Anytime recently, I, I'm not sure she's in the business anymore, but, um, years ago I came across her a couple of different times, and once I got inside the industry and I gained knowledge and some level of expertise, I realized that she just honestly just wasn't a very good agent.

You know, just, you know, it, it was. It was a situation where I, I happened to be advised to go look for property in this area of town. I went there, I called the, the phone number on the sign and she was the one that came out to show me the property. Um, and I just didn't know any better. So I was like, Okay, she seems nice enough and started to tell her all the stuff I mentioned earlier.

And then she showed me a couple other places and we went back to the one I called about initially. And so, you know, I, I don't know. I'm not gonna say anything bad about this person, but let's just say that there's many, many, many better [00:23:00] realtors in our area than her .

Laura Moreno: It was just like, out of curiosity.

Well, Mike, um, you've shared amazing information with us today. What can we do for you? .

Mike Sposato: Um, well, I mean, if there's anybody that's in the Greater Charlotte area that's listening to this podcast, that'd be great. If they have any questions, they can give me a call. They can email me. Um, do you want me to give you the contact information or would you put Okay.

Yeah, that would be great. So, um, the name of my company is Carolina Realty Advisors. My direct line is 7 0 4 6 1. Seven. Um, my email is Mike Carolina. Realty advisors.com. We work a, uh, eight county area all around Charlotte and down into the northern part of South Carolina, like Fort Mill, Rock Hill, um, Newark County.

So there's a big geographic area we work [00:24:00] in. We love helping first time buyers and you know, we're happy to answer any questions and see if it might be a fit for you to join us for buyer consultation and have us help you through the process. Fantastic.

Laura Moreno: Well, thank you Mike, so much for being in the first time Home Buyer podcast.

I really

Mike Sposato: appreciate you. Yeah, you got it. You're welcome. Thank you. Thanks for having me.