EPISODE 17: Home Buying Process – What to Expect from Application to Closing
Episode 17: Transcript
Mousetrap: All right. All right. Welcome back to another episode of Doublewide Dudes. Before we get into the fifth episode of Home Buying Process – AP, I saw an article come across my feed on the Bleacher Report that Jonathon Simmons got traded to the Magic man.
Mousetrap: I guess that’s your boy. Backing him up there for a little bit.
AP: I know. Even shouted him out here on the Podcast when they were in the playoffs. But yeah, man, he got a 3-year deal with the Orlando Magic. And definitely sorry to see him go. His 2 years with the Spurs he brought the, what were you calling it? We were talking about him earlier.
Mousetrap: The ZAZZ
AP: The ZAZZ.
AP: Yeah. I don’t even know what that means, but I know he brought it, right?
Mousetrap: A little flashiness. The Spurs are so old school and pure basketball that they don’t really have none of the flashy stuff.
Mousetrap: So he was bringing.
AP: Sometimes you just want to see the other team get dunked on, right?
AP: And that’s what he did. He definitely earned it Mousetrap. He made a name for himself, especially during the playoffs. And it just got to the point where we couldn’t afford him. Good on him man.
Mousetrap: Yeah. He’s a good player. I know, thinking of work, I think we got the Chavez video right about wrapped up, that final clip.
AP: Yeah. Yeah. Adam over there at White Cloud Media Group is putting the final touches on this video that, man, I was thinking back, we started this thing back in March. We did our first shots at the closing with Leroy and Michelle there signing the paper work to get all this started. Now we’re at the finish line and really excited to see that finished video that Adam comes out with.
Mousetrap: Yeah. They’re putting together some good stuff. He was showing me some of his other clips that he’s done. Some of the wedding videos he’s done in the past. Just amazing man. Drones are incredible.
AP: Yeah. Yeah. Like I got told Adam, it’s one thing to take pictures or videos from a drone, but just the artistry he’s able to put together with the videos and whatnot. He did that video with the drones following the Chavez home from the factory to the property. But did you see that Viper video they did?
Mousetrap: Yeah. He showed it to me.
AP: Yeah. That thing was just out of this world.
Mousetrap: Yeah. The editing is incredible. Editing this Podcast, I struggle a little bit. Cutting it and making sure it sounds crispy. But some of the shots that I saw in the video and the timing of the music is just impressive. I’m happy Adam and Wes over at White Cloud was able to deal with us and it’s just a good group. Good group of guys.
Mousetrap: Okay. Well, why don’t we jump into this episode. Let’s give the listeners the next step in the home buying process. Just to sum up the first four. We talked about finding a piece of property, knowing where you’re going to put the home. Choosing a floor plan. What’s going to be the best space for your family? And then, knowing the building process and how these homes are built. The next step AP would be finding a retailer.
Mousetrap: Now you’ve got to choose the team you want to work with to help you get to the finish line. A lot of these retailers sell the same product. They have access to the same factories. They can get it sent from the same location. But it really comes down to on who you feel comfortable with and what team can ultimately get you what you need.
AP: Yeah. Yeah. In some of the previous episodes Mousetrap, we spent a lot of time really dissecting the process of negotiating with retailers. We talked about in our very first segment on depreciation, how to get the best price out there in the industry. You hit the nail right on the head Mousetrap. It’s going to be a gut feeling. You’re going to know within the first 5, 10 minutes of talking with this company if that’s the right team for you.
AP: And it’s hard to really describe. It’s hard to put in words. There’s not some scientific method to figuring it all out. Just trust your gut. That’s the biggest thing I can say that we haven’t really elaborated on already when it comes to choosing that retailer.
Mousetrap: Yeah. Yeah. That gut feeling, when it comes to any buying process, I know buying a home is one of the biggest ones you’ll take part in. But when you go out shopping, no one really likes to deal with sales guys these days, right?
Mousetrap: It’s just a bunch of games and gimmicks that homeowners or potential homeowners feel like they’re getting themselves into. They dread the opportunity go out and search for homes just because they don’t want to take part in that.
AP: Yeah. This is a very adult decision. And I think people want and deserve to be treated like adults.
AP: Just tell me what it is up front. Good, bad, indifferent. Tell me what I need to know. Don’t just try to spoon feed me what you think I want to hear. Let’s get to the finish line together while moving forward with reality, right?
Mousetrap: Yeah. How AP was saying about getting the best price, really we found, knowing what the home cost, or what they’re selling it for, is going to be the first thing you’re going need to know. There’s a lot of moving parts on getting the home to the finish line and out to your property. The retailer is really responsible for delivering and setting the home up to the state code. So that’s one of the first price points that you need to focus on. The second one is going to be what the improvements cost. So everything exterior of the home like the base pad, skirting, the decks, connecting the home to utilities, that’s another price point that you’re going to have to figure out before moving to the closing table.
AP: Right. Right. And insisting, before you start dealing with closing, on a physical site inspection. If you’re buying a new home, a manufactured, modular home, mobile home, whatever it is, you really need to insist on the physical site inspection. Having someone meet you face to face at your property so that you can not only show them exactly where you want your home to be, also ask questions. “Is my electric up to code? Is it going to work for my new house? What size base pad?”. Or this, that and the other. And that’s what Construction Managers, that’s what site inspections are there to do. Once you’ve closed, once you’ve bought a house, if you find out you don’t have electric and it’s going to cost 5 grand to get it there, it’s one of those things, it’s too late to go back. So I strongly, strongly urge folks, when going through the process, to insist on having this site inspection done up front.
Mousetrap: Yeah. How many horror stories have you heard about retailers selling the home and not even doing one of those, come to find out there’s a high elevation needed to be installed, or you’re in a flood zone, there’s a fence line and your neighbors don’t let you cross their property.
Mousetrap: Just all types of stuff that you definitely need to find out before even purchasing the home because you need to know what costs you’re going to confront. Now at Braustin, we don’t charge for that. How would a customer take advantage of getting a free site inspection ordered?
AP: Well, all we ask for Mousetrap is either a pre-approval or proof of funds, if it’s going to be a cash purchase. If you’re looking to get that free site inspection and you don’t already have a bank approval, we make it really easy. And again, free of charge to get those exact numbers from the lender. So at this part of the process, obviously you’re not going to know the exact options or upgrades you want in the home. And you’re not going to know the exact numbers for any site work or improvements. So what we do at this part of the process, at least to give you a rough idea of monthly payment, down payment, that kind of thing, is use what we call allowances. Improvement allowance for things we might be doing to the property. And then an upgrade allowance for things we might be doing to the home. With those two allowances plus all the other numbers we’ve got publicly posted on our website, you get a pretty good idea of what you need to go ahead and submit to the bank for. At that part of the process that’s really where you guys step in, right?
AP: So elaborate a little bit more on just how easy it is to get started with the application process.
Mousetrap: Yeah. Yeah. So once you know what floor plan we’re going with and we’re going to shoot up an application to the bank, my job is just to really help you make the best first impression. So the first documents needed along with the app to submit is going to be four documents. Now if you work for a company that pays you in checks and you get a W-2 at the end of the year, the bank’s going to want to see the previous 2 years on that. So 2017 for example, they would want 2015 and 2016 to see the wages that you reported. To verify income, they want to see the last two pay stubs. So the last two ones that you received, they’re going to want to see documents of that. And the other ones, is going to be the ID and your Social.
Mousetrap: So those four, together with the application, is what’s needed for a pre-approval.
AP: Yeah. And you guys do an awesome job with our customers collecting that up front. One of the reasons we like to ask for that up front Mousetrap, we review all this stuff. And we review your application before we send it up to the bank. You mentioned first impression. And I was always taught growing up, you only get one chance at a first impression. Sometimes folks will put on the home application, what they bring home, what’s actually on that check. Whereas the bank wants to see what it is before taxes. So allowing us to find and correct that stuff by giving us that information up front actually allows us, Braustin Homes, to make that first initial impression for our customers as good as it possibly can be.
Mousetrap: Yeah. Could you imagine submitting an application, getting excited because the retailer told you they can promise you this and that. And come to find out that the bank’s just not going to allow it.
AP: Yeah. Yeah. And that’s really what we want to eliminate. When we get an approval for a customer, we don’t want it to be a pre-approval contingent on proving this, this and that. For the most part, we like to go into this deal with our customer and the bank being able to prove that day one out the gate. What that does for our customers as well once they are approved, the process to closing is that much quicker because we’ve already cleared a lot of that off. So I guess for the purpose of this Podcast, we’ve got to assume that we’ve gotten all conditions, we’ve submitted the application, it’s gotten approved. One thing we do Mousetrap is for the most part, we’ll submit these applications asking the bank for the bare minimum down payment that they allow, which is generally 5 percent. And the bank either comes back and says, “Yes. That will work”, or, “No. But here’s what will work”. So for the most part Mousetrap, our customers aren’t going to just get a flat no, right?
AP: So we find an approval that works. There comes to a down payment, monthly payment. The last part is getting all the conditions cleared.
AP: And generally that simple stuff like the land deed, where the home’s going to go. Or an employment verification filled out by your H.R. department. For the most part, we try to get the bulk of this stuff done up front. And this is also the part of the process where that site inspection’s getting done. So on your end, while I’m doing the clearing conditions and working with the bank to get that part done and working with our Construction Manager to get the site inspection done, you guys are doing a lot to make sure that once the home arrives, it’s exactly what they wanted.
Mousetrap: Yeah. And expected. Yeah.
AP: So how’s that process going on your end?
Mousetrap: Yeah. Yeah. So the next thing after submitting the site inspection, the way the Construction Manager can take care of that, is finalizing the colors and the options in the house. This is really a fun part. The customer knows it’s getting a little more real. This is actually going to happen. So we get a spec sheet from the factory. And this part’s real important guys. This is really key. In this industry, if it’s not on paper, it’s not going to get done. So some of the things that we take care of, we have the customer look over a spec sheet. And that’s from the factory and that shows you what’s all going to go in the house. And of course, we get that final document once we discuss what’s going in it. But once you see that, you’re going to see what model you have, what options are in it, what color the home’s going to be, and all that. So you can have your peace of mind in knowing that what you think’s going to be done, is actually going to get done. The spec sheet’s really important. Another document that we clear and make sure we have on file is a final purchase agreement that way you know when it gets time to close with Alberto or with any retailer comes down to closing the home, that number’s not going to change. You’re going to see each individual cost of the options, the delivery, the home, everything that you agreed on with your Housing Consultant, that final purchase agreement is going to show you the exact dollar amount.
AP: Yeah. I think you hit on a really key point Mousetrap, is knowing what that dollar amount is before you go to sign paperwork. I can think of two families just in the last month that thought they were going to be paying 500 and something a month for a house, when the reality was the retailer had left off what taxes and insurance were going to be and their payments are almost 700 a month.
AP: You don’t want to be caught off guard or surprised at closing. And I think what happens is people are so, the emotions are running high. You’re excited. You can’t wait to get to the closing table. And you’ve done so much. You’ve sent so much paperwork to the bank and talked to so many people on the phone and you’re just ready to become a homeowner. And some companies, definitely not all, but there are still some companies out there that will try to pull a fast one on you at closing because they know how excited you are. So having that final purchase agreement, knowing what your final monthly payment is going to be, what your final down payment is going to be before you go to close, and then making sure of course at closing, that all of that matches what you’re signing.
Mousetrap: Exactly. Yeah. You want to make sure when you get to the closing table that there are no surprises. But once the home’s closed the project begins. So tune into the next episode. We’re going to cover just that. We’re going to break this one up into two episodes. The first one we covered Choosing a Retailer and Closing on the Home. And the next one we’ll talk about what goes into the construction process, timeframe, and what to expect once you finally move in. Thanks for tuning into this episode and we’ll see you on the next one.