Ep. 15_Building Your Home with Selling in Mind

Join guests Meagan Rowland and Danny Tutt, regional sales managers for John Houston Custom Homes, as well as marketing experts Hannah Lippert and Natalie Crabb as they take over the podcast for Whitney & Chelsi on this episode of the Welcome Home podcast! They give us the scoop on what to keep in mind for resell purposes when building a home. If you know it's not your forever home, what design choices and upgrades should you choose when building to increase the value of your home? Important information is uncovered on this episode so that you can maximize your resell value!

Intro: [00:00:03] Welcome Home, a podcast brought to you by John Houston Custom Homes. Join hosts, Chelsi Frazier and Whitney Pryor, as they walk you through the exciting adventure of your home buying and building journey.

Hannah Lippert: [00:00:18] Hi, everyone! Thanks so much for tuning in with us on this episode of the Welcome Home podcast. This is a really special episode because today we are doing a Podcast Take Over. You get to hear from 4 brand new voices today, including myself. I'm Hannah Lippert. I work in the Marketing Department at John Houston Custom Homes, alongside our normal podcast hosts, Chelsi and Whitney. They are the best. I'm so grateful they gave us the opportunity today to host this podcast and to fill their shoes. I'm also with another an amazing co-host. Natalie, how are you doing?

Natalie Crabb: [00:00:53] Hey, Hannah. I'm great! I'm Natalie Crabb. I'm also part of the Marketing and Online Sales Team for John Houston Custom Homes. I've been with the company now for a little bit over a year and a half. I've loved every minute of it. I'm so grateful to be a part of such an amazing marketing and sales team.

Hannah Lippert: [00:01:09] Agreed! Speaking of sales, we have the privilege of hearing from 2 more guests today that we haven't had on the show. I'm really excited that they're on because I really believe that these guys are going to offer a wealth of knowledge for our listeners. They really know their stuff. We have Meagan Rowland, who is the Regional Sales Manager over all the East Region communities. We also have Danny Tutt with us, who's the Regional Sales Manager over our West Central Regions. Welcome Danny and Meagan, thanks for being on the show!

Meagan Rowland: [00:01:38] Thanks for having us. We're excited to be here.

Danny Tutt: [00:01:40] Yes, thanks for having us.

Hannah Lippert: [00:01:42] I'm really excited about hearing the insight you guys are going to give us today. We're talking about a really important topic, which is buying or building with selling in mind and how to really maximize the resale value of your new build or new home, when it comes for you to hopefully build another John Houston Custom Home. Before we get into that, Meagan, let's start with you. Just tell us a little bit about your background in sales and how long you've been with the company.

Meagan Rowland: [00:02:13] Yeah, absolutely. My name is Megan Rowland. I run the East Division for the sales side of things. I've been in the industry for 18 years now, which ages make quite a bit. I've been with John Houston Homes for 9 years. I've helped with the Marketing side of things for a little while and now I'm heading up the the sales for the East Division.

Hannah Lippert: [00:02:34] Awesome. Danny, what about you?

Danny Tutt: [00:02:37] I'm going to really show my age here because I've been at this since about 1981. I was 21, which is a long time.

Meagan Rowland: [00:02:49] I was born in 81'.

Danny Tutt: [00:02:52] That's depressing! All I've really ever done in some shape, form or fashion, has been in real estate and new home sales. My background and education is in real estate and finance. I had my broker's license way back when. I've worked with a couple of different homebuilders as a sales manager. I also was on the mortgage side for for about half of that time, working for home builders and running the mortgage company side of things.

Hannah Lippert: [00:03:24] I didn't know that, so you're a veteran. You're a veteran of this?

Danny Tutt: [00:03:28] I'm a veteran. I love it.

Hannah Lippert: [00:03:30] Let's just dive into the topic today. We're talking about increasing the value of your new home. I think a good question to start with this is how should you view your home? Is it something you view as a forever home that you create to make uniquely yours or should you see your home as an investment and always looking for the future of when you plan on selling? Danny, let's start with you on that.

Danny Tutt: [00:03:57] I think that depends on the individual, where you are in life, what you aspire to have, and where you want to end up housing wise. It is an investment to a degree, but it's also an emotional thing. It's where you want to live, where you want your family to be, what school district you want to be in, and a lot of different things like that. I don't think you can look at it purely as an investment. when you buy something, in order to evaluate that, you have to almost determine how long you think you're going to be in it. It could be your forever home or you may have to get there in stages. You might have to buy a starter home and move up a couple of times to get to where you ultimately want to be. That used to be the way you had to do it. It's not as much anymore, because you've got interest rates and things right now, which allow people to get there quicker to their forever home.

Hannah Lippert: [00:05:00] What's interesting, is I feel like the the dynamic of the family- the normal model of a family looking for a home, has really changed, from your traditional husband, wife and kids. Now, it's millennials looking to move into a home. Do you think that affects that at all? I feel millennials my age are starting to see a home as more of an investment, instead of a forever home.

Danny Tutt: [00:05:28] It is, it kind of shifts and goes in waves. Even with this recent pandemic, things have shifted. Awhile back, there were a lot of young people coming out of college. They really didn't have a desire to have the responsibilities that come with a home- the upkeep and different things like that. They would just as soon live in uptown or wherever where they can walk to everything. But it's shifted a little bit. What I'm saying, make it more. I can speak into this, too, where people kind of wanting to go to the, you know, be out more in rural settings and things, right?

Natalie Crabb: [00:06:09] What are your thoughts on that, Meagan?

Meagan Rowland: [00:06:11] Buyers are coming from all over. We've got buyers that are relocating here in Texas from Austin and up, San Antonio, Houston and even Dallas. People that are wanting to move further South, get into some good school districts and have a little bit more land for their families. Our 1-acre home sites are a huge hit right now with our product and our custom communities. We can't seem to keep enough lots on the ground for families looking to be in the country setting. We have several families relocating from California, New York, and all over the United States, that are coming here for the schools, for the shopping, for the jobs, the lower taxes, just a better place to raise a family and cost of living.

Natalie Crabb: [00:06:57] I see that with a lot of people wanting more space. They don't want that neighbor right next to them. They want space for their children. I know that school districts are very important. That's one of the number one questions is, what is the school district rated? I know those are some big things going on right now with the purchase of homes. It's important for families to have that space, but also to be in a location where there is easy access to shopping, dining, but far enough away to not be overcrowded.

Danny Tutt: [00:07:32] One of the things that's dynamic right now, is these interest rates are historically low. You can go in and buy. I've said this to my kids, I honestly believe you can make as big a mistake underbuying, as over buying right now. If you can qualify for the house for the mortgage purposes, more than likely you can pay for it. You might have to sacrifice some of your other spending habits. You can sit there and try to save money to buy a nicer house, then interest rates go up 1% and actually lose purchasing power. You may be in worse shape than where you were to start with. You can go in there now because your rates are in the two's. Where before, a year and a half or year ago, your maximum sales price might have been $300,000.00, where it might be $375,000.00 now. You might be able to get that house. I think that's something a lot of people don't really look at. You may be able to get all the way to the end, to your forever house, or you may be able to skip a house right in that process where you're trying to get to. That's a huge thing. One of the things that sometimes frustrates me is people will come in and the sales managers will say, "well, they don't want to go over $350,000.00. What I want to ask is, are they paying cash for that house? If they're not, what they're really saying is they don't want to go over a certain payment. What they're really wanting to show in your interest rate, is the biggest determining factor of the payment that there is. There's a huge opportunity right now for people to go in and do that. By doing that now, where they might have said they're going to stay in that house for 3 or 4 years, they may run that on out to 10 years. The length of time that people used to stay in the house keeps expanding. It keeps getting bigger. You'll see right now that interest rates are low. People are putting pools in and outdoor living areas all over the place right now because they're able to do that, Those people are going to be staying in those houses for a lot longer than they used to be, more than likely. There's an opportunity there ,because of the rates, to whether or not it's a it's an investment.

Hannah Lippert: [00:10:10] Absolutely, that makes sense. When it comes to having a budget for your home, it's about that monthly payment. What are some things that buyers can do ,as far as upgrades go, to get the most bang for their buck, maximizing that financial investment on their home, that overall increases the resale value in the future?

Meagan Rowland: [00:10:27] I think some of the most important things that the buyers can choose from in the beginning will be your structural options. Making that powder bath a full bath, adding additional covered patio space or even a media room upstairs. Making sure that you put extra square footage, the extra bathrooms in,  always helps in resale value to customers that are looking for more square footage or more bathroom counts, things that you can't do later on. If you do try to add more square footage or add a bathroom, it's extremely costly. It's always price efficient to to do it in the beginning.

Danny Tutt: [00:10:27] I totally agree with that. The things that are difficult to do later. Your floors, trim items, different things like that, tend to be a trendy kind of thing. It's the latest thing somebody saw on T.V. Or Pinterest. Those things go in cycle. It doesn't matter what you do to a house right now, how you decorate it or what color you paint the house or the cabinets, because that's more than likely going to go out of style in a few years. You're going to want to redo that at some point in time if you stay there long enough. Those things are more of a  personal preference, The common denominator people add for value is add square footage. Those things are a lot more economical to do when you're building the house, like Meagan was saying, rather than coming back and trying to do it after the fact. If you go back to a payment, there is a concept we used to always talk about Price VS. Cost. You may have one sales price be a certain thing, but if your utility bills are lower, you can have a house with a higher price that a lower cost.

Meagan Rowland: [00:12:29] This happens because of extra insulation or radiant barrier upgrades, upgrading AC units and even adding gas to the house in some communities.

Danny Tutt: [00:12:38] The quality of the appliances. We're going to put in name brand appliances.

Hannah Lippert: [00:12:53] You're paying more up front, but in the end, it's going to save you a lot.

Danny Tutt: [00:12:58] Yeah, you've got to factor those things.

Natalie Crabb: [00:13:03] What are some lasting trends that are playing a role in the resale value of homes that you guys are seeing?

Meagan Rowland: [00:13:09] I think one of the biggest trends that we've seen for a while now and John Houston Homes floor plans accommodates, is the open concept. The large island in the kitchen, open to the family room, open to a large breakfast nook area, and just a space where everybody can come entertain together. You're starting to see a lot of the formal dining rooms go away. Everybody's gathering around the kitchen and living space right in front of the island breakfast nook where they can be together, talk and entertain.

Natalie Crabb: [00:13:43] What are your thoughts, Danny?

Danny Tutt: [00:13:45] I think that as well. I think you see a trend of people working from home now. Before, it seemed like you almost had to have a study in a house. Now, with all the technology, everything's so small. You're working with a laptop instead of a big desktop units. You don't have bookshelves with a bunch of books. Everything's on audio. It's on your phone. You don't need the space for that necessarily anymore, unless you truly do work from your house. If you need privacy, if you're going to be on calls or you need to lock kids out. That's one trend I see. Another trend is  natural light. People love windows and lights. Everything is glass across the back, stick a window everywhere you can get it and let lighting. There's a reason they do light therapy for depression. It makes you feel good. You'll see windows all over the place. They've got energy efficiency down on windows now to where, from my understanding, is pretty much the same as a wall with insulation. You don't lose heat, cold and air flow through that with all the energy options they now have for a house. Those would be a couple of things ,as well as, your outdoor living areas.

Meagan Rowland: [00:15:12] I was just about to chime in on that. I know that my personal preference and one of the biggest, most important things to me and my family is outdoor living. You know we're here in Texas and huge covered patios are so important as well as, an outdoor kitchen area. We're always outside. We're always entertaining. That is a trend that I think we'll see continue to grow and stick with us for a while, especially here in Texas.

Hannah Lippert: [00:15:38] Danny, I know earlier you are saying that trends are not very lasting when it comes to the interior design and paint colors, but what would you suggest to first time home builders? What should they be considering if they're thinking towards the resale? What do you think makes sense when it comes to things like paint colors and countertops?

Danny Tutt: [00:16:02] Honestly, something that stands the test of time. You've got certain things that withhold time. I wouldn't go too far off, nothing too wild.

Hannah Lippert: [00:16:19] Maybe not red?

Danny Tutt:[00:16:20] Yeah, maybe not. One of the things that's huge to me, is the neighborhood and the elevation of the house- the way the house looks from the exterior. That's something I'm really proud of with John Houston Homes. I think our elevations are just superior to what you see from most of the builders, particularly in our price points. You can drive by and you will notice one of our homes with stone and steep roof pitches. One of the things that helps on resale to me is landscaping and what you do to the outside of the house. That's what gets street appeal. That's what gets people's attention first and foremost. When they drive by the house and they see that house in neighborhoods where people keep their yards up. Everybody gets caught up on what the HOA dues are in a community. Sometimes, that's kind of a big deal, but there's good and bad in that. The HOA will protect you from somebody coming in there having some kind of junk car in the front yard that diminishes the look of the neighborhood, which is really bad. No matter how nice somebody's house is, if you pull up and there's someone who hasn't taken care of the house next door, you're probably not going to want to move there. The surroundings are huge. It's the old adage: location, location, location.

Hannah Lippert: [00:18:05] I think that's interesting because I think a lot of people don't actually know what that means. Buyers, they're not really sure what that means. Let's talk about that. What really is the ideal location when it comes to where you put your lot? Do you pick the lot in the neighborhood where the school is right across the street, or do you put it in the Master Planned Community? What's the ideal location for a home?

Meagan Rowland: [00:18:32] I think that's completely personal preference and what stage of life you're in. Are you early 30's with 2 kids that are needing to go a school that is rated a 10? Are you a single person that is looking for the convenience of places that you can go out and entertainment? Are you empty nesters that are just looking for a slower pace and not so much maintenance in a yard, a smaller lot. I think it's just personal preference and and what stage of life that you're currently in. If you're looking to go into a home and know that you're going to sell in the next 3 to 5 years, you do need to have caution of what you choose, as far as color selection goes. I've seen some really cool, trendy tiles recently that are heavily patterned. Honestly, I have it in my house, but I know in 3 to 5 years, if I want to go to sell my house, that's probably not going to be the best tile. It will probably go out of style quicker than the simple whites, beiges and grays that tend to have a little bit more timeless appeal.

Hannah Lippert: [00:19:38] What about flooring? What have you guys noticed is the most attractive to buyers when it comes to flooring? Is it just your traditional hardwood flooring?

Danny Tutt: [00:19:47] There are some really good flooring products right now, there really are. There's tile that looks like wood. There's vinyl planks that are really good, that look like wood. There's some crazy good looking floors out there now. You can spend a little bit or you can spend a whole bunch.

Meagan Rowland: [00:20:08] One thing that I think stands us apart from our competition, is our designers and our design showroom. We've got experienced designers that work with our clients, our buyers. We just have so many different options like Danny was talking about, that we can offer the buyers on any budget depending upon what their needs are and their price points are. Our design showroom is one of a kind here in this area. There's no other builder that has it South of the Metroplex.

Natalie Crabb: [00:20:34] With that being said, what areas of the house matter most when considering adding upgrades such as the flooring, the tile, when it comes to the resale of the house?

Meagan Rowland: [00:20:44] I think definitely the kitchen. I think the kitchen's the focal point of the home. I think that's where people gather. Guests and kids come in. You sit down every night, maybe not every night, but you're there to eat your meals with your family and and do most of your entertaining, especially in our homes. We have that open concept that we were talking about earlier with the kitchen open into the living room or the breakfast nook. I think that part is is a good place to focus on adding the upgrades that you want.

Danny Tutt: [00:21:13] I agree with that. There's a lot of focus on your cabinet colors, your your countertops, fireplace surround, master bathrooms and kitchens. If you have to choose, I would always go with what Meagan said. If you're on a budget, I would focus on the kitchen, family room, fireplace or something that people can see when they come in.

Meagan Rowland: [00:21:45] Where do you spend your time?

Danny Tutt: [00:21:47] Exactly?

Hannah Lippert: [00:21:47] Around the kitchen table.

Meagan Rowland: [00:21:49] I definitely don't want my guests coming into my bathroom. My guest bathroom is where I put that trendy, cute tile. I made it really fun, but my bathroom ,I kept pretty simple.

Danny Tutt: [00:22:01] It was like you were saying before though with the open concepts, now you're standing in the kitchen and you've got your eating area ,like you mentioned Meagan, with not as much emphasis on formal dining room. You've got kitchen eating area and family room. It's all there where everybody can be together. Typically you're looking off the back porch, through that into the yard. That's definitely where you want to to spend any extra money for upgrades.

Hannah Lippert: [00:22:34] I notice a lot of our floor plans offer the game room options. What about that? Do you think adding that game room, media room or even just a one story or two story plan, makes a difference?

Danny Tutt: [00:22:47] It can. Again, it's where you are in life. Do you want to chase 3 kids up and down stairs? Or do you want them up there where they can play and you can have friends downstairs, to keep it hidden kind of thing. That's just a stage of life and just how you live your life. Meagan mentioned earlier, those are the things that if you're going to do, but not sure whether or not you want to do it and you can afford it, go ahead and do it. It's not the time when interest rates are this low. It's not the time to sit there and not get something that would have cost you $30.00 a month to get. When in doubt, go ahead and get it.  It's economical square footage. You're still building it on the same concrete slab and you still have the same roof above it. You might have to add a little bit of air conditioned for that, sheetrock and floors, but it's very economical square footage to do vs. to try to come back and do it later ,should you decide to do that. Or you're just going, "this house doesn't work for me anymore. I've got a couple more kids now. I need to move to a bigger house, but interest rates are 5%. I wish I had a do over on that."

Meagan Rowland: [00:24:18] I think that one thing that John Houston has are really great floor plans, but we also have really great structural options that we can already offer those buyers. You can see one of our base plans. It may really work for your family, but hey, we've also got a game room option, media option, extended cover patio, 3-car garage and bay windows. There's a lot of different structurals that you can take from just our base plans and add very simply to your home. Our architects have done a great job designing these plans for all different stages of life, with all different types of buyers and what's important to them in a home.

Hannah Lippert: [00:24:57] I agree. I think what we've learned is that, if you're looking to build or buy, you can on the front end add these additional upgrades that are still unique to you, but know that it is going to be universal for the next person who wants to come along and buy your home. There's a lot of options that don't necessarily have to break the bank, but that overall boost the resale value of your home when it comes time for you to buy.

Danny Tutt: [00:25:22] One of the things that I always struggle with that I tell my friends, younger people and my kids, is it always amazes me how somebody doesn't want to spend another $5,000.00 to get an upgrade or to buy that plan that they really want,  because they set this hard limit or they'll negotiate for $5,000.00. I don't want to overpay and that same person will go out and spend $60,000.00 for a new car. That car will go down 15 % the minute that they drive it off. It's hard to overpay for a house because you have to have an appraisal done before you can move forward ,in most cases, if you have financing. I would rather pay $5,000.00 more for a house that I know is going to be worth that at some period of time, then buy a car for $5,000.00 less than it's worth at that moment, because I am going to gain that. That's something that people don't take into consideration because it's still an emotional thing. If you're going to buy a house, it's where are you going to raise your kids. It's where you're going to sleep. It's where your neighbors are.  It's where you're going to make friends. It's all of those things that you're going to do. Get what you want as long as it's within your budget and you can you can afford it, particularly while these interest rates are down and it allows you to do that. That was something that always comes to my mind. People don't even hesitate to go buy a $60,000.00 car, but yet they'll sit there and just kill themselves over, and me, over $5,000.00 on a house. This is not even going to be $20.00 a month on a house payment. Now's the time to to go out there and expand on that. That's an opportunity right there. Is tremendous right now, as far as what you can get, the value that you can get. There's what they call Leverage Principle and buying a house. If I buy a $400,000.00 house and I get in that house for $20,000.00, I've got $20,000.00 in it, but my appreciation is going up on $400,000.00. Does that make sense? I understand you still have to make the monthly payment, but you got to live somewhere. If I've got $20,000.00 invested in that $400,000.00 house, I realize it's only 5% . This is just for illustration purposes. If that goes up 5% a year and that's going to cycle. You're going to have years that it goes up and flattens out and you may have a year along the way that it actually goes down. But historically, it's going to go up, just like the Stock Market. Historically, even though it's up and down over time, it's going to go up. If that goes up 5% or so, in a given year, I'm going to make $20,000.00. I'm going to have $20,000.00 equity in the house. I just got my $20,000.00 back, in the form of equity in the house. That's a concept that the people leave out of the equation when it comes to investing. You don't have all the tax breaks and stuff that you used to have for a house because of the tax laws now, but it's still a good investment in my mind.

Hannah Lippert: [00:29:12] Absolutely. It's where you spend your most time. It's the biggest purchase you'll make, so the home is definitely worth the investment. Meagan and Danny, thank you once again for being a guest on the podcast and sharing all of your knowledge with us and insight into this topic. We really appreciate you being here. I know our listeners are really going to enjoy what you had to say today. Thank you so much for being here.

Danny Tutt: [00:29:33] Thank you.

Meagan Rowland: [00:29:34] Thanks for having us.

Natalie Crabb: [00:29:34] Thanks guys!

Hannah Lippert: [00:29:36] Thank you listeners for joining us on this Podcast Take-Over. We hope you enjoyed it. Be sure to click the description for episode notes and links to more information about our building process. For more information about John Houston Custom Homes, check out our website at www.johnhoustonhomes.com. You can follow us on Facebook, Instagram, Twitter or even LinkedIn and for any other questions or comments, call us at 866.646.6008 or you can email us at info@jhoustonhomes.com

Hannah Lippert and Natalie Crabb: [00:30:07] And as always, Welcome Home!