So you found a home builder.. but what about all the other parts?? What title company do you choose? Who will be your mortgage lender? When you begin the journey of home ownership, there's already so much to coordinate and think about. As a Family of Companies, we have a solution to this! On this episode, we bring in long-time employee of the JH Family of Companies, Danny Tutt, to introduce the Smart Move Experience. Listen in as Danny shares how working with the JH Family of Companies creates a seamless process from start to finish and provides peace of mind to you as a new homeowner, from home financing all the way to closing.
S2_Ep21_The Smart Move Experience (Danny Tutt).mp3
Intro: [00:00:03] Welcome Home, a podcast brought to you by John Houston Homes. Join hosts, Chelsea Frazier and Whitney Pryor, as they walk you through the exciting adventure of your home buying and building journey.
Whitney Pryor: [00:00:18] Thank you for joining us today on the Welcome Home podcast. I am Whitney and I have Chelsi here with me. Hi, Chelsi.
Chelsi Frazier: [00:00:25] Hello.
Whitney Pryor: [00:00:26] How are you?
Chelsi Frazier: [00:00:27] I'm great, how are you today?
Whitney Pryor: [00:00:29] Good! We've got a great guest on today. We've worked super close with him with John Houston Homes. He's going to talk to us a lot today about a Smart Move Experience. Chelsi, do you want to kind of give us some details on who we have and what we will be discussing?
Chelsi Frazier: [00:00:48] Absolutely. He's hands down one of our favorites. We're talking with Danny Tutt here today. Like Whitney said, we've worked with Danny, with John Houston Homes for several years. He's been here longer than both of us. We'll let him tell you about his history in the industry. He's transitioned back onto the mortgage side. We still get to work with him because we're part of the same Family of Companies, but he's going to really just break down the benefits of working with the Family of Companies and what we've coined the Smart Move Experience. We've talked about this before. Within the John Houston Family of Companies, we have John Houston Homes, Trinity Oaks Mortgage, Precise Title, Keystone Home Design Studio and JH Development, so we've got several pieces or members of this family. When we're able to package those real estate services together, there's a lot of benefits to that. That's what we call the Smart Move Experience. We'll dive into that with Dany because he's really seen both sides and has a wealth of knowledge. Welcome to the show Danny.
Danny Tutt: [00:01:54] Thanks for having me ladies. I appreciate that. I'm not sure how long your list of favorites is, but I'm glad I'm on it.
Chelsi Frazier: [00:02:02] You're definitely top three easily! Danny, why don't you just tell us a little bit about yourself, your experience in the industry, what you've been doing and kind of what you're going back to now in this transition?
Danny Tutt: [00:02:16] I've been doing this longer than what I really want to admit. I've been working for builders or builder owned mortgage companies for a long time, since like 1987. I was actually in the industry prior to that in a different way.
Whitney Pryor: [00:02:34] The year I was born.
Danny Tutt: [00:02:35] That's scary.
Whitney Pryor: [00:02:37] How is that possible? You're only like 24 now!
Danny Tutt: [00:02:40] Exactly! I started out in new home sales and did that for a while. I was a Sales Manager and that particular Builder, owned a Mortgage Company. I worked for that builders mortgage company. Then, I actually went back into sales for a National Builder as a Regional Sales Manager and then from there to another National Builder back into the mortgage field. I was the actually the VP of Production for that Mortgage Company, for that builder. We were in like seven states and it was a pretty big company, a very well-respected company and great company. My job there was to combine using finance - the positive things about the builder owning a Mortgage Company and blending those two things together. I was there 15 years. I actually came to John Houston, initially, with the thought in mind of going to work for Trinity Oaks Mortgage.
Chelsi Frazier: [00:03:59] Oh, I didn't know that. Yeah.
Danny Tutt: [00:04:01] The I was intercepted, if you will, or realized that Danielle Depot and I had worked together before. She asked me if I had interest in going back on the homebuilding side, so we did, and I've done that for almost six years. I just feel that may be my best use for the company would be to go back to the mortgage side again. I've just kind of flip flopped, so that's the boring story of how I got to where I am. I feel like I've kind of have some insight, from both sides, and experiences that we can use to utilize to help the consumers and help ourselves, as well.
Chelsi Frazier: [00:04:52] Whenever you first told us we were like, "oh man," but then excited at the same time because knowing how closely we work with each other, between the Family of Companies, it's a huge benefit for our customers to have someone like you in that capacity. When somebody is not just trying to offer you one product, but they have an understanding of what you need from a buyer side, from working with the builder, I think that's huge.
Danny Tutt: [00:05:23] Well, there's a couple of benefits, really. There's benefits for the homebuilding side and the Mortgage Company, obviously, but there's also tremendous benefit for the home buyer, the borrower and the ultimate consumer. One of those is convenience. Obviously, if you've got everybody working together, you don't have to go around searching the internet looking for this company or that company, somebody that you don't really know anything about. Very few people, believe it or not, actually use the same Mortgage Company again.
Whitney Pryor: [00:05:59] Oh, really? They'll switch it up every time?
Danny Tutt: [00:06:01] Yeah, there's a very low percentage of people that actually refinance or whatever with the same mortgage company. Obviously, you have people that are loyal, but that doesn't really represent the masses out there. That's one part of it - the convenience of it, but there's an accountability level there that's really hard to explain to people. If a Mortgage Company only thinks or they feel like that's a one time shot for them. If you go online, find some lender and they don't really know you. There's some good ones on there. If they mess up, if they don't close on time, if they put you through all kinds of different issues, they're not ready when the house is ready - there are numerous things that can go wrong. Everybody's heard war stories. They miss something and at the last minute, you don't qualify, really, all they're going to do is just apologize.
Whitney Pryor: [00:07:11] Yeah, it doesn't affect them. They don't know you.
Danny Tutt: [00:07:16] If Trinity Oaks Mortgage and John Houston builds a house for somebody based off of a pre-qualification, we build a 1/2 a million dollar house for somebody, it takes us 6-7 months to build that house and at the end, they can't close on that house, we're going to ask Trinity Oaks Mortgage to explain that to us. The accountability is to the consumer, but there's also a level of accountability to the seller or the home builder, if you will. What a lot of times the consumer doesn't really understand, is that they don't have a whole lot of leverage over that Mortgage Company. We do because you're going to walk across the street or whatever, and you're going to say, "why did this happen?" You're going to hold whoever told you they could close accountable for that if they can't close, so that's a huge thing and the same thing to a lesser degree, if they don't close on time. You're going, "hey, you said this loan would be ready at the end of November, and it's not ready, why?" Those are tough questions that get asked. If that's what we refer to as an "outside lender", you may or may not get a response, but certainly you don't really have any leverage over them.
Whitney Pryor: [00:08:56] Ultimately, our higher ups or managers are looking at the same reports. They're wondering, "okay, why didn't 10 homes close this month?" if it's because the lender dropped the ball and the lender is our own company, we're looking at that. there's definitely accountability there, Just with management looking at those reports.
Danny Tutt: [00:09:16] Correct, communication is a key too because we're constantly in communication. When you're building a house, it's different. We sell finished homes or spec homes, too, but when you're building a house, it's different than buying a house that you can close on in 45 to 60 days. You're talking about seven to eight months sometimes. In today's world, it could be longer than that with lead times on supply chains and things like that. You're talking about having to communicate properly on closing dates and things like that which is pretty difficult to do right now. You're also talking about people locking in interest rates. If you've got someone who's using an outside a lender and they're like, "hey, we can get this rate today and we can lock this rate in for 30 days." You really want to make sure if that's a house under construction, that you've communicated properly with that builder. Are you sure we can finish this house in this period of time? You might get an answer from that builder saying, "well, right now there's a delay on tile", so instead of locking that loan for 30 days, you may want to lock it for 60 days. What you don't want to happen, is for that lock to expire and interest rates too have gone up. Then you either have to go up on a rate or possibly, if you're lucky, you get to pay an extension fee to to hold the initial rate. Those are things that really come into play that people don't think about initially. Of course, obviously the benefit for us as a home builder or to the home builder from the mortgage company, is just more reliability on prediction of of closing dates. We'll close 700+ houses in a year. I'm not sure I'd have to do the math on whatever that is per month, but 50+ homes a month. If 30 of those are with 30 different mortgage companies, that is very difficult to try to coordinate all of those closings.
Chelsi Frazier: [00:11:46] I can't imagine.
Danny Tutt: [00:11:49] That's why the builder will often incent or they'll contribute either by virtue of some sort of a design center allowance or something on a home that's to be built or they'll contribute to closing costs on a home that may be already finished or can close soon because it's worth it to contribute some of the profits that the company, The Family of Companies, make off of the mortgage, which they do. Obviously, it's beneficial for the company, from a monetary standpoint, for somebody to use Trinity Oaks Mortgage. Also, we're willing to take part of that and give that back and incent the customer to use us because of the things that we just mentioned. If that house doesn't close on time, then it costs us money for that house to sit and rollover into the next month or the next month. If we built a house for somebody from the ground up and then for whatever reason they can't buy it, that's expensive, as well. Now we don't have the flexibility to choose whatever plan, whatever we want to put on that particular lot or custom build a house for another person. We've got to sell the house that we've built for that other person to somebody. It's probably going to sit there. Even if you've sold it the next day, it's going to take somebody 45 to 60 days to get their loan approved and get in the house. Those are the primary things. There's a lot of other benefits as well, but those are the things that are probably the most relevant to.
Whitney Pryor: [00:13:46] Yeah. I think a lot of people might not realize the constant internal communication that's going on between loan officers and sales managers, to make sure those dates and even our closing team inside, just making sure that everyone's on the same page for closing dates and locking rates. It's just so much easier as a homeowner to not have to worry about contacting and communicating with both parties like that, when you've got some of that going on internally.
Danny Tutt: [00:14:16] Even if somebody does not use Trinity Oaks Mortgage, there's still a benefit to everybody to go through the pre-qualification process. We need to know before we start a house. Sometimes people think we're just strong arming them or holding a gun to their head that you're going to go apply with our mortgage company. Obviously, we want them to use Trinity Oaks Mortgage, but we also want to know they can buy that house, right? To be candid, pre-qualification letters are a dime a dozen. I see them all the time where somebody will say this person's pre-qualified based off the information they gave us off the phone. They have not actually applied yet.
Whitney Pryor: [00:15:05] They could tell anyone, "I make $500,000 a year.
Danny Tutt: [00:15:09] You can and sometimes people will think that they do because maybe they're in an occupation, their self-employed or whatever, but yet they don't understand that the income that they can use for qualifying purposes only what they pay taxes on, right? Or you've got somebody that's in a commission job that's done really well for for a while, but they've just changed jobs or just entered that industry, and they don't have a long enough history to do that. Somebody could go in and find somebody off the internet or whatever and tell them that they're prequalified. You'll even see occasionally somebody will give a pre-qualification letter. There credit scores may not be where they are at that time, and that person is gambling on being able to get those scores up by the time that house is finished.
Whitney Pryor: [00:16:06] Yeah.
Danny Tutt: [00:16:07] Sometimes you can do that. There are instances where somebody can increase their scores and qualify. As the homebuilding side, we need to know what the risk is on that. You want to get to a certain point. If that hasn't happened by a certain point, we may we may need to put that house back on the market.
Whitney Pryor: [00:16:33] We don't want to find out on closing day that they can't qualify.
Danny Tutt: [00:16:36] Correct.
Chelsi Frazier: [00:16:37] Nobody does!
Danny Tutt: [00:16:39] We work with people or John Houston Homes works with people all the time. There are people, particularly in situations now, where you're dealing with the pandemic and things where people have fallen on hard times. Maybe their credit scores took a hit or something, so we get that. We're compassionate to people that have come across unfortunate situations. If they can buy the house, we want them to buy the house, but if it's not time for them yet, and maybe they need to wait until you know some of that stuff has straightened out, that's another story.
Chelsi Frazier: [00:17:19] I think that just plays into the relationships with the customer that they make with the loan officer from Trinity Oaks Mortgage and the Sales Manager from John Houston Homes, that stick with them their whole time. I don't know how unique that is. You could probably speak into that, but the fact that the person that gets your initial pre-qualification is the person that stays with you through that whole process, is that unique?
Danny Tutt: [00:17:43] Yeah, you're going to have that person that's communicating with you throughout that process.
Chelsi Frazier: [00:17:48] It's the same person, you're not bouncing.
Danny Tutt: [00:17:50] It's that level of accountability. If a person has purchased a home from John Houston, they're building that house and they tell them they're using an outside lender. They tell them," well, I haven't heard from my Mortgage Company in X number of days and I'm not sure where we?" If that's Trinity Oaks Mortgage, we'll find out where you. Normally you don't have to, the person has kept up with them and that's where we can help the customer. That's the level of accountability. You've got this lag period of time, which is a little bit awkward. If you go in on a to-be built home, you pre-qualify, you're pre-qualified and then there's really nothing to talk about for a few months other than maybe checking what rates are doing or whatever. You've got an initial documentation on stuff - pay stubs, bank statements and things like that. You've gotten that initial documentation, but really for two or three months, you're really kind of waiting because you've got to redo that documentation in the end, which is something sometimes people don't understand.
Danny Tutt: [00:19:10] I think is goes to underwriting?
Danny Tutt: [00:19:10] Yeah, you can't necessarily submit to underwriting with a pay stub that is six months old that you gave at the beginning of the process. That's part of the coordination part too, where your Loan Officer is coordinating with your builder on knowing when that house is finished. It's time to update your stuff, so we're not doing this last minute. This house is projected to be finished in 60 days, so we need to get updated bank statements, pay stubs and things of that nature. That's part of that communication as well. Instead of right at the last second, all of a sudden somebody's going, "hey, we're closing next week," and you've got this fire drill going on with this outside lender and they're going well, "they can't close on time. We just now got the this or the that or they didn't order the appraisal until until now." There's just a million different things.
Whitney Pryor: [00:20:12] They bought a car.
Danny Tutt: [00:20:13] Oh yes, all kinds of things. You're updating credit, which that's even a trick. You want to update credit far enough in advance to where your credit report will still be good. What if there is something that's not correct on somebody's credit report and you need a few days to get that off there. Believe it or not, that happens more times and what people will think. They're like, "all of a sudden this thing popped up on my credit. This isn't accurate." Or even if it is accurate, you have time to deal with it and do what you need to do to take care of it. I had a person one time who was paying their bills online, thought they closed out one of their credit card accounts and there was like a $10 balance on it. When the bill came in the mail, they were just throwing it away. They thought it was paid off. That thin went late for $10 for like 60 days and dropped their credit scores significantly on that, but fortunately we knew in enough time to get it straightened out. Otherwise, we get down to closing and somebody just pulls that report, they're showing a current balance on basically a loan that's in arrears, which really messes things up. There are a million war stories and million things that can go wrong. Mortgage Companies that are not used to working with new construction, it's different. There are a lot of good Mortgage Companies out there, but if you're not used to working with new construction, there's a lot more to it. There's a lot more traps you can fall into for things to go wrong, for the consumer and the seller. You mentioned the communication. The Title Company is another part of that as well, communicating with the Title Company and getting information to the Title Company. Obviously, we have our Title Company that we use.
Whitney Pryor: [00:22:34] It's party of the Family of Companies.
Danny Tutt: [00:22:34] Absolutely. That helps things like communicating closing dates and all of that kind of stuff. They can do things electronically and things of that nature.
Chelsi Frazier: [00:22:49] Yeah, we can E-close now, so you can close from anywhere. It's time saved, not going to the closing table, all the paperwork and the documents. I mean, you're still signing all the same things, but they've gotten it down sometimes less that 10 minutes with those E- closings.
Whitney Pryor: [00:23:07] On closing day, as a homeowner, all you want are those key, so going through and signing all of that paperwork is not the favorite part of the day. I think it's awesome that we've come up with that way to E-close and get that down to 5 or 10 minutes worth of signatures. E-closing, meaning you can do it anywhere. You don't have to go to the Title office.
Danny Tutt: [00:23:33] It's actually over when the loan has funded. Sometimes people will close and they'll think, "well, can I have my keys now," and that alone has actually not funded yet. You're talking about, "hey, we've got a funding condition that we're waiting on or an Underwriter." I've even seeing situations where an Underwriter looks at something again and now they want something that they hadn't even asked for before.
Chelsi Frazier: [00:24:00] All that time!
Danny Tutt: [00:24:01] All that time. It doesn't happen that often, but it can happen. It's very frustrating to the consumers and frustrating to us, too. If somebody's got stuff on a moving truck or they're trying to get into a house for Christmas, it's a tricky deal.
Whitney Pryor: [00:24:28] If they do use the Smart Move Experience and use all of our companies, then it's funded quicker than using an outside lender.
Danny Tutt: [00:24:38] It is because we're what they call "Table Fund", which a lot of companies do that now. The funding of the check is waiting on signatures for the most part.
Chelsi Frazier: [00:24:55] Oh, cool.
Danny Tutt: [00:24:56] Occasionally, there will be something that you're waiting on. If there is, we know in advance, so we could tell somebody, "hey, we can close this today, but the VA Appraiser has to send in his final inspection and we can't fund it until this happens or that happens." That's just a kind of a random example. It could be anything. I don't know if that's a good example, but there can be things that you're waiting on before you can actually fund it. Another thing that comes to mind that has come up in recent years, particularly with all the scams and things that are out there right now, occasionally, you will see this phishing scam where people will come in there with these fake email addresses and somehow they find out people are closing on a house. They'll give wiring instructions to wire money for funds to to another place. Basically, they're hi-jacking people's closing funds. We're really cautious about that and saying," okay, this is how much money you need to bring." There are even times when those things get so prevalent that we're saying, "hey, right now, we don't want you to wire funds, get a cashier's check on it because of all of the different scams out there.
Whitney Pryor: [00:26:43] When you see one of those emails, it looks real. It's really from one of our companies, but it is not.
Chelsi Frazier: [00:26:50] You'd have to look very closely at that email address.
Danny Tutt: [00:26:53] It does. You need to make sure you talk to somebody.
Whitney Pryor: [00:26:56] I think that's what our companies say, right, to make sure we're having conversation about it.
Danny Tutt: [00:27:02] Yes, because that can be a real mess, if that happens to somebody. I've seen it happen a handful of times over the last 20 something years. A previous job and different things like that, but how how that happens, I have no idea. I'm not smart enough to understand that.
Chelsi Frazier: [00:27:27] The criminals are getting smarter and smarter. Some of them have always been smart, but getting smarter.
Danny Tutt: [00:27:34] There's a lot of things there that we can help with. By having everything under one umbrella, is a huge benefit to the customers and benefits us, as well. We're not trying to hide that fact that there is a benefit in there for us. I would say the biggest thing to me still, circling back around, is accountability. The fact there's a level of accountability between Builder, Mortgage Company and Title Company within each other because ultimately, we're all reporting to or accountable to the same leaders. That's kind of important.
Chelsi Frazier: [00:28:29] Well, thank you this. This has been super helpful taking us through the benefits of that. Like you said, it's obviously a service that we offer because it benefits us as a company, but I think it's important for people to hear the other side of it too. Just point out those things of why this is actually really good for you as a customer and the ways that is is. We're excited to continue working with you in that new role and seeing what awesome things we can keep doing. I'm sure we'll have you back. I think there's probably tons more we can talk about.
Danny Tutt: [00:29:03] I'm sure you're going to have to speed up the pace.
Chelsi Frazier: [00:29:07] No, I love the smooth, chill.
Danny Tutt: [00:29:11] Oh, okay.
Whitney Pryor: [00:29:12] We are all guilty of that!
Danny Tutt: [00:29:16] All right. Well thank yall, thanks for having me. I appreciate yall.
Whitney Pryor: [00:29:18] Thank you listeners for joining us today on the Welcome Home Podcast. For more information, visit our show notes and we will link to Trinity Oaks Mortgage, so that you can get a better idea of what that smart move experience looks like and what that means for you. We also have a phone number you can call us with any questions about. You can call us at 866.237.7803 or visit our own website at jhoustonhomes.com. Thank you again for joining us on the Welcome Home Podcast.
Chelsi Frazier and Whitney Pryor: [00:29:54] Welcome Home!