Buying a Home with Lindsay Williams and Cody Sustakoski
Man 1: Welcome to the “What Matters Most” podcast, presented by First United Bank and Trust, that’s My Bank. Visit us today at mybank.com.
Eric: Hello and welcome to “What Matters Most,” the podcast all about finances, community, savings and security for you, your family, and your business. This podcast is brought to you by the helpful folks at My Bank, First United Bank and Trust. I’m your host, Eric Nutter.
And in today’s episode, “What Matters Most” is preparing to buy a new home. And for this helpful discussion, I am thankful to be joined once again today for our final in our three-part series on mortgages and the real estate market by Lindsay Williams, broker, owner at Berkshire Hathaway HomeServices, Touchdown Home Pros Realty in Morgantown, West Virginia, and Cody Sustakoski, residential loan originator in First United’s mortgage area. Good morning again. How are you both doing?
Lindsay: Very good, thank you.
Cody: Doing very well.
Eric: Yeah, thank you both, once again, for joining me in this three-part series. And today, we’re kind of wrapping things up by talking a little bit about buying a new home. So we’ve been talking the last couple of episodes around selling, it’s been mostly focused around that topic. And, you know, this time of year, as we learned last week, this time of year started back in January, December-January timeframe. This is the hot time of year when people are buying and selling and wanting to do remodels and things like that. So when it comes to buying a new home, if you’re currently in that market, engaging a good realtor is kind of part of that process. What are some of the tips and tricks that you recommend, Lindsay, to our listeners that are in that boat right now?
Lindsay: So if you’re going to buy a house, we’re super excited for you, and we want to help you buy a house. But you got to know what you can spend. So, you know, usually buyers tend to come to us first because they think that’s exactly what they should do, is go to a realtor. Do not be offended when we’re like, “Have you talked to a lender yet?” Because nothing is worse than taking someone to look at 10 houses, and then them calling Cody and realizing that they actually can’t afford those 10 houses we just saw, they can afford less. That makes our job much harder.
We cannot make your $50,000 less house as nice as the $50,000 more house when you have that kitchen in your mind all the time, right? So we want to make sure that you’re comfortable with that. We want to make sure that we’re working hand in hand with the lender. And even if you’re looking at buying, not tomorrow, but looking at buying in the fall, still call and talk to us, still call and talk to that lender. You may have some credit things that need cleared up, you may have some items on your credit report that shouldn’t be there that you can fix between now and when you’re ready to buy.
So there’s no too early time to get that process rolling. And I can guarantee you, if you reach out to a good realtor, they’re going to put you in their system and know that your lease ends in August. So they know they need about 90 days, 30 to find the house, 60 to close it to get you to that point. So having that relationship and developing that chemistry with those people who are going to help you make the largest monetary decision you’ve ever made. Until you’re ready to do it again, you want to go back to that same person.
But, you know, making those first calls and feeling comfortable with that person is huge. If you don’t like your realtor, but you’re just using them because you saw their billboard or, you know, there’s a perception that they’re the most amazing realtor because they do the most, they’re probably not. You know, you don’t have to feel stuck either, I guess, is what I’m trying to say. You can work with the person you feel comfortable with. So interview, talk to different people, see what you like and who you’re comfortable with. Make that connection before you start haphazardly going around.
Cody: Yeah, I can say, from my experience in a lot of transactions, and there are so many phenomenal realtors and hopefully, I’m not going to get scolded for saying this, but in my opinion some of the transactions that tend to not go as well are when somebody sees the house, they like the house, and they just pick the realtor off the sign, and use that realtor to also represent them.
And I think a lot of buyers don’t realize that you can be represented as a buyer, and typically it doesn’t cost you anything. So you need to find the realtor that fits with your personality and, like Lindsay said, interview, don’t just go on a whim or feel like you have to use who’s listing the home. I think it’s…you know, we all have different personalities and, you know, not everybody’s going to click with the same people. So I think it’s extremely important to know that you have that option.
Lindsay: And we don’t want people to feel stuck, right? We want people to feel like they’re having a good experience and it’s a fun thing to buy a house. It is fun, it’s decorating, and it’s…packing is not fun, but it’s packing and going through the things and finding other treasures you forgot you had or packing them up, and then moving in the new house and remembering you had them. There are so many things in this process that are great.
Having bad people on your team, your support for this move, a lender you don’t like, or a realtor that you really don’t feel a good connection with, or that doesn’t communicate well with you. You know, I’m not saying that everyone’s everyone’s cup of tea, because that’s not the way it is, but there are so many of us. Talking like 300 and some of us in Morgantown alone, you can find someone you can get along with, right?
So, find someone and go ahead and build that relationship. That way, when your realtor is like, “Okay, so the market’s really ridiculous right now. And if we find the house, we definitely have to go ahead and put an offer in and, most likely, you’re going to spend more than the list price. And we need to do this, this and this,” you’re not going to be like, you know, the stereotypes, you know, “You’re trying to push me into this, or you’re just trying to make more money or whatever.” And I think so much of it has to do with education.
And I think I’ve mentioned this in almost every episode, we need to educate our buyers and our sellers to let them know what to expect in the market, and to let them know what comes next or what happens between contract or closing. That helps Cody, that helps the lenders so much. I mean, if I say, “Congratulations, here’s your contract, I’ve gone ahead and I’ve CC-d your lender on it, please make it a point to get them everything they need when they ask. We are working towards the closing date of this time,” we will not hit it if you are not proactive with getting the information your lender needs in a timely fashion. You know, just laying that groundwork helps the process along so much from start to finish, and that leaves happiness and smiles across the board. Right?
Eric: Absolutely. Yeah, and so you mentioned interviewing your realtors, and so I’ve been through two house purchases, never dawned on me to talk to more than one person. From your point of view, for somebody that’s listening and they’re thinking about reaching out to a realtor, what does the interview process look like? I don’t know, maybe I’m unique here. But I wouldn’t have thought of that. And then what kind of questions are they asking someone who’s in the know and is doing it properly to your point? What are they asking you to kind of set the stage that they’re interviewing you, not that this is a done deal from day one?
Lindsay: So I think a lot of it’s misconcept…or, like misconception or misinformation out there, that there’s no representation for a buyer, or that it’s, you know, buyer beware, that sort of thing. And that’s not really the way we work anymore. And a lot of times the general buying public, especially those first time homebuyers, feel like they can’t afford a realtor, or what’s this going to cost them. And it doesn’t really cost them anything. Like Cody said, I’ll spend all the time in the world with you and I don’t get paid at all until you buy a house from me.
So it’s me educating that I can call for sale by owners, I can show you any listing irregardless of who the list company is, that you have the choice for buyers representation, that in the state of West Virginia, at least, if you buy a property that is listed by someone else in the company, it’s actually called dual agency, not a single agency transaction. What does that mean? What should you be thinking of? And if they have family from somewhere else, that’s like a designated agency state like Pennsylvania, a lot of times their families are like, “Oh, no, I don’t want to do that.” You know. But, like, let’s tell you why it doesn’t matter if you do. Let’s tell you how we work.
You know, most of what we do, most of what my team does is work based on the golden rule. I’m not going to do something if I don’t want that done in my presence. And if I was buying a house, this is how I would want it done. So if I was going to use a home inspector, these are the three I would use. If I were going to use a pest inspector, this is who I would generally call. You know, if I were going to use a lender, here’s a list of three. We always have to list three. You can look at our list, and you can usually see who a realtor wants you to choose, usually the first one on the list, right?
But, you know, you want to have that resource and have that comfort that you are being taken care of. There are some box builders that will tell you, “You don’t need a realtor.” Do you not need a realtor? Because a realtor is someone who could walk through with your pre-drywall inspection and talk to you about the electric outlets in your house, or things like that, that they have experience with that maybe you haven’t thought of.
So, you know, having that connection with someone. In an interview situation, it’s really just that. If you say, “I’m wanting to interview some people and I would love to sit down and talk, do you have time to have a call with my spouse and I? Do have time to have coffee?” COVID times, who knows what happens anymore? “Do you have some Zoom time for me?” You know, whatever it is, you know, if they say no…
Cody: That tells you something.
Lindsay: …that tells you something too, right? So to show them what you know, and how you care and how you will work in this transaction is really what you’re looking at as a buyer. Do you have a comfort level there with that person? I have a tendency to bring, especially first time homebuyers, like, “Come, meet me at my office. Let’s not just go meet at a vacant house. I don’t know you, you don’t know me. Like, let’s just meet somewhere where it’s public and we can get to know each other. I can get your email address, your current address, and talk about that list of wants.”
You know, “What’s your dream house? What’s your five-year plan?” You know, in the United States people move every five to seven years. In Morgantown, it’s two to five. So, you know, you’re 23. Honey, this isn’t forever. “Okay, so what are we doing on this house? What is our goal here? Is this the house that you’re getting married and coming home to? Is this the house you’re bringing your first kid home to? How many bedrooms do you have? Is school district important?” Let’s talk about those things. And, you know, we have financial advisors, right? Let’s have a lifestyle and planning guide and plan this out, so we are all on the same page?
That will make you more money in the long run, and you’ll be more comfortable and a better buyer because of it. Because you’re using the same person, you’re on the same page. So don’t get offended if the realtor is like, “Hey, you know, what’s your goal? Do you love to vacation?” You know, we tend to tell people…and I know Cody knows I tell people this all the time, your lender is going to tell you the exact maximum amount of money you can spend, where your debt to income ratio is, what that is, what that looks like. They are not saying, and by God you spend it. Okay? If you’re not comfortable with what that monthly payment looks like, you don’t have to spend that much. It’s nice to know we have wiggle room.
But if you’re working with a realtor who is saying, “Nope, Cody said you can spend $600,000, and we’re going to look from $550,000 to $650,000.” And you really want to buy a $300,000 house, you’re working with the wrong realtor, okay? So, you know, you want to have that comfort level with the person you’re working with and then decide what the attributes of the house are. That’s like, I tell people all the time, when we sell houses, house is the end to the game, that’s how we get paid. But we’re in a relationship business. We’re building relationships with our clients and our customers. That’s what’s important, not selling the house or finding the blinds or doing the things like that. We’re here to help you make your life better.
Eric: Right. I love that stance. That’s great. And so now shifting gears a little bit, we talked about, step one is, maybe you should know how much money you can spend. So, Cody, why don’t we talk a little bit about that? What’s the…
Cody: Spend it all. So if a person’s…you know, they’re thinking about buying, and we said step one is, if you take the approach which a lot of people do, of going to the realtor, hopefully the realtor says, “Why don’t you go talk to a banker first?” And then so someone comes to you, “What does that process look like and what do you talk through with them?” So a lot of what I’m going to say is going to sound unusually similar to a lot of the things that Lindsay just said. I’m sitting there like, “Oh, yeah, you’re hitting the nail on the head on all that stuff.” Because I think you should interview lenders too.
No, I mean, granted, you should always call me, you should always go with me. You know, that’s the obvious, but, no, you really should interview lenders. You know, that first call is very telling. You know, if you call and ask what your interest rates are, and they give you a rate and hang up the phone, do not go with that lender, because it’s not all about the rate. And a lot of times there are things that come with that rate that may not have been disclosed in that conversation or questions that may not have been asked.
You know, I always say, “Make sure the lender that you go with is somebody that you could cross in the grocery store, and they don’t have to hang their head because they treated you wrong.” Reputation is key. And, you know, I think Lindsay can attest to that, as, you know, we see each other in the community for a lot of different things. And, you know, if I wasn’t worried about my reputation, then I’d be in big trouble, right? Or I could be in big trouble.
So, you know, I think in kind of going back to her conversation about the affordability, the amount that you can’t afford, when I run pre-qualifications, I always tell my borrowers, “You’re going to come out of this conversation with three numbers, not just your maximum number, I’m gonna give you three numbers. Number one is going to be your maximum number. We’re going to look at this from a debt to income perspective and say, ‘Okay, based on what you just told me, or what we looked at, here’s essentially what your maximum could be.'” And that’s really the bank’s number. Number two is going to be Cody’s number, that’s going to be the one where I’m going to tell you, “Hey, you need to be thinking about these things.”
Like Lindsay said, you know, “You’re moving into this house that may not be your forever home, do you like to vacation? Maybe you don’t want to botch yourself up against the maximum debt to income ratio, let’s take this back out. You know. Okay, I noticed you didn’t have any car payments, what are you driving? Is it about to break down? Are you gonna have to have a car payment? Because maybe we need to factor that in here.” And then the third number is your number. And like you said, maybe they can afford the $500,000 to $600,000 house, but maybe they only want to buy the $300,000 house. That’s okay. As long as all three of those numbers line up, you’re good to go.
And of course, you know, having your credit pulled, you know, I am very sensitive to pulling credit, because every time you do that, you get dinged. But, you know, there’s, through the conversation, we figure out, you know, how confident are you and your credit? You got to gotta be real careful because some of the online credit bureaus, do credit score things, are not 100% accurate, but they’re a really good indicator, they’re a really great tool. So maybe, during our first conversation, we might not be ready to pull credit yet, maybe we don’t need to pull credit, maybe you know you’re an 800-plus score and, you know, you don’t want to ding it, I’m not gonna make you ding it.
We can still have an affordability conversation without doing that. But the trick is to make sure that we’re having that conversation, that we’re educating them as much as the realtor is educating them as far as the programs that are available. You know, I’m not ashamed to say even if it’s a program that I don’t offer, I will find you somebody that does, if it’s the most appropriate thing for you. So, yeah, I mean, getting out there and making sure that, you know…because we might pull credit, and we might figure out that… I mean, I will tell you, probably a small majority of folks have medical collection on their credit report that they didn’t know about.
That is so common, and it might only be $20, stupidest thing you’ve ever seen, but they didn’t know about it. And now that they know about it, they can go out and take care of it. And sometimes we run into problems that are a little worse than that, that we need to…you know, we really need a game plan. And it might not be, “Hey, you’re gonna buy a house next month, it might take you 6 to 12 months to clean this up, but we’ll help you get there.” And those are the most rewarding one is for us, you know, when we see that long road ahead, but when we finally get there, you know, it feels great, because we’ve built that relationship over 12 months. You know, I probably know too much about these folks by the end of it. But, you know, it’s very rewarding.
Eric: Yeah, absolutely. Well, I like the idea, the thought that you’re thinking things beyond just the one purchase. You know, I want to buy a house, but then you talked about, well, “You don’t have a car payment right now, you might in 6 months or in 12 months, and that could present a problem if you’re trying to max out.” So I like the thought of thinking things beyond the one thing right in front of you right now. Looking at the picture holistically is important, and it’s not… I mean, both of you are kind of saying the same thing, look at things holistically, what are you trying to accomplish in your life?
Cody: Yeah. Well, and then you’ve got people that are trying, like Lindsay mentioned, selling and buying at the same time. You know, you talk about needing to get way out ahead of that to make sure that we’re properly game planning, you know, “How are you coming up with your down payment? If your house doesn’t sell, can you afford both mortgages? If it does sell, where are you going to live in the meantime?” There are so many things that we need to talk through and game plan, that the sooner you start the better.
Lindsay: And you definitely want to have a team where the realtor has a good working relationship with the lenders also. I mean, that open line of communication. You know, I know that there are some lenders in town and no matter what it is…lenders are all over the country, probably…no matter what it is, they have one way of doing business, and they’re going to take all the loans no matter what.
And then there’s other lenders that have some compassion and will say, “I honestly think this type of loan program is going to be best for you. We don’t do it. So, this is who’s the best in this area. If you want me to look at your loan estimates and that sort of thing, I’m happy to do that for you.” Also, you know, having that human compassion and wanting the true best for someone instead of a paycheck is super important. And, you know, having that relationship between lender and realtor also just builds your support team, you know.
You’re out there buying a house, well, if you’re buying a FHA, VA, government-backed loan, there’s things we have to know. Just like we talked in episode two, if I walk through your house, and I go into the basement, and I see that there’s no fire rated drywall between the garage and the living space above it, there’s a 90% chance if we have an FHA buyer, that’s going to have to be done. So what do we do, right? You know, let’s talk about it right now before it becomes a problem, right? We know that exists.
There’s no reason in this world that if I’m working with a buyer or anyone on my team or any realtor on the planet is working with a buyer, who is getting an FHA or a VA or government-backed loan, that they don’t see those things. Peeling, chipping paint, not acceptable. No fire rated drywall, pretty not acceptable. Say 90% not acceptable, depends on the appraiser. That fire rated door between the garage and the house is pretty not acceptable. No handrails on a VA loan, some VA loan programs require it to be handicap accessible.
Like, what are we dealing with? If I don’t know what I’m looking for, if the lender hasn’t told me, “Okay, no, really, this loan program has these things that you have to make sure hit these things, we don’t care about how many fireplaces it has. We have to first decide if it’s going to qualify for the loan.” So there’s so many spinning parts and moving things that if we’re not all on the same page and working together to get you to the closing table, it’s going to feel like a not good experience.
Cody: Yeah. Yeah, I use USDA as an example often just because Morgantown is a very unique market for a loan such as that. And not only does the property itself have to meet the requirements, but where we’re sitting right now, we’re a stone’s throw…where we’re sitting in this room right now is not a USDA eligible territory. If you go out here and cross underneath the interstate bridge, you’re in a USDA eligible territory.
So it is just a very finicky…and you know, your lender obviously needs to know that, but it’s very important that your lender communicates that to the realtor and the realtor is aware. Otherwise, you know…and that that program is very specific, you know, it’s 100%. And if you find the house and get your hopes up, and find out that it’s not USDA eligible, I don’t have any other 100% down or 0% down programs that you can utilize for that. So we just got your hopes up for nothing.
Lindsay: I mean, there’s so many programs like that too. The USDA programs or even, there are some programs, some employers that have certain contracts with the SBA have to have so many employees living in the HUBZone, which is a highly underutilized business zone. And you have to, like, “What?” Like, I mean, there’s maps for that, but you better check every address because, just like what Cody said, you get your hopes up but your employer says you have to live within this zone, we better find a house that qualifies in this zone.
And we joke all the time. It’s like someone in Morgantown put a map up on the table and was like, “You know what, I’ll put my hand right here and draw some lines around my fingers in that city limits.” That’s what’s gonna look good in Morgantown. So, you don’t know, if you’re on, you know, Briarwood Street or you’re on Bishop Drive behind Mont General in North Hills. Some of those streets are city limits, some of them aren’t. You call 911, maybe you get the sheriff, maybe you get the city deputy. No one knows, you know. It’s crazy.
Eric: And it’s wild. So we’ve talked about the buying process from the standpoint of starting off with a budget, understanding what you can afford, and working with a trusted partner on the banking side to understand your holistic picture. Then you interview realtors to understand someone that’s going to work for you, with you, build a relationship with you, just the same as your banker, so then you can have a good team to find a house that hopefully fits within that pan print of a map, of any requirements that you have from where you want to live and the type of house you want. Are there any other thoughts or tips or tricks that you all want to share when it comes to buying a home?
Cody: You want this episode to go for like three or four hours? Because we could make that happen, for sure.
Eric: Let’s see what time we got here. So, just any quick thoughts that we haven’t really touched on too deeply? And, of course, we can always have additional episodes.
Cody: You know, I mean, my number one is ask questions. And don’t be afraid to ask questions. You know, we hear this growing up all the time, there’s no such thing as a stupid question. Yeah, but there’s a stupid answer. I mean, there really is. Lindsay specializes in real estate, buying and selling real estate. I specialize in financing real estate. You know, these are what we do. If I’ve got a broken arm, I’m going to go to a doctor, right?
And you brought this up in one of the other episodes that, you know, we have these relationships, utilize them. Ask questions. Make sure you are comfortable and clear. And, you know, it never hurts to have somebody in your corner double checking things for you. And that’s why it’s great to have a multifaceted relationship where if you have a good lender and a good realtor working together, they’re watching out for you. And ultimately, it can make or break your transaction as to whether it’s pleasurable or not.
Lindsay: You know, I think it’s an interesting topic, but it’s like the chicken or the egg or the cart before the horse, I don’t know if it really matters if it’s lender or realtor who you talk to an interview first. But the lender should give you recommendations for realtors to talk to, if you come to them without a realtor. And your realtor should give you recommendations for a lender to talk to, multiple, if you don’t come to them with a lender. And, you know, putting into that, you know, so many people have asked, you know, “Well, what’s in it for you?” Well, you know, with them syndrome, that’s our country problem, right?
So, you know, I’m not going to do anything if there’s nothing in it for me, “Well, okay, I have nothing in this, you know. I’m going to help you, I’m going to put you in contact with the people who can help you. And if you decide that I’m not the right person, that’s fine. I will still say hi to you when I pass you in the aisle at Kroger.” I hope you’re going the right way. “But we will still say hi, if you recognize me with, you know, eyes showing.” But, you know, definitely having that comfort is super important across the board and knowing that your lender knows your realtor.
I mean, there’s a ton of programs and even encroaching into the real estate industry, which is a totally different topic. But, you know, there are online mortgage companies, you never see the people there in Detroit, they’re wherever they are, there’s now going to be online realtors. What you don’t realize is that we’re building relationships here that you are going to miss if you’re online. So just remember, you know, utilizing the technology that we have in our industry is great, but work with someone who works within the confines of that technology and helps.
Eric: Yeah, absolutely. Well, that personal touch, I mean, we’ve always been big proponents of that, and just that ability to have that human connection and that empathy, that want to help, I think that’s what we’ve kind of talked about a lot here, is that desire that we just really want to help that person achieve their dream. And I think that’s super important.
So, again, I appreciate you both for joining us for this three-part episode. I’m sure we’ll have more to talk about. As Cody mentioned, we could probably talk for hours about some of these topics. So we’ll find a way to do that, Cody. But, Lindsay, I want to thank you once again for joining us for this series. If anyone has a question or wants to learn more, what’s the best way they can get the support they need?
Lindsay: You can find all of our contact information on our website at bhhstouchdownhp.com or find us on our Facebook community at bhhstdhomepros. And happy to answer any questions you have.
Eric: Excellent. And, Cody, from a banking standpoint, how can someone get the support they need if they’re looking to maybe finance the purchase of a new home?
Cody: So all of our originators should be, or say, are willing to go that extra step to take the time and answer questions and really be your advocate through the process. And you can find them on our website at mybank.com and search for either the nearest branch or the nearest lender, and find the direct contact information on there.
Eric: Excellent. Thank you both. I really appreciate it.
Lindsay: Thank you.
Eric: That brings us to the end of our show. You can always find more episodes by visiting mybank.com/podcast or on your favorite podcast app, and we’re on basically all of them. So find us on your favorite one and give us a subscription and a five-star review, that helps other people find the helpful content that folks like Lindsay and Cody are offering here today.
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