Today on the Heath Barnes show, we speak with Carson Vaughn of Guild Mortgage in Austin, Texas.
Carson has been a producing branch manager for 20 years and is a professional coach with Core Training, so he has a lot of experience to share. This is a great episode and very timely as we run through our list of ‘what to do in a seller’s market.’ I had my list, but Carson’s lists blew mine away. There’s so much gold in this episode. I hope you enjoy it as much as I did.
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How To Win In A Seller’s Market With Carson Vaughn
I am excited about this episode. Carson Vaughn with Guild Mortgage is going to be on it. I had a list of what I do in a seller’s market, but his list blew mine away. There is so much gold in this episode. I hope you like it as much as I do. Stay tuned.
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My guest is Mr. Carson Vaughn with Guild Mortgage out of Austin, Texas. He is a producing branch manager and has been for many years. He is also a professional coach with The Core Training. I’m excited about this topic. Welcome, Carson How are you doing?
Thanks for having me. I’m excited to be here with you.
Before we got started, I got to share with everyone my favorite story of Carson. We’ve known each other for several years. He and I worked together at a company called Mission Mortgage. You and I were both in The Core at the time. I was a coach. For those of you that don’t know, The Core Training is one of the most elite training programs in our industry. I was a coach at the time. This was 2015 or 2016. Every twice a year, they do what’s called The Summit, which is a two-day event. The coaches get together afterward for a Saturday download. Typically, if we need to add another coach, we’ll sit around and talk about which coaches we want to add.
On this particular Saturday, Carson’s name came up. His name would come up the last couple of times, but this particular time was different because Rick Ruby, who’s a militant-style drill sergeant, stood up. He is the one that owns and runs The Core. He said, “Let me tell you about Carson Vaughn.” He went on this long explanation about what you had done since you’d been in The Core. He finished it off with, “I want you to hear this. If I was in a dark alley and I could pick anyone, I would pick Carson. That guy gets it done.” I was thinking, “Carson in a dark alley. Really?” I thought that was the greatest compliment. I was like, “I want to be in the dark alley. I want to be that guy.” Maybe he was coaching you at the time. Have you heard that story before?
I did not know that was the intro before you all voted on who the coach was, but he has many times told me that I’m the guy he wants to be at his side in a dark alley. I’m a blue-collar guy and I’m scrappy. It certainly didn’t have anything to do with my muscles or my fighting ability. I can guarantee you that.
Before we get into our topic, I want the audience to get an idea of who Carson is. Tell me about how you got into the business, what put you in the business, and maybe a little bit about yourself. Go ahead.
I live in Austin, Texas. I went to college at San Antonio Trinity University. I was in school in Austin with somebody one night probably for a UT Longhorn football game. I met this gal. We ended up getting married, and now we have three kids together. It has been many years ago since we first met. Laura is her name and her mom ran a mortgage company here in Austin, Texas.
I was a junior in college. In my senior year, I drove to Austin and tucked my way into a job. At the time, I didn’t know but it was a loan officer assistant job. In February of 2001, I got into the mortgage business. I graduated that May. I was a setup processor/loan officer assistant. I graduated in 2001 and thought, “These guys don’t work hard. They close a bunch of loans. They make a bunch of money. I’m so dumb. I didn’t know any better. If they can do it, I can do it.” That’s how I got started in the mortgage business. That was several years ago.
Your career has taken off in the last ten years.
Yeah, in the last five, I focused more on growing a branch. If I have actively been doing this for twenty years, the first ten years, I flew by the seat of my pants. For the last ten years, I’ve been coached. The accountability, structure, and systems certainly are responsible for the results. The last 4 to 5 years are when I started growing a branch. I’m a little behind you. I know you’ve had a branch a little longer than me, but growing a branch has been the focus for the last five years.
When was the first time you ever went to The Core Summit? When did you end up signing up for coaching?
I went to my first summit event in November of ‘06. I didn’t make enough money to be coached. There were some limits. There was a minimum. You had to make enough money. I made about half that. I started working on the things they were teaching. I went back the next year, and I went back the following year. I finally signed up. My big regret was not signing up earlier, but I officially signed up to be coached in 2009.
We did get in The Core together. I don’t know if we were working together in 2009, but I guess we were. That’s probably the same time I went to work at Mission as well or in 2010.
I was always a pretty good producer. I was closing 8 to 10 loans a month. I was doing it without any team, flying by the seat of my pants, calling on the cell phone, writing stuff down on sticky notes, losing the sticky notes, and not knowing how to keep track of my business. When I looked back from then, 100 loans a year were probably a $200,000 loan amount. Maybe a $20 million a year producer to looking back in 2020, which was a little artificial because of all the low rates and some refinances. In 2020, I closed about 400 loans, $130 million. It’s 4X the number of loans. We were about 35% refi. It’s still the majority purchase loan, 65% purchases or so.
That’s phenomenal. Most people are closing a bunch of refinance loans. You’re running a branch, and one day a week, you’re coaching people. You get it all in one week, which is amazing. You’re in Austin, Texas. It doesn’t make it any easier. A friend of mine called me and said, “Heath, you would never believe that I sold my house.” He starts the story. In 2020, he had his house on the market for $850,000. He got a buyer that fell out. In 2021, he put his house on the market for $950,000 on the lake and ended up selling it for $1.3 million, a cash offer.
It goes to show that a year ago, he had his contract fall out. It went up $100,000 and ended up going up almost $500,000. What’s going on in Austin is going on all over the country. I know that’s what’s going on here in Houston. Carson is one of the best people I know in the business when it comes to a seller’s market and how to position yourself. Most of the people here think, “There’s not enough inventory.” That’s great news for us in the lending industry. What are you doing right now in Austin? I’m sure it’s going on all over the country. Give me some things you’re doing in teaching your students how they can position themselves to pick up more transactions.
The harder the market gets, the more excited I get. If the rates go up, great. I love it because then it’s back to roll up your sleeves, grind it out, make more phone calls, and get back to work. People aren’t lining up at the door and knocking the door down to get a loan from you. That’s what changes. The market gets harder and harder. The market is an opportunistic market for folks like you and me that don’t mind rolling up our sleeves, getting to work, and putting in the work. There are no shortcuts.
You talk about the market. Whether it’s a buyer’s market or a seller’s market, it creates its own challenges. Specifically, in a limited inventory market where there are 5, 10 or 20 buyers for each home. In Austin, we got the top spot in terms of percentage over list price. The price of the home closes relative to the actual price it went on the market at. We were the number one city in the country. That comes with a lot of challenges.
If a realtor calls you on the weekend, they need you. Click To TweetI love that opportunity that it creates because now what matters more than ever is the lender you’re working with. I look at our job, Heath. The minimum is to get that loan closed on time, do a good job, get the client a good deal, and do what we say we’re going to do. That’s just the bare minimum of the job. Now I look at it as an opportunity. My realtors will fight for me if they look at me as an extension of their team to help get that offer accepted.
You’re saying, “The harder it is, the better it makes you.”
Are you going to use that lender out of Kansas that doesn’t have a real office that you can only email, and nobody answers the phone in this market?
What are some of the strategies that you’re thinking about and maybe that you’re sharing with your agents so that people can have a few ideas if they’re experienced in the same thing?
It starts with that initial consultation with the client. We call those our pre-approval meetings. Whether we’re doing it on Zoom, in person or on the phone, I want the agent to know that we’re doing a few important things there. Number one, we’re setting the proper expectations about what kind of market we are in. I’m telling the client, “This is the market where you may go out and look at 5, 6 to 10 homes that you fall in love with that you don’t get an offer accepted right away. I want you to know it has nothing to do with your realtor. Your realtor is one of the best negotiators that I’ve worked with. It’s a function of the market. It’s the reality. Here are some things that we can do to help your offer stand out and make you look stronger.”
Whether that is putting more money down and getting full approval or what we call a fast-track program so that we can write it with fewer contingencies. My first job is to set proper expectations. My second job in that initial meeting is to sell and endorse my realtor, and that referral partner that referred them to me is in such great hands, and how I know that referral partner. It’s important that your referral partners know that you’re doing that.
Third, I know that if they want to spend $400,000, they may have to spend $500,000 to get that $400,000 house. That’s the market we’re in. When they come to me and they want a $400,000 purchase price and the mortgage, I need to go ahead and educate them on what spending more would look like so that they’re not panicking on a Sunday morning, “This one is $50,000 more. Can I reach my lender?” They already know that their max is $400,000, but they could go to $500,000 and here’s what it looks like. That’s important.
The biggest one is that we know in a crazy limited environment that you’re going to need to waive the appraisal. You’re going to need to waive your right to terminate a contract should it not appraise. I will bet you if we ask our realtors, “What happens when the appraisal comes in $20,000 short? They have to bring that $20,000 and make up the difference.” The agents are like, “That’s how it works.” You and I, and the audience know that the reality is we can often absorb some of the shortage in the loan.
How do you do that?
If someone is putting 20% down and the appraisal comes in 10% short, they still put their 20% down, but on paper, it’s a 90% loan. Now the loan has mortgage insurance at $200 a month for the next five years. We showed them, “Sixty payments at $200 a month will cost you $12,000 or bring in the shortage of $50,000. The $12,000 is a lot cheaper than having to bring another $50,000.” It blows your realtor’s mind. I want the realtor to know that we’re having that conversation automatically, educating their clients on what it means. I don’t want them to explain what happens when the appraisal comes in short. Do you?
No, not at all. I like that idea of telling them upfront, “We’re probably going to pay more than less. Let’s talk about what that looks like if it’s 100 over.” Just because they have mortgage insurance, it doesn’t necessarily always make the payment higher like they can roll it in. You could roll in the mortgage insurance and do a one-time payment, and the payment will be almost the same. The cash to close is almost the same.
If you go over it upfront and go over those numbers up front, I don’t know about you, Carson, but I often get clients that say, “I didn’t know that there’s not that much of a change in the payment and the down payment.” If they’re out there driving around in the car, the first thing they say is, “I don’t know if we can do that.” I love that you addressed that upfront.
That’s the key. That’s what will help get your realtor to fight for their client to use you because you make their job easier. You’re educating their client. You’re making them look good.
What else are you covering? What you’re saying is you’re building an agent up. You are preparing them for what’s going to happen, which is probably going to have to submit an offer over the list price. Are there other tactics?
You’re probably going to be disappointed. You are probably going to lose a few times.
It’s setting expectations. What other tactics are you using?
I love the idea of getting your buyer or your borrower an additional buy-in from them. It would be to fully underwrite and approve their loan before they find a property. I tell them, “This fast track program, where we fully underwrite and approve you, will allow us to take a 30-day close and shave a couple of weeks out because we can do all the underwriting approval before you find a home. That will allow you to remove some contingencies in your offer. You can almost be the same as cash, but more importantly, you can write a quicker close.” That commits them to me when I tell them to go write a seventeen-day close. They’re not shopping me because we’ve already done all the work, and they’re 90% of the way done.
Rate is not even an issue anymore because you’ve created so much value for them. The price is not even a factor. I love that. I’ve got a go-over appraisal upfront. When you submit to underwriting and get it approved, do you get all the conditions cleared so that you can underwrite it without financing?
That’s right. We’ll get the majority of the stuff cleared. There are going to be things we know. We’re going to need an updated bank statement or whatever, but we’ll clear most of the stuff. It allows us to confidently tell them that they can go in and make an offer, not subject to financing. We will talk through what waving and appraisal look like and what a partial waiver looks like. We educate them. We are the right ones to explain what an appraisal waiver means, in my opinion, because your financing is impacted based on what it appraises for, the lesser of the purchase price or appraisal. We’re the right ones to be explaining that.
I want my realtors to know that I’m the right one to explain that. They don’t need to worry about trying to represent what’s right and what’s wrong. It’s such a big deal in our market. They can’t afford to let some online lenders try to explain it. We have our preferred process of appraisers compared to someone from out of town. It is back to the old-school selling. If you didn’t scrap, you roll up your sleeves.
Do you have a phone call with the real estate agent, generally, before most clients come into your office or before you speak with them so you can get some background?
Often, the realtor will refer me to the client and give me a heads up on what they want, what they’re trying to do, and how high they need to go. They give me the information for that. I can reach out to the client rather than just saying, “I referred someone to you.” The goal for all of us is to get our realtors to take control of that referral process.
You were talking about the fast track. Do you do that with all your clients or do you do it with some of them?
We do it with a lot of our clients. We pitch it as a benefit to them. It’s more work on our end, but it’s worth it for them for these reasons. Especially the rate shoppers and the people that aren’t committed, we’ll try to get more commitment from them by taking them down that road.
Our market is not nearly as bad as your market, but we’ve decided that we’re going to take everyone and submit them upfront as to be determined so that we’re not caught off guard. It has taken three weeks now for appraisals here in Houston. How about you? How long do you have to wait?
We used to get them back in seven days in 2020. Now, we need to give the appraiser about fourteen days. We will bump the fee to get a rush to get it accepted. On average, it’s taking about fourteen days. Our average appraisal fee has probably gone up from $500 to about $750.
I’m thinking about calling our appraisal company and doubling the price of the appraisal and saying, “I want to set a time period in which I know I can get the appraisal back. Instead of $550 or $750 for jumbo, I’ll give you $1,500 and $1,200,” just to take that off the table. We’ll see if that works. I’ll let you know if it works. Other tactics that you’re using, I’ve got TBD, underwrite, and going over list price. What about when it comes to someone that is putting 5% down? How do you handle those people that only have 5% down?
That’s tough in this environment. I’m educating the realtors upfront. If you have a client that needs a $1,500 a month payment because that’s what they’re paying in rent, chances are great that they’re not going to be able to find a $250,000 house or $200,000 house to have that payment. There’s an entry-level price point. That number keeps growing. The minimum down makes it tough. We’ll tell them to go with a new build in some cases because you negotiate a price upfront. You know what it is. They build it for 6, 7 to 8 months. You have instant equity eight months from now.
Maybe I don’t get a loan, but I’m giving the client the right advice doing that because they’re going to have a hard time getting an offer accepted at 5% down. The only other way to talk about, do they have a way to come up with more money. Having those conversations if they have a relative. Do they have a 401(k) they can dip into? After you’ve exhausted all the other options, have that candid conversation with them.
Let’s say a client has enough money to pay cash. Do you collaborate with the agent and the client to submit a cash offer and opt for financing during the process? Is that a strategy you use?
Sometimes the client comes, goes to the realtor and says, “We just want to be a cash buyer.” I’ll tell the realtor, “Get them over to me anyway.” I’ll get them on the phone with their financial advisor. We can talk through the rates where they are. Maybe it makes more sense to get a loan.” What you’re asking me is if they’re going to do a cash transaction, we’ll come in afterward and do a delayed financing loan. We’ll do the cashout refi under the delayed financing guidelines. We’ll do that sometimes. If they’re paying cash, we’ll advise them to get a private party lien holder. We can pay it off as a rate term refi. If they’re getting a gift from parents and have parents be the lien holder, then we’ll pay parents off rather than having to pay higher rates with the cashout. Being an advisor is the best way to structure it, and then we get the deal down the road.
What are other ideas that you’re using that you feel are helping you win contracts?
We’re all probably doing it. It’s super important to reach out to the listing agent when an offer is presented. When you’re a cash buyer, the listing agent may require you to show proof of funds. Why wouldn’t you show proof of funds for your down payment? You’re getting financing. Why wouldn’t we show they have $200,000 in a retirement account, even though they’re only putting $50,000 down? That’s a great little tactic. It’s easy to do. Blackout the account numbers. I send it back to the client and I say, “You provide this to your realtor because I don’t want to be the one providing it to the realtor. You can provide your own financial information to your realtor to submit.”
That strategy helps. That’s a little trick that we found works. I know you do this as well. We’ve talked about it a lot. Calling the listing agent and looking at my job is to help sell the offer of my client. I’m calling and I’m checking with you. Heath, it’s Carson of Guild Mortgage. I want to let you know I’m working with The Smith. They made an offer on your listing at 123 Easy Street. I heard it’s a great house. I bet you’ve had a lot of traffic through it. Black people are standing in line. I heard their cars all the way around the block. Is that true?
They’re all the way around the block. We’re accepting contracts now. We’ve got about nine right now. Hopefully, your client is strong.
I figured you were in a multiple offer situation. We’ve got a strong buyer. I’ve already run them all the way through underwriting. We use our money to fund the loan. My underwriters sit down the hall. We even service our own loan. There is nothing to worry about selling this loan to another bank, and what their guidelines are. We got a super strong slam dunk deal. We can close quickly. I took the liberty of running it through. We’ve got a property inspection waiver. That means we don’t need an appraisal. I understand they’re waving the appraisal. We’re good there. I don’t have any financing and appraisal contingency. Do you have nine other offers?
We've got to do our work upfront if there's no way out. Click To TweetI got nine other offers. It sounds like you’re as good as my two cash buyers. If you can get that price, I’m sure we can make a deal.
Is there anything else I need to know or that you like to tell me or anything else that would help make it easy for your seller to say yes?
My client would like to close quickly in a couple of weeks, but they’re going to need another month to find a house. Other people are asking for a lease back. I don’t know if you all would be interested in something like that.
If I could get them to do maybe a two-month free leaseback, that might help.
That will most likely win it if you’re going to give a free leaseback.
I can’t speak for them, but I know they love your house. I’ll make sure to relay that information back. I love it when agents like you share information with me. You feel more comfortable than maybe sharing it with the agent directly. I’ll keep this between us, but I’ll relay some of the details over.
If you’re not using that tactic, I will write it down free 60-day leaseback. I’m going to start using that tomorrow. It’s a great idea.
Can I ask you one more question? You said you had nine other offers. How many other lenders called you proactively to go over the terms of the offer?
None. You are the only one.
Are you kidding me?
Not at all. No one called me.
That’s like getting a realtor to call you back. What about your lender? Is your lender doing that automatically when you guys write offers?
No, but I’m going to tell them, too, from now on. Maybe, I’ll get your information.
Let’s jump on a Zoom call next week, Monday or Tuesday. Is one of those mornings worked better for you? That was some bonus script in there.
Let me ask you this because I’m sure everybody wants to know. How many of those phone calls that you make end up becoming a successful meeting? How do you make it a successful meeting?
Over half of the realtors that I work with now have probably picked up on the listing agent side. I can give you an abbreviated run-through on the strategy behind that if that’s of interest.
Please.
If we break down how we get agents and going after listing agents is an easy way. You and I were successful lenders. We’re handling lots of transactions. I do a lot of purchase business. There are great opportunities in every single transaction. The first opportunity to impress that listing agent when you make that call is the offer stage. I’ll get a meeting sometimes even when they don’t take our offer. I will follow up if I liked that agent. I made it funny, but I was bold and memorable.
The chances are great that I have worked with them before. I’ll be like, “I remember you. We worked together a couple of years ago. I called you 2 or 3 times for a meeting, and you never would meet with me.” I don’t know if that’s true or not, but they usually laugh. “I’m determined. This time you’re going to meet me. Let’s get it scheduled right now.” I make it lighthearted and funny.
If they do accept your offer, we update our clients. I think you do as well. We pick a day of the week, and we do our updates on that day. I check in with them. Let’s say if we do ours on Tuesday, I’m checking in with Heath now. He is the listing agent. He took our offer, “Heath, this is Carson. I want to check in with you. How do you guys feel about the transaction? Are your sellers worried? How are they feeling? Is there any information you need from us?” I don’t even go into a lot of detail like, “How your seller is feeling. I just want to let you know we’re on track. We are going to close on time. Is there anything extra you need from me?”
That’s great advice. If you’re a newer loan officer and you’re not updating the agents every single week at the same time, in the same place, you’re missing the boat because it’s a great opportunity for you to provide information and show off your game to the listing agent. The number one problem in our industry is communication. If they’re calling you, then you’re losing.
You’ve already lost. Calling them one day a week for the 3 or 4 weeks that you’re in a contract is great. That alone will often get you on their radar and get you an opportunity to be a backup lender to whoever the lender is. There’s a home run tactic that we started doing a couple of months ago. I’m going to give this one for free. If I call on a Friday, going into a weekend, and let’s say that this is that first week, he took our offer, and I was memorable on that offer call. I impressed him on the first Tuesday, “How is your seller feeling? I know it takes all of us working together to get to closing. Is there anything else extra I can do for you guys? I’ll talk to you next week.” If I called you and you’re your big listing agent on Friday and said, “Heath, it’s Carson of Guild Mortgage. I want to check in with you. I didn’t want to let your whole weekend get by from us before I checked in with you. Is there anything extra you need heading into the weekend?”
No, I’m good.
We are still on track. Everything is great. I wanted to let you know. I know things are happening on the weekends. I know you’re busy at weekends. I know real estate in Austin is the busiest on the weekends. If there’s something you need this weekend and you can’t reach your lender, when we hang up, I’m going to send you my contact card. Call my cell phone. I will take care of you.
I’m putting that in my tool bag right there. I’m calling on Friday the listing agent to give them an update. What you’re doing is you’re saying, “Call me.” My favorite line that I heard from a buddy of mine who had been on the show, Blaine Stewart, says, “If you’re working, I’m working.” They will never apologize on the weekend.
If a realtor calls you on the weekend, you know they need you. They always are like, “Heath, it’s Carson. I’m sorry to bother you on the weekend.” If they get a sales call from another lender that’s like, “Please call me on the weekend. If it’s you, I’ll drop what I’m doing, and I’ll get you taken care of,” it’s a home run. If you want to lock down a meeting with the listing agent, that’s a home run. You planted the idea up front. Is your lender doing this automatically for you when you make offers? How many other lenders? They’re lazy. Not me. We’re going to work hard to make sure this is a successful transaction.
I know here in Texas and most places around the country since it has taken longer to get an appraisal, there’s also the option period in which they’re doing inspections. Are there some tactics that you’re using in order to make your offer look stronger when it’s coming in? If so, what do those look like?
There are some things that we’re doing in terms of increasing earnest money, shortening or making no financing window, knowing that they can back out during the option period but often, right now in our market in Austin, we’re having to waive appraisal, financing, option period and delivery of HOA documents. That’s the little secret backdoor way out of a contract if you don’t get back out within three days or something like that. They’re waving the HOA receipt. It’s got to be strong. We’ve got to do our work upfront if there’s no way out.
Most people don’t even know that. At least that’s here in Texas. I don’t know if that’s all over the country. Here in Texas, you can get out of the contract if you don’t get the homeowners association documents within a certain period of time. If you’re a loan officer and you’re not looking up the listing agent to figure out how long they’ve been doing business together, you should. Not only how long have you been doing business together, but you need to look them up to see whether or not there’s someone that you want to market to. It’s going to be a better game if you know all the players that are in the competition you’re playing against. I use MMI to look up real estate agents.
What is that?
MMI is a national database for both mortgage loan officers and realtors. There is a builder list. You can look up a builder, neighborhood, and salesperson. What it does is it goes through all of the national records and gives you a running fourteen-month total. It will tell you who the agents’ lender is that they’re using. It’s called Mobility Market Intelligence. I can type in a real estate agent’s name and see all the transactions that they do business with. What do you do? Are you doing any research on real estate agents?
I get a list once a year with their production numbers. I get it through the board of realtors. I update it once a year. I sort it by the number of buy sides. We’ll then go in and search for the agent. I know when we need to try a little extra harder to land a big fish.
You got to get this because if you don’t have this, I may be calling Josh Leighton, Julie Burton, Paula, or any of those top agents to send you business. Do those names sound familiar?
Yup.
What I do is I’ll click on that real estate agent and see which lenders they’re doing business with, and click on those lenders to see what agents they’re doing business with. For anyone that has ADHD, it’s a wonder.
How much does this software cost you?
Look at every conversation as an opportunity for a new relationship and to sell. Click To TweetIt only cost me $50 a month. We got a national account.
It used to be more expensive. My MTA back then was $400 to $500 a month to have access. It sounds like there is more competition in that space now.
You still have my MTA. It’s called MTA Go. In MTA Go, you can get the app version and it’s only $250. You just put it in your county. They’ll tell you who the brand new agents are. What we’ll do with my new loan officers is we’ll pull up the new agents. For a new loan officer to call a new agent, it’s easy. A new loan officer calls him and says, “My name is Heath Barnes. I’m with Cardinal Financial. I understand you’re a new agent.”
I say, “I’m a new agent.” “Congratulations, I’m sure you’re excited.” I’m like, “Yeah.” They’re like, “I would love to interview to be your preferred lender.” Half of them say yes and they’re like, “Sure.” We’ll say, “Most of the agents want to come to our office, but I’m happy to meet you for coffee somewhere or even do a Zoom.” When you say most agents to a new agent, what are they saying? They’re like, “I’ll come to your office.” You were talking about down. You are talking about the option fee? You all have eliminated it completely.
What they’re having to do is make themselves cash. A lot of buyers are being told that the only way they can put an offer in is if there is a cash offer if they want to have a chance. It’s that stupid right now. They’re going to Homeward and having to learn about that program. We’ve had a handful of buyers that go to Homeward to buy the house for cash and flip it to our buyer.
What’s Homeward?
It’s a big company. They will qualify your buyer. They will pay cash for the house and buy the house for your buyer if you have your buyer approved. You need to get it appraised to make sure that it will appraise. You have a certain number of months. The last couple I did, we had six months before we had to buy it from Homeward. They prorate out what their expense would be, and Homeward takes a fee.
What’s the fee?
It depends. In the last couple I did, it’s more than 2% of the purchase price.
What’s the rate? Is there an interest rate?
I don’t know how they calculate it, but the buyer can move into the house and pay Homeward a monthly rent amount, which they have some formula to determine what the cost of credit is.
Is it nationwide?
I believe it is. It’s certainly in my market. What we see happening is they’re getting a shot at the mortgage transaction as well. My client is now getting qualified over there. I’ve been able to do the loans both times, but they’re required to qualify with their lending arm. They’re still allowed to use an outside lender, but they have a straight-to-consumer capture, where they may be getting buyers without realtor representation. They have their own title affiliation, where it’s a reduced fee. It’s obvious to me that they’re getting into the space of a real estate transaction. The advantage there is that it can make your buyer cash. We can buy before you sell. We can buy without a mortgage.
Any other thing that you want to share before we start to wrap things up?
No. Thanks for having me on. Our mindset needs to change. If you want to succeed and continue this run, you’re going to have to roll up your sleeves and work a little harder. We need to make sure we’re looking at every conversation as an opportunity to sell and as an opportunity for a new relationship. Heath, who are we selling when I call the listing agent? We’re selling the buyer’s terms. If you’re good, you’re selling yourself.
I often think we forget that my job is also to sell my buyer’s agent. I might remember to ask you, “Do you know Julie? Have you worked with her before? You’re going to love working with her. She’s not that realtor that you’ve got to call six times to get her to do something. She’s a pro’s pro.” Remember, with every opportunity and every conversation what the goal is. If I’m talking to a listing agent, I want to make sure I represent my buyer, I put a plug in there for myself, and I’m representing the buyer’s agent.
One last thing, because after being in the business for many years, I have been through some painful experiences. I’m fairly sure one thing is ahead of all of us right now in the mortgage business. When you come off a year as we did in 2020, we’ve got some pain up ahead. I would like to hear from you. Knowing that you’ve been in the business for many years, tell me about your most painful experience in the mortgage business, what you’ve learned about yourself, about your business, and maybe some advice you can give to people before I tell you what I acknowledge you for before we wrap up.
There are a few times in my career that come to mind. Probably the biggest was in 2009. It was a one-man show. That was a year that was much like last year. It was a big housing crisis. The rates were low. I had been in the business for 8 to 9 years. I had enough past clients. The rates were good. I was getting blown up with refi requests. Plus, Austin was booming still.
That year in ‘09, I missed two days of work the whole year. I had no team. I was processing my own loans and closing about 10 to 14 loans a month at that time. The two days of work I missed were when we were in the hospital. My wife was giving birth to our second kid, our daughter. I was on my phone and email. I lied to her right before she gave birth and said, “I’m hungry. I got to run down. I got a headache. I need to eat something.” I ran down to the cafeteria and made 2 or 3 work calls.
They had to send a nurse because I wasn’t answering my phone. I was trying to save a deal or arguing about a rate. They sent a nurse down to track me down, and she delivered five minutes after I got back to the room. They can’t wait on me. It’s embarrassing. On our way back from the hospital, we got this newborn. I’m like, “Let’s stop by the office so I can show Madison off.” My wife is in the passenger seat. She was sitting on a bag of ice. I make her wait in the car for 45 minutes. I bring our daughter in and set her down on the couch. I talk to my underwriter and push 2 or 3 more files through. I was the biggest schmuck ever.
From that low point of working 60 to 70-hour weeks, working seven days a week, and not ever having time off, not remembering my first kid like holding him in my arms when he was that age, I have created great memories now. I wanted to be that dad that was around for our second kid. I broke down and that was the moment that I reached out. I signed up for coaching and learned to start building a team so that I’m not the one doing all the heavy lifting and I can have more balance in life. That was my low point.
I don’t know if that’s what you’re looking for, but that was pretty low for me. I coach golf and football with my kids. I miss Mondays for golf tournaments. I leave at 3:30 when I need to be at practice. I got a great team of 8 or 9 people. They deserve all the credit. We couldn’t close 400 loans without 7 or 8 people on the team that helped process and push the loans through.
If anyone wants to get ahold of you, what’s the best way to do that?
They can email me or they can go to my website, which is www.YourTexasLender.com. You’ll have my contact information there. It’s Carson.Vaughn@GuildMortgage.net.
Before I let you go, I wanted to acknowledge you for three things. I want to acknowledge you for the drive you’ve had over the years, us working together, and competing together in a fun and friendly way. It made me better. I acknowledge you for that. I also like to acknowledge you for the passion you have in the business, for coaching others and for coaching me. It’s great when someone loves it that much.
It seems like I’m always the one calling you saying, “Tell me how to do this deal.” I’m waiting for the time when you call me and say, “Heath, tell me how to do this deal.” The last is for your unending friendship. Sometimes we don’t go a couple of months without talking. Some, we talk every day. I appreciate your friendship. You’re a blessing to me. I’m looking forward to seeing you when I come down to Austin.
I love this journey that we’re on, doing life together and doing work together. It’s a lot of fun.
I’ll see you at the top. Bye.