Not many of us can instantly buy a house, and while most would take action to find means, others are just too hesitant because of fear. This is usually the case for people who are thinking of getting a loan. The thought of qualifying for their first loan seems intimidating. Dino Katsiametis sheds light about the house loan process and lets us in on how to score the biggest loan of your life. As an expert practitioner in the mortgage, banking, and real estate industries helping people on their financial purchases, Dino helps quell the fears of first-time home buyers and take the mystery out of the whole scary process of getting a loan for your home.
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How To Get A Loan When Looking To Buy Your First Home with Dino Katsiametis
Let’s Talk To A Lender – You Know, The Person Who Helps You Get The Huge Loan To Buy A House
Dino, welcome to the show.
Thank you so much, David. I appreciate it.
We’re glad to have you here. We’ve got all kinds of folks out there that are excited about finding out how to get themselves a home, but they’re freaked out and scared about getting a loan. That’s why we wanted you to be here, to bring your expertise. Have you been doing this a long time?
I have.
Probably the biggest thing that a lot of the first-time buyers are talking to me about is that they’re scared or they’re not informed and don’t realize that maybe they could be someone that could qualify for a loan. Talk to us about your experiences in helping people qualify from their first loan for their first house.
It’s such a big thing in their life. It’s not just a lot of money, but it’s a huge decision on where you’re going to live. It depends on what stage in your life you’re at. If you’re single, if you’re married, newly married or if you’ve got kids. If there are school districts, if there is, “Can I walk to a restaurant or a market?” all the way down to, “Is it safe? Can I park wherever I want, in front of my driveway or is some association going to tell me I can’t park my Sea-Doos or my boat?” There are a million things they got to think about. A first-time homebuyer is so freaked out about all of it. For the most part, the best way to say it is don’t be freaked out. Don’t be so scared of all of it. Learn and have knowledge because that’s the most important thing you can do. You have to be informed about this loan you’re getting into. You have to be informed about the neighborhood you’re getting into and all of the rest will fall in place.
I always tell my clients, “Stop worrying so much about all the details of what you and I do. That’s why you hire a David Sidoni and a Dino because we handle that stuff for you. Just enjoy the fact that you’re buying a brand-new house and you’re getting into your first home.” Financial freedom is the first step to having a home. Sometimes it’s an investment. Other times, it’s just a home. A home that you’re going to be creating generational memories in with your family or even with your friends if you don’t have a family yet. There are so many wonderful things that happen within the walls of this future home that you’re buying that you need to step back and enjoy it.
There are a lot of processes that happen, but it’s not their job to worry about it. That’s why you hire us. I did a step-by-step podcast and step six was to hire a realtor. It went all the way to step thirteen. Step thirteen was opening escrow. Within step thirteen were another 35 steps. The reason why I did that is that when these first-time buyers go online and you Google how to buy a home, every top ten things you need to know were all things that happen after they hire you and me. It’s the stuff that we’re supposed to know. I feel like it’s people going in for heart surgery and they spend all the time researching what the guy’s going to do after they’re under anesthesia. In doing this and talking to folks, one of the big things that the first-time buyers say when they want to talk to a lender is, “I’ve rented an apartment before, what’s the big difference between giving my information to a landlord and giving my information to a bank?” Is it way more complicated than that?
Yeah. A landlord is an individual who wants to pick the right person for their home, who will take care of the home and pay the bill on time. The majority of them don’t have true insight on how to underwrite an individual. I’ve been doing this for 21 years so I try and think a little more like old school. A new school is, “Let me see your credit report. What’s your credit score?” It’s as simple as that. If you have a good credit score, you’re worthy. If you don’t, you’re not worthy. I look at a credit report differently. I look at it and I try and read into it. For example, sometimes there was a life event. When I see collection accounts, you missed your direct TV payment and your cell phone payment and you never paid them, maybe you don’t have what it takes to be able to take on a house. If I see that there are all these medical collection accounts, it means that at some point, something happened and you got sick. Maybe you lost your job. Maybe you couldn’t work for a while. Maybe there was something big that happened in your life that created this little process of you missing payments and all this other stuff that created this bad credit score. If that’s the case, let’s figure out how to tell that story and get you back to a par level so you look creditworthy again because that is the new way of doing stuff.
Let’s use a little bit of logic, a little bit of old school and tell the story so when I present this loan to the underwriter, it has a story behind it. I can walk the underwriter through this path that I’m taking her down to look at you as individuals as opposed to a number. That oftentimes helps with getting loans approved. That’s the difference of when you go to a big bank or you’d go to one of these online banks where you don’t even talk to somebody or if you do, it’s a brief little, “Thanks for coming on in and filling out our online application.” This online application doesn’t tell your story. There are so much more to these individuals who are trying to buy a house. I’ll also be the first one to tell you, “You have no business trying to buy a house. You haven’t been able to make any of your payments on time for the last two years. What makes you think you should be buying a house? Let’s get you squared up so you can get your life under control and your finances and let’s get you to a point where you’re buying a house.”
Tell your story. That can be encouraging. What you’re telling us is that our folks looking to buy a home are more than that score.
They’re more than a score. They’re more than just a number. All these places have these loan numbers and they’ve gotten to be so big that they’re nine to ten digits long and that’s all you are to them. I urge all first-time homebuyers to do some shopping and talk to a few different people. It’s whatever makes you comfortable. Even if you have a good credit score and you’re creditworthy, still talk to a few different people. I always tell everybody, “Stop focusing so much on the interest rate.” The interest rates are all pretty much the same give or take a tad. You don’t want to go to somebody who’s the most expensive. That’s a mistake. Oftentimes, if you pick one of these online banks, for example who advertises these super low rates, you’re going to miss out on so much other stuff, as well as not being able to talk to somebody that can give you true value when you’re in the thick of it. It’s not only when you’re pre-qualifying. That’s the easy part. When you’re buying a house, you’re in escrow, you have all these timelines and deadlines that you have to meet and you have somebody who is sitting behind a telephone or a computer that won’t even talk to you, they just want to chat with you. Is that any way to do this transaction?
[bctt tweet=”A landlord is an individual who wants to pick the right person for their home who will take care of the home and pay the bill on time.” username=””]
Do you mean message chat?
Yeah, that’s the only way they’ll even talk to you most of the time and that’s super cool. I can do that too, but let’s message chat over simple things, super easy things. When it gets a little tough, let’s talk. Don’t be afraid. Don’t be like these online banks where you’re going to keep it at arm’s length because you’re scared to talk to somebody. Don’t be scared to talk to somebody. That’s the best advice I can give these first-time homebuyers. Don’t just deal with the chat thing. The reason why is because you’re not buying a $100 item on Amazon. You’re not even buying a $30,000 or $40,000 car. You’re buying a $400,000, $500,000, $600,000, $700,000 or $800,000 house. For God’s sake, talk to somebody. Don’t be a fool. When you talk to somebody, you will know the true character of who this person is and if you can trust them. You’ll get that gut instinct. I always tell my clients, “Go talk to two, three or four people.” Try to cap it at three, otherwise, you’ll confuse yourself. It’s not worth doing and go with the person your gut tells you that you trust the most. Because at the end of the day, you’re going to need somebody like yourself and somebody like myself who will be an advocate for you, not just for their paycheck. You’ve got to realize there are so many people in our industry that it’s all about their paycheck.
Don’t get me wrong. I want to get paid. I don’t come here and do this for free, but I have such a high ethical standard for my client that at times, if I know they need it, I’ll do it for free. Who else will do that? I won’t just do it for free but if somebody needs it, I will do that. That goes to show the character of who I am and how much I care about you. If you could talk to somebody, you’ll hear it in their voice and their words. You will know you’re going into this huge transaction with somebody behind you that is for you, on your side. That’s why I love working with you. I’ve known you for a while. We’ve done a ton of deals together. I can honestly say that you bend over backward to help these people. I see you bending over and doing cartwheels even more so for them, for the smallest ones. Most people are like, “Are you kidding me? I’m not going to make any money on this one. I got it in. It’s great. Let’s let it roll. I’m going to go focus on bigger and better things.”
It does come from that place. My mind is still stuck on the, “Why don’t you call me so you can hear the tone of my voice as opposed to trying to interpret the chat?” I did a whole episode talking about the push button technology, the tap technology. Because I’ve heard so many horror stories, I never even realized that they were chat-based. Here’s another thing that I think a lot of the readers aren’t going to get. We were supposed to try to get together and Dino called me in the morning and said, “I have a client. We have an important deal. I understand the deadlines. There’s going to be a potential for a phone call during that time slot that we do the podcast. Can we reschedule so I can be fully available?” That’s the personal touch that you’re talking about.
That’s why we’re doing it before anybody else shows up to my office and before the phone starts ringing. Most people aren’t even awake yet. Nothing’s going to get in our way of doing this because this is important too. Once business hours start, we’ve got to pay more attention to the clients and their needs.
Everybody has their best intentions and their to-do list. What we do, a lot of the times, is reacting throughout the day. I had a showbiz background and people thought I was going to be a great real estate agent because I was an actor. I kept telling them, “Do you know what real estate lenders are? It’s not about having the big glitzy personality to attract people because you spend your whole day putting out fires. We’re the people behind the scenes, the stage managers and the lighting guys on the movie set, making sure that everything’s perfect when things start to go sideways. Let’s go back and do a little definition for us. We do have some folks that have never thought about this. You’ve helped explain to them that they’re not a score if they’re talking to a real person. You used a word that I’m wondering if they heard undertaker. You mentioned it multiple times. They might think that they’re going to die in this transaction. You said underwriter. Explain to them who’s the underwriter and how does that process work in a loan?
An underwriter is a person that signs off on the deal. It says, “You are worthy of us giving you money to buy a house.” Their job is to try and poke holes into your loan application and decide whether or not the bank they work for is going to give you money. They’re trying to kill a deal but there’s a multitude of banks to choose from of where to go. I’ll give you an example. I’m a mortgage broker, not a banker. The difference is, if I were a banker, I’d be working for a particular bank and I would have those products available that this bank has only.
Those products, meaning they only have a certain amount of loans.
They have, for example, the standard 30-year fix. Everybody has that. They have these other loan products. If you don’t qualify this traditional way and you’re self-employed, there are some other products where if you provide twelve months’ worth of bank statements, for example, we can add up all your deposits. Divide it by twelve and that’s your income, which is cool because a very traditional bank doesn’t allow that. We have banks on the broker side that you don’t even know about because they’re wholesale that allows something like that. Another product would be a P&L. You provide a profit and loss statement if you’re self-employed. You back it up with only two months’ worth of bank statements that show that the revenue you have fits your bank statements and you’re qualified.
Going back to your underwriter question, we have these underwriters within. As a banker, they have their bank’s loan programs and their bank’s underwriters. There’s a certain tolerance level that bank has. What that means is maybe they’re not as risk-averse and they want the perfect person who has a 740 credit score and had been on the same job forever. There are these other banks that, on this whole sales side that I’m at, have a different viewpoint of things. They’re not trying to kill the deal like a lot of people think underwriters are. They’re fighting for our business. They are constantly coming to us as brokers saying, “We want you to give us loans. We have great customer service. We have a can-do attitude. We have great rates. We’re okay if your client doesn’t have an 800 credit score.” They’re trying to make the deal work.
That’s what the beauty of my side of the business is, of the broker side. We deal at the wholesale level. We have all these different banks, all these different underwriters. We know which bank is more tolerable to what. It’s a real true advantage to be able to know which bank to go to. We prepare the file. We pre-underwrite it in a way that we know they like to see it. Therefore, the chances of it getting approved there are significantly higher because of that, versus if you were to go walk into some random bank like one of the big-box banks out there. All you have is a loan officer in one side that likes to chat with you online versus talk and doesn’t have the sharpened tools in his tool chest of knowing how to put a file together the right way. When it gets submitted to the underwriter, the underwriter is constantly looking for holes to put in it because they don’t like what they see. What I’m saying is there are so many different avenues to go down. I’m not saying a big bank can’t be good, but all they have is what they have and that’s it. There are so many other programs out there and so many other banks and a whole different tolerance level at these other banks. A lot of times, as a first-time homebuyer, you need a little bit of help and a little direction. It’s like trying to find a destination without your Google Maps.
I do get people that have questions about a mortgage banker or a bank. Sometimes they’re not even thinking in that term. When I discuss a mortgage broker, a lot of times, I see them start to be afraid. Mortgage brokers, in general, can help the folks who might not have been at a job for 25 years with the same job, the same paycheck. Let’s say you’re 32 years old, had been out of college and have been bouncing around trying to figure out what you’re doing. You’re only a couple of years into a new job, perhaps some of the folks who are reading this. What you said that I thought was interesting is the banks have the products they sell. When you work with a mortgage broker, there are these wholesale banks that are selling themselves to you. They’re saying, “Because we don’t get paid by big daddy, Bank of America, Wells Fargo, Citi or Chase, we don’t get our paycheck no matter what.” They’re fighting for your business, which means you can turn that around and bring a bank that wants to work with buyers.
[bctt tweet=”With big banks, no matter how much money you have with them, you’re still just a number.” username=””]
They want to work with you. They will overlook certain things because they can. Here’s an example. I’ve got a brand-new client, one of these total deal killers at the vast majority of the banks. She’s fine in every which way, except for the fact that she just quit her job. She’s accepting a new job that she hasn’t even started yet. She fell in love with this house and she wants to buy it. Try going to certain banks and telling them you want a loan. It’s not going to happen. They’re going to say, “That’s fine, but you need to be working there for X amount of time so we can see that you’re going to get paid.” I have a great bank on the wholesale level. All they want is a contract from the new employer clearly stating what your new salary is and your start date is. As long as you have a start date that’s within two months, you can even get a job without officially be working and a clear salary number, you’re in. You’re not even paying extra for it. It’s a good bank with good interest rates.
The rule of thumb is you’ve got to have a job for two years. Are you telling me that because you have a plethora of products from a plethora of banks, even if you don’t even have the job yet and you just have the offer in hand, some still might approve you?
Yeah.
Here’s the last myth that I would like to see from your perspective. You don’t know what you don’t know. A lot of first-time buyers say, “I’m 30 years old but I’ve been working on this adulting crap. I’ve got a great relationship with my credit union.” Usually, what that means is they’ve got $5,000 or $10,000 saved. They started a small retirement fund with them. They’ve got their $30,000 car loan. That’s a lot to that first-time buyer. Does that credit union or that big-box bank matter? Are they going to suddenly have a better loan product than a mortgage broker who could be shopping at all over town because these guys want to work with me, I gave them my money?
I have no love for big banks because, no matter how much money you have in their bank, you’re still just a number. Let’s switch over to credit unions. Every once in a while, I’ve seen something incredible happen at a credit union. I’m not going to knock it and it’s typically not the standard credit union. The ones I’ve seen it on, they’re some military credit unions that get a big influx of cash. They have $100 million for example. They offer something ridiculously cheap. One of my clients brought this to me one time and I didn’t buy it. I called up and said, “I wanted to join the credit union,” and made up this whole story. I wanted to see if this was available. I finally came clean. I’m like, “How is this available? It’s impossible.” I couldn’t even believe for myself. They told me, “Every once in a while, we get this big influx of cash because it’s military and we have to give it out.” It’s only good for as long as they have that money and then everything goes back to normal. I bowed down. I acknowledged and said, “Awesome.”
Every once in a while, the credit union is awesome. The vast majority of credit unions are not that way. The vast majority of credit unions are very conservative. Just because you have a car loan with them and just because you have some money in their bank, it doesn’t mean that they are going to hand you a big check to go buy a big house. It’s because you still have to meet certain credit guidelines, income guidelines and debt ratio guidelines. For the most part, credit unions are known to be conservative. On the wholesale side, they have much larger risk tolerance. It’s a lot better to go to the wholesale side because we have a lot of options. Even if you’re the perfect client and have the perfect score and the perfect everything, there are still so many more options.
Let’s say we have that client who has the perfect score and they’ve been banking at this credit union for ten years. That doesn’t mean that the credit union is going to give him the 10% discount because they’ve had X amount of dollars and had been working with us for ten years. There’s no secret deal in the back for people that we like.
There’s nothing like that at all. It’s usually the big awakening for people that have lived by this code through a credit union. They think that they’re loved and that they will be taken care of all the way to the end and they realize that they’re still just a number. It’s not as bad as the big banks, but a credit union has very conservative guidelines that they have to follow. They can’t just give the money out because it doesn’t meet their conservative guidelines. That’s what I found to be the case the majority of the time.
You and I have had a personal experience with the big credit union that works for our Disney folks. The credit union for the Disney people, they’re so great with small personal loans and car loans that people have a great opinion of them. I’m hitting number 69 and not one person has ever used them. If you’re working with a mortgage broker and you had interviewed the right people, the credit union had a fantastic product. It was worth zero down payment. When I brought it to Dino and said, “All our Disney folks are going to be bailing and going over here.” Dino said, “If they qualify for that one, tell them to go get it.”
That made me feel very good about who I was choosing to work with and who I was choosing to refer to other people. In your position, do you feel comfortable doing that because you realize either it’s one of those crazy deals where you called and found out or once they get a couple steps down the line, they’re going to find out that maybe that’s for that crazy, well-established borrower, but that buyer who’s got a ton of cash? They offered the product that most likely 90% to 95% of the first-time buyers aren’t going to get that thing. Even though you said, “I can’t beat it,” you don’t tell them, “Good luck. Go try to qualify for it.” You say, “I can’t beat it. Go check it out.”
Every once in a while, there is something that isn’t available to me. If it is available and it’s there, by all means, you need to go and explore it and try. If it doesn’t turn out to be as rosy as it may sound, I’m always here. I told this to somebody. I’m like, “If there’s a way for you to save money and I’m not talking about $10 a month but something significant, then, by all means, I do not want you to use me just because it’s me. You need to go save money. It’s long-term. It’s something that you need to do.” It’s hard for me to say this but I’ve got four kids. I don’t want to turn any business down but at the same time, I would feel horrible if I did some fast-talking and got somebody to use me when I knew there was something that was significantly better somewhere else.
We had a client. They were struggling to buy this home. They did everything we told them to do. We worked on getting their credit score better. We increased it by a ton. They needed a little extra cash in reserves. We did a little bill of sale on the third car that they had and had this proof all of sudden that they got this money. They stuck it in their account. We were able to use it. They had their reserves. We worked on this thing. We teed it up for months to get them to qualify. In the middle of the transaction, we found this credit union that was advertising this special thing. I was like, “That’s perfect for them. It’s so much better than what I have.” I called them up because it was still a little hard to believe. Sure enough, it was no money down but you had to be beyond perfect in order to get it. We spent about two or three months putting this perfect person together on paper. Believe it or not, he was perfect. I was like, “Mine was 5% down. Theirs was no money down.” You get pretty close to your clients after working with them for a while. From our side is a lender, we know everything about them.
[bctt tweet=”When one hand giveth, the other hand taketh.” username=””]
It’s a lot of money.
As bad as this feels to lose a deal, I want to make sure that I tell you about this. It’s the only way that I can have a good conscience. He went there. He was extremely thankful because it’s saved them about $35,000 on his down payment. He was able to buy his car back afterwards.
The only way you can get these crazy, once-in-a-lifetime deals is if you’re a perfect buyer or a perfect borrower. The only way that you can become a perfect buyer or a perfect borrower is if they spend time working with someone like you.
It is what it is. I still felt good about doing it. The other thing I want to stress to people though is I get asked all the time about all these special deals and first-time homebuyer deals. There’s so much stuff that’s out there. Envision this bank or this entity reaching out with one big hand with a pile of cash. When one hand giveth, think about this other hand coming in from the other side. The other hand taketh. What I mean by that is they’re willing to give you but too often, they’re taking on the other side way more than they should be. Sometimes these programs, if it’s the only way you can get into a house, maybe it’s good and maybe it’s worth doing. Too often, there are better solutions that you might not get exactly what you want on one end, but you’re going to put yourself in a much better position to succeed in the next five years because you didn’t sell your soul in order to get what they were offering.
When one hand giveth, the other hand taketh. Sometimes it’s not as good as it looks on the long-term. You need to understand and be aware of that. If you don’t understand it completely, it’s when you talk to somebody like David or to me. Go through the process and figure out if that is the best solution. Can you do a couple of things to qualify for this other loan instead, including coming up with maybe 3% down or 3.5% down? Between David and I, we can help with the closing costs. There are so many different avenues that we can help with all of that and you’ll end up with a much better loan that you won’t be tied to for years to come. I’ll give you a good example. This one gal that I did a loan for, she stepped over every stone and tossed over every stone to dig and come up with the money to put down as her down payment. She’s a single mom of two. She works hard and doesn’t have much savings at all. She didn’t have the entire 3.5% down for that FHA loan, but she was able to go borrow a little bit from dad. She was able to borrow a little bit from her 401(k). She put together the 3.5%.
We took care of all the closing costs. The way we did that is the realtor negotiated it in on the purchase. Let’s say the going price is $400,000. He did a $405,000 sales price and asked the seller to pay for $5,000 worth of closing costs. What happened? Nothing. The seller ended up netting the exact same amount of money. The buyer did not have to come in with $5,000. On the loan side, the going rate was 4.25%. We gave her 4.375% and because she took a little bit of a higher interest rate, we were able to pay for all of her taxes and her insurance for the next six months. She was covered and her payment only went up by $20 a month for doing that. Interest rates now for FHA loans are awesome. I pulled up all my FHA clients. I started calling them on. I called her in particular. I was only bringing her up because of her situation is she’s a single mom and works hard. The deadbeat dad does not give one dime to her and has not given her any money for years. Her interest rate is going to be 3.375%. She game-changed it for her.
A little disclaimer if you’re reading this in the future. First of all, tell us what it’s like. I want to know if I get rocket shoes. Second of all, this is June 2019. Don’t call us and ask for 3.3% if the rates go up.
What I mean by that is if she had gotten into one of these first-time home buyer special, “We’re going to help you out with everything because we love you so much,” kind of loans, she would be stuck in that loan and she would not have been able to refinance into this 3.375% interest rate. If she had gotten into one of those loans and she got a 4.375%, that rate in that loan at that time would have been 4.875%. The payment would have been even higher. She would have gotten a few things paid for. She wouldn’t have had to come up with some cash as she did. Her monthly payment would be significantly higher. She’d be stuck in it for years to come. Now she’s not stuck at all and she’s refinancing. She’s going to be saving even more money every month. When you’re doing a refinance, if you time it right, you can also skip two payments. She’s going to be skipping her next two payments.
I have a little theory when people ask me about the first-time buyer grants too. Now that they’ve read this episode, they know that wherever the best deal is, you’re going to send them there. That’s a little-known fact. What you’re saying is she has the ability to refinance because it’s a more traditional style loan but these first-time buyer grants, you’re locked into it. You cannot refinance out of it for a long time or forever.
They’re all a little different. A lot of them are five years. If you do refinance or sell the house, you have to pay it all back. You didn’t gain anything and you are paying a higher interest rate the whole way through. I’m not saying to delay in buying a house. If it’s the only way you can buy a house, it may not be such a bad gig. Too often, people put this plan together all by themselves of how they’re going to buy the house, when they’re going to buy the house, what they’re going to do to make their credit score better and what they’re going to do to save more money. When you start thinking about even potentially buying a house, it’s the best time to engage with somebody like myself or somebody like David. We can help you put that plan together. Even if it’s two years out, it’s fine. It’s no big deal. Call us up because we’ll help you put it together. Chances are, because we’ve been through so much of this stuff with so many other clients, we can get you there faster or at least more efficiently.
That’s the whole mission behind the show. I’m pretty sure someone’s not going to chat message you two years out before you’re going to buy with their online bank. They’re not going to send you instant messages on your laptop and start to talk to you about the two-year plan.
They won’t. They’re not even going to care about you because their funnel in their CRM is much smaller than that. If it’s within three months, they grade you a certain way and they’ll pay attention to you. If it’s within six months, you still have a little bit of their love and attention. If it’s anything further than that, you might as well be the redheaded stepchild.
[bctt tweet=”When there is stiff competition, you have to be able to stand out in the crowd.” username=””]
I cannot tell you how many real estate seminars I’ve gone to where they grade the buyers A, B and C. If someone walks into your open house, this is what they’ll teach real estate agents. If they’re going to buy in 30 days, that’s an A buyer. Jump all over that person and give them fantastic service. If they say 30 to 90 days, it’s a B buyer. If they say 90 days or more, it’s C as in, “See you later.” I’ve heard people on stage teaching other real estate agents that. I want to go back to one point that I think is a great wrap up because it encapsulates everything that we’re talking about. Are first-time buyer grants out there somewhere? “Yes.” What you mentioned if you’re willing to start your plan early and that’s the whole thing we’re trying to do here is get you guys to start thinking about this early, you may find out that you can put yourself in a better situation over those two years instead of waiting and grabbing that grant.
People think that you have a wallet and that wallet has money. I walk into Target and I pick the item off the shelf and buy it. You and I know that’s not the way it works. Real estate is crazy. You’re not going to Target. You’re going to one lady who decided to sell her house and she can be the crazy cat lady. She might be nuts and your wallet doesn’t get filled with money in the same way. Sometimes if you go and do it on your own and you spend two years working on it, you can get a loan approval in 30 days. That money is in your wallet and you can go buy the house.
If you’re using a grant, a lot of times those loans take a lot longer to process. We’re talking 45 or 60 days. Real estate is all about two things, time and money. If that crazy lady wants to get out of her house in 30 days, you might’ve jumped through all these hoops to get the first-time buyer grant but you can’t close in time so you lose the deal to somebody else. Whereas if you’d spent the last couple of years working with us and figuring out how to make a plan, you might have been in this situation to pull the trigger a little faster and get the house that you wanted, which is the true value.
On June 4, 2019, the market is red hot out there. There are multiple offers right away and a lot of stiff competition. I always say, “No matter how good-looking you are on paper, there’s always somebody that’s a little better looking.” You might have a 750 credit score and 10% down, but the other guy got 20% down and an 800 credit score. It’s hard. If the seller was looking at the paper, they would be looking at who’s qualified the most. That’s a simple, “Who has got the best credit score? Who’s got the highest offer?” There’s so much more to putting an offer in than that. That includes the rest of the deal. How many days of escrow do you need in order to close? You might need 45 for one of these special programs.
Even if you have an 800 credit score and 10% or even 20% down, the other guy is going to be ready and close in 30 days. That seller typically wants their money sooner, not later. They like it. In this market, it’s very hard to even get an offer accepted if you need 45 days or if you have to go through this process of getting these grants and all this other stuff going in. If there are other people that are interested in buying the house, they’re going to get chosen over you. That’s how it is. If the market shifts, it’s a whole different story because if there’s not another buyer, they’re going to wait for you to do what you need to do but not in this market. It’s very hard to do.
David and I had been doing this for a long time. When there is stiff competition, it’s when we rise to the top, more so than anybody else. The reason why is because the standard contract is written with a 30-day close of escrow. The standard contract has a 21-day loan contingency period, which means you as the buyer get 21 days to situate your loan. Otherwise, if something goes wrong, you get your deposit money back. The standard contract has a seventeen-day appraisal or a home inspection contingency, which means you get seventeen days to go inspect the home. If there’s anything wrong, you get it squared away and us on the lender side, we get to do the appraisal and make sure that it’s worth what you’re paying for. Even if you only had 3.5% down and your credit score was only 680, the chances of you getting your offer accepted are slim to none because there’s always somebody that’s a little better looking on paper.
The way David and I package this loan and this offer is we come in with twenty-day close of escrow, not 30. Instead of a 21-day loan contingency period, we come in with zero. The reason why we come in with zero is that it makes you look like an all-cash offer. Who cares what your credit score is? We’re signing off on all our contingencies upfront. We’re saying, “We don’t have any issues getting these people a loan.” How powerful is that? You could be up against the guy with an 800 credit score but who cares if you only have a 680? They have 21 days on their contract. You have zero. You are as good and as strong as an all-cash offer. There are a seventeen-day home inspection and an appraisal contingency. David and I don’t need seventeen days. We can do it in ten.
When we package this, give it to the seller and you’re up against all this competition, you’ve got the seller that’s looking at all these people. Sometimes the highest bid is not even always that best offer. Sometimes the best offer is the one with all the best terms. If the seller is trying to sell a house and go buy another house, no loan contingencies are going to help him get an offer accepted on another house. He has twenty-day close of escrow. Having money in his account in 20 days versus 30 is going to be extremely powerful for him in order to be able to go buy a house.
You might be $2,000 or $3,000 under the next guy on your offer, but you have the best offer still. You’re guaranteeing that you’re going to close this thing, versus the other guy who goes all the way to the max and can’t even qualify after 21 days so they have to back out of escrow and now the seller has to lose the house they found. They’re stuck trying to relist this house and get it back on the market. Only now, it’s got a stigma because it’s been on the market for a long time. There are a lot of ways to package something. Unfortunately, there are way too many real estate agents out there, especially the ones that are typically willing to work with the first-time home buyers that don’t even understand what I said. If they don’t understand that, there is no way they’re going to package this and sell it. Packaging it and putting it on paper is one thing but selling it to the listing agent and the seller is another. You have to know how to do that properly. The last thing I’m going to leave you with is to find a team that’s going to work for you. Find the team that is ultra-aggressive because this market is not for sissies. You’ve got to be able to beat out the competition. If your realtor can’t stand up strong and firm and present this offer with power, there is no way you’re going to get a house. That’s the unfortunate truth.
The way you set it up makes the most sense. Our job is to make you the best-looking person bringing an offer in. We’re like super stylists. All the people out there in How to Buy a Homeland, I tell them, “This podcast doesn’t go from my home here in Orange County and stop at twenty miles. It’s for everybody out there.” The number one thing first-time buyers do when they’re shopping for lenders is they’re thinking about rates and price. You need to go find your unicorn realtor. Don’t work with a trainee. Go find that unicorn realtor, the experienced agent who’s willing to take the time with you. Dino changed my whole thing, “Our job is to make you better-looking. If you’re so ugly that it’s going to take us two or three years. Come see us early.” If you’re out there, you realize that prices and rates are great but it’s someone who’s willing to help you get better-looking. It sucks, but there’s always somebody better-looking than us out there. We’re the team that is going to take a couple of years to help you get the best-looking package that you can and get you in front of those folks. Dino, this is fantastic. I love that you said that the realtors probably didn’t even understand what you said. I know some of the readers might not.
Let me add to that too. Even if you’re not good-looking, we’ll help you get good-looking. If you are good-looking already, you’re ready to go and you’ve got all your stuff in line, if you don’t have a lot of money to put down and you don’t have the best credit score in town, you’re still going to have the same problem. Let us help you in that situation. If you’re not even around here and you’re in some other state, David knows people in all the states. He can refer you to somebody that knows how to work in the manner that we’re talking about. It’s not for everybody. It’s an aggressive manner. It has to start with the loan officer because he’s got to be able to back it up but it has to end with the realtor because he needs to go out there and present it with confidence and sell the offer. When there is stiff competition, you have to be able to stand out in the crowd.
We’re doing it. I got my gal out in North Carolina. She’s out here in Charlotte. She’s in step two now, how to find a unicorn realtor and now she’s got some questions about her lender. I’m going to download this episode and say, “Here are some of the answers to the questions you were asking about.” We’re able to put you in touch with folks all over the country and give you a roadmap. This is roadmap number two, the things you’re looking forward with the lender. We already did things to look for when you’re finding a realtor. Dino, if anyone does have questions or if they’re down here in Southern California and want to reach out to you, how do people find you and say, “Make me more good-looking?”
First of all, I’m only licensed in California. If you need some advice, somebody to talk to you about a couple of things, feel free to call me. I can’t do the loans anywhere else, but I’ll help you out still and guide you as to finding somebody and helping you put together the right package. My phone number is (949) 720-1616. You can even text me at that number. My email address is [email protected]. The name of the company is California Coastal Loans.
Dino, thank you so much. This was super fun and informative. People came in here looking for real advice on money and instead we told them that we’re stylists and unicorns and they need to find stylists and unicorns when they’re buying a house.
Thanks for having me on, David. I appreciate it. I’m stoked you’re doing this for all the people.
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This podcast was started for YOU, to demystify things for first time home buyers, and help crush the confusion. After helping first timers for over 13 years, I knew there wasn’t t a lot of clear, tangible, useable information out there on the internet, so I started this podcast. Help me spread the word to other people just like you, dying for answers. Tell your friends, family, and perhaps that random neighbor you REALLY want to move out about How to Buy a Home! A really easy way is to hit the share button and text it to your friends. Go for it, help someone out. And if you’re not already a regular listener, subscribe and get constant updates on the market. If you are a regular and learned something, help me help others – give the show a quick review in Apple Podcasts or wherever you get your podcasts, or write a review on Spotify. Let’s change the way the real estate industry treats you first time buyers, one buyer at a time, starting with you – and make sure your favorite people don’t get screwed by going into this HUGE step blind and confused. Viva la Unicorn Revolution!
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About Dino Katsiametis
Dino Katsiametis has close to 20 years of experience and is an expert practitioner in the mortgage, banking and real estate industries. He has a passion for serving clients with a financial planning/ relational approach instead of a “one-time transaction” mindset. Because of this, Dino is truly considered a trusted advisor by his clients, realtors and other financial professionals he works with.
As the former Area manager of a large national bank and the host of his own radio show “Money Matter’s with Dino” on Clear Channel Radio, Dino has always stayed ahead of market trends. His approach comes from looking at his client’s entire financial picture before making recommendations, as well as utilizing his innate listening skills to give his clients exactly what they want.
Within his practice, Dino works alongside CPA’s, financial planners, attorneys, accountants, real estate and banking professionals in order to provide comprehensive financial scenarios along with “Win-Win” opportunities for his clients. Integrity, attentiveness, availability, insightfulness and strategic thinking are some of the words that clients use to describe Dino, but the proof is in his execution and delivery.
When it comes to performing without compromise, timely execution and getting what you were promised with personalized service, Dino Katsiametis and California Coastal Loans are your ONLY choice.
Dino lives in South Orange County close to family and church, which he considers the foundations of his character. Alongside his mortgage company, Dino has founded and hosts a popular podcast called “God’s Men of Influence” where he promotes Christian values by interviewing men in leadership positions in the community about their walk with God.