If we want to stand out in our marketplace, we should start and get things done. The first thing to consider is how the buyers will purchase from you. How could you create a process that is appealing to prospective buyers? Jeffrey Rutkowski discusses CT Homes certification with JD Esajian. CT Homes has a unique process that separates it from the competition. Certification is essentially an arm of the marketing department of CT homes, which is broadcasted to the public via CT homes, website via social media, email, and many different channels. In this episode, they dive deep into how customers certify the homes that they’re going to buy and how they negotiate with better pricing. The buying process shouldn’t be complicated. Tune into this episode to know how to provide value to your buyers to scale in your real estate journey!
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CT Homes Certification In Real Estate Investing With JD Esajian
I’m pumped for this episode because we have none other than our resident expert and CEO of CT Homes LLC, Mr. JD Esajian. First, the word of the week for this episode is CT Homes Certification. That’s what we’re going to be talking about in this show. This certification is essentially an arm of the marketing department of CT Homes, which is broadcasted to the public via the CT Homes website, social media, email, and many different channels where we are showing potential buyers how we certify the homes that they’re going to buy. This makes the buying process much more appealing to prospective buyers and separates CT Homes from the competition. What it does is make the buying process as easy as 1-2-3. Let’s get into this episode with Mr. JD Esajian.
We have an incredible episode with our resident expert and CEO of CT Homes LLC, Mr. JD Esajian. I’m excited to have you. Things are great. The show is going great. NFL Football is back. How are you feeling about your Las Vegas Raiders?
Your reputation is everything and is very important in your business.
I’m a lifelong fan. Whether we’re going to the Super Bowl or getting ready for the draft, I’m always excited. In 2021, I’m feeling good.
You are a faithful fan. I have to give you that. You stuck with them through the highs, lows, and all of that stuff.
It’s mainly highs. We’ve had a lot of highs. That’s my recollection of it. We’re here doing a great show. We got a lot to cover. I’m excited. How are things with you?
Things are good. I have nothing to complain about. I’m excited about this. We’ll be in Orlando for a bootcamp there. We’ve got a bunch of different bootcamps. We’re pumped about that. It’s just that this pandemic, we’re not able to teach in person. I don’t know about you but I like seeing people.
There’s nothing better. We love teaching what we do and we’re doing a lot of it in real estate. This show is an example of that real-time information.
We’re going to get into some great stuff. We’re here teaching and we want to impart things to you that are going to help you on your journey. If you have anything to add to the subject matter that we’re teaching that can help us, please share. We love to learn and grow. The last couple of times we had you on the show, we got into the tips and techniques to get more offers accepted. We went to the other side of things like, “How do we sell our properties for more quicker?” Now, I want to get into a little bit of some of the specific marketing techniques that you’re doing. I have this beautiful flyer here. It’s called the CT Homes Certified Program. You could also see it on the CT Homes website. This is marketing material that you’re using to entice people to work with you to buy your homes.
We sell between $50 million and $60 million of real estate in San Diego alone every year. We have been doing that for many years. We have a lot of experience in selling homes. This is an example of taking past and current experience, and rolling it all into what we’re calling CT Certified, which I’ll share a story. Most people have heard of a certified used vehicle.
A couple of years ago, I was thinking about this idea that we’re going to discuss and teach from that we’re implementing. It hit me like, “You feel better and more confident buying a used car when it’s certified because they do certain things that you don’t automatically get when you go to buy from a private seller.” They do a 25-point safety check. They have some version of an extended warranty, even if the car already has one. They have gone through it. They know the vehicle. They do these other things that when you go to buy a certified used vehicle, you feel more confident.
When we’re selling a home, most of the time, it’s not a newly constructed home. We’re talking about renovating homes for sure. We’re buying a used home, but why not certify it and do some things better and different as a seller and investor that make people feel more confident doing business with you? That’s where this came from.
It’s so simple but profound at the same time. Was this truly your idea?
I will sit here without a doubt 1,000%. I will look you in the eye and say it was my idea.
Thank you. Once in a while, the sun shines down in a way that hits me and we come up with something. After now having implemented this for a number of years, whether we offer every point, people feel more confident because they know we’re willing to do some things differently, and that’s important. Your reputation is everything. It’s one of the most important things you have in business. It’s going to be fun to get into some of the details on a few of the big ones.
We’ll touch on a few of them. I’ll have this posted for you. If you go to FortuneBuilders.com/podcast, we’ll have this there next to it. There are about 10 or 12 different things. We’re not going to go through all of them.
Maybe we’ll do a second show on some of the other ones.
That’s a good idea. We can definitely do that.
Notice how the banner is like a certification when you’re at the science fair and you get that first place? It’s all thought-out.
That was your idea too, right?
I didn’t come up with the logo but I had an idea in my head. I didn’t design it. That’s not my thing but everything is thought about. Nothing is neutral.
You’re making the homebuying process as easy as 1-2-3.
We’re having fun and we should, but what we’re going to talk about will make a difference in your business when you implement it.
I checked off about 4 or 5 here that maybe we could get into. We’ll see how it goes with time. Let’s start with the Home Virtual Tour.
Before I talk about that, the idea was in a sales transaction there are some things that always happen. Every state works a little differently but there are things that always have to happen. There’s someone that holds the paperwork, money, escrow, attorney and title. There’s going to be a title report that gets produced. There’s going to be an appraisal by someone. The buyer is most likely going to get a home inspection. If you’re smart, you’ll clean the home for them before they move in.
There are things that always happen or should happen. I thought, “What are those major ones? Let’s do some of them that we know are going to get done anyways ahead of time, and then let’s do some that don’t always happen. If we want to stand out in our marketplace, we should do these things.” One of the things that you asked me about and it’s the first point that you brought up was the virtual walkthrough of the home.
Given the last environment we’ve been in where people literally couldn’t get into the home because of the pandemic, we virtually take a video of the home. It’s not just a series of photos running through on a photo player. It’s the ability to walk in the home. There are now the abilities to do this on your own phone or you can invest in a more expensive camera if you want, but you want someone to be able to get into the home when they want to. I’m not saying doing that by breaking into the house.
I’m saying like if they’re watching them many times and they’re looking at your home for the first time on their phone, give them the experience of being in the house. A photo is one thing, but if they can click a button and be in the home on their phone and navigate through the house going to the bathroom on their phone because you’ve done a proper virtual tour, they’re going to feel like they’ve been in the home when they’re there. If they’re feeling like they’ve been in the home or they’re looking at a picture or a virtual tour and imagining themselves in the home, chances are they’re going to be in the home pretty soon.
They’re walking into something that’s familiar to them already. They already saw and liked it enough to come and see it.
The opposite of that, and you probably have seen it, is where the seller or agent will take photos and they won’t even orientate them right. The photo will be where you have to turn your head to look at the kitchen. The buyer is out at that point. If you can’t take a good photo of the house, you don’t appreciate the home and you don’t care about it as much. With technology and what the buyers have on their phone, the resolution and all the stuff, if they see a lower quality than something else from a photo, what are they going to think?
What technology are you using for this?
The brand of the camera that we use is called Matterport. I’m not saying they’re the only one because there are other companies now, but they have great technology. They have a couple of different methods you can use through your phone in an app. They have to invest in their technology. An investment done properly always pays a return and this type of technology definitely does.
We should have brought one to show to the audience. If they go to CT Homes LLC, they could see every one of the properties.
Every one of our homes has a virtual walkthrough and it’s not just photos. You can click around in the home and experience every nook and cranny.
You’re controlling the experience. It’s not like you’re just watching a video that’s going through. There are these little white circles. If you click it, it moves you here. You turn to the left and go to the kitchen or into the backyard. It’s next-level.
As you alluded to, it gives people familiarity with the home before they’re there and that matters. That makes a difference when someone is making a buying decision. If they walked into the home and it feels more familiar, you’ve done a good job with the renovation that’s priced right and they want the home, you’re going to get an offer pretty quick.
I said this before, “A ton of feathers equals a ton.” It amazes me how you guys are doing these little things that just add up over to that. That’s what it’s about. This one is brilliant. It’s a Three-Year Home Warranty. How are you positioning that? How does that come into play?
Every state is a little bit different, but some things always have to happen.
One of the things that are pretty common in a transaction is that a buyer can elect to invest in a home warranty for their house when they buy it. There are companies like Fidelity, American Home Shield, and many others that offer a home warranty. It is like any insurance. You pay for something. When you go to use it, in the home warranty world, there’s a small copay. They either repair or cover the replacement of major components of the home like appliances and mechanical systems.
You can get a pool upgrade if you have a pool at the house. From personal experience, when I bought my home, I won’t go into all the numbers. My home has a pool that I live in now and the equipment was twenty years old when I bought it. Through the home warranty and a small copay as a way to think of it, I now have all new pool equipment at my house for a fraction of the cost because I invested in a home warranty.
Buyers can elect to do that. We thought, “Why don’t we have them choose? Let’s pay for that, find a company that appreciates repeat business, and negotiate a better price. Let’s not just offer one year.” This isn’t something that a buyer has to ask for. On our encounter with them, we let them know, “Good news, you’re already getting a three-year home warranty.”
I got to admit. I was surprised when I saw that. I was bragging about on the last show how I got a one-year. You’re coming not just doubling it, but you’re coming in hot. That has got to give such a good feeling to the buyer.
It’s an overwhelming feeling of confidence. It’s not CT Homes warrantying everything in the home because we didn’t normally touch everything in the home. It’s us paying for a third party for them to get coverage on things. If they use it properly, that can be massive savings for them over time and they now know.
As an example, when they go to get a home inspection from us, if we didn’t replace the hot water heater because it wasn’t needed, it’s still working and it’s relatively new. They know now that it’s not new, we can then go ahead and explain to them, “You now have a home warranty that when or if that water heater doesn’t function right and needs to be repaired or replaced, the home warranty company that we’re paying for has got you covered for three years.” It helps us at the home inspection. More importantly, it helps the buyer in the home that they’re going to live in.
That’s a huge objection blocker there. As investors, the hot water heater has got five years of life left on it. We don’t want to throw it away.
We don’t need to replace it just because we want it to have a new sticker on it. It’s still working right.
This isn’t a part of this, but one thing that blew my mind as we were talking is certifying the roof. I know it’s the same idea. Share that with the audience.
When we don’t replace a roof or it doesn’t need to be replaced because it’s still in good serviceable condition, we’ll send a licensed roofing contractor by to go and do whatever they feel needs to be done so the roofing company can warranty that roof that they didn’t put on most of the time for 1 or 2 years. They might go and replace a couple of shingles and do a little flashing around. Now, we can provide that one or sometimes two-year warranty to the buyers on a roof that we didn’t replace.
The difference between replacing a roof versus warrantying it or certifying with a roofing contractor is a massive difference. The average replacement of a roof is $10,000, $15,000, or $20,000, depending on the size and the material versus having a company come and certifying it for $1,500 to $2,500. It’s a similar kind of idea. It’s one of the things that sparked my mind about using the home warranty.
Also, when you use the same company over time, you can negotiate better pricing. When we’re paying for three years, we’re getting a better price because we’re using the same company over time and we’re always paying for three years. We’re not paying for three individual years’ pricing. We’re grouping it together, but we’re still providing the same value to the buyer.
On paper, we’re sharing a three-year home warranty. It gives a good feeling, but could we bring it to life a little bit? Are there any particular buyers you could think of that were impacted by it?
I’ve got multiple stories about each one of these points, but on the three-year home warranty because we finished talking about that. Earlier in 2021, we sold a home in San Carlos. It’s a neighborhood or area here in San Diego. Some people like cold showers. Most people like a little warmth or a lot of warmth in the shower. The hot water heater was not new in this home. It was working fine.
At the home inspection, the buyer felt comfortable with the fact that the hot water heater wasn’t new. They are an empty-nester couple because their kids don’t live with them anymore. This home was not small, so I don’t know if I would say downsizing. I’m not sure about the size of their previous home, but they wanted to be near the lake up there in San Carlos where this home is. They felt comfortable moving forward and they didn’t ask for anything with the hot water heater not being new because it was working fine.
After they closed a couple of weeks, we got a call from the wife. She called the mainline at CT Homes and I haven’t answered at that time. She was a little upset, anxious and nervous because her hot water heater started leaking. I was able to calm her down and remind her because she had forgotten, given all the hecticness of buying a home. It’s in their home manual that we talked about in a previous episode.
I said, “Ma’am, I want to remind you that at CT Homes, we certify the home and you have a three-year home warranty. Go over to your home manual, the binder that we left in the home. Flip to that section. You’ll have all the information about the home warranty company, how to handle the call, who to call, etc.” She was not frantic when we left that call because she knew where to call and who to call. As a result, she made that call and paid. That’s how the warranty works, the copay. It’s now what they call it. The company came out and she ended up getting a new water heater out of it.
To give you an idea, we paid for three years. She paid approximately $50 for a company to come out through the home warranty company and got a new $2,500 hot water heater in her home. It’s not a copay but you can think of it that way. She is loving her home. After that experience, she is at least liking CT Homes if not very satisfied that she has got that coverage for three years.
I bought a home not too long ago. I didn’t get a binder.
You can get a binder and go back. You already own it now but maybe you could talk to the seller or the previous owner and see about getting it. What you can do, Jeff, and you probably know this, is when the warranty is getting ready to expire, you can renew it as I shared in my pool story example. I’ve lived in that home for many years. Every year, I’ve renewed it. In 2021, I got a new cooktop that I paid a small amount for because the cooktop was original.
One of the things is sometimes in the franticness, excitement and also nervousness of buying a home, because for most people, it’s the biggest investment they ever made, they can forget about what we offer. We’re offering a lot as a seller as you realize. We want to remind them and this is what the certification process does. I can’t say it’s the most important but I will tell you that the three-year home warranty is something that resonates loud with the individuals and families that buy our homes.
This is setting you guys apart. Inadvertently, it’s making the competition look bad. You’re not bashing them.
If you’re not doing what we’re doing, you’re going to be looked at differently.
The next time I’m picking up a house, I’m going to ask for my binder, “You have no binder?”
If anything comes upon a title that you didn’t check or know about, now you’re on the hook for it.
When you buy new appliances to put in rehab like we do 99.9% of the time, they have manufacturer warranties. You can either lose that paperwork like a lot of people do if they’re not conscious of it. You can tell your contractor to put it in a drawer. When the buyer goes to the home for the first time, they could try to find it or you could step back and say, “I’m paying for new appliances. I budget for that in the rehab. I’m going to save those warranties, put them in a binder, and call it the home manual. I’m going to make it special so they don’t have to call me to find out where that is.” It’s there for them and something that they can have that’s tabbed. We tab it and there’s a table of contents and a picture of their home on the front of the binder. We could go on another show and talk about the home manual that we give them.
I want a binder.
If you didn’t get a binder when you bought your home, give me 24 hours, I’ll get you a binder.
I appreciate that. Let’s keep rolling here. First and foremost, I want to let everyone know we have free training coming up with our mentor, Than Merrill. Than is the Founder of CT Homes, Fortune Builders, and a multitude of other companies. He bought over 1,500 deals in his career, residential deals and over $1 billion in commercial real estate.
This class is about pulling back the curtain and sharing the systems, tools and resources that you guys use every day to do these 1,500-plus deals and billion dollars in real estate. To get a free ticket to that training, go to FortuneBuildersShow.com. Before we go on to the next one, just to set a little context, this is used as marketing material. It’s out on your social media and website, so buyers and agents are aware of this. At what point do they normally bring this up? Is it when they’re getting ready to write the offer? Explain that.
We do social media. Every once in a while, we’ll put out a post to remind the community. We also have the sheet attached to our listing. On most listings, you’re able to put the attachments. This is one of them so people can understand what we do differently as an investor. As you see noted on there, not every point applies to every house, depending on the market we’re in and the home. If they look at the attachment, they know about it. If not, then we discuss it once we’re accepting the offer. If they don’t bring it up, we’ll mention it to them as we’re getting the offer, negotiate, accept it and going into escrow here in California. That’s what we use primarily. These are the things that are available in this home. If they want to ask for others, then those are points of negotiation.
As JD mentioned, we’re an escrow state here in California. If that term is foreign to you, likely you’re in an attorney state like Connecticut. Some closings are conducted with the attorneys and some through an escrow company.
Some areas only use a title as the intermediary third party for the buyer and seller.
We’ve got the Virtual Home Tour and the Three-Year Home Warranty. Let’s get into a Title Report Already Available.
In every place in the United States, you’re going to buy a home. If you’re doing it right, you’re going to buy the home with a free and clear title if you know.
Define a free and clear title.
For layman’s terms, when someone gets a mortgage on a home, for example, the lender, the Bank of America or whatever bank you want to plug in there, they record something on the title. The bank is saying that they have an interest in the home because they’ve lent X amount of dollars. That’s a lien on the title as you know. For those of you that aren’t familiar, when you go to sell a home or that person that has a loan goes to sell a home, that loan will need to get paid off to be able to transfer the home with a free and clear title because that’s the lender’s security against the home.
A title company will handle the process of paying off the loan through the money that the buyer is paying the seller. That title company will then give a free and clear title to the new buyer. If you buy a home without a free and clear title, don’t do it. If anything comes up on the title that you didn’t check or know about, now you’re on the hook for it, depending on what that could be. It could be a significant financial downfall. Never buy a home without a free and clear title.
For any transaction that’s done properly, the buyer and seller will go through a title company and get a free and clear title. If you’re doing business the right way, which is the only thing we teach on the show, you’re getting title insurance and using a title company. That always happens on transactions. Why wait for the transaction to start? Meaning you’ve already opened escrow. Why not go ahead and get the title process started? Depending on how busy the title company is, that could take a long time and it could slow down the closing.
When we get a property done at CT Homes, we’re getting ready to list it. We go to the title company. We already have them prepare the title paperwork before listing. I can even back up and say that when we buy a home, we get something called a Title Binder, which is basically you’re paying that title company a fee. When you buy the home, you’re paying them and you’re saying, “I’m going to use you again when I go to sell the home.” It has to be done in a certain time frame.
When you go to sell the home and use that binder, you pay a reduced fee because you’re using them twice. Overall for the seller who wants a buyer, they’re paying less money by using them twice. We already know the title. I saw all that to say this. For everyone reading out there, we were having an inside joke about that. We’re saving money as a seller in this case and we already know the title company that we’re using. Prior to listing the home, we get all that started.
That means when we open escrow with our buyers, we can already give them all of that most of the time, which means they feel more confident because we’re ahead of the curve. They’re able to review that faster because that’s one of the things they sign off on. We’re all holding hands and getting to the closing table faster. Maybe not always holding hands but if we do it right, we are. This is something that you’re always going to do anyway if you’re doing business the right way. Why wait until the last minute? Let’s get it done before the house is sold.
When people experience them, they know they’re dealing with a professional, somebody that knows what they’re doing. That gives confidence. People are attracted to this type of stuff.
This is what we do at CT Homes. The day we open escrow, we send over all the disclosures. Meaning we don’t wait to find out who our buyer is, do disclosures, and they get those ten days later. We send them the day we open escrow along with the title report and any other reports we have. It’s confidence, but it’s also stuff they’re going to need to look at and sign off anyways. The sooner we get it to them, the sooner they can sign off and the sooner we can close.
I also know whenever you deliver a home to a new buyer, that house is pristine, you have it professionally clean, and there are no dust bunnies. There’s nothing like that. What is a dust bunny? Am I saying the right word?
It sounds right. It’s those little dustballs when you remove a rug from a hardwood floor. There’s all that dust on the outside.
I get that but how does it become a bunny?
I don’t know. We’re going to have to look to the audience for that answer.
It’s like we had that whole cooking with oil thing a few weeks back. If I’m saying that wrong, tell me what it is or give me the origin of the dust bunny.
Is it cooking with gas?
That’s what it was.
We cook with oil. We use avocado oil at home.
I like coconut. I’m a little more partial to coconut.
Everyone has got their opinion. Cooking with gas is the reference.
Cooking with gas and dust bunnies, for the moment, unless I’m wrong so you can correct me. You have all your homes professionally cleaned. They’re looking great. What’s the philosophy behind that?
When we get a home ready to list before we stage it or as we’re staging, we always professionally clean it. The first time buyers walk into the home and they’re thinking about writing an offer after they’ve seen it online, we want it to be pristine. What we also do, and we’ve been doing it since day one, is once all contingencies are removed and the home staging is out, before the buyer goes in for the first time when they own it, we send the cleaning company back in for another round of professional cleaning.
At that point, you might have had a dozen or multiple dozens of people walk through to look at it. The staging company has been in there pulling the staging out. We want them to have the best experience now in their new home. We’ve always done it but we haven’t always highlighted that we’ve done it. Lots of times, when you do something and someone doesn’t know that you’re doing it, they don’t get the maximum value out of what it is. When they walk into a clean home and they should walk into a clean home when they own it for the first time, I feel it’s nice for our buyers to know ahead of time. That’s just one thing they don’t have to worry about. We’re making the homebuying process as easy as 1-2-3.
I’m assuming, for a final walkthrough, you have it ready for that as well.
We try to time it where all the staging is out. The house is professionally cleaned. All the repairs that were agreed to are done. Sometimes depending on the timing, that doesn’t always sync up that way but that is the goal.
As I said, there are about 10 or 12 of these. You can find them at FortuneBuilders.com/podcast. I hit the main ones that I want to. Let me get one more out of you. We’re going to do Referral Services To Save Money.
It’s a good point to discuss.
CT Homes Certified goes with it. The referral services to save money.
When we work on a home or renovate a home, we’re hiring licensed and insured contractors to do the work. I started thinking, oftentimes, we’ll get asked from a buyer if they want to extend the cabinetry or they want to do something a little different to the home than what we had planned, “Can you help with that?” At CT Homes, we don’t do retail work for homeowners. That’s not our business. We’re investors that do a lot of construction. I started thinking, “I hate to say no. I never want to say no to a customer, so how can I offer them that ability by us not getting involved?”
One of the things that are now certified by us is if that’s something you want to do, extend the cabinetry or add an island, we’ll refer a contractor to you that can help with that. Depending on workload, we try for it to be the contractor that did the work on the house. That gives us the ability to say yes to that customer if they ask for it and they can spend more money. It gives the contractor more business because they’re going to charge what they’re going to charge and we’re not involved. They can negotiate better pricing with that contractor as we move through the next project with them.
I have had many stories about buyers that have reached out to us after they bought a home. We sold a home to a couple, a first-time homebuyer. They loved the home and were super excited. We did all the gifts that we’ve talked about in another show. They were stoked. Many people decided after they live in the home that they want to adjust things because you don’t know how you’re going to live in a home until you move into it.
As a result, they wanted to add an island into the kitchen. They reached out to us and we referred a contractor to them. They were able to add the island. It matched the cabinetry and the countertop. They sent us a nice thank you afterward and a photo of them using the island. We got involved because we referred a contractor, but we didn’t have to coordinate the work. We stepped out of that. It gave us the ability to help them and our contractor.
As a result, it helped us too because that’s more work and more money for the contractor that we can now remind them of when they quote on the next job for us, “Remember when we got you that additional work?” It’s a win-win situation. It’s something that we’ve done a little bit over the years. We always try to help our buyers when referring a contractor, but now we remind them upfront that that’s a benefit of buying a home from us.
When you do something, and someone doesn’t know that you’re doing it, they don’t get the maximum value out of really what it is.
Given a solution, you’re not saying no. I don’t want to get off on a tangent here, but you develop little affiliate income streams of money there too.
I didn’t talk about that but that is something you can do.
We work with our internet Quick Star students. We teach them how to set that up. It’s so good having you on the show, JD.
It’s great to be here again as always.
I appreciate it. We’ll get you back here. Every other week is the plan.
I would love to talk about it. Maybe we break down a couple of these in more detail or focus on one. We could spend 45 minutes talking about how we implement each of these but we hit the high points now.
I know many of you have been commenting during the show. If there are big topics you want to know, let us know. When we see a trend, we’ll definitely craft a show around that. I appreciate you guys being here. Go ahead and subscribe to our YouTube channel, Facebook page, and all different audio platforms where the podcast is available. Share it with a friend so we can help in our mission of empowering people’s purposes through financial education. See you guys next episode.