21 - 3 Reasons The Tampa Housing Market Isn't Going to Crash

Today, your hosts Peter Murphy and Chase Clark will walk you through 3 reasons why the Tampa Housing Market ISN'T going to crash any time soon: #1 - Foreclosure Sales; #2 - Inventory and Prices; #3 - Home Equity. Don't let the naysayers get you down. There are plenty of reasons why the Tampa Housing Market will hold up into the future. Listen while Murphy and Clark give you the facts

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Transcript

Chase Clark: Hey everybody, this is Chase and Peter with the buying Tampa, Bay podcast. Today, we're gonna tackle over very important subject for buyers and sellers and that's the inspection period. If you're a seller and you go to sell your home on the contract, there's going to be a period of time in which the buyer has the opportunity to bring in an inspector and dig around and uncover all kinds of potential issues with your house. It might be the most dreaded thing that happens during the sale process for you.

Peter Murphy: He?

Chase Clark: But it's necessary and something that every seller encounters. Okay.

Peter Murphy: I'm so sorry for standing up. I hope I didn't distract you.

Chase Clark: No, I'd rather. I started looking at your camera thinking that was mine. I was like,…

Peter Murphy: I was like,…

Chase Clark: what's going on here on?

Peter Murphy: I got a little bit glare on my face. I'm gonna adjust my blind a little bit that you start. I was like, I threw him off.

Chase Clark: I got my screen. This is very difficult to do the way I have my screen set up.

Peter Murphy: I'm sorry about that.

Chase Clark: I need to change this.

Peter Murphy:  Well, I just read my introductions and it I don't know if that's I don't care really about whether I'm locking eyes of the camera because so much of the conversation I'm looking at a screen anyway. So what I do is I drag the script right underneath the camera lens, I just read it. And it's not that bad.

Chase Clark: Yeah, I gotcha. Yeah, so I need I need to move my camera.

Peter Murphy:  And now my face isn't quite as glarey. So, All's good.

Chase Clark:  Got it. Oh yeah. Swapping her things around here.

Peter Murphy:  I'm not stopping the recording, I'll just edit out this beginning.

Chase Clark:  Yeah, yeah. It's fine.

Chase Clark:  Just like new setup, you know. It's like Yeah you guys All right.

Peter Murphy:  no, totally Yeah, without it out, man. No, no problem.

Chase Clark:  All right. That's it again. Hey everybody Chase and Peter here with the buying Tampa Bay podcast, today we're going to tackle a common issue, that many sellers run into and trying to sell a house. That's navigating the inspection period. It's a moment that every seller dreads, you have a contract to sell your home but there's an inspection period. Your realtor tells you that you're out of the woods but

Chase Clark: Oh, this is bad day. I got like congested and…

Peter Murphy: and,

Chase Clark: not thinking straight, I Three.

Peter Murphy:  It was perfect, man.

Chase Clark:  Hey everybody. Jason Peter here with the buying Tampa, Bay podcast. Today we're gonna tackle a common issue that many sellers run into and trying to sell a house and that's navigating the inspection period. It's a moment that every seller dreads, you have a contract to sell your home but there's an inspection period. Your real realtor tells you that you're not out of the woods until you get past the inspection period. Because almost anything can happen during that period of time. It's the time in which the buyer can basically back out of the deal for any reason. You've got an inspector coming in to uncover all kinds of things in your home. That could be potential issues. And you've got to wait around for that inspection report to come in to see if they're gonna try and negotiate for repairs to be done. It's a real stressor and a difficult period of time for every seller.

Chase Clark:  So today we're going to talk about how you as a seller might be able to better navigate through this period of time. And so, let's start out with the basics, right? So Peter, what is an inspection period?

Peter Murphy: Oh man, I'm getting like a palpitations just having hearing you describe that process just there because it's so common. And I have like all kinds of shared anxiety for my clients and for myself, whatever this period starts, right? I mean, it's pretty much the period of time, right? From the point that you have a contract, right? I mean, it can almost happen in any moment where the buyers agent's gonna send over a requests that Inspector can come and start probing around in your house and the inspection period is a period of time from the point that a contract is executed, and it's usually negotiated within the standard language of the contract up to 10,…

Chase Clark: Here.

Peter Murphy: maybe even 15 days and some extreme cases where the buyer can come and examine just about anything. They want to examine in your home.

Peter Murphy:  And depending on the actual language used in the contract, they have the right to back out of the contract or renegotiate, the deal based upon their findings. So it's a really vulnerable time, you know, and it's one of those things chase because like you go into a contract and everyone's so happy when you have an inked contract and signatures, but really, they've got to hold on celebrating until this inspection period is done. At the very least, this inspection period is done. Probably all. So, the financing contingencies that, you know, you don't know about until practically the time, you're gonna close, right? But all of these things can up and contract process, and they're super stressful and and buyers and sellers, just need to know how to negotiate these processes. Once they come

00:05:00

Chase Clark: That's right. You know it's never done deal until you sit at the closing table and you get the check right. I mean that's really the moral of every transaction story but this period of time, is that first hurdle that you got to get over right? You've negotiated you've agreed to terms on a contract. Now you've got this period of time where there's a lot of uncertainty and so we think about, you know, inspectors coming into our home. Like what kinds of things are they looking for, what kind of inspections would a buyer typically perform during this time

Peter Murphy: So, the most basic one is the standard home inspection, right? So, there are all kinds of home inspectors out there that are going to do a general readily observable, defect inspection on your house, and they're going to come through and they're gonna really examine all the major mechanical systems, the AC systems, they're gonna look at roofing electrical plumbing and then just a general health of the House inspection, that's your biggest one but you can also have a termite inspection during this course of time or a wood destroying organism inspection as it's referred to. You can have a four point and a win mitigation inspection which sometimes are a part of the basic inspection and there's sometimes something different. You can have a radon gas inspection here in Florida too which is crazy but in the contract because someone some long time ago had lots of problem with radon and so their attorneys built that into the contract and here it is standard language. Now those are the basic ones but you could have even more than that. A buyer is entitled to have a special mold inspection if they want to have one.

Peter Murphy:  They're entitled to have all kinds of special atmospheric or environmental inspections that they might want to have. They just got to get all of that done within that inspection time. Frame at the front end of the agreement and then based upon that they can renegotiate almost anything.

Chase Clark: Yeah, one important thing to remember, is that not only do they have to give these inspections completed within the inspection period, but they've got to receive these reports back from all of these specialty inspectors that they use, you know, specialists for different areas and then submit to you as the seller or to your agent and addendum requesting what they want fixed replaced, repaired, whatever, right? And so there's a lot to be done this. Very usually, a very tight time window.

Peter Murphy: Yeah, it's that's a great point Chase and here's a good common sense thing. Just to remember based upon that,

Peter Murphy:  How hard is it? These days to get a good cost estimate on anything and it's both difficult and it takes a lot of time because our contractors are vendors, are majorly tied up. So let's just talk about the financial scenarios that have to break down or the steps. I have to happen in order for within a 15 day inspection window or even less for a buyer to come back with an ask for the seller, They've got a nail down. What needs to be done? They've got well first of all, do the full inspection then nail down the list of what needs to be done. Then get an idea of what it cost is gonna cost to fix that item. If there is a cost associated with it, and I will assure you, that is not being done as rigorously as it ought to be done. They're probably spitballing, a cost of what it most commonly causes to address certain items in the property and you are open to all kinds of abuse because of how hard it is to nail down the cost of repairs. And so within that short period of time, they're gonna come back to you with a very high and all likelihood

Peter Murphy:  Estimate of repairs of what needs to be done because they have to do that in order to make that 15-day negotiated time limit. It's a really kind of perverse, Incentive for them to rush it and many of us fall prey to that by being asked for high repair concessions at the end of an inspection period.

Chase Clark: Yeah, and so given this tight timeline, typically what I see with my buyers is they're gonna do three, inspections two are at the behest of their insurance company to try and get them the best possible policy, premium for their insurance. And one is that general home inspection, right? And we're talking about general home inspection, you've got a license home inspector that comes out to the property and just generally inspects the functions and the systems in the home, right? You're gonna look at AC plumbing, electrical the roof, the structure windows and doors GFCI outlets, you know, all that kind of stuff that you'll see in a common, general home inspection, right?

Chase Clark:  Then the wind mitigation inspection is really designed for the insurance policy application. It's designed to tell the insurance company. Hey has this home been built up to hurricane code here in Florida? Right? Does it have the appropriate length of nails? The right decking, the right attachments of the trusses to the house, the tie, right type of shingles, the right, type of windows, and doors, and all that good stuff, right? Anything that wind or a wind storm, is going to impact on the home is what that inspection looks at. And then you've got this dreaded four point, right? The four point inspection has become the critical inspection for most sellers, because the four point covers the roof, the plumbing, the electrical, and the structure. And it's designed by the insurance company to make sure that they understand what the risk is that they're ensuring for this home. If your home does not pass at four point inspection,

00:10:00

Chase Clark:  you can't get insurance. If you can't get insurance, you can't get financing. Can't get financing. The deal is done, right? And so that's those are the big Three, but the one that, that seems to always be the one people are most concerned about is the four point and specifically, will my roof pass the four point.

Peter Murphy:  Yeah, that's right, right. So the four point is fundamentally the most important and the most the most cost potential attached to it as well for the seller. Because if a four point inspector comes back and says that a roof is past its useful life. Then there's a major cost obligation being placed on the seller before they can sell that home and it they cannot negotiate in most cases that item away because the home is effectively uninsurable. Now we'll talk more about whether or not that's a true statement. To make that the whole that the roof is truly passed useful life, but it's definitely the boogie man of inspections. Everyone wants to watch out for is that four point? But I will tell you all the other inspection items are presented with every bit of the level of importance is that for point and a very good buyers Realtor is going to come with guns blazing. After that inspection report she's gonna or he's gonna document all the deficiencies of the house.

Peter Murphy:  Every popped nail in the drywall, every piece of tile that's loose on a shower enclosure. A toilet that might jiggle on its base and outlet. That's not working. They're gonna go through every item and they're gonna like, you know, these, the inspector themself will highlight in orange or in red on the report, the items that look shady and look, suspect and that Realtor is gonna demand that every single one of those items be fixed. That is the art of the deal, right? Because not everyone of those items has to be fixed and understanding which of those have to be fixed and which do not is a critical point for sellers to be aware of in this process.

Chase Clark: Yeah, so when a seller's market, what we do is we put in as is requirement out there, right? We said, Hey, it's a seller's market. We're gonna have multiple offers, we're not fixing anything unless it feels the four point, you know, that. That's typically how you can go. That's the power you have as a seller. If it's a full-blown seller's market, right? We've transitioned a little bit out of that full-bone sellers market into a little bit more of a buyer's market here recently, right? And so some of these negotiations have have come more into play and recent months and they have over the past couple years where people were willing to pay over appraisal and didn't care if anything got fixed, right? As long as it passed, the four point,

Peter Murphy: Yeah, right. I mean and that's, that's certainly what was going on? Just a couple of short months ago. People were, you know, accepting or willing to accept, whatever kind of condition, the whole might be in. Now, as we transition into a buyer's market, there's certainly less. There's certainly more power. The buyer has to demand items be fixed. But folks must be aware in this process. And I, and I'm approaching this, I want to approach this. These comments more from the perspective of the seller, because as a buyer's agent, I'm gonna be as aggressive as I can and demand as much as possible. Be fixed because I don't want to pay for it. Once I own the house, but as a seller, what we must be aware of, is this psychology of the buyer? We all are very aware right now. There's almost nothing for sale on the housing market. And so if you found a house that you like and you've gone through the hassle of the time spent on putting a contract on that property and viewing it and kicking, it's tires and all the showings and you and your spouse or emotionally committed to that house, which you are whether or not the deal.

Peter Murphy: Closed. And then you've paid serious money for a home inspection. And you discover problems,…

Chase Clark:  If?

Peter Murphy: you're inclination is going to be, of course, to demand that those be fixed, but boy, that buyer is committed there. They've made some real commitments and the seller must recognize that they have that negotiating leverage right there that no buyer who's done that much diligence in an in a purchase process is going to just walk away from a deal unless there's a huge or insurmountable number of repairs in their eyes. So do keep that in mind, the seller has real power even in a buyer's market.

Chase Clark:  Yeah. Yeah. And so let's go back a little bit more of the technical side. Maybe let's talk about. Okay. When we're looking at how to pass a four point specifically you know and again the four point items are also going to be included in that general home inspection. A lot of times they're just not on that specific four point inspection form. The insurance company looks for But when we talk about a roof, right? I mean, we're looking for, you know issues, like cracked broken missing shingles, we're looking for granule loss on asphalt. Shingles, is you got a barrel tile room for looking for crack tiles. We're looking for membrane issues, we're looking for on flat roofs. We're looking for standing and pulling water, we're looking for cracks in the scenes on a roof like that. And and really overall, they're looking for evidence of leaks or things that are potentially going to cause a leak.

00:15:00

Chase Clark:  As well as trying to evaluate how much life does. This roof really have left in it before, it needs to be replaced which is a very subjective thing I might add. And and so are these issues, I mean like the fact that there are crack broken or missing shingles That's a fact. They can document that with a photo but is that really a severe condition? That's causing this roof to fail an inspection you know that's what you got to consider.

Peter Murphy: Right? Because the answer is maybe right, and it's also, maybe not. But every inspector and…

Chase Clark:  Yeah.

Peter Murphy: goodness. Every insurance company right now is gonna take the ultra conservative path and they're gonna say that roof has a diminished useful life remaining because I see all that stuff on it. And oh by the way that's not forget, they're all. So looking for errors or deficiencies in workmanship when the roof was first installed because you know roof, there was installed 20 years ago, you don't know the quality of the vendor that did the work back then and maybe they're not as good as maybe they just weren't that good, right. And they did a kind of a crummy job on the roof install so highly subjective.

Chase Clark:  Yeah.

Peter Murphy: But we're still in a case where the inspector holds a lot of the cards and they can force you through the language they use and that agreement to spend a lot of money on repairing a roof if they determine that, it doesn't have a lot of life left.

Chase Clark:  Yeah, and so I mean the roofs have big component, obviously if they say the roof's bad and you know, it's old and even if it's maybe got some leaps in it, that's a huge cost. You're gonna have to outlay and, and replace before or at least repair, if not replace before, you can close this deal but this inspectors also looking at like electrical systems, right? So you've got to make sure you've got GFCI outlets in your wet areas that are properly functioning you can't have aluminum wiring typically that that's become a big issue through houses because of the fire danger. That the insurance company say it poses. You've got to have a breaker panel that's got you know up to date breakers in it like you know, square d, General Electric. You know there's several brands that they look for. You can't have open wire Splices could cause a fire and you can't have ungrounded outlets, right? God are the days where you can buy a home from the 1950s with a two prong outlet everywhere with no ground wire, like they don't like that, you know? That's a potential hazard.

Chase Clark:  Right. So electrical stuff is also a big deal and may not cost you like a roof will cost you but still you can spend several thousand dollars fixing electrical issues as well.

Peter Murphy: Great points all and that's not forget things like double taps, right? Some well-intentioned prior owner comes through, it does a small remodel and there's not a free breaker. So they double tap a breaker and, you know, that's not permitted either. Some of those are very cheap things to remedy, but some are not some are very costly and let's add to that the fact that find a good electrician right now. Fine. See, if they'll come out and give you an estimate to fix that. The amount of time, it takes to get that done. That's not easy. And so if you're a buyer and you're doing that, you're gonna ask around your friends, you're gonna ask your realtor, you're gonna get an estimate for a worst case scenario of what it costs and that's what you're gonna demand either that kind of cost concession or that kind of repair from the seller so big deals

Chase Clark: Yeah. And you know, On that point and maybe we'll touch on this a little bit more but um, that's why so often we see these addendums for repairs, come back and they're not asking for money. They just want it all fixed because they have no idea…

Peter Murphy: Right.

Chase Clark: what it's gonna cost and they want to put all that burden on the seller to find the vendors, pay it in full and provide evidence in a licensed contractor. Fix this stuff, right? They don't have to deal with it, you know they just kind of dump it on the seller. When in fact there are some times if you're in a power more powerful position as a buyer, maybe it's better for you to negotiate for a dollar amount or a credit at closing if it fits within your loan parameters, and it won't cause any red flags with the underwriter or the insurance company.

Peter Murphy: Great points, great points, you know that inspectors also looking for plumbing issues, right? I mean they're looking for, for polybutylene pipes. They're looking for old clay pipes. They're looking for obvious deficiencies in the structure of the plumbing. Plumbing is one of those things that, you know, almost, everyone's a part-time plumber, and you open up a sink and you look under there, and you see the craziest things, right? All kinds of flexibin pipes attached to the p-traps and all kinds of, you know, it's been knocked and bumped over the years and it's like sprayed with flex seal. I mean, they're looking for all these kind of things, as they assess the plumbing systems, to make sure that these this plumbing system has been both well, maintained and was constructed well constructed to begin with. And if they determine that we have leaks, they see any leaks, these are all things that must be fixed as a part of the contract process.

00:20:00

Chase Clark: Yeah. And then you know that last element is the structural element, right? So, in the structural element, they're looking for things like, You know, well, did somebody put an addition on the back of this house and not properly, put in a stem wall foundation, or did they not attach it correctly to the home Are there oversized cracks you know in the foundation or in the blocking you know along the sides of the home especially at like door jams and windowsills things like that things that that would be outside you know? Settlement Issues, You know, enough that where you can put your pinky through the hole basically, in Florida here but they're looking for stuff like that. Looking for poor construction standards looking for, you know, these DIY home editions or remodels that weren't done up to code, right? They're looking for some of that stuff too and you know who doesn't have a DIY project somewhere in their home or attached to their home, right?

Peter Murphy: All right. A little too much. Cock. Little extra like yeah, spackling here there, right? You know, something that you decided to shove in there. And then ignore, you know, there's they're all over and, you know, all the well-intentioned people and man, that contractors can be the worst. So, if your client was a builder, I guarantee they've got some of these are the seller was a builder. I guarantee they've got some of those in their house, right? These are things that that those inspectors are gonna look extra close for. And then they're also gonna look for some just general items that are good health safety items to be aware of such as the installation levels in your home, they're gonna assess. Do we have insulation? And is it overly compacted? If you do and they're gonna look for things like evidence of peeling painter, evidence of lead-based paint or things. That might indicate that we've got moisture problems in the house, they'll look for water lines. That might have been at one time inside of your garage from some kind of leak that might have come in at a various point in time. And all of these are gonna be and they'll do some moisture checks and drywall. Just looking for, you know,

Peter Murphy:  Moisture levels. Like What are the environmental conditions of this house? All of these things are very valuable, things to know as a buyer. I'm going to want to know every single one of them. And I want to suggest this as a seller, you intuitively know every single one of them already. Now there might be some things that you just like are gonna be totally shocked by when that inspection report comes in. But in most cases you are not, you're gonna know these problems. And so we really need to talk before this podcast is over about the right way to handle that. Pretty that knowledge. You have it. What can you do to preempt some of the difficult negotiations, that you're gonna deal with? If this is the first time you're taking action on these repairs in your house, you're gonna be held over a barrel. If this is your first time, and no one likes to do things at the at a gun point, like this,

Chase Clark: You know so you'd be his most people become so good at living with stuff. Right. It's like you know Yeah there may be three bottles of flex seal on the floor around the base of the toilet to stop it from leaking but you know, it's not leaking anymore. So we're living with it.

Peter Murphy: It.

Chase Clark: Right? You know who cares that the wax rings, totally eroded and it rocks back and forth a little bit, but, you know, it doesn't leak. So we're fine, right? You just learn to live with this stuff, right? Because it's scary. You get this long list, right? Of all kinds of stuff and you feel offended, right? Like, Who are you to tell me that? My house is a piece of junk. You know, you came in here and you're telling me all this stuff's wrong. Well, do you really want to buy it or not? Right. And it gives the seller asking the question.

Peter Murphy: Right.

Chase Clark: So, hey, what do I what's my obligation here? What do I have to do? You know, Do I have to do all this stuff? Do I not? What's required of me as the seller?

Peter Murphy:  Yeah, that's a great question. And no one wants to be put in a situation where they're having to decide those things, you know, as I mentioned earlier, at gunpoint, right? So do yourself a favor seller and maintain your house. I mean, I know that's easier said than done. I get, I have a list of things that I like, I can't believe it. Took me four months to put the toilet paper, holder back on the wall again, but the reason why it took me for months was because the drywall is compromised. And I knew it was, I had like patched it too much before you know with all the use it was coming off and I needed to like do it kind of a significant drywall patch job and probably locate some studs behind there. And attach the toilet paper holder to the studs and maybe even move to the other side of the wall and then read re texture it and paint it. I had to do all of that and it like took me four months to get it done but it's done right? And that's the problem. And now I don't have this long list of things that someone's gonna demand be done or they're gonna be distractions in a negotiation for the sale of my home. All of these rocky toilets, this extra flex deal. These are distractions. They

00:25:00

Peter Murphy:  Buyers think you're hiding something because you haven't done things correctly. So you must do yourself a favor. You must get ahead of these a long time before you go to sell your house. And don't put off to till tomorrow. What you can do today.

Chase Clark: yeah, just another little small piece of advice is if you are looking to sell a home, Most most of the time, your real estate agent, you're listening, agent has a relationship with a home inspector and they probably give that home inspector quite a bit of business. With all the buyers that they have coming through their office and…

Peter Murphy:  If?

Chase Clark: those home inspectors are often willing to do a pre-listing inspection for you and where they'll come through your house in a very general way. And point out some of this stuff to you that may not be as obvious as you know, a toilet paper holder, not on the wall, you know, they can check your gfis for you. They can they can do a couple real minor things to help you get ahead of the curve on this, right? So that when that list of repair requests comes back, you've handled the obvious stuff. And it doesn't look like you're as dare like as the list might indicate.

Peter Murphy:  Yeah, good advice, you know. So what we know is that, you know, because some of these things you're not, it's not like you're being a procrastinator by not repairing, the roof that might have five years, but might have 10 years of useful life left. You're somewhat of a victim to on, to the Home, inspector at that point. But when the Home Inspector comes back in and they say that these four point items need to be repaired plumbing, mechanical, structural or roofing, then you're generally obliged to repairing those items. The items that come back in and say, Please fix this loose tile, Those are far more open to negotiation and we'll again, we'll touch on what that means at the end. But Chase, tell me what we can do, because I know there's been several scenarios that you personally have experience with lately, where a four point has failed an item and then the seller has had had to respond to that. That's been able to effectively respond without selling the farm.

Chase Clark: Yeah, you know, most recently, I had a relief issue, which is very interesting. We had a roof that was 16 years old and so, you know, not totally at the end of its useful life. But you know, getting there, maybe two-thirds of the way there based on current standards for materials that are used on roots today. And the four point inspection performed by the buyer failed initially and it failed for things like crack shingles. Some granule loss and a couple other minor you know, issues on the roof.

Chase Clark:  But the way it was worded in the report in the way that it came back from the buyer's agent to me. And my seller was, This roof is toast, it's got to be replaced, get a bid now, get it replaced ASAP so we can close right. So what do we do? We go out, we're waiting on these reports to come back so we can actually see the photos, but in the meantime, we go get a roof quote. It's 14,000 dollars, right? This is like a 1500 square foot home. You know, $14,000 root that's, that's on the low side. I mean, a lot of routes now are bumping up there to 20,000 plus right. But 14,000 is deal impacting, right? That's a big big deal. And so putting that 14,000 roof on. Doesn't mean now that the buyer's gonna pay you another 14,000 for the home over. What you negotiated for the price, right? That'd be nice if they would but most of the time that's not happening.

Chase Clark:  And it also doesn't increase the value of your home necessarily by 14,000 either on the appraisal. Right.

Chase Clark:  So in this situation after we got the reports back and we had our $14,000 new roof bid in our hand, we looked at the photos from the inspector sent out one of our roofer contractors to kind of check out what the repair scenario might be and really it wasn't as big, a deal as the report was making it out to be. We spent 1500 dollars, repairing, one section of the hip on the roof, on the backside of the house, and we replace the rich captioningles. We replaced a few squares of shingles on either side to add some granule loss and voila. We're able to now pass a 4-point inspection, so not 14 grand. We spent 1500 dollars and brought that roof back to where it still had seven years of useful. Life remaining, according to the inspector. So big win for the seller in this. Maybe you didn't make the buyer that happy but

Chase Clark:  Based on the terms of our contract, we were not obligated to replace that roof. We're only obligated to pass the four point inspection which we did.

00:30:00

Peter Murphy: So, in order to do that chase, I assume you had to have the inspector come back out and verify that this home had indeed more than five years of useful life remaining.

Chase Clark: Yeah in fact you know it's interesting because the contracts don't stipulate who's allowed to get that inspection done or…

Peter Murphy:  If?

Chase Clark: who's supposed to perform that inspection. So instead of bringing the guy back out that made a big deal out of this and kind of blew the deal up for a day or two. I brought my own four point inspector out and again, you know, he's a guy that I work with but not tied to me in any way, truly a third party. He came out did his own assessment with his own photos, which he's accountable for in peer review and review from the insurance company. So it's not like a, you know, it's totally an arms, linked inspection, if you will and he signed off on, it was seven years of life left with those necessary. Repairs. Having been made,

Peter Murphy: So that's that brings up a very important point. I think not. All inspectors are created equal. And like you said, they are certainly accountable to peer review and to professional development and and they have a professional license to maintain, but you've got some inspectors who are just alarmists about things and they'll and there is interpretation that this these evaluations are open to. So, without a doubt, I see different levels of of alarm being sounded about all kinds of repairs from different kinds of of inspectors. And sometimes I feel like, wow, that inspector past something and he did it generously because I think it's far less useful life remaining and sometimes the opposite extreme. So let's make sure that, you know, you're not subjecting yourself to an alarmist inspector and find one that's balanced in all of this. That's what you want. You want to present the balance truth of the matter. And not be either too conservative or too alarmist.

Chase Clark: You know, when one, good piece of advice that I'll give here and this actually came from the guy that I typically used to do my four-point inspections is that if you do have a roof that is, you know, five seven, 10, 12 years old, however, old it is, and it's discolored whether that's because of dirt, whether it's because of acid dripping from oak, trees on your roof, whatever the case might be, whatever builds up residue when you're shingle. Before you go to sell your home, it's a good idea to hire, someone to come soft to wash it. Okay? You don't want to pressure wash it a bad idea, right? But they have these soft washes now that many people publicize and they work, they make your roof look brand new.

Chase Clark:  From a, from a visual perspective and so that will go a long way. If you spend, you know, four or five, 600 dollars, getting your roof soft washed, that'll go a long way toward you being able to pass your initial four point inspection.

Peter Murphy: That's sounds like washing a car before you sell it to me. That's a smart thing to do.

Chase Clark: What exactly?

Peter Murphy:  Well, so let's hit on a couple of these things that we can do to get ahead of the negotiation process for non-mandated items. So the general items that come up right. You know one of the things I think is very important is for you know your realtor is going to have some expertise there in this whole situation as far as how to negotiate these types of items. But many realtors you'll find are going to not have some of the construction knowledge that you might have. They might also be a little weak on some of this step in negotiation because what we find here is that many people just demand that these items be completed and realtors kind of cave to that demand. And so it's probably very important to have that conversation before you take any contracts at all with your realtor. What kinds of repairs you're going to take seriously and that you're going to repair and what things you're not going to repair, right? Make those statements may have that discussion with your realtor, very fully up front, and maybe even build those items into your listing, make your list.

Peter Murphy:  To such an effect, that you understand that? There are loose tiles on the shower wall and you do not intend to make that repair period. Right. Then when that inspection report comes back, they'll of course note the loose tiles in the shower wall, the buyer will see them when they're going through the house, but they will know based upon your disclosure that you do not intend to make that repair. Now they can still ask you to make that repair, but it's much easier if you've already disclosed the item and you've already disclosed your negotiating position for you to say, No, I'm not gonna do it per my listing. So, just a thought there.

Chase Clark: Yep. Yeah, you know, this is where it becomes very important that you hire a realtor that has some experience and knowledge with what it costs to fix stuff like this because you may not have a lot of time during this process to figure this out. Some of it, you can do preemptively but we've got a lot of general experience. Rehabbing homes. We know what stuff cost to fix. We know the best way to fix it, the most efficient way to do it. and if you have that knowledge to be able to advise your client, You can help save them. A lot of money, sometimes. Usually when I get a laundry list of items like this, that I consider cosmetic back from a buyer and a request. I kind of do a ballpark estimate for the seller and I say, Look,

00:35:00

Chase Clark:  It's not worth your time. We've got two weeks still closing, right? It's not worth our time and effort to get a contractor out here, to fix. All this stuff. Let's offer them 1500 dollars. Let's offer from two grand, whatever it is comparable to what the list looks like. That's offer them just enough money so that they think it's enough to pay for this stuff after they move in, right. But let's not over, let's not overdo it, right? And let's not spend our time and our money, getting it all fixed. Because in the process of fixing it, sometimes not uncovers even more stuff than needs to be done. So, that's typically, just personally my strategy that I try to pitch to my seller and try to negotiate with hard with the buyers agent.

Peter Murphy: Yeah, that's a great point. I mean even, but do keep in mind too. That, like, if you got a home that's lovely and has got a lot of great things. Going for it, you might have someone come in and request a large list of cosmetic items. It's perfectly fine to say, no, not gonna fix these items. My homes in wonderful can shape generally, you're not buying a brand new home fix your own tile, right? Once you buy the house,…

Chase Clark: Yeah.

Peter Murphy: right? And I know that sounds aggressive and you're afraid, they'll walk away but you've got to imagine that there as eager to buy this house as you are to sell it and aren't gonna walk away over a small amount of money when they know they can live with it or do it themselves or get it done cheaply too. So, but it's a great point. Know the cost of these items preemptively and know what these items are. Right? We've already said, Get your own home inspection. We've already said You know try to understand completely what the scope of potential repairs are at your house. Do not do it to yourself, where you're gonna be blindsided by this.

Peter Murphy: Action report. It's a mistake and it's a completely self-inflicted wound because you don't have to be ignorant as to what your house needs from an inspection standpoint. so, make sure,…

Chase Clark: That's right. Yeah, that's right.

Peter Murphy: you know,

Chase Clark: And you know one other thing too, I try to I try to do typically for my sellers is when an offer comes in below asking price. you know, when we're doing the negotiation as far as what the terms and the price are going to be on the home, And the buyers pushing hard to get the price down sometimes. I'll go to the, to the seller and say, Hey, look, they're way down here on price, you know, if you're good with that, let's go to them and say, Look, we're not gonna do anything to this house, Okay? We'll take your price but it's as it so, no up front, we're not repairing anything. Okay. For that price, if you want to put repairs in bump the price back up, you know, similar to what you're saying before, but I think what you said is very important, do it up front.

Chase Clark: You know, let the agent know,…

Peter Murphy: Yeah.

Chase Clark: at the time, they submit the offer. The Hey look, we're not doing anything, you know? So give us your best offer, we'll take a look at your inspections, We'll make sure we pass the four point but we're not doing this nickel and dime stuff at that price.

Peter Murphy: Yeah, surprise always works to the advantage of the buyer. Because either you are were hiding something and they're not going to trust you or now, they've got the upper hand in negotiations. Do not be surprised in a sale. You don't have to and so disclose disclose as much as you possibly can. If you get an inspection report, you can even disclose that report, save the buyer. Some hassle make them feel like this is the most transparent seller I've ever worked with and they're showing me everything that's wrong with the house and they're telling me they're not gonna fix it, right? But I know. And now I know when I'm buying the house, that's what I'm what I'm dealing with. And so it just makes the whole situation, so much, less, confrontational and move, surprises, and element from negotiations.

Chase Clark: Yeah, yeah. And so, if you're out there and you're looking to sell a home, when you're interviewing real estate agents, maybe ask them what their experiences and dealing with repairs. How much knowledge they have, have they remodeled a home before, do they have vendors and contractors that they routinely work with? Do they have inspectors that they work with all the time that can do, favorites for them? Like, pre-listing inspections. All these things are very important for you as a seller because you're about to spend a lot of money. Hiring a professional to help you sell your home and having that knowledge is what they're expected to have and what you should expect them to have when you're paying them that kind of money to help you with this process.

Peter Murphy: I think it's hands down the most important knowledge bank that your realtor can have. And this this has to be right or else you're going to risk losing a deal and losing a lot of money in the process. So hey home prep realtors do a really good job of this? I'm gonna give a plug for them. Allow them to help you get ahead of these problems in your selling transaction or if you're using them as a buyer's agent. That's real good too. Because hey, they know how the other side thinks and that's gonna be really helpful to you in the long term.

00:40:00

Chase Clark: All right, that's all right. I hopefully this has been helpful to you if you're out there looking to buy or sell a home, remember Homeprop.com.

Peter Murphy: There you go chase. It's been a blast until next time.