August 2022

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Do I Need A Home Inspection?

Episode #11

Charlie 

Welcome to the Trade Secrets Inspections podcast, because “You need to know!”. Here’s your host, Rick Kooyman.

And what a conversation we’re gonna have today I mean there’s some crazy things happening in the marketplace. And, you know, some Off mic conversations we had before we got hit the old record button here. And I don’t know, you know, one of the craziest, is this, rush into buying a home and not, you know, checking all the boxes of like, what could happen down the road? If you don’t do it right? So I’m setting you up here…

Rick

Absolutely, you know, there’s, there’s definitely a rush to move to Florida, it seems like right now. And I hear that the markets hot everywhere. But in general, in our areas, there’s a really high demand for new or for people wanting to become new residents of Florida. There’s a shortage of homes listed, and a huge supply of people willing to buy, and it’s creating some really crazy things happening in the market. And I just wanted to take a few minutes to talk to, you know, the realtors and the buyers out there that give a give you some ideas and some options on what you can do in this competitive market and some of the risks you might be taking that you may not be aware of. So yeah, a few minutes. You know, recently and I, when I say recently, I mean, in the last year, 18 months or so, the market prices have increased by more than 50% in some cases 100% House values have gone skyrocket, you know, properties are selling 10, sometimes hundreds of 1000s over appraisal value, you, people are willing to take, they want, they want to be here bad enough that they’re willing to spend that kind of money, and that’s fine. But there’s so much competition that the sellers are being put in this power position, where they get to say, well, you know, I have so many people offering me to take this right now, I can make some demands that otherwise wouldn’t generally happen. We’re getting offer periods, you know, people calling in with three to five day inspection periods. And, and that’s in the cases that they’re not waiving the inspection completely. And that’s what’s really concerning, you know, people from other parts of the country moving down to Florida, in particular, not familiar with, you know, the environment and what we live with down here and how it’s different. And then just stepping into a high risk, huge investment like that, when you have some options. And, and I’ve seen a few inspections just recently that I wanted to speak of, just to let people know of some of the risks they’re going through.

So, you know, let’s just talk first about what we can do for you, in the short offer periods. If you don’t have the time necessarily, or you’re not in a position to do the full due diligence inspections, there are possibilities you can call in. And there are this thing called and an informational only inspection or a walkthrough of inspection. Essentially, we go with you, if you will, on, when you’re when you’re doing your initial, you know, walkthrough of the open houses or whatever it is like that. And instead of doing an actual written inspection, we’re just walking through it with you. And going well, this is kind of what I see here. And you know, we got 10 minutes to go through this, let’s talk about it for a few minutes and give you sites but it’s not gonna save you a lot of money. This isn’t something to, you know, think you’re going to get out of spending money on buying an inspection report, it’s essentially going to cost you the same thing. We’re just getting something done for you in a quicker timeframe, or in a window where you otherwise wouldn’t be given the permission to do the inspection.

One of the other options we have, or we tell people is, you know, put in your offer. If you’re going to offer what is generally more than asking, put in a bonus offer for allowing the inspection, you know, if you let us do the inspection, we’ll put an extra 2500 bucks on top of the offer. Well, let me tell you, that’s a great, do too many inspections, that the report doesn’t come back with at least $2,500 worth of findings. So even if you’re not going to get that money credited to you, or accounted for you in the offer, you just need to know what it is you’re purchasing. So, you know, a few dollars today could save you 50 grand tomorrow and not, and just knowledge. So, you know, we have options, we can do short inspections. We’ll talk about that here shortly where we just do, essentially, what is the insurance requirements, you know, you’re gonna buy a property, if you’re looking to insure it, you’re going to probably be asked for these documents anyways, they’re documents meant for the insurance companies, and they’re hard to interpret for the layman. But we can do those documents and, and do it as sort of an informal inspection and say, Well, based on the what the insurance is looking at, these are your risks that they see, you know, it’s not going to cover the, the little stuff, but it’s going to cover the primary things.

In your offer, you can, you should have a right to void regardless of whether the customer is saying they’re selling the property as is I hear that all the time now? Well, they’re selling it as is, Well, honestly, everything is being sold as is it’s all just a negotiation.

That’s fine, they all they’re saying to you is is is their firm on their price, and they’re not willing to do anything, they just want it to be, here’s that house, and this is what we want for it. But you still have the right and the need to know what is in that package you’re buying, you know, it can be a mystery box, like a game show.

So we want to we want to put the word out there, you know, just give us a call. And let us know what the situation is. Even if you’re not in it yet. And you’re looking at, hey, we want to go look at houses and three, four days, we’re coming down next week, we’re looking to get in an advantage situation, you know, we can schedule with you early and do these, you know, pre emptive inspections, where you know, we’re not doing a written inspection. But we’re going out with you essentially and saying, you know, I advise against this property or not. And then to talk about that a little bit, the insurance stuff, you know, it basically is the four fundamentals again, you know, your your HVAC, your roof, your electric and your plumbing. These things collectively accumulate into hundreds of 1000s of ballots, roofs in particular in Florida, or they were difficult a year ago, two years ago. And they’re harder today than they were six months ago to get insurance for. You know, it honestly, people don’t quite understand that it’s not that the roof has a problem. It’s that nobody wants to take the risk to cover it or insure it. It’s brand new. Yeah, I mean, if you got a roof that’s a century older than let’s say 15 years right now. Yeah, it’s almost not. There’s almost nobody out there willing to offer you a coverage policy on it. They’ll give you insurance on the house, but the limit the coverages more coverage, water intrusion, or they won’t cover the roof, or, you know, in some cases, most of these are cash buyers right now. So the mortgage requirements aren’t necessarily coming into play.

Charlie

Yeah,

Rick

You’re still you’re still out there. $100,000 on a roof. And in today’s market are these tile roofs. So, you know, that’s, that’s not a small thing for most people.

Charlie

Wow.

Rick

Right. So, a couple. Okay. So there’s a couple of examples. I went on an inspection a couple of weeks ago. They didn’t think they were going to do the inspection. They talked to me they decided, well, let’s let’s get you in because I could get in there quickly. They were convinced brand new, you know, great. New, newly remodeled home looks beautiful. There can’t be anything wrong with it. You know, we go in there. And honestly, the workmanship is fine, you know, the places in Okay condition is small repairs here and there, whatever. There’s only one problem. There are no permits on file.

Charlie

Oh, geez.

Rick

Right. And at the last minute, you know, they’re like, well, is that a problem? I’m like, it’s probably going to be a huge problem. But really, what I want you to do is invest some time in finding out exactly what it is you’re stepping into. Before you proceed any further. And they did, they did. And after a couple of days, they walked away from that property, you know, and wisely so, but my point is, is, you know, three days before that happened, they were willing to hand over, you know, a half million dollars blindly.

Charlie

And, Rick just so for those who don’t understand what happens if they had moved forward with that sale, you might just going through through though,

Rick

oh sure if you in that case situation, you know, where the city really does get involved in these big, you know, construction projects that weren’t done correctly, or legally, let’s say with permits, basically, what the city does is they say, Okay, well, you need to buy all the permits, and we’re going to charge you triple. And here’s the real hardship, we have to do all the inspections, which often means you have to take everything back apart, because they want to do the rough-in inspections, and you’ve buried all that stuff. So essentially, you’ve got to remodel that house again.

I mean, that’s a big deal. Okay, here’s another one, I went to a beautiful big home, you know, 5000 square foot home, pest control went through, and everybody said it was great. They didn’t, you know, it was fine. And I needed inspected, I talked to man to let me go through it. The back wall of the house was completely infested. And, and what was called big headed ants. But they essentially needed to take out what in the game room, the whole back wall, which was all cabinetry and big windows and it all to be stripped out because it was all full of these, these ants that were living in, what was a wood decay situation in the wall from a window leak, and nobody had picked up on it. But I went in there, and you know, I do what I do, and I look in places most people don’t. And I was like, Oh, my look at this.

And again, we’re looking at, you know, well, here’s 25 to 50 grand, before you move in, and stuff you’re gonna want to do to this house, you’re not even gonna want to come in here until all this insect stuff is dealt with. And they didn’t even know the owners had no idea.

So again, it’s just, it’s not always what you think you’re looking for. It’s actually there. So the risk is high. It’s often the case in new construction, I hear this all the time, it’s brand new, it’s got to be what could be wrong. In today’s world of these that the supply demand, the slow edge on weird things that are coming in and making it incredibly hard on the builders to get things done. Let her get the same people that started it to finish it. I mean, the complications that arise, and the things that get overlooked, because ultimately one person goes, well, I didn’t do that I’m going to do what I came here to do. And things just get compiled down. And then, you know, it’s all shiny on the outside until you start to live with it. And you’re like, well, this doesn’t work very well. And this has fallen apart. You know, it’s brand new. Do you really want to move into a brand new home and deal with a bunch of headaches? Or do you want it to be right when you move in?

That’s the kind of I mean, I’m not saying anything bad about the builders, everybody’s human out there. And it’s not really the builders or the supers or the trades. It’s the compilation of everybody’s experiences coming together. And what it takes to complete that that structure, and sometimes the challenges are huge. And you know, unless someone third party is looking out for your particular interest.

Charlie

Yeah, you Yep.Yeah, you know that.

Rick

That’s that’s the message I’m saying.

Charlie

that that peace of mind they did really provide or, you know, any home inspector worth their salt provides the homeowner or the potential homeowner, you know, it’s like you said, you buy this new house and then all of a sudden, weird things start happening. And you just you’re going Oh, my goodness, you know, is this just crazy? The beginning of you know, a nightmare.

Rick

Here, let me add one more thing. Here’s the other thing in the hot market. People want to find like the they’re like, oh, I want to cash out of my house now. Right? So the homeowner improvements. This is what I just saw. So an attic was reinsulated blown in insulation look beautiful. The only thing problem was the trusses were completely annihilated by termites, but they were covered by insulation. So ….

Charlie 

oh, man,

Rick Kooyman

you know, and it was just like, is that shady? I’m not gonna point fingers. But it’s a problem. You know, I’m not saying that someone was trying to sell off a problem, but, you know, if you don’t know what you’re getting into, yeah, find yourself in a world of hurt. And we’re here to help. Give us a call.

Charlie

this has been great, Rick. I mean, I, again, continue to learn from your episodes and I just I never even thought nor heard of. Yeah, you know, in a market like this. Bring the inspector with you when you’re looking at homes and protect yourself, my lord. Great stuff.

Charlie 

Thanks for listening to the Trade Secrets Inspections podcast. To learn more about Trade Secrets Inspections, go to www.TradeSecretsInspections.com or call 239-537-1186.