When To Repair, When To Walk Away? HOME INSPECTIONS

hey guys Donnie here with the Morrow  Group eXp Realty Memphis Tennessee   and today we're going to talk about inspections  and repairs on your home that you're purchasing   so stay tuned check it out let's talk real estate home inspections wow this is a big deal personally  i recommend that you get a home inspection   probably 99 of the time when you buy a home  there's a few cases where i don't recommend a home   inspection on a case-by-case basis most of the  time you need to get the home inspected okay you   should use a licensed inspector you should not use  your uncle's grandpa who used to be a contractor   you should not use your mom or dad sorry moms  and dads i know you're all well-intentioned   but our contract in tennessee actually  specifically says licensed inspector in order for   your inspection contingency to be in full effect  and that is what i recommend is an inspector who   does it for a living and knows what the inspection  is actually supposed to cover that's number one   number two what is the inspection the inspection  is there to find major defects that are going to   cost you a lot of money they're there to protect  you they're kind of an insurance so to speak what   they are not there is to bring houses up to code  contract in tennessee specifically says that and   they're not there for cosmetic issues the carpet  has a stain on it is not an inspection issue   number one you could see that when you walked  through the house and looked at it before you   offered to purchase it so therefore you weren't  surprised you knew what you were getting   number two it does not affect the functionality  or the investment in the house so keep that   in mind as well lastly how important is  the inspection and you making a decision   of whether or not you should move forward so after  you get your inspection in our contract there's a   couple options you can accept the house and as  this condition you can choose to withdraw from   the contract or you can request repairs based on  that inspection so when should you ask for repairs   when should you withdraw those obviously are the  big questions it's in great shape there's only a   couple minor things you may very well move forward  with the home as is not a bad option you got the   inspection you know what you're moving what you're  looking at what you're getting into it's not there   to make the home new for you number two and this  is the big one when should i withdraw because   you can ask for repairs and then still withdraw if  the seller doesn't agree because we can't make the   seller do those repairs you request so withdrawing  is the big one at what point do i draw the line   and this is where i think people make a lot  of mistakes really unless it's a large repair   typically it isn't worth you withdrawing  from the house for and here's the reason why   the longer you're not invested or the longer  you're paying rent or whatever the case is   it's typically costing you more money and  opportunity or rent or not having your   kids in the school district you want them in or  whatever the case might be then what that repair   realistically is let me give you an example i had  a house that i listed for one of my clients been   four or five years now i think we had that house  under contract for about seventy five thousand   buyer did their inspection inspector convinced  that buyer that it needed a roof now that's an   opinion so that's why i said the inspector  convinced the buyer that it needed a roof uh   buyer withdrew the sellers couldn't put the roof  on they didn't have the money it was only three   or four thousand dollars but they weren't able  to put that roof on that house at that time and   buy or withdrew well a couple years down the road  not right away but a couple years later seller did   put a roof on the house but here's what happened  in the meantime the seller rented that house and   let's just say i think that house had a market  rent of about twelve hundred dollars a month   but let's just say a thousand dollars a month in  addition to that we just recently sold the house   for i believe it was a hundred and eighty three  thousand dollars so we'll round down to 180 and   be conservative so conservatively the sellers made  a hundred and eight thousand dollars on the price   plus another fifty thousand dollars in rent  revenue so basically a hundred and fifty   eight thousand dollars in revenue they had a few  expenses but i guarantee you it wasn't a hundred   and fifty eight thousand dollars so even if we get  real crazy and say they're expensive for 50 grand   i guarantee they were nowhere near that that buyer  still missed out on a hundred thousand dollars   in revenue and price appreciation over a three  thousand dollar rift now let me ask you if i were   to say hey i'll give you three thousand dollars  today you give me back 150 thousand dollars in   four or five years i'm betting you wouldn't take  that deal and i'm bet and i absolutely would take   that deal in my opinion it was a huge mistake for  that buyer to to back out of that purchase based   on a three or four thousand dollar roof to give up  a hundred thousand dollars in return so keep that   in mind especially on smaller repairs because i've  seen buyers back out over a 500 repair if you're   renting guess what one month you lost your 500  bucks don't pay a thousand dollars rent for an   extra three months over a 500 repair if you back  out of that house you have to start the process   all over so if it takes you another 30 days to  find the house and then another 30 days to close   on that house you could be looking at two or three  more months rent possibly fifteen hundred two   thousand dollars a month the last thing i wanna  see you do is pay six thousand dollars more rent   over a 500 repair your landlord that you're  paying rent to he'll probably love you for it   but i don't want to see you do that if i'm  looking out for your best interest okay   so let's talk about what are big items on repairs  on the inspection things that maybe you should   consider backing out for it really comes down  to your monetary value and what you can stomach   ultimately there's no right or wrong answer what  i will say that you should look for that i see   that make buyers really nervous roofs as i just  talked about that in that example but even then   it probably cost the buyer more money to back out  a lot more money to back out based on the roof   a roof is a large expenditure that's something  you should be concerned about your mechanical   systems your hvac and your hot water heater those  are things you should be concerned about the last   thing i want to do it's like 400 million degrees  in memphis this year if you buy a house and next   week the air conditioner breaks down because  it's really hard to get people out there repair   maybe possibly that could be a consideration  for backing out of a home when it's 100 degrees   even then though you know if you got  a really good realtor like myself   i've got somebody that's an hvac technician  that can get to you pretty fast so that might be   something to consider water heater is not a huge  expense but most of those right now are between   five hundred dollars for an installation so you  know it's a good expense again i wouldn't want   to give up a hundred and fifty thousand over a  two thousand dollar repair and then of course   there's a couple big ones that you gotta look  for that are really expensive foundation issues   now you're talking serious money water issues or  other things that are major but those are probably   just the biggest off the top of my head to think  of and remember there's always alternative ways to   keep your deal together and get you in your dream  home even if you can't come to an agreement on   inspections with the seller for instance you want  the roof the seller says hey the roof isn't that   old it's not leaking i'm not putting a new roof on  maybe you can work out a credit i know the first   house i ever sold the inspector told my buyer that  the roof had been put on incorrectly like 12 years   before that and my buyer kind of wanted a new roof  and we kind of came to the conclusion if it hasn't   leaked in 12 years just because an inspector  says something was done incorrectly it's like   a piece of flashing or something let's not let  that kill the deal it hasn't leaked in 12 years   it's probably not going to start leaking tomorrow  what we were able to do though was get a credit   so my buyer said you know what i get it i will  take a credit he was very happy he got a credit   seller was happy they didn't have to put a roof  on we kept the deal together we met their goals   and then a year or two down the road a storm came  through and that buyer ended up getting a roof   based on the storm ripping some of the shingles  off anyway so he ended up getting a credit to help   him absorb his uh deductible for his roof and  then his insurance covered a roof he came out   in a great position he turned around and resold  that home a few years later and made great profit   on it had he killed that deal over that roof he  would have lost out because not only would he have   gotten basically a free roof that added value to  the house when he resold it he would have missed   out on all that appreciation so there's a great  example of ways that you might can work things out   even if repairs are not done i highly encourage  you don't just jump to the conclusion emotionally   that i think the seller should make it like  a new house that i think the seller should do   this try to take the emotion out of it try to  be logical obviously everybody wants to buy a   great home for their family i will also tell you  no home is perfect i'm building a brand new home   it's not going to be perfect and no seller  should be expected to take up the burden   of making a 20 or 30 year old home perfect for you  because you got an inspection and you're buying it   again you should get a good home there shouldn't  be major issues but there are some things there   you need to be reasonable with as well so that  we come to a good end and everybody is able to   meet their goals i hope that helps you out i  know a lot of you out here looking at homes   i know a lot of you are looking at the expenses  especially these rising interest rates and   and repairs can certainly play into that but  be reasonable and most importantly don't cost   yourself to make a bad decision based on the  emotion of a couple hundred dollar repair don't   forget to like the video and subscribe to the  channel throw down in the comments maybe some   things that are deal breakers for you on an  inspection like hey this would really scare   me i might would consider backing out i'd love  to hear you guys thoughts as always if you need   anything our information is in the description  feel free to reach out we're always happy to help

Channel: Living in Memphis

Views: 6,222

Keywords: memphis real estate, moving to memphis, exp realty, tennessee real estate, tennessee realtor, real estate coach, tennessee real estate coach

Id: 7JNttMVPdSA

Length: 10min 3sec (603 seconds)

Published: Mon Jul 18 2022