Decoding the Inspection Code: Expert Tips for Realtors

00:00:11 - Mike Mills

Hello.

 

00:00:12 - Mike Mills

Hello to all you real estate dynamos out there. And welcome back to your trusty guide through the ups and downs of this crazy business that we all just coming back to. This is the Texas Real Estate and finance podcast, and I am your Sherpa, Mike Mills, local mortgage banker here with Geneva financial right in the Dallas Fort Worth metroplex. So I want you to imagine this scenario. So you just nabbed one of the last houses in a highly desirable neighborhood for your buyers. After looking at 20 homes over the last few weeks, you got a great price on the home. You paired it with a great lender like me and my team. And now it's only a matter of time before that hard earned paycheck drops into your bank account just in time for spring break vacation. But the inspector shows up and drops a 50 page novel on you and your buyers. And now you wait nervously, like when you were a kid and you had to give your parents that progress report from your math teacher that we all know wasn't too complimentary of your performance. So, except this isn't about you or anything that you did. This is all about that perfect house that your buyers absolutely fell in love with. And now this document reads like a fixer upper nightmare, straight out of house hoarders. Okay, so has this ever happened to you? And if so, today's episode has got you covered. We're going to be diving headfirst into what to expect when inspecting. It's my new favorite little term. I dropped out in this one, so. But before we get into it on how to navigate this little hurdle in the home buying journey, let's make a deal. If today's episode helps you dodge the inspection bullet like Keanu Reeves in the Matrix, then give us a like and hit that subscribe button. Your support is what fuels me to do this thing each week and keeps experts showing up to help you add a little bit more knowledge to your real estate encyclopedia Britannica. And speaking of experts, my guest today has over two decades of real estate, construction and inspection experience. He's handled more inspections than Taylor Swift, has ex boyfriends, and is the owner of Siteguard inspections right here in Dallas Fort Worth. So please welcome to the podcast Mr. Nathan Ross. Howdy, sir.

 

00:02:14 - Nathan Ross

Hey, thank you for having me today. I appreciate that very much.

 

00:02:17 - Mike Mills

You got it. You got it.

 

00:02:18 - Mike Mills

More inspections than Taylor Swift's boyfriends, right?

 

00:02:20 - Mike Mills

Like that. Is that good?

 

00:02:21 - Mike Mills

Is that solid?

 

00:02:22 - Nathan Ross

It is all about Taylor Swift these days.

 

00:02:24 - Mike Mills

Yes.

 

00:02:24 - Mike Mills

I'm trying to stay topical and current. That's what we're trying to do. So, first off, please tell me, why in the world is a home inspection report always 75 pages?

 

00:02:35 - Nathan Ross

That's a good question.

 

00:02:37 - Mike Mills

Where are the three page ones? That's what I want to know.

 

00:02:39 - Nathan Ross

Well, they used to, years and years ago, 20 plus years ago, there was such a thing as a two page, three page inspection report.

 

00:02:47 - Mike Mills

Okay?

 

00:02:47 - Nathan Ross

There was no videos, no photos. There was no special equipment. It was literally like a carbon copy three pager. A home inspector would scribble down a few notes, hand it to you, tear off the page. You keep the yellow one pink, they get the white one, that sort of thing.

 

00:02:58 - Mike Mills

Yeah.

 

00:02:59 - Nathan Ross

And then, like most professions, we've evolved.

 

00:03:02 - Mike Mills

Right, right.

 

00:03:02 - Nathan Ross

And then nowadays, you get a home inspection, and there's a large variety of quality and standards. There's a general standards of Texas, the trek, which is what? Real estate.

 

00:03:17 - Mike Mills

So the regulations.

 

00:03:18 - Nathan Ross

Regulations. So there is a minimum standard that has to be met as far as what we look for, but how we document it, there's a large array of products that you'll receive from different inspectors.

 

00:03:31 - Mike Mills

Right.

 

00:03:31 - Nathan Ross

So one of the things, if you get a ten page inspection report, you think, oh, that's a good one. Well, I actually would completely disagree because you do need to have some volume to your report. You need to have content, and some of it's going to be audio. Some people may do some video. There's a lot of written information in there. But you have to think you're covering your roof, your roof structure, your foundation, your HVAC system, your plumbing, electrical appliances, not to mention cosmetics, code and safety. There's a whole ton of stuff that we're covering.

 

00:04:01 - Mike Mills

Right.

 

00:04:02 - Nathan Ross

So you don't really want somebody to hand you five or six pages and say, here's your house, good luck. Right.

 

00:04:08 - Mike Mills

Because then they really didn't do their due diligence, probably. Right.

 

00:04:10 - Nathan Ross

Correct.

 

00:04:11 - Mike Mills

They just kind of whipped something together and didn't give you a good report. Or in some cases, I'm sure. I don't think this probably happens very often, but there's probably certain situations where maybe the inspector is trying not to make it a big deal for the realtor, and so they try to keep it as minimal as possible. And instead of just telling, hey, look, here's the truth, here's what it is. Not on purpose, but just kind of minimize it as much as they can because they don't want to mess up the transaction.

 

00:04:38 - Nathan Ross

Well, and that's true because part of it, too, is you are building relationships. You're building a relationship with the buyer of the house. You're building a relationship with the realtor that very possibly referred you to this buyer. And hopefully we'll talk to you again later down the road. But on the flip side, you don't want to give them 125 page novel either that there's several chapters and they're having to take four days to read through it because then it's like what are we actually telling them at that point? Is it pertinent? Is it reliable information? So I would say just kind of as an industry standard, if you get something that's in the, let's say it was just 40 pages, for example, that's kind of standard for a reputable company because also you may not just be getting the structure a lot of times like speak for what we do. We actually do a wood destroying insect inspection as well, which is pretty standard in Texas termite report and it's a different license. But we have learned to become accustomed to getting the home inspection and the wood destroying insect inspection all in the same process. So that's going to add a few pages as.

 

00:05:43 - Mike Mills

So when we're, when an agent is looking at, let me ask you this in the normal process because I don't do this much myself, so you can help me out here. But when you do an inspection, okay, usually what's the timeline usually take on a day to do an inspection on a house?

 

00:05:59 - Nathan Ross

Yeah, good question. A lot of that is based on square footage and amenities.

 

00:06:02 - Mike Mills

Okay.

 

00:06:02 - Nathan Ross

So if I have a 2000 square foot house or an 8000 square foot.

 

00:06:07 - Mike Mills

House take a little longer.

 

00:06:08 - Nathan Ross

That's going to take long. Right. Because you have instead of one air conditioner, you may have five.

 

00:06:11 - Mike Mills

Right.

 

00:06:11 - Nathan Ross

So one water heater, you may have four, those sorts of things. But I would say the general public lives at around 3500 less. I would say that's an average number to throw around. So if you did about an hour for every 1000 have 45 minutes to an hour, something like that, including your presentation time and report writing because it's always recommended to write your report on site. I mean you don't technically have to, but you want to capture the information while it's live and relevant.

 

00:06:40 - Mike Mills

Yeah.

 

00:06:40 - Mike Mills

And it's fresh in your mind. Absolutely.

 

00:06:42 - Nathan Ross

So you don't leave out any gaps for us. I would say about three and a half hours from start to finish, including the presentation is fairly standard.

 

00:06:52 - Mike Mills

Okay, well that's not bad. I've heard them taking five and 6 hours before so that's not bad at all.

 

00:06:57 - Nathan Ross

And we've had them. Or if it's a commercial structure or if it's like I said, if it's that 8000 square foot variant mansion, we'll say, right? Yeah. Then of course you're going to be there for a considerable amount of time. But generally speaking, you can have one in the morning or in an afternoon.

 

00:07:12 - Mike Mills

And I imagine you guys have software now too. That probably makes the reporting of it much easier because you can take like an iPad or something out and just kind of punch it all in versus having to sit in your truck for 2 hours and write out a dissertation.

 

00:07:23 - Mike Mills

Right?

 

00:07:24 - Nathan Ross

Absolutely. And there's several different programs of software that most inspectors use. I would say there's three or four in general that in Texas anyway, there's three or four in general that are the most common because they're the easiest to work with. But most people will have either a laptop or we use a tablet, like an iPad or surface pro, something like that. And you carry that around with you and you're actually taking your pictures and implementing it and downloading it into the report in real time.

 

00:07:50 - Mike Mills

Oh, wow.

 

00:07:50 - Mike Mills

Okay. So it's really all set and put together. Once you're done putting in your data, then it's ready to go.

 

00:07:56 - Nathan Ross

Absolutely.

 

00:07:58 - Mike Mills

All right.

 

00:07:58 - Mike Mills

So you show up, we do the inspection. You've got your trusty little iPad, you filled it all in, you got it ready to go. So is it something where you can speak to what you guys do? Do you all present it to the client and the agent together, or is the agent usually there? Are they not there? Or is it just to the buyer? Because obviously the buyer is the one purchasing it from you, so it's their inspection. But how's the presentation usually work on what you're showing them, what you go through?

 

00:08:25 - Nathan Ross

Yeah, we invite anybody to the presentation. So from my perspective, the more the merrier. Because again, if you read something on a page, you'll receive the information, but you may not understand the context, how to interpret it. Right, exactly. So if you're there on site, we can discuss it together and if need be, I can actually take you over to that water heater, show you that wall or that bathroom or what have you. As far as realtors coming to the inspection, absolutely. If they want to come, we welcome them every time.

 

00:08:53 - Mike Mills

Right.

 

00:08:54 - Nathan Ross

That one can be a little tricky though, because a realtor typically will work with a brokerage.

 

00:08:59 - Mike Mills

Sure.

 

00:08:59 - Nathan Ross

And those brokerage have their own rules and requirements and regulations. Some of the brokerages recommend for the realtor to not be there.

 

00:09:09 - Mike Mills

Really?

 

00:09:09 - Nathan Ross

Okay.

 

00:09:10 - Mike Mills

Is there a reason why it can.

 

00:09:11 - Nathan Ross

Be a little bit of a liability that you have to juggle. Nothing super scary.

 

00:09:16 - Mike Mills

It's just they don't want any undue influence. Maybe.

 

00:09:20 - Mike Mills

Exactly.

 

00:09:20 - Nathan Ross

If you're not the licensed inspector but you're on site and you're giving an opinion, well, you're kind of inserting yourself into that.

 

00:09:28 - Mike Mills

Right.

 

00:09:29 - Nathan Ross

And that could possibly lead to some negative press, we'll say, downstream. So it's either you want to kind of be quiet during the presentation and let the licensed inspector give that presentation.

 

00:09:41 - Mike Mills

Right.

 

00:09:42 - Nathan Ross

Or what some realtors might prefer is have the buyer present.

 

00:09:46 - Mike Mills

Right.

 

00:09:46 - Nathan Ross

So the inspector and buyer can have their time, and then the inspection report gets emailed over directly. And like for us, we always ask because the person that buys the inspection is actually the one that owns the information.

 

00:09:58 - Mike Mills

Right.

 

00:09:58 - Nathan Ross

So typically that would be the homebuyer, of course. But sometimes it could be somebody else.

 

00:10:02 - Mike Mills

Sure.

 

00:10:02 - Nathan Ross

But we always ask the homebuyer, we're going to email this to you. And is it okay if we send it also to your realtor? Because they need to help you. They need that information because presumably after the home inspection, during the rest of that option period, they might want to talk about some of the deficiencies and may want to work towards a possible repair amendment or things to talk to.

 

00:10:24 - Mike Mills

The seller about something that you need to negotiate with the seller. So you need to kind of be aware of what's in there.

 

00:10:28 - Nathan Ross

Absolutely. Right. Absolutely.

 

00:10:32 - Mike Mills

Now, what do you find as far as, like, what's more common? Do you have agents?

 

00:10:36 - Mike Mills

Is it 50 50?

 

00:10:37 - Mike Mills

Do you have agents there often or not? I will say from your perspective, seven, eight years ago.

 

00:10:42 - Nathan Ross

So I've been doing this about 14 years or so. I've been around it for, gosh, my whole life. I've got family that's in real estate. In fact, my mom's been a realtor for, oh, wow, 30 some years, I think.

 

00:10:53 - Mike Mills

Okay.

 

00:10:53 - Nathan Ross

So I've kind of been familiar with it for a long time, but in the 14 years that I've been actually a licensed home inspector, it's evolved. Used to the realtor would meet you there and the buyer would meet you there on property when, let's say the inspection starts at 09:00. Everybody's there at 901.

 

00:11:07 - Mike Mills

Right.

 

00:11:08 - Nathan Ross

And you have 3 hours of home inspection with everybody. Well, over the years, and especially more since COVID has happened, realtors don't go as often and buyers, most of the time, buyers will be there, but I would say it's probably about 80 20 on the buyers and maybe a 50 50 on realtors. And part of that is because we're all so busy these days, and everybody's just running as fast as they can to try to get the objectives met. And then part of that also is, again, a realtor may have a strategy to how they want to implement those steps through the option period. And so they're working their business plan on that.

 

00:11:46 - Mike Mills

Right. It ultimately just varies. It depends on the agent and what they want to do with it. All right, so you've given the inspection of the buyers, you've gone through your presentation with them and kind of walked through, from your point of view, doing these every day. What are the things that they need to pay attention to? Like, hey, this stuff's important. And then what are some of the stuff that's kind of always there but isn't maybe that big of a deal? I remember I always just use an example when I talk to people about this, that I bought a house one time and they were talking about how there was a whole section about how the bushes in the front of the house were too close to the house and needed to be trimmed back. And I was like, okay. I mean, there was literally like a whole page about different parts of the bushes and trees and stuff. And it was like, all right, I mean, I get it, but I'm not going to mess with, there's not going to be a reason I'm not going to buy this house. From your point of view, what are some things that are kind of important? And I wouldn't even say red flags, but just you need to pay attention to this section versus the ones where like, hey, this is in there because we have to put it in there because we have to do our job.

 

00:12:49 - Nathan Ross

Well, part of that is the threshold of the buyer.

 

00:12:53 - Mike Mills

Okay.

 

00:12:53 - Nathan Ross

Are you a first time home buyer? Is this your fifth house that you purchased?

 

00:12:57 - Mike Mills

Right.

 

00:12:57 - Nathan Ross

Because then your knowledge level is going to be very different on that as well.

 

00:13:00 - Mike Mills

Right.

 

00:13:01 - Nathan Ross

Generally speaking, though, there's, I would say, kind of your big six items. So the, the roof covering, because we don't want water to get into the structure. That's right. Your foundation, because we want our house to be on solid footing. The HVAC system, because we are in Texas. So a working air conditioner is very important.

 

00:13:21 - Mike Mills

Very nice.

 

00:13:22 - Mike Mills

Yes.

 

00:13:22 - Nathan Ross

Water heater, because that's the distribution system in which you're going to get hot water to your faucets, the electrical panel box area. So that's the hub of where all your plugs and switches and everything, all of them. The common denominator is your panel box, and then you're going to have your appliances.

 

00:13:37 - Mike Mills

Okay.

 

00:13:38 - Nathan Ross

And not so much from an integrity standpoint, but just from a monetary and functionality standpoint.

 

00:13:43 - Mike Mills

Right.

 

00:13:43 - Nathan Ross

When you move into day one, you want to be able to wash that dish, you want to be able to cook your plate of food. So those items are typically the ones that we would say, let's focus on these other things like the cosmetics. Not too important. Right? Not that they're not important.

 

00:13:57 - Mike Mills

Well, it depends on the individual. Right?

 

00:13:58 - Nathan Ross

It's up to them for sure.

 

00:13:59 - Mike Mills

Yeah.

 

00:14:00 - Nathan Ross

But it may not hinder the ability of the house to function. It may not hinder the ability of the loan to move forward because there's kind of two battlefronts that you want to protect on that. Again, it's your monetary nuisance, something that's a safety item, of course. And then is any of the findings potentially standing in the way of that loan moving forward?

 

00:14:20 - Mike Mills

Right.

 

00:14:21 - Mike Mills

Something that the lender might find or possibly have an issue with?

 

00:14:23 - Mike Mills

Yeah.

 

00:14:24 - Mike Mills

Well, I mean, even really in our space for lending, we don't ask for the inspections. I mean, it's not something that we require, so we're not looking for that. Now. The appraiser goes out, obviously, and they're not doing a home inspection, of course, but they are certainly going to walk through and test the faucets and test the appliances and see if there's any cracks on the wall and all that kind of stuff. So they're usually the ones that kind of notify us if there's any potential issues with the property. But they don't even give. Appraisers typically aren't going to give their opinion. They're just going to say, hey, this needs to be checked out or repaired or whatever. And then when we get to say, va loans, right, Va loans. We do need the wood destroying insect report to show that there isn't any infestation, if there's anything that needs to be fixed on that side of things. But outside of that from a lender, know, we typically don't have a ton to do with the inspection on our end. But I do know that, especially with first time home buyers, because this is where it always comes into the whole not freaking out, but just certainly getting this big document and going, oh, my gosh, this house is horrible. And it's like, well, hang on. I want you to talk about how we talked about in the beginning a little bit, but you have to give everything that's wrong with the house, right? Like your job, in order to make sure that you're doing your due diligence. And doing what the buyers paid you to do is to tell you every single thing that's deficient in the home, right?

 

00:15:51 - Nathan Ross

That's correct. We're going to do code items, safety items, structural integrity items, cosmetics. And so we do have to tell you everything. Now, there is a little bit of a misconception. Sometimes people think, oh, well, an inspection will cover everything about everything.

 

00:16:07 - Mike Mills

Right.

 

00:16:08 - Nathan Ross

That's not really true.

 

00:16:09 - Mike Mills

You're not perfect.

 

00:16:10 - Nathan Ross

Well, there's things that, because we are regulated by Trek, so there's a minimum standard.

 

00:16:15 - Mike Mills

Oh, I see what you meant. Yeah, that makes sense.

 

00:16:17 - Nathan Ross

So you'd like to think that most companies would go above the minimum.

 

00:16:20 - Mike Mills

Yeah.

 

00:16:21 - Nathan Ross

Well, but companies, sometimes they're just reaching to the minimum. But that's where the legal threshold is met at that point. But there's something like, let's see, a fence, a wood fence around the perimeter, right. We want to make sure that it's in good shape and so on, but that's not actually required to be on a general home inspection. Now, a home inspector can know about it, but they don't have to.

 

00:16:45 - Mike Mills

Got you.

 

00:16:46 - Nathan Ross

There's also flooring. There's a good one. So as a home buyer, you and I go in, if we see carpet that's damaged, well, we're absolutely going to talk about that and we want to address that with the seller. But did you know in the state of Texas, it is not a requirement for a home inspector to address that stained carpet? The only time that a home inspector has to actually talk about the flooring is if it is some way connected to the foundation performance.

 

00:17:12 - Mike Mills

Gotcha.

 

00:17:12 - Mike Mills

So like a safety thing, maybe.

 

00:17:13 - Nathan Ross

Well, let's say there's used tile, right, because nice, pretty tile floor, and there's this big old crack that's going across the bottom of the tile floor. Well, is that crack just cosmetic? In which case, it's not really a requirement. Now, again, homebuyers expect it. So, like at Siteguard, we do comment on flooring.

 

00:17:29 - Mike Mills

I didn't see a crack with cracking.

 

00:17:31 - Nathan Ross

We do comment on it because our customer base has grown to expect that. But I mean, from, just from a legal perspective, though, that crack was not related to the foundation in any way.

 

00:17:42 - Mike Mills

Right.

 

00:17:42 - Nathan Ross

So if the inspector did not comment on that, it's not that they forgot or overlooked it, it's that they weren't required to.

 

00:17:48 - Mike Mills

They just didn't have to. That makes sense. One of the biggest concerns for realtors especially is when these home inspections come out, is what is the buyer's reaction going to be right and I find this occasionally, but I will see where they will say, well, really, they won't say anything. It's kind of like what I was talking about before with the parents progress report. You're like crossing your fingers and hope it's okay. Just like anything. I don't think that that's the best approach. I mean, obviously you want to address these things head on and you want to make sure that you prepare your clients for what's coming. So if you were a realtor and your mom is, and I'm sure you've had these conversations, what would you recommend as far as the process of preparing a buyer for a home inspection? Whether it be what you talk to them about beforehand, what you talk to them about once they get the inspection. And then what you would say the inspection is complete. And here's what we need to look at and move forward with. And again, this is just your point of view. You're not a realtor, obviously, but if you are helping a realtor say, hey, look, these are the things you need to talk to your buyer about beforehand so they understand what they're reading and what they're going into, because it's all about setting expectations. What we're trying to do, my job, realtors job, your job with your clients is we're trying to set the proper expectations so that way when we present the information that we're presenting, that it's digested properly. So what would you suggest for agents in how they would communicate with their buyers about that?

 

00:19:15 - Nathan Ross

I definitely think that setting a realistic expectation is important. And when any house, whether it's a new construction house or something that's been around for 50 years. Right. Perfection does not exist, especially on new construction, which we can talk about that in a minute, but there needs to be an expectation that the inspector is going to judge it on the most current revision of the building code. Okay, but if it's a 40 year old house, some of these deficiencies doesn't make it bad, doesn't mean that it's failing. It just means that it was okay when the house was built. But fast forward, because we change building code every three years. So you've had, what, 1012, 13 cycles of this building code changing? One of the things that I hear all the time is like GFCI receptacles, which are the little ones with the reset buttons you see in your garage or bathrooms, whatever. Just about every house is not up to code in that. It seems like because the building code has become more and more stringent, it was just the garage. Then it was the garage walls and then the ceiling and then the bathrooms. Well, now the bathrooms and the laundry room. And it just kind of keeps expanding. And the whole point of it is to be more safe and to build a better product. But again, if you're thinking, you see these in the report, you're thinking, oh, my goodness, I'm going to have to totally replace this. No, that's not the case. Those receptacles or the wall outlets, they're functioning, they're fine, and they were up to code back on that day, just not today. So part of it is just communicating, educating, and realizing, is it a first time home buyer? Because you're probably going to want to spend a little bit more time just talking with them, showing them hands on a few things, giving them resources. And part of it, too, is like, for us. So we do the inspection. We're here this morning, we do the inspection. Come noon, we're done. We're going to email you the report. Our interaction with you does not stop. Let me rephrase that. It will continue if you want it to.

 

00:21:15 - Mike Mills

Sure. Yeah.

 

00:21:16 - Nathan Ross

Because we're not going to just.

 

00:21:18 - Mike Mills

Okay.

 

00:21:18 - Nathan Ross

Thanks for your time. See you later.

 

00:21:20 - Mike Mills

Adios.

 

00:21:21 - Nathan Ross

We have a website that has resources on there. So if you do need an electrician, or if you do need a HVAC system or a painter or sprinkler guy or whoever it may be, you can just go to the website, you pick who you need and then they're all local and they can help you. Or six months from now, you're like, you know, I don't remember what you said about that, and give me a call. We're going to be there to help you. We're not there to push the realtor in any direction. We're there to be a supportive team member. We're going to all approach this together, right? They have their function, I have mine, the buyer has theirs, and we're going to all lock arms and we're going to walk to the finish line together. And I think if you approach it as this is a team effort and that you're not there to scare them, you're there to just give them some information. We're not going to report anymore or any less. It's just going to be kind of is what it is, right? The facts. Nothing but the facts and how they digest them. Sometimes you can talk when you're talking to them. You can kind of see. You could just kind of tell it kind of concerned them a little bit. So then we'll back up, we'll start talking to them a little bit more about that and we'll say, yeah, however, and we kind of put it in context and help them understand the theory behind it and the process. And then if they want to continue to have the conversation, then again, we can get those resources whenever they need.

 

00:22:38 - Mike Mills

Well, often I think I use this analogy when I do loans all the time is I tell people, look, my job is to give you the information as it is and then let you make the adult decision on what you want to do with that information.

 

00:22:50 - Nathan Ross

That's right.

 

00:22:51 - Mike Mills

I'm not here to guide or push you in one direction or the other. I mean, I'll give opinions. If you want my opinion, I'll tell you, well, this is how I do it or this is how other people have done it. But at the end of the day, it's your decision. It's your decision if you want to move forward, if you don't, if you think this is a problem, if you don't, that's it. We often say too, with homes in general, it's like, look, you can't fix the location, right? Wherever the house is, there's nothing you can do about that.

 

00:23:16 - Mike Mills

That's right.

 

00:23:16 - Nathan Ross

You can't move the house, right.

 

00:23:17 - Mike Mills

And once you pay for it, you paid what you paid for it. But outside of that, a lot of things can be changed, fixed, move, done. You're not going to regut a whole house most of the time, but little things can always be fixed. And then it just comes down to how much do you really love this house? Right. If you can look past some of these little deficiencies that you have, then it's going to be a great decision because like you said, no house is perfect. There's never going to be a house that's perfect. And speaking of that, because I do want to get into a few specifics on each section a little bit so that way we can tell people, hey, if you're looking at roofs, here's something that you're going to see often. Here's what's a big deal. Here's not. But before that, I want to talk about new builds because you brought it up. So these days especially, the market is dominated by new builds. It's just what it is because that's the inventory that's available.

 

00:24:04 - Nathan Ross

Absolutely.

 

00:24:05 - Mike Mills

And I think if you go back 20 or so years, you could maybe say the inspection isn't as big on new builds because they're good quality and maybe not. Maybe I'm living in good old days, but especially these days, because cost of building is so expensive, labor is expensive. These home builders are now these huge conglomerates. They're not just like Joe's home builder that is going to stamp his name on this property, and it's his word. Now it's Dr. Horton, who's one of the biggest companies in the world. That kind of seeing. Well, first off, I want you to talk about why it's still important to get a home inspection on a new build. And then second off, am I crazy? Are you seeing the construction still the same and things are good, other than a few one offs here and there, or are you starting to see a little bit of a deterioration and it becomes even more pertinent these days to get the inspection done?

 

00:25:01 - Nathan Ross

All of that's a very good question. So there has definitely been an influx over the last few years of new construction homes?

 

00:25:08 - Mike Mills

Yes.

 

00:25:08 - Nathan Ross

And I would say just from ten years ago to five years ago, there was some, and then from five to two, and then over this last two years, again, just a dramatic increase of new construction. And there's a whole host of reasons. But there's been more of those on the market.

 

00:25:23 - Mike Mills

Yes.

 

00:25:24 - Nathan Ross

And builders are doing everything from you introduce yourself in the beginning, and then you have a prepour into a foundation, which we can actually inspect all of that, too. And whether it's a prepour to the foundation, the framing is the next step, or what we call the blue tape walkthrough, or the final, which is right before you move in, and then the one year warranty also. So there's different steps in which you can inspect those. Or sometimes you get a spec home, which means the builders, basically, it's already done, constructed a bunch of houses and they're selling them in that final phase.

 

00:25:55 - Mike Mills

Right.

 

00:25:55 - Nathan Ross

And a lot of them are getting that way, too. But absolutely new does not mean perfect.

 

00:26:01 - Mike Mills

Right?

 

00:26:01 - Nathan Ross

In fact, quite the opposite.

 

00:26:03 - Mike Mills

Yes.

 

00:26:04 - Nathan Ross

I was just talking to my wife the other day, and we were just kind of hypothetical games.

 

00:26:08 - Mike Mills

Right.

 

00:26:08 - Nathan Ross

And, okay, if I have two houses, one's a 30 year old house and a single homeowner, he's lived there. He built it and lived there for 30 years. Or you have this other house that's brand new, no one's ever lived in it. I'm buying one of those houses and I can only get one inspection. Now, obviously, you want to inspect both.

 

00:26:26 - Mike Mills

Right? Right.

 

00:26:26 - Nathan Ross

But just hypothetically. Yeah, I can only get one inspection. I'm getting that inspection on the new construction house every time, because one, it's made by humans. We make errors. Of course. Builders, no matter how great they are, no matter how reputable they are, they're buying in bulk, they have building construction quotas. The quicker they can get that house constructed and off their books, the quicker they get their bonus structure. And that does not always lend itself towards quality. But then I hear, in the back of my mind, I hear somebody say, well, they have a QA person. Which quality assurance person. They have a QA person that's going to look over that structure. They do. That's working on behalf of the builder, not the buyer, then say, well, we're going to have a city inspector look at it. Okay. City inspectors are great in the field that they work. But keep in mind, with a city inspection, let's say they've got a list of 200, 300 things they have to look at. If it meets the minimum standards, not the maximum, but the minimum. If it meets the minimum standards, you get a green tag builder, keep building. If it doesn't meet minimum, then you get a red tag. They have to stop, fix the problem.

 

00:27:42 - Mike Mills

Right.

 

00:27:43 - Nathan Ross

Well, a third party home inspector isn't looking at hundreds of items. They're looking at 2000, 3000 different items.

 

00:27:49 - Mike Mills

Right.

 

00:27:50 - Nathan Ross

We're ensuring it up against the most current code and safety regulations. Also, let's say you're building a house and you have it in the city, like the city proper, city center.

 

00:28:01 - Mike Mills

Right.

 

00:28:02 - Nathan Ross

The codes are going to be more strict. Or you have that same house, same builder, but you're 50 miles out, you're kind of on city limits or what would you call like country land right now?

 

00:28:12 - Mike Mills

Little rural. Yeah.

 

00:28:14 - Nathan Ross

All of a sudden the building codes become much more relaxed.

 

00:28:16 - Mike Mills

Yes.

 

00:28:17 - Nathan Ross

And so the builders become much more relaxed.

 

00:28:19 - Mike Mills

Yes.

 

00:28:20 - Nathan Ross

And just to kind of. Here's a couple of funny things. When new construction house we've had. In fact, I'll give you two quick examples.

 

00:28:27 - Mike Mills

Yeah, please.

 

00:28:28 - Nathan Ross

And again, these are new construction houses. We thought that they were a reputable big box store that everyone's heard of. I'm not going to put their name.

 

00:28:35 - Mike Mills

Here, but don't have to put a name out.

 

00:28:37 - Nathan Ross

But they're the ones that we would go to and buy.

 

00:28:39 - Mike Mills

Right. Okay.

 

00:28:40 - Nathan Ross

One of them, it was like a condo, three story condo. There's like ten or twelve units stacked in a row.

 

00:28:46 - Mike Mills

Right.

 

00:28:47 - Nathan Ross

So the washer and dryer was going to be in a closet area and a stackable washer and dryer.

 

00:28:52 - Mike Mills

Okay.

 

00:28:52 - Nathan Ross

So good for space.

 

00:28:53 - Mike Mills

Condo.

 

00:28:54 - Mike Mills

Yeah.

 

00:28:54 - Nathan Ross

So we go in there. Looks great. Closet looks good. Nice. Pretty paint. Got some. Everything looks right. Got the water connections and all that. And then quickly realized there was no dryer vent. Like the hole where the lint goes. Yeah, there's no dryer vent, no hole. There was no hole in the wall at all. There's nowhere for that lint to go. And we're like, well, then start looking around a little bit closer and realize there was no 240 volts outlet either, because the driver's 240 volts.

 

00:29:21 - Mike Mills

Right.

 

00:29:21 - Nathan Ross

So you have to plug it in to get power and then you have to take the lint somewhere. Neither of those were there. The house was complete. The city inspector signed off on it. The builder's QA person signed off on it. The builder signed off on it. The homeowner already had their blue tape walk through. They were moving in in a few days, right? Yeah, it was done. We were just doing our due diligence because the realtor's credit, the buyer would have never got the home inspection. But the realtor was like, you know, you probably just want somebody on your side just to look at it. And if everything's great, well, now you spent money to know that everything's great. Peace of mind.

 

00:29:54 - Mike Mills

Right.

 

00:29:55 - Nathan Ross

And they had to fix it. Another quick one, new construction.

 

00:30:00 - Mike Mills

That's not an easy fix, by the way, too, depending on where that wall was. I mean, the electricity, probably not a big deal, but the vent, if you're not on an outer wall that you can just kick out. Because I could be wrong, but most of those vents have an exit point.

 

00:30:16 - Nathan Ross

To the outside and it has to be within a certain amount of linear feet too.

 

00:30:21 - Mike Mills

Right.

 

00:30:21 - Nathan Ross

So, like, say the overall vent has to be within 30ft from start to stop.

 

00:30:24 - Mike Mills

Right.

 

00:30:24 - Nathan Ross

So you have to get all of that completed within 30ft and still make it outside. Wow. We had another one beautiful house going through. There was a little three bedroom, two bath, two car garage going through. And I realized that I keep going in and out. Like, I'm checking the bedroom and I'm going out the front door, checking the back room, going out the front door, and I just keep all my in and out. So I kept going down the hallway to the front door and I realized I keep going out the front door. Why am I doing this?

 

00:30:49 - Mike Mills

Yeah.

 

00:30:50 - Nathan Ross

And then I realized there was no back door. There was no doorway, no opening, no door. That door never exists.

 

00:31:00 - Mike Mills

This is a single family home.

 

00:31:01 - Nathan Ross

Single family home with a backyard. Because you build the backyard and you have to have two points of egress.

 

00:31:06 - Mike Mills

Right.

 

00:31:06 - Nathan Ross

Or reasons or ways to leave the house.

 

00:31:07 - Mike Mills

Yeah.

 

00:31:08 - Nathan Ross

So if there's an emergency on this side, you can go out the other side.

 

00:31:11 - Mike Mills

Right.

 

00:31:11 - Nathan Ross

Or vice versa. There was no rear exit to the home. None.

 

00:31:16 - Mike Mills

They forgot the back door.

 

00:31:18 - Nathan Ross

The city inspector signed off on it. The builder signed off on it, and this was two days before closing. They just so happened they're like, you know, I'm going to get my inspection last minute. Because them and the builder were sort of just kind of at ODs with a couple of things. Nothing to do with the door. It was just other kind of cosmetic stuff.

 

00:31:37 - Mike Mills

Sure.

 

00:31:38 - Nathan Ross

And I was there. Nobody realized that the builder never put a rear entry on the home. So they end up having to cut a hole, a doorway in the back of the house and putting a way to exit the home. The craziest stuff. But when you walk past it, it looked perfect. It looked clean, because it didn't look like there was anything wrong with it.

 

00:31:58 - Mike Mills

It's crazy with stuff like that because that seems like everybody's like, what? How would you miss a back door? But it happens all the time with homeowners, like on preexisting homes, not even just new builds. But when you go into a house, there's certain things that people are looking for, right? There are certain things that they are interested in. They're interested in something with the kitchen or they're interested in the master bedroom or whatever, right. They have certain things in their mind that they're paying attention to, which is why a lot of times it's good. I know realtors will hate this, but the reason a lot of times people bring other people with them is because we all live in this little bubble.

 

00:32:34 - Mike Mills

Yeah.

 

00:32:34 - Mike Mills

We all live in our own little world, and sometimes we need somebody else there with us to just be like, hey, did you notice that there's a hole in the wall over here? You're like, there's no refrigerator space in here. You're like, what? Because you're just not thinking about it. Right? It's just not in your scope or your radar of what you're paying attention to. And I think that happens to all of us now, you would think on major stuff.

 

00:32:57 - Nathan Ross

You would notice stuff like that, but you would think. But if it's not, it's easy to see the hole in the wall, right? It's easy to see the thing that's rusted or the thing that's bent or damaged. But if it's been completely omit, something's just not there. It's just not there.

 

00:33:12 - Mike Mills

Yeah.

 

00:33:12 - Nathan Ross

You're not looking for it because it's not there.

 

00:33:14 - Mike Mills

No, it's like, realizing there's no fireplace or something. It's like, did you know this place doesn't have fireplace?

 

00:33:19 - Nathan Ross

Really?

 

00:33:20 - Mike Mills

Oh, yeah.

 

00:33:20 - Mike Mills

I guess not. If you're not looking for it, you just don't think about it.

 

00:33:24 - Nathan Ross

Or the waterline for the fridge. That's something that I see a lot of times the builder will forget to put waterline. It's just a nice, pretty wall. But in this day and age, everybody expects to have water nice in the door.

 

00:33:37 - Mike Mills

I think it's even when you could say, oh, well, the inspector should have caught that, or the builder, the quality assurance guy should have caught that as well. That's all true. But we're all human beings. That's right. Everybody's a human, and we're going to make mistakes. So if you're a building inspector, by the way, and this is your job every day, is to go out to these houses and commercial buildings and all this stuff and make note of what it is. There's a lot of things I think you just assume in your head it's not that you're not looking for it, but you're just thinking in your mind, there's the washer and dryer.

 

00:34:07 - Mike Mills

It's good.

 

00:34:08 - Mike Mills

I don't need to check. You're not even consciously going, I don't need to check to see if it's got a return line on the hose. They all do. So I'm sure it's, and again, you're not thinking about it. You're just like washing dryer or dishwasher, good works. It's functioning okay, fine. And you move on because it's just what you do.

 

00:34:23 - Nathan Ross

You get on an autopilot type thing. And I don't mean to dig on the QA of the builder because they're great and they catch a whole lot.

 

00:34:35 - Mike Mills

Yeah, well, there's a lot of great ones, I'm sure, out there. But they're human beings.

 

00:34:38 - Nathan Ross

They are working on the behalf of the builder. So if they're going to give leniency, they're going to give it to the builder.

 

00:34:44 - Mike Mills

Right.

 

00:34:44 - Nathan Ross

So just by very nature, they're a little bit favored on that side. And then the monotony of just going through. How many houses a day do they look at?

 

00:34:54 - Mike Mills

Look at them all day long.

 

00:34:55 - Nathan Ross

Builders making a subdivision that has 250 units. So they're just going from as fast as they can from one to the next to the next, to the next. So you get a home inspector that's on your side. They're going to take three, 4 hours or whatever the time is, and they're going to be digging and looking for you, the homebuyer, they're working solely for your benefit and they're not selling you anything. That's a great.

 

00:35:18 - Mike Mills

Well, they've already sold you. You bought it, you pay the fee for it.

 

00:35:22 - Mike Mills

That's it. That's it.

 

00:35:24 - Nathan Ross

There's certain trades out there that, hey, we'll give you this, I'll leave the name of the trades out. There's certain trades out there that they'll say, we'll come and do the inspection on this part of your home for free. But what they're really hoping is that they can sell you that new part of your home.

 

00:35:37 - Mike Mills

Right. Right.

 

00:35:38 - Nathan Ross

Whichever part that may be.

 

00:35:40 - Mike Mills

Yes.

 

00:35:40 - Nathan Ross

And again, a third party inspector, they're not really selling you anything. They're giving you information. Hopefully you digest it well and it suits you well. And then you take with the inspector and the realtor, mostly the realtor, after the inspection, and they walk you through those next steps after that and help you get to that finish line.

 

00:36:00 - Mike Mills

Well, and I just don't think in most cases we want to pretend like that there's some kind of evil. They're like, oh, they're trying to screw us or whatever. And I'm sure that has happened for sure. It's life. But I think most of the time it's just human error. And by the way, when you're talking about the amount of people involved in building a house, from the framers to the electricians to their workers to their office people ordering supplies to the Q and a, I mean, there's just so many people that when you have that many people involved in any process.

 

00:36:33 - Mike Mills

That's right.

 

00:36:33 - Mike Mills

People are going to make mistakes, and sometimes they're big mistakes and sometimes they're small mistakes, but they're going to mess up.

 

00:36:38 - Nathan Ross

That's right.

 

00:36:38 - Mike Mills

And you just need to have somebody there that's going. And they're not going, hey, this person's terrible. No, we're just saying, hey, look, we're just making sure that everything was done the way it should been done. And if it wasn't, then we're just going to say, hey, look, this needs to be fixed. How often do they not come in and fix it? Usually they're going to come in and fix it.

 

00:36:56 - Mike Mills

Right.

 

00:36:56 - Nathan Ross

Well, with new construction. Well, first, I would say if you have a home inspector that is causing alarm or being scary.

 

00:37:03 - Mike Mills

Yeah.

 

00:37:03 - Nathan Ross

You got the wrong home inspector. Right. So you want to have somebody that just kind of, what do you call it, the nice bedside manner.

 

00:37:08 - Mike Mills

Yeah.

 

00:37:09 - Mike Mills

You want to be a calm voice and that you're just a reasonable, logical voice and that you're not raising a bunch of drama.

 

00:37:14 - Nathan Ross

Exactly. But on a new construction, it's a little different than an existing house because new construction, you're going to presumably, of course, run this through your realtor first because of the plan of action, may be different, but you might give that entire report to the builder and say, hey, Mr. And Mrs. Builder, before I accept ownership, I want these things addressed, because most of those products, anyway, are under warranty, and most builders will give you what's called a 1210 warranty, meaning one year bumper to bumper, two years on the mechanical. So lights, microwaves, that kind of stuff.

 

00:37:48 - Mike Mills

Sure.

 

00:37:48 - Nathan Ross

And then ten on the structure like foundation. Right. So they are protected by this warranty process. You just have to go through the process.

 

00:37:56 - Mike Mills

Right.

 

00:37:56 - Nathan Ross

And you give them these items. And I would say, let's say we give the builder. By the way, I've never, in 14 years, I've never, not once come across any house, much less a new construction house that was perfect, was good to go. Like clean bill health. There's always a handful of things.

 

00:38:14 - Mike Mills

Yeah.

 

00:38:14 - Nathan Ross

Not all of them are earth shattering. Some of them are just, oh, hey, catch that before you move in. But there's always some things.

 

00:38:20 - Mike Mills

Right.

 

00:38:20 - Nathan Ross

But, yeah. Go to the builder and most builders will probably fix nine out of ten of those, if not ten out of ten of those before the buyer moves in. And the buyer says, well, we're moving in in four days. How in the world are they going to fix these 20 pages or whatever it is, in four days? Well, you'd be surprised. Builder can get their cruise out pretty quick and handle that.

 

00:38:39 - Mike Mills

They want to close the loan.

 

00:38:40 - Mike Mills

They do.

 

00:38:40 - Mike Mills

Yeah, they want to close the deal. They're not trying to drag it out.

 

00:38:43 - Nathan Ross

And also, the buyer has more power before the loan closes than after.

 

00:38:47 - Mike Mills

Yes.

 

00:38:48 - Nathan Ross

So not that I would ever recommend this, and again, run this for your realtor first. That's my disclaimer. Right.

 

00:38:52 - Mike Mills

Always.

 

00:38:53 - Nathan Ross

But if they had to, let's say, closing was on Wednesday and if they had to close on Thursday instead of Wednesday, but that way it would ensure that those products got corrected first. That is an option.

 

00:39:05 - Mike Mills

Well, I mean, it's no different. That's like a final walk through.

 

00:39:08 - Mike Mills

Right?

 

00:39:08 - Mike Mills

I mean, the whole point of realtors on any property doing a final walk through is to say before this thing actually closes in funds, we need to make sure that there's no problem.

 

00:39:17 - Mike Mills

That's right.

 

00:39:18 - Mike Mills

Because we're in a better bargaining position right now before it funds and closes than we are after.

 

00:39:24 - Nathan Ross

It's who holds the leverage.

 

00:39:26 - Mike Mills

Right. Yeah.

 

00:39:27 - Nathan Ross

Now they can give you an IOU, and they literally will give you this. It's a piece of paper, and it's like, I actually think it says Iou on it. And they write down, okay, we got items a, B and c that are going to get to you after close. Sometimes they have to do that and it works if you have to. But again, if the time will allow, you then try to get those things corrected before you close.

 

00:39:49 - Mike Mills

Right.

 

00:39:50 - Nathan Ross

And then if it's an existing house, a little bit different, you don't just hand the inspection report to the builder or to the homeowner.

 

00:39:56 - Mike Mills

Excuse me.

 

00:39:58 - Nathan Ross

This is really where the realtor's business strategy is going to come in and really help you. So if you're a seasoned realtor, you may just have this process streamlined.

 

00:40:08 - Mike Mills

Right.

 

00:40:08 - Nathan Ross

But you might negotiate. If there's a handful of items on that inspection report that you want to address, you can ask for all of them. Or sometimes they'll say, hey, let's have a few bucks, instead of calling the plumber out to fix the thing. Yes. Or we really want five things, but we're going to ask for seven so that they really end up with five. And in all actuality, they may end up with three.

 

00:40:32 - Mike Mills

Right.

 

00:40:32 - Nathan Ross

And it's sort of this negotiation of.

 

00:40:34 - Mike Mills

What you're trying to do.

 

00:40:35 - Nathan Ross

So you do have a little bit more negotiation on that existing house. But another thing, too, and a lot of companies, I shouldn't say a lot. There's our few companies, we are one of them that can offer a product called a reinspection. Okay, so let's say you go, whether it's new construction or whatever existing, you have your inspection paid for it, it's done. We decided, okay, there's some, these things, whatever they are, that need to be addressed. Builder, homeowner, whoever says, okay, yeah, I'll fix them. Okay, they're fixed. But did they.

 

00:41:06 - Mike Mills

Right.

 

00:41:06 - Nathan Ross

How well are they fixed? Yeah. So we go back out and we do a reinspection on those items and we give you another report. So it's not just, okay, yeah, it's fixed. I mean, you have another written report.

 

00:41:16 - Mike Mills

Right.

 

00:41:16 - Nathan Ross

And you could say, well, there was six things on this list, but four of them, they're performing, they look real good. But these other two or three things, back to the drawing board.

 

00:41:26 - Mike Mills

Yes.

 

00:41:26 - Nathan Ross

And then you just slow walk it into the corrective measures.

 

00:41:29 - Mike Mills

Right.

 

00:41:30 - Nathan Ross

And it keeps the temperature down a little. Bit too, because those negotiations can be a little bit heated on both sides and it's just the facts, it's the.

 

00:41:37 - Mike Mills

Fact, it's just a third party said here, this is what we saw.

 

00:41:40 - Mike Mills

That's it. That's it.

 

00:41:41 - Nathan Ross

And it helps everybody and it really does streamline that process.

 

00:41:44 - Mike Mills

Well, I mean, that's great because I always recommend whenever they ask me, because I get asked all the time, too. It's like, look, get the money rather than having them fix it. If it's something that you, if it's not, it doesn't cause an issue with the loan, obviously, because the sellers are.

 

00:41:58 - Nathan Ross

Going to get out, they're going to do the cheapest way they can just get the house out of their name.

 

00:42:02 - Mike Mills

Exactly right. But sometimes it does become a bit of, I don't want to say a bit of contention between the buyer and the sellers about who's going to do the work. And it's like, okay, well, if you absolutely don't want to give us 5000, 10,000 or whatever it is, and you want to do the work yourself, fine, but we're going to have someone come out and doing another inspection afterwards.

 

00:42:24 - Mike Mills

That's right.

 

00:42:25 - Mike Mills

And make sure that the work was done correctly. So if you're okay with that, then sure, we can go forward with that decision as well.

 

00:42:30 - Nathan Ross

And that happens quite a bit, actually.

 

00:42:32 - Mike Mills

Yeah.

 

00:42:32 - Mike Mills

And then you could probably even negotiate and since you're doing it that way, you're going to pay the inspector to come do that because there you go. Yeah, we're asking you to just give us the funds. But if you're not going to do that and you want to fix it yourself, that's fine. But you're going to pay to make sure that it gets done correctly with our company. Not with the company that you choose, but with the one that we choose. That's right. Again, it's all about, you said it's all about how your agent and the buyer approach the conversation with the sellers on how to handle those things when they come up. Because they're going to come up, every single house, every single property, every single situation almost to a t. There's going to be something in the house that's deficient and then it's just a matter of if you're okay with it or if you're not or if you want to negotiate repairs or if you don't. But I also think that in most cases, everything's always negotiable. And that's the problem. I think that happens, that I see a lot with new agents is they get the house, they get it under contract. The inspector comes out, gives a pretty standard inspection because I've seen some of them before, a few little things here or there that aren't great about it, but they get a typical inspection and then the buyer is like, no, I'm backing out. And the agent, because they don't want to seem pushy or they don't want to seem like they're trying to talk them into something, which I totally understand, but then they're just like, well, they just decided against it. And it's like, well, did you have a conversation with them about it, though? Did you explain the stuff that was deficient? Because these seem like pretty small things that could easily be fixed if this was the house. Now, if this wasn't the house, if this was like, we kind of like it, but not a big deal. Great, go find another one. But if this was the house, and they were like, man, we just loved it. But the roof needed repair. It's like, well, you can fix that. That's not a big deal.

 

00:44:16 - Nathan Ross

The funny thing with roofs that you mentioned that is because that's one of.

 

00:44:19 - Mike Mills

The big six items always.

 

00:44:20 - Mike Mills

Yeah.

 

00:44:20 - Nathan Ross

So it's like, is my roof performing? But that can actually be a blessing because let's say we go out there and there's impact damage, some damage, shingles, there's enough deficiencies that we would recommend to have further valuation on it.

 

00:44:34 - Mike Mills

Right.

 

00:44:35 - Nathan Ross

So that process goes through and the realtor says, okay, we're going to get our favorite roofing company out here. They're going to go take a look at it and they agree. Yes, there is impact damage in any roof. Okay. Well, a lot of times. Now, this isn't every time.

 

00:44:50 - Mike Mills

Sure.

 

00:44:50 - Nathan Ross

A lot of times the roof can be claimed on insurance.

 

00:44:55 - Mike Mills

Yes.

 

00:44:55 - Nathan Ross

So the seller actually claims it on their insurance before they leave the property. Then the buyer ends up getting a brand new roof. Didn't pay a dime. Or maybe they're sending negotiations. Sometimes they'll negotiate because you've got, what do you call it? The deductible or the copay.

 

00:45:11 - Mike Mills

So there might be a little bit.

 

00:45:12 - Nathan Ross

Of negotiation of the, hey, there's $1,000 copay. Okay, who pays that? Well, we'll 50 50 it. Okay, fine. But so for $500, you got a $15,000 roof for free.

 

00:45:20 - Mike Mills

Yes.

 

00:45:21 - Nathan Ross

Now you don't have to worry about it for 15 years, 20 years, or however long it is.

 

00:45:25 - Mike Mills

Well, and your insurance is way cheaper.

 

00:45:27 - Nathan Ross

And your insurance just went down. So it's a huge blessing. So just because there's a deficiency, don't get so sidetracked or focused on the deficiency itself. Because almost always there's a plan of action that either the inspector, the realtor, that the professionals, these are deficiencies we see all the time.

 

00:45:44 - Mike Mills

Right.

 

00:45:45 - Nathan Ross

So we have people that's kind of waiting in the wings that can help. Or maybe the buyer's dad is an HVAC technician.

 

00:45:55 - Mike Mills

Right.

 

00:45:55 - Nathan Ross

So for client a, air conditioner is scary. For client b, dad says, I'll be over there on Sunday and I'll fix it. Yes. So there's a lot of variables here, and the information can appear to be overwhelming sometimes. But if you just kind of step back a little bit and just really try to look into that information and use the resources from buyer's perspective, if you use the resources you have available, you have a mortgage professional that's going to help you walk through the financials. You have the real estate agent that's going to help you with the strategies of how to connect all the dots. You have the inspector that's here to work solely on your benefit. Right. So use us. We are here to help you. That's our sole reason for our professionals, to help you, educate you, and get you where you need to be and one step closer to being a homeowner.

 

00:46:44 - Mike Mills

Yeah. Okay.

 

00:46:45 - Mike Mills

So of those big six, because we just talked about the roof, actually, and that's a common thing. And I've had roofers on before that. We've gone through that, on how all that works. If you have roof issues, there's remedies there like you showed.

 

00:46:57 - Nathan Ross

So talk about just to be fair, sometimes you can just fix the roof. You don't always have to replace it.

 

00:47:02 - Mike Mills

Yeah, absolutely.

 

00:47:04 - Nathan Ross

Get up there with a handful of shingles and some nails and a repair becomes less scary.

 

00:47:09 - Mike Mills

Yes.

 

00:47:09 - Nathan Ross

Just quantifying that.

 

00:47:11 - Mike Mills

And you don't have to do that. You can pay somebody to do that. So talk about the other of the big six, the HVAC. You said the appliances, you said the electrical system. I'm seeing if I was paying attention really well. What was the other two?

 

00:47:27 - Nathan Ross

Water heater and foundation.

 

00:47:28 - Mike Mills

There we go. I don't know. I forgot about foundation, especially in Texas.

 

00:47:32 - Nathan Ross

Let's start with foundation.

 

00:47:33 - Mike Mills

Foundation.

 

00:47:34 - Nathan Ross

Foundation. Because I would say roof and foundation are the two. Well, roof, foundation. HVC probably are like the three big ones that we talk about all the time. Foundation. Because, well, we live in north Texas, and in this part of North Texas, we have a lot of clay soil.

 

00:47:48 - Mike Mills

Yes.

 

00:47:48 - Nathan Ross

So there's a lot of expansion and contraction. That happens. So the house is always moving and shifting. Just because you see a crack in the wall does not mean that your foundation's bad. I need to preface that, yes. Just because you see a crack in the wall does not mean you have a poorly performing foundation. In fact, a lot of cracks are quite normal. Yes. And there's some that are vertical. That means one thing. If they're horizontal, it means another diagonal. But just because you have, most people think the diagonal stairstep cracks.

 

00:48:14 - Mike Mills

Yeah.

 

00:48:14 - Nathan Ross

Those are like, oh, I got foundation problems. Well, that means your foundation moved. I mean, that's true, but there's tolerances. How much did it move? Is it still within acceptable tolerance, or am I receiving adverse performance? Well, with your naked eye, as just Johnny Homebuyer, you're not going to know. Right. Most of the time, a visual inspection through a licensed inspector, they can tell you, you know, you've had movement and it's exceeding what we think is probably acceptable tolerances. But to be fair, an inspector cannot legally say your foundation is not performing. You need three peers right there. That is not what we do.

 

00:48:57 - Mike Mills

No. Your job is to recommend they have somebody look at that specific.

 

00:49:01 - Nathan Ross

It's like a general practitioner. We check you out. Yes, you do have a broken bone. Yes, it is your femur. Go see an orthopedist.

 

00:49:07 - Mike Mills

Yes.

 

00:49:07 - Nathan Ross

And they'll put a cast on it.

 

00:49:08 - Mike Mills

Right.

 

00:49:09 - Nathan Ross

It's kind of that same process.

 

00:49:10 - Mike Mills

Yes.

 

00:49:11 - Nathan Ross

But one thing that we can do, like, let's say we take that house we're talking about, and there's some stairstep cracks, and we're thinking, man, there could be some adverse performance here. It's possible. We're seeing quite a few of these cracks. Windows. And it's not just cracks. Is your windows, are they opening and closing properly? Does your doors open and close properly? There's a whole bunch of symptoms, we'll say. And how many of these symptoms do you have? Do you have this 100 year old tree that's growing into the side of your foundation? That could cause a little movement, right?

 

00:49:39 - Mike Mills

Yeah.

 

00:49:40 - Nathan Ross

But like, at our company, we actually go one step further. All that's required, to be fair to everybody out there, all that's required is to do a visual inspection for your general home inspection.

 

00:49:49 - Mike Mills

Okay.

 

00:49:50 - Nathan Ross

But if you do have the qualifications, you can do what's called a foundation elevation survey. So you use a piece of equipment. There's several different out there, but we use what's called a precision altimeter. And it basically looks like this really weird yellow box with this long extension cord looking thing and this computer gadget on the end. And what it does is it's actually measuring the levelness, or lack thereof, of your foundation all the way down to the 10th of an inch, which is crazy. I mean 10th of an inch is tiny. It's what, millimeter, something like. And we measure that all the way across the house. And then there's this math calculation that we do and we say, okay, yes indeed, you have had movement, but this house is 60ft, we're say 60ft from end to end and your movement is only about three quarters of one inch. Yeah, you're fine.

 

00:50:39 - Mike Mills

Very small.

 

00:50:39 - Nathan Ross

You're fine. Yes, you had movement. Yes, there's cracks, but at this point let's just make sure you have a proper watering program and we can patch the cracks. Get a painter out here.

 

00:50:48 - Mike Mills

Sure.

 

00:50:48 - Nathan Ross

Or if it's excessive, then we can tell you that too and say, okay, now you're outside of the threshold, you are receiving adverse performance. This point we may want to talk to an engineer. Yeah. And they'll prescribe a plan of action.

 

00:51:02 - Mike Mills

Right.

 

00:51:03 - Nathan Ross

But of course that's kind of last resort. Right, but those things are available. But you want to ask when you're hiring a home inspector because usually your realtor is going to tell you, hey, we've got these three numbers that we like to use. Whichever one you want to call them all and see which one works best for you.

 

00:51:17 - Mike Mills

Right.

 

00:51:17 - Nathan Ross

Because legally they're not supposed to tell you use this one person.

 

00:51:20 - Mike Mills

Yes.

 

00:51:21 - Nathan Ross

Although if you do pick sideguard. Yes, there you go.

 

00:51:24 - Mike Mills

Pick sideguard always.

 

00:51:25 - Nathan Ross

But they don't say pick these three numbers. Well when you're calling them, interview them. How long have you been in business? What kind of qualifications do you have? What kind of licenses do you carry? What services do you offer? I've got a pool back there. Can you inspect the pool? Well, we don't inspect pools, but we have a third party person we can call and get court. Oh, so that's another appointment that we've got to coordinate another report from another person and another fee. Well, what about your foundation? Well, we got a company we can call. Okay. Can this one company take care of all your needs?

 

00:51:57 - Mike Mills

Right.

 

00:51:58 - Nathan Ross

In fact we did one just yesterday. It had thermal imaging, it had swim pool, had the spa, had the foundation elevation survey. What else did have? It had all the bells and um. But you want to, can they do these services and use a Woodstring? Insect inspection, most people call it the termite inspection, but we look know carpenter ants powder, post beetles, all the good jazz. Do they offer know? Because that is a separate license.

 

00:52:26 - Mike Mills

Yes.

 

00:52:26 - Nathan Ross

It is not a trek license. It's a license through Texas department of Agriculture. They had to go to school and get that one too.

 

00:52:31 - Mike Mills

Right.

 

00:52:31 - Nathan Ross

So do they offer it? Well, no, but we have another guy we call. Okay. Do we want to go through that route again or cost or, or. Yes, we do. Okay, well, do you charge for. Yeah, like for us we just give it as a customer service because we work with a lot of VA clients and they have to have VA specifically. And it's the weirdest thing with VA. So you are required as a VA homebuyer, you are required to have a termite inspection and you are also required not to pay for it.

 

00:52:59 - Mike Mills

Actually, that changed. So they can pay for it now. Allowed to pay for it?

 

00:53:04 - Mike Mills

Yes.

 

00:53:05 - Mike Mills

It's just changed within the last few years, but they can actually pay for.

 

00:53:07 - Nathan Ross

It now because in our invoices we put it's like a value, but there's no dollar that they paid for.

 

00:53:14 - Mike Mills

They don't want to have to force somebody else to do it. So they actually made it to where they can't pay it.

 

00:53:19 - Nathan Ross

Do they offer that? Are you getting the inspection? Are you getting the inspection and a report?

 

00:53:22 - Mike Mills

Right.

 

00:53:23 - Nathan Ross

Because those are very different things, too, because somebody can come out there and give you a verbal. But something in writing.

 

00:53:29 - Mike Mills

Yeah.

 

00:53:29 - Mike Mills

Because the lender is going to require it in writing. Yes. What about the HVAC? What are common things that you see with that specifically a bunch?

 

00:53:39 - Nathan Ross

Well, it's just because we're in Texas, so it's what, between 81 hundred degrees nine months out of the year? So we use our air conditioner nine months out of the year. Well, maybe not quite. Probably eight. Almost always they need serviced because we just don't really service them as much as we should. Biggest thing is like your blower motor inside your filters, the outside unit that collects debris and dust. Just like you change your filter in your car, you want to change the filter and your air conditioner in it, too. It's something simple like that, but it's going to help your unit run more efficiently.

 

00:54:14 - Mike Mills

People are terrible at that. Me included, by the way. I have to put it on my calendar, on my phone to remind me and it's got to remind me 100 times before I actually do it.

 

00:54:22 - Nathan Ross

You know, I always tell everybody. So you write your mortgage check on the first?

 

00:54:25 - Mike Mills

Yeah.

 

00:54:25 - Nathan Ross

Change your filter on the first. When you write your mortgage check, change your filter.

 

00:54:28 - Mike Mills

Yeah.

 

00:54:28 - Nathan Ross

Or some people now have like the wide four inch or five inch filters instead of the one inch wide filters. So on those, you're only changing them two, three times a year or something, depending on your environmental conditions.

 

00:54:39 - Mike Mills

Right.

 

00:54:40 - Nathan Ross

You can go to Amazon and there's a subscription.

 

00:54:43 - Mike Mills

Right.

 

00:54:43 - Nathan Ross

So, like at my house, I have it where it is. I don't say every four months. Every four months that it delivers me a new filter.

 

00:54:49 - Mike Mills

Would you get it? Just go change it.

 

00:54:50 - Mike Mills

That's it? Yeah. Okay.

 

00:54:51 - Nathan Ross

That's pretty good. That's pretty good.

 

00:54:52 - Mike Mills

I like that.

 

00:54:52 - Nathan Ross

Just walk upstairs, change it, and that's it. I like that.

 

00:54:55 - Mike Mills

Okay.

 

00:54:55 - Mike Mills

I'm probably going to have to implement that.

 

00:54:58 - Nathan Ross

But no, otherwise, I would say one of bigger things with HVAC systems is a few years back, we did this conversion from r 22 to 410 a, and it's just the fuel. So like, if you had a car be leaded versus unleaded or diesel versus. Yeah, I think it's kind of just a fuel difference.

 

00:55:14 - Mike Mills

Right.

 

00:55:15 - Nathan Ross

But because of that, one is way more efficient, but it's also one is more expensive to maintenance and so on. So if we see r 22, we always like to point that out and say, hey, this is something. These are obsolete units. I mean, you still use them, but when you decide to go for a replacement, you're going to be probably going to a 410 a unit, which will actually, in the long run, you'll actually save a little longer energy bills because they do run more efficient, but that's pretty common on that. Water heaters is another major thing. Generally speaking, you get about twelve years or so off of a water heater. Most builders now, though, do not put in tanked water heaters. They put tank less, really. But over the last couple of years, it's really become, I would say probably a 70 30 split, 70 on the tank less and then 30 on the tanked. Now, if you get further out to the country, you're going to get more tanked units, but tank less if it's installed correctly and of course, depending on your water conditions and so on. But you can get 2025 years out of a tankless unit, whereas on a tanked you're getting 1215. Maybe tankless is a little more expensive to install, but it lasts a lot longer. But it lasts a lot longer.

 

00:56:27 - Mike Mills

Yeah.

 

00:56:28 - Nathan Ross

And there's less components because you're not really breaking, holding a reservoir of water.

 

00:56:33 - Mike Mills

Within all the fun stuff that comes with that.

 

00:56:38 - Nathan Ross

So we see a lot of stuff on the tank list and so on. And if there's something that's, if it's performing then great. But if there's some deficiencies, some of it is just, hey, it's an old tank, so we want to change the fittings or something at the top, some corrosion or something.

 

00:56:52 - Mike Mills

Or the pan. The pan is always a problem.

 

00:56:54 - Nathan Ross

Is there a pan? Yeah, if it's in a garage, is it elevated 18 inches? Oh, it has a pan. It is elevated. But is there a drain line on that pan? Does it go to the exterior or like a lot of houses, they will have a pan, but it drains right to the garage floor.

 

00:57:09 - Mike Mills

Right.

 

00:57:10 - Nathan Ross

And it's like, well, that was okay.

 

00:57:11 - Mike Mills

Probably not where it's supposed to go, I would think.

 

00:57:13 - Nathan Ross

Yeah, when the house was built, that code was okay, but that was 30 years ago. So next go round on the water heater, you might want to think about bringing it up to code.

 

00:57:22 - Mike Mills

Well, man, this is a ton. And I think it's great because it's one of those things, like, I have guys that come and talk to me about insurance, I have guys that come and talk to me about roofing. And it's like this stuff isn't like sexy and exciting. It's not like the person telling you how to use AI to make your marketing better. But this is the most important stuff about your business. And for every realtor out there that's listening to this, you have to understand that you don't have to be an expert on this stuff, right. Because this is why you guys exist. This is why you have good referral partners for this type of stuff. But you got to have a base of knowledge to be a little bit dangerous. You got to know something about it because you want your clients coming to you as the expert in all things related to real estate and finding out more, as much as you can about what is required in inspection, what is going to show up, what are the main, the big six that you need to be aware of and those items that are important to pay attention to. All of this stuff is going to help your transactions go smoother. And the benefit of the transaction going smoother is that the whole idea of all this stuff is that when we want to close a loan, we don't want to just close a purchase. We're not just trying to close one, we're trying to close six more after that because we want them to refer us to their friends and family because we did a great job. And that's the goal of all this. Just like you as a business owner, you're going to make sure that when you go out there as a site guard, you're going to do everything in your power to make sure because, yeah, the 600 or $800 or whatever it is you got on that one inspection is great. It helps pay the bills, but that's not the goal, right? The goal is to pick up clients forever because you want them to continue using you, which is why you're always going to give top notch service. And so that, to me, encompasses everything when it comes to being a realtor. Is that making sure that, a, you have great referral partners that are going to take care of your clients the way that you would, and then, b, that you also understand a little bit about what each one of them do, because the more you can have a base of knowledge to operate from, the more success you're going to have in your transactions and the more people are going to walk away with a smile on their face versus feeling like they just got run through the ring.

 

00:59:24 - Nathan Ross

Absolutely.

 

00:59:25 - Mike Mills

So before we wrap up, is there anything. Well, first off, I want to tell know where to find you, where you guys are at, how to locate you. There'll be some stuff in the show notes as well for their website. If you go to my web page for the podcast, you'll find all of Nathan's contact information there so you guys can reach out to him if you want to use siteguard here in the DFW area. But aside for that, is there anything that you want to leave everybody with before we go?

 

00:59:48 - Nathan Ross

Yeah. Well, thank you again for the opportunity. It's been a great time visiting with you. And again, yes, my name is Nathan Ross with siteguard Inspection Services. You can find us. We've got hundreds of Google reviews. You can easily find us on Google Yelp, all the hashtag SG inspections or sginspectionservices.com. We're on all the social media outlets, so please check us out, even if you haven't shopped with us and used us as an inspection company. But maybe you're out there looking at houses and you just have a question. I'm not ready to get my inspection yet, but I saw this thing on the house I really like. Is this cool?

 

01:00:24 - Mike Mills

Cool?

 

01:00:25 - Nathan Ross

Or is this a big deal or what am I looking at here? I get that kind of stuff all the time. Shoot me a text. Literally. Realtors all the time will do that and be like, hey, here's what I'm looking at.

 

01:00:33 - Mike Mills

Check it out.

 

01:00:34 - Nathan Ross

And we can kind of converse that way. And they're okay, great. Buyer loves it. This is the house. We'll be seeing you next week. Okay, perfect. But no, we're here to help. We're here to educate. We do have resources. We've got a resources tab on our website. So we just want to help any way we can. Whether it's new construction, septic systems, pools, foundations, roofs, commercial, we try to make sure that if it's something in a real estate transaction, then we have the ability to.

 

01:01:00 - Mike Mills

Sideguard's got it covered.

 

01:01:01 - Nathan Ross

We got it covered.

 

01:01:02 - Mike Mills

You got it covered. Well, Nathan, thank you so much for your time today. I really appreciate you coming in and chatting with us today and dumping your brain on us because there's a lot here. And I encourage you to go back and listen to this again if you need to take some notes, realize every little bit of information you can take from this and add to your repertoire of real estate knowledge is going to help you in the future. So thank you for everybody that stuck around to the end. And I'll be back on Tuesday with another market update and we will see you then. So everybody have a great day. Nathan, you have a good weekend and we'll see everybody next week.

 

01:01:33 - Nathan Ross

All right, thank you.

 

01:01:34 - Mike Mills

All right, bye.