I've learned that to really do well investing in real estate, you need to have a team of people you can trust and rely on. Here are some possible team members, and what they need to be on the team.
1. Real estate agent. A licensed agent with experience in the area you invest in and access to the MLS (Multiple Listing Service), can be a great help.
2. Real estate attorney. This should be someone familiar with the laws and legal customs of your area, and have experience with the type of deals you intend to do (If you are buying rentals, she should be familiar with doing evictions, for example.)
3. Accountant or bookkeeper. Keeping proper books for real estate investments is getting more complicated with all the tax-law changes. Find someone that understands the law, and what you want.
4. Mortgage broker or banker. The first can offer many options, but the second can make the loan decision. Each has their advantages, and you could use both. In either case it's important that they understand what you want (fast closings, lower interest, corporate loans?) PS. Do not overlook private money leanding.
5. Appraiser. Not only can a good appraiser give you an accurate valuation of a property, but they should be able to suggest ways in which you can raise the value of a property. Use someone that will talk to you.
6. Inspector. In some areas it is easy to become an inspector with little experience. It's best if you use one that is or used to be a contractor, so he can find the problems AND give you a general idea of the cost of repairs.
7. Insurance agent. A good one will understand what you want, and find ways to save you money. Insure all your properties with one agent, and you're likely to have discounts available, and better service.
8. Escrow officer. They will usually be with a closing company. Look for someone that's efficient, and can explain things clearly to both sides. If he is confused by a slightly creative contract, he should educate easily or be replaced.
9. Contractor. Having a trusted person or crew ready means a fast turn around when you buy a rental or rehab project.
10. Property manager. Be sure that the company you hire has exerience, is responsive, and will have time when you call. A good property manager can tell you BEFORE you buy, what you should get for rent in a given area.
Real estate investment is less stressful and more profitable with a good team on your side.
I've learned that to really do well investing in real estate, you need to have a team of people you can trust and rely on. Here are some possible team members, and what they need to be on the team.
1. Real estate agent. A licensed agent with experience in the area you invest in and access to the MLS (Multiple Listing Service), can be a great help.
2. Real estate attorney. This should be someone familiar with the laws and legal customs of your area, and have experience with the type of deals you intend to do (If you are buying rentals, she should be familiar with doing evictions, for example.)
3. Accountant or bookkeeper. Keeping proper books for real estate investments is getting more complicated with all the tax-law changes. Find someone that understands the law, and what you want.
4. Mortgage broker or banker. The first can offer many options, but the second can make the loan decision. Each has their advantages, and you could use both. In either case it's important that they understand what you want (fast closings, lower interest, corporate loans?) PS. Do not overlook private money leanding.
5. Appraiser. Not only can a good appraiser give you an accurate valuation of a property, but they should be able to suggest ways in which you can raise the value of a property. Use someone that will talk to you.
6. Inspector. In some areas it is easy to become an inspector with little experience. It's best if you use one that is or used to be a contractor, so he can find the problems AND give you a general idea of the cost of repairs.
7. Insurance agent. A good one will understand what you want, and find ways to save you money. Insure all your properties with one agent, and you're likely to have discounts available, and better service.
8. Escrow officer. They will usually be with a closing company. Look for someone that's efficient, and can explain things clearly to both sides. If he is confused by a slightly creative contract, he should educate easily or be replaced.
9. Contractor. Having a trusted person or crew ready means a fast turn around when you buy a rental or rehab project.
10. Property manager. Be sure that the company you hire has exerience, is responsive, and will have time when you call. A good property manager can tell you BEFORE you buy, what you should get for rent in a given area.
Real estate investment is less stressful and more profitable with a good team on your side.
You've bought a house, a fixer-upper you can make some money on. What improvements and repairs should you make? First of all, before you buy, you need to have some simple rules with which to start analyzing possible fixes.
Return On Investment
With fixer-uppers, you have do things which give the most "bang for the buck." Aim for a three-to-one return on improvements. If you're going to resurface the driveway for $1000, it better raise the value of the home by $3,000. Even when you're just guessing, keep this three-to-one formula in your head, if you want to invest safely.
How To Fix A Fixer-Upper
With things like new curtains, you can't really estimate the increase in value. What you can do, though, is group together the many small repairs and improvements you are considering, and imagine how the house will look when you are done. Then you can estimate whether you will have increased the value enough to justify the cost.
It often is in the small details that you'll get the best return on investment, so look at these first. A new mailbox, flowers on the porch, a raked yard and trimmed trees - $30 total if you do the work yourself - can make a big difference in the first impression potential buyers have. First impressions are important.
Other small investments that pay big include shiny new switch covers (less than $1 each), shelves, new door hardware, new light fixtures, curtains, new rocks or wood chips on outdoor paths, new faucets, new woodstain on decks, and general cleaning. Stand in front of the house and imagine what it might look like with various small improvements (flowers, wood-rail fence, birdbath, etc.).
The Big Fixes
Obviously, there are things that just have to be repaired. The basic systems must function. Improvements, though, should be subject to the three-to-one rule. You may have to get creative here. An investor client of mine once had a wall put up, and for less than $1000 created a new bedroom, probably raising the value of the house by $10,000. Now that's a good return on investment.
Bathrooms and kitchens are important. A $1000 updating of a bathroom can add $4000 in value to a home. Spend $2000 wisely in the kitchen (New fridge, re-finish the cupboards, add a garbage disposal, etc.), and you can add $8000 to the sales price of the house. Look for changes which are most universally valued (don't paint the kitchen pink because YOU like that color), and be sure you get a decent return on investment.
Depending on the fixer-upper, there are many potential improvements that can be worth doing. The bottom line is the bottom line: be sure anything you do returns more than you spend, preferably three times as much.
Here are 10 tips to help you find the perfect flip from HGTV's The Big Flip renovator's John Stassen and Randy Mackay.
1. Find properties that are diamonds in the rough - homes that are rundown in comparison to those around them - as these often have a low list price.
2. Are the surrounding properties well maintained? This can add value and clinch a sale when your house goes back on the market.
3. Scrutinize previous renovations. Poor quality workmanship can mean you have paid a premium for finishes that you will have to repair or replace yourself.
4. Can you add bathrooms, storage or enlarge a small kitchen to meet the needs of today's average family? If you can't, walk away, as these features often make or break a sale.
5. Ensure you do a thorough home inspection before purchasing properties - this could save thousands of dollars in the long run.
6. Identify your potential buyers (i.e. young professionals or families) and design the house with their needs in mind.
7. Find a real estate agent who understands the market. There are thousands of real estate agents; get one who is experienced and understands the business of flipping houses!
8. Do your research and find areas that are up and coming. Neighbourhoods that are in the early stages of being gentrified often contain homes that offer large returns on their investment.
9. Be realistic with your budget and always leave room for hidden costs. Early budget optimism can mean cost cutting later on, which means sacrificing quality - and profits - in the final sale.
10. Keep your eye out for properties with good layouts that can be easily updated with new paint and trim. You may get lucky and find a home that's a good price and only needs finishing touches, adding tens of thousands of dollars with minimal investment.
Contrary to what the credit bureaus would like you to believe, credit repair does work and can work for 100% of people in most circumstances. This is, of course, provided you are getting the best advice and have an experienced professional working on your case.
Any one with a credit score below 720 can benefit long-term from the advice and information provided through credit repair; however, there are times when your own limitations make adhering to this advice impossible.
The two limiting factors are: 1) your financial situation and 2) the time frame within your need to reach your results.
It is possible to remove anything from a credit report, even accurate items, if the creditor does not adhere to the law that outlines what needs to be done and by when. Just because you have a certain type of account removed at one time does not mean other, similar items are going to be able to be removed, even with the same circumstances. A hit-or-miss aspect exists in credit repair, because credit repair relies not only on the strategies of the person attempting to repair the credit, but also on the effectiveness or ineffectiveness of the creditors and credit bureaus in adhering to the laws. Sometimes you want the credit bureaus and creditors to follow the law, sometimes you don't; it all depends on your particular situation.
The reason credit repair has received such a bad name is due to the abundance of scam artists who flock to the easy money made available by people desperate for this type of service. This unfortunate reality leads the credit bureaus and the FTC to make blanket, untrue statements such as, "Credit repair does not work ever and there is nothing a credit repair company can do for you that you can't do for yourself." Given that more than 90% of credit repair companies are scam artists, promising the world and then disappearing when you pay, the credit bureaus and the FTC are forced to make such bold statements. It would be impossible for them to explain the truth to consumers without causing them to make a bad choice that would result in them getting scammed. As a result, the credit bureaus and the FTC must adhere to the "credit repair does not work" position.
As I have stated, credit repair does work, but don't let anyone tell you that credit repair is effective every time. Its success varies with the number of players in the game, some of whom never perform consistently. Even if you have a true master of credit repair on your side, you have to take into account that sometimes the other players perform in a way that throws your master off his game.
Take Shaquille O'Neal, for example. Although he has the ability to win every game for his team, there are going to be times when the other team has a formation that takes him off his game and causes his results to be less than optimal. Given that fact, you still cannot predict to any level of certainty whether or not he will perform well or poorly the next time he faces that team. Credit repair is similar. Sometimes the opposing side shows up strong, other times they don't. Even if you follow the same approach with every situation that arises when doing credit repair, your results will still vary due to the other players involved. So the next time someone tells you they can get everything repaired on your credit, run the other way, because, at best, the pendulum will swing widely both ways for the same situation.
Credit repair limitations occur almost 100% of the time under the following situations. These situations make it nearly impossible for credit repair to help someone needing results within six months to a year. Please keep in mind that even when you can't be helped in the short term, the advice that can be given now - if coming from a professional - can prevent you from making a mistake in the near future that may worsen your situation. Here are examples of situations where not much can be done within a six to twelve month period:
1. If more than 50% of the negative accounts showing on the credit report appear as unpaid collections, charge-offs, repossessions, or foreclosures and you do not have the money to either pay the accounts in full or settle them. Due to the negative accounts remaining unpaid, these items will simply reappear on your report once removed. Any negatives, even unpaid accounts, can be removed, but unless the negative account is current, paid or settled, it will simply reappear in 10-90 days. The only way to prevent this is to bring the account current by paying the past due amount, or, in the case of a collection, charge-off, repossession, or foreclosure, pay the balance in full or settle it for pennies on the dollar. Unpaid accounts that do not have collection, charge-off, repossession or foreclosure status require only that the past due balance be paid to be considered current. Unless the negative account is a public record, the only way to keep it from being re-reported is to make sure the status is "current, paid, settled, transferred or sold." In other words, if deleted, any negative account that does not show one of those five statuses will most likely get re-reported, unless the account is a public record.
Public records are the only negative items that do not need to be paid to prevent re-reporting. Because they are only reported once, public records, such as unpaid judgments and tax liens, can remain unpaid and yet will not reappear once they are removed. In fact, the only time they reappear is when the initial reason for removal was the public record agency failing to respond the credit bureau's verification request within the 30 day period outlined by the Fair Credit Reporting Act, in which case the credit bureau would reinsert the public record if and when the public record agency responds to the credit bureaus after that 30 day period.
2. Credit repair is nearly impossible if you can't pay your minimum monthly payments and you keep adding new late payments to your report. This is a "spinning wheels" scenario that rarely yields much improvement to your credit score.
In conclusion, you can repair your credit if you hire a pro and listen to his or her professional advice. The effectiveness of the credit repair depends not only on the skill of the professional you hire and your ability to cooperate with his or her advice, but also, a little luck.
Did you know that paying a collection account can actually reduce your score? Here's why: credit scoring software reviews credit reports for each account's date of last activity to determine the impact it will have on the overall credit score. When payment is made on a collection account, collection agencies update credit bureaus to reflect the account status as "Paid Collection". When this happens, the date of last activity becomes more recent. Since the guideline for credit scoring software is the date of last activity, recent payment on a collection account damages the credit score more severely. This method of credit scoring may seem unfair, but it is something that must be worked around when trying to maximize your score. How is it possible to pay a collection and maximize your score? The best way to handle this credit scoring dilemma is to contact the collection agency and explain that you are willing to pay off the collection account under the condition that the reporting is withdrawn from credit bureaus. Request a letter from the collector that explicitly states their agreement to delete the account upon receipt/clearance of your payment. Although not all collection agencies will delete reporting, removing all references to a collection account completely will increase your score and is certainly worth the involved effort.
2. GET RID OF YOUR PAST DUE ACCOUNTS.
Within the delinquent accounts on your credit report, there is a column called "Past Due". Credit score software penalizes you for keeping accounts past due, so Past Dues destroy a credit score.
If you see an amount in this column, pay the creditor the past due amount reported.
3. GET RID OF YOUR CHARGEOFFS AND LIENS.
Chargeoffs and liens do not affect your credit score when older than 24 months. Therefore, paying an older chargeoff or a lien will neither help nor damage your credit score. Chargeoffs and liens within the past 24 months severely damage your credit score. Paying the past due balance, in this case, is very important. In fact, if you have both charged off accounts and collection accounts, but limited funds available, pay the past due balances first, then pay collection agencies that agree to remove all references to credit bureaus second.
4. GET RID OF YOUR LATE PAYMENTS.
Contact all creditors that report late payments on your credit and request a good faith adjustment that removes the late payments reported on your account. Be persistent if they refuse to remove the late payments at first, and remind them that you have been a good customer that would deeply appreciate their help. Since most creditors receive calls within a call center, if the representative refuses to make a courtesy adjustment on your account, call back and try again with someone else. Persistence and politeness pays off in this scenario. If you are frustrated, rude, and unclear with your request, you are making it very difficult for them to help you.
5. CHECK YOUR CREDIT LIMIT(S) AND EVENLY DISTRIBUTE THE BALANCES YOU ARE CARRYING.
Make sure creditors report your credit limits to bureaus. When no limit is reported, credit scoring software scores the account as though your current balance is "maxed out".
For example, if you know that you have a $10,000 limit on your credit card, make sure that the limit appears on the credit report. Otherwise, your score will be damaged as severely as if you were carrying a balance of the entire available credit. Credit scoring software likes to see you carry credit card balances as close to zero as possible. If it is difficult for you to pay down your balances, read the following guidelines to maximize your score as much as possible under the circumstances:
• There are different degrees that scoring software can impact your score when carrying credit card balances.
• Balances over 70% of your total credit limit on any card damages your score the most. The next level is 50% of your balance, then 30% of your balance.
• In order to maximize your score without having to pay down your balances, evenly distribute your credit card balances among all of your credit cards, rather than carry a large balance on one credit card. For example, if you are carrying a $9000 balance on a credit card with a $10000 limit, and you have two other credit cards with a $3000 and $5000 limit, transfer your balances so that you have a $1500 balance on the $3000 limit card, a $2500 balance on the $5000 limit card and a $5000 balance on the $10000 limit card. Evenly distributing your balances will maximize your score.
6. DO NOT CLOSE YOUR CREDIT CARDS.
Closing a credit card can hurt your credit score, since doing so effects your debt to available credit ratio. For example, if you owe a total credit card debt of $10,000 and your total credit available is $20,000, you are using 50% of your total credit. If you close a credit card with a
$5,000 credit limit, you will reduce your credit available to $15,000 and change your ratio to using 66% of your credit. There are caveats to this rule: if the account was opened within the past two years or if you have over six credit cards. The magic number of credit card accounts to have in order to maximize your score is between 3 and 5 (although having more will not significantly damage your score). For example, if a card was opened within the past two years and you have over six credit cards, you may close that account. If you have more than six department store cards, close the newest accounts. Otherwise, do not close any at all.
7. BECOME AN AUTHORIZED USER.
If you have a short and limited credit history you can ask someone who is a primary account holder to add you to their account as a joint account holder or an authorized user. When added, the primary account holder's credit card will appear on your credit report. Credit scoring software will treat the added account as though it is your account and you will benefit from the low balance and the long payment history for that account. It is important to remember that being an authorized user is helpful for your credit score only if (1) the person is carrying debt below 10% of the credit limit and (2) has had good payment history on the card for seven years or longer. The longer the history, the better. Being an authorized user is potentially detrimental to your credit score if, for example, the primary card holder carries a high balance on the card and has had it less than five years.
8. KEEP YOUR OLD CREDIT CARDS ACTIVE.
15% of your credit score is determined by the age of the credit file. Fair Isaac's credit scoring software assumes people who have had credit for a longer time are at less risk of defaulting on payments. Therefore, even if your old credit cards have horrible interest rates, closing those cards will decrease the average length of time you've had credit. Use the old card at least once every six months to avoid the account rating to change to "Inactive". Keeping the card active is as simple as pumping gas or purchasing groceries every few months, then paying the balance down.
An inactive account is ignored by Fair Isaac's credit scoring software, so you won't get the benefit of the positive payment history and low balance that card may have. The one thing all credit reports with scores over 800 have in common is a credit card that is twenty years old or older.
Hold onto those old cards trust me! Preparing credit is a slow and time consuming process.
If you would like to schedule a free, no obligation consultation about how I can do this for you, please give me a call or send me an email. It would be my pleasure.
If you are interested in rehab as a real estate business, please contact me. We offer turn key opportunity for investos who want to invest in Kansas City or in the Akron/Canton areas.
Overview
The basic investment strategy is to purchase fixer-upper single family homes, rehab the properties to top condition, and quickly sell the homes for full market value. Only houses that can be purchased at wholesale value will be considered for investment. This ensures that the profits are secured at purchase and do not depend on an inflated market.
To have success with this strategy requires speed in the execution of the entire process, from speed in the acquisition of properties when an opportunity is found, speed from the contractors on the project, and speed in selling the properties on the market. This will be accomplished through aggressive project management, selection of quality professional subcontractors, and marketing and selling the property.
Target Properties
The properties targeted for investment are single-family homes in need of significant repairs and located in decent neighborhoods. Houses in marginal areas are not considered. The attention is on houses in areas where first time homebuyers would want to live.
It should be noted that houses with major foundation or structural issues will not be considered for investment.
Determining Purchase Price
The purchase price will be determined by using a unique formula which will factor in the purchase cost of the property and the work to be done. This is what secures the profits. The beginning point in the formula is the ARV (After Repaired Value) and is determined using actual comparable sales in the neighborhood. This is determined with a licensed real estate agent by using the MLS (Multiple Listing Service). After the ARV is determined, subtract 30% and the rehab costs to determine the maximum purchase price. This will leave a target profit of 20-25% depending on holding time.
Maximum Retail Value x 70% less rehab costs = Maximum Purchase Price
Estimating Repairs
Properties under consideration are inspected using a checklist developed for this purpose. Items needing repairs or upgrades are identified. Based on this information, a Rehab Cost Summary will be developed.
Rehab Project
The rehab plan for each property will pay particular attention to curb appeal, the kitchen and the bathrooms. These areas of the home are critical to the success of every project. All rehab work is contracted to experienced professionals and is closely monitored. The project will be professionally managed with experienced crews performing the scope of work.
Marketing & Sale of Completed Houses
The homes will be listed by a licensed real estate agent to allow for maximum market exposure. The homes will be marketed using a professional marketing system.
Exit Strategy
Refinance the property after the improvements and cash out up to 90% LTV, then either rent the home using a property management company or sell it on a lease option for 1 year (which would also give you another 5% down payment in your pocket up front) the monthly payments would create a positive cash flow.
SAMPLE
This house is a sample of one completed. 3100 Haskell, KC KS
Purchase Price $12,000
ARV $75,000
Rehab Costs $ 20,000
Based on the formula the Maximum Purchase Price is $32,500
This is a form that is ery comprehensive. I have used it as a contractor for inspections for my investor clients and rehabbers. This is similar to a NAHI approved inspection in all the areas that are listed
General information 1 Inspector: ____________________ 2 Structures inspected: __________________________________________________ 3 Type: 1 / 2 / 3 / 4 / Condo / Mfg / ____________ Age: ________ 4 Client: __________________________________________________ 5 Start: _______________ End: _______________ 6 Fee: ________ Payment method: Check / Cash / Invoiced / Escrow / ____________ 7 Present: Client / Owner / Tenant / Realtor / Builder / Contractor / ____________ 8 Occupied: Yes / No / No, but furnishings present / ____________ 9 Weather: Clear / Partly cloudy / Cloudy / Rain / Snow / Fog / ____________ 10 Temp: Cold / Cool / Warm / Hot / ____________ Ground: Wet / Damp / Dry / Frozen / ____________ 11 Front of structure faces: N / S / E / W / ____________ Entrance faces: N / S / E / W / ____________ 12 Foundation: Unfinished basement / Finished basement / Crawlspace / Slab / Post-pier / ____________ 13 Excluded: Septic / Security / Irrigation / Pool / Hot tub / Well / Shed / Playground / Sauna / Outdoor lighting / Vacuum / Water filter / Water softener / Sound / Intercom / Generator / Sport court / Sea wall / Outbuildings / ____________ 14 Excluded:Furniture, stored items: Many | Some Winterized 15 Utilities not on: Natural gas | Propane | Water | Electricity | Oil 16 General warnings: Gas leak No CO alarms Pre-1979 Abandoned oil tank
Exterior 1 Footing material: Concrete / Masonry / Logs / None / Not visible / ____________ 2 Foundation material: Concrete / Concrete block / Post-pier / Brick / Stone / Steel on block (mfg homes) / ____________ 3 Wall structure: Wood frame / Steel frame / Concrete block / Pan Abode / Log / Brick / Stone / Straw bale / ____________ 4 Wall cover: Wood clapboard / Wood panels / Comp wood clapboard / Comp wood panels / Cement-based clapboard / Cement-based panels / Wood shingles / Wood shakes / Vertical wood / Brick veneer / Stone veneer / Stucco / EIFS / Metal / CAB / Vinyl / Masonite / ____________ 5 Driveway: Asphalt / Concrete / Aggregate / Gravel / Dirt / Permeable concrete / Porous pavers / Cobblestone / None / N/A / ____________ 6 Sidewalk: Concrete / Aggregate / Paving stones / Gravel / Wood / Brick / None / N/A / ____________ 7 Exterior door material: SC Wood / SC Steel / SC Fiberglass / Sliding glass / Wood panel / Glass panel / HC Wood / ____________ 8 Excluded:Vegetation, stored items: Foundation and/or walls | Retaining walls 9 Foundation:Cracks: Minor | Moderate | Major Large tree near Footing above grade 10 Retaining walls: Missing or inadequate guardrails above 11 Cracks or deterioration: Monitor, maintain | Repair-replace | Repair-replace w/ engineer 12 Rotten timbers: Monitor | Repair-replace | Repair-replace w/ engineer 13 Driveway: Minor cracks | Repair-replace | Trip hazard Reseal asphalt New gravel 14 Drain: Missing | Inadequate | Clogged 15 Sidewalks and patios: Minor cracks | Repair-replace | Trip hazard 16 Undermined: Minor | Major, replace slabs 17 Fences and gates: Repair-replace | Repair-replace (major) Repair gates 18 Soil contact: Soil w/in 6" of siding/trim | Soil w/in 6" of siding/trim, rot Unlined wood planter boxes 19 Rotten landscaping timbers: Replace | Replace steps 20 Vegetation: <1' from exterior Stump near exterior Large tree, fall hazard 21 Firewood contact Trees against roof | Trees against roof with damage 22 Drainage: Soggy yard or standing water Negative perimeter slope: Soil | Pavement 23 Downspouts: Loose or detached Missing Extensions missing or ineffective 24 Dented, crushed, damaged Terminate above roof surface 25 Gutters: Missing Damaged Leaking Poor slope End caps missing Rusted 26 Crawlspace vents: Blocked 27 Screens: Missing Deteriorated Clogged Wells: Missing Inadequate 28 Siding: Gaps at penetrations Deteriorated Incomplete or missing 29 Composition wood fiber: Minor, maintain | Moderate, maintain/replace | Major, replace 30 Brick veneer: Minor cracks | Moderate cracks/deterioration | Major cracks/deterioration 31 Cement-asbestos: Asbestos warning Deteriorated 32 Stucco: Repair-replace EIFS Repair-replace stucco 33 Logs: Uncaulked up-facing cracks Rot Sealant failed Masonry contact Bark 34 Soffits: Deteriorated Rot Water stains: Dry | Wet 35 Soffit vents: Screens missing or deteriorated Screens painted or blocked 36 Cantilever: No soffit cover | No insulation or soffit cover Unvented soffit 37 Fascia: Deteriorated Rot Rafter ends rotten 38 Deck: Reseal deck | Reseal deck & rail Repaint deck | Repaint deck & rail Narrow spacing 39 Substructure: Excluded Needs bracing Ledger board: No lag screws No flashing 40 Soil at support posts | Soil at support posts with rot Inadequate clearance to soil below 41 Stairs: Wobbly Rot: Base of stringers | Treads 42 Non-uniform risers: Warning | Repair Non-standard: Warning | Repair 43 Hand rails: Missing Ungraspable Loose Not continuous or too short 44 Guardrails: Wide gaps Missing Wobbly Low Climbable 45 Electrical:Cover plates: Missing | Broken 46 Receptacles: Open ground, rewire or replace with 2-prong | Open ground, rewire 47 Broken Scorched Hot-neutral reverse Loose No power Worn 48 Damaged waterproof cover | Not waterproof | Need in-use cover 49 GFCI receptacles: Won't trip | Won't trip with tester Won't reset Energized when tripped 50 Non-GFCI outside within 6'-6" of ground Damaged by paint Bad GFCI, can't verify others 51 Light fixtures: Inoperable No bulb(s) Loose or substandard Deteriorated 52 Not rated for use in wet location No caulk around back plate 53 Wiring: Exposed Not terminated Splices not in box Extension cord Lamp cord 54 Wires run overhead to trees 55 Exposed wiring at disconnect switch: Install lock | Repair (emergency disconnect) 56 Paint & caulk: Caulk missing or deteriorated Paint or stain failing: Entire | Some areas 57 Window glazing putty missing or deteriorated Caulked head flashing 58 Hose bibbs: No anti-siphon No water No handle Need screws Leaks Winterized 59 Supply pipes outside subject to freezing 60 Vents:Vent caps: Deteriorated Missing 61 Plumbing vents: <3' above opening | <10' from opening 62 Direct vent: Inadequate clearance to openings or ignition sources Installed upside down 63 Propane tank: <3' from opening | <3' from electric meter | <10' from ignition source 64 250/500 gal. tank <10' | 1000 gal. tank <25' | Underground 1000 gal. tank <10' 65 Hornet, bee or wasp nest
Roof 1 Roof inspection method: Traversed / From eaves / From ground / From windows / Not inspected / ____________ 2 Roof type: Gable / Cross-gable / Hipped / Cross-hipped / Pyramidal / Shed / Flat / Mansard / Gambrel / A-frame / ____________ 3 Roof covering: Composition / Wood shakes / Torch down / Built up / Metal / Concrete tile / Clay tile / Slate / EPDM / Rolled / ____________ 4 Estimated age of roof: ____________________ 5 Gutter & downspout material: Aluminum / Steel / Plastic / Copper / Galvanized / Wood / Built-in / None / ____________ 6 Roof ventilation: Adequate / Inadequate / None visible / Unable to determine / ____________ 7 Excluded: Couldn't traverse 8 Snow obscures: Partially | Completely Debris obscures: Partially | Completely 9 Vegitation and maintenance: Clean gutters Clean roof Moss Trees overhanging 10 Trees against roof | Trees against roof with damage 11 Age: Beyond service life < 5 yrs left 12 New composition roof will need: Tear-off | Sheathing | Both 13 Flashing: Deteriorated, rusted Lead improper at top of vent pipes 14 At chimney: Deteriorated, substandard No counterflashing 15 Rubber boots: Deteriorated Lifting or improperly installed 16 Roof design: Slope-slope | Slope-wall | Slope-flat No cricket above wide chimney 17 Siding in contact with shingles below 18 Composition: Deteriorated or missing Popped nails Raised shingles Pressure washed 19 < 3/12 slope Pabco HO25 20 Shakes: Deteriorated | Clean and preserve | Both 21 Metal: Dented or damaged Failing paint Rust Asphalt or tar sealant 22 Concrete or tile: Chipped or cracked Slipped Missing 23 Flat roof: Coating failed Ponding Gaps: Seams | Penetrations | Both 24 Parapet walls: Deteriorated, substandard flashing | Slopes towards exterior 25 Masonite Woodruf: Warning | Repair-replace 26 Vents: Improper B-vent termination 27 Plumbing vent: <6" above surface | <12" from vert. surface Blocked: Caps | Debris
Garage 1 Excluded:Stored items: Perimeter | Perimeter and center | Vehicle door(s) | All 2 Appliances with no protective barrier Walls or ceiling not fire-rated 3 Garage-house door: Not fire-rated | Pet door No auto-close | Repair/replace auto-close 4 Weatherstrip: Missing | Deteriorated | Both Gaps around when closed 5 Vehicle door: Replace | Repair/replace Water stains - caulk, paint Lock inoperable or difficult 6 Not balanced Broken spring No restraining cable on springs Difficult to open or close 7 Weatherstrip: Missing | Deteriorated | Both 8 Vehicle door opener: Inoperable Mechanical auto-reverse inoperable or needs adjustment 9 Lock not disabled Infrared photo eyes: Too high | Inoperable | None 10 Control button: Too low or within reach of children | Loose 11 Entry door: Deteriorated entry Weatherstrip missing or deteriorated Hollow core 12 Attic access: Hatch missing | Hatch not fire-rated Pull-down stairs not fire-rated 13 Stairs: Wobbly Garage-house step missing 14 Non-uniform risers: Warning | Repair Non-standard: Warning | Repair 15 Handrails: Missing Ungraspable Loose Not continuous or too short 16 Guardrails: Wide gaps Missing Wobbly Low Climbable 17 Electrical:Cover plates: Missing | Broken 18 Receptacles: Open ground, rewire or replace with 2-prong | Open ground, rewire 19 Broken Scorched Hot-neutral reverse Loose No power Worn 20 GFCI receptacles: Won't trip | Won't trip with tester Won't reset Energized when tripped 21 Non-GFCI in garage (excluding 1 for freezer) Damaged by paint Bad GFCI, can't verify others 22 Wiring: Exposed Not terminated Splices not in box Loose Extension cord Lamp cord 23 Rodent evidence: Light to moderate | Heavy
Attic 1 Inspection method: Viewed from hatch / Traversed / Partially traversed / Not inspected / ____________ 2 Roof structure: Trusses / Rafters / Not visible / ____________ 3 Ceiling structure: Trusses / Ceiling beams / Not visible / ____________ 4 Insulation material: Fiberglass loose / Fiberglass roll/batt / Mineral wool loose / Mineral wool roll/batt / Cellulose loose / Cellulose roll/batt / Vermiculite / None / ____________ 5 Insulation depth: _______________ Estimated R value: ____________________ 6 Excluded: No attic | No access hatch | Hatch inaccessible | Some areas inaccessible 7 <1" clearance to flue Water stains on wood: Dry | Wet 8 Ceiling insulation: Vermiculite, asbestos warning Paper facing on batts exposed 9 Substandard | Uneven | Missing in some areas | None | None at skylight 10 In contect with recessed lighting: Not IC rated | No visible rating 11 Exhaust fans: No duct | Duct broken or collapsed | No vent cap 12 Access hatch: No insulation over | No weatherstrip Uninsulated pull-down stairs 13 Electrical:Cover plates: Missing | Broken 14 Wiring: Not terminated Splices not in box Loose Extension cord Lamp cord 15 Attic fan: Inoperable | Noisy, vibration 16 Vents: Blocked | Screens deteriorated or missing Inadequate ventilation 17 Water pipe insulation: None | Repair 18 Rodent evidence: Light to moderate | Heavy 19 Hornet, bee or wasp nest
Electric service 1 Service type: Underground / Overhead / ____________ 2 Protection: Breakers / Fuses / ____________ 3 Amperage: 60 / 100 / 125 / 150 / 200 / 400 / ____________ Upgrade to 200 amp service 4 Voltage: 120 / 120/240 / 3 phase, 4 wire, 120/208 / ____________ 5 Location of main service switch: ________________________________________ 6 Location of sub panels: ________________________________________ 7 Location of main disconnect: Top / Bottom / Top bank / All / ____________ 8 Service entrance conductor material: Aluminum / Copper / Copper-clad aluminum / ____________ 9 System ground: Ground rod / Cold water / Concrete encased electrode / Copper / Rebar / ____________ 10 Main disconnect rating: 60 / 100 / 125 / 150 / 200 / N/A / ____________ 11 Branch circuit wiring type: NM sheathed / BX / Knob and tube / Copper / Aluminum multi-strand / Aluminum solid-strand / ____________ 12 Aluminum wiring present: No / Yes / Can't verify / ____________ 13 Smoke detectors: Yes / No / ____________ 14 Excluded: Interior low voltage lighting 15 Panel cover not removed: Stored items, debris Paint/wallpaper Arcing noises 16 Shelving, cabinets or structure Equipment energized Water: On floor | Leaking into panel 17 Service drop wires: Frayed In trees 18 < 10' above ground | < 12' above driveway | < 3' from openings 19 <3' above 3/12 roof or steeper | <8' above a flat roof | <18" above roof ridge 20 Service entrance wires: Frayed Loose point of attachment 21 Drip loop: None Substandard 22 Service mast: Loose Bent Broken or damaged 23 Meter: Missing or broken seal Tap before meter 24 Federal Pacific Zinsco panel | Zinsco breakers 25 Service panel (substitute "sub panel" as needed): Inadequate working space 26 Missing or inadequate legend Tap before main >6 switches or hand movements 27 Bushing missing Undersized wire Wires not terminated Contamination 28 Double or multi tap Doubled or bundled neutrals Open knockout 29 Burned or melted wires or insulation No anti-oxidant Old fuses: Eval | Replace 30 Burned or damaged circuit breaker 31 GFCI breaker: Won't trip Won't reset 32 AFCI breaker: Won't trip Won't reset Recalled (blue test button) 33 Service panel cover: None or not installed Not flush Open closure 34 Screws: Missing Pointed or too-long In contact with conductors 35 Grounding and bonding: Plastic pipe Dielectric connectors 36 Clamp on rod: Missing | Loose | Rusted or corroded 37 Clamp on pipe: Missing | Loose | Rusted or corroded 38 Sub panel: Neutrals and grounds bonded at sub-panel 39 Branch circuit wiring: Aluminum solid strand Knob and tube: Energized | Abandoned 40 Incompatible components:Undersized: Meter base | Service conductor | Main service panel Water heater 1 Estimated age: ____________________ Type: Tank / Instantaneous / ____________ 2 Energy source: Electricity / Natural gas / Propane / Oil / ____________ 3 Capacity: 30 / 40 / 47 / 50 / 52 / 65 / 66 / 80 / Not visible / ____________ 4 Manufacturer: American / American Proline / American Standard / A.O. Smith / AquaStar / Bosch / Bradford White / Envi-Ro-Temp / General Electric / Hotpoint / Reliance / Rheem / Richmond / Row Con / Rudd / State / Takagi / U.S. Craftmaster / Vanguard / Whirlpool / ____________ 5 Model: ________________________________________ 6 Water temperature: ____________________ 7 Excluded: Shut off 8 Obscured by: Insulated jacket | Stored items | Permanent enclosure 9 Temp > 120 Flame or source of spark <18" from garage floor Reverse plumbed 10 Undersized No catch pan or drain Circulation pump installed 11 Age: Near 8-12 years | 8-12 years or older | Unknown, may be old 12 Corrosion: On tank | Water stains below | Both On fittings 13 Earthquake straps: Missing | Substandard 14 Supply valve: Missing | Handle missing 15 T-P valve: Missing | Leaking 16 Drain line: Missing Routed up >6" from floor <6" from floor Undersized In crawlspace >4 elbows 17 Electric: Substandard wiring No insulated pad 18 Gas: Inadequate combustion air Melted insulation by draft hood 19 No drip leg Scorch marks Scale on burner, pilot assemblies or at draft hood 20 Flame: Yellow | Noisy (whistling) | Floats | Too high 21 Flame sheild missing or loose: Inner | Outer | Both
Heating and cooling 1 Estimated age: ____________________ 2 Primary heat energy source: Natural gas / Electric / Oil / Wood / Propane / Solar / Coal / ____________ 3 Primary heat type: Forced air / Heat pump / Baseboard / Fan wall units / Radiant / Hot water / Gravity / Circulating pump / Steam / Up draft / Down draft / Horz draft / Standard / Medium / High / Gas fireplace/stove / ____________ 4 Primary A/C energy source: Electric / Natural Gas / Propane / N/A / ____________ 5 Primary A/C type: Split system / Heat pump / N/A / ____________ 6 Distribution: Sheet metal / Flex / Metal pipe / Plastic pipe / Not visible / N/A / ____________ 7 Manufacturer: Amana / American Standard / Armstrong / Bryant / Carrier / Coleman / General Electric / Goodman / Heil / Intertherm / Janitrol / Lennox / Luxaire / Payne / Rheem / Ruud / Tempstar / Thermopride / Trane / York / ____________ 8 Model: ________________________________________ 9 Filter location: Return air above / Return air below / Behind grill / Base of furnace / Top of furnace / ____________ 10 Last service date: ____________________ 11 Excluded: <60 degrees, can't eval A/C Can't verify heat source in every room 12 No response: Furnace | Boiler | Heat pump | A/C 13 Shut off: Furnace | Boiler | Heat pump | A/C condensing unit 14 Age:Furnace: Near 15-20 years | 15-20 years or older | Unknown, may be old 15 Heat pump condensing unit: Near 15-20 years | 15-20 years or older | Unknown, may be old 16 A/C condensing unit: Near 8-15 years | Older than 8-15 years | Unknown, may be old 17 Service: Now & annually (heat pump or AC) Now & annually (gas or oil) Now & annually (hydronic) 18 Now & every few years Perform heat exchanger CO test 19 Return air: Open in basement - gas & oil Gaps in attached garage No gaps below interior doors 20 Fresh air: Fresh air timer not set Keep air supply ports open 24-7 21 Filters: Replace now | Wash now | Maintain in future 22 Deteriorated | Not secure | Wrong size | None 23 Ducts: Broken or disconnected Broken hangers Lying on ground 24 Flex duct: Sagging | Supports > 5' apart | Narrow support straps | All 25 Asbestos on ducts: Warning | Deteriorated 26 Ducts need cleaning: Debris, dirt, dust | Rodents | Mold | New construction 27 Insulation: None | Deteriorated 28 Combustion air, clearances and disconnect: Inadequate combustion/dilution air 29 Flame or spark <18" above floor in garage <1" from B-vent flue <2" from double wall flue 30 Single wall flue: <18" w/o draft hood <9" w/ draft hood and oil <6" w/ draft hood and gas 31 Cabinet: <6" from top or sides of furnace/boiler <24" from front of oil furnace/boiler 32 <18" from front of gas/electric furnace or boiler 33 Gas: Rusted or cracked heat exchanger No drip leg 34 Gas supply lines: Rust Flexible connector: Through cabinet | Subject to damage 35 Flame: Yellow/orange | Floating | Noisy or dancing | Pop | Rollout | Changes with fan on 36 Oil: Flame not orange to yellow-white, or sooty Oil smell or soot 37 Oil tank: Buy replacement insurance Leaking | Rust 38 Buy contamination & clean up insurance (for tanks still in use in WA state only) 39 Oil supply lines: Leaking Subject to damage No shut-off valve No filter 40 Barometric draft damper: Defective Spilling exhaust gases 41 Air handler: Noise or vibration Loose v-belt No catch pan in attic - heat pump or A/C 42 Evaporator coils: Ice Cooling fins: Deteriorated | Dirty | Both 43 Outside condensing unit: Not level Noise or vibration No disconnect 44 Refrigerant line insulation deteriorated or missing Cooling fins: Deteriorated | Dirty | Both 45 Inadequate clearance: Vegetation | Structure 46 A/C supply air: Not cool enough | Too cool 47 Hydronic: Open system, Legionnaire's disease
Plumbing and laundry 1 Water pressure: ____________________ 2 Location of main water shut-off: ________________________________________ 3 Location of main water meter: ________________________________________ 4 Location of main fuel shut-off: ________________________________________ 5 Visible fuel storage systems: ________________________________________ 6 Type: Public / Private / Community well / ____________ 7 Service pipe: Copper / Galvanized / PE / Lead / Not visible / ____________ 8 Supply pipe: Copper / Galvanized / CPVC / PE / Polybutylene / Not visible / ____________ 9 Vent pipe: Plastic / Galvanized / Cast iron / Copper / Not visible / ____________ 10 Drain pipe: Plastic / Galvanized / Cast iron / Copper / Not visible / ____________ 11 Waste pipe: Plastic / Galvanized / Cast iron / Copper / Not visible / ____________ 12 Excluded: Laundry appliances Washer had clothes in it 13 Main shut-off not found Meter not found Inspect, pump septic 14 Pre-1986 lead solder warning Lead service pipe Polybutylene 15 Public supply pressure: > 80 psi | < 40 psi, warn | < 40 psi, repair Need expansion tank 16 Galvanized steel supply: Old, advise, monitor | Corrosion, leaks or low flow 17 Copper supply: Pin holes or corrosion Steel hangers 18 Drain and waste: Active leak Stains: Monitor | Repair 19 Oakum packing deteriorated or missing Hanger straps: Broken | Substandard 20 Waste cleanout: Cap missing Bad seal Shows wear: Public sewer | Private septic 21 Laundry: No catch pan or drain for washer | No visible drain Fan timer not set 22 Laundry sink: Unanchored Concrete cracked | Concrete cracked and leaking 23 Dryer duct: Plastic or foil Kinked Broken or disconnected None 24 Needs cleaning Too long Routed vertically Sheet metal screws 25 Water softener discharge: To septic system To sump pump Near foundation 26 Air gap: None or substandard Inaccessible 27 Sump pump: Installed Inoperable Couldn't test No GFCI Not on dedicated circuit 28 No check valve No pit liner
Fireplaces, woodstoves and chimneys 1 Fireplace type: Masonry / Masonry with metal liner / Metal prefab / ____________ 2 Woodstove type: Metal / Metal insert / Ceramic / ____________ 3 Chimney type: Masonry / Metal / ____________ 4 Excluded: Fireplace firebox obscured by ashes or debris 5 Gas: No gas | No response | No controls found 6 Hearth: <18" deep | Deteriorated 7 Clean flue: Annually for all Now: Fireplace | Woodstove 8 Fireplace: Rusted liner Gaps between firebox and face 9 Fireplace firebrick: Minor cracks | Repair, replace 10 Refractory panels: Repair | Replace 11 Damper: Stuck open or closed Deteriorated Missing 12 Woodstove: In garage Replace firebrick Eval and verify safe installation 13 Inadequate clearances: Flue pipe | Stove | Heat shield 14 Chimney:Missing: Screen | Rainproof cover | Both 15 Too short Pie plate Wood burning flue shared with oil or gas flue 16 Repoint mortar Crown deteriorated Cracked flue tiles Major masonry repairs 17 Unlined wood burning | Unlined with gas appliance | Unlined with oil furnace 18 Gas: Vent-free warning Glass: Fogged | Soot 19 Conversion: Damper can close No glass doors
Basement 1 Insulation material: Fiberglass roll/batt / None / ____________ 2 Pier/support post material: Wood / Bearing wall / Concrete / Masonry / Steel / ____________ 3 Beam material: Solid wood / Built up wood / Laminated wood / Steel / ____________ 4 Floor structure above: Wood joists / Engineered wood joists / Wood trusses / 2x6 T&G / Not visible / ____________ 5 Structural: Post-beam missing ties Overspanned: Joists | Beams 6 Notches and bored holes: Joists, various substandard | Studs, various substandard 7 Joist notches: In middle 1/3 | >1/6 of depth | >1/4 of depth at end 8 Joist bored holes: <2" from edge | >1/3 of depth 9 Stud notches: >40% of depth | >25% of depth, bearing wall 10 Stud bored holes: Bored hole <5/8" from edge | >60% of depth | >40% of depth, bearing wall 11 Water: Standing water or wet areas | Past water intrusion 12 Entry door: Deteriorated entry Repair/replace lockset 13 Weatherstrip: Weatherstrip missing or deteriorated | Replace 14 Stairs: Wobbly 15 Non-uniform risers: Warning | Repair Non-standard: Warning | Repair 16 Hand rails: Missing Ungraspable Loose Not continuous or too short 17 Guardrails: Wide gaps Missing Wobbly Low Climbable 18 Electrical:Cover plates: Missing | Broken 19 Receptacles: Open ground, rewire or replace with 2-prong | Open ground, rewire 20 Broken Scorched Hot-neutral reverse Loose No power Worn 21 GFCI receptacles: Won't trip | Won't trip with tester Won't reset Energized when tripped 22 Damaged by paint 23 Wiring: Exposed Not terminated Splices not in box Loose Extension cord Lamp cord 24 Rodent evidence: Light to moderate | Heavy
Kitchen 1 Appliances older than 10 or 15 years 2 Dishwasher: Inoperable No water No high loop or air gap | No air gap 3 Loose or missing bracket Water beneath Noisy Kick plate missing, loose or deteriorated 4 Bad door seal Door handle loose or missing Leaking at air gap 5 Refrigerator: Inoperable Ice maker turned off No ice or water 6 Bad door seal Broken or missing shelving Door handle(s) loose or missing Uses GFCI 7 Range hood: None Light: Light inoperable | Missing bulb(s) 8 Fan: Inoperable Noisy Vents indoors Filter(s) missing Undersized exhaust duct 9 Microwave: Inoperable Turntable inoperable No turntable Digital display defective 10 Range/Oven/Stove top:Inoperable: Bake | Broil | Burner(s) | Oven light 11 No anti-tip bracket Knob(s) missing or damaged Door handle(s) loose or missing 12 Bake element standoffs missing or damaged Downdraft exhaust: Inoperable | Noisy 13 Food disposal: Inoperable Noisy Substandard wiring Corroded or at end of life 14 Hot water dispenser: Inoperable Disconnected 15 Electrical:Cover plates: Missing | Broken 16 Receptacles: Open ground, rewire or replace with 2-prong | Open ground, rewire 17 Broken Scorched Hot-neutral reverse Loose No power Worn 18 GFCI receptacles: Won't trip | Won't trip with tester Won't reset Energized when tripped 19 Non-GFCI within 6' of sink Damaged by paint Bad GFCI, can't verify others 20 Light fixtures: Inoperable No bulb(s) Loose or substandard Deteriorated 21 Closet lighting: Open lamp Incandescent <12" clearance | Fluorescent <6" clearance 22 Exhaust fans: Inoperable or inadequate Noisy 23 Plumbing: Shut-off valve handle missing Supply line leak 24 Faucets: Loose or missing handle Leaks when off Leaks when on Reverse plumbed 25 Sinks: Sprayer inoperable or defective Enamel deteriorated 26 Sink drains: Leak Clogged or drains slowly Substandard repair Flexible pipe 27 No trap S-trap 28 Cabinets: Deteriorated Loose Missing shelving or components 29 Hardware loose and/or missing Drawers difficult to operate No pulls or handles 30 Water damage below sink: Minor | Needs repair 31 Countertops: Minor deterioration Deteriorated Loose laminate 32 Needs caulk at backsplash Cracked or broken concrete 33 Tile, stone and grout: Deteriorated Reseal grout 34 Floors: Refinish wood floor Gaps between tiles in wet areas 35 Vinyl: Deteriorated | Deteriorated in wet areas 36 Tile, stone and grout: Deteriorated | Deteriorated in wet areas Reseal grout
Bathrooms 1 Electrical: Switch within reach of shower Cover plates: Missing | Broken 2 Receptacles: Open ground, rewire or replace with 2-prong | Open ground, rewire 3 Broken Scorched Hot-neutral reverse Loose No power Worn 4 GFCI receptacles: Won't trip | Won't trip with tester Won't reset Energized when tripped 5 Non-GFCI within 6' of sink Damaged by paint Bad GFCI, can't verify others 6 Light fixtures: Inoperable No bulb(s) Loose or substandard Deteriorated 7 Closet lighting: Open lamp Incandescent <12" clearance | Fluorescent <6" clearance 8 Exhaust fans: None with shower Inoperable or inadequate Noisy 9 Plumbing: Shut-off valve handle missing Supply line leak 10 Faucets: Loose or missing handle Leaks when off Leaks when on Reverse plumbed 11 Sinks: Enamel deteriorated Cracked or broken Loose Stopper missing or defective 12 Sink drains: Leak Clogged or drains slowly Substandard repair Flexible pipe 13 No trap S-trap 14 Toilets: No water Loose | Loose w/ wet or damaged floor Clogged or weak flush 15 Runs Flapper valve did not reseat Cracked or broken: Bowl | Tank | Tank lid | All 16 Bathtubs: Enamel deteriorated Clogged or drains slowly Tile or grout deteriorated 17 Caulk missing or deteriorated: At floor | At surround | At base of spout | All 18 Jetted tub GFCI: None visible | No access, cannot verify 19 Showers: Clogged or drains slowly Tile or grout deteriorated Diverter valve defective 20 Caulk missing or deteriorated: At floor | Around surround | All 21 Cabinets: Deteriorated Loose Missing shelving or components 22 Hardware loose and/or missing Drawers difficult to operate No pulls or handles 23 Water damage below sink: Minor | Needs repair 24 Countertops: Minor deterioration Deteriorated Loose laminate 25 Needs caulk at backsplash Cracked or broken concrete 26 Tile, stone and grout: Deteriorated Reseal grout 27 Floors: Refinish wood floor Gaps between tiles in wet areas 28 Vinyl: Deteriorated | Deteriorated in wet areas 29 Tile, stone and grout: Deteriorated | Deteriorated in wet areas Reseal grout
Interior rooms 1 Heating and cooling: No visible source of heat 2 Recalled Cadet heaters, FW, FX, LX, TK, ZA, Z, RA, RK, RLX, RX, RW, ZC 3 Registers: Missing Loose or not flush Damaged Weak flow or no flow 4 Baseboard heaters: Baseboard heater deteriorated Electric receptacles above 5 Electrical:Doorbell: Inoperable Button loose or damaged 6 Smoke alarms: None >10 years old Replace batteries Too few | Damaged or missing | Both 7 Cover plates: Missing | Broken 8 Receptacles: Open ground, rewire or replace with 2-prong | Open ground, rewire 9 Broken Scorched Hot-neutral reverse Loose No power Worn Childproof caps 10 Few receptacles | 2-pronged receptacles | Few & 2-pronged receptacles 11 GFCI receptacles: Won't trip | Won't trip with tester Won't reset Energized when tripped 12 Non-GFCI within 6' of sink Damaged by paint Bad GFCI, can't verify others 13 Light fixtures: Inoperable No bulb(s) Loose or substandard Deteriorated 14 Old fixtures Need 3-way switches at both ends: Hall | Stairs 15 Closet lighting: Open lamp Incandescent <12" clearance | Fluorescent <6" clearance 16 Wiring: Exposed Not terminated Splices not in box Extension cord Lamp cord 17 Fans:Whole-house fan: Inoperable Noisy 18 Ceiling fans: Inoperable Wobbly, unbalanced <7' from floor 19 Ceiling: Minor cracks Dry stains, monitor Wet stains: Roof leak | Plumbing leak 20 Pre-1979 asbestos popcorn: Intact, warn | Deteriorated, needs repair or abatement 21 Walls: Minor cracks 22 Windows: Won't open Lock missing or inoperable Springs broken Vents closed 23 Glass: Broken Double pane seal(s) failed Non-tempered w/in 18" of floor 24 Screens: Missing Holes or tears 25 Bedroom egress: Too high | Won't open, or opening too small | Both 26 Doors: Deteriorated interior Won't latch Binds in jamb No gap for return air 27 Keyed lock or deadbolt on interior door 28 Locksets: Missing Loose Damaged Installed backwards 29 Entry door: Deteriorated entry Weatherstrip missing or deteriorated Hollow core 30 Deadbolt: Key-only, no handle Inoperable or difficult 31 Sliding glass doors: Deteriorated Difficult to open/close Lock inoperable or difficult 32 Double pane seal(s) failed Handle missing or loose 33 Sliding screen doors: None for only source of ventilation Deteriorated 34 Holes or tears Difficult to open/close 35 Stairs: Door swings out over stairs 36 Non-uniform risers: Warning | Repair Non-standard: Warning | Repair 37 Handrails: Missing Ungraspable Loose Not continuous or too short 38 Guardrails: Wide gaps Missing Wobbly Low Climbable 39 Floors: Not level Refinish wood floor Squeaky 40 Vinyl: Deteriorated | Deteriorated in wet areas 41 Gaps between tiles in wet areas 42 Carpet: Loose | Loose with trip hazard Needs cleaning Deteriorated 43 Tile, stone and grout: Deteriorated | Deteriorated in wet areas Reseal grout 44 Miscellaneous: 45 Trim: Missing | Damaged | Both 46 Fixtures: Missing | Damaged | Both 47 Rodent evidence: Light to moderate | Heavy 48 Lead paint: Intact | Poor condition
Marketing Can't Sell Overpriced Properties: You might as well be straight up from the beginning. If you're going to take an overpriced listing, have the nerve to tell your seller that it is overpriced in your opinion. Make sure that you make it clear that you hope to see either a market change or a price decrease in a reasonable amount of time.
Be sure that you also make it clear that no amount of marketing will get their home sold, and that some agents may not even show it if they believe it to be out of the acceptable price range.
Newspaper and Magazine Ads are More for You than for Your Client: The industry consensus is that most print advertising is more advantageous to the real estate broker than to their listing clients. These ads generate phone calls and possible buyers, but generally do not produce a buyer for the specific property in a given ad.
With a recent NAR survey of actual buyers stating that less than 7% first saw the home they bought in a print ad, it's clear that the consensus is validated.
Let your client know these facts and that they shouldn't expect a big showing response after ads run.
Internet Marketing is Effective, but it's a Numbers Game: The accessibility of the internet and the ease with which buyer prospects can research properties makes it an excellent marketing media. However, buyers begin their home searches sooner, and with longer time frames between research and a purchase.
If you are reporting web site listing page views or visits to your client, be sure that they understand that there may be hundreds or more that are only mildly interested or are using their listing as research to justify their interest in another property.
No matter the marketing, it won't sell until it's shown. Actual showings will tell the tale.
If Your Home Isn't Showing, More Ads Probably Won't Help: When you think about a real estate agent's job when working for a buyer, they advise them in their best interests. If a home is over the market price of comparable homes, they may have enough to see and choose not to view your home at all.
In light of our previous discussion of who print ads really benefit, running more of them, or larger ads, won't improve on your showing situation. Consider a downward price adjustment or some significant improvement in the property.
The MLS is the Most Effective Marketing Venue: By placing your property into the Multiple Listing Service, we expose it automatically to all the real estate members in the area. The listing is very detailed and provides significant information about your home for easy access. We offer compensation to any agent that brings a buyer, so it's in their best interest to search the MLS, locate and show your home.
In addition, we do various forms of online prospecting and reverse-prospecting functions in the MLS that have the goal of matching properties with buyers looking for their particular characteristics.
This is with an investor approach, mbut can be easily used by an agent wanting to help a client facing foreclosure
A short sale is a win-win for everyone involved.
The key to taking advantage of this strategy is to understand the dos and don'ts of working with a bank's loss-mitigation department.
Making the Bank's Loss-Mitigation Department a Friend, Not a Foe As soon as your motivated seller is comfortable with you and your short-sale package, the time has come to work with the bank. So you make a call and ask for their loss-mitigation department. (In some banks, it will be called the work-out department, foreclosure department, short-sale department, loan-modification department, or reinstatement department.)
Once you have the bank's rep on the phone, get to work. This person will make or break your deal, so be very nice. Your initial conversation should go something like this:
"Hi, my name is Sue and I am calling on behalf of Bob and Sally Smith [the distressed homeowners]. I have an 'authorization to release information' form I'd like to fax to you. What is your fax number? Great, I'll send it right over."
Stay on the phone while the rep retrieves the form from the fax machine. When he returns, continue the conversation. It should go something like this:
"As you know, Bob and Sally are in foreclosure. I recently met them and they seem like sweet folks. When I found out about Bob and Sally's dilemma, I said I'd try to help. They would like to sell their property and get on with their lives. I own several rentals in the area, and I am willing to purchase Bob and Sally's property. However, we have a big problem."
"I called a real estate agent friend of mine and asked her to run comps for me. Based on her comps and what I know about the area, Bob and Sally owe much more than their property is worth. As I said, I'm willing to help them out of foreclosure - and help you get a defaulted loan off your books - but I can't possibly pay the mortgage balance. Would you consider some sort of short payoff or something along those lines? Great! What do you need from me?"
By taking this approach, you will not come across as a professional investor out to make a killing on the bank's loss. Many investors choose to present themselves that way, but I think you will have much more success as a friend trying to help Bob and Sally. (I certainly have.)
Use either approach - whichever one makes you feel most comfortable. But never lie to get the deal. Given the above scenario, for example, it would have to be true that I did recently just meet Bob and Sally... that I do have rentals... that I do have a real estate agent friend... and that I am willing to purchase Bob and Sally's property.
In your conversations with the bank's loss-mitigation rep, be certain to refer to your distressed homeowners by name as often as possible. This makes them seem more real. (Keep in mind that you are trying to build rapport with the rep - trying to get him to make an emotional as well as a business decision.)
After you send your short-sale package to the rep, call him at least once a day to follow up. Always ask him how the day is going, how the weather is where he is, how the kids are, and so on. You want the rep to look forward to your calls, not dread them.
Find out who makes the actual decision, how long it typically takes, how long the rep can give you to close once your proposal is accepted, etc. If you maintain a helpful attitude, your loss-mitigation rep will push it through quickly.
When your short-sale proposal is accepted, get it in writing immediately. Find a buyer for the property or arrange financing, and get the deal closed. You don't want anything to happen between the bank's acceptance of the short sale and the closing.
Once the deal is closed, send the rep flowers or a gift basket and write a letter to his boss saying how much you appreciate the professional way you were treated. The rep will remember you - and the next time you call about a short sale, he will be more than willing to help you again.
This blog will be a random mix of writing for real estate, including rehab and fixer uppers, foreclosure, marketing and prospecting, goals, investor related information and much more.
Craig Giles
;)
;)
