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Thread: Bank Repo

  1. #1
    Vince Santos's Avatar
    Vince Santos Guest

    Default Bank Repo

    They are a necessary evil in our profession. More than not the ones I inspect are in terrible shape and need extensive repairs from the neglect. Tomorrow I have one and my client told me when the water was turned on the pipes were leaking in the basement. No doubt the home was not properly winterized.


    Do any of you add a disclaimer to your report header when you inspect these types of homes? I'm thinking about something that would explain some of the defects common with a home that has been vacant for a while and lacking general maintenance.

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  2. #2
    Bob Stark's Avatar
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    Default Re: Bank Repo

    Intersting comment.... what sort of disclaimer would you propose??


  3. #3
    Rick Hurst's Avatar
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    Default Re: Bank Repo

    Vince,

    I tell them that their Dad called and said don't do it.


  4. #4
    Vince Santos's Avatar
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    Default Re: Bank Repo

    Quote Originally Posted by Bob Stark View Post
    Intersting comment.... what sort of disclaimer would you propose??
    Just something explaining how a vacant home tends to need significant repairs due to lack of maintenance. Particularly repairs that may not be obvious on the surface but rather behind walls and in supply and/or waste lines.

    Most of the time these homes are purchased by investors and I imagine they already know they will have to put a good amount of work into the home but once in a while I get a couple looking for a great deal on their first home. It's not my intention to get them to run away from the home but I want them to have realistic expectations and understand the potential for larger repairs other than a new coat of paint. Of course most things will be pointed out and reported on anyway..

    Perhaps I am thinking too much out of the box on this.

    Quote Originally Posted by Rick Hurst View Post
    Vince,

    I tell them that their Dad called and said don't do it.
    I have wanted to say something like that more than once.


  5. #5
    Thom Walker's Avatar
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    Default Re: Bank Repo

    Vince,

    It doesn't matter who the Client is in terms of what the report looks like. Just as it doesn't matter whether I'm doing it for the buyer or the seller.

    The cost may vary, but only because I'm a sucker for young kids with the "I can do this" attitude. I will usually cap the cost.

    With investors its a straight hourly cost. Repeat investor Clients seldom show on site after the first inspection. My time seems to be more valuable when they're paying for it.

    So there is no disclaimer. There is a very clear explanation of how they will be billed.

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  6. #6
    Vince Santos's Avatar
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    Default Re: Bank Repo

    The billing was not the issue.

    It was relating to explaining how bank repos tend to need a good amount of repair.

    The inspection today had terrible wiring issues, service panel issues, most windows did not work, missing light fixtures, water stains, water leaks, rot, pests, foundation problems etc. etc.

    While the home was worth the repairs it would cost a chunk of change to get it up to "living standards."


  7. #7
    Eric Barker's Avatar
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    Default Re: Bank Repo

    Vince:

    You and I had identical days. Even with the water off I found holes on water and waste pipes. Literally the entire plumbing system needed redoing. Stone foundation failed, plenty of electric, shot shingles, mold throughout the basement.

    I always plant a bug in the client's ear - no matter what I find in a repo, there's going to be more when they start working on rehabbing. A client who's expectations are too high is a client who's probably going to be calling me after they move in. I always like to prepare them for the great unknowns that lurk.

    Today's client knew the house needed lots and lots of work. By the time I got half way through the basement he knew it was too much and he walked. I have had clients who go ahead with the purchase. Of those that I see again, many will say that the required work was more than they expected or budgeted for. Fine by me, as long as that bug did his job.

    Eric Barker, ACI
    Lake Barrington, IL

  8. #8
    Jerry Peck's Avatar
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    Default Re: Bank Repo

    Eric,

    Very good post.

    I keep saying that over and over ...

    It is up to the HI to train their client into what to expect and what not to expect.

    Raise the expectations too high (or do not make a sufficient effort to lower high expectations) and you will be on the not-so-pleasant end of a phone call asking why you did not tell them you could *not find everything*.

    Hopefully, it is a phone call from the client and not a letter from their attorney.

    ONLY YOU (the HI) can set the "expectation level" of what your client expects from you. Set the expectations lower than you can deliver, then deliver more than you said you could.

    Jerry Peck, Construction / Litigation Consultant
    Construction Litigation Consultants, LLC ( www.ConstructionLitigationConsultants.com )
    www.AskCodeMan.com

  9. #9
    Thom Walker's Avatar
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    Default Re: Bank Repo

    [quote=Vince Santos;5479]The billing was not the issue........quote]

    Vince, I was aware of what you were asking. Poor explanation on my part.
    Let me try again. In my opinion there are no disclaimers that can protect or prepare you or them from issues involved with unforeseen future failures in any house.

    [quote=While the home was worth the repairs it would cost a chunk of change to get it up to "living standards."quote]

    I don't try to influence the decisions about continuing or terminating the deal. I give them as much information as I can and let them make that decision. I don't know their personal finances, I don't know their personal expertise or contacts, and I don't know the given value trend of every neighborhood. I would feel equally bad if I had steered them away from buying some POS where they might triple their money in a short period of time.

    Most of us use disclaimers of some sort. We should all understand that they are paper shields at best.

    I do disagree with your belief that billing isn't the issue. It is a big part of the issue. To responsibly inspect the homes of your description is a big investment of time. You deserve to be compensated for that investment and they need to understand that if they want to tackle the responsibility of a "fixer upper" the cost of that desire starts with an inspection that has value for them. Those inspections cost more. When your compensation is based on time, disclaimers become a nonissue because you will take whatever time is needed to explain the issues you now want to disclaim.

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  10. #10
    Eric Barker's Avatar
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    Default Re: Bank Repo

    Jerry,

    For as much as I can disagree with you, I really appreciated the comment.

    Thank you.

    Eric Barker, ACI
    Lake Barrington, IL

  11. #11
    Richard Rushing's Avatar
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    Default Re: Bank Repo

    Vince,

    Here one that I made and use (open attachment);

    Attached Files Attached Files

  12. #12
    Vince Santos's Avatar
    Vince Santos Guest

    Default Re: Bank Repo

    Thanks again Richard.

    This guy delivers!


  13. #13
    Jon Randolph's Avatar
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    Default Re: Bank Repo

    I think that a disclaimer is a good idea. I have one in the overview section of my report. BTW, it takes me an average of about 10-15 minutes to pressure check a hoome and I charge $10.00 (I'm thinking of raising that to $20.00. I use bungees to hold the toilet floats up and close the faucets/hose bibs. Make sure that there is a meter in place or that the main shut off is closed. You can't pressurize through an anti-siphon, but the washing machine is usually gone and you can use that connection. Make sure that the TPR and the water heater drain are closed. An 11 gallon tank charged to 120 psi will put about ~20 psi on a typical homes supply system with no leaks, but they usually have leaks in which time I refer a plumber because leaks were found and many more probably exist. I know that 20 psi is much less than will be on the system after it is charged with water and that this does not test the drain lines, but it will indicate a large leak.


  14. #14
    Claudia Lawrence's Avatar
    Claudia Lawrence Guest

    Wink Re: Bank Repo MT home disclosure

    You might want to add in your reports that MT homes for long periods of time without running water that the debris in the sewer lines harden to the consistancy almost to cement. Once they take possession, to eliminate the phone call, you might want to tell them to run plenty of water through the system and prepare to call the rotor router guy or plumber to ream out the system. We had plenty of this in 1993 repos as well as we found cement in the toilies...cabinets missing, appliances and you guys have seen enough to know the drill.

    Claudia Lawrence-Cothran
    TWI Affiliates Reporting and Training
    Home of the Uniform Building Inspection Report and OnSiteDataSolutions Software. Over 20 years of Setting the Standards
    The Home of TWI Affiliates, LLC. Products and Services - Home


  15. #15
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    Default Re: Bank Repo

    Mr. Lawrence.

    Thanks for the post. Good advice as REO appears to be a growing segment of this market
    area.


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