What Standard Amenities do You Include to Your Buyer?

Question

Appliances, home warranty, lawn service, etc...

Bill Gulley · Answer

The title search and title policy are usually split, buy pays one the seller pays for one. Since a title search proves good title that the seller must provide they usually pay for the search, the title policy is an insurance policy with the buyer being the insured, just as your hazard insurance is, so the buyer obtains their own policy. But it's not logical everywhere, as Jerry said, it what is customary.

I agree with J Scott as well, I skimmed, but I'd not give contractors names and business numbers until after closing, that would be nice, along with any warranties. I'd not worry about getting stuck with a bill as the contractor was called by the "then" owner, not me.

Example: Hot water heater, warranty by manufacture, installed by Mike's Plumbing, 9/12/14, 555-345-6789.

Too much information about a listing can be an issue, what if you said Mike's Plumbing did all the work and some Realtor hates Mike and doesn't trust his work, what will the say? Or what if the prospective buyer had run ins with Mike? I'd not go there until the dealing was done and closed. :)

Todd Whiddon · Answer

We include as few "amenities"  as possible  "no fridge, no warranty, ect", when we first list, letting our design and renovation speak for themselves and leaving the rest for negotiation.

If we have been on the market for a while and/or the buyer is a hard barganer, we first offer home warranty "probably benefits us more than them", extra appliances,  etc.

Same goes with inspection request items, if we are fresh on the market and get a quick offer, we will only repair safety items or super legit stuff we may have missed on our renovation, if we have been sitting on the market awhile and the buyer wants the electrical panel labeled... We break out the label machine and label that panel like no panel has ever labeled before!

Karen Margrave · Answer

@Brandon Sturgill I was just working on a list of our standards for a new build in San Clemente today. Obviously, it depends on the market you are in, the price point, etc. What we, and many other higher priced builders, offer for standards would not be possible for the majority of markets, etc.

The important thing is to know what your local market is, and what the competition is offering.

Bill Gulley · Answer

What to add really goes to the property and what is expected in the market, you begin adding to enhance marketability, there is no sense id giving extras away if you don't need to.

Now, if you're a rehabber and you add "final touches" that are unique to you as you brand your business, that can be a good thing. Not expensive touches but unique, such as an embossed crest in a fireplace mantel or in trim moldings, a brass mail drop in the front door, brick or stone mail boxes, embossed concrete as stone work, house number counter sunk in an exterior beam, these can identify your work and with a good reputation will add value as a more sought after home than the run of the mill comps. But, you need quality work and a good reputation.....it pays off. Takes five to seven years with a good inventory turn over, but you'll see in some areas ads, like; This is a Don Russell home or a Ted Miller home. Best advertising is word of mouth, but it takes time to get established, which should be one of your goals. :)

Jerry W. · Answer

@Brandon Sturgill  in my state it is pretty standard that seller supplies title insurance.  It is not law, but just common practice.  I cannot speak for all states but I know several states where it is common practice also.

J Scott · Answer

Let me suggest that unless your contractors are providing a written warranty, you DON'T give out their direct contact information to your buyer.  The potential problem that could arise is that your buyer could have an issue, call contractor, have the contractor fix it, and then tell the contractor to send you the bill -- all without your input.

While -- in my opinion -- there are plenty of situations where it's reasonable that you foot the bill for a renovation item that wasn't done correctly, you would much rather those phone calls go through you than directly to the contractor.  Otherwise, you might end up in an argument over who pays a bill for work already completed.

Here are two examples from my previous flips:

1.  I get a call from a buyer saying that after a heavy rain, the roof leaked and the entire kitchen ceiling was soaked and falling down.  Turns out my roofer screwed up, water was able to get under the shingles and ruined the kitchen ceiling.  I called my roofer, had him fix the roof issue, and then called my sheetrock guys and painters and had them take care of the kitchen.  Didn't matter if the buyer had their info and called them directly...result would have been the same (roofer covered cost of fixing roof, I cover cost of fixing kitchen).

2.  I get a call from a buyer saying that their toilet is clogged the day they move in (call was two days later).  I tell them that I'm happy to have my plumber take a look and if it was a renovation mistake, I will cover the cost; but if it's something they did, they'll pay my plumber for his service call.  I also explain that I have final say over who pays.  They weren't happy with that stipulation, but they agreed and my plumber comes out.  Turns out there was about a roll of toilet paper flushed and clogging the drain.  Given that they had the house inspected and that I never even had toilet paper in the house after the renovation, it's nearly certain that the issue was caused after the buyer moved in.  Luckily, the buyer didn't call the plumber directly, or it's very possible they would have tried to stick me with the bill.  Legally, they'd have no grounds, but when it comes to pissing off a customer, sometimes legal grounds are irrelevant.  The fact that he had to go through me and I could stay on top of the situation meant that I wasn't risking losing control of the situation and putting myself in a position where I was extorted into paying more contractor costs.

Maybe not the best examples, but you probably see my point.  I will nearly always give my phone number to my buyers at closing and will tell them to call me should they have any issues.  I've gotten a few calls here and there, but for the most part, my buyers have been completely reasonable with requests.  I've had a few issues that were mistakes by my contractors, and they fixed them free-of-charge; I've had a few issues that were clearly not the fault of me or my contractors and for the most part, I've refused to pay (though I happily give them my contractor's info at that point); and I've had a few situations that were grey areas, and I'll typically pay to keep a buyer happy if the amount isn't too high.

There have been a few buyers who were so difficult during the closing period that I knew I'd regret giving them my phone number, so I didn't.  If they had an issue, they'd have to go through their agent.  Not many of those buyers, but a few.

J Scott · Answer

We attempt to make the property completely move-in-ready.  That includes appliances, washer/dryer, all fixtures, mirrors, etc.

For extra stuff -- like home warranty or furniture -- that's a negotiation point, and for a good offer, we're happy to throw those types of things in.

Brandon Sturgill · Answer

@Karen Margrave  Good advice. I think my problem is I only know one way to rehab...like i was going to occupy the property. I tend to go overboard, but that is just how I feel things should be done. I just put a $14k dual HVAC system in a split-level home because it was the only way to really effective control the climate...I think there is a balance somewhere, though. Thanks, again.

Brandon Sturgill · Answer

@Bill G.  Good advice...integrating that into the business plan.

Brandon Sturgill · Answer

@Bill G.  Thanks for the response. Makes total sense.

What Standard Amenities do You Include to Your Buyer?

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