If you are a realtor in today’s market you need to set yourself apart from the competition. One of the biggest compliments a realtor can get in my opinion is when a customer says their agent was very educated and informed on the entire home buying process. Unfortunately, in today’s market, not all agents know the trade secrets that will make the home buying process easier for their clients. Hopefully, after reading this blog you will have a better grasp of what it takes to get your client properly insured on their new home.
My professional background has given me the inside scoop on what it takes to make every transaction as smooth as possible. Not only am I a property and casualty insurance agent(W011281), but I am also a State Certified Property Appraiser(State Certified RD6460) and also a licensed realtor(SL3230790). I am still heavily involved in all 3 professions today. I have seen the buying process from every angle possible and now I am going to pass my advice to you and hopefully make your next real estate deal that much easier as an agent. If you follow these easy steps it will alleviate some of the headaches that can pop up before and after closing for your client.
When you are showing property it is important to view the home as an “underwriter” for your client. If you think it might be an issue, more than likely it will be. When you arrive at the property make an overall assessment of the condition. If you can look at the roof and see missing or lifting shingles, for example, you need to realize this will be an issue down the road. This is a major concern for insurance companies, especially on roofs over 15 years old. You can always try and negotiate a new roof before closing with the sellers, but I always recommend trying to show properties with newer roofs if you can.
Other things to look for during the initial showing are safety hazards that might be present on the property. These can include missing handrails on steps, large cracks in the driveway(trip hazards), unfenced pools, diving boards, etc. While you may still be able to close on the property initially, you never want to get a call from a client down the road when the insurance company makes them correct these items. Correct, this may not be your area of expertise, but it can leave a bad taste in your clients’ mouth. This can hinder your ability to get referral business from this client down the road. It makes you look good as a realtor to advise the client that these might be an issue after closing and give them fair warning.
Below are some examples we see as insurance agents.
Now that you have a contract on the property, what are the next steps? A full home inspection is always standard with most purchases, but what else might you need to get done in the inspection period of the contract? The first thing to do is determine the age of the home. If the home is over 30 years old you will want to get a 4 point inspection as well. This is what the insurance companies main concern is. The 4 point will summarize the roof, electrical, HVAC and plumbing. There are several red flags that arise on these inspections that can hinder the clients’ ability to get insurance. Below are the things to looks for.
The overall condition of the roof is very important. Age is the main factor. Most carriers will not insure a roof over 15 years old, some will allow you to go up to 20 years old when it is in good condition. If the inspector notes missing shingles, lifting shingles, worn shingles etc this will hinder the insured’s ability to get new insurance until the roof has been replaced.
The electrical has several red flags that may arise. Aluminum wiring is a major issue with all carriers. The house will either have to be completely rewired or updated with AlumiCon or Coppalum connectors. The breaker box is also a concern. If the breaker box has the brand name Federal Pacific, Challenger or Sylvania most companies will require you to replace before you can close. These types of panels are fire hazards and most home inspectors will let you know if they are present. If the home inspector notes safety issues on the report they will have to be repaired as well. These can be double tapped wires, insufficient amps, etc.
The plumbing can be a little tricky. Most insurance companies do not like Polybutelane or Galvanized plumbing. They prefer copper, PVC, or CPVC. We do have some carriers that accept Galvanized plumbing as long as it is in good condition. They also recommend that all water heaters be less than 20 years old.
Most companies just require Central HVAC that is updated and up to code. We hardly see many issues with this portion of the inspection. A home with no central HVAC will be ineligible.
The final step in helping your client get the best possible option for insurance is considering a wind mitigation report. What is this report exactly? This report is used to get your clients discounts on the insurance when the roof has been updated. There are several factors that go into a wind mitigation report that can help your clients rates. My recommendation is to always get a report done if the roof has been installed after 2002. This is when Florida changed the building code on roofs. If the home was built 2002 or later you do not need one of these reports, as the credits are automatically applied. If you have a home with a flat roof a wind mitigation report will not help. The wind mitigation report can save your clients hundreds of dollars a year on the insurance.
Now that you have this ammunition hopefully it will help you to better grow your business. If you ever have any questions or concerns feel free to reach out to me or any agent here at Pablo Beach Insurance.
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