Don’t Make an Offer Without Including These 10 Items (Save Thousands)

Ashley Kehr:
You could offer the highest price on a house and still lose the deal or worse, win it and deeply regret it. Because of what was not in the contract, today DFW realtor and mortgage loan officer, Layla Smith, is going to walk us through the 10 things she puts in every buyer’s offer to protect her clients. These are the terms most people overlook and the ones that could save you thousands. Today, we are talking about one of the most underrated skills in real estate, not finding deals, not financing them, but actually writing the offer in a way that protects you from the moment you sign to the moment you close.

Tony Robinson:
Our guest today is a DFW realtor and licensed mortgage loan officer who started her career as an investor alongside her husband before earning her license. She knows what it feels like to be on the buyer’s side and that experience shapes every offer she writes.

Ashley Kehr:
This is The Real Estate Rookie Podcast. I’m Ashley Kerr.

Tony Robinson:
And I’m Tony J. Robinson. And with that, let’s give it a big warm welcome, Layla. Thank you for joining us today.

Laila Smith:
Thank you for having me.

Ashley Kehr:
Now, Layla, before we get into your list here, give us a 30-second version of your story. So you started as an investor, then you became a realtor and also a loan officer. What made you want to do all three of these things and how does the combination change the way that you write offers?

Laila Smith:
Well, I decided to start all three really because I actually started being a lender and then a realtor after that with investing as well, just because it made it a complete package for my clients.

Ashley Kehr:
I haven’t run into anybody else I know that is all three of those things. Do you know Tony? Especially an agent and a lender, I don’t think that I … Unless somebody just didn’t tell me that.

Tony Robinson:
David Green, no. Oh, wow. David Green, I think, is checks that box. And James Dainer. Jimmy has a lending company too. Okay.

Ashley Kehr:
Now you’re getting ahead of yourself. Okay. I know two people. Now three.

Tony Robinson:
Well, let me ask, right? Because I think that a lot of investors just kind of stay investors, but it does give an agent, I think, a slightly different perspective because there are a lot of investors who end up becoming agents. I think there’s fewer agents who are also investors. So how does that background of you being an investor maybe give you an edge? Or maybe was there a moment that you realized a lot of agents were leaving some of these critical protections on the table for their clients they were working

Laila Smith:
With? Yeah, I think it gives an edge because I know exactly when I go into investment transaction, I know exactly what the numbers are and what is going to be profitable and what’s not. So it made it easier to be able to pivot with investing and lending. And then real estate is just being a realtor was just given when it went into that.

Ashley Kehr:
And what about the investing? How did you start? What was your first investment that you did for real estate?

Laila Smith:
So we did a property over here in about 30 minutes away from my house. It was a single family residence that had been vacant for quite some time and came in and my husband and I, at the time, we gutted it out and then just built it from the ground up. And that was the first transaction. It was exciting and scary, but exciting at the same time.

Tony Robinson:
Yeah. I mean, a full gut on your first deal. That takes some guts. But now you’re here, right? And how long have you been in real estate in general now, Layla?

Laila Smith:
In the industry total, almost 17 years.

Tony Robinson:
Okay. So you’ve seen some of the ebbs and flows that come along with investing in real estate. Now, you shared a list of the 10 things you include in every buyer’s offer to protect your clients, and a lot of these are things that people overlook. So I want to go through each one of those 10 things, starting with number one. So the seller paid home warranty. Most buyers don’t even think to ask for this. So what is a seller paid home warranty and why do you fight for it in every offer? And what does it actually cover after the buyer moves in?

Laila Smith:
Yeah. So the seller paid home warranty, typically it is a warranty that is given to the buyers. Usually it’s paid by the seller for about a year. And some of the major items that those things cover is going to be like your appliances. It’s going to be a protection for things like your HVAC unit, plumbing, electrical, things that may happen within the first year of moving. That’s what it covers for the clients.

Tony Robinson:
Ash, have you ever had one of these on a transaction you’ve done, a seller paid home warranty?

Ashley Kehr:
No, I have not.

Tony Robinson:
Yeah, me neither. I’ve never dealt

Ashley Kehr:
With that. Yeah.

Tony Robinson:
Never even thought to ask for that. Layla, what’s the typical cost to the seller? Is this $500 or is it $5,000?

Laila Smith:
So a decent warranty usually is going to run you about $1,000, between eight to $1,000.

Tony Robinson:
And I guess how hard is this to actually get? Is this something that sellers are typically open to or is it maybe a bigger fight to get them to agree to this?

Laila Smith:
So most of the time it is more so by just asking. I think a lot of agents miss that for their clients. It’s not really difficult to get because most sellers are open to paying that small cost to, in a way of a good negotiation to sell the home, they’re more willing to do that. So not very difficult at all. It’s just about asking.

Tony Robinson:
Yeah. And I guess how many things are covered under the seller paid home warranty? You mentioned the appliances. I’m assuming larger systems as well, like the HVAC, but does it include the roof or if a window stops, how much wiggle room do we have within this warranty?

Laila Smith:
Yeah. So it wouldn’t cover things like the roof or foundation, but it will cover things inside the house. So like we talked about like the fridge or like the oven or just appliances that came with the home. It can also cover things like if there was any type of like plumbing issue, minor things that you may not need to go to your homeowner’s insurance for, the home warranty is going to be covering those things.

Ashley Kehr:
Yeah. I really haven’t had any experience at all with a home warranty. I know it’s pretty common with the new builds correctly where it will come with a home warranty, but I never even thought to actually have it, have the sellers get it for you. I just purchased a property that on the day of closing, the basement was flooded during the final inspection. And so the boilers underwater, the hot water tank’s underwater. And so it was like crunch time, what should we do? And we just kept thinking like, oh my God, thank God this happened before closing. This could have happened after we would be buying a new boiler, a new hot water tank, new sump pumps, draining this out. So it definitely puts it more into perspective of like things that can happen after closing. But what we ended up doing was they gave us a seller credit and that’s how we ended up working it out.
But if you’ve already closed on the property and something breaks or dies right after, then you can’t get that.

Tony Robinson:
Yeah. Now it’s yours right now you’ve inherited that issue. But it actually does because we bought our primary home as new construction and it did come with a one-year warranty from the builder. And I’m so glad that that came in because there was one day I was sitting in my dining room area and my sister was there with me and she kind of looks up and she’s like, “Hey, your ceiling’s wet.” I’m like, “What do you mean?” And I look up and like there’s this big wet circle on my ceiling and it turns out that my son’s bathroom is right above and there had been some kind of leak in the plumbing in his sink and it had been dripping, dripping, dripping. We were in the house for maybe six months at that point. So it had been a while and this water had just been dripping for six months.
Now, luckily because it was under warranty, they came in, they cut everything out. They literally had to rebuild basically his whole portion of his bathroom, redo all the drywall and the ceiling up there and obviously remediate whatever mold that had happened during that time as well, but it was all covered. All we had to do was make a phone call. Now to your other point, Ash, about finding surprises before you close, I was buying a home from a wholesaler. And obviously we expect these homes to be in disrepair. It was a home that needed a lot of renovation, but we walked the property, we got our scope of work and the day before, or not the day before, it was like maybe a couple days before closing. For whatever reason, we had to go back just like it went additional measurement. And when we walked back in, the entire ceiling had collapsed inside the main living area and talk about a big material change.
So luckily we found it beforehand, but yeah, things can get crazy if you wait until afterwards.

Laila Smith:
Yeah, definitely.

Ashley Kehr:
Okay. Now another thing that you like to put in is mentioning that the repair deadline is in writing. So what goes wrong when repair agreements are vague and what does it look like when you write repair deadlines the right way?

Laila Smith:
Well, we definitely want to have a clear language requiring the repairs to be completed and also be able to do a reinspection prior to closing. And most of the time we try to create a deadline where it’s like, if we’re going to be having repairs done, we want to make sure that we have a date set so we can be able to renegotiate with the seller.

Ashley Kehr:
I was selling a property and there was a telephone line down and they wanted the cable taken off the property or fixed or whatever before closing. And so I had my assistant take care of it and she called and one company came out and said, “Nope, that’s not our line. It’s this company, whatever.” She’s like, “Don’t worry, I’ll take care of it, whatever.” The day of closing, when they’re going to do their final inspection, they’re like, “Oh, this line is still down.” And it was kind of to the point the two agents were like, “Well, it’s not like we’re not going to close over this. So we’ll still continue to close or whatever and just they’ll have to figure out whose line it is and call and get it done.” So it wasn’t that big of a deal. But if the buyer in that situation, I would be kind of upset, you asked for this to be done, it was in the contract to be done and yet it wasn’t done and there was like no repercussions at all.
And I do like the idea because I don’t think in any of the contracts I’ve ever done, there’s like a date as to when the repairs had to have been done. But I’m also buying a lot of dilapidated properties where I’m not even asking for repairs to be done, but I think that is such a good idea of like to even give you time to inspect and make sure it’s properly done so it’s not the day of closing and you’re frantic and panicking like I was.

Laila Smith:
Correct. Yeah, we definitely don’t want to do that. And usually we’ll have an initial date that the repairs after we submit an amendment for the repairs to be done and then we have a follow-up. And usually I try to get it done a week before closing because you don’t want to wait until closing and be surprised that you’re excited to sign these papers, but all the repairs that were requested weren’t completed. So try to make sure that we’re kind of looking at the property one more time before going into closing and that everyone’s happy, the client’s happy and I walk into any surprises.

Tony Robinson:
Layla, for that re-inspection clause, you said like a week prior to closing. So since your due diligence period has already ended, if you get to that date of the re-inspection and they’re not completed, does the buyer now have the ability to walk away and still get back their earnest money deposit? Is that how you structure it? Or what happens if the work isn’t done?

Laila Smith:
Correct. Yeah, because when I submit an amendment for the repairs to be completed, that also said in my report, I am putting in there that it has to be done prior to closing. So depending on the amount of days, depending on when closing is happening, we’re going to have a set date that the repairs has to be completed by, whether it’s three days or it’s five days, depending on the length of type of work that’s being done to make sure that it’s done. If not, then yes, they will be able to get their earnest money back.

Tony Robinson:
I love that. I’ve never included a re-inspection clause into any contract. So I love this because I’m picking up some things for myself. So the third point you had, Layla, was that window coverings convey, and this one sounds small, but it can actually save you thousands of dollars. And I think a lot of people overlook this. So walk us through why window coverings matter and how buyers get burned when it’s not actually in the contract.

Laila Smith:
Yeah. I mean, you definitely want to have those things written out. So if you walk into a home that has blind shutters, things are going to be a little bit more of an expense. It’s not just your typical blinds, basic builder grades, blinds in the house. You want to make sure that we have that in a contract. So even like drapes, like the buyer walks in, they fall in love with the drapes. We want to make sure that we include that in a contract. So that is something that if it is present, I will include it to make sure that if the seller is going to leave it behind, we want to make sure that happens and not, again, walking in after you close and then whereas the beautiful drapes or the nice shutters that was put in, they’ve taken it to the next home.
So those are things I would definitely want to make sure that is included and I make sure that it is.

Tony Robinson:
Yeah. And you don’t realize how expensive those things are, but it’s like if you have a lot of windows in your house, it adds up. And again, my wife and I, when we bought our first home, biggest investment we’d ever made, this is before we were real estate investors and it was new construction. We just got to build or grid everything. And because of that, we got no window treatments at all. There was nothing on any window. And we lived like that for two years before we even bought blinds because we were just doing the math. It’s like, man, this is so much money for blind. So I love this.

Ashley Kehr:
Did you hang up sheets? College kids do hang up sheets.

Tony Robinson:
In our bedroom, we had temporary shades, at least for the one by our bathroom, because when get out the shower, there’s this big window there, so we had to figure out something. But Layla, what does the actual language look like to make sure that there’s clarity? Because I feel like maybe that there can be some ambiguity there or signals get mixed. So what does the actual language look like?

Laila Smith:
The language is going to be specifically like the fixtures convey. So we’ll want to be very specific because if they want to be able to keep the shutters and not really caring for the drapes, we’ll want to be able to write that out. So that’s something that I will write off specifically for the items that are going to be left behind because most of those things are personal items to the seller and sometimes they feel like they can take the drapes with them, but I do write it out specifically for my clients to make sure that the buyers are fully protected in that aspect.

Ashley Kehr:
Now, what about seller paid closing? Has This is your fourth item in here and you negotiate seller credits that actually reduce the buyer’s out- of-pocket expenses. And this is kind of what happened to me on the day of closing unexpectedly is I got a $25,000 credit at the closing table and actually took a check home. So how do you frame that ask without killing the deal and what does it actually mean for a buyer’s bottom line?

Laila Smith:
Yeah. So the closing costs on average can run anywhere between two to 5% on the purchase of a home. A credit that can be given to the client, especially for first-time home buyers that can be given to them to help out with closing costs. I usually go in with that negotiation as far as how long the property’s been on the market, how eager my clients are. And that would help me determine the amount of closing costs that I’m asking for my clients. But try not to kill the deal because you want to be fair as well, you’re working for a buyer’s agent, but you want to also be fair in looking out the seller, where they stand with the property and make sure that we are kind of fitting the right numbers, and which also kind of run into the type of loan the client has as well, can determine how much of a concession that I’m going to be asking for.

Tony Robinson:
Layla, can you elaborate on that? What do you mean by the type of loan they have and what are the restrictions depending on the loan type?

Laila Smith:
Yeah. So the difference would be between efficient and conventional, for example, and also depending on how much you put down. So efficient, you can go up to 6% in concessions. Conventional, you can start at 3% all the way up to 9%, but that really just depends on how much money they’re putting down. So it’s going to be anywhere from depending on the loan size, and we can start at 6% and try to negotiate to work our way down, but I always go in for the max. So full protection. Yeah.

Tony Robinson:
And why a credit versus a price reduction from the buyer’s perspective? Because for the seller, it’s the same thing, right? Whether they give a credit or they reduce the price, a lot of it works out to be the same in terms of cash to them at closing, but why is maybe one more beneficial for the other or over the other for the buyer?

Laila Smith:
Yeah. For the buyer, the credit actually makes more sense because it helps them with their bottom line as far as what they’re bringing to close in. And most people are going to be first time home buyers that I’m working with. So usually they need more help with the amount of money they’re bringing to the closing table. So if we can get a credit to help out with that overall cost that’s going to reduce their closing costs by 10 or 15,000, it’s more advantageous for them than just getting a price decrease that they’re still going to come up with the same money anyway at closing. So it’s actually better for them to bring less money to closing that they can put into their home when they first move in.

Tony Robinson:
And as you just said, you got to check at closing because of this credit.

Laila Smith:
Correct. Yeah. Yeah.

Tony Robinson:
Yeah. That’s crazy. And think

Ashley Kehr:
About that. I mean, yeah, they have to go and buy a new HVACs. It’s not like it’s money. I get to shove under my mattress.

Tony Robinson:
But it’s still a crazy concept that you can purchase a piece of real estate that’s going to produce cashflow, appreciate over time, give you tax benefits, and that if structured the right way with your loan, your down payment, your credits, that you can actually walk away with money in your pocket. Ash, we interviewed someone, and it was a while ago, I believe his name was Andre, but he used the NACA loan. And I’ve talked about NACA before, but it’s a 0% down loan that you can use on your primary residence up to four units. And he bought a four unit, I was able to negotiate some credits at closing, and because it was a zero down payment loan, I think he walked away with 20 grand at closing for this four unit property that he was unable to house at. So it’s like my mind is blown that more people aren’t trying to leverage seller credits to help reduce the cash they need to actually get into some of these deals, especially if you’re doing it for a house act.

Ashley Kehr:
Yeah, because your loan is set. So especially me getting a credit last day, your loan amount is already fixed. You’re proof for that amount for that house and they’re not changing and saying, “Oh, you’re getting a seller credit today. We’re going to take that money off of your loan and now you have a lower loan or whatever.” So that’s part of the reason as to why you walk away with the check, but yeah, it can be. So maybe it’s even better just to negotiate the seller credit at the last day.

Laila Smith:
Oh yeah. No, it’s so much better. And even on the loan side, I’ve been able to use some of those credit because we have a max amount that we can use, but on the lending side, we could use some of that credit to even bring their interest rate down, which reduces their payment as well. But the credit is always great to have for sure. Yeah. And I’ve had several clients actually walk away with money at the closing table, they’ve actually gotten a check because we have so much more.

Tony Robinson:
Yeah. And that’s a great situation to be in, getting paid to buy real estate. All right, Layla, so your fifth point is clear possession terms, right? So move out dates and penalties spelled out in writing. Why does this clause matter and what does it look like when possession terms are left maybe more vaguely than they should be?

Laila Smith:
Yeah. So I mean, the nightmares and error could be on closing date, your seller has not moved out and you are now roommates. So you definitely want to have that written out and have a clear possession date and which is always going to be on closing date for me when I do a contract. So we need to make sure that we don’t have any issues as far as like coming, they having completely moved that was their personal items or anything else, or if they need to have a lease back agreement, you want to have that clearly written out as well.

Ashley Kehr:
Actually, it was the first ever house that I bought on my own without a partner. And it might’ve actually been the first house that I bought that didn’t have tenants in it or wasn’t already vacant, but it was a family that lived there and they were moving out and we were doing a double closing. So they had to close on their house and then within that hour, they were closing on their new house. Well, when I went to do the final walkthrough inspection, they were literally still moving stuff out of their house. And this was like, I was on the way to closing. So I didn’t even get to see the house completely moved out. So when I actually, we went to the actual county clerk’s office to do the closing and we sat down at the table and my agent actually negotiated a credit for me because it was not clean at all.
It was supposed to be like broom swept or whatever and it was not like the fridge, I threw it out. It was so disgusting. And so their hands were kind of tied because they needed to close to close on their new loan. So it gave me a little bit of negotiating power, but that was like one thing I never wanted to do again is like do the final inspection and they’re not even completely moved out yet. Okay. So that’s five down and we’ve got five more to go. And the next batch is where Layla get into the clauses that most rookies have genuinely never heard of. So the appraisal protection clause alone could save you from one of the most common and most painful surprises in a real estate deal. So stay with us. We’ll be right back. Okay. Welcome back to Real Estate Rookie.
We just went through the five things that Layla has every buyer put into their offer. Now let’s finish the list with five more protections and these ones get into some territory most buyer’s agents completely ignore. So Layla, our next one, number six is appraisal protection. You’re using contingencies or capped appraisal gaps to prevent overpaying if the value comes in low. So walk us through what actually happens when an appraisal comes in under the contract price and how this clause protects your buyers.

Laila Smith:
The appraisal gap scenario that I can think of is you offer 350,000 on a property, but it appraises for 330. Without this protection, you’re going to be owing the difference. And typically I make sure that that is written out for my clients to make sure they’re not in that position to have to come out of pocket with that extra money. So we definitely want to have that written out in the contract.

Tony Robinson:
And what are the different ways that a buyer can go about protecting themselves if there is any sort of appraisal gap? What are you writing into the contract to give them some flexibility there?

Laila Smith:
So there is a contingency document that I usually add to every contract that basically saying that if the house does not appraise for the offer price, then my buyer can choose to walk or they can choose to renegotiate. So usually that’s the option that I have for them.

Tony Robinson:
This was like a really big thing.

Ashley Kehr:
Have you ever bought a house that didn’t appraise?

Tony Robinson:
The only time I bought a house that didn’t appraise, and this is kind of like a crazy store. I think I shared this on the podcast before. We were buying a new construction and it was supposed to be a four bedroom, but it ended up being a three bedroom. Oh yeah. So that was one where it didn’t quite appraise, but luckily we were able to get the builder to rectify. But aside from that, we haven’t bought any property that didn’t actually appraise. But I think like coming out of COVID when the market was going crazy, there were so many people buying properties way above appraised value. And it was like you had to almost include in your contract how big of a gap you’re willing to cover. But I’ve personally never done that. Ash, what about you?

Ashley Kehr:
The only one was new construction also, and it was my primary. And it was when we did all of our blueprints with the architect, we did a finished basement so that we would have the plans and the drawings for whenever we did decide down the road to finish the basement. And when we went through our final draw to close out our loan, they flagged it and had sent the inspector out and said, “No, it’s not finished. The basement needs to be finished. That was what was in your drawings.” And that was like panicking like, “Oh my God, we don’t have another $50,000 to finish off the basement.” And it had a bathroom, it had a bar, all this stuff, all these rooms. And so what I ended up doing was I fought it by saying, “Here is my contractor’s contract, his scope of work that you reviewed and you approved and you set the draw schedule to, and nothing in that contract shows any finishes to the basement.” So they actually honored it and they agreed and they said, “Yes, it wasn’t in the contract.
It wasn’t in the scope of work. You’re fine, you’re good. We can close out the loan, you’re okay.” But that was definitely like a really panicky situation there.

Tony Robinson:
Look at you, Ash, many lawyer over here, and this is like pre AI days, you had to do all that sleuthing on your own.

Ashley Kehr:
And that was like, I probably only like two properties, investments at that time. So very, very … And this was my first ever loan that I ever got from a bank too. So it made it even more scary, I feel like.

Tony Robinson:
Well, on that point, let me ask, because I feel like the appraisal gap was a big thing, like I said, coming out of COVID, are you seeing that as much of a necessity today? Have market conditions maybe shifted how often you’re including this one or is this one that you just always include no matter what?

Laila Smith:
It’s one that I always include no matter what, just because … And we don’t have a whole lot of homes that we’re dealing with that right now, especially like you said, after with COVID homes were inflated so much. And I think as the market’s starting to adjust, we just want to have that for protection because the house that was appraised for increased in value a hundred thousand four years ago is not going to be the same today. So just to make sure that my clients are fully protected, that is something that I always include in every contract. There is also a difference with FSA always is automatic with the appraisal that it has to meet that. But with conventional, definitely I always include that into the contract.

Tony Robinson:
Your seventh protection here is the option period leverage. Now, this is basically an inspection that allows you to renegotiate credits or termination if major issues are found. How do most buyers use the option period and how should they actually be using it?

Laila Smith:
Yeah. So the option period is a paid time that I usually discuss with my client. You’re paying for the house, kind of like you’re renting the house for X amount of days to have the right to terminate if the inspection does not go the way you want it to go. And there is a difference between the option period and option fee with option money, with earnest money, and also leveraging that as far as how much money they can put down for the option for us to buy those limited amount of days to have enough time to do inspection and then renegotiation after that.

Tony Robinson:
So let me ask that, because I just want to make sure I’m tracking. When you say it’s paid time, what do you mean by that?

Laila Smith:
Yeah. So option period, typically you’re paying per day. So it can range whatever you and your client talk about and feel like it’s the best fit for you. So anywhere from two to $300, like $50 a day, for example, that you’re paying per day for you to do your inspection. So you’re asking the seller basically take your house off the market for five days or 10 days. So we can do the inspection, we’ll pay you $50 a day as an example to do the inspection. And if it doesn’t work in our favor and we cannot come to an agreement for negotiation on the repairs, then I owe you that money and I can walk away free and clear. So it’s just really buying the client’s buyer’s protection at that time, but also giving the seller something back just in case it doesn’t work out for either parties.
I’ve

Tony Robinson:
Never heard of this before, so what’s the timing on this? Is this before you have an actual purchase and sell agreement accepted? Because you said take it off the market, but if you’re already under contract, then technically it’s still on the market, but it’s listed as pending or under contract. So what’s the timing of this paid period?

Laila Smith:
So the timing usually is after the contract has been executed. So usually in Texas, when the contract’s executed, we have an option period. So the option period, again, it can be, depending on how aggressive the offer is, it can be two days, it can be three days, it can be on average, it’s about seven days, seven to 10 days that you’re technically asking the seller to remove the house off the MLS and say the house is technically on a contract, like a contingency contract, so you’re pulling it off the market. No one else can put a contract in at that time until the option period is over.

Tony Robinson:
That’s interesting. Ashley, is it like that in New York? Because I feel like for me, whenever I sign a purchase agreement, I have my due diligence period, which sounds or similar to this option period, but we don’t have to pay for it. It’s just like an understanding that, hey, we need the opportunity to get into the property and do our inspections. Is it like that for you in New York too, Ash, or do you have something similar to this?

Ashley Kehr:
Yeah, it’s the same. You have your inspection period and sometimes it’s actually very vague. It’s just like, okay, once the inspection is done, you have to let them know if you’re going to make any change or things like that. It really depends on the timing as to when your agent thinks that they can get an inspector out there. So sometimes it’s as fast as two days, so it’s like three days is your inspection period, could be seven days, but usually not over that for single family or small multifamily at all. All

Tony Robinson:
Right. So the eighth thing on your list is survey responsibility. So responsibility for the survey, existing or new, is something most buyers never even ask about upfront. So Layla, what is a survey? Why does it matter for an investor and what happens when this is left too vague?

Laila Smith:
Yeah. So the survey is basically kind of like you’re looking at a map of the property lines. So it shows anything like from the encroachment, easements, flood zones, any destination with that property that has to do with it specifically is what the survey shows. As far as for an investor, you can’t really build on a lot if you don’t have a survey to know how to expand and where your fence is going to be, you need to know your exact property lines. So the survey usually is something that is the seller’s responsibility to have it. However, if the seller doesn’t have the survey, there could be negotiation as far as them purchasing a new survey for the buyer. And if they cannot purchase it in the buyer, that’s going to be the buyer’s responsibility. But that is something that the seller usually will always have.

Ashley Kehr:
I’ve done it a couple times, and I haven’t done this in a while, but a lot of times I would write into my contract that I would accept an existing survey as long as it was done within a certain timeframe. And I can’t even remember what the timeframe was, but my attorney would advise me on that. But that actually did help me get some offers accepted because they don’t have to pay. I mean, now it’s like, I think I’m seeing thousands of dollars to get surveys done. So that is something I’ve done. And I’ve also, when I’ve accepted an offer on a property I’m selling, I also have asked sometimes if they will take an existing survey too, because it’s worth asking. But honestly, and probably in the last couple years, like every deal I’ve done, my attorney has just, they take care of hiring the survey or they take care of getting it done.
Or if I have an existing survey, I just give it to them and I don’t even know if it ends up getting used or they use a new one. I’d have to look at my closing statement. I don’t know.

Laila Smith:
Yeah. So the survey in Texas usually have to go through title and everything in Texas. Every closing has to be reviewed by an attorney. So we have to, when I put that clause in the document, in the contract, basically I’m saying that if the title company does not think the survey is fit, then that’s when a new survey has to be purchased. So you’d be surprised. I had a client that has lived in a home for 26 years and they presented a survey that was in meant condition. So we had no issues, but then you have people who live in the house for five years and the survey have coffee stains on it, right? So then it’s all ripped up and they have to order a new survey. So usually we have to get over to the title company if the client has the survey and the seller has it, and then the title company has to make sure that it has the right stamp on it and it has to be reviewed by the attorney.
And then that’s when we determine who pays for it within the contract.

Ashley Kehr:
I got to ask you guys, because I think about this all the time and I never actually ask anyone, how are you guys storing your title of abstracts in your surveys? Because they don’t like fit in a standard filing cabinet or they don’t scan easily. How are you guys storing them? Tony, where do you put all of your title of abstracts?

Tony Robinson:
Anything that I get back from title … Well, first, I always ask to get everything just emailed to me. But if I ever do get anything that’s physically sent, I don’t think I’ve ever gotten anything that couldn’t scan into my scanner before. So I don’t know. Maybe it’s just like a New York thing, Ashley. They blow it up for you too big because for me, I just scan it all in the Google Drive.

Laila Smith:
Yeah. Same here. I think usually I just get emails on everything and then …

Ashley Kehr:
Yeah. See like this right here.

Tony Robinson:
It’s on legal size.

Laila Smith:
Yeah, legal size. Yeah.

Tony Robinson:
Yeah. That’s true. I do- It’s all

Ashley Kehr:
Paper clipped together and

Tony Robinson:
They

Ashley Kehr:
Want the original when I close it on a paper. So I just have tons of them just sitting in a bucket basically.

Tony Robinson:
That’s true. I do have several of those in the legal size paper and yeah, I haven’t found an effective way to … They’re just sitting in my closet actually.

Ashley Kehr:
Editors, if an address or something on that showed, if you could please blur that off. I tried to flip it, but I think they probably showed the exact parcel or whatever.

Tony Robinson:
Well, Layla, let’s talk about HOA review rights. Again, it’s something I never really ask about. I haven’t bought too much in HOAs, but HOA documents, reviewing timelines, termination rights, this is one Ricky Skip probably all the time when it comes to HOAs. What are you actually looking for inside of the HOA documents and what could potentially make you walk away from a deal?

Laila Smith:
So for the HOA documents, I think specifically we want to make sure that the property is in good standing with the HOA. So if I have a client moving into a subdivision where the HOAs also include restrictions as well, but if the HOA have issues with any type of legal issues, if they have any pending lawsuits, if they have litigation going on or the HOA is not paying their dues, those things can affect our current buyer coming into the subdivision. So that is something that I have to make sure that it’s always covered, that we have kind of like a clear title, but it’s like a clear HOA that when the client’s moving in and also looking for any type of restrictions. So if the buyer is also thinking about possibly renting this property, as an investor, I should say, we have to think about what the restrictions are for an investor.
If they’re purchasing a property that have really stringent rules as far as how many renters can be in the community at a time, that’s something that we want to make sure that we are reading through the contract to make sure that that’s not going to affect my investor. Once the property’s purchased, now they’re like, oh, I can’t even rent the property out because we are over the percentage of renters that we can have in this neighborhood. So we want to make sure that that’s also clear too.

Ashley Kehr:
Okay. So we’re onto number 10, our final one, which is also the final walkthrough and utilities. So this one, you require that utilities stay on through closing, the keys transfer, and a final walkthrough is completed before any funding. Why is this important and what happens when agents skip this or treat it as optional? Well,

Laila Smith:
The final walkthrough is not more self-courtesy. It is a contractor agreement to protect the buyers, to make sure that everything stays on until the day of closing, and also that the buyers can be able to transfer in their name after the day of closing. So things like you want to make sure that things like that the water’s still … You’re not have any leaks in the house the day of closing, or you want to make sure that nothing’s wrong with the units in the house, turning on the HVAC unit, making sure that it does work, make sure the electricity on. That is something that you want to make sure that the electricity or utilities are kept on until the day of closing, until the buyer can actually transfer in their name.

Ashley Kehr:
And you want to remember to call to switch the utilities in your name too.

Laila Smith:
Oh, so that.

Tony Robinson:
And when you sell, remember to switch them out of your name because I’ve had some issues forgetting to do that as well. Now, Layla, we just went through all 10. Now, the last question, because knowing what to include is only half the battle, but how do you put a fully protected offer together and still actually win the deal? So Layla’s going to show us exactly how she does it right after a quick word from today’s show sponsors. All right, welcome back. Now we’ve got the full list, the 10 protections all explained. Now let’s kind of bring it home, right? Layla, the question everyone’s thinking is, can I actually include all of this and still be competitive? Can I actually still get my offer accepted? So we want you to walk us through how you write a winning offer that keeps every one of these protections intact.
So you’ve said that you can offer the highest price and still lose, or you can win and regret that you actually won. So talk to us about what winning and regretting looks like. What is the version of winning a deal that maybe actually hurts a buyer?

Laila Smith:
Yeah. So I’ll just give you some example. I mean, winning with no contingency, what happens with that is that inspection reviews that there are issues with the house and then now you’re purchasing the home or winning without the appraisal protection and now you owe 20,000 over the appraised value. Those are things that you want to avoid. And just having clear possession. So winning without that specific language with clear possession with the property, now you’re a landlord to your seller. So we want to make sure that even though we’re making this emotional decision that we are not trapped in something because we decided not to add these protections for the buyers.

Ashley Kehr:
Now, before we wrap up here, the last thing I want to know is as both a realtor and a mortgage loan officer, you are seeing the full picture before an offer is written. What is a conversation most buyer’s agents are not having with their buyer that you always have before that first offer even goes out?

Laila Smith:
Yeah. So the financing reality check, what their rate will look like, what the payments look like, what their cash to close will look like at the price that they’re wanting to purchase the home. We talk about things like rate buy downs versus closing costs, credits, and how offering, making a good offer can structure them to where they can be able to see their full buying power, right? Walking away with price and not selling because they have an emotional attachment to this house and just making a sound decision that is based more on the actual numbers at the end of the day.

Ashley Kehr:
Well, Layla, thank you so much for joining us today. We really appreciate you taking the time to share your experiences with the rookie listeners. Where can people reach out to you and find out more information?

Laila Smith:
Yeah. So I am on Instagram at Lila_Dallas_Realtor.

Ashley Kehr:
Well, thank you so much for joining us today. We loved going through your list of 10 things to help everyone listening write a better offer. I’m Ashley. Hey, Tony, and we’ll see you guys on the next episode.