Shannon Register, Broker / Owner of Register Real Estate Advisors and long time contributor to the show, talks about the process of physical clean up and what is expected in a rental situation.
Please excuse any typos in this hasty transcript.
Matt Register: Hey guys, welcome to Texas Business Radio, episode 89. Houston is still drying out and just beginning recovery from hurricane Harvey. And this is going to take quite a bit of time. We’re going to spend a little time today talking about that subject. There’s a lot of things about that. If you own a business, if you own a home that got damaged or impacted by the storm, there is a whole lot of things you need to know and get smart on. I’m your host Matt Register. I’m here with Jay Curry here in the co-host chair. What do you think Jay?
Jay Curry: Well, I think listeners need to really pay attention because there’s a lot of help that you could, It’s available to them. And starting with, with Shannon and wrapping up with the tax relief. We just got an awful lot of good stuff on this program.
Matt Register: Yeah. No, no doubt. And Texasbusinessradio.com has a lot of information on it as well. If you want to use that as a resource. Real quick guys, Moms Modern Mixes is a cookie company out of Austin, Texas. I met these guys at the Austin Small Business Festival. Really, really good guys. They sent us a bunch of cookies. It got here right in the middle of the hurricane. Cookies were delicious. Thank you very much for sending them. We enjoyed them but didn’t get on the air with them last week. So, MomsModernMixes.com is the web site. Do yourself a favor, they’re vegan, gluten free, nut free. If you have somebody who has allergies, you’re never going to know the difference. These taste delicious.
Jay Curry: And delicious.
Matt Register: Yeah. Tastes like really good cookies. We’re going to jump right into it. We have Shannon Register on the line. Shannon is the Broker/Owner of Register Real Estate Advisors and our real estate contributor here on Texas Business Radio. Shannon, are you with us?
Shannon Register: I am with you.
Matt Register: All right. Talk to us a little bit about what people need to know. They were stupid amounts of homes flooded over the past week with Hurricane Harvey.
Shannon Register: Yeah.
Matt Register: What do people need to know, should their house have been impacted?
Shannon Register: Well the flooding, yeah, was horrific in Houston. But not only Houston, even in just a lot of the suburbs, as well; Kingwood, Humble area and even in Spring, Texas. So, a lot of recovery, there was even parts of The Woodlands. So, a lot of recovery has been happening. And I’ve seen people tearing out their own drywall, cleaning out their own houses, working at massive speed with the help of churches and volunteer organizations. It’s just been fantastic. Now that the water is really receding out and they’re starting to dry out. That’s really one of the main thing is drying things out. Your air conditioning unit will certainly, having the HVAC system going will help with that. But in addition to keeping your HVAC system on very cool settings, you also want to have dehumidifiers in the house. And know that your, your good professionals are not going to walk up and knock on your door and ask to help you remodel. So we see a lot of scams going on right now. People walking up to your house that say “Hey, I’ll buy your house with cash. Your insurance company is never going to cover all this. Just let me buy it”. You’ve also got remodelers coming to the door, wanting to help. Go through your insurance company, you know, ask them for good renovation companies. Ask them for places that can help you. There are companies that will come out and help you, help you dry out the house, if you need that. They have lists of water remediation companies, check them out through the Better Business Bureau and get their insurance certificate.
Matt Register: Well, that’s going to be hard to do.
Shannon Register: And once the house…
Matt Register: That’s going to be hard to do because there’s going to be a line for reputable contractors. There is going to be a massive line.
Shannon Register: There is. And well, here’s the thing. They can, the remodelers can’t even give you an estimate until the drywall is torn out and the drying process is complete. So that’s why I say, really keep your air conditioning on the lowest, you know, as cool as you can get it, to help prevent mold from growing. And take as many photo documents as you can. And try to dehumidify because once it’s dry, then the remodelers can actually come in and give you a quote. And here’s something interesting, that I just learned recently, if you are in the Houston city limits, you’ve got to have a permit to do the work in the city of Houston. You have to get a permit over with the floodplain management office. They’ve got a three page document you and your renovator have to fill out. You don’t want to just use someone to come to your door. If you are doing flood repairs over $10,000, you’re going to need this permit to, with the city of Houston, if you’re, if you’re in the 100 year flood plain.
Jay Curry: Shannon, is that an opportunity for you to tell if the person knocking on your door is legit, if they don’t suggest that.
Shannon Register: It is. That and checking their insurance. They should have no problem giving you an insurance certificate and references and even going through the Better Business Bureau. I think that those are all three, important things to do when you’re looking for the remodeler.
Matt Register: Well and a lot of people got caught because again, people within that hundred year flood plain, generally had flood insurance or should have had flood insurance. But this affected a whole lot more people than that. Earlier today, I was down near Cinco Ranch. Those guys still have water in their house. Right? The water still hadn’t receded that far yet.
Shannon Register: Yeah. You know, here’s another thing with the pros, a lot of them will bill your insurance company directly. You may have to pay 10 percent out of pocket but the rest of it is going to be billed to your insurance company. So if someone wanting you to pay upfront for remodeling. That should be a really, a clue right there, you don’t want to use that company. Make sure your renovation contractors check out.
Matt Register: No. Good information. Because there’s going to be a lot, there’s going to be a whole lot more scammers in the weeks to come as they get, get down here to Houston, knowing there’s so much work available. Right?
Shannon Register: I know a lot of people have already put all their debris out at the curb. But if you haven’t, know that there are six different categories for putting things out. And if you can, the more you can put them together in an area, I know it’s going to kill the grass. but it takes a while for the city to pick it up. But it will help the city to pick it up if you’ve got all your like electronics together, all of your dry wall, sheet rock, building products together. You know, then you’ve got your actual garbage in trash bags together. I mean they have a kind of a system in place for coming and picking all this stuff up. And they will not pick it up close to the house, it’s got to be at the curb.
Matt Register: Talk to me a little bit about, about housing. All of a sudden we have a lot of people displaced out of their homes.
Shannon Register: Yes.
Matt Register: So what is available?
Shannon Register: So several things going on. We have, so realtors in Houston have come together very quickly. First of all the Houston Association of Realtors immediate put, immediately put out a link at HAR.com. Where people can, number one, donate. And numbers to the realtors relief fund. And number two, people can apply for assistance immediately. So, HAR was very quick to react with that. And then they started sending information to the realtors on, not only how to apply for assistance but how to look for rentals. So, they created a Facebook page where agents can put rental properties that have not flooded. Because a lot of realtors could not get into the MLS system to update their listings to say they haven’t flooded.
Matt Register: Sure.
Shannon Register: So, they created a Facebook page where everyone could share on there. So your realtors do have access to housing that is not flooded. In addition to that, anybody who wants to list a home right now, we, HAR is creating a web site just for listing short term rentals. So, if you only want to be in a rental for three months, six months, eight months, they are creating a place, a portal right now for agents to use for short term rentals. I know our agents over at Register Real Estate Advisors have really been helping people get into rentals. And also working with some people, who are investors, who have houses that are ready to get them listed, if they didn’t flood. Because we know there’s such a demand for housing. Another issue that we have, is we had all these properties pending, all these pending sales and when you have a pending sale right now, if it’s your regular resell contract, your 1-4 contract with a realtor, you’ve got three different options on that. Well first of all, any of them can be extended if the buyer and seller agree on it. And that’s what I immediately had all of our realtors do. Let’s just go in and extend them, let everybody have time to figure out what they want to do. And then once you, once you’ve extend and they have time to think about it, they have basically three options. One the buyer can get their earnest money and walk away, if the house flooded or has damage. Two, the seller can actually, if their insurance company is agreeable to it, the seller can take the insurance proceeds and on the contract, they can reduce the price of the house by that amount. And then the third option is giving the insurance money to the buyer or having the house fixed and then the buyers buy it. You know, just postponing closing. So, even…
Matt Register: But even if the house wasn’t damaged. You still have lenders that have to go in and re-inspect, you have appraisers that have to go in.
Shannon Register: Yeah, we’re…
Matt Register: There’s a lot more work to do. Right?
Shannon Register: Right. We’ve had title companies that have flooded, we’ve had lenders that have flooded. All the houses have to be reappraised by an appraiser, if they’re getting loans on the house and all that has to go back for underwriting. So I think with all of my realtor, anything that was pending, I just said “Hey, let’s go and get buyers/sellers agree to extend, first and foremost. Because we know, we’re not going to have any closings this week just, just because people just aren’t available to get it done right now.
Matt Register: Right.
Shannon Register: The appraisers are getting backed up. The title companies, the lenders are backed up and trying to get out from under water themselves. So extending has been a big thing. And now once we get past the two week extension, you know, buyers and sellers are having to decide what they’re going to do going forward. Now your builder contracts are different. Builders, a lot of builders don’t even use the, the Greater Houston Builders Association or the National Builder Association Contract. They write their own contract. And so if that is the case, you and your realtor really going to have to sit down and read through that contract. And you may even need an attorney to figure out what your options are.
Matt Register: Well and on that point, any time there’s a disaster like this, words mean things on contracts. Right?
Jay Curry: You better believe that.
Shannon Register: Yeah. And now Irma’s heading our way.
Jay Curry: Yeah.
Shannon Register: Well, actually heading more to Florida and Georgia and South Carolina. But who knows? Who knows how these hurricanes are going to turn and move.
Matt Register: Yeah, no doubt. Hey, great information. Thank you very much. This is Shannon Register, Broker and Owner of Register Real Estate Advisors. And our favorite realtor here at Texas Business Radio. Our real estate contributor, Shannon thank you.
Shannon Register: Thanks Matt, Jay, appreciate it, always great talking with you guys.
Matt Register: All right.
Jay Curry: It’s a pleasure.
Matt Register: Yep. Absolutely. And guys we have to go take a break. We’ll be back right after this with a whole lot more of hurricane Harvey addition, recovery of hurricane Harvey addition of Texas Business Radio. We’ll be back.
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In addition to hosting "Texas Business Radio," Matt is an investment banker and serial entrepreneur from Montgomery, Texas. He is the owner of RREA Media and Register Real Estate Advisors and a Managing Director and Principal at Corporate Finance Associates. He has a BS from the United States Military Academy at West Point and an MBA from Rice University in Houston. You can read more about Matt HERE.