The Insurance Industry Is Quietly Becoming Real Estate's New Gatekeeper

Fred Glick00:00:25

Let’s get it started. Yeah. Let’s get it started, yeah.

Drew Thomas Hendricks00:00:30

What a great intro to We Fixed Real Estate. Let’s get it started. And today, we’re getting it started by talking about AI and inspections.

Fred Glick00:00:38

So you get an inspection or you download an inspection, and in the old days, you would, two years ago, you would read it, or you go through the highlights. And the great thing is the inspection reports, the way they work is, usually on the first couple of pages, they tell you, “Here’s the red and yellow things to worry about.”

So they kind of give you degrees of things. But it really doesn’t go into depth. It really doesn’t tell you what professionals you really have to use for things. And the biggest thing, it doesn’t tell you what it’s gonna cost to fix because when you’re neg- when you have an inspection contingency, you have a period of time where you can get the inspection done, and part of that contingency period is to get back to the real estate agent on the other side, the listing agent, and tell them what you want the seller to do.

You want them to fix things, you want them to give you a credit, you want a combination of the two, or you just, you know, are worried about one thing. It’s a multitude of ways that this can go. So the idea is now, you wanna throw that sucker into AI.

Drew Thomas Hendricks00:01:51

Oh, yeah.

Fred Glick00:01:51

But here’s the thing, I’ve been using ChatGPT and pretty much everybody else who has been doing this has been using GPT so that their LLM for all the repairs and all the knowledge is extraordinary.

So it’s gonna be better than Claude or Gemini at this point, we’re in the end of April 2026. I mean, this might be irrelevant a week from now, but they’ve really built it up so that when you stick your report up into ChatGPT with the right prompt, you’re gonna get a really good answer and it’s not hallucinating.

And that’s the thing. So my prompts, and this is really generic and you can kind of delve off of this, is I say, “I am a first time buyer, I’m scared to death, I have no idea what I’m doing, I couldn’t even hammer a nail into a wall, and you are the expert at home inspections in the certain area.”

You wanna state the area because there’s things about certain areas in the neighborhoods. It’s gonna know the address when you put in the inspection, but in the area that happened. And you also wanna say, “I need to know what it’s gonna cost for each individual item to be fixed so you want a good number.”

And the best way to get that number is to say that you want the cost based on union labor in that metropolitan area. So in Bay Area will say, “Give me the union wages to fix this, so it’ll, it’s gonna give us the highest number.”

Drew Thomas Hendricks00:03:49

Oh, I see.

Fred Glick00:03:49

‘Cause what you, what you’re doing as a buyer, you’re, you wanna negotiate as high as possible because, of course, the sellers thinks this place is Nitaj Mahal with nothing wrong with it, and how dare they?

And I’ve had these sellers come back. They’re just out of their minds, and then we just walk, or we threaten a walk. I had one where there was mold, there was … Some of it was half-ass repaired, but you don’t know what’s behind the, the wall. And we had two mold people come in, and it’s like, “Yeah, you gotta take this wall out, and this might be a whole problem.”

It was like 30, $40,000 worth of work.

Drew Thomas Hendricks00:04:27

Wow.

Fred Glick00:04:28

And this seller, who was a lawyer, so I’m not giving a dime off, and it’s like, “Okay, dude, well, make sure you disclose this to the next buyer.” And guess what? The next buyer’s gonna find the same problem. So this house is just gonna stay on the market. And it ain’t going anywhere.

He’s gonna end up renting it where he doesn’t have to disclose mold. And that’s another problem with disclosures to renters.

Drew Thomas Hendricks00:04:53

Ah.

Fred Glick00:04:54

That’s a whole separate topic, and I’d love to have a s- that’s a good idea. Maybe we’ll get a lawyer to come in and talk about that. That’ll be great. So and just as a reminder for inspections, you wanna get a home inspection without a doubt. In your area, it depends. You might need termite, radon, mold inspector. Like in Seattle, we always get somebody, you know, if the home inspector sees mold, we get a mold inspector. In back east, in the Philadelphia area, we would definitely have radon.

It’s a little thing you leave in the basement for a couple days and that’s it. Bay Area, we really don’t have many basements. That’s another reason we don’t have radon gas. I don’t know anything about if we have radon gas out there, but I’ve never seen it. So it’s important to get those specific ones.

And also the big one is a sewer video.

Drew Thomas Hendricks00:05:47

Oh, yeah.

Fred Glick00:05:47

‘Cause the owner has not gone into the sewer to take a look of what it looks like. If you got new construction, it’s two years later, you know, wouldn’t worry about it. But if you’re buying an older house where there’s a big tree in the front.

 …

A lot of roots, it’s gonna be a nightmare.

We had one deal where it was contingent upon the inspections and part of it was sewer, ended up costing the seller $100,000 to fix the sewer.

Mess. Exactly. So anyway, back to AI. Obviously, you wanna look at it anyway, compare what the AI does to what your eyes see, talk to your agent, talk to, … you know, and another thing that people said, i- if they see something on an inspection, they don’t know what to do, go ahead and call the inspector.

Drew Thomas Hendricks00:06:39

Mm.

Fred Glick00:06:39

It’s okay. I mean, some of them will say they’ll need permission from the seller or the seller agent, and, you know, we’ll, we’ll ask for that. Because who best to know what he wrote or she wrote than the person who wrote it?

Drew Thomas Hendricks00:06:52

It’s that simple. And they can give you some context. Now the a- now the AI agent, when you s- when you tell it to use union labor, you really, from the buyer’s side, just wanna show what these r- the highest price that these repairs were gonna be.

Fred Glick00:07:06

Exactly.

Drew Thomas Hendricks00:07:07

And then the seller’s gonna come back and give you the price that Chuck and a truck could do that’s gonna be the lowest price.

Fred Glick00:07:14

Exactly. So this is, you know-

Drew Thomas Hendricks00:07:17

But you don’t wanna start with a Chuck and the truck if you’re, um-

Fred Glick00:07:20

This is why you need a good real estate agent. These are things you don’t know to ask a buyer broker.

These are the things that when you’re in an open house and some young little thing says, “Hey, I wanna be your buyer broker. And you’re nice.” And they’re all nice and friendly, but you have no idea how well she can negotiate inspections, or even know how to fill out a form. So- That’s hard. Yeah.

Drew Thomas Hendricks00:07:44

First time home buyer, analyze this inspection and then go from there.

At least you’re educated and you can talk to the agent and, yeah.

Fred Glick00:07:52

So, we had a buyer, and this was a pretty big house, so I don’t know if this is going to be for everywhere, but the, her insurance broker, and I’m reading this, mentioned if we have an inspection done, home inspection, that they, the buyer is required to fix things flagged, meaning, you know, the red alarm things, the yellow alarm things, we don’t know.

Within 40 days, they have to be fixed or the policy gets canceled.

Drew Thomas Hendricks00:08:31

What …

Fred Glick00:08:31

You know what I mean? I got our headline. You have to do the repairs or you lose your insurance.

Drew Thomas Hendricks00:08:40

Yeah. So I don’t know who the company was, and I should ask her, but-

Is this the serious insurance problems that might kill every deal known to man?

Fred Glick00:08:50

Pretty much. And I’m gonna add to that. Okay. So I had another client, this was down in San Diego, also a kind of big house, expensive house, but she went through, I don’t know, it was probably about a dozen insurance companies. So let’s, let’s go down. She reached out to them directly on phone calls, and this is another thing that might kill every deal known to man.

She talked to Cincinnati Insurance, and they denied it because there was no permits for the electrical or the roof work. Chubb twice denied it, once for no permits on file with the city, and once for location and a fire risk, which we know happens here. AIG private client denied for no record of permits.

Pure, her broker, they will not insure the property without either permits for updated electric or signed and dated contractor invoices from the time the work was completed.

Drew Thomas Hendricks00:09:58

And what, what type of work was this? Is it an addition or just-

Fred Glick00:10:01

No, no, no. It’s just upgrading the electric. Um-

How do they know it was Because this is, this, there was no permits. This is what she probably told them of, you know, she was truthful and honest because they asked the questions. I know AAA won’t touch a property with a roof over 20 years. So you can just forget it. But the key thing here is that the permits- you have to get the permits. All over California, we close deals all the time without permits.

You know, it’s usually for, like, a little inside addition or some kind of work like that, but these insurance companies are getting smarter. Now, if you remember a week or two, we talked about in, the fact that these insurance companies are trying to buy the inspection reports from the inspectors through these companies that have bought the inspection software.

This might turn into complete hell.

Drew Thomas Hendricks00:11:07

Huh.

Fred Glick00:11:08

Doesn’t matter what the interest rates are, don’t have the work done, you don’t have the permits, and, you know, everything’s not perfect in the house. They’re just not gonna do it. The insurance companies are going to become the death of the real estate industry-

Drew Thomas Hendricks00:11:27

Hmm.

Fred Glick00:11:28

As we know it, if this all goes through. You think private listings were bad, you’re not gonna have any listings because nobody will be able to buy a house. Boy, I’m full-led here, but, you know, this is breaking news.

Drew Thomas Hendricks00:11:47

The insurance company’s interests are not exactly aligned with most homeowners interests and most real estate, the real estate economy’s interests.

They’re there to provide really-

Fred Glick00:12:00

No, they’re not provide. They’re there to prevent, okay? They wanna cut their, they wanna raise the rates and cut down the amount of claims they have.

All better to do it. I mean, I kinda sort … Don’t say, don’t, don’t tell anybody this, but I kinda sort of don’t blame them.

Drew Thomas Hendricks00:12:18

Yeah, no, it’s hard. You know? I mean, it’s gonna drive up prices.

Fred Glick00:12:22

Yeah. Yeah. Houses are gonna go up because the seller, “Oh, what do you mean I gotta spend $10,000 in permits and then it’s gotta wait 60 days and they’re gonna inspect and then I need to do more work or I need to tear it out because they didn’t do it right.”

So all these Chuck in a truck, is that what you call it? Yeah. The checks, the chucks in the trucks aren’t gonna be able to do things, you know, like they used to. It’s like, you know, get it done. Yeah, lady, no problem. You go to Mr. Permit, Mr. City. I mean, and, and as you all know, if you’ve ever gone to a city to try to get a permit, I don’t care what city it is, city, county, town, municipality, it’s a fricking nightmare because they don’t have people who know what they’re doing and, and understand the process. They just have bureaucrats who could care less. So let’s build an AI system where you can just get everything approved in 30 seconds, because it knows all your codes, you submit the things within code.

I mean, that’s what we’re gonna get to, hopefully, so somebody can build that in their Claude tomorrow, have it out, have it out by Saturday. I mean, you know, it’s, this is gonna hit like a rock very soon, everywhere. It’s in the high end market, it’s gonna go in the lower end market soon.

So beware. Buyers and sellers gonna be different.

Drew Thomas Hendricks00:13:57

That’s some good advice. Well, you did mention Claude, and let’s talk about, innovative ways to diversify your portfolio.

Fred Glick00:14:06

Okay. So there’s a guy in California. You know, he’s, he’s your basic, I don’t know, multimillionaire.

And he’s the kind of person who doesn’t know the guy who knows the guy to be able to invest money in anthropic before they go in the IPO. He wants to buy his private stock. So what is he doing? He has too much real estate, is what he said. So he’s, he wants to sell his house in exchange for insider anthropic stock.

Okay, sounds great. So let’s say it’s a three million dollar house. He gets $3 million anthropic stock priced at, I don’t know, 25 cents, made up numbers. And you told me something interesting about, well, that was ChatGPT, a different story, but anyway, so now he’s gotta find somebody who really wants that house and has that inside stock.

The guys who have the inside stock are the basic billionaires or the employees and-

Drew Thomas Hendricks00:15:16

And can you sell? …

Fred Glick00:15:17

Really gonna happen? Yeah. And, and they have to want that exact house, which yeah, may appreciate two, 3% per year, but what would you rather have the Anthropic stock or the house? And probably pre- IPO, you want the stock.

So it’s funny, it’s a good try. I don’t think he’s gonna sell it. Do you think he’s gonna sell it? Put, put your remarks in the comments because we always love to hear from you.

Drew Thomas Hendricks00:15:44

Yeah, it’s interesting. I guess if it’s vested, but I would say the stock’s not out there yet.

Fred Glick00:15:50

No.

Drew Thomas Hendricks00:15:50

You can’t give it to anyone.

Fred Glick00:15:51

No, no, that’s his whole point.

He wants the stock at this price.

Drew Thomas Hendricks00:15:55

So it’s gonna be like a promiseory note or something like, when I can s- sell this stock, I will give it to you.

Fred Glick00:16:02

I don’t know the legals and, and their, the ways it works, but it’s a good try on his end. I don’t think- Yeah. … we’re gonna get, find a buyer on that end.

But I’ll follow it. We’ll, we’ll see.

Drew Thomas Hendricks00:16:14

You never know. You never know. That’s, that’s-

Fred Glick00:16:17

So yeah, I mean, I’ve had people say to me, “Hey, I’ll take crypto for my house if they wanna buy it in crypto.”

Different, little different story. But everybody’s gonna be a little different. I mean, you wanna pay us crypto for your buyer broker fee?

Sure. You know, I’ll probably cash it in that day, but however you wanna do it.

Drew Thomas Hendricks00:16:39

Yeah, you probably, probably would want to at least diversify a little bit of that fee. Pay the overhead.

Fred Glick00:16:46

Yeah. Pay the overhead. Exactly.

Drew Thomas Hendricks00:16:50

So I’m dying to know. What happened in 1918?

Fred Glick00:16:54

1918. It’s the end of World War I.

Drew Thomas Hendricks00:16:57

Oh, the late teens. I was thinking of the 19. I’m just joking.

Fred Glick00:17:01

Okay. So we had our history left. And 1918 was the end of World War I.

Drew Thomas Hendricks00:17:04

I know, I was just joking.

Fred Glick00:17:07

What happened around that? So what happened, what happened in the mid-teens … Okay, so I had a listing of a property for … started out at 50,000, we came down to 35,000. Okay, there see houses on each side, and then behind them there’s a driveway.

And to get, everybody, you know, has access to get into your garage. Well, you would think it was maybe owned by all the homeowners and they had an easement to travel on it, or the city owned it … and they had an easement.

Now, this guy, he’s from New York, he found a tax sale for this strip of land that was a driveway … that he bought, for like $5,000 because nobody paid the taxes on it. It was actually owned by somebody. So we thought, okay, this is fabulous. It’s, it’s the craziest listing. And it got picked up by the local San Francisco- I remember that.

Okay. And then it got picked up by SF, S- F- FS- SFIST.com. I don’t even know if they’re still around. But, you know, we were talking about things you could do with it. You could put advertising on it, paint it with advertising in charge. You could … I, I sent something like, “Hey, let’s charge for the air rights for the Navy to fly over during fleet week.” You know?

Drew Thomas Hendricks00:18:43

Or charge-

Fred Glick00:18:44

‘Cause they violated the air rights.

Drew Thomas Hendricks00:18:46

That’s crazy.

Fred Glick00:18:47

I just thought it was-

Drew Thomas Hendricks00:18:48

Now was this driveway, did it ha- people have to use it as a throw up there to get to the house?

Fred Glick00:18:54

Yeah, yeah.

Drew Thomas Hendricks00:18:54

Did he charge you full?

Fred Glick00:18:56

20, 20 houses on each side. No, you couldn’t.

Drew Thomas Hendricks00:19:00

Okay.

Fred Glick00:19:01

Yeah, they had a, they had a legal way to get into the ingress and the egress, so, but yeah, it’s just nuts.

So I looked at it. I don’t know how it popped up in my brain or somewhere and I actually tried to get ahold of the guy, but his email is full, his number’s disconnected, but it would just be fun. It, it’d be fun just for advertising.

Drew Thomas Hendricks00:19:26

And he still-

Fred Glick00:19:27

Yeah. Yeah, I guess he does. I saw, I looked up the public records.

It’s still him. So if anybody out there wants me to really dig and find this out, you know, buy it from them, you have a good idea what to do with the driveway.

Drew Thomas Hendricks00:19:43

Have you thrown that through AI for creative ways to monetize a private-

Fred Glick00:19:48

Yeah, I mean, I should have thought of that. That’s a fabulous idea.

So how do you monetize a driveway that you like this, so.

Drew Thomas Hendricks00:19:57

Without-

Fred Glick00:19:57

Yeah.

Drew Thomas Hendricks00:19:58

You can’t charge your neighbors.

Fred Glick00:20:00

No. But you can taint it and advertise it or you can go down literally, you know, put vaults down there or something.

Drew Thomas Hendricks00:20:09

Oh, the air rights, yeah. Oh, I see.

Fred Glick00:20:11

Yeah. Ground rights. Remember, okay. Okay, kids, let’s have real estate lesson 101.

When you buy a physical property, you know, let’s say, you know, a square house on it- … the house is considered real estate. Okay? The definition of real estate is the building that’s on it. What you’re buying is real property. What does that mean? That means the land underneath to the center of the earth on straight up through the air rights. Everything has to do down and up.

So that’s why when you see a house that has a land lease, basically, and this has been my idea for years and I wish I could get this practical. Let’s say you find a house for a million dollars that they’re advertising, but the land is worth 600,000 and the house is worth 300.

You could sell the house for 300,000 and then have the people pay you a monthly fee for the land and you own the land forever. You can sell the land along with the lease. It’s a way of getting a little cheaper monthly payment usually. It’s not gonna save you that much. But also the interest you’re paying is only based on the 300,000 sale price with your down payment and that’s what your mortgage is as opposed to putting, you know, the same amount down on the million dollars.

So there’s the deductibility thing and all that, but it’s just another way of being able to get in a property a little cheaper. And for a seller, it’s a way for you to keep, keep your fingers in the property. So houses in Cupertino, let’s just say your $4 million house in Cupertino, the land’s worth three million, the house is worth a million.

And if you keep it for 20 years, the land might be worth four million down the road. House, you know, it might go to a million and a half. So yeah, it’s a way of keeping, you know, your money in the Silicon Valley to invest and sell the house and not have the burdens of the house. The taxes are still on you, but there’s a way to ma- that they’re paid in check on the payment of the taxes because not, you can just foreclose on them.

Insurance has to be kept up for the property. So that’s the buyer’s problem also. And here’s the kicker kitties, Fannie Mae, Freddie Mac will do these loans. I’ve done them. I know how to do them. So if you wanna get creative on a property, ping me, I’ll go over the details with you. Regular rates, nothing exciting, but the land lease, it has certain restrictions.

Drew Thomas Hendricks00:22:58

So we had a guest on the show a little while back talking about that.

Fred Glick00:23:01

Jubilee.

Drew Thomas Hendricks00:23:02

Yes.

Fred Glick00:23:03

Yes. Jubilee’s a company that’s doing it. They’re kind of the only ones. And the thing is with them, they have graduations and the payments and they’re, it’s, it’s a little expensive.

Drew Thomas Hendricks00:23:18

There’s simple way to do it.

Fred Glick00:23:20

Yeah, you as basic homeowner can offer it too.

And, you know, if I get the listing for something worth a million where it’s 250 for the land, I can advertise the house for 750 plus the monthly fees. And think of it as a, your, your own version of an HOA. And you can do anything with the house. You can destroy it.

Y- you can rebuild it. The landowner doesn’t care what you do with the physical property on the land. It’s pretty cool. Pretty cool. We didn’t plan on talking about this, but this is a good subject.

Drew Thomas Hendricks00:23:55

Oh, that’s a good evolution. Yeah. As we’re all trying to think about the underground bunker underneath the driveway.

Fred Glick00:24:02

There you go. So always something interesting here at Arrivva.

Drew Thomas Hendricks00:24:06

Yeah. I’m gonna be gonna do some further research. We’ll get back to you next week.

Fred Glick00:24:11

Exactly.

Drew Thomas Hendricks00:24:13

Any closing departing thoughts on this,how’s the hockey playoffs going?

Fred Glick00:24:18

Flyers are up 3-1, I have game five today in Pittsburgh, and of course I’m predicting victory.

We shall see, you know, this, this is gonna air after it’s already done, so I look like a dunce or I look like a genius. You never know. So anyway- In the 1970s at Barley Dickinson University in Madison, New Jersey, for my freshman year, I was the sports editor of the newspaper.

Drew Thomas Hendricks00:24:47

Ooh.

Fred Glick00:24:48

And we would have to write and print everything on Sundays.

So after all the football games were done, because there was no Sunday night football back then. … I wrote an article called Glick Predicts.

Drew Thomas Hendricks00:25:04

Oh.

Fred Glick00:25:04

So I had to pick the football games a week in advance. I wasn’t bad.

Drew Thomas Hendricks00:25:08

Really?

Fred Glick00:25:08

So, yeah.

Drew Thomas Hendricks00:25:09

What happens when you did it wrong? Oh, but it was a prediction, so you’re there, you got like a writing total.

Fred Glick00:25:14

Yeah. You know, and it said why and all that, so, but here I am.

Drew Thomas Hendricks00:25:19

What time’s the game on?

Fred Glick00:25:22

Hm, I think it’s 7:00.

Drew Thomas Hendricks00:25:24

Oh, well, we, we better get up.

Get ready.

Fred Glick00:25:28

Yeah. I gotta, you know … I saw Buffalo had a game the other day and playing Boston, you know, they, they hate each other. So they took this figure of a dummy, a boxing dummy, and they put a Boston jersey on it.

And so these guys in Buffalo would just take turns beating the living crap out of it. They even had like a five-year-old beating the living crap out of it. And Billy, they’d have the live Pittsburgh Penguin fan. They would just beat the crap out of it. That’s the difference between Buffalo and Philly. So.

Drew Thomas Hendricks00:26:08

Oh, that’s funny.

Fred Glick00:26:11

Yeah. It’s, they’re interest- it’s interesting. Flyer’s mentality.

Drew Thomas Hendricks00:26:17

Well, set, sending the flyers good thoughts tonight? Um-

Fred Glick00:26:21

Yes. …

Drew Thomas Hendricks00:26:21

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