HomeTeam’s director of business development discusses the current state of real estate, the emerging concept of annual home health checkups and why the home service industry is booming.
Matt Cook, the director of business development for HomeTeam Inspection Service, recently sat down with Nick Powills, founder and publisher of ESTATENVY, to discuss the current state of the housing market. During the interview, Cook provides insights on the significant impact of economic conditions — particularly interest rates and election-related fears — on real estate and business decisions, highlighting the importance of overcoming fear when making financial choices.
Understanding the context of the current market is crucial for HomeTeam Inspection Service franchises, as they offer a structured support system and established relationships that facilitate business growth in a fluctuating market. As part of his role within the home service franchise industry, Cook understands how big changes in the economy affect real estate.
According to Cook, economic conditions — particularly interest rates and election-related fears — significantly impact real estate and business decisions. While elections can influence the market, their effect is relatively minor compared to broader economic factors like interest rates. After a period of historically low rates, they are now stabilizing at levels closer to long-term averages. This stabilization, combined with rising housing inventory, is a positive development that will hopefully help prevent a market crash.
Cook also emphasizes the importance of overcoming fear when making significant financial decisions, such as buying a home or investing in a franchise. Delaying decisions due to uncertainty can lead to missed opportunities. Sound financial choices and long-term investments, particularly in real estate, are valuable as properties tend to appreciate over time.
In franchising, joining an established infrastructure provides advantages, including a built-in support system and valuable relationships that can drive business growth. The home inspection and service industry, in particular, has a growing need for innovations, such as subscription-based services that offer regular home maintenance to protect long-term investments. HomeTeam Inspection Services is actively addressing these opportunities.
The "home health checkup" model for home inspections is akin to regular medical checkups, emphasizing proactive maintenance — especially with the rise in home improvement during the pandemic. Annual inspections are recommended to identify issues early, preventing costly repairs later. There’s also a call for stronger regulation in the home inspection industry, as many states lack licensing requirements. Exploring partnerships with insurance companies could incentivize homeowners to maintain their properties, enhancing their value and condition. By positioning themselves as proactive partners in property maintenance, HomeTeam franchises can help homeowners safeguard their investments while meeting the growing demand for reliable inspection services in an evolving real estate landscape.
A transcript of Cook’s interview with Powills has been provided below. It has been edited for clarity, brevity and style.
Nick Powills: Does an election year have an impact on outcomes, or is it completely based on interest rates?
Matt Cook: I think, to some degree, [elections] have an effect. I would say it’s probably more of a minority effect on the overall economics of the country, particularly in terms of real estate. A great thing you brought up is interest rates. We like to say around here that interest rates are a lot like gas prices; they go up and everybody gets upset because they're so high, but then you get used to it. Right now, our interest rates are actually very similar to what they’ve been as the national average for the last 20 to 30 years. They just happened to be very low for a time and people got used to that, then they went very high.
Regardless of politics, I think the government did a fairly good job with the soft landing they aimed for. The way they adjusted interest rates — as much as people were calling for them to come down, the fact that they held them where they did until they saw certain indicators — was actually beneficial for the country and the real estate market. It helped prevent a crash.
We’ve definitely seen a decline in transactions over the last two years, but we also saw an incredible increase in transactions in the two years prior, so it kind of evens itself out. Corrections occur in every market. From an interest rate perspective, rates are back at a level where people are comfortable. We’ve seen a substantial increase in inventory around the country, now at levels similar to pre-pandemic numbers. So, inventory is up and interest rates are stable, which is really the most important thing.
Then you have the election in November. You factor in a good dose of fear, and that’s really the driving force. It has less to do with the election and more about fear — whether it’s from the media or, for lack of better terms, ignorance. People just don’t know what the future holds, so they think, “I’ll wait till next year to sell my house,” or “I’ll move in three years once things calm down.” In reality, real estate is one of the only things that consistently appreciates. It ebbs and flows. If you had bought a home in 1990, you would have thought it was incredibly expensive at the time — but today you’d be making out like a bandit.
I actually received one of those updates on my phone yesterday; it was kind of depressing. The home I sold in 2019 or 2020 is now worth a good 30 to 40% more than when I sold it. I think they send you those emails just to kick you while you’re down. To answer your question about the election, it’s about fear. If you let that control your decision-making, I think you’ll regret it. But if you don’t and you make good, solid purchases — good, solid economics — and you buy a home within your means, then those things aren’t really going to affect the market from a business standpoint.
Powills: I've always found it fascinating that the franchisees and franchisors that take off are not the ones that ride alongside fear or emotion in our economy. They’re the ones that run opposite of that. How does that statement resonate with you?
Cook: It’s absolutely true. I think it was Warren Buffett who said, “I buy when there's blood in the streets.” It’s probably not a good reference, but that’s why he’s as successful as he is. When people are running for the hills, that’s when he’s investing. From our brand's perspective, I love numbers; I think good data proves good decision-making. The average time from when someone signs a franchise agreement to when they’re open for business is 121 days, although that fluctuates based on a state’s licensing requirements. In a state like California, which doesn’t require a home inspection license at all, openings are a little faster.
But there’s still a timeline associated with training. To your point, there’s a spin-up time for relationships, which is important in every business. You can’t just go out there and expect to have business and revenue on day one. If that were the case, people wouldn’t be in franchising; they would just open company-controlled locations. That’s why the owner on-site is so important. If you’re putting off those decisions today until after the election, you’re looking at almost fall next year before you really feel like you have your feet under you. In our business, you need a good amount of inspections and your team has to settle in. I would love for that to be sooner rather than later, but that’s the sales side of me as well.
Powills: An entrepreneur is crazy enough that they don’t really see things. Looking back, it’s wacky, but I created my business. If you’re entrepreneurial, you might ride alongside fear. It’s hard for the franchisee mindset to grasp that. Any thoughts on those comments?
Cook: No, I couldn’t agree more. As people are looking at investing in a franchise — whether it’s HomeTeam or anything else — it’s really like purchasing real estate. You're making large life decisions and altering the course of what you do daily. You need to disconnect from that fear and look at the logical support around it. When we look at buying a home, we consider if it’s in the right neighborhood, if it’s in the right school district and whether it has everything my family needs and desires. Yet so many times, people focus on how the home looks and feels when they’re in it ahead of those logistics, which become complications later. They often wish they hadn’t bought that house.
For us, when you buy a franchise with HomeTeam, we have relationships with some of the biggest real estate firms in the world. Those are very intentional. When a new franchise opens — like we have one this week — I’m about to send an email on their behalf to every real estate agent in their territory, letting them know we’re opening a new location in their market. I’ll also share an article featuring their CEO endorsing HomeTeam. That level of support doesn’t exist outside of that franchise model. So, not letting your fear manage your decision-making and really looking at the support structure is how you’ll make the right decision.
Powills: What is the approach taken for system maintenance during different seasons?
Cook: They created a system where they come twice a year — spring and fall — to service the system and ensure it’s ready for the next rough season. The cold winters and hot summers necessitate these checkups. When they are there, they check for anything that’s broken and needs to be fixed.
We’ve started calling it a home health checkup. In some areas of the country, they already do this, where you have a home inspector come in once a year for a maintenance review. It’s a cheaper, faster inspection — essentially going to the general practitioner to get your physical checkup. This is the biggest purchase and investment of your life for most people; why wouldn’t you want a professional to let you know what needs better maintenance?
Powills: Why is it hard to change consumer behavior regarding inspections?
Cook: I would tell you that it’s probably still a couple of years off because it’s hard to affect change in consumer behavior when someone doesn’t buy the product or service consistently. You need a plan to change the consumer mindset to get more consistent inspections. Our industry has been alarmist; since it’s the biggest purchase of your life, most home inspection companies feel the need to justify their fees by finding issues. This has led to a negative reputation, whereas we should be coming in consistently so that when it’s time for a sale, there are no surprises.
Powills: What’s the connection between your past and companies like House Doctors?
Cook: It’s funny because my wife’s dad started HomeTeam, and he also started House Doctors. I was at a trade show recently, and we had a great conversation with House Doctors, highlighting how we both aim to provide a full-circle service — not just identifying issues but helping fix them. However, a challenge arises in real estate transactions due to conflicts of interest. If I own the company that will fix your roof and also tell you it needs replacing, someone could sue me for creating an issue that didn’t exist.
Powills: How does this model relate to insurance and property value?
Cook: There are partnerships with companies that provide third-party services. For instance, home health checkups could be connected to insurance companies. If we could report that a home is well-maintained, homeowners could see lower premiums. This is similar to how Progressive uses data tracking for car insurance. The dynamic is that as long as inspections aren’t mandatory, someone with a financial stake may not recommend them. However, some areas have enacted laws preventing agents from recommending waiving home inspections.
Powills: How does appraisal differ from actual home condition assessments?
Cook: Appraisals often evaluate homes from the outside, without assessing functionality inside. If a homeowner is diligent, it could positively impact their property’s value, reflecting the amount of work they’ve done to maintain it. The conversation around home health checkups is ongoing, with opportunities for home inspectors to provide regular maintenance checks.
Powills: What are the implications of regulation within the industry?
Cook: The industry indeed needs more regulation. There are states with no licensing requirements, which creates a “Wild West” scenario. For example, California doesn’t require licensing or insurance for inspectors, whereas Texas mandates extensive training. We advocate for regulation because it would ensure inspections become a mandatory part of the process.
Powills: What are your thoughts on the future of home inspection and maintenance services?
Cook: The future is promising. We need to establish a scoring system for homes based on their maintenance. If a homeowner maintains their property well, it should reflect positively on its value, much like how car insurance companies reward good drivers. This conversation is significant for both prospective franchisees and homeowners looking for trustworthy companies that prioritize maximizing returns for them.
Watch the full interview in the video above or on YouTube.
