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Sean Casey,  in 30317

Home Pre-Inspections, good idea or bad?

Asked by Sean Casey, 30317 Thu Apr 10, 2008

Since I sell alot of older homes (Turn of the Century & Newer), I am thinking of pushing home pre-inspections a little harder with my listing clients. My thoughts are 1) Defects can often be corrected pre-emtpively and cheaper by the buyer. 2) It cuts way down on the second round of negotiating that often comes after the buyers inspection. By providing the inspection report along with the disclosure to the buyers, they theoretically have all of that information to consider prior to making thier offer and I have found it drastically reduces the "laundry list" on the Amendment to Remove. Would love to have further thoughts on pros/cons of this practice.

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HI Sean. Good question. Personally, I live in a 161 year-old home in a district listed on the National Register of Historic Places. As such, I do deal with a lot of historic properties as Attica has four districts.

I always recommend the pre-inspection. I don't always get the seller to do it but I always recommend it...

Sometimes it does "cut to the chase" so to speak as when a current inspection is done sometimes the buyer will not feel the need to do his or her own. Another issue is money, occasionally, sometimes the buyer is just not interested in "all the little, hidden costs" and, as such, the pre-inspection is available to assist the buyer in that respect. Yet another consideration is a seller who is committed enough to the entire process (and in this buyer's market we are in every seller needs an edge) will do this to set him or herself above his or her competition.

It also shows a buyer, in my opinion, how much pride the seller has in the investment. A seller who has maintained the property will want to use that as a marketing tool. I also recommend a home warranty system at the time of the listing. I use American Home Shield but there are many. The warranty costs $405 in my market and covers the seller for free for 180 days. It has a minimal deductible for a service call but is well worth its money... At closting, the seller pays the fee and the buyer has one year of coverage....yet, again, another worthy marketing tool to set your client above the competition and make you look like you are the Realtor of choice! Best of luck to you! Hope I answered your question!
1 vote Thank Flag Link Thu Apr 10, 2008
While I believe that a pre-inspection is a good way for the sellers to understand what may need to be fixed and/or they can take care of potential deal breakers beforehand, I recently had a deal where the sellers offered to show my buyers their inspection report. I felt that this ended up being detrimental as they were wary of many things on the report that are very normal in old houses. This hindered their decision to even put an offer in--I believe that once buyers put an offer on the table and the property goes under contract, buyers are more willing to follow through with the deal even if the inspection report is intimidating. A pre-inpection report will most likely just give the buyers another reason to pass the property up or go in lower with their offer. Unless the inspection report is clean, which it usually is not on an old or new property, I would suggest the sellers keep it themselves. It is a good idea to fix as much as they can before putting the property on the market, but I would have reservations sharing with the buyer a pre-inspection report.
Web Reference: http://www.leaveittobee.com
2 votes Thank Flag Link Fri Apr 11, 2008
Home Inspections done before sale or after contract offer. Before Sale is now a good idea due to our market area. The seller has a better handle on presenting the property and can possible head off the problems that arise in a Contract Inspection. The cost is usually averaged at $300 and that will be returned if doesn't stay on the market long. After contract inspections always seem to bring out problems (usually the seller already new about) and sometimes will break a deal or negotiate the price down below where now the seller starts hesitating to close the deal. My advice is to do the Pre-Inspection and fix what needs to be fixed before the house even goes on the market. That will produce a true seller and true buyer.
1 vote Thank Flag Link Wed Apr 23, 2008
Absolutely! A Pre Listing Home inspection will allow rational decisions to be made before you are in the heat of closing the negotiations. With nine out of ten buyers getting an inspection anyway, you are getting the jump on the market by eliminating possible objections to the sale. As a Chicago Home Inspector, I could not agree more! Thanks for raising this point!
Web Reference: http://www.inspexpro.com/
1 vote Thank Flag Link Fri Apr 11, 2008
Great Idea! Avoid renegotiating with buyers after inspection. They will have upper hand during negotiations if the report does not come back favorable. Know in advance what needs to be done, get it done and get the price you want for your home.

Hope this helps!
Web Reference: http://www.rmr-usa.com
1 vote Thank Flag Link Fri Apr 11, 2008
This is very common in California... CYA- cover your ass!
1 vote Thank Flag Link Thu Apr 10, 2008
I think it's great edge for sellers for all the reasons you mentioned and a great way to make the listing less mysterious to buyers who often get intimidated by the thoughts of a money pit. The promotion of a one year home warranty would make your listing even more attractive to buyers.

As a buyer's agent I would still strongly recommend buyer get their own professional inspection as usual-for comparison and adequate assurance of their own due diligence.
Web Reference: http://www.junelizotte.com
1 vote Thank Flag Link Thu Apr 10, 2008
Stephen Covey's first habit of highly effective people: proactivity.

Enough said.

Sean - I'm gonna start calling you the Pusherman.
Web Reference: http://intowninsider.com/
1 vote Thank Flag Link Thu Apr 10, 2008
Sean,

I think this is an excellent practice. A thorough inspection with items fixed should reduce the items on the following inspection from a buyer.

I would not do the inspection under the impression that it would make the buyer feel more comfortable. They will most likely see the inspection as biased.

My offer is that I will cover the cost as closing if they will fix the items in the pre-inspection report.
1 vote Thank Flag Link Thu Apr 10, 2008
Joshua Jarvis, Real Estate Pro in Duluth, GA
MVP'08
Contact
Hi Sean,

I have seen so many new articles about the positives of home pre -inspections. It may just be the wave of the future. I think it gives the seller somewhat of a competitive edge in negotiations. Certainly they know that the contract won't fall due to an unforeseen repair issue.

I think they're a good idea today. I am attaching a link that you may find of interest http://www.doityourself.com/stry/preinspections

Regards.
1 vote Thank Flag Link Thu Apr 10, 2008
As an Atlanta home inspector, I think it is a fantastic idea also. I have had instances where the pre listing inspection was done and the home owner took care of almost everything at a fraction of the cost if it had been done in a rushed situation. When they didn't fix the problem they called 3 different contractors and got 3 different estimates and then attached those to the home inspection report. I always leave additional copies of the hme inspection report and if the sellers wish our reports are stored on line and I can make it public so that when anyone is looking at the home the agent can put a link directly in the listing to the home inspection report. I also go back for a very small fee and do an amended report, the original one is still there, but they have a 2nd one shoing the repairs as mark completed. This really helps in the selling of the home especially when there is so many on the market. It makes the sellers home a step above.
0 votes Thank Flag Link Fri Jan 30, 2009
I love the idea of pre-inspections. From a lenders standpoint, it makes me more comfortable locking the loan with my preferred lenders. The higher my pull through with lenders the better deals they make with me.

A source you might check in your area for a good home inspector is http://www.bni.com

I am a member of this organization in the Oklahoma City metro area and the code of ethics these members agree to is exceptionally high.

Good Luck!

Trey Bowden
(405) 340-3277
0 votes Thank Flag Link Thu May 8, 2008
It is one of the smartest things a seller can do. By having a pre listing home inspection, they will go into the whole process knowing exactly what a buyers inspector will be looking for, and know what needs to be addressed.
0 votes Thank Flag Link Thu May 8, 2008
Hi Sean!

I say they are a good idea. Timothy's idea of Pre-Certified Properties is very interesting. Marketed correctly, it could give you and your company an advantage in your local market.

Rudy
Social Media Guru at Trulia
Web Reference: http://www.truliablog.com
0 votes Thank Flag Link Mon Apr 28, 2008
Sean has some great ideas but here in the greatest, litigious, state of California the judge would ask, "Why did you wish to close so soon Sean? Quicker commission? How does this benefit the Buyer to rush to purchase the biggest investment in their lives?" We had this conversation many years ago with the advent of the internet. The Internet was going to allow us to close an escrow in hours! The whole premise was based on buying a new car. The rationale; I can go in and buy a new Mercedes for $100,000 so why can't I get a new loan and close a house with equal ease? We'll we all know what happened to THAT idea and Web-Van along with it!! But like Sundance said to Mr. Cassidy, "You keep on thinking!” I won't bring up the ending to the movie!! Who are those guys?
0 votes Thank Flag Link Sun Apr 27, 2008
Hey Sean,

I would make a revolutionary suggestion. Take it too another level - Pre- Certified Properties. Include home inspection, title search, and pre-appraisal. Why? Offer closings that can be done with simple updates to these baseline products.

It is amazing to me that we pre-approve our buyers, but wait until we get a contract to "approve" our listings. What would happen if you matched a pre-approved buyer to a pre-certified house? Quicker closings. I have utilized this idea and found closings can happen in less than 7-10 days. I believe if a system was tweeked, you could offer a marketing campaign of "72 Hour Closings".

Good beginning, take it all the way and make it sing!!! Fa La La La La la la la la.......
0 votes Thank Flag Link Sun Apr 27, 2008
Hello Sean
One thing you can always depend on and that is..."things change". Just about a year ago, I would not have advised one of our listing clients to get a home inspection in advance of any showings. I would only ask that they take care of obvious repairs before any showings....i.e. leaking faucets, fogged double pane windows, etc.
But now that it's a completely different market, I have not only recommended but have had my last three listings in just the last month, to have a complete home inspection and follow through by completing all repairs mentioned in the inspector's report. This is a great selling point and just one more thing to help differentiate your client's home from the homes you may be competing against.
It's a smart thing to do and I plan on suggesting it to all of our listings that we currently are holding as well as these last three.
Don DeBaer Memphis Realtor
0 votes Thank Flag Link Sat Apr 26, 2008
Ramiro, I think the liability issue may be related to our required disclosure form (not sure if yours is the same as ours or not). Most agents encourage sellers to be honest and dsisclose everything they are aware of. But few homeowners would know if there are structural concerns hidden behind insulation at the rim joist, for example. After an inspection, they are now aware of a potentially expensive, but hidden issue that must now be repaired or disclosed. By simply letting buyer's have their inspection and reacting to it, the seller may or may not ( the buyer's inspector might not look, they are not required to) have to fix the problem but they certainly don't have to put a "structural" problem on a form that might scare potential buyers or negatively impact the pricing of the offers they get.

Most buyers I have met are fairly savvy and regard the sellers inspection report (in the few cases where on exists) as propaganda or fluff geared to benefit the seller, not an accurate gauge of the home. In this sense, the actual value of the inspection to the buyer is not as great as one might initially think.

Again, as an inspecotr, I would love all Seller's to have an inspection (more business for me) but I can certainly understand those who elect not to, andhave encoutered such opposition to teh idea in general from local Realtors I work with regularly, that I have all but ceased marketing them.
0 votes Thank Flag Link Fri Apr 25, 2008
Wow, this last answer is a bit disturbing, coming from an inspector... My opinion is that there is actually increased liabililty if they don't disclose a problem or potential problem. Why take that risk of something coming back later when it can be addressed on the front-end? And it would be a selling poing to any and ALL potential buyers that the seller is disclosing (to the best of their knowledge) any concerns with the home. Once again, the main concern for me, are inspectors whom may indicate minor issures as major defects, when they are not... I live in a 100 year old home and it's drafty and not all the windows open perfectly. Just my .02 (again) ;-) from a fellow agent here in Atlanta. Thanks.
Web Reference: http://www.DweLLintown.com
0 votes Thank Flag Link Fri Apr 25, 2008
Here in Pa, they are not as common (disclosure: I am an inspector). One reason given is the potential increase in liability to the seller (defects must now be added to teh disclosure). A lengthy disclosure about known areeas of previous leaking can scare the bejeezus out of nervous buyers.

Another reason I get which I also give credence to is that every inspector is different. Some are better than others. Some have different areas of strength than others. So while the seller's inspector may be good, the buyer;s inspector may be excellent (or a former master electrican or HVAC pro) and may identify issues that the seller's inspector quite reasonably did not identify. All of this can leave the seller wondering just what the heck he paid the first inspector for, anyway.

On the flip side, the buyers may opt not to have an inspection or their inspector may not uncover some items that the seller's super thorough inspector did, in which case they seller winds up fixing things or spending money he many not have needed to.

As an inspector, I love doing Pre-Listing inspections and encourage them, but I certainly understand why some folks pass on them.

Specifically relating to turn of the century homes. Here a common thing to identify would be knob and tube wiring, aged cast iton soil lines,and a furncae that is operable but at or near the end of its statistical useful life. Also of these are tremendously expensive to correct, and - if operable - are not things most sellers wish to replace on their dime. So now, the report (and the disclosure) must indicate that there is knob and tube wiring (which without education can scare buyers off), and other potetnially expensive concerns that may hit them in the near future.
0 votes Thank Flag Link Thu Apr 24, 2008
Having a home inspected prior to listing is a good idea. Some sellers however have been reluctant to spend the extra money , often believing their home is flawless or that the buyers will not find the flaws.
0 votes Thank Flag Link Wed Apr 23, 2008
Weather buying or selling, I feel it is always a good idea to have a licensed inspector, even with an "As Is" Contract. However, there people who feel they are knowledgeable enough who do not want to spend the money. At least get a signed notation that you have suggested an inspection.
0 votes Thank Flag Link Tue Apr 22, 2008
One thing that might be useful with these old homes is to ask for references of similar homes in the area. Of course, using certified inspectors is always the way to go.
Web Reference: http://www.DweLLintown.com
0 votes Thank Flag Link Mon Apr 21, 2008
Sean,

I tell continually tell my clients to get a home pre-inspection and I always hear the same thing. “What, you want me to spend more money?” No, I want you to sell your home as quick as possible for the most money possible without spending a lot of money. Having your home inspected tells your probable buyer that you are an honest seller with nothing to hide. It is a fact that most buyers these days will have a home inspection done and should that inspector find anything, even things considered to be “minimal or normal” the damage is done. They will ask for some crazy discount to off set the cost or worse not feel good about the investment and move on. An inspection is also helpful when marketing a house. I know of people that went out and remodeled their kitchen for thousands of dollars to get the home ready. The reality was they only needed to spend a few hundred dollars in repairs that an inspector found. With just these things alone, they would have been ready to out shine the competition. Get a home inspection

Best
0 votes Thank Flag Link Sun Apr 20, 2008
I agree it can be a good idea, especially to differentiate from competing homes. It will show how the sellers's are willing to invest in a pre-inspection and be upfront with items that were found and if they were repaired or what the plan is in addressing them. But, one important factor to always consider is what is defined as a 'defect' or 'functional obsolescence' by a inspector (or appraisor) may be written more for liability and covering their behind, than the truth of the matter- that many old homes were designed and built differently than today. Those historic and architectural windows throughout a house may add significant value to a potential home owner, but an inspector may indicate that the windows are drafty, not fully open or be 'defective'. Most older homes in Atlanta fall into this category, so one may want to be explain this to prosepective buyers, so they are not scared away. Yes, there has to be a balance with functionality and the old world charm and character of a 100 year old home.

As always, it's best to DISCLOSE, DISCLOSE, DISCLOSE any and all items with appropriate explanation in the Seller's Property Disclosure. I always recommend certified inspectors, but when it comes to old homes it seems the ASHI certified 'understand' the 'charm' older homes and CABO certified inspectors do well with new home constructions, since that seems to be more 'code' oriented.

Hope this helps!

Ramiro Garcia
Keller Williams Atlanta Midtown
JRgarcia@kw.com
0 votes Thank Flag Link Thu Apr 17, 2008
It’s the best thing to do, with older home just for the simple fact that it could save you time and money in marketing the property because if the inspector finds a serious problem with house that would or could cause the sell to fail.
0 votes Thank Flag Link Tue Apr 15, 2008
In a market where you are vying for every buyer, anything you can do to make your home more appealing to buyers helps. And it gives the seller a chance to not be surprised and perhaps fix some of the nitty stuff. In our office, we disclose, disclose and disclose. The more the better. And we have had experience where the buyer waived the inspection.
0 votes Thank Flag Link Tue Apr 15, 2008
We think it would take a lot of buyer concern away up front however we would still recommend our buyers have their own inspection. For some buyers the pre inspection may be enough. We would think it would help to show how well the home was maintained and give a slight advantage over a comparable home. But if the buyer is not interested, they are just not interested. The only thing is when another inspection is performed; you know there will be other items found. That should be expected. How the seller will respond to that is questionable. They may not like doing even more repairs in addition to the inspection they had performed.

May be a better idea to have the seller put the home under a Home Warranty, that way the warranty can be transferred to the buyer. It is good to advertise home is already under Home Warranty too. It seems most buyers are going to ask for a Home Warranty and this way the seller has already taken care of that issue.
Web Reference: http://thekatzcrew.com
0 votes Thank Flag Link Mon Apr 14, 2008
Sean,
I have had this discussion with several agents in my office recently. I agree that having the home pre-inspected will help the seller see if there are any items that they can correct - prior to getting Buyers looking at the home. Plus exactly what you said about giving the Buyer all the information up-front. Since alot of Buyers make low offers to begin with, and then come back for more off after the inspection. Having the inspection report attached to the condition report makes it a much cleaner transaction.

I had one Seller who did it, made all the corrections recommended by the inspector. Now it is much easier to show the property, and it cost the Seller very little compared to what a Buyer may have deducted from an offer or possibly walked away. Even on homes that are 50 yrs old or newer - not a bad idea. Anything that may give your Seller an edge on the competition.
Great Question!
Web Reference: http://www.GoPackerUp.com
0 votes Thank Flag Link Sat Apr 12, 2008
Hate to get off this love fest but I do a pest report here in the greatest state of California but insist the BUYER order/pay for the home inspection. I don't want any whisper of "steering" (hey, I'm in California!!Land of lawsuits, disclosures ad infinitum!!) or handing a Buyer a home inspection I ORDERED. No, let them get dragged around by the home inspector and shown every nook and cranny of their new digs and be given THEIR OWN report with list of summary items to work on. We can then negotiate this through. My pest control operator has a pretty god idea and gives me an idea of issues relating to items OTHER than pest control (active infestation or dry rot). When the market was very hot we had agents/Realtors ordering all reports and giving them to the buyers to inspect and the buyer's agents telling their clients to accept them or they'd loose the house!! Lovely fiduciary arrangement that one!
0 votes Thank Flag Link Fri Apr 11, 2008
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