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Is a Seller's "pre-listing inspection" a good idea?

Lately, I have been recommending to most sellers that they pre-inspect their home prior to putting it on the market. This often comes with resistance because at first, it doesn't seem like the expense will be recouped on the sale. I advise that this is a good strategy and could net a seller more in a slow market. Here are some reasons:

a pre-inspection catches what the buyer may find during their own inspection so that the seller can repair and/or price the house accordingly from the outset

by making necessary repairs in advance, the seller can better manage the repairs on their own terms and there is no time constraint to having the job done; the seller can shop around for estimates

the pre-inspection report can be offered to potential buyers to provide disclosure and evidence of repairs and/or defects that a seller may choose not to repair

a report gives nervous buyers more confidence to submit an offer, especially if the home is older and competes with new construction

it is less likely that the buyer will "renegotiate" the offer after their own inspection because it is less likely they will find a surprise or a "new" deal breaker; the buyer will likely submit their highest offer at the outset

a pre-inspection can uncover a huge potential "deal breaker" like toxic mold, termite damage, code violations, etc. If a buyer discovers this after submitting an offer they are more likely to back out, rather than adjust the price or ask for repairs

if the first buyer backs out due to a large defect, the seller still has to do the repairs for the next buyer while the house remains on the market longer; possibly needing a further price reduction

making the repairs after the buyer discovers them does not "add value" after the fact, it only prolongs the sale process

I'm sure my colleagues can add more good reasons here....and maybe add any reason why this would not be a good idea?

Posted by Athina Boukas, Broker/CRS on 11/29/2009 05:19 PM

Comments (168)

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168 Comments on Is a Seller's "pre-listing inspection" a good idea?

NOV

2009

I also advise this if for no other reason than to have an idea of what the buyer's inspection could look like - and have a response if the buyer report comes in very different.

Athina, this is all great advice----I think in time these inspections will be as much a part of selling homes as buyer's inspections are. It is a no brainer as near as I can tell.

Welcome to active rain too Athina---great first post---now just upgrade to rainmaker----if I can be of assistance in any way let me know.

Athina, great post. Super idea for the seller.

Michelle - yes, having their own report puts the seller in a stronger position to respond

Charles - I do hope it becomes more common. In cases where I feel strongly about having a seller's inspection, I offer to reimburse the seller for the cost of the report when the sale closes...

and thank you for your comment...I will definitely upgrade!

Sounds like a pretty cheap "investment" on your part and the seller's part.

NOV

2009

Athina, What a great idea! I hadn't ever thought about it before. It's so much easier to hold the asking price if a bunch of repairs don't have to be done.

Hi Athina:

Yes a sellers inspection makes a lot of sense, I always advise my sellers to do it.

www.JorgeSanchezRealestate.com

Wow - this is your first post? GOOD job! No reason to make it "Members Only" though - this is good information for consumers too.

I've struggled with this issue, and am now currently struggling with this as a Realtor/Home Seller.

I am hesitant to do inspections prior to putting my home on the market because I may have to disclose more than I want - wait, that sounded stupid after I typed it. :-)

My home was built in 1929 - it's in a very elite historical district and we tend to overlook old electrical wiring in trade for the amazing architecture and wonderful charm of the neighborhood.

But, you're right, a deal could fall through if the Buyers are not familiar with our older homes. So, inspect away I shall.

Welcome to AR!!!!

I think some would say that the downside is that there are two inspections paid for when perhaps one would suffice, but the upside to the seller is right on as you noted above. So I'm in the camp of getting a pre-sale inspection.

Barbara Calwhite Great advice!!! A seller inspection can also protect the seller against having to pay for a large repair and possibly not have the funds to cover it all at closing. This can save a lot of grief on both sides of the transaction.

If possible, I always encourage my sellers to get a pre-inspection. It takes away any unwanted surprises.

Welcome to Activerain!

I also recommend pre-listing inspections. Better to get that information out of the way on the front end rather than scramble with a surprise later...

Hi Athina,

I am with you 100% here. As a consumer, I would definitely be more attracted to a home listed with a "pre-inspection", especially in a slower market. It shows motivation to sell on behalf of the seller, and encourages me as a Realtor too. I would show that home over one that was not pre-inspected any day. Less headaches for us all down the road.

Happy Holidays!

Absolutely Athina!

Not only will this make the seller at ease knowing they will not have a "punch-list" from the buyer to perform before closing, but it will insure the trust of the potential buyers knowing it has been completed in advance at a savings to them. If they would like to order an additional inspection the items at hand would be minimal at best.

Having too much Fun!!! Follow us on Face Book!!!

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Athina.. Having a home inspection prior to listing is a great idea. This gives the seller the opportunity to make minor repairs up front.

This seems good in theory, but for some reason sellers are very resistant to it. The last seller I convinced to do this had zero items on the home inspection. It brings great peace of mind. I have the best results convincing them when I mention that they can shop contractors for the work, and likely save nearly what they will spend on the inspection.

This is also a great test of their motivation, and their willingness to work with you and follow your advice. Very important in today's market.

I used to think this was a good idea, now I'm not so sure, after hearing this story, where seller pays for an inspection, completes the repairs, buyer comes along orders his inspection, inspector finds a bunch of stuff not on the first inspection. This was one ticked of seller, I think he got the Realtor to pay for the inspection!

I'll check back and read the comments, Welcome to AR Athina, you'll love it.

Hi Athina -- Great topic and it's almost non-existent in our market. You point out many good reasons. Anything to lessen risk in a transaction is a good thing.

It helps in so many ways! On top of that, if there's a big item found and the seller can't afford to do anything about it, then they could make an informed decision as to what they could get with the defect and if that won't work, then they may need to not sell. Much better to find that out before being half-sold and possibly under contract on another home...

For the few hundred bucks it takes, I think it'd be worth it to save some anxiety down the road, know what you can and can't take care of, price right, disclose fairly, and of course, good for marketing.

NO...

In Texas, real estate is sold as is... When I am the listing agent I don't evan what to see the byuyers inspection report... Just send me a list of the repairs you want done.. If the sellers disclose everything they know it can only weeken their position to have the report and or to get a report... Just saying

I think it's a good idea for a preinspection, but it also means there could end up being a net of more repairs, as a buyer's inspection is still likely to find new items, because an inspector still wants to look like he or she earned their money.

It's very common in San Francisco. Mostly, for the buyer they have a clearer understanding of what they are buying. For the seller it takes away some of the negotiating firepower away from the buyer since the buyer already knows much of the property's condition.

DEC

2009

I have alswats thought about that but wondered if I was the only one. I am very happy to read your post. I will start recommending it to my sellers and see how it goes. Thanks

As an EBA (Exclusive Buyer Agent) I always encourage my clients to get the home inspection done, even if the seller's have done a pre-list inspection. We don't rely on anything the sellers may have / or may not have done. From the seller's side, it's not a bad idea . . . and for the reasons you outline. Also, if they have done this, with a good inspector and had repairs made PRIOR to listing, there's not going to be any "negotiation" (or very little) with repairs, and they WILL be able to recoup this cost by not having much to do.

No, the buyer may come back and file a lawsuit saying you hid anything the inspector of choice didn't find. We have seen this a number of times in our local MLS by one agent and his inspector "friend". Do not do it or have a lawyer drawn letter stating this is only a helpful item they may use if they so choose to. Good luck

I think this is done without the "official" form (or should be). Good points are covered but folks want their house on the market right away.

Thanks for your post

Tony

I definitely wish pre-seller inspections were more popular, for everyones sake. Our company offers 3 different types, even one that can be paid in full at the time of closing, no matter how long it takes.

We encourage sellers to get a pre-inspection. The market is extremely competitive and a few dollars invested in an inspection can equate to a higher sales price.

Often times after a buyer has an inspection, the cost of a simple repair becomes magnified in the eyes of the buyer. It can wind up being a deal breaker later.

Athina,

Hats off to you for many reasons! Good advice for sellers and the rest of us. You took the tip and became a RainMaker.

You could edit this post to make it Public - Very worthwhile reading for non-agents too!

Athina,

I also have recommended that my agents get a inspection up front. It takes alot of unknowns off the table. It is hard enough to get a good offer today. Why open it to new negotiations after the home insoection?

First welcome to AR. Second I have a licensed builder do the inspections for my listing clients FREE of charge. Its a perk for them. It also helps that he is my Husband as he works cheap for me!

Welcome to 'the Rain' Athina. If a seller does a pre-list inspection, they will know what needs to be done and will not have any surprises when the buyer does theirs. Occasionally, though not often, I've had buyers use the sellers inspection report and not do their own, resulting in a much smoother close.

It is viewed as a good idea in my market area. It isn't construed as a warranty of any kind, but forewarned is forearmed.

Congrats on having your first post get featured! Save the screen view for your listing presentation.

Good Idea,unfortunately sellers quite often are on their high horse in the beginning and aren't going to spend money. It usually bites them before its over.

Athina, It's the law in California, but your post clarifies the value for sure.

I like the fact that a pre-inspection can uncover a deal breaker (like radon) or getting odd repairs done so that it's not a big negotiation factor.

Hi Athina,

I think it's an excellent idea. But what about those folks that have to sell because of financial hardship, and just can't afford it?

Athina

There are more pros than cons on this. If your sellers are honest and motivated to sell, it is a great idea and works well. I have had prospective sellers not want a pre-inspection and after further discussion, I refused the listing!

My assistant did one before she sold, and found mold in the attic. So had it remeated before it went on the market.

If you have lived there a long time then yes.

I find that a home that is promoted as having a prelisting inspection relieves some anxiety buyers have about spening $400 plus on an inspection after contract that might reveal serious problems like the one Missy talks about above. They still get an inspection, but they feel confident. It helps sell the house.

great idea....i have asked my sellers to do this and their comments were always my house is perfect and I am not paying any money up front... but i agree, i wish my sellere would do it

I always have my own properties pre-inspected before putting them on the market, so I guess I think it's a good idea. However, I'm not 100% on that side of the fence due to disclosure issues. A few years ago, I had my home pre-inspected and the inspector found what he declared to be "white mold." I panicked (prematurely it turned out) - it was not mold at all, but rather concrete. Sheesh. So, here I am, a licensed real estate agent with an inspection report that said I had mold. Which wasn't mold. And honestly - I was NOT in the mood to spend a bunch of money hiring a mold investigator to come out and declare my concrete to be Not Mold.

Inspectors aren't perfect - some are far from it - and just because one inspector has an opinion doesn't make it fact. And in my experience - when you share an inspection report with a buyer, he's going to insist that every single thing on the report is fixed, even silly stuff. And, frankly, if the seller fixes something major as a result of the inspection, and the buyer sees the inspection report, the buyer might be even fussier about how the problem was corrected.

As a seller, I want to know what I'll be dealing with at inspection. But not all sellers are good candidates for pre-inspections, especially if they don't intend to fix darn near everything.

I would be very interested in hearing from the home inspectors out there if there is ANY difference between a Buyer side inspection and a Seller side Pre-inspection? In my experience, Home inspectors Buyer reports forewarn the buyers about items that are not material defects, such as systems being in working condition but at the end of there normal life expectancy. This iis where the deal breakers have come in for me. Now the buyer want a new roof or a new hot water heater, because it's old. I'd like to hear from agents who have provided pre-inspection reports on homes that would fall in this category.

Everyone thinks Pre-Inspection reports are a good idea, but I never see any homes that are marketed as such in my area....I'm still on the fence because you simply don't know what Inspector A will find that Inspector B may not find, and once you know it you can't reverese it--whether it's valid or not. I THINK I could get 3 different inspectors and 3 very different reports, and that's what holds me back from recommending pre-inspections to Sellers.

If a seller has had a home inspection performed, it creates a strong leverage point for negotiations. Instead of the listing agent having to grin and bear it with almost every request by the buyer, the seller's agent can now push back and address only those items that the seller knows are potential problems.

The only fallback is that if something does get noted by the seller's inspector, and if it is deemed "material", it must be disclosed. So, sometimes you get what you ask for - but most of the time the seller's pre-inspection is a great thing to support asking price, avoid unnecessary negotiations for repairs and better positions the home for sale.

I think it just opens you up to a game of he said she said. Seller hires an inspector. Makes a list of items, seller can repair / replace or just hold onto the list for future reference. Buyer hires inspector, finds additional items.. seller says "o. no, my inspector didn't find that or said this"... buyer says sorry that was YOUR inspector and this is MY inspector and MY inspector wins!

Lately its septic inspections that have been the problem.. I would recommend to any seller that they have that inspected because it seems they all "fail" inspection then the buyer wants to negotiate 30 to 60K off the price of the house, interesting enough none of them want it fixed before closing and then its interesting to see when and if the new buyers actually make the repair (if it was needed at all)!

This is an excellent write up for us to be better agents for our Seller clients. Thanks very much for taking the time to give a great outline. I'm bookmarking this one.

Hi Athina,

I'm on the "con" side of this idea. I think that every inspector will have a different "list" of items noted. As a buyer agent, I would definitely encourage my client to have their own inspection done anyway. One buyer's perceived "issue" may be different from another's.

When I sold my own house a few years ago, the buyer's inspector wrote "the basement wall is in danger of exploding" ... some of the block foundation had been built out of plumb (two of the middle rows protruded further than the rows above and below). That buyer RAN from the purchase. I had to have a structual engineer come and verify that the basement had just been built that way. The second buyer had another inspection and the "non-ssue" was not even mentioned.

Very well-written post Athina. I always recommend a pest report. Occasionally buyers have performed inspections of their own and found something that the first inspector missed. But if you prepare your seller for that possibility, they're less likely to freak out.

My philosophy about what lurks within - it is what it is. You're going to have to deal with it now or later, so let's just get it taken care of. And especially because the costs as quoted by pest companies can cause sticker shock, it's better to be aware of that sooner rather than later. A buyer will only use it as leverage after the fact.

I always encourage my Sellers to have their home "Pre-Certified". The home then is Pre-Inspected and includes a one year home warranty which also covers the home during the period of time that the home is listed. As an option, the Seller may have a home stager come in for a minimal cost. Great post Athina.

Great Post! I work with a lot buyers and they love it when there is already an inspection to review. It makes me more confident, as a buyers agent, that there will not be any surprises down the road that would kill the sale and perhaps make my buyer have to start over, get temporary housing, etc. I will start suggesting that to the sellers that I have, as well.

Very good post Athina. I think it is a good tool for the buyer and the seller to have. The seller is aware up front what needs repaired and the buyer may feel more comfortable with the purchase knowing that the sellers have already started the process and are concerned about any repairs necessary.

Hello Pam,

"I would be very interested in hearing from the home inspectors out there if there is ANY difference between a Buyer side inspection and a Seller side Pre-inspection?"

In Texas the inspection laws carry the same requirements for a buyer as for a seller. As a matter of fact, the Texas laws take this one step further. If an individual is even considering buying a home (no purchase offer or contract yet), or a person is even considering listing their home (no listing contract with an Agent yet) then the inspection falls under the Texas inspection/Inspector laws and the control of the Texas Real Estate Commission.

There are quite a few valid points on both sides of the issue. Pre-listing inspections are good and work for some situations and not for others. One of the larger arguments against pre-listing inspections is one of disclosure. There is fear that a poorly performed pre-listing inspection can open up the seller, and possibly the Agent, to disclosure fraud or other issues. Actually a pre-listing inspection should be properly worded with a statement to advise any potential buyer to have their own inspection instead of fully relying on the pre-listing inspection.

As for liability on the seller's part I look at this an entirely different way. It does not matter whether you have a good, bad or no pre-listing inspection as anyone (i.e. buyer) can file a complaint or lawsuit anyhow. The value of the pre-listing inspection with regards to disclosure, among all the good points above, is coupled with a buyer's inspection. If your seller client did not mark a disclosure item, and two Professional Inspectors did not find it, then how could the seller have been expected to know about it? If the seller did manage to hide something extremely well that nobody noted it until after moving in and living there, then as the seller or buyer's Agents you have triple documentation for protection. Any sane judge would dismiss any action against you and your E&O provider would love you for taken the extra measure.

I think it is outstanding that Athina pays for the inspection at closing. Not only is it an incentive for the owner to have it done but also an incentive to stay with the RE Agent until the home is sold.

Emmanuel Scanlan, TREC #7593

www.psinspection.com

I think it's a good idea, but realize that the buyer's inspector could still find other things, or have other opinions, so the seller may fix a bunch of items only to be handed a new list from the buyer, and feel like he ended up doing more overall. I like it, though, because even if seller chooses not to fix certain items he can disclose them and buyer can make their offer accordingly.

I also think people who've been in their homes a long time should get an inspection. We can get so blind to defects in our own home. If someone's trying to get mom and dad to move out of their home because they no longer can really afford to take care of it, springing for an inspection might be a real eye-opener.

RE: "I would be very interested in hearing from the home inspectors out there if there is ANY difference between a Buyer side inspection and a Seller side Pre-inspection?"

Every inspector has their own way of doing inspections and reports. Some have multiple levels and types of inspections. Personally I do just one type. I will make some slight modifications if it is for a seller, like not including some extra minor upgrade or preventative maintenance tips. I also sometimes use less photos. Here in Calfornia pest inspections are regulated by the state and home inspectors are not. Most sellers will get a wood destroying organism (pest) inspection beforehand. In this area pre-sale home inspections are not done very often.

Though occasionally we have sellers who have done inspections it seems they are the ones who have the near perfect houses. I seldom recommend seller inspections as most sellers are aware of problems whether they list them or not. Yes if the first buyer finds some major problem they can ask seller to repair, negotiate or back out, even if the home is being sold as-is.

Most people have a pretty good idea of what needs some work, so calling a good handyman to take care of those things ahead of time is a good idea, plus get the mechanicals serviced and repaired as needed....as with any routine maintainence system a homeowner should have in place. But since inspectors are so different in what they focus on, I lean towards not having a full-blown inspection conducted. The seller can deal with the repairs requested by the buyer through negotiation. The exception would be for the person who never maintains anything around the house, and that seller might need to have the reality check early in the process. If you do have the full inspection, just be prepared to disclose the whole ball of wax.

As a buyer's agent, I'm watching this conversation closely. I don't think I would ever encourage my client to only rely on the seller's inspection report, but I definitely fall into the camp that feels "the more you know, the more you know". As noted above, if a material defect IS revealed, it would probably be found anyway and now the seller won't be taken by surprise after they are pending and worry about having the deal fall apart.

I have often had buyers who do not wish the sellers to make repairs as they feel better about getting their own done and simply want a concession or a lower negotiated price.

I think it's important to note that Home Inspections get things wrong time to time. Having your own inspection report to compare to a buyer's report may show some discrepancies and save the seller from making unnecessary repairs. I like the idea of reimbursing them for the cost at closing. Is this a form of inducement though?

I have mixed feelings. I find that many buyers still want to have their own inspection done since they don't trust the sellers report. Still sometimes it's good to know what you are dealing with and it can be a very useful marketing tool.

Athina,

Great blog.

A pre-listing inspection can...

•· Help identify motivated sellers

•· Help make your listings more marketable

•· Set your listings apart from the competition

•· Help reduce contract fallouts

•· Identify problems before a buyer sees the property

•· Allow the property to show better with necessary repairs

•· Can determine if seller has made needed repairs

•· Help eliminate significant surprises should another inspection occur

•· Help receive offers closer to the asking price

•· Reduce the chance of losing a buyer

While I don't usually recommend this for clients--I did recommend it for a home I recently sold in the Skyline Heights area of Portland. They had been over priced and languishing on the market for 6 months with an other realtor. When they asked me to come and give them a 'read' on the market, I showed them in the sold comps that only 2 homes in their neighborhood close per month--and that they have to be one of those 2 if they were going to meet their goal of actually sellling it. So not only did they come down $55k on the price, we did a whole home inspection and in this time of 'not knowing what you get' and so many bank owned properties with unknown issues..... we garnered 3 offers by the 2nd weekend i had it listed and closed with a full price offer last week. This home was above the $500k mark. Each person that made an offer said that they were relieved that there had been a home inspection made available to them. That they had seen the other short sale and bank owned properties and knowing that this one had been inspected and repaired was a great relief to them. I still tend to not recommend them for every situation, but in this one--it was the right thing to do and it totally paid off.

Every point you made Athena is a good one!! Ones that I currently use,.. there is one additional reason to do one however,...

*Not all Inspectors are created equal and some will make things up just to make it appear that they are doing their job. With the Seller's inspection in hand,.. it helps to identify "Smoke" that some inspectors will present as a problem.

I understand some not wanting to have one done as it will require some issues to be disclosed that the Seller nor the agent may have had knowledge about,.. but truth is that those same issues would likely be found when the Purchaser chooses to have their inspection done. The pre-inspection provides the Seller time to get a second opinion from a qualified contractor to verify the inspectors findings, could be the inspector believes something is wrong when it's not,.. if the Purchaser's inspector believes the same thing you have the document from the professional to argue with.

Dealing with the items in the front end also takes the pressure off the back-end when they are subject to the time constraints of contract.

Just my thoughts

A lot of good points have been raised in the comments above. As a Home Inspector of 7 years & 3000+ inspections I fall on the side of Yes, it should be done. Yes, there are potential down sides to doing it if the home is in sad condition and has been let go and not maintained well. I think is is much worse to be ignorant and get caught by the buyer's inspection than to just confront it and deal with the problems up front. Some homeowners (and Agents) seem to prefer the "head in the sand" approach and do not want to know. Dumb idea IMHO.

It really depends on how the inspection is handled and the verbiage of the disclosure. If you are using a reputable home inspector that is not prone to drama and scare tactics, the report will be pretty matter of fact. As I tell my clients, " I don't have a dog in this fight. My job is to observe and report, not evaluate or make recommendation about what should and should not be in the request for repairs. That's the Realtor's job.

A good inspector has many resources and lots of experience and can be a huge asset to a seller. After all, this is their LIFE. it's what they do, every day! Use the asset to your best advantage, they are working for you.

No one likes to be told that there are problems with their wonderful home that they have lived in for many years. It's only natural. If you step back, take away the emotion and take a "buyer's" point of view for a few minutes, you will have a better idea of what is important to a buyer and be able to handle those items that are important and disclaim the less important findings and just disclose them. As I always tell my buyer clients, "pick your battles" and don't expect that a 60 year old house will be "perfect". There ain't no such animal!

Why are you putting the home on the market? Is it for "display" so people can come by and tell you how wonderful it looks and stroke your ego? Do you get all incensed if someone has the temerity to say something is not perfect? Is this an emotional big deal? You need to step back and really look at what you are trying to do and get on with it. Yes, some people can be harsh in their remarks. There are jerks everywhere in life, get over it. Just blow it off and move on.

If you were buying a used car you would not expect it to have a new engine, new tires, perfect upholstery and perfect paint. It's USED and you are paying a price that reflects that to some extent. The same criteria applies to a house. A 60 year old property should be well maintained but systems do have a lifespan. Just because one of them is nearing the end of its lifespan is no reason to ask for a replacement. Home maintenance is part of owning a home. Just build it into your maintenance budget for repairs or replacement when due.

Best,

Dana

As a Home Inspector and in today's market it's the best step a seller can make, 4 years ago 99 % of the home i inspected, the buyers moved forward with the transaction. that number has drop to about 75 %.with It being a buyers market, most buyers are being real picky. Some buyer's have even use a clean inspection report to back away from a deal. Because another bank approved their bid on another short sale property. The buyer realtor's does not have to disclose, what the inspector found, just that the buyer want's out due to the inspection report. Some of the positive's from a pre-listing inspection.1- the buyer may have to submit the buyer's inspection to the seller, if they want out and can prove it. 2-it helps educate the selling agent on the property that they are listing. 3- what if the property is over 30 years old and the a/c ,heating and roof is less than 5 years old ( good selling point ) . 3- how does a Realtor deal with mold, is it major or minor, 1st a home inspector that states that the home has mold should have use the word " it appears to be mold " unless they did swab and air testing and sent the samples to a lab, in florida the florida EPA recommends that mold under 10 sq ft. be cleaned with bleach, so if a pre inspection does find what appears to be mold under 10 sq.ft, a homeowner can deal with that issue for under $3.00. and any pre-listing inspection should be addressed that it is a sellers inspection and that the buyer's hire their own inspector.

Hector

http://www.hpcertifiedhomeinspections.com

Great blog!! I wrote one supporting a pre-listing inspection a month or so ago as well!! Happy to know other's feel the same!

I usually recommend a pre-sale home inspection as a better disclosure for the seller rather than their non-professional/licenced disclosure. I've found it puts alot of buyers at ease knowing a licenced home inspector has gone through the house, I do offer for the sellers who choose to do one that I'll reimburse them the cost of it at the close. It's usually very well recieved and also gets the property into better showing condition with the suggestions coming from another authority.

Athina,

You have written an excellent first post. Great ideas. I have heard of some agents who will actually offer to pay for a pre-listing inspection as part of their premium service, in addition to offering a home warranty.

We believe that this is a huge advantage and helps a properly priced home stand out in a crowded field. Any defect that may come up will almost certainly be picked up on by the buyers inspector, so why not be proactive and try to get in front of any potential problems.

Not all of our seller's get one, but we definitely recommend them.

I think it is a good idea, but in this market people are not willing to spend the money on such things.

I've had this work both ways in the past. My seller of one home had a home inspection done and made all the repairs as advised, only to have the buyers inspector dig deeper to find a few other problems he then had to repair. Most importantly we kept the deal together.

Then on the other hand an old farm house with slanted floors that scared everyone out the door was a different story. We called in a structural engineer out and he gave us a favorable report that worked in our advantage when placed where everyone could view it prior to seeing the slanted floors. It sold right away after that. I suggested this in the first place and the seller didn't want to spend the money, he said later he wished he would have listened in the first place. Great Post & Welcome aboard!!!

This is a great first post! I am somewhat new to Activerain and have not gotten that brave yet, but hope to some day..

I am in the position to decide on a case by case basis with this issue... If I think the sellers are not being honest with me, or on the disclosure, then I will urge an inspection. On the other hand, as a couple of other comments suggest, not every inspector will find the same list of issues. Your sellers may end up with twice the repair costs. I also feel that different buyers have different opinions on what they are willing to work around or demand to have corrected. I have sellers fix anything they are aware of that is resonable, disclose these repairs and anything else they know of. Then I make sure we inform anyone interested in the home what the issues are wich ones they are not willing to fix. If you do this upfront, the buyer knows and there is proof they knew, what the issues are and where the seller stands.

How serious is the seller in selling? If they want to know what they're dealing with, get estimates, or actually do the repairs prior to putting the house on the market it's a great idea!

Danny Frank - Good point made above about if the seller or we as their agent know, the information, it must be disclosed.

If they are going to do the pre-listing inspection, the seller should be prepared to do the actual repairs, or disclose and sell "as-is" at a lower price.

Give your seller the pros and cons and let them make the decision.

I believe the pros definitely outweigh the cons on this issue. The seller may be reluctant to spend extra money upfront, however it is to the seller's advantage to be aware of possible issues that may arise in the buyer's inspection. Of course, as diligent professionals we are going to discuss pros and cons of such a decision with our clients.

This is a good strategy to have from the seller's side, as it can eliminate much of the haggling that can take place after the buyer's inspection. Very valid points.

When I sold my mother's home, I had a pre-inspection. Good thing, because there were three major issues that would've killed the deal and cost me another year of marketing. As it was, we discovered them while we were still doing pre-listing improvements. Sold in 28 days and no more inspection problems.

Hi Athina, Your advice to the sellers is absolutely correct for all the reasons you list and probably more. Good selling to you !

I think it's hard to recommend an inspection because it's not the norm, but I think it's a great idea! No one likes surprises. I think it's great to list the benefits like you did on your post at your listing presentation. I think a hard copy is great to leave with the seller for them to think about.

Somewhat great idea, but not seen much in my area of northeast Ohio. In my 20 plus years of inspecting houses there has been just one agent recommend pre-listing Inspections. She would not list a house without an Inspection and then would lay the Report and any Work Orders that resulted from the findings on the dining room table for all to see. I have inspected a few homes of buyers after I inspected the homes that they were looking at, but not many. After finding problems that they did not see, they worried about what they hadn’t seen in their own home.

I think a better idea would be to inspect the components of a house while it is being staged. People who are willing to pay to stage a house also may not want any major flaws to hold up a sale. I wonder what any Home Stagers think of this idea.

In Oregon, the state-mandated seller disclosure form has an item where the seller must take a position about whether an inspection has been done.

Once that has been checked, the buyer is going to request a copy. Not producing it would invite issues.

So in deciding whether to pre-inspect, the seller needs to be informed as to how this process is going to work.

Anything found in an inspection is going to have to be disclosed. In a discussion of what was or was not a material defect, all pushes are going to be decided in favor of (disclosure and) the buyer.

I think that is a great idea, if they are willing to take action on the items found.

You are so right.

I have had some success with pre-listing inspections, and one interesting thing I have noticed is that with every one, the buyers decided to just go with the seller's inspection, and not do one on their own!

Very nice post Athina. I re-blogged and am glad you made it public.

Amen! I hate surprises at the end! I always suggest pre-inspections!

I'm just catching up on responding to my (first!) blog's comments...

#9- Lori: Thanks! I just made my post public. I started the blog before becoming a Rainmaker so was only able to reach "members only"

#10-Terrylynn: That's what I found some sellers object to..the double cost. But the cost is only to the seller for the seller's inspection. The seller can benefit in catching an inspector's discovery and solve potential problems ahead of the buyer.

#11-Barbara: Excellent point! Most sellers have very little wiggle room these days. No one wants to accept a price and then be hit with a big repair they can't budget for at the last minute.

Pre-inspections can be good in certain cases but I don't think I would use one in every case. If there was an issue that needed to be addressed or sellers that were blind to the actual state of their home then I think it might be a good idea. Otherwise most issues can be resolved quickly during the sale process. Great first post! --Marian

Marian, you live in a lot easier market than I do! The home inspection is almost always "THE" stumbling block we face and we have to get by.

Hello Athnina,

I am an inspector in Los Angeles area. I am a CRIEA (California Real estate Inspection Association) certified inspector and an ASHI (American Society of Home Inspectors). This is a great subject and is truly a very valuable tip you have shared with agents. It is difficult for an inspector like myself to try to convince agents and owners to do this pre listing inspection. Some of the bigger listing agents in LA do this regularly while most agents seem to hestitate or avoid this. It is quite obvious form my position that this prevents a lot of negotiated discounts and surprises during the contingency period. The amount of added work and delays for agents and escrows can add up fast as further specialists are called for to repair or do additional examinations such as plumbers, roofers, electricians, etc. which typically adds a lot of time for agents to oversee or meet at the property for access, etc. Overall most of this is prevented witht full disclosures.

The inspection standards of practice are the same for a pre listing inspection or a buyers inspection. If a good qualified inspector who is certified with a reputable association, does an inspection, there may be small things which are different from another qualified inspector. But I have found there are often large defects missing with unqualified or uncertified inspectors.

I have found it very rewarding personnally, to inspect a home for people who have lived in their house for a long time and have most of their savings and personal assets in their home equity and knowing that my report will protect them from otherwise unforseen problems which typically result in major costs either for repairs or credits, after some complex and frustrating negotiations. People do get used to their house as it is and do not notice obvious defects and once informed can easily coordinate with their agent to price the house accordingly and do repairs if appropriate.

Overall, this makes work much easier for agents, better prediction for getting the asking price amount and is also much better risk management for the agent(s).

I still advise buyers to get their own inspection irregardless if their is a prelisting inspection.

I also strongly advise to have a brand new house or condo inspected since there are often defects found that the building inspector or the builder himself did not catch taht often some sub contractor did not install properly.

~~~~~Bud Hayes

Senior Inspector LaRocca Inspections

It is from thje eye of the beholder!~~~

Be careful about offering the pre-inspection report to potential buyers to provide disclosure and evidence of repairs and/or defects that a seller may choose not to repair because some states don't allow that and some home inspectors don't allow that. This is part of the problem with not having national standards for home inspections.

There are several Realtors here who hire me for pre-listing inspections, and I'm continually amazed that pre-listing inspections are not more prevalent when each year I read reports from NAR, CAR, SDAR, or some third party that homes that have pre-listing inspections sell for more money, sell faster, and sell with fewer problems during escrow. What's not to like?

Hey, in California, several courts have said that Sellers and Realtors should know what they are trying to sell, that ignorance is not bliss. The cost of a pre-listing inspection is not an adequate excuse considering the Seller will make many hundreds of thousands of dollars and the Realtors will make many tens of thousands of dollars. Front the money and find out what you're trying to sell!

Re George, comment #17: I have never heard of a home inspection report having zero items on it. That's a first. Even new homes have items on them. Perhaps you mean zero big-ticket items?

Re David, comment #18: There can be several reasons for that, one being the experience of different inspectors. If you are going to have a pre-listing inspection done, done hire the cheapest inspector, hire the most thorough inspector, even if he is the most expensive. Call a few Realtors and ask them who the "deal killer" inspector is, and then use him.

Lastly, sometimes when the plumber comes in to repair the water heater, he damages the furnace sitting right next to the water heater. No one knows except the plumber, and he ain't telling on himself. The only one to find out the damage to the furnace is the buyer's home inspector, or your pre-listing inspector. Whenever I do a pre-listing inspection, I always offer to go back by to check on repairs to ensure that they were done properly and that no additional damage was done.

Other problems include the many different standards that inspectors can use, either from one of the six national trade associations, their own state trade association, the standards issued by their state, etc. Remember that standards are the minimum acceptable, so choose someone who exceeds the standards; choose someone who is willing to work with you to address the new stuff found in the buyer's inspection report; and, as noted above, choose someone who will come back to ensure that repairs were done, were done properly, and that no additional damage was done.

Re Kyle, comment #22: Prior to Texas getting licensing, standards of practice, and even standard reporting procedures, I might have agreed with you, and in some unlicensed states, I might still agree with you. However, as the home inspection profession continues to mature (it's only 33 years old), that continues to become more of a myth.

Athina - I haven't ever recommended them, because of the disclosure laws here in Texas. I suppose it would be something to consider if the sellers were interested in fixing EVERY item on the report ahead of time, but the next inspector will still probably find more stuff. Just my two cents -

Great responses. All of them. Thanks!

#12-Russell: Thanks. Surprises are often a deal breaker in our skittish buyer's market. Especially for first time buyers.

#13-Lane: Yes. Good to try and eliminate just one more closing "scramble"

#14-Jessica: Motivated sellers seem to be more "in tune" with the market...because they have to be. I agree it helps bring more showings if the Seller's inspection is disclosed.

#15-Ben: Punchlist: I recall when I worked for a couple of builders they had their own "quality control" guys "punchlist" the house to get it to 99%. Of course buyers sometimes brought their own inspectors which we welcomed. There wasn't a single case where their inspectors didn't find something...but that's the beauty of it...it was usually a very minor item.

#16-Roland: You mentioned minor repairs. But catching and repairing the major ones is most important. If a seller won't/can't fix a major item that will be found by a buyer's inspector anyway, at least the seller can set a price knowing the 'defect' and sell it "as is", reducing the need of a further discount due to the 'known' defect.

#17-George: Zero defect? Wow, that must have been a hit with agents and buyers. "Willingness to work with you"...I agree is very important.

#18-David: Good example. We should make sure to disclose to sellers that buyers could still find additional items with their own inspectors. It also depends on the inspector; some are more "thorough" than others. However, if the seller's inspector missed an important item, I would gladly pay for the inspection! Most often I find the buyers don't find anything that isn't a simple fix. What we're trying to avoid is a possible "deal breaker" that catches us by surprise.

Re Jeremy, comment #26: There are bad apples in any profession, including collusion between Realtors and home inspectors, but those are few and far between. I note that you also are in Texas, which has licensing for home inspectors, Standards of Practice for home inspectors, and even standard reporting procedures for home inspectors, so if anyone in Texas has a problem with a home inspector, Texas provides recourse. Also keep in mind that anyone can sue anyone else at any time for any reason. Doesn't even have to be a good reason.

Re Gabe, comment #33: It's rarely a good idea to let buyers rely solely on the seller's pre-listing inspection for several reasons:

Any repairs that were done could have been done improperly, and sometimes not at all, notwithstanding repair receipts. Too often, especially if it's out of sight and out of mind, repairs were not done. Roofs, attics, and foundation crawl spaces are notorious for repairs not being done.
Occasionally the repair person will damage something while doing the repairs. This happens often here when the furnace and water heater are right next to each other in the garage.
With a buyer's inspection, the buyer has direct recourse with his inspector, something that he doesn't have with the seller's inspector.
Real estate changes in response to weather and activity in the home, either from people or pets. It's not unusual for something to break down between the time of the pre-listing inspection and close of escrow. That problem would not have been on the pre-listing inspection, so all that happens is an unhappy buyer who, depending on the expense involved, winds up suing everyone involved. A buyer's inspection can help prevent that.

As many home inspectors like to say in response to being asked how long the inspection report is good for: "As long as I can see the property in my rear view mirror." After that, I have no idea what might happen to the property from wind and water, or from people and pets.

Re Steve, comment #36: I'm not sure what "it" is, but having pre-listing inspections done in California certainly is not the law. Sure wish it was, but we can't even get licensing for home inspectors, much less pre-listing inspections done by those unlicensed home inspectors.

Re Michael, comment #38: That's when the Realtor should step up and get it done. After all, it's only a few hundred dollars. Look at it this way: If you want the home to sell as quickly as possible, for as much money as possible, and with fewer problems during escrow that could result in the purchase contract being canceled, it's better to know as much as possible up front. The longer someone in financial hardship holds on to the home, the greater the carrying costs and the more the financial hardship worsens. Figure out the bottom line and one should be able to figure out that a pre-listing inspection is a no-brainer.

Re Pam, comment #44: Unfortunately, Pam, you are in Pennsylvania where the state has licensing but has no enforcement provisions. It creates a free for all up there.

If you want to have a pre-listing inspection done, find an inspector who will stand behind his report and help you address any additional problems noted on the buyer's report. Any inspector who is not willing to do that probably is not willing to do it for his buying clients either.

As far as whether or not there is a difference between a buyer's inspection an d a seller's inspection, mostly there is not. However, I am one of the few who does make a difference. For example, if there is a corner crack in a window, I'm not noting it for Sellers but will for Buyers. I will not describe the property for Sellers but will for Buyers. After all, Sellers don't really care what kind of house they've been living in for the last 20 years since they are selling. Consequently, by not spending the time to describe the property, I save time, and since time is money, my pre-listing inspections are less expensive than the Buyer's inspection.

In California, the Leko Decision from January 2001 made home inspection reports part of the public disclosure process, so if a Seller wants to provide the report to Buyers, and Buyers would like me to come out and update the report to verify that no additional damage has been done and that repairs were done, and done properly, I do that for a much lesser fee than a complete Buyer's inspection.

Re Patty, comment #46: Since real estate can, and does, change in response to the weather, and in response to people and pets living in it, quite often something happens to the property after the pre-listing inspection that should show up on the Buyer's report but not the pre-lising report. The longer the time between the pre-listing inspection and the Buyer's inspection, the higher the likelihood of this happening. In fact, I would guarantee it to happen since the average days on market is up there in the six-month range right now. Six months is an eternity when it comes to real estate, which is why Realtors don't use sales from six months ago in their comps!

Additionally, quite often a repair person can cause damage to something that he wasn't even working on, or he could be a newbie and didn't know the proper repair, or the union bell went off and he didn't even finish the job, or the repair was in the attic or on the roof or under the house, so "out of sight, out of mind" meant that he could do a less-than-satisfactory job for the same money.

Re Randy, comment #65: I have never ever heard of a home inspector making something up. I have, however, heard of home inspectors who discussed possible causes of things there might have been unfamiliar with. After all, home inspectors are generalists, not specialists, so it would be impossible to know everything there is to know about electricity, plumbing, gas, fireplaces and chimneys, roofing, engineering etc. Heck, it's hard to find an electrician who knows everything there is to know about electricity!

I think this is a great post. I also think it's a good idea for the Seller to have a home inspection before they start showing the house. This will tell them what, if anything needs to be fixed and taken care of. Then there are no surprises!!

Patricia/Seacoast NH

#19-Chris: Pre-listing inspections were also non-existent in most of my 22 years in the business; especially when times were "good". Even buyer inspections were rare in the 80's.

#20-Sheree- A few "hundred bucks" can be a cheap investment. But, it depends on the seller.

#21-Danny-Sounds like a good approach. Just send me the list too! Sellers should do the inspection for their own benefit, and unless required by law, they don't have to hand it over to the buyer.

#22-Kyle- It is possible it can bring more net repairs. But I'm betting on it to help sell and close the house faster.

I always recommend pre-inspection of issues that could be big. structural, mold, etc. - the real deal breakers. Better to know and disclose than to have a huge upset after an inspection!!!

Russel Ray: Thank you for helping out here with the inspector's points of view and helping with the more technical matters. We all need to better understand the inspection process and the meaning of its results. I like the example of hiring the worst "deal killer" inspector!

#53- Emmanuel Scanlan: Thanks for pointing out the liability points from an inspector's point of view.

#92-Bud: I agree that new homes can benefit from a buyer's inspection. When I sold new construction for a production builder, about half the buyers did an inspection. Of those, very few found anything important. But when they did, the builder was happy it was caught and remedied. It also helped the builder know if a trade was not doing their job!

#40-Missy: This is a great example of a pre-listing inspection benefit. It would have been worse for the buyer to catch the mold problem; suddenly they woud have had more fear about any other latent defects.

There are a lot of pros and some cons to doing a pre-inspection. You never know what a buyer will uncover and request so sometimes a seller may wonder how much do i have to spend to repair. I had an instance where we found things, the seller decided not to address all of them, and --guess what-- the buyer didn't ask for most of them to be addressed either, and we got the price.

Bev and Bob: Good example. Not all items are "deal breakers" or else the property was well priced in spite of them.

#68-Crystal: Thanks! I will also look up your blog on this topic.

#43- Hi Jennifer: Lots of food for thought. Thank you for such a great example. We do have to be careful about disclosures and how they vary state to state. I agree some inspections can create problems where there are none, and miss problems that are obviously there! For eg. I bought a home in 1990 that "passed" inspection (no seller disclosures were required at that time, in that state). A few weeks after moving in, we had a rain storm and the basement flooded! The inspector offered to refund the $350 fee. That's all I got out of it. It cost us thousands to waterproof the basement. It really depends on finding a good inspector and/or getting second opinions if there's any doubt. (I obviously hired the wrong inspector then). It goes both ways: buyer and seller beware.

BTW, I subscribe to and enjoy reading your SWS emails.

If your seller is willing to pay for it and then willing to take care of any critical issues that come up, then go ahead. Keep the paid bills to show that the work was done by a licensed professional. However, if the seller is NOT going to do anything about what is found during a pre-inspection, then perhaps it is better to leave the inspection until after you have an executed contract. The buyer may be more motivated to work things out rather than bail. And if you know ahead of time the problems that the seller refused to take care of, you are legally bound to disclose them to the prospective buyers. And in my experience, their extimations of what the repairs will cost will be double or more of what the real cost wiould be. So, a lot depands on why your seller wants to do a pre-inspection and what he/she is willing to do about problems that turn up.

Here we are STRONGLY encouraged to have the buyer do their own inspections and not rely on those done at the request of the sellers or their agents. What happens if after closing a problem occurs that the sellers' inspector did not find? Who is to blame? The inspector is working for the seller, not the buyer. Those most are ethical, to a buyer there will likely be some doubt that could come back to haunt, at least the selling agent, and likely the listing agent and seller as well. I much prefer that the buyer has his/her own independent inspection done by an inspector of his/her own choice. Even if you are legally on solid ground, they can cause you a lot of headaches unless you are very careful. Things may be different in your state.

I agree with you, all the way. I always get my listings pre-inspected and then advise the buyers agent to get their own inspection as well. Alabama is a buyer beware state. Most of my buyers are Engineers. They prefer a pre-inspection...gives them a bit more comfort moving forward. They always hire their own as well, and I insist they do so. IF an inspector would miss something big, then they aren't much of an inspector. I use an inspector that is widely known as the "deal killer" lol. Bring it on, I say. Better to find the issues before the buyers do, so we can handle it upfront and not potentially lose the deal later :) I pay for the pre-inspection if the home is ready to sell, meaning price, condition, etc. I've never lost a deal yet that I've prepaid. It's worth it to me.

Great post! I wish all seller would get a pre-listing inspection they make for a much smoother transaction.

This is a service I may offer as part of my package at a listing presentation. It is a hit with many sellers as no one else is doing it currently. But I also do it for peace of mind, knowing we can address whatever issues come up beforehand.

Great minds think alike, I see. I wrote something similar back in July/August, but from a different angle. I'll send you the link to that post. And this is definitely worth a reblog. Welcome to ActiveRain...you've made quite a splash with your first post!

I can see the benefit of doing a pre-inspection appointment as a way to advise both buyer and seller. Though I still think the buyer should do their own inspection.

So important, especially in this market.

DEC

2009

I do a few real estate office/risk management presentations annually. Los Angeles Realtors mostly stare like a deer-caught-in-the-headlights when pre-listing inspection is mentioned. The pest report is usually performed before the home gets on the MLS. I don't get it... and I offered a FREE pre-listing inspection at 3 large real estate offices. No bites yet.

i may be in the minority here. our latest Calif. Purchae Offer contract is an as-is style form. the seller is not required to go find flaws but is required to disclose all those known. i just don't think it's a good idea to open cans of worms that may not get opened by the buyers who are required to do their own due diligence and perform any desired inspections. this is not to say i don't advise fixing stuff that needs it, just that it's not necessary to go hunting for stuff. it's easy enough to paint trim and fix fences and gates but i would limit repairs to stuff they are aware of.

i also advise sellers to be careful what they paint or repair before a sale as it might seem like they are covering things up. a stain on a ceiling for example. certainly they should fix the leak but what if they hire a dummy. this is stuff that somes back.

i prefer to let the buyers find the flaws, WITH FULL SELLER DISCLOSURE OF ALL KNOWN ONES OF COURSE, and make a request for repairs. i am careful to be sure the buyer gets all the disclosures before their inspection(s) so that they can make those disclosures the topic of inquiry with their inspector(s)

with the exception of a VA deals i strongly advise that the seller refuse repairs and instead grant allowances to relieve any chance that the work might be done inadequately and come back as a complaint after the close of escrow. let the buyer hire their own trades so that any warranty's are original to them.

Athina: Not a big fan of the concept & it has never caught on in my area. I think the people that should do them won't and the people that do, don't have too. Conscientious people take care of their houses the others just live in them.

#132 - Michael: Good argument here. My angle has always been about the seller catching the "biggies" in advance to help the sale down the road and net them more money.

I do see the point about CA's "as is" offer. I'm in NC and we have two options for inspection/repairs so there is more flexibility. Each situation should be looked at individually. I discuss the pros and cons, then let the seller decide.

Right now I'm listing an "estate sale" where the seller/executor has no knowledge of the property and they decided to NOT do a seller inspection, since they will not make any repairs anyway.

I also prefer that buyers do their own repairs for the same reasons you stated.

#127 - William: Thanks, I look forward to reading it too.

# 133 -Lyn: So true - the part about conscientiuos homeowners vs "mere occupants". It's also not a popular concept in our area. I suggest it to give the seller more options for pricing, negotiations, repairs, disclosures, etc. It is not a good idea in every situation, but I would do it if I were selling my own home in this market.

Athina

You have the making of a great piece of content here. You could create a downloadble guide and put this on your web site or maybe even sell this as an information product to help seller to get their homes in tip top shape to make the transaction go smooth and give them a competitive edge in this market.

A great title could be A winning edge to list your home in this market.

I also recommed you send message via twitter or facebook promoting this guide or maybe giving it away free in exchange for a listing appointment or consultation.it could work and i have seen this used many times before.

Good tips.

Neil

DEC

2009

Thanks Neil. All of these are great ideas.

DEC

2009

Athina we at David Home Inspection provide this service for free! Yes it's FREE! For any seller living within 40 miles of our main office in Colton Ca. All we ask is that we place a sign in the yard. Every time I meet a top producer in a Real Estate Office it's easy to see why, they are the ones requesting the pre-list inspections.

David Home Inspection Services

That's a great idea! Maybe I will suggest it to some local inspectors here. That sign is very eye catching and should make the phone ring for the Listing Agent and the inspector.

JAN

2010

Thanks for a great post. As a new agent I have learned a lot by reading the post and most of the comments. You really got something started. I think I agree with #132 and #133 the most. Thanks again. Not bad for your first post. You have set the bar very high for yourself.

JAN

2010

Congrats on the feature! I think pre-inspections can be a good idea. But you need to have a wriiten disclaimer stating that the inspection was done for the seller, and it is recommended that the buyer has their own independant inspection.

FEB

2010

Athina - I'm so sorry that it took me this long to send you the link to my similarly-themed post, but here it is: http://activerain.com/blogsview/1128090/negating-the-twin-evils-of-appraisals-and-home-inspections

BethAnn also has a good point, btw.

MAY

2010

Athina,

Getting the Seller on board up front will only make the sale much smoother.

JUL

2010

Every hurdle that can be jumped before negotiating makes everything easier. Not all my listing will do it but it is always advised. We leave the reports available at the homes that do one with receipts of any repairs that were decided upon. What peace of mind for any buyer and a great reason for them to take the leap.

Athina, great post! Years ago I had a listing that had what appeared to be a huge case of the "Mean Scaries". I had them get a home inspection, and it turned out to be a pretty simple fix, which they took care of. They disclosed the problem and how they fixed it, and it was not really an issue in the sale. I like your idea of making it a normal part of every listing.

Pre inspections are a good sales tool to place with the brochures inside the home. Included with it the receipts showing the seller corrected the deficiencies.

Yes, pre-listing inspections are a great tool for sellers. I have worked out an arrangement with a local inspector to give listing clients a discount for doing a pre-listing inspection. In addition to all of the reasons that you cited, I would add that doing an inspection could also uncover issues that might cause problems with the appraisal when you are under contract.

Inspection issues can usually be overcome, often times, appraisal issues cannot.

I think this is a great idea; one that I have recommended for years. It is an especially good idea for estates as many times the executors (and others involved) are extremely emotional about the home and don't understand that there can be many flaws that deter a buyer.

I really don't see this as being something that you should offer to a potential buyer, however; this is more of a tool to prepare the seller and hopefully get a few items done beforehand that will definitely be requested by any buyer. AND we all know that if you bring in four inspectors, you will get four opinions on what is a flaw and what is not.

Michael (post 132)... In regards to opening a can of worms...Wouldn't you rather the can of worms be opened prior to the listing? For example, you've got a nice elderly couple who have lived in their home for 40 years. The've done few upgrades except those done by the 'handyman' home owner. His pride tells him his home is in excellent condition, and his disclosure reflects his pride of ownership.

You sell the home, the buyers have their own inspection which reports a few things, and the sale goes through...

3 months later you get a letter from the buyers lawyer because of unreported and undetected defects in the home that the homeowner had previously "repaired" incorrectly.

You may think you are on safe ground here, but the end result is that the elderly couple are now living in a nursing home, and are virtually untouchable legally. Who do you think has the deepest pockets in this trascation? (And if you say the buyers inspector who made $250 for his inspection, you would be wrong.)

You might also think that since you did what is required of you, you are legally safe, but the reality is you are now involved in a shotgun lawsuit. Everyone involved in the transaction is getting sued. Studies have also shown that approximately 80% of all real estate related lawsuits end in a settlement. What that means is that even though you did everything right, you are 80% likely to be paying out a settlement. And if your E & O insurance is paying out a settlement for you, they will also likely drop you. Are you still in business then?

So doesn't the minimal expense of an additional sellers inspection up front make a little sense? Go ahead and open the can of worms, dump it out on the counter for everyone to see, and get rid of at least a few of the bigger ones up front to make the home show better.

Most buyers are savy enough to know that there is no such thing as a perfect house. But the one that is going to give the buyer the most peace of mind is the one with a full UNBIASED dosclosure. That may even mean disclosing the results of the sellers home inspection. (Like Russel mentioned, check with the sellers inspector first before actually giving away copies of the report. Personally I'm fine with that for sellers inspections, but many are not.) That combined with their own buyers inspection (yes more or different defects may be found) makes your life much safer in the future.

Consider it an additional layer of legal protection for both your sellers, but also for you, the other agent involved, as well as the buyers...

This could be great advice to a seller in certain situations. I wouldn't recommend it for everyone. But if you have a 30 year old house and you've been living there for the last 15 years this is probably a really good idea. It will also help open the seller's eys as to how buyers will perceive the home itself. Maybe take some of the emotion out of the deal. Good post.

Nathan,

What about a truly great house in excellent condition with very few defects? Why not have the sellers do their own inspection, and then "Certify" the home is Move-In-Certifed. (www.moveincertified.com).

Combine the marketing tools available via move-in-certified, the sellers certification of a great house, maybe a warranty provided through your agency, and the peace of mind it gives a potential buyer, and you've got a quick sale with maximum return, for a very small amount of money.

prelisting inspections are a great idea and i recommend them to all of my sellers. I can't see a downside to doing them at all.

I love statements such as "a buyer's inspection is still likely to find new items, because an inspector still wants to look like he or she earned their money."

An inspector earns their money by doing a proper inspection, not by omitting items that would help their client's decision making process, or adding items that would not!

We don't kill deals but we have assisted a few suicides.

Wow! You sure got lots of feed back! That is because it is a very good and smart idea for the Seller. In this market Sellers need to be pro active. Great tips and good thinking! Continued success.

Another suggestion: have your sellers Stage the property before the appraisal.

Athina...The best offense is the best defense...for example a home inspection and appraisal.

Jerry Gray CRB,CRS,GRI,SFR / Allen Tate Realtors / Winston Salem, NC / 336-918-2433

I think that it is good in theory. The sellers repair all the little aggravations found at the inspection. But .... the buyers inspector is going to have to find SOMETHING & always does. Then you could have conflicting reports - sellers inspector says this & buyers inspector says that. It's just frustrating & the buyers will never trust the sellers report on it's own merit.

I make this part of a program for my sellers. I tell them that if they inspect, they leave very little room for negotiation when repairs are made. Also, after you have a contract, our contract reads that you have to have a professional make any repairs negotiated. I tell my sellers they can save money before if they don't have to hire a professional for something simple. Leave nothing to chance.

I agree... and there's one more reason why pre-inspection can save money.

Some of those repairs could be things the seller could take care of himself or herself at a minimal cost. But if a buyer's inspector finds them, they might be required to hire a professional to make the repairs. That depends upon how "handy" the sellers are, of course.

Normally I think it is, but with the Short Sale and REO market in control I do not think we will see this happenning.

#144 and 146- Laura and Bruce - Having the report with the repair receipts can give peace of mind and help sell the home over another that has big question marks all over it.

#145 - Patricia - True, many biggies can be reduced to simple, inexpensive fixes BEFORE the pressure of a contract comes in and needing to run out and get estimates under the gun.

#147 - Jenna - Yes...appraisals can uncover issues and then...it's too late or more expensive to fix at the last minute; closing gets delyed at best.

#148 - Chris - Yes, once sellers get the pre-inspection done, they can decide how to use it. It's a great FYI, "To Do" list or a marketing tool.

#149 - Mark - So true. I had a handyman, frugal seller that made so many improvements over the years...and the house looked great and his work gave him no problems. However, at inspection time, it was revealed that half the things did not meet code for the time period the work was done. So it is a real eye opener.

#150 - Nathan- I do go through the pros/cons with Sellers and let them decide. It does make them more "objective" about their home and this helps them make it more competitive in the market.

#151 - Mark - I will look into the "certified" option. I have never seen it in my market...

#152 - Jenny- That's my feeling too. But there are a few cases where it may not add value. For eg. an REO property that is 30% below market and targeted at investors.

#153 - Marshall - Although that would not be my objection---that another inspector will find other things anyway--I do see some cases where inspectors call out unecessary items. After challenging them to pieces, they have gone as far as recanting their report and apologizing. At that point the buyer is turned off anyway..because they can't even trust their "own" inspector now! Like in any profession...there are bad apples.

To me there are pros and cons to pre-listing inspections:

Pros:

Sellers won't be surprised by problems.
If they are handy and it is a minor problem, they can fix it themselves without having to hire licensed contractors (usually required once a buyer's inspection is done - has been mentioned above).
Although doubtful, a buyer could accept the seller's inspection report and not have another one done.
It can help set the seller's thought processes about asking price vs. needed repairs and also future contract negotiations.

Cons:

As has been mentioned, most buyers will still hire their own inspector (and should).
As has been mentioned, you could hire multiple inspectors and each one of them will find something another one didn't. This can really confuse a seller and even make them angry that they paid for an inspection and yet the buyer's inspector found something else.
If the above happens, you'll be the first one blamed for suggesting the pre-listing inspection.

I really like John Elwell's post (#121) - sums up a lot of what I'm thinking. Bev and Bob Meaux (#117) pointed out another issue - you don't know what a buyer will actually ask for.

#154 - Thanks Janis!

#155 - Lynne - Staging is an important part of marketing a home and helping it sell quickly and for more money. I'm not sure it helps appraisal value though...appraisers look at the house after it has sold and they look at it without emotional appeal.

#156 - Jerry - Appraisals are a great idea too, but I would think only for higher priced and more unique properties.

# 157 - I agree the buyers' inspector will ALWAYS find something that the original report did not. But that's okay. The goal is to not use it as a weapon, but to catch the biggies or help sell the home. I would never expect a buyer to rely on a seller's inspection, but it shows that the seller is serious and still gives a comfort level that this home went through 2 inspectors! If there's a serious item in dispute...we can at least call in a "tie breaker".

#158, #159 -Great point Janet and Marte - buyers may hold repairs to a higher standard unnecessarily once they've requested the repair themselves.

#159 -

Hi Athina, I agree with your post. The post is very well written.

I was not a member of A/R when you originally posted it, but saw your post when it was featured. I had a similar post recommending Seller's or Pre--Listing inspections on June 14, 2010 with many of the same points.

In North Carolina, the governing statute and standard of practice only differentiate between a Buyer's (pre-purchase) or Seller's (pre-listing) home inspection on one point. The governing statute explicitly requires the inclusion of a Summary section for a "pre-purchase" or Buyer's inspection. The statute is mute on the the requirement of a Summary section for a "pre-listing" or Seller's inspection. In performing a Seller's inspection, I include the Summary section. The Standard of Practice which establishes the minimum requirements for a home inspection makes no differentiation between Seller's or Buyer's and uses the term" client." My net, is the inspection should be no different if performed for a Buyer or a Seller.

#160 - Gene - Agreed. REO's eliminates this as a viable option. But, not all buyers have the stomach to fix up an REO property and having a good, pre-inspected home compete fairly...may get the buyer to go with a non-REO. Not every one buys "scratch and dent" furniture at a discount!

#163 - Judy - Good summary and certainly something to review with sellers. I always tell the sellers that the buyer's report will come up with new things and they will often supercede the seller's inspection. They are not under the illusion that it will make the buyer's inspection/repair request "go away". But it is a good tool to catch the biggies and repair them at the Seller's pace and terms.

#166 - Thanks for clarifying this Dale.

JUL

2010

"The Group" in Fort Collins, Colorado led by Larry Kendall I believe they do this on all of their listings. At least 90% of there listings have this. By the way they have the highest production per agent of any real estate company in the United States.

Athina: Great Post! Well thought out presentation. Thanks for the tips and your extra effort in placing them in a concice ordered presentation. Great post, I agree totally. And, Maybe, this should have been labled the luckiest ideas for another collegue to find.

Taking the risk out of purchasing a property can be a great motivater for a lot of buyers. Alleviating some of those fears with a pre-inspection can help.

JUL

2010

There are definitely pro's (and some con's) to the seller pre-inspection and I've often weighed both sides when listing a home.

The points you mention are definitely good points and have merit.

The one concern, as I see it, would center around information learned as a result of any pre-inspection. Should the home not sell, and is ultimately taken over by a competitor, the issue would be confidentiality working with any buyers for this property.

In fact, as a listing agent, I try to limit the information shared by the buyer's agent for purposes of negotiating any repairs following an inspection. I do not want to receive the entire copy of their buyer's inspection report, merely those parts pertaining to what the buyers wish the sellers to address or remedy.

One way I ease possible buyer fears is to encourage the provision of a Residential Service Policy (often referred to as a "Home Warranty").

JUL

2010

Great post. I too have made this recommendation under certain circumstances.

JUL

2010

Being a home inspector, of course I completely agree!

Not only will it turn up any hidden "deal breakers", but it can be used as a marketing tool. When I do prelisting inspections, I include a printed hard cover inspection report- this makes the potential buyer that walk through the home more familiar with what they are buying. My clients leave the report in a obvious location in the house so buyers can't miss it. My prelisting clients also get a "Move-In Certified" yard sign to attract attention to the home.

Great first post! Welcome to Active Rain!

United Home Inspections

JUL

2010

Excellent idea, as I tell clients: If it needs fixing "fix it", if it needs painting, "paint it", if it needs replaced "replace it".

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Athina Boukas, Broker/CRS

Greensboro, NC

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Keller Williams Realty (Greensboro, NC)

Address: 1501 Highwoods Blvd., Suite 103, Greensboro, NC, 27410

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Cell Phone: (336) 337-4262

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