Buyer Inspection DOES NOT EQUAL Negotiations Round 2

Jonathan Dalton inspired this post by his post yesterday about the Forest and the Trees.

One of the things we learned quickly in real estate was to do everything possible to avoid - preclude - prevent - whatever your favorite word is - BAD surprises during the course of a transaction.

Since we were and are primarily focused on listings, we found that there were several "opportunities" for the ever lurking "Murphy" to swoop in on any transaction, all of which could be prevented in advance.

One of the predominant ones "Buyer Inspections and Request for Repairs" I'll address in this post - and save the rest for another day!

Scenario A

Take a listing and put it on the market.

Along comes a Buyer and an offer is accepted by the Seller.

Buyer Inspection period clock starts ticking.

Buyer completes inspections and presents a request for repairs on (in Arizona) a "BINSR" - Buyer's Inpection Notice and Seller's Response form.

Seller freaks out when seeing the request for a new patio roof due to extensive dry rot.

Seller and Buyer (hopefully) negotiate repairs or credit to closing costs ILO repairs.

Seller "loses" money and is unhappy since they thought the contract price was the "final" price.

OR WORSE

Buyer refuses to close.

Repairs are so extensive that Seller cannot address them - even for the next Buyer.

Goodbye listing and goodbye marketing time, effort and expense!!

Scenario B

Take a listing to be put on the market once it's "ready for showtime" - per written instructions from the Seller in the listing agreement.

Ensure the Seller completes the SPDS - Residential Seller's Property Disclosure Statement

Review the identified items needing attention with the Seller.

Seller has several options:

1. Fix the item(s) prior to activation of the listing and have the items signed off by a re-inspection
2. Disclose the item(s) and write them into the contract as not being subject to a request for repairs - those items are "as is".
3. Be prepared to negotiate with the Buyer after receipt of the BINSR

Once property is ready for show time - activate the listing and throw open the doors to Buyers!  This includes placing a copy of the SPDS and the Pre-Listing Inspection Report and Receipts for Completed Repairs at the property to be reviewed by prospective buyers.

Along comes a Buyer and an offer is accepted by the Seller.

Buyer Inspection period clock starts ticking.

Buyer completes inspections and presents a request for repairs on (in Arizona) a "BINSR" - Buyer's Inpection Notice and Seller's Response form.

No surprises for the Seller or the Buyer. 

Proceed to a smooth closing - barring any surprises in other areas - financing, title, etc. - which I will cover in later posts.  UPDATE: Here is a link to a post about when to get the Title Company involved.

We have pre-listing inspections conducted on ALL our listings, at our expense.  An ounce of prevention is worth a pound of cure - and then some.