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Inspect in Advance to Get Better Offers & Save Grief for Everyone

By Regina P. Brown

Real Estate Broker/Owner with MBA Broker Consultants CalBRE Broker #00983670

February 16, 2009 09:37 PM

Eliminate surprises and hurdles during escrow by ordering Home Seller Reports when first listing your property on the market. Listed below are the advantages of ordering each type of report in advance.

1. Appraisal

· Price your property correctly at the very beginning, when most qualified buyers are viewing it.

· Help buyers see the value of your property.

· Demonstrate a better value in the market.

· Increase showings of your property.

· Give you and your agent confidence.

· Other agents are eager to show your property.

· More likely to get full price offer.

· Reduce surprises and pricing problems in escrow.

· Guarantee a faster, smoother closing.

· Make seller feel secure during escrow.

· Stimulate buyer confidence.

Once in escrow, if the appraisal comes in low, the buyer will probably cancel the sale.

2. Pest Control Inspection

· Buyers know exactly the condition of the property.

· Help seller disclose material defects in writing, limiting liability.

· Seller knows the cost of repairs in advance.

· Repairs can be completed early, reduce surprises (work needed) during escrow.

· Guarantee a faster, smoother closing.

· Make seller feel secure during escrow.

3. Home Building Inspection

· Buyers know exactly the condition of the property.

· Help seller disclose material defects in writing, limiting liability.

· Seller knows the cost of repairs in advance.

· Repair can be completed early, reduces surprises (work needed) during escrow.

· Guarantee a faster, smoother closing.

· Make seller feel secure during escrow.

These reports are well worth their cost, saving both money and stress!

Oh, how I wish it was MANDATORY for sellers to complete HOME BUILDING INSPECTIONS before listing their house for sale here in California! Then buyers could make more informed offers. It would save a lot of "later" negotiations in which sellers lose control of their transaction and the whole thing quickly unravels. If sellers completed an inspection in advance, and handed it to each prospective buyer, it would save everyone a lot of grief.

Join my new AR group and post your blog at http://activerain.com/groups/virtualoffice

Regina P. Brown
Broker, Realtor®, e-Pro
Author of eBook "Stop Foreclosure Fast: Solutions to Save your House"

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Regina P. Brown

MBA Broker Consultants - Carlsbad, CA

M.B.A., Broker, Instructor

Bob Willis: I agree that REOs and even short sales are a problem. REOs represent a big problem for our industry. The lender-sellers don't think they have to abide by any rules or contracts or laws. They think they are above the law and can make their own rules. This will continue until they are sued or fined enough times, or until their industry starts to be monitored, whichever comes first.

In one instance, a Buyer submitted a contract to buy an REO on a CAR contract, which gives the Buyer 17 days for their inspection period. After waiting weeks for a response, the lender-seller sent back their own homemade contract, which cut down the Buyer's inspection period to only 5 days (which is nearly impossible to do an inspection & review it in that timeframe), and also sent the Buyers an Inspection Waiver form to sign, saying that they waive their right to an inspection. The Buyer managed to get an inspection in the short 5-day window and found major problems with the foundation. The lender-seller wouldn't give them any more time to do further inspections. They wouldn't negotiate at all. They wouldn't even answer the phone! Apparently they don't care about Buyers, or even if they have Buyers. This Buyer withdrew. The good news is that now the lender-seller and their agent have a copy of the inspection which they MUST now present to other prospective Buyers. But from what I've heard, they aren't disclosing this major foundation problem at all. They don't think they have to follow the law. As for this Buyer, he no longer trusted the lender-seller, he felt that they knew about the problems and just wanted to get rid of the house. He ended up buying an owner-occupied non-REO, non-Short Sale property. Just for his own sanity and peace of mind.

I have many examples of lender-seller reprehensible behavior, but will save it for another post. I'm sure that many other AR members can provide ready examples also.

In my humble opinion, REO properties are much more subject to problems than Owner Occupied and should be inspected MORE, not less! Why? Think about it. Once again, that's a whole new post!

Feb 17, 2009 06:05 AM

Kathy Opatka

RE/MAX CROSSROADS - Ocean City, MD

Serving Ocean City, MD, & The Delaware Beaches

Regina,

Great idea! However, if I'm a Buyer's agent, I would still recommend that they have there own inspection done!

Kathy Opatka, Re/Max OCEAN CITY, MARYLAND

Feb 17, 2009 06:11 AM

Michael Wright

Re/Max Right Choice - Westport, CT

I love the idea of getting all the inspections done immediately right off the bat. That way there's no surprises. You know exactly what's going on with the house inside and out. It also allows the sellers to evaluate what problems they are willing to take care of immediately versus possibly losing a deal over them to nervous home buyers.

Feb 17, 2009 06:25 AM

Kim Dean

www.GoSimplyTexas.com - McKinney, TX

Simply Texas Real Estate - Broker/Owner

Regina - this idea is catching on in my area. I've seen a few listings with riders that read "pre-inspected by....". I love it - it automatically creates trust with the buyers.

Feb 17, 2009 07:55 AM

Rebecca Gaujot, Realtor®

Lewisburg, WV

Lewisburg WV, the go to agent for all real estate

Reginia, I agree...it should be MANDATORY for sellers to complete HOME BUILDING INSPECTIONS before listing their house for sale in every state.

Feb 17, 2009 08:34 AM

Jack Gilleland

Home Inspection and Investor Services, Clayton - Clayton, OH

Regina, really great information. I whole heartedly agree that having that information in your pocket can prevent major headaches during the transaction process.

Feb 17, 2009 09:22 AM

Regina P. Brown

MBA Broker Consultants - Carlsbad, CA

M.B.A., Broker, Instructor

I think that if we as real estate agents will promote the idea of pre-listing inspections to our sellers, it will eventually become the standard.

Feb 17, 2009 09:35 AM

Carla Muss-Jacobs, RETIRED

RETIRED / State License is Inactive - Portland, OR

It's a good idea for the seller to pre-inspect, but I would not allow my buyer clients to soley rely on what the sellers have obtained, or take their home inspection as part of our own due diligence.

If the sellers have a pre-lising inspection, then they won't be surprised because the corroded/leaking pipe in the crawlspace (that they didn't know existed) will be (should be) taken care of prior listing the home. The buyer's inspector won't find the plumbing to be an issue. WHEW!! The more items that can be taken care of, the better the property will look. No questions about that!!

But I would never suggest to my buyer clients to accept the sellers own inspection as theirs. There would be too much liability on my part if I made this suggestion.

Feb 17, 2009 02:01 PM

Regina P. Brown

MBA Broker Consultants - Carlsbad, CA

M.B.A., Broker, Instructor

Carla, I agree 100%. See my response to Paul Francis & Barb Szabo above.

Feb 17, 2009 02:13 PM

TIM MONCRIEF

Tim Monciref - Austin, TX

Over 2,000 homes sold…..

We use inspection on each home and get them certified by the inspector which means that the needed repairs have been made. The inspector puts his sign on property showing it is a certified inspected home and I put his label on our flyer.

Feb 18, 2009 06:24 AM

Bob Willis

Berkshire Hathaway HomeServices California Properties - Orange, CA

Orange County & L.A. County Real Estate Agent

Regina,

Thank you for your thoughtful responses here. Very good post.

I wonder if we could start a movement to get CAR to push legislation in California that would require REOs to pay for an independent inspection that they have to use as part of their disclosures. I would support such a piece of legislation whole-heartedly.

Feb 20, 2009 08:22 AM

Regina P. Brown

MBA Broker Consultants - Carlsbad, CA

M.B.A., Broker, Instructor

Tim: great job! I hope more of us can follow your lead. Please share with us how you get the sellers to agree to this!

Bob: good idea but I sincerely doubt that the banks will ever listen to anything our organization has to say. Remember, they're trying to push us out of business so they can get their foot in the door of selling real estate!

Feb 20, 2009 01:32 PM

DeAndrea "Dee Dee" Jones

Samson Properties - Manassas, VA

DMVRealEstateChick

Their is one company in this area of Virginia that give their sellers an inspection at time they list. It makes it easy when showing these homes to buyers to be able to flip thru the inspection left on kitchen counter for review.

Feb 24, 2009 07:41 AM

Regina P. Brown

MBA Broker Consultants - Carlsbad, CA

M.B.A., Broker, Instructor

Dee Dee, yes that is wonderful that they pay for the inspection at the time of listing! It would provide a good incentive for sellers to list with them.

Feb 24, 2009 03:31 PM

Latonia Parks

Top Bragg Realty, Fayetteville NC, Home of the 82d ABN DIV - Fayetteville, NC

Certified Military Relocation Expert

I agree with the pre-inspection and a pre-market appraisal. The appraisal goes over much easier than the inspection, however.

Mar 04, 2009 12:39 PM

Regina P. Brown

MBA Broker Consultants - Carlsbad, CA

M.B.A., Broker, Instructor

Latonia, thanks for stopping to comment! I agree that sometimes it's difficult to get sellers to pay for reports and inspections.

Mar 04, 2009 03:10 PM

Jeff Abram

Magic Valley Realty - Twin Falls, ID

Thats a really smart way of doing this! Good idea i was doing a pre listing home inspection to use as a perk of not hiding anything from the buyer. But i think is going to a big present not only to the seller and the buyer and a sale at the end of it.

Mar 09, 2009 01:53 PM

Regina P. Brown

MBA Broker Consultants - Carlsbad, CA

M.B.A., Broker, Instructor

Jeff, I think it's a wonderful gift to pay for the pre-listing inspection for the seller, but it costs a lot of capital AND it doesn't always ensure that you'll have a motivated seller if they don't have to put forth any investment on their part.

Mar 09, 2009 04:37 PM

Chris M.T. Bodden

Keller Williams Realty - Kapolei, HI

RA, CDPE - www.BoddenRealEstate.com

Wouldn't it be GREAT if every seller did the inspections first! Maybe in a perfect world...sure would make things easier for everyone.