Pre-Inspected Listings, The Future of Real Estate

By
Services for Real Estate Pros with Discover Horizon

The Carson Dunlop Report is Published by Carson Dunlop & Associates Ltd., Consulting Engineers - Building Inspections

Pre-Inspected Listings, The Future of Real Estate
Home inspections have traditionally been for the benefit of the purchaser. Pre-inspected listings benefit all parties - purchasers, vendors and Realtors.

Deals Won't Fall Through
Home inspections, performed as a condition of the offer, can kill deals. Sometimes this is because the purchaser gets cold feet; sometimes there's a big problem no one knew about. Sometimes it is because the house has been mis-represented; sometimes it is because the home inspector scared the purchasers by not explaining that minor and typical problems are just that - minor and typical.

If the home inspection is performed prior to the house being listed, all parties will be aware of the physical condition of the house before an offer is drawn. There will be no surprises after the fact. Deals will not fall through.

Pre-inspected Listings Avoid Renegotiation
In a buyers' market, most houses have to be sold twice. It takes a lot of work to get a signed Agreement of Purchase and Sale. Then the home inspection is done and the purchaser wants to renegotiate.

If all parties know the condition of the house prior to the offer, there is no need for renegotiation. As most real estate agents know, renegotiation is very difficult. Vendors have already mentally sold the house; purchasers are suffering buyers' remorse. Egos, pride and frustration can muddy the already emotional waters.

A vendor who pays for a home inspection will be further ahead than one who has to renegotiate. He of she may even sell the house faster.

Unrealistic Vendors
An inspection at the time of listing can also help a Realtor deal with a vendor who has unrealistic expectations. The inspection report is good ammunition for explaining why you can't ask top bucks for a house which is not in top condition.

Repairs Prior To Sale
Sometimes, the home inspection will reveal items which should be repaired immediately. A pre-inspected listing allows the vendor to repair the problem prior to putting the house on the market.

If the inspection occurs after the Agreement of Purchase and Sale, the purchaser could walk, renegotiate or, depending on the inspection clause, the vendor may have the option to repair. A repair done by an unmotivated vendor may not be the best repair and may not meet the purchasers' expectations. This has caused more than one deal not to close.

Peace Of Mind For The Purchaser
There is no doubt that part of the value of a home inspection is a guided tour of the house for the prospective purchaser. The inspection company can return to do a walk-through with the purchaser, if requested.

Reputable Inspection Companies
Pre-inspected listings will only have value if the home inspection company is perceived to be reputable, qualified and properly insured. Prospective purchasers will have little or no faith in a report done by someone they perceive to be in the vendors', or Realtors' pocket.

Summary
We believe that the future of home inspection lies in pre-inspected listings. Offers are cleaner and deals are less likely to be renegotiated or fall through. Pre-inspected listings afford purchasers, vendors and Realtors the information and protection they all deserve.

Comments (4)

Ron Hackett
Coldwell Banker Heart of the Hills - Kerrville, TX
CRS,GRI,ABR,SRES,e-Pro
John I truly believe thats the way to go. Sellers should have an inspection and it is in the best interest of all parties. That being said some sellers are reluctant to getting a home inspection and it appears to me that they might have something to hide.
Jun 03, 2007 01:49 PM
John Kwasnik
Discover Horizon - Toronto, ON

True enought Ron,  we've experienced slow uptake on Pre-listing inspections in the beginning. As sellers and Realtors become familiar and experienced with the advantages, the Prelisting inspection really takes off.

I was out looking for houes recently and was amazed, 4/5 homes we went through were staged and included a Prelisting inspection.  The inspection report was available on the table for everyone.  Many of the reports included Major defects (Termite problems, Roof replacement) for all to see.  Each of these homes sold within a day of the seller taking offers, for asking price or better, including one we were out-bid on.

Now, the housing market in my area is pretty good and there are many more houses on the market without prelisting inspections. But, it was amazing to see how effective a prelisting inspection can be first hand.  Just another valuble tool for Realtors and sellers.

Jun 04, 2007 01:31 AM
jamie allen
Allen's Pest Inspections - Evansville, IN
John, i have been trying to get the realtors in my area to pre-inspect for the last couple of years. Most of them are coming around to the idea. They think that because you pre-inspect that now there is more you have to disclose to the buyers, which i understand but if your pre-inspection shows problems & the seller gets them fixed then that gives the owners a leg to stand on. Great topic!
Jun 24, 2007 04:07 PM
Anonymous
Anonymous

Yes there is a potential for some agents to be concerned here, but this is all part of the disclosure agreement.  All homes have room for improvement. Disclosing the condition of the home allows you to reflect the condition in the listing price, rather than have to negotiate again later when the issues are discovered.

Other benefits include: 
-Can fix any conditions identified (if you choose to) or simply reflect it in the purchase price. This takes it off the table as a negotiating point against you.  
-Can resolve any differences of opinion about the house before it goes on the market.
-No more 11th-hour re-negotiations based on the inspector's findings.
-No more parade of inspectors through the home before a multiple-offer situation.

Jun 25, 2007 07:20 AM
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