Seller Inspections: Streamlining Real Estate Transactions
Seller inspections (sometimes referred to as pre-listing inspections) are slowly becoming more popular as real estate sales slow down. They can virtually eliminate the pitfalls and hassles associated with waiting to do the inspection until a buyer is found. In many ways, waiting to schedule an inspection until after a home goes under agreement, is too late. Seller inspections are arranged and paid for by the seller, ideally just before the home goes on the market. The seller is the inspector’s client. The inspector works for the seller, and generates a report for the seller. If repairs are needed, based on the report, the seller then has the opportunity to have the repairs made by a contractor of his choosing, at his convenience, based on his own estimates, not rushed by an eleventh-hour discovery in order not to “kill the deal”.
The seller typically makes multiple copies of the inspection report and receipts for any repairs needed. The report and receipts are then shared with prospective buyers that tour the home. This process alone can make a prospective buyer much more comfortable with the seller’s disclosures made later.
Seller inspections are a benefit to all parties in a real estate transaction. They are a winning solution for everyone involved, and more real estate professionals should consider them a necessary part of listing a home for sale. In fact, with a seller’s inspection completed, the home inspector can be made a part of the real estate marketing team by scheduling participation at open houses or a final walk-through of the home.
Advantages for the Realtor:
- Agents can recommend a trusted, certified inspector as opposed to being at the mercy of the buyer’s choice in inspectors.
- Inspections can be scheduled at the seller’s convenience – one less obstacle in getting the listing.
- Sellers can assist the inspector during the inspection, something not normally done during a buyer’s inspection.
- Sellers can ask the inspector to correct any misstatements in the report before it is generated.
- Reports help sellers see their home through the eyes of a critical third party, thus allowing sellers to set a realistic asking price with the advice of their Realtorâ.
- Agents are alerted to any immediate safety issues found, before other agents and potential buyers tour the home.
- Repairs made ahead of time may help the home show better.
- The reports provide third party, unbiased opinions to offer to potential buyers, and could be used as a marketing tool to help sell the house.
- Seller inspections reduce the need for negotiations and 11th-hour renegotiations.
- Seller inspections relieve the Realtorâ of having to hurriedly procure repair estimates or schedule repairs.
- Seller inspection reports may encourage buyers to waive their inspection contingencies.
- Deals are much less likely to fall apart at the last minute based on an unfavorable buyer’s inspection.
- Reports provide documentation to protect against full-disclosure legal claims.
Advantages for the Seller:
- The seller can choose a certified inspector as opposed to being at the mercy of the buyer’s choice in inspectors.
- The seller can schedule the inspection at his or her own convenience.
- The seller may be alerted to any immediate personal concerns, such as radon gas or active termite infestation.
- Sellers can assist the inspector during the inspection, something not normally done during a buyer’s inspection.
- Sellers can ask the inspector to correct any misstatements in the report before it is generated.
- Reports help sellers see their home through the eyes of a critical third party, thus allowing sellers to set a realistic asking price with the advice of their Realtorâ.
- The report can help the seller substantiate a higher asking price if problems don’t exist or have been corrected.
- A seller inspection reveals problems ahead of time which:
- May make the home show better.
- Gives the seller time to make repairs and shop for estimates.
- Permits the seller to attach repair estimates or paid receipts to the inspection report.
- Removes over-inflated buyer-procured estimates from the negotiation table.
- A seller inspection is the ultimate gesture in forthrightness on the seller’s part.
- Seller inspection reports may encourage buyers to waive their inspection contingencies.
- Deals are much less likely to fall apart at the last minute based on an unfavorable buyer’s inspection.
- Reports provide documentation to protect against full-disclosure legal claims.
Advantages for the homebuyer:
- The inspection is already done.
- The seller paid the inspection fee.
- Most buyer inspections are scheduled after an offer is made. The seller’s inspection report provides a more accurate third-party view of the home’s condition prior to making an offer.
- A seller inspection eliminates surprise defects.
- Problems are corrected, or at least disclosed, prior to making an offer on the home.
- The report may assist in acquiring financing.
- The seller inspection allows the buyer to “sweeten” the offer, without increasing the offer price, by waiving the inspections.
Common myths about seller inspections:
Q. Don’t seller inspections kill deals by forcing sellers to disclose defects they otherwise wouldn’t have known about?
A. Any defect that is material enough to “kill a deal” is likely to be uncovered eventually anyway – probably by the buyer’s inspector. It is best to discover the problem ahead of time, before it can “kill the deal”.
Q. A newer home in good condition doesn’t need an inspection anyway. Why should the seller have one done?
A. An inspector’s responsibility is to reveal any defects in a property’s mechanical or structural systems, or any safety hazards that may be found, and report these findings to his client. It is very uncommon to have a “perfect” house built, and stay perfect. If the property is truly in great shape, the report aids in marketing the property, with the added benefit of having been generated by an impartial party.
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