I have read many posts on this subject and each has merit BUT which one works to for your client depends on which side of the transaction you are on. This post is considering the listing side of the transaction.
Having inspections done at sellers expense before the sale, at the time of listing. This can be handled in several ways and will have different impacts depending on the result.
- If the home is in great conditionwith little to do in the way of repairs and inspection can help support the CMA and keep the price up depicting value against other homes that have not had an inspection. You are presenting a home with the condition known up front.
- The other side of the coin is if you uncover a material defect that will affect the property you will have to change you disclosures to reveal this defect. The repair may be more than the home owner wishes to pay or can afford. The next obvious choice is to adjust the listing price with an allowance to cover the repair and have the estimate ready.
- This may save you personal time and effort too. First: You will know more about the property and how to market to the features and benefits that best show the properties values. Second: You may find your seller is not willing to adjust the price or do the repair and your efforts could be and exercise in spending money without result. Thirdly:The CMA that you thought was accurate has to be adjusted downward or upward based on condition which will help you attain the list price and maintain a higher sell to list price.
Having inspections done post-purchase agreement is by far the most common used method. This method can reveal many surprises and even create a abandoned or revoked contracts with the buyers walking upon inspections that reveal something that the homeowner and the listing agent did not know.
- Unknown defects can and are revealed, in most cases. These can range from roof problems, wood dry rot, electrical, water damage, settling, and the list goes on. I just had a home that seemed to be in very good shape...the air conditioning unit gave a low feedback. The buyers called a air conditioning company to review the inspectors results...that was great to get a professional opinion. The compressor was leaking and could not be repaired. The only choice for the home owner was to reduce the price, repair it with like equipment or have the buyers walk. If we would have know earlier this problem existed a compressor could have been replaced without replacing the whole unit. That would have saved the seller thousands of dollars.
- Should the buyer walk the material defects have to adjusted and disclosed or repaired and disclosed.
Here is an option to get home owners to do the pre-inspection...
- Have them pay it up front.
- Have them pay it at close.
- You pay it up front and reimburse you at close.
- You pay for it as part of you listing service.
I always put a home warranty on every listing. This puts the buyers mind a ease with all the major issues covered with a nominal service call. It does not cover everything and it does have it's draw backs but you are representing the seller. The buyer deals with the warranty company. I have not had any issues with our warranty company although I do know of agents that have had some issues but were of a specific gray area defect.
How do you handle the inspections? Which do you feel offers the best option....pre-listing inspection or post PA inspection?
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