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A Pre Listing Inspection Is Like Opening A Can Of Worms For The Seller

By
Services for Real Estate Pros with RE/MAX Executive Realty - Happily Retired 104763

 

I just read a post by Erika Rogers titled “Steps to Take After Your Pre-listing Home Inspection Report Comes Backand I thought I’d share my opinion on this topic.  My team and I are listing agents, and we focus on this niche.  We must always keep in mind that everything we suggest should be in the best interest of the seller, not the buyer.

 

Pre listing home inspections are not typical in our area and I’ve never heard of a seller paying for this inspection.  Having a pre listing inspection is like opening a can of worms.  Once it’s opened, it cannot be closed again. 

 

There are full disclosure laws that come into play.  Whatever is in that report now needs to be fully disclosed to all potential buyers.  If there is a major problem that the sellers are not planning on correcting, the problem needs to be disclosed.  Anything that would make a potential buyer change his mind about buying a property needs to be disclosed. 

 

The home inspection must be the responsibility of the buyer.  The buyer should select his own inspector.  The buyer may be capable of making all the repairs himself.  We never know who will be viewing our listings.  The buyer may be a contractor and a repair that would cost a homeowner thousands of dollars might be a small inexpensive job to a contractor who has the right equipment and tools to repair the problem. 

 

It’s usually not in the best interest of the homeowner to do a pre listing inspection.  I see this function as a benefit to the buyer.  All listing agents must think about what is best for the seller and how the seller will benefit.  A pre listing inspection is nothing more than a game of chance for the seller.   We’ve all had fun at the “crap table” until we lose. Once the money is swept away, the game’s over.  Be cautious about what you recommend to your potential seller.  Your recommendation may cost your seller some money they don’t have, and it may cost you the loss of a listing.

 

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Barbara Todaro, Great Grandmother to Caleb, Santino, Aiden and Gianni       

Todaro Team - Retired

508-918-9148

               

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Comments(51)

Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Pre-listing inspections are not the norm here....though I know that they are in some markets....and in those areas if they are not done it is assumed ...and we know what happens with assumptions...that there are problems the Seller is not disclosing.

Jun 15, 2012 01:49 PM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel
I have not had prelims ting inspections but had a couple of listings that came back on market after inspections , Though it was not because of defects. I requested the sellers to disclose everything that was reported in the inspection , and gave the buyers the info we recd from previous buyers.
Jun 15, 2012 09:14 PM
Conrad Allen
Re/Max Professional Associates - Webster, MA
Webster, Ma, Realtor

Hi Barbara.  I agree 100%.  Having said that I do my own "home inspection".  I like to be proactive and eliminate the obvious issues.  $1000 spent will save having $10,000 off the sales price to deal with home inspection issues.

Jun 15, 2012 09:27 PM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Conrad.....I agree....

Jun 15, 2012 09:39 PM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Ed...there are always exceptions...

Brenda.....that could be a slippery slope....

Ellen.... love selling new homes...

Sally and David..... the seller usually takes it on the chin one way or another....  if it's the norm and they don't do it, they're hiding something might be the assumption!!

Gita..... if the home deal fell through because of inspections, it would be necessary to request a copy.

 

Jun 15, 2012 09:44 PM
Ritu Desai 703-625-4949
Samson Properties - Chantilly, VA
Northern Virginia,Washington DC & Maryland Realtor

Barbara on our listings anything that is material has to be disclosed example Lead base or Poly pipes. However beyond that I let the buyer get their inspector and inspect the home. No home is perfect and some buyers can inherit others they can negotiate to get the seller repaired. 

Jun 15, 2012 10:09 PM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Hi Ritu.... yes, it's a good idea to let the buyers get their own inspections done....

Jun 15, 2012 10:14 PM
Mona Gersky
MoonDancer Realty, Dillsboro,NC - Sylva, NC
GRI,IMSD-Taking the mystery out of real estate.

Barbara, no shortage of opinions on this one.  When we worked for Coldwell Banker a few years ago, one of their programs was making a house "Buyer Ready".  This meant having the home inspection already done and either the repairs made or if the seller chose to make the inspection report available to the buyer, they could.

NC allows the seller to select "no representation" on the disclosure form, even if they are aware of a defect.  The Agent isn't allowed the same luxury.  So far, we've found the pre-inspection to be of benefit TO the seller.  They've gotten a head's up on minor repairs so the buyer doesn't have an opportunity to nickel and dime plus if there is a serious issue it can be dealt with however the seller sees fit.

In 99% of the cases though, the seller does NOT have an early inspection done and it is the buyer's responsibility.  IMHO though, if the house is basically in good shape I think a pre-inspection is a good idea.

Jun 15, 2012 10:34 PM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Hi Mona..... you're right, everyone has an opinion and a rule of thumb for handling this situation.... most leave the inspection to the buyer and I think it's always risky business for the seller to have that home inspection before listing....

Jun 15, 2012 10:46 PM
Tom Bailey
Margaret Rudd & Associates Inc. - Oak Island, NC

Barbara, as always a great post. Lots of good thoughts on both sides. I agree with you 100%. I do however try to get an inspection of an obvious problem in hopes of knowing what the repairs will cost.

Jun 16, 2012 12:35 AM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Tom....yes, an obvious problem would need to be addressed in one method or another.... get a bid and/or get it repaired....

Jun 16, 2012 12:45 AM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Barbara I am going to disagree with the premise of your article and the reason for the seller not doing a pre-inspection. Based on what you have written, I don't think you really know the laws in Mass. A seller does not have to disclose any defects unless they are asked a direct question. It is the Realtor that has to disclose. We are held to different standards.

The seller's statement of property condition that we make all our seller's fill out is for OUR benefit NOT the seller.

So if a seller does a pre-inspection they could fix anything on the list that is found before you and I even know what came up as a result of the inspection. They do not have to tell us or a buyer anything unless someone asks them a direct question.

While it is not my practice to do pre-inspections, the reasoning you have given in your article about the seller disclosing defects is not accurate.

 

Jun 16, 2012 06:16 AM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Bill.... if there is something withheld that would have made the buyer change his mind about buying the property, that would be grounds for a chapter 93A lawsuit.... I haven't been actively listing property for many years but when I did, I wanted to know everything about the house.... no secrets....whether it had to be disclosed or not, I wanted to know and I disclosed everything....I've never been sued and neither has any seller of mine......but thanks for bringing me up to speed with current laws!!

Jun 16, 2012 06:29 AM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Barbara that is true of a Realtor not a seller. Unless the seller is asked a direction question they are not required to disclose anything. Honestly I never realized this myself until a few years ago but it is absolutely true. Check it out for yourself. This is not to say that ethically a seller shouldn't point things out they know about:)

The term "buyer beware" still holds true in Massachusetts when it comes to a seller disclosing defects. Not so with us which is where all the lawsuits against Realtors come from.

I think seller's should have to disclose but I don't make the laws! What is more incredible is that the onus is on us to "discover" possible defects. So for example if we see possible evidence of water in the basement we can't turn a blind eye to that and pretend we didn't see it. We are supposed to ask the seller if they have gotten water.

Jun 16, 2012 09:00 AM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Bill.... I wasn't aware that sellers did not have to disclose.... buyer beware went out with chapter 93A for Realtors.... it's our job to ask and hopefully we're told the truth... we never suggest that a seller have a pre listing inspection....we go through the house and have the obvious problems taken care of.... the buyer will have their own inspection and we'll deal with whatever results.... thanks for the clarification.... I'm glad Lorraine is the listing agent now and I just blog!!

 

Jun 16, 2012 09:18 AM
Christine Smith
Buyers Brokers Only LLC - www.BuyersBrokersOnly.com - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA

Of course, once the Seller discloses that pre-listing inspection to his/her agent, then of course, the agent needs to disclose.  My guess is that if the agent recommends a pre-listing inspection, the Seller is likely to then disclose the results to the agent.  The way the article was written, I was assuming that the agent was privy to the pre-inspection report results.  

Jun 16, 2012 11:38 AM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Christine..... seller's don't hire home inspectors for pre listing inspections unless their agent suggests it....most sellers know that the buyer has the inspection....so if the agent is suggesting there be a pre listing inspection then the agent must ask what the results were and everything would have to be disclosed.....

Jun 16, 2012 03:49 PM
Christine Smith
Buyers Brokers Only LLC - www.BuyersBrokersOnly.com - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA

Barbara....that's pretty much what I figured...that they wouldn't likely to be doing this without the agent's involvement.  

Jun 17, 2012 10:37 AM
Charita Cadenhead
eXp Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)
Barbara I distinctly remember writing a post some time ago suggesting a prelisting inspection. You and I went to task just like you and Amimee. In the end you wrote a post and we eventually agreed to disagree too.
Jun 19, 2012 08:33 AM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Christine.... right....

Charita.... another agent in the office said he just did one and will never do it again....it was a can of worms.... he actually read my post and told me his story after he read this....

Jun 19, 2012 09:02 AM