Script to Explain the Benefits of Pre-Listing Inspections

By
Real Estate Agent with Certified Realty Services BRE# 00572654
https://activerain.com/droplet/4HWy

Script to Explain the Benefits of Pre-Listing Inspections. 

In response to Bob Stewart's request for scripts and dialogues we use, the following is submitted.   

Many sellers do not want to pay for pre-listing inspections because they don’t understand the benefits.  This is the script I use to explain to a prospective seller, usually during the listing presentation, why it's in their best interest to pay for pre-listing inspections.  This usually comes after the discussion of the Competitive Market Analysis.  Bracketed [  ] comments are to the reader, not to the homeowner. 

"Mr. and Mrs. Seller you have a choice to make.  That choice is to either get inspections before your home goes into the MLS, or to let the buyer get them after their offer is ratified.  Please, let me explain" 

"One way or another, as part of the sale, your home will be inspected by professional inspectors.  There will be a termite inspection, a general property inspection, and sometimes a roof inspection.  [If there's a pool or spa]  And probably a pool/spa inspection."   

"The question is really WHEN, not IF, the buyer to gets the information contained in the inspections.  Will they get the information before they tender an offer, or after?  I believe it's in your best interest to get the inspections completed before your home goes into the MLS; and to include those inspections in the online marketing package I prepare for the prospective buyers to read before they tender their offer."  

"There are several benefits to you, Mr. and Mrs. Seller." 

"First, we can negotiate everything upfront at the beginning of the transaction including the purchase price AND who pays for repairs--if any.   That's when your negotiating leverage is the strongest, before you accept an offer.  Your home is still listed as Active and For Sale so we'll probably have showing activity from other prospective buyers.   Once you accept an offer, I change the MLS status to 'Pending' and we lose showings and marketing momentum and your negotiating leverage declines." 

"Another reason to get the inspection completed before the home goes into the MLS is that sometimes the inspectors find problems you'd like to correct irrespective of selling the home.  That's not uncommon.   When was the last time you crawled under your home, Mr. Seller?  [Nearly all homes in my marketplace have crawl spaces, not basements.]  There may be evidence of termites or plumbing leaks, or some other problem you're not aware of, but which you'd like to get corrected so it doesn't create additional damage that's even more expensive to repair in the future.  Does that make sense?" 

"Is it okay if I order the inspections?  The general property inspection will cost about $450 for a home with this square footage; the termite inspection will cost $225; and the roof inspection will cost $125.  Do you know how old the roof is, Mr. and Mrs. Seller?  [Write down the answer for future reference.]  Those are the costs of the inspection if you pay at the time of the inspection.  I typically order the inspections and you're welcome to be present, or not.  I'll be present whether or not you are.  I order the inspections from well-respected inspectors whom the buyer's agent may already know and trust." 

"You need to know that even if we get inspections, the buyer may still get their own, but the chance of any big surprises is greatly reduced.  The buyer pays for any inspections they want, of course." 

[If the seller agrees, that's the end of the script.  I include the cost the inspections in a Net Sheet.  I ask the seller to pay for the inspections at the time of the inspection, not to bill the escrow.  I want the inspectors to be paid promptly and I want the seller to save on the cost of inspections.  If the seller needs further explanation, I continue.

"If we don't get the inspections completed before your house goes into the MLS, the buyer will get them after we've negotiated the purchase contract, and there may be surprises;  surprises that may kill our transaction.  I say, 'Surprises are wonderful on birthdays and Christmas, but not when you're selling your house.'  It's best to avoid surprises, if possible."  

"Even if we sell your home in "As Is" condition, the buyer's offer will be SUBJECT TO their approval of their inspection results.  That's a boilerplate contingency pre-printed into the standard purchase contract.  Let me show you.  [I show the seller that clause, which I've highlighted, in the purchase agreement.]  If the buyer doesn't like the results of the inspection, they may withdraw their offer without forfeiting their deposit, or they may ask you to pay for the repairs or give them a credit."  

"Depending on the terms of the purchase agreement--if it's As Is or not As Is--you may not be contractually obligated to pay or get the repairs done, but the buyer is not obligated to continue the purchase, either." 

"If the buyer asks you to pay for the repairs, or to give them a credit, we've lost negotiating leverage and marketing momentum so you're more likely to agree, but maybe, begrudgingly and under the threat of cancellation.  As I mentioned, our negotiating leverage is the strongest before you accept an offer because we're still getting showing activity and we still have momentum from our marketing." 

"Some offers may also ask you to pay for the eradication any termites that are discovered by the termite inspector, and to repair any damage they've done; and also damage done to wood by water, such a wood rot.  Those repairs are for what's called a Section 1 Termite Certification.  But we won't know what those costs are without a termite inspection."  

"If you agree to make those repairs, you're agreeing carte blanche to pay for something without knowing its cost.  That's not a good idea.  The first home I sold was a $27,000 home in east San Jose with more than $10,000 of hidden water damage that was discovered AFTER the seller agreed to pay for all Section 1 damage.   Yikes.  [That's a true story.]  You can limit the amount you'll pay for repairs by specifying a cap in a counter offer--'repairs not to exceed $X'-- but then we just get bogged down over an issue that may not even be an issue.  And we can easily prevent that potential problem by getting a pre-listing termite inspection." 

"Doesn't it make sense to learn those things BEFORE the home goes onto the market?  My experience is that you'll be happier with the job I've done if we get inspections completed before your home goes onto the market."  

"Having the inspections completed demonstrates that you're serious about selling.  That you've done your homework just like we expect the buyer to do their homework by getting pre-approved for financing." 

"If you were buying a home, wouldn't you want to have inspections to read before you tendered your offer?" [end of script.] 

How can anyone remember such a long script? It's easy: (1) Practice and repetition; (2) make it flow logically for you; (3) have a printed outline of bullet points and clip art as a memory aide in your listing presentation. 

A quick MLS search for this post showed that 65% of the 243 homes sold in my city, Saratoga, CA, since 1/1/2013 had pre-listing termite inspections, 64% had pre-listing general property inspections, and 43% had both.  Forty-four percent had pre-listing roof inspections.

 Lloyd Binen

Broker/Realtor/BRE 572654

Certified Realty Services

19200 Shubert Dr.

Saratoga, CA 95070

Certified Residential Specialist (CRS); Graduate Realtor's Institute (GRI)

408-373-4411

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Rainmaker
2,161,213
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager
A great explanation of why a seller should pay for a pre-listing inspection. I agree....surprises are not good in real estate!
Sep 13, 2013 10:52 AM #1
Rainmaker
387,111
Bahman Davani, CM at Texas Five Star Realty, Plano, TX (214) 457-7055
Texas Five Star Realty, Plano Texas - Frisco, TX
Homes for Sale in Plano, Frisco, Prosper, Allen TX

I agree the pre-listing inspection benefits seller with many reasons. one example: If you find a problem, you could fix it with your choice of contractor, materials, etc., But when buyers find out after contract, he/she wants to fix it with their own choice of contractors and materials that usually are more expensive than your.

Sep 13, 2013 02:48 PM #2
Ambassador
3,984,754
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Lloyd, That would get the listing for sure and take lots of practice for me to remember but we all remember our wording because we do it over and over.

Sep 14, 2013 12:33 PM #3
Rainmaker
375,616
Lloyd Binen
Certified Realty Services - Saratoga, CA
Silicon Valley Realtor since 1976; 408-373-4411

Sharon, most sellers out here will pay for pre-listing inspections just to get me to shut-up and stop talking about it.  And because it has become somewhat the norm.  Pre-listing inspections do improve the transaction for both buyers and sellers, in my opinion.

Bahman, our market has been so hot the seller just discloses the deficiencies and leaves them for the buyer to fix after closing.  But I know that's not the national norm, nor was it the norm out here 15+ years ago.

Debbie, that's right.  I've gone over the reasons to get pre-listing inspections so many times that I can recite them in my sleep.  Plus I have a printed outline with clip art in a listing presentation as a memory aide.  And I'm motivated to explain the advantages because the old way presented so many transaction problems that are prevented with pre-listing inspections.

Sep 15, 2013 04:20 AM #4
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Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living
Lloyd, getting a home inspection before or at time of listings will definitely give the seller a chance to correct any problems. It's also a great selling point!
Sep 16, 2013 10:10 AM #5
Rainmaker
375,616
Lloyd Binen
Certified Realty Services - Saratoga, CA
Silicon Valley Realtor since 1976; 408-373-4411

Silvia, yep, in my town 65% of the listings have pre-listing termite or property inspections, and 43% have both.  Fifteen years ago that percentage was close to zero.  In the current market pre-listings inspections are used to disclose deficiencies and to prevent surprises during escrow.  Buyers accept the homes As Is and fix the deficiencies after closing at their own expense.

Richard, thanks and I agree about removing obstacles to make it easy for a buyer to buy.  Best wishes to you as well.

Sep 18, 2013 01:47 PM #7
Rainmaker
4,268,552
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Lloyd, there are definite benefits of having the inspection done prior to receiving an offer.   There have been a few offers this year with no inspection contingency.

Sep 21, 2013 12:12 AM #8
Ambassador
1,978,802
Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

Lloyd, this is a very great script for folks to adapt to their own style. I really do believe that for many properties a pre-inspection is one of the best first steps for marketing a home. It also gives the sellers a LOT of peace of mind. I'd rather know what needs to be done - than have that thrown at me as a BIG surprise somewhere in the selling process.  

Oct 01, 2013 01:54 AM #9
Rainer
31,861
Please delete this profile Delete

I just posted the Pre-Listing Presentation that I used to sell over $440 million in my career. Now that I'm retired, you can help yourself to a free copy. All you'll need to do is to find a person who is skilled at InDesign to modify it to your liking. 

Agents in Facebook groups like "Real Estate Success Principles" & "Real Estate Agent Group - Collaboration, Tips & Insights: have called it "one of the best pre-listing presentations they've ever seen."

You can have a copy for free, along with a tutorial on how I used it to get listing after listing.

Click here to download your copy.

If you have any questions, shoot me a line at greg@agentsuccesstools.com

Dec 06, 2013 02:18 AM #10
Ambassador
2,001,714
Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living

Lloyd, I've only had one seller thus far actually doing a full Pre listing inspection, but at least some others took advice to get roofs or components checked.  It does save bad surprises down the road

Jan 29, 2014 09:53 AM #11
Rainmaker
1,505,323
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

This is a very useful script. Thanks for sharing. I personally believe that every seller must order a pre listing inspection, so they don't have any ugly surprises later.

Jun 07, 2014 09:26 PM #12
Rainmaker
488,977
Scott Seaton Jr. Bourbonnais Kankakee IL Home Inspector
SLS Home Inspections-Bradley Bourbonnais Kankakee Manteno - Bourbonnais, IL
The Home Inspector With a Heart!

Great post and script. I am going to work on growing this part of my business. Thanks

Jun 16, 2014 10:24 PM #13
Rainmaker
499,046
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Lloyd.  Thanks for taking the time to provide us with this well thought out script for explaining the benefits and reasons for having a pre-home inspection before listing the house and putting in the MLS.  I have had similar conversations with my sellers and there are a handful of them that have listened and gotten it done. Each one was happy and our transaction went through without a hitch.  I like the idea of having a printed outline with bullet points!

Oct 17, 2015 03:47 PM #14
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Rainmaker
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Lloyd Binen

Silicon Valley Realtor since 1976; 408-373-4411
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