Cat Scratch Fever (Pre-listing inspections)

There is a recent move for sellers to not only have pre-listing inspections done, but to use the pre-listing inspection report as a means of promoting the sale of the house. This includes, in some cases, the sale of that report to prospective buyers for a small fee. This helps the seller recoup the cost of the pre-listing inspection and maybe even make some money on it.

Other approaches amount to the inspector doing the inspection for free and the payments from prospective buyers goes to the inspector.

In my opinion these models, and other similar ones, are fraught with problems.

Despite this, there are so many good reasons to get Pre-Listing Inspection done on your home when you are planning to sell your home.

The reasons most sellers are discouraged from having pre-listing inspections done, has to do with “disclosure” issues.

Once the cat is out of the bag, they do not go back in quietly or safely.

It does not seem to matter that sooner or later the seller is going to get scratched by the cat, but the thinking is that there is the “possibility” or “hope” the buyer’s inspector will not find the cat and the seller can ride off into the sunset financially better off.

I think it is better for any possible cats to be found beforehand, so that they can be properly de-clawed, and the home can be improved in the areas that might prevent a sale—or narrow the field of potential buyers.

This is a really good idea if the entire house has been used as a climbing pole and litter box.

There is always a buyer for any house—but are we really thinking about selling it to someone that is just going to tear it down? That will likely make you the least amount of money—but then again it might be accurate.

A pre-listing inspection can be meaningful in starting the conversation about what the house is REALLY worth—perhaps the seller has unrealistic expectations that need to be brought into perspective.

Perhaps the cat just needs to be put out of its misery—or merely petted nicely.

As compelling as the idea of pre-listing inspections might be to a seller, they should be of zero interest to a buyer, other than to maybe give them a clue as to whether they want to make an offer. This makes even more sense in a really hot market where there are going to be a lot of offers.

They should NEVER be a substitute for their own due diligence.

There are questions as to who owns responsibility for the report and its content once the report is sold. Since the inspector has a contract with the seller and not the buyer, the buyer certainly cannot “rely” on that report for anything.

This would seem to add potential liability on the seller–or whoever is selling the report that is not likely even a home inspector.

Sure the “fine print” will say that the pre-listing inspection is not a substitute for a buyer’s due diligence,but there is a real danger the consumer will not know these reports do not satisfy their due diligence. Under the pressure and the heat of the moment, and without reading the fine print or any encouragement to read the fine print, the buyer can make one of the bigger mistakes of their life. Is it in the vested interest of the agents and seller to communicate clearly that the pre-listing inspection does not satisfy the buyer’s due diligence?

I caution any buyer, to not rely on these pre-listing inspections solely to make their decision. If the report is inaccurate or incomplete and you “rely” on that information there will likely be no recourse because you do not have a contract with the inspector that did the report. Most reports go out with very specific expiration dates and who can rely on them. The further these reports get from who they were done for the less value they have.

There will be no way to put the cat back in the bag—and there may not be bandages enough if you try.

By Charles Buell, Real Estate Inspections in Seattle