Cat Scratch Fever (Pre-listing inspections)

By
Home Inspector with Charles Buell Inspections Inc.

a cat named dogThere 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

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Seattle Home Inspector

 

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Ambassador
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Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

We actually lost a multi-bid offer once because another buyer's agent let her clients forego their own inspection because the sellers had a pre-inspection. I could never recommend that course to buyers. 

Jun 01, 2018 07:23 AM #1
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Hannah Williams
Re/Max Eastern inc. - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-953-8818

Interesting concept Charles Buell I find most buyers and buyers agent to be suspicious of this . Unless however it was an inspection company they themselves were going to use .

Jun 01, 2018 12:29 PM #2
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Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Excellent post but anything by Ted Nugent is not my cup of tea referring to his song title. No offense intended to you.

Jun 01, 2018 03:04 PM #3
Rainmaker
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Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

Interesting post, Charles.  I was also interested in comment #1 by Debb Janes and Bernie Stea.  I agree with their view that buyers should have their own inspections performed by qualified contractors, and not rely on the pre-inspection by seller entities.

Jun 01, 2018 03:13 PM #4
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Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Gee, it seems I've seen this post somewhere else before!

I had a pre-listing inspection just this week, with another on Monday.  It's a market I have been trying to crack for well over a decade.  And the recent interest is an interesting change!

Jun 02, 2018 02:03 AM #5
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Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Charles- It's an interesting topic because I often wondered why more sellers didn't get a pre-listing inspection just so they would know (or hope to know) what may come up. But I can also see it as a tricky slope because of disclosure issues. 

Jun 02, 2018 02:00 PM #6
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Kathy Streib
Room Service Home Staging - Delray Beach, FL
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                 Thank you Charles.

Jun 02, 2018 06:01 PM #7
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Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I do not encourage sellers to do a prelisting inspection . I encourage them to have hvac systems serviced to make sure it is in good condition.

Jun 03, 2018 04:53 AM #8
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Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good morning Charles Buell ,

I'm so glad to see Kathy Streib featured your post in her "Ah-Ha" moments for the week as I missed this feature worthy post. Pre-Inspections should never be relied on totally by the buyer. They need to complete their own due diligence!

Jun 03, 2018 05:08 AM #9
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Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

Good morning, Charles Buell this is a win for every seller, yet, no one does them or wants to do them in our area....prior to my selling my big home to downsize, I had an inspection of the property inside and out.... I had some minor repairs and did them...my home sold quickly (prior to this sellers' market) and there was nothing for me to do or for the buyer to request to be done....the worst comment was the appliances were all 20 years old but all commercial grade and are in good condition... 

wise advice to have a pre-inspection....

Jun 03, 2018 05:19 AM #10
Rainmaker
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Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager

I certainly wouldn't trust a pre-inspection report rather than have my own done. Doesn't make sense to me. I would agree with you, and love the cat analogy.

Jun 03, 2018 12:13 PM #11
Rainmaker
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Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

It's that darn cat that stops sellers from proceeding with pre-inspections. I'm putting my own home on the market tomorrow and did a pre-inspection about a month ago. 

And whoa - what a surprise we found out about. Not going to fix it but will definitely disclose it. And sadly, I think some sellers would not want to disclose. I figure it would have been found no matter what.

Jun 03, 2018 03:14 PM #12
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Hi Charles

This was an entertaining way to present the concept of pre-listing inspections, and the issues they raise. I've never heard of a seller selling a pre-listing inspection report to a buyer! But they certainly need to disclose the findings. Buyers should absolutely do their own due diligence, pre-listing inspection or not.

Jeff

Jun 03, 2018 09:45 PM #13
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Ricardo Mello
Manhattan Miami Real Estate - Manhattan, NY
Manhattan & Miami Real Estate Agent

Happy Friday Charles 

Jul 19, 2018 09:58 AM #14
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