We've been thinking about these pre-contract (what we call "Walk-Thru") inspections for some time now, as the over heated market in Washington DC has created a situation where sellers' agents will convince a seller to refuse a contract with a home inspection contingency because they know they will be getting multiple contracts just days after the listing hits MLS. As this situation has begun to spread to surrounding areas, we've thought more about how and what the Home Inspection process provides for the purchaser and whether these pre-contract walk-thru inspections really give a purchaser enough information to make a rational and informed decision in the heat of the frenzied home buying moment.
Arrive another person with similar thoughts on the matter in a recently published article:
John Adams of Fox Atlanta provides commentary on the matter, taking on both sides of the argument, so we decided to join the discussion. First let's take on the agent's role in the discussion with the buyer. As is the case with many of the ones we get called on, in DC, the agent has prepped their buyer with the importance of a "home inspection" with the qualification that a contingency won't fly in this seller's market. Some of the agents seem to expect the walk-thru to take a cursory view of the property and be finished within an hour, with the buyer(s) typically sitting and waiting for a simple Yea or Ney from the inspector's review. However, what seems to be missing is letting the buyer know that the walk-thru is not an exhaustive Home Inspection which may not reveal things that would be of importance to them, if the market was not so heated, and the buyer should thus thoughtfully consider opting for a full home inspection.
Our walk-thru inspection still reviews, tests, and inspects most everything in a standard inspection albeit in a bit more expeditious manner taking between 1-3 hours on average, depending on the volume of questions asked by buyers, which many times involve themselves in the walk-thru process. Does all of this time and effort matter if the buyers bidding on the home with an escalation clause, no matter what we find? Most buyers do not take notes and may not recall the bigger issues if they do win out in the bidding process. First-time home buyers only know their agent has told them that an inspection is an important and necessary part of the home buying process. Occasionally, we have been called in to do a post-occupancy inspection on issues that the new owners, once moved in, have encountered after having received a pre-contract inspection from another company.
As much as we don't like doing these pre-contract walk-thru inspections, the current market is driving this situation. Which brings us to an option we are now pitching in these situations - an option for a written report after the contract is accepted. Several Realtors are also pushing their purchasers to get the pre-contract inspection and/or a full inspection after the contract is ratified (with no contingency), but before settlement (preferably once the owners move out) so any major or latent defects that could not be located or evaluated sufficiently during the pre-contract inspection are brought to their attention, which may require explanation from the seller(s).
Bottom line...We are hired to protect the purchaser's interests and should not let sellers' demands obstruct or diminish the processes necessary to provide a complete and comprehensive view of the property's condition to the potential new owners. It's important to be reminded (as Mr. Adams does in his final comments) and remember these things in the pressure of the moment of this overheated market.