Pre-Sale Home Inspections?

Stevetn.jpgBuyer property inspections… Always a hot topic here. What about Seller property inspections? Kris and I have discussed and evaluated the potential value of recommending pre-sale home inspections to our seller clients for years. We are aware of agents (very few and for good reason) who promote this as a part of their listing presentation.  In fact, as an enticement to list your home with them, the agent may even offer to pay for the pre-inspection. He/she will say that, “it’s better to know early on if there are any major problems, rather than be surprised in escrow”. This should raise several red flags. Who selects the inspector? You guessed it. The agent. This is already a conflict of interest. Even if the seller selects an inspector, what’s to be gained? If you have an inspection and deficiencies are revealed, is it going to change your decision to sell? Of course not. Except now, since you had a pre-inspection, you are legally obligated to disclose it to all potential buyers.

Unfortunately, unknowing sellers may buy into this gimmick (and that’s exactly what it is). So why not have a pre-inspection? The reality is that in almost all cases there is no benefit. None, zero, nada. Here’s why:

If there is a major problem with your home (i.e., roof leaking, cracked slab, etc.) it should be obvious and you already know it. If you know it, the pre-inspection does not benefit you.  

But what about those “hidden” problems? Most likely these are relatively minor items. Even if they’re not, it’s not likely going to reverse your decision to sell. Don’t forget that defiencies will also will show up on the BUYER’S INSPECTION. Yes, even if you have your home pre-inspected, the buyer will have their own inspector do it again. Except now, you, the seller, have to disclose BOTH inspections to the buyer. We all know that no matter how “perfect” the condition of your home, the buyer’s inspector will find items that they believe require correction. They have to, it’s their job. We all know that if you put three inspectors in a home they will all come up with different lists of deficienies. Each has their list of favorite items to call out. One inspector we encounter often (and whom we trust, by the way) is notorious for finding “evidence of possible ceiling patches requiring further investigation”. We laugh about it and have come to expect it. Another fancies himself the drainage expert, and so on.  So, now, you just gave the buyer more ammunition to respond with a longer list of repairs, which may become a contingency of the home sale. Wonderful! The seller has now put their own sale at risk. The agent did their client a real favor, didn’t they?

Is my position one that lacks ethics or integrity? Does it suggest that I or my client want to hide something? Of course not! To the contrary, we strongly advise our sellers to disclose, to the best of their knowledge, EVERY deficiency they are aware of, however small it may be and however long ago it happened. This provides the client the greatest liability protection. But, I stop short of suggesting you rebuild the home prior to listing. You have the statutory right to disclose all that you know, and the buyer has inspection rights. Believe me, they will (as they should) exercise those rights.

Might there be a situation where a pre-inspection is warranted? Of course. Say you inherited the home from a deceased relative and have no idea of the condition. This situation might justify a pre-inspection so that you are fully informed as to potential repair issues and to possible future repair costs during escrow. Also, if you are aware of significant issues (systems or structural issues, for example), early inspection might certainly be warranted to assess the extent and associated costs of needed repairs. There are always exceptions to the rule. But by and large, I believe there is little or no benefit to a pre-inspection. Best case is that the home is revealed to be in the condition you expected. Worst case, you are presented with a laundry list of “deficiencies” that you are now obligated to present to the buyer, who will in turn deliver the report to his own inspector, who in turn will feel compelled to not only confirm your inspector’s findings but add to the list.

As a potential seller, you may be enticed by agents who may use gimmicks to secure your business. Common sense is all it takes to see these for what they are, which is to say not in your best interest. Seasoned veteran agents do not need gimmicks to get business. That should be enough to tip you off.  



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