If you have ever sold or purchased a house, you know it can be a cat and mouse game when it comes to pricing, negotiations and closing the deal. What use to consist of a two page purchase agreement has turned into 8 to 12 pages of legalese and disclosure laws. Because buyers and sellers have become so savvy to how the process works, they are doing a much better job of uncovering issues with a house using programs and search engines to do most of their homework. In todays market, sellers are quickly turning to Pre-Listing home inspections to streamline the process.
Traditional home purchases usually go something like this:
* Buyers looks at homes in their preferred market area and find one they are interested in pursuing.
* Agent gets all the information about the home, including seller disclosures, lead base paint, mold disclosure, association documents (if applicable) and any other information that pertains to that home.
* Based on the disclosures and the information obtained, you make an offer to purchase with any contingencies you may have, like inspection, financing or the sale of a residence.
* Negotiations go back and forth and in most cases and you eventually agree upon a final purchase price.
* Because time is of the essence, you order your home inspection by a qualified licensed home inspector and attend the inspection to see what you had missed while walking the property.
* Upon receiving and reviewing of the report you find that there are some issues that you want addressed prior to closing. ( these are issues that were not in the seller disclosures)
*The options available under most contracts are, 1) seller fixes the issues at seller expense, which is sometimes capped at a percentage of the selling price, 2) seller agrees to a price reduction to cover the cost of repair(s), 3) buyer walks away from the deal and starts over with their search.
*In the end, cooler heads usually prevail and the deal gets closed with neither party really feeling like they got what they wanted.
At this point, everyone involved is usually at there wits end. The seller feels like they are being beat up and the price just keeps going lower. The buyer feels like they have caught the seller in a coverup, misrepresenting the house and the agents on both sides feel like the deal is never going to make it to closing. This is called 11th hour negotiations and is usually painful for one or both parties.
Streamlining the Sales Transaction:
Most of the pitfalls that muck up a real estate transaction can be mitigated with regard to the inspection process by sellers obtaining a Pre-Listing Home Inspection.
Advantages to the Seller:
*The seller can choose a certified InterNACHI inspector rather than be at the mercy of a buyer's choice.
*The seller can schedule the inspection at their convenience.
*A seller may be alerted to issues that could be adversely affecting the sellers health and well being, such as a gas leak, mold or even a termite infestation.
*The seller can participate and ask questions that they may not otherwise be able to get information on during a buyer inspection.
*The seller can use the report to ether substantiate an asking price or make adjustments if problems exist and can't afford to be fixed.
*The Report can give the seller ample time to make correction before listing the house, eliminating the surprise price reduction from the buyer in the 11th hour.
*The seller will have the option of getting competitive price quotes, in advance, for items that need to be fixed and not be subject to the buyers last minute overpriced contractors estimates.
*The report will provide the ultimate gesture that the seller is being forthright in their representation of the home.
*The report may encourage the buyer to waive the inspection contingency and expedite the closing.
*The deal is less likely to fall apart, the way they often do, when a buyer's inspection unexpectedly reveals a last-minute problem.
*The report provides full-disclosure protection from future legal claims.
As a home inspector, I can say that 90% of my clients have questions about a certain part of the home they are looking to buy. It usually is an obvious sign like a sagging ceiling, stains or obvious cracks in the walls or foundation. A pre-listing inspection alleviates many of the upfront concerns that buyers will have about your home and project confidence in the property buying decision.
I'm busy working on my blog posts. Watch this space!