A CLOSE LOOK: They can give the owner a chance to correct problems before a buyer starts negotiations
August 14, 2010
lfpress.com
Seller inspections, sometimes referred to as pre-listing inspections, are becoming more popular because they eliminate many of the pitfalls and hassles associated with waiting to do the home inspection until a buyer is found.
Often, minor deficiencies that might dissuade a potential buyer from making an offer can be fixed or corrected.
On the downside, discovering major deficiencies, of which the owner was unaware, may be a little difficult for the owner to accept; however, at least having this knowledge will allow the owner to either correct the problems or be prepared to negotiate.
For example, assume the seller has hired a home inspector who finds the roof, though only 10 years old, is in very poor condition and needs replaced. This is one area a qualified home inspector would definitely point out.
The seller then has two choices:
- Fix the roof
- Accept less than the asking price because of the repair job required.
Once the inspection has been done, the seller will have the report available for review by the potential buyers.
Seller inspections are arranged and paid for by the seller, usually just before the home goes on the market. They also can be done after the house is listed, especially if the seller is concerned that they haven't received any offers.
A seller inspection is a win-win-win for the seller, real estate agent and buyer:
Advantages to the seller n The seller can choose a fully qualified inspector rather than be at the mercy of the buyer's choice of inspector.
- The seller can schedule the inspections whenever it's convenient.
- The seller can assist the inspector during the inspection, by providing information about repairs and other conditions, something normally not done during a buyer's inspection.
- The inspector's report can help the seller price the home realistically if problems exist.
- The report can help the seller substantiate a higher asking price if problems don't exist or have been corrected.
- The inspection can reveal problems ahead of time, giving the seller time to make repairs and shop for competitive contractors.
- The report can alert the seller to any immediate safety issues, before agents and visitors tour the home.
- The report provides a third-party, unbiased opinion to offer to potential buyers.
- A clean home inspection report can be used as a marketing tool.
- The report might relieve a prospective buyer's unfounded suspicions, before they walk away.
- The report might encourage the buyer to waive the inspection contingency.
- The deal is less likely to fall apart the way they often do when a buyer's inspection reveals a problem at the last minute.
Advantages to the real estate agent n Sellers can schedule the inspection at their convenience with little effort by the agent.
- The inspection report helps sellers see their homes through the eyes of a critical third-party, thus making sellers more realistic about price.
- Agents are alerted to any immediate safety issues found, before other agents and potential buyers tour the home.
- Repairs made ahead of time might make homes show better.
- The reports provide unbiased opinions to offer to potential buyers.
- Seller inspections eliminate buyer's remorse that sometimes occurs just after an inspection.
- The inspection reduces the need for negotiations especially at the 11th hour.
- The inspection relieves the agent of having to hurriedly procure repair estimates or schedule repairs.
Advantages to the homebuyer
- The inspection is done already.
- The inspection is paid for by the seller.
- The report provides a more accurate, third-party view of the home's condition before an offer is made.
- The inspection eliminates surprise defects.
- Problems are corrected or at least acknowledged before an offer is made.
- The report might assist in acquiring financing.
Hire a qualified inspector Anyone buying or selling a home today needs to understand the importance of having a home inspection performed by a qualified home inspector, not by someone just claiming to be one.
A qualified home inspector must meet certain education, experience and professional development standards each year to maintain membership in a professional organization.
Just because someone is a licensed engineer or other tradesperson, doesn't mean they meet the requirements to be considered a qualified home inspector.
A further complication is that, in Ontario, there are many organizations (some of them U.S.-based) to which home inspectors can belong, and they don't all share the same standards.
You should review the following websites for the requirements for membership as well as a listing of registered members:
Of course, even qualified inspectors can make a mistake. That's why you should only hire an inspector who carries E&O (Errors & Omissions) insurance.
The cost of the inspection should be the last question you ask; too often, it's the first. People offering to do the inspection for free or for a ridiculously low amount usually lack proper qualifications, proper insurance, or both.
As with so many things in life, you get what you pay for.