I don’t like surprises, do you? Let’s talk about home inspections
Our listing was ready to go on the market and the seller has done everything we recommended in preparation for going onto the market.
The one last item to complete is doing pre-sale inspections on this home. Note that when doing pre-sale inspections, it is important to select inspectors that are well respected in our local market, and who have a good track record. Now, our seller was reasoning that spending money to do these pre-sale inspections when a buyer may not necessarily choose to rely on inspection reports we provide, but rather choose to do their own, may not be money well spent.
My pre-sale inspection recommendation was based upon a tried and true strategy. This seller was curious and wanted to know more.
I explained that the value behind spending in some cases $1K to $2K on these pre-sale inspection reports is that a buyer has the opportunity to review these reports prior to making an offer. The reason this is so valuable, is that the buyer now knows the pre-existing conditions of the property and factors that into his/her offer price and terms before submitting an offer. By not having any pre-sale inspection reports it puts both the buyer and the seller in a tenuous position. Imagine that once a buyer gets into escrow, generates his/her own inspection reports, because there are none provided by the seller, and discovers very unpleasant surprises. The buyer now has two choices: to either renegotiate the price, or back out of the deal. This puts the buyer in a position of leverage over our seller, and our seller in a very disadvantageous position.
In the case of this specific home, by doing the inspections in advance, we discovered that we had a huge $ amount corresponding to issues that needed to be remedied per the pest control report. It was an unprecedented $80K! Now imagine if the buyer on this property had discovered this after they had gotten into contract! They could have backed out of the deal, or they could have asked for large credit toward the purchase price. Instead they were able to see this report before they even decided to write an offer. And, to our pleasant surprise, they still came in over the asking price by $350K, plus they absorbed the inspections and even waived their inspection contingency in their contract!
Imagine the opposite scenario where the buyer could have made a repair request for an $80K credit off of the price for this termite work and the seller said no. Most likely the buyer would have rejected the seller’s response leaving the buyer no alternative but to pull out of the deal. Then our seller would have been left with the burden of having to explain to future buyers why that deal fell apart. Now, future buyers approach the house with an inherent bias, thinking what is wrong with that house?
But by having the inspection reports reviewed by the buyer prior to writing and submitting their offer, and by having all the relevant criteria on the table upfront they, our sellers put the buyer in a position to feel secure in the fact that there had been full transparency, and thus they waived the opportunity to negotiate their offer price and closed the deal.
