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Inspections in this high speed market
After performing thousands of inspections for the last sixteen years, beginning my business amidst the housing boom in 2005, I wonder if I could offer some perspective. There are others more invested but I have spent time with more than five hundred clients during this high speed market of the last two years. I’ve talked with a hundred different real estate agents and heard countless, transparent conversations concerning what it is like to buy and sell in our area. My hope is to offer some help that might clarify the challenges and offer a little peace of mind.
Should I perform a pre-listing inspection before I put my house on the market?
I’ve been through the house-selling experience and know the costs that seem to pile up reducing the net sale price. Adding another $470 or so for a home inspection that has traditionally been a buyer responsibility may feel like too much or unnecessary. On top of that it is paid upfront and not enfolded into the closing costs which can put an added squeeze on the bank account. Most choose to list their property and leave the inspections to the buyers. Here’s what I have come to learn about this that may change your mind.
First, many first-time home buyers, often young professionals who are barely able to consider a home purchase, are pressured into forgoing inspections in this high speed market. In order to be competitive they are having to waive their inspection contingency. I hate this! My daughter just bought her first car and we had a mechanic look it over before she put in her offer. She saved and sacrificed all through high school and college to have enough. As a parent I would have worried sick if she had to make that kind of decision without a guiding eye. If the seller had said no mechanic, I would have encouraged her to forgo the purchase. This scenario is being repeated with young people who I view like my kids. However, the stakes are so much bigger than a car. I believe that for many buyers, a seller unwilling to disclose the issues through a third-party home inspection is viewed as suspect and not out for their best interest. Many choose not to make an offer.
Second, a seller who discloses the performance of a pre-listing inspection is market gold for buyers. It’s like dropping chum in the water for agents and buyers. This seller is perceived as straight-forward, honest, generous and eager to find the best buyer for their home. Pre-listing inspections bring as many offers to the table as possible, which always means stronger offers. Additionally, the nickel-and-diming that can come with offers, fix this or discount the price due to that, is lessened. Sellers are able to come up with a listing price that reflects the fully disclosed condition of the house. Prospective buyers may ask for shared closing costs, etc. but have less leverage to reduce offer price due to major repairs needed. I believe this actually pays for the cost of the inspection long term and that a pre-listing inspection can actually increase the net proceeds!
Third, most sellers are scared of what the home inspection will find. I often feel like I’m walking into the exam room after the x-ray and bloodwork to the patient’s desperate, “So am I dying, doc?” Every house has issues. Endless maintenance and ongoing costs accompany home ownership. There will always be things to talk about in my findings but most of the time, and by that I mean 95% of the time, I am delivering news that is a huge relief. I believe that pre-listing inspections give peace of mind to sellers and buyers alike.
Fourth, repeated inspections cause excessive wear on a house. I remember an inspection in Green Lake pre-COVID when there were three of us inspectors trying not to trip over one another in doing our work. There had been six earlier inspections. Every toilet was loose and on the verge of leaking. I am pretty confident that the numerous inspectors tugging to ensure they were sitting properly created the new problem. Home inspections are to be visual and non-impacting but wear happens as we set ladders against gutters, walk on roofing, pull on toilets, access attics, etc. I believe pre-listing inspections will reduce the wear and damage to a home.
What should be repaired from the pre-listing inspection report?
In this market. Nothing has to be. Buyers just want to know what’s wrong – they don’t need to have everything fixed. The repairs that seem to bring increased value and make buyers eager to buy seem to relate to roofing replacement, furnace servicing and replacement, hot water tanks, out-dated electrical concerns, and foundation issues. I will talk through the specifics with my clients but always encourage them to talk with their real estate agent about what, if any, repairs or tasks should be performed.
What happens when a prospective buyer gets hold of my pre-listing report?
I can only imagine some of what happens, but what I know is that on some rare occasions they give me a call as the inspector who has performed the pre-listing inspection. My first advice, is that they get their own inspector to perform an inspection and personally explain the issues seen there. I explain that legally this report is between me and my client. That being said, I acknowledge the high speed market we are in and what it means when a seller offers a pre-listing report for review. Then, attempting to operate within my ethical guidelines, I answer their questions. Often I am asked if I think they should buy the house or be worried about the issues disclosed. This is where I get to coach them to make their own decision and seek other experts. If they want to hire me later to come out and provide them with my services I am more than willing to become their inspector!
What should I do if I couldn’t have an inspection done on the house I just purchased?
Don’t panic. Give me a call. I’ve worked with numerous clients just like you who had to waive their inspection or could not get a slot to perform their own. I’m thrilled to come in and identify major issues, introduce you to your house and upcoming maintenance, and be that continued resource you can reach out to. You’ll have the advantage of performing an inspection after you’ve had a chance to live in the place and find questions you would not have had a chance to discover otherwise. I am confident that my time with you will give you much welcome peace of mind about your purchase!
Anything else home buyers and sellers should know?
Entrust yourself to the guidance of a friend and expert. There are some companies and strategies reducing the involvement of the real estate agents and associated costs. I’ve obviously developed many dear friendships with real estate agents and desire their success. But I will say this from my personal experience as a buyer, seller, buyer again, and long-time home inspector, you get what you pay for! These folks may seem to be making hand over fist in this market but I can assure you they are working hard for it. You need an advocate and wise guide in this season. I’m honored to enter the process for a few hours but encourage you to use an agent you can know, build a long term relationship with and trust. Most of my referrals come from Windermere, John L Scott, Keller Williams and smaller brokerages in Snohomish and King County. Good companies hire good agents. If my name is on their referral list I think they are top notch!
