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Seller

Paying a little extra for an InterNACHI inspector pays off!

Buying a home?  It is probably the most expensive purchase you will ever make.  This is no time to shop for a cheap inspection.  The cost of a home inspection is very small relative to the home being inspected.  The additional cost of hiring an InterNACHI-certified inspector is almost insignificant, in comparison, but your choice is just as important.

You have recently been crunching the numbers — negotiating offers, adding up closing costs, shopping for mortgages — and trying to get the best deals.  Don’t stop now.  Do not let your real estate agent, a patty-cake inspector, or anyone else talk you into skimping on the home inspection.  InterNACHI-certified inspectors perform the best inspections by far.

InterNACHI-certified inspectors earn their fees many times over.  As the most qualified inspectors, they do more, they deserve more, and, yes, they generally charge a little more.  Do yourself a favor…and pay a little more for the quality inspection you deserve.

 


On the House: Should seller get inspection?

By Al Heavens

Philidelphia Inquirer Columnist

Jan 27, 2008

With today’s wide selection of homes making buyers pickier, some of my readers are again raising questions about the value of pre-inspections by sellers.

Here’s a case in point:

One reader, Kevin, says his mother recently inherited a home in Springfield, Delaware County, from her late sister. The house is in an attractive neighborhood, and Kevin believes that his mother’s primary goal is to sell the house quickly rather than “maximize what she is paid for it.”

The house has some “obvious issues,” he says, including plumbing in disrepair, dog-stained hardwood floors, dated wallpaper, a 55-year-old gas stove, and several stress cracks in ceilings. His mother is correcting some of these issues, and trying to decide which ones are simply cosmetic and “not worth fussing with.”

Yet Kevin points out that “there could be serious hidden problems with a house she does not know well because she has not lived there.” He asks whether there is an advantage to engaging a home inspector and disclosing the findings – and any repairs or corrections – to potential buyers, or whether his mother is better off simply not knowing unless a buyer’s inspection uncovers a problem.

Good question. I posed it to some experts in the Philadelphia market.

In this litigious society, ignorance is not necessarily bliss, and the words “seller should have been aware of the problem” is being heard in a lot of courtrooms these days. Still, says environmental lawyer and educator Joseph Manko, “I think you’re getting a little ahead of yourself when talking about litigation.

“With an inspection before the property goes on the market, the seller is better able to control the transaction,” he says. “If you don’t pre-inspect, it could give the buyer all the leverage.”

Manko and his wife relocated to Center City from a Lower Merion house they owned for 41 years. They paid for an inspection before putting it on the market. “We found a few small things and took care of them,” Manko says.

Fred Glick, a Center City real estate and mortgage broker, believes that pre-inspection is more important in a market with a surplus of homes for sale.

“With a pre-inspection, you know the problems, you take care of the problems, and then you are able to price it right for a quicker sale,” Glick says. “It will cost the seller money, and the buyer will probably have an inspection done anyway, but at least you won’t have the aggravation of having to negotiate a lower price for problems of which you were unaware.”

Real estate agents, too, seem much more willing to recommend pre-inspections to sellers.

“The sellers can provide a better disclosure of the condition of their property,” says Michelle Leonard, an agent with Long & Foster Real Estate in Devon. With a pre-inspection available for them to look at, “buyers are not as afraid to make their offer. You remove the stress of renegotiating the agreement of sale after the home inspection.”

Leonard acknowledges that many sellers complain about spending the money for a pre-inspection. But in the long run, she says, “those same sellers end up giving thousands of dollars away to keep a transaction together.”

Noelle Barbone, Delaware Valley operations manager for Weichert Realtors, says that when sellers and buyers negotiate an agreement of sale, “most often a price is agreed upon between the parties contingent upon an inspection.”

“Once the inspection happens, the buyer may come back to the seller to renegotiate the price or terms based on the results of the inspection,” Barbone says, “meaning the seller may walk away with less money after the inspection than what was anticipated.”

Harris Gross, a licensed engineer and home inspector in Voorhees, says a pre-inspection could easily be used as a marketing tool, as well as to reassure buyers that the seller is “on top of things.”

If, on the other hand, the house is in bad condition, a pre-inspection report might scare away buyers, says Gross, owner of Engineers for Home Inspection. “Still, the seller has to disclose, and the pre-inspection will help.”


Seller Inspections: Streamlining Real Estate Transactions.

by Nick Gromicko

Former REALTOR and Founder of the International Association of Certified Home Inspectors

Seller inspections (sometimes referred to as pre-listing inspections) are becoming more popular because they virtually eliminate all the pitfalls and hassles associated with waiting to do the inspections until a buyer is found.  In many ways, waiting to schedule inspections until after a home goes under agreement, is too late.  Seller inspections are arranged and paid for by the seller, usually just before the home goes on the market.  The seller is the inspector’s client.  The inspector works for the seller and generates a report for the seller.  The seller then typically makes multiple copies of the report and shares them with potential buyers that tour the home for sale.  Seller inspections are a benefit to all parties in a real estate transaction.  They are a win-win-win-win.  Home inspectors should consider offering seller inspections and marketing this service to local listing agents.

Advantages to the home inspector:

  • Seller inspections allow the inspector to catch inspection jobs upstream, ahead of real estate transactions and the competition.
  • Seller inspections are easier to schedule and are not under the time constraints of sales agreement’s inspection contingencies.
  • Working for sellers is typically less stressful than working for buyers about to make the purchase of their lifetimes.
  • Sellers can alert the inspector to problems that should be included in the report, answer questions about their homes, and provide seller’s disclosure statements.
  • Repairs of problems found during seller inspections often necessitate the need for re-inspections by the inspector.
  • Seller inspections put a sample copy of the inspector’s product, the report, in the hands of many potential buyers who will need a local inspector soon.
  • Seller inspections put a sample copy of the inspector’s product, the report, in the hands of many local buyer’s agents that tour the home.
  • The inspector is credited, in part, with the smoothness of the real estate transaction by buyer, seller and agents on both sides.
  • The liability of the inspector is reduced by putting more time between the date of the inspection and the move-in date of the buyers.
  • The liability of the inspector is reduced because the inspector’s clients are not buying the properties inspected, but rather moving out of them.
  • The buyer might insist on hiring the seller’s inspector to produce a fresh report since the seller’s inspector is already familiar with the home.
  • Seller inspections provide inspectors opportunities to showoff their services to listing agents.
  • Seller inspections provide examples of the inspector’s work to the listing agent of each home, which might encourage those agents to have other listings pre-inspected by the inspector.
  • Most sellers are local buyers and so many sellers hire the inspector again to inspect the homes they are moving to.

Advantages to the seller:

  • The seller can choose a certified InterNACHI inspector rather than be at the mercy of the buyer’s choice of inspector.
  • The seller can schedule the inspections at the seller’s convenience.
  • It might alert the seller of any items of immediate personal concern, such as radon gas or active termite infestation.
  • The seller can assist the inspector during the inspection, something normally not done during a buyer’s inspection.
  • The seller can have the inspector correct any misstatements in the inspection report before it is generated.
  • The report can help the seller realistically price the home if problems exist.
  • The report can help the seller substantiate a higher asking price if problems don’t exist or have been corrected.
  • A seller inspection reveals problems ahead of time which:
    • might make the home show better.
    • gives the seller time to make repairs and shop for competitive contractors.
    • permits the seller to attach repair estimates or paid invoices to the inspection report.
    • removes over-inflated buyer procured estimates from the negotiation table.
  • The report might alert the seller to any immediate safety issues found, before agents and visitors tour the home.
  • The report provides a third-party, unbiased opinion to offer to potential buyers.
  • A seller inspection permits a clean home inspection report to be used as a marketing tool.
  • A seller inspection is the ultimate gesture in forthrightness on the part of the seller.
  • The report might relieve a prospective buyer’s unfounded suspicions, before they walk away.
  • A seller inspection lightens negotiations and 11th-hour renegotiations.
  • 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 unexpectedly reveals a problem, last minute.
  • The report provides full-disclosure protection from future legal claims.

Advantages to the real estate agent:

  • Agents can recommend certified InterNACHI inspectors as opposed to being at the mercy of buyer’s choices in inspectors.
  • Sellers can schedule the inspections at seller’s convenience with little effort on the part of agents.
  • Sellers can assist inspectors during the inspections, something normally not done during buyer’s inspections.
  • Sellers can have inspectors correct any misstatements in the reports before they are generated.
  • The reports help sellers see their homes through the eyes of a critical, third-party, thus making sellers more realistic about asking 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.
  • Reports hosted online entice potential buyers to tour the homes.
  • The reports provide third-party, unbiased opinions to offer to potential buyers.
  • Clean reports can be used as marketing tools to help sell the homes.
  • The reports might relieve prospective buyer’s unfounded suspicions, before they walk away.
  • Seller inspections eliminate buyer’s remorse that sometimes occurs just after an inspection.
  • Seller inspections reduce the need for negotiations and 11th-hour renegotiations.
  • Seller inspections relieve the agent of having to hurriedly procure repair estimates or schedule repairs.
  • The reports might encourage buyers to waive their inspection contingencies.
  • Deals are less likely to fall apart the way they often do when buyer’s inspections unexpectedly reveal problems, last minute.
  • Reports provide full-disclosure protection from future legal claims.

Advantages to the home buyer:

  • The inspection is done already.
  • The inspection is paid for by the seller.
  • The report provides a more accurate, third-party view of the condition of the home prior to making an offer.
  • A seller inspection eliminates surprise defects.
  • Problems are corrected or at least acknowledged prior to making an offer on the home.
  • A seller inspection reduces the need for negotiations and 11th-hour renegotiations.
  • The report might assist in acquiring financing.
  • A seller inspection allows the buyer to sweeten the offer without increasing the offering price by waiving inspections.

Suggested language for:

  • inspectors to add to their seller inspection reports.
  • sellers to use to encourage buyers to perform their own fresh inspections.
  • agents to use to encourage buyers to perform their own fresh inspections.
“Note: Just as no two home inspectors and no two reporting systems are alike, no two inspection reports, even if performed on the same property at the same time, are alike. This seller or pre-listing inspection report was performed for my client, the home seller, with the cooperation and assistance of my client, the home seller. It assumes full disclosure on the part of my client, the home seller.  My client may choose to share my report with others, but it was performed solely for my client.  Although ABC Inspections performs all inspections and writes all reports objectively without regard to the client’s personal interests, performing additional fresh inspections, which of course could reveal and report matters differently, should be considered.”

Common myths about seller inspections:

Q.  Don’t seller inspections kill deals by forcing sellers to disclose defects they otherwise wouldn’t have known about?

A.  Any defect that is material enough to kill a real estate transaction is likely going to be uncovered eventually anyway.  It is best to discover the problem ahead of time, before it can kill the deal.

Q.  Isn’t a home inspector’s liability increased by having his/her reports be seen by potential buyers?

A.  No.  There is no liability in having your seller permit someone who doesn’t buy the property see your report.  And there is less liability in having a buyer rely on your old report when the buyer is not your client and has been warned not to rely on your report, than it is to work directly for the buyer and have him be entitled to rely on your report.

Q.  Don’t seller inspections take too much energy to sell to make them profitable for the inspector?

A.  Perhaps.  But not when the inspector takes into account the marketing benefit of having a samples of his/her product (the report) being passed out to agents and potential buyers who are looking to buy now in the inspector’s own local market, not to mention the seller who is likely moving locally and in need of an inspector, plus the additional chance of re-inspection work being generated for the inspector.

Q.  A newer home in good condition doesn’t need an inspection anyway.  Why should the seller have one done?

A.  Unlike real estate agents whose job it is to market properties for their sellers, inspectors produce objective reports.  If the property is truly in great shape the inspection report becomes a pseudo marketing piece with the added benefit of having been generated by an impartial party.

Q.  Don’t seller inspections and re-inspections reduce the number of buyer inspections needed in the marketplace?

A.  No.  Although every inspection job a InterNACHI member catches upstream is one his/her competitors might not get, especially if the buyer waives his/her inspection and/or the seller hires the same inspector to inspect the home he/she is buying, the number of inspections performed by the industry as a whole is increased by seller inspections.

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