Pre-Offer Home Inspections – Are you Seeing Them Too?

Every real estate market is different; this one has brought more pre-offer inspections than I have ever seen (in part because I’m more comfortable suggesting them to my buyer clients).

1 – Allows for an As-Is Sale

2 – Removes one phase of negotiations from the process.

3 – Allows for fewer emotions clogging the negotiating process. The home inspection negotiation is often the most emotional, vindictive, painful, and difficult part of the negotiation; a pre-offer inspection removes  this element.

4 – It’s cleaner, procedurally.

Risks:

– Even in this market, homes are selling; some are selling with multiple offers and buyers can lose properties if they opt for the pre-offer inspection path

– Some sellers don’t want to allow these; they want assurances that a buyer is really committed before allowing a home inspection.

As with every question and answer in real estate, whether a pre-offer inspection is right for you is dependent on the situation. One must evaluate all factors involved, some of which are the buyers, the sellers, the buyers’ agent, the sellers’ agent, the respective companies, the days on market, market activity to name a few …

Originally posted at RealCentralVA.com.

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12 Responses to Pre-Offer Home Inspections – Are you Seeing Them Too?

  1. As a home inspector for the past 23 years I think it is very smart. Even smarter is to have the seller do their own pre-listing inspection. The advantages are too numerous to mention in this reply. Pre-Offer inspections can sometimes be awkward for all the reasons mentioned above but especially when the sellers are present. However, when we do pre-listing inspections for the seller, they are quite often very involved and want to learn as much as possible. So, either way is good and should help the sale providing nothing to terrible is wrong with the property. Even if it is, it allows time to address the problems and avoid any last minute surprises. It has also been my experience that when handed a professional home inspection report, most buyers will opt not to get their own inspection. We always make it clear they can call us with any questions as long as it is OK with the sellers. This has worked well and more and more listing agents are suggesting a pre-listing inspection to their clients. Most of my pre-offer inspections come from investors and clients who are about to bid at auction.

  2. Here in No Va, the market moves too fast in most cases.

    If I am working for a seller doing a short sale, we want the inspection before we get seller’s lender approval. At that point at least the buyer has some investment in the transaction.

    AND it is for all your very good reasons I am starting to recommend that sellers (not distress sellers, but “retail” sellers) consider having their property inspected before putting the home on the market. Some buyers won’t even do an inspection of their own. But in all cases, we get the buyers to agree to all those conditions at the time of contract ratification. So if they want to do an inspection, that’s fine… but unless they find something new there will be no new negotiations.

    Doing an inspection when buyers are second guessing their decision is the worst pattern EVER in this business.

  3. Wes Atiyeh says:

    I agree with Bill in getting a Pre-listing inspection over the pre-offer inspection. Again for many reasons why but here are a few. 1. Seller gets pre-listing inspection to find things that they don’t see on a daily basis. Things they think are right might not be and an pre-inspection will determine that. 2. a great way to Prep your home for sale and have it in tip top condition. 3. Eliminates potential issues after a contract the waiting game through the inspection period. There might be a few things another inspector will find but at least you know it’s not major.
    Why a Pre-offer inspection is not a good idea: If something goes wrong then the potential buyer walks and when that happens people talk. The word travels fast that your home has an issue. Regardless of if the Seller fixes it or not, it out there. Another reason why it is a bad idea is the cost. Why spend the money on an inspection before you are invested in the home with a purchase contract.
    I am all in favor of the seller getting a pre-listing inspection so you know your home is in the best possible condition.

  4. Jim Duncan says:

    I’m not sure I would be inclined to advise my buyer clients to accept the inspection report done by an inspector for a seller.

    Sellers don’t have to disclose anything, so why trust them? (not saying they’re all liars, but what incentive do they have to disclose?)

    Wes – People would talk even if the property were under contract. Seeing a property go under contract and then come back on due to the home inspection would raise more questions, no?

  5. Wes Atiyeh says:

    I didn’t say for your buyer clients to accept the inspection report nor would I advise any buyers to accept the inspection report. I would advise all buyers to do their OWN due diligence and have an inspection done. The reason the Seller would have a pre-listing inspection done before the house goes on the market is this: Not all homeowners are in tune with their home inside and out, in the crawl space and in their attics and on top of their roofs etc. Some are but most are not. The pre listing inspection offers the opportunity to find “defects” and issues that might come up down the road- post contract acceptance and right before closing. Eliminated buyer objections and also allows the Seller to make repairs prior to putting the house on the market and make that house a much better product to sell. Not sure but where I practice sellers do have to disclose defects if they know about them and they are not repaired. Doesn’t mean they do it but they are obligated to do so.

    I certainly would not advise my seller to provide the inspection report since it was for the sellers information only.

  6. Jim Duncan says:

    Re: disclosure: I thought that too, until I asked counsel who told me that Sellers don’t have to disclose anything (but Realtors do).

  7. Point taken about advising clients not to accept the seller’s inspection report. Truth is when I do a pre-listing inspection it is even more through than most of my other inspections. Why, because I don’t want some wanna be coming after me and finding anything else. So, unless the seller changes my report which is unlikely considering they are in .pdf format, the report coming from my office will be the same or better than the report they would get if they hired me directly. They are more critical for the seller’s benefit as well. Disclosure laws aside, I have found it shows good intent by the seller. Many of my seller clients will leave the report out on a table for anyone to see. They will highlight the items mentioned which needed repair at the time of the inspection to let anyone reading the report know those items have already been addressed. Anything not highlighted is something the seller has no intention of addressing.

    Some other good reasons to have sellers get a pre-listing inspection can be seen at:
    if anyone is interested.

  8. Jim Mellen says:

    I think a pre offer inspection should be far better for both a buyer and seller. For the seller-the buyer is paying for it, the findings will be part of the offer so everyone will know upfront what they are negotiating for. The problem comes when something warranting future disclosure is found and the seller will be made aware of it,and will be required to disclose it regardless if the offer is ever made. There are sellers who want to have no knowledge of anything like Sgt Schultz ” I know nothing!”. I love sellers who do pre listing inspections too at their cost. The disclosure requirement doesn’t change and if you find something hidden or covered up that they clearly knew about, have opened themselves up to litigation and most certainly added costs and remdiation.

    But I think a seller who allows a pre offer inspection would do well to accept it. makes for a much happier transaction for everyone I believe

  9. Pre-listing and pre-offer inspections can be good but remember that the insepectors are only human and there can be different items found on each inspection and some of them can be major. I had 2 deals fall thru on a home so had 2 inspections and a third inspection for the final contract. Each inspector found defects not found/reported by the previous inspectors with one of them being found by the third inspector that was a major electrical issue. Yes it will elimiate some defects but maybe not all.

  10. Craig Davenport says:

    I agree with Roger. On more than one occasion, I’ve had buyers who had their own home inspection and several things were found that the pre-offer inspection did not. None (so far) was ever a major issue, but the items still needed to be addressed. Differing inspections may also make the buyer untrusting of “what still may be unseen” even if there is nothing else to be found. I think that the mentality that it “eliminates” potential issues or removes aspects of negotiations may be presumptuous. I agree that it can help quell some emotional aspects of the negotiations, but I can certainly cite situations where the other three points would fall short. I certainly suggest that my buyers use the pre-inspection as a tool, but I don’t feel that it should not be the final say on condition.

  11. Dan Daniels says:

    Working as a Buyers Agent I believe it is my job to advise my buyers to do their own due diligence (home inspection). When representing the Seller I leave it up to the seller to decide, reminding them that people prefer to trust professionals they hire themselves to gauge the condition of a house (or car or boat, etc.).

    As a Realtor, I try to set the tone that we should all promote fairness (subject to state disclosure requirements) for both sides in a real estate transaction. Keeping in mind that if either a Seller or a Buyer feels they been on the short side of a transaction it gives them pause about using a Realtor in the next transaction. I always want them to come back to a Realtor (especially me!)

  12. Sellers have the concern that if they select the auction method they will have to
    accept less for their home.

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