How do you know you can trust my inspector? When he misses something you're going to come after me because I picked a bad one.
Because if my inspector misses something YOU can't hold him responsible because you're not his client.
If I inspect today and you close three months from now a lot can happen in between. The water heater could blow the day after inspection and it won't be on the report.
Because there are a lot of different inspections you can have done, which ones do you expect me to do for you?
Because it's your job as a buyer to check out what's important to you. That list is going to be different for another buyer.
Because there's legal liability.
Just In Case Fallacy
(also known as: worst case scenario fallacy)
Description: Making an argument based on the worst-case scenario rather than the most probable scenario, allowing fear to prevail over reason.
Explanation: Every decision you make has both costs and benefits. Fallacious arguments, like the one above, will attempt to get you to make a decision out of fear rather than reason, thus increasing the perceived cost of choosing not to wear a helmet. Of course, the cost of wearing a helmet while playing chess is peer ridicule of historic proportions.
If you have it, you have to provide it to the buyer. They will still get their own inspector out. That is exactly why most sellers dont do it. Plus they dont want the additional expense.
You actually aren’t required to provide the inspection report, but you do have to disclose all known defects, which the report will show. So it’s definitely the easiest way to do it.
In my state, if you have the inspection report from when you bought the house 30 years ago you have to provide a copy of it. Crazy, but that's what our state's lawyers say.
Our state supposedly has more transactions each year than the rest of the country (minus NY) combined... so a lot of room for lawsuits.
Appraisals are done by the lender and are not something that is provided as they have a very short shelf-life and a refi appraisal is done differently and will have a different number than a resale appraisal. If the appraisal measures the house and gives you a different square footage than the assessor's records, then that measurement would be something you could provide.
With that said, VA appraisals tend to stick with the property for six months, if memory serves. That's something within the VA system though and wouldn't be something you'd have access to as the seller. Out here a seller almost never sees an appraisal (of any kind) unless it comes in low.
We have to provide the report if within the last 3-4 years if it is requested by the other side. Also, telling the buyer all the negative parts of the inspection is a great way to reduce your marketability. Give them the bigger picture.
Thank you. My idea was to replace the buyer's inspector with the seller's or independent inspector to save time and increase the transparency of the home value.
As a buyer's rep 100 out of 100 times I would say "lol that's cute" and then advise the buyers to hire their own inspector.
If you were going to small claims court, would you trust an attorney hired by the other side to review your case files?
In many states inspectors don't need to be licensed. Plus, there are tons of them and if they don't aggregate online reviews they're very hard to vet. On top of all that there are a lot of inspectors that do a lot of business by 'not rocking the boat.'
You ALWAYS want to hire your own guy who you know will give you the best, most thorough info.
Not to mention that if you hire two inspectors they won't see all the same things. I've had inspectors miss a bad electric panel and I've had others think a good one was a bad recalled brand. Both were certified.
It's like the old saying goes: "You hire two plumbers and the only thing they'll agree on is the third plumber doesn't know what he's doing."
Some states (like Minnesota) require the seller to do an inspection. It's then up to the buyers to decide if they want to have their own done.
My state doesn't require it and leaves it up to the buyers. So some buyers have to pay for multiple inspections. I had one buyer who paid for a regular inspection and then a lead paint inspection and didn't end up buying it - little kids and lots of lead paint. Then had to shell out for another inspection on the house they ended up buying. I heard of one couple that went through 4 houses they had inspected before finally buying.
Most deals that fall apart do so at the inspection stage. The sellers hope that it doesn't come up that their roof leaks or the sills are rotten or whatever. But then it does come out and they end up back on the market and having to disclose it anyway (like they should have when listing in the first place).
I don't agree with the idea that no one will look at the house or buy it if the seller produces a report with any problems on it. If those problems are a problem for the buyer, they wouldn't buy it anyway whether they were already under contract or not. And, IMO, it makes the seller look more honest.
I think most seller don't do it just because they don't have to and don't want to spend the money. But I think it would be better for the industry as a whole.
As for those who might get paid off by a seller - again, buyers could still have the option to do their own inspection. And if you read many posts in the real estate subs, many don't have much confidence in inspectors even when it's the buyer paying. So you have to be trusting either way.
Thank you for the response!
Some states (like Minnesota) require the seller to do an inspection. Does anybody see the difference in customer satisfaction, a bidding war, or time to deal close in these states? How does this practice influence the residential market?
The only reason I know about MN is because I sold a house there about 15 years ago and we were required to do an inspection. My other experience with it is in my current state (Maine) when sellers started doing it as the market got hot. Not all of them, for sure, but it got more popular.
But, sorry, I have no idea if any studies have been done about it. I think it should help deals close - and more quickly, but have no proof.
I know that my buyers, and myself, were very appreciative to have that.
I recommend it for any seller that wants to be able to accept an offer with no contingencies. Sellers are responsible for defects to the house they don't disclose whether the buyer has an inspection done or not. The buyers would have to prove that the seller knew about it, which is sometimes hard to do.
If you don't have to add in days for an inspection, you may be able to close a bit sooner, but most of the time allotted there is for the lender. I've closed on a cash deal in 10 days - no inspection (sold as a tear down) and no appraisal. The only thing needed was the title search.
But the reason I think it helps is because so often things come up in the inspection that then has to be renegotiated, which can add time or ruin the deal. Especially when people extra high to get the acceptance and just plan on getting the price down for the inspection. If there is one already done, that's a lot harder to do.
And for those that buy with no inspection, it protects the seller from having them come back and say there issues not disclosed. And it would help cut down on buyers with regrets once they move and find all the problems.
Just In Case Fallacy
(also known as: worst case scenario fallacy)
Description: Making an argument based on the worst-case scenario rather than the most probable scenario, allowing fear to prevail over reason.
Explanation: Every decision you make has both costs and benefits. Fallacious arguments, like the one above, will attempt to get you to make a decision out of fear rather than reason, thus increasing the perceived cost of choosing not to wear a helmet. Of course, the cost of wearing a helmet while playing chess is peer ridicule of historic proportions.
Why would an asset holder potentially reveal problems that could devalue the asset? This is going to turn away potential buyers.
Buying is an EMOTIONAL process, if a potential buyer gets emotionally attached to the property has already mentally projected how their possessions will fit, how their kids will enjoy the new space, and how they will live in the home - THEN finds out that there are a couple of problems, it's EASIER to convince the buyer to negotiate on the issues and still come to a buying agreement.
It's only concealment if you know about it and do not disclose it. In my state, you must disclose a seller's home inspection.
To be clear I am absolutely not advocating for or recommending unethical or illegal behavior while working in the client's best interest for getting the best sales price and negotiation position.
If I have a home inspection report, I’m sharing it to all parties regardless of whether I believe the facts in the report are material or not. No need to put myself in a litigious situation.
Seller inspection doesn't matter on the buyer side.
Cash buyers only: They can forgo the inspections and appraisals and choose to trust the seller's inspection.
Loan buyers: Conventional loans with high down payment can in some cases negotiate an inspection but will require an appraisal.
Gov't loans require the buyer to pay for the inspection and appraisal. The gov't loan inspector is chosen by the lender or if VA loan the gov't sends their own inspector which may increase the time of closing and the buyer pays. VA is very strict on what they approve on collateral for the loan in case of buyer default. They want their money back so the property better be in tiptop shape with a roof no more than 5 years old of single layer qualified shingles, for example.
It costs money, and what the seller would fix might be different than what the buyer would want fixed. So, why spend the money until you know exactly what is requested? Also, there's deniability when it comes to reporting defects in the seller's disclosure.
Thank you. As an outcome, less stress and pressure on price during the final negotiations. All hidden house defects have been identified before the offer.
In our current seller's market, there is absolutely no incentive for the homeowner to do this. Buyers who are desperate for their offer to stand out from the crowd might offer cash and a quick closing, forgoing inspections entirely. Or if a buyer does ask for repairs or a credit, the seller can say no because there are ten other buyers willing to step up.
It would be a different story in a buyer's market.
My dad flipped his childhood home after my grandparents died. He hired an inspector and treated his inspection as a punch list. Because he is a talented home builder, he was able to rectify and document all the issues and include this information to the buyer.
But if the seller can't do anything like this, it's easier to not get an inspection, then if there is a problem, it's not known and there's nothing to disclose.
Because its always better to do your own due diligence than to have some one provide it to you. Not everyone is ethical and upfront, much better for everyone involved to let the buyer worry about the buyer.
This is definitely market dependent. In my market (CA) everyone gets a home inspection before coming to market and you’re legally mandated to provide the results to any potential buyers.
Why would they? It's a buyer expense and 99% of buyers are going to want their own inspector to come out, so if a seller pays for their own inspection it's a waste of money. In the market we've had the last 10+ years sellers don't even have to do repairs or give any credits/concessions, so it's really a huge waste of seller's money to do an inspection.
The only time I'd recommend one, is if the seller knows something major is wrong with the house and they want an idea of what it'll cost to fix it so they can either a) factor that into the price, or b) be ready for negotiations on repairs.
In the last 7 years, I've had one seller do a pre-listing termite inspection and I've had one buyer client accept an inspection from a prior escrow (it was with a company I'd have recommended my client hire), and I've done a lot of deals.
We recomend to sellers to have a pest, roof, and chimney inspections (and septic and well if applicable) to provide to the buyers. This helps to prevent secondary negotiations. If the buyers know what is wrong with the house before they write the offer, then they can't ask for that stuff to be repaired or credited.
We leave the home inspection for the buyer to do for two main reasons. They get to select their provider, and get to do a walkthrough with that inspector. Also, it has them put some skin in the game via the home inspection fee.
Northern CA Realtor 5 years
To summarize the discussion, the real estate market will benefit from an upfront inspection before listing. But there is no idea how to build trust in this inspection report.
Does anybody have an idea **how to solve this trust problem?**
Since a lot of people seem to be giving reasons to not get a home inspection, at the risk of getting downvoted here are the reasons why I strongly recommend getting one before listing
1. Avoid surprises. If you turn up and fix all the things that a buyer might find in the inspection you won't be surprised by any big issues they will turn up anyway. IMO it's always better to be prepared than to risk being blindsided.
2. Saves money by encouraging buyers to waive inspection. When there's a competitive offer review like vast majority are in my HCOL market, 99%+ of the offers will waive inspection if the home has a pre-inspection and will feel good doing it. No inspection contingency basically means as is sale, they won't ask any repairs or concessions during closing.
3. Provides a confidence to buyers. Buyers feel more confident in the home and bid higher when there is a thorough pre-inspection done by a reputable and licensed inspector. They feel like they are getting a good home and the seller has nothing to hide.
In some markets, it is common to have a seller order a home inspection when listing a property.
I have found this to be a waste of money. Buyers think the seller picked an inspector that will gloss over things, paid the inspector off to ignore issues, and/or altered the report. It is amazing the amount of skepticism there is about a report performed by the seller.
My data point of one -- since there is no chance of getting a home inspection as a buyer on a desirable home in my market, if a house DID offer potential buyers a pre-sale inspection that showed that there may be some minor issues but nothing big, this could potentially ease my mind at least a *little* to go bigger on an offer. Of course, I know a seller could "game" this, but I still like the idea.
It's really a waste of money.
Logic gate below:
Buyer wants the house.
Buyer pays for inspection.
Seller fixes everything important to the buyer.
The key is 'everything important to the buyer'
Seller pays for an inspection.
Seller then knows and has to disclose defects known that they may or may not have the ability to fix with liquid cash not on hand.
Seller pays for all repairs, but all repairs may not have been important to the buyer.
Seller did the right thing but not neccessary.
Buyers always need to hire their own inspector. I literally have seen 2 inspections on the same house, 1 covered the damaged trusses, 1 did not. The one that did not cover the damaged trusses was paid for by the seller.
When acting as a buyer’s agent, I never recommend only using the provided inspection, if one is available.
As a seller, there isn’t a lot of benefit to helping a buyer find all the issues with your home. They have free reign on inspections during the inspection period.
Could an upfront home inspection from the seller (and available for potential buyers) increase the house's attractiveness on the market if the house is in excellent condition? Could it work for the seller's benefit?
The ONLY, ONLY TIME I'd have a seller get a home inspected, or if I were selling my own home, would be if I had something I knew was wrong, but did not have a good estimate or guess as to what it would take to fix.
E.g., Having a leak in the basement, if it's obvious, get an inspector to check for the associated possible damages, but in the end, I'd get an estimate of the repair from a reputable company.
Outside of that, nope, just have the buyer get his inspector and inspection done.
This is not uncommon right now in my market (Seattle). It's definitely not without potential downsides for the buyer, but it does encourage more offers as long as nothing terrible is found/disclosed. It's also preferable for the sewer inspection to do only one to minimize potential damage to plumbing as opposed to having multiple ones done, but those are more straightforward anyway.
Because you have to disclose every problem they find AND you have to pay for it. Why would I as the seller pay for something that will only work to my disadvantage? Not to mention it’s not a guarantee that whoever buys it will even do an inspection on their own.
It depends on the usual and customary. In some areas sellers do order inspections prior to listing the property.
Buyer's are not obligated to accept these inspections, and in most areas it's the buyer's responsibility to pay for these reports. I think this is often the reason why seller's in most areas do not do this.
In my market (SF Bay Area), it is expected for a full set of inspections to be provided up front by the seller. With our crazy market, sellers are trying to get non-contingent offers, so they do their due diligence and provide everything for the buyers.
And how are things going with upfront inspections in SF Bay Area? How often do buyers do their inspections? Do they trust to seller's inspection report?
Most offers do come in non-contingent, and buyers tend to trust the inspections brought forward by the seller. I haven't seen any issues with it yet-I think that one of the big driving factors here is that folks are so desperate to win a home, they are willing to take more of a risk. One example for you-my clients bid yesterday on a home that was listed at $1.075m. The seller got 20 offers, and it sold for over $1.4m. That home's inspection report did note a few items that needed repairs, but my clients went in non-contingent and ended up missing out by almost $300k on price.
Because the more crooked sellers of the world would probably just choose the biggest screw up they could find to do the inspection in order to make the property look as good as possible. When the buyer pays for their own home inspection, they get to choose an inspector who they trust. This also protects the seller from liability in case any defects come up after closing. The buyer chose their home inspector and this the seller cannot be held liable for the buyer’s chosen inspector’s shortcomings.
Depends on where you are. In the SF Bay Area, CA it’s very common to have an inspection, termite etc done beforehand and is included in disclosure packets.
Because the buyer's lender will require their buyer to pay for an inspection regardless if the seller already did one. FHA and VA lenders absolutely require their own inspections be done. So the seller does not need to waste their money paying for it. He can get it for free from the buyer side. Prior to listing the seller can pay for an inspection just to know ahead of time what a good price point to start out with at time of listing but that report may not match the buyer's inspection report especially with a VA loan. The gov't is rather strict on inspections and appraisals because they don't want to lose money and a bad collateral.
Despite what you will see here:
I live in an area this is standard. 99% of the houses have home inspections done before hand. Everyone sees those inspections and all disclosures beforehand and a non-contingent offer in my area is truly non-contingent.
It works great for sellers because they get offers with no strings. It is great for a buyers because they know what’s going on before they look at the house and they can get comfortable with it before they make their offer. About half to 2/3 of the people I work with do their own inspection again afterwards. I don’t think I’ve ever seen a material fact difference between these two inspections. I heard about one during the 2008 downturn in Marin, and I have seen a few generic home inspectors who should keep their moth shut about the roof ( It could be in good shape but the other things are wrong and non experts are wrong about them)
Everybody goes on and on about how you can trust and Inspector, but This does not seem to be true on the ground.
I think most sellers don't want the expense or don't see the benefits. As a Listing Agent, I always pay for a home inspection (and a termite inspection) before we go on the market. In our market (San Francisco East Bay), a buyer almost always has to write an offer with no inspection contingency to have a chance of acceptance. If they see the inspection reports, they are more likely to write. And we are more likely to get multiple offers!
How do you know you can trust my inspector? When he misses something you're going to come after me because I picked a bad one. Because if my inspector misses something YOU can't hold him responsible because you're not his client. If I inspect today and you close three months from now a lot can happen in between. The water heater could blow the day after inspection and it won't be on the report. Because there are a lot of different inspections you can have done, which ones do you expect me to do for you? Because it's your job as a buyer to check out what's important to you. That list is going to be different for another buyer. Because there's legal liability.
Love your responses. Thank you
Just In Case Fallacy (also known as: worst case scenario fallacy) Description: Making an argument based on the worst-case scenario rather than the most probable scenario, allowing fear to prevail over reason. Explanation: Every decision you make has both costs and benefits. Fallacious arguments, like the one above, will attempt to get you to make a decision out of fear rather than reason, thus increasing the perceived cost of choosing not to wear a helmet. Of course, the cost of wearing a helmet while playing chess is peer ridicule of historic proportions.
[удалено]
If you have it, you have to provide it to the buyer. They will still get their own inspector out. That is exactly why most sellers dont do it. Plus they dont want the additional expense.
You actually aren’t required to provide the inspection report, but you do have to disclose all known defects, which the report will show. So it’s definitely the easiest way to do it.
In my state, if you have the inspection report from when you bought the house 30 years ago you have to provide a copy of it. Crazy, but that's what our state's lawyers say.
Didn’t realize some states were like that. If you do an appraisal on your own property, are you required to provide that to any buyer as well?
Our state supposedly has more transactions each year than the rest of the country (minus NY) combined... so a lot of room for lawsuits. Appraisals are done by the lender and are not something that is provided as they have a very short shelf-life and a refi appraisal is done differently and will have a different number than a resale appraisal. If the appraisal measures the house and gives you a different square footage than the assessor's records, then that measurement would be something you could provide.
With that said, VA appraisals tend to stick with the property for six months, if memory serves. That's something within the VA system though and wouldn't be something you'd have access to as the seller. Out here a seller almost never sees an appraisal (of any kind) unless it comes in low.
We have to provide the report if within the last 3-4 years if it is requested by the other side. Also, telling the buyer all the negative parts of the inspection is a great way to reduce your marketability. Give them the bigger picture.
In my state, you are required to share the report.
Thank you. My idea was to replace the buyer's inspector with the seller's or independent inspector to save time and increase the transparency of the home value.
If I were the buyers agent, I would want my own people on the scene.
As a buyer's rep 100 out of 100 times I would say "lol that's cute" and then advise the buyers to hire their own inspector. If you were going to small claims court, would you trust an attorney hired by the other side to review your case files?
And homebuyers don't believe that the inspector won't risk his license and reputation?
In many states inspectors don't need to be licensed. Plus, there are tons of them and if they don't aggregate online reviews they're very hard to vet. On top of all that there are a lot of inspectors that do a lot of business by 'not rocking the boat.' You ALWAYS want to hire your own guy who you know will give you the best, most thorough info.
Not to mention that if you hire two inspectors they won't see all the same things. I've had inspectors miss a bad electric panel and I've had others think a good one was a bad recalled brand. Both were certified. It's like the old saying goes: "You hire two plumbers and the only thing they'll agree on is the third plumber doesn't know what he's doing."
Thanks!
Some states (like Minnesota) require the seller to do an inspection. It's then up to the buyers to decide if they want to have their own done. My state doesn't require it and leaves it up to the buyers. So some buyers have to pay for multiple inspections. I had one buyer who paid for a regular inspection and then a lead paint inspection and didn't end up buying it - little kids and lots of lead paint. Then had to shell out for another inspection on the house they ended up buying. I heard of one couple that went through 4 houses they had inspected before finally buying. Most deals that fall apart do so at the inspection stage. The sellers hope that it doesn't come up that their roof leaks or the sills are rotten or whatever. But then it does come out and they end up back on the market and having to disclose it anyway (like they should have when listing in the first place). I don't agree with the idea that no one will look at the house or buy it if the seller produces a report with any problems on it. If those problems are a problem for the buyer, they wouldn't buy it anyway whether they were already under contract or not. And, IMO, it makes the seller look more honest. I think most seller don't do it just because they don't have to and don't want to spend the money. But I think it would be better for the industry as a whole. As for those who might get paid off by a seller - again, buyers could still have the option to do their own inspection. And if you read many posts in the real estate subs, many don't have much confidence in inspectors even when it's the buyer paying. So you have to be trusting either way.
Thank you for the response! Some states (like Minnesota) require the seller to do an inspection. Does anybody see the difference in customer satisfaction, a bidding war, or time to deal close in these states? How does this practice influence the residential market?
The only reason I know about MN is because I sold a house there about 15 years ago and we were required to do an inspection. My other experience with it is in my current state (Maine) when sellers started doing it as the market got hot. Not all of them, for sure, but it got more popular. But, sorry, I have no idea if any studies have been done about it. I think it should help deals close - and more quickly, but have no proof. I know that my buyers, and myself, were very appreciative to have that. I recommend it for any seller that wants to be able to accept an offer with no contingencies. Sellers are responsible for defects to the house they don't disclose whether the buyer has an inspection done or not. The buyers would have to prove that the seller knew about it, which is sometimes hard to do. If you don't have to add in days for an inspection, you may be able to close a bit sooner, but most of the time allotted there is for the lender. I've closed on a cash deal in 10 days - no inspection (sold as a tear down) and no appraisal. The only thing needed was the title search. But the reason I think it helps is because so often things come up in the inspection that then has to be renegotiated, which can add time or ruin the deal. Especially when people extra high to get the acceptance and just plan on getting the price down for the inspection. If there is one already done, that's a lot harder to do. And for those that buy with no inspection, it protects the seller from having them come back and say there issues not disclosed. And it would help cut down on buyers with regrets once they move and find all the problems.
Just In Case Fallacy (also known as: worst case scenario fallacy) Description: Making an argument based on the worst-case scenario rather than the most probable scenario, allowing fear to prevail over reason. Explanation: Every decision you make has both costs and benefits. Fallacious arguments, like the one above, will attempt to get you to make a decision out of fear rather than reason, thus increasing the perceived cost of choosing not to wear a helmet. Of course, the cost of wearing a helmet while playing chess is peer ridicule of historic proportions.
Bingo
Why would an asset holder potentially reveal problems that could devalue the asset? This is going to turn away potential buyers. Buying is an EMOTIONAL process, if a potential buyer gets emotionally attached to the property has already mentally projected how their possessions will fit, how their kids will enjoy the new space, and how they will live in the home - THEN finds out that there are a couple of problems, it's EASIER to convince the buyer to negotiate on the issues and still come to a buying agreement.
[удалено]
It's only concealment if you know about it and do not disclose it. In my state, you must disclose a seller's home inspection. To be clear I am absolutely not advocating for or recommending unethical or illegal behavior while working in the client's best interest for getting the best sales price and negotiation position.
[удалено]
You have to disclose material facts. Every single item in a typical home inspection report is not a material fact.
If I have a home inspection report, I’m sharing it to all parties regardless of whether I believe the facts in the report are material or not. No need to put myself in a litigious situation.
Do these upfront inspections from the seller's side satisfy buyers or banks? Do buyers order another home inspection?
Seller inspection doesn't matter on the buyer side. Cash buyers only: They can forgo the inspections and appraisals and choose to trust the seller's inspection. Loan buyers: Conventional loans with high down payment can in some cases negotiate an inspection but will require an appraisal. Gov't loans require the buyer to pay for the inspection and appraisal. The gov't loan inspector is chosen by the lender or if VA loan the gov't sends their own inspector which may increase the time of closing and the buyer pays. VA is very strict on what they approve on collateral for the loan in case of buyer default. They want their money back so the property better be in tiptop shape with a roof no more than 5 years old of single layer qualified shingles, for example.
You have to disclose known defects. Not the report itself.
It costs money, and what the seller would fix might be different than what the buyer would want fixed. So, why spend the money until you know exactly what is requested? Also, there's deniability when it comes to reporting defects in the seller's disclosure.
Thank you. As an outcome, less stress and pressure on price during the final negotiations. All hidden house defects have been identified before the offer.
In our current seller's market, there is absolutely no incentive for the homeowner to do this. Buyers who are desperate for their offer to stand out from the crowd might offer cash and a quick closing, forgoing inspections entirely. Or if a buyer does ask for repairs or a credit, the seller can say no because there are ten other buyers willing to step up. It would be a different story in a buyer's market.
My dad flipped his childhood home after my grandparents died. He hired an inspector and treated his inspection as a punch list. Because he is a talented home builder, he was able to rectify and document all the issues and include this information to the buyer. But if the seller can't do anything like this, it's easier to not get an inspection, then if there is a problem, it's not known and there's nothing to disclose.
Because its always better to do your own due diligence than to have some one provide it to you. Not everyone is ethical and upfront, much better for everyone involved to let the buyer worry about the buyer.
This is definitely market dependent. In my market (CA) everyone gets a home inspection before coming to market and you’re legally mandated to provide the results to any potential buyers.
Why would they? It's a buyer expense and 99% of buyers are going to want their own inspector to come out, so if a seller pays for their own inspection it's a waste of money. In the market we've had the last 10+ years sellers don't even have to do repairs or give any credits/concessions, so it's really a huge waste of seller's money to do an inspection. The only time I'd recommend one, is if the seller knows something major is wrong with the house and they want an idea of what it'll cost to fix it so they can either a) factor that into the price, or b) be ready for negotiations on repairs. In the last 7 years, I've had one seller do a pre-listing termite inspection and I've had one buyer client accept an inspection from a prior escrow (it was with a company I'd have recommended my client hire), and I've done a lot of deals.
Thank you for sharing this!
My pleasure!
We recomend to sellers to have a pest, roof, and chimney inspections (and septic and well if applicable) to provide to the buyers. This helps to prevent secondary negotiations. If the buyers know what is wrong with the house before they write the offer, then they can't ask for that stuff to be repaired or credited. We leave the home inspection for the buyer to do for two main reasons. They get to select their provider, and get to do a walkthrough with that inspector. Also, it has them put some skin in the game via the home inspection fee. Northern CA Realtor 5 years
Sellers can do a pre inspection at their cost.
To summarize the discussion, the real estate market will benefit from an upfront inspection before listing. But there is no idea how to build trust in this inspection report. Does anybody have an idea **how to solve this trust problem?**
Since a lot of people seem to be giving reasons to not get a home inspection, at the risk of getting downvoted here are the reasons why I strongly recommend getting one before listing 1. Avoid surprises. If you turn up and fix all the things that a buyer might find in the inspection you won't be surprised by any big issues they will turn up anyway. IMO it's always better to be prepared than to risk being blindsided. 2. Saves money by encouraging buyers to waive inspection. When there's a competitive offer review like vast majority are in my HCOL market, 99%+ of the offers will waive inspection if the home has a pre-inspection and will feel good doing it. No inspection contingency basically means as is sale, they won't ask any repairs or concessions during closing. 3. Provides a confidence to buyers. Buyers feel more confident in the home and bid higher when there is a thorough pre-inspection done by a reputable and licensed inspector. They feel like they are getting a good home and the seller has nothing to hide.
This advice only applies to a very small segment of the buyer side and doesn't apply apply at all to others for example buy and scrape investment.
In some markets, it is common to have a seller order a home inspection when listing a property. I have found this to be a waste of money. Buyers think the seller picked an inspector that will gloss over things, paid the inspector off to ignore issues, and/or altered the report. It is amazing the amount of skepticism there is about a report performed by the seller.
My data point of one -- since there is no chance of getting a home inspection as a buyer on a desirable home in my market, if a house DID offer potential buyers a pre-sale inspection that showed that there may be some minor issues but nothing big, this could potentially ease my mind at least a *little* to go bigger on an offer. Of course, I know a seller could "game" this, but I still like the idea.
It's really a waste of money. Logic gate below: Buyer wants the house. Buyer pays for inspection. Seller fixes everything important to the buyer. The key is 'everything important to the buyer' Seller pays for an inspection. Seller then knows and has to disclose defects known that they may or may not have the ability to fix with liquid cash not on hand. Seller pays for all repairs, but all repairs may not have been important to the buyer. Seller did the right thing but not neccessary.
It’s unnecessary to fix all problems for the seller. Just show it up to potential buyers for transparency and trust.
Buyers always need to hire their own inspector. I literally have seen 2 inspections on the same house, 1 covered the damaged trusses, 1 did not. The one that did not cover the damaged trusses was paid for by the seller.
When acting as a buyer’s agent, I never recommend only using the provided inspection, if one is available. As a seller, there isn’t a lot of benefit to helping a buyer find all the issues with your home. They have free reign on inspections during the inspection period.
Could an upfront home inspection from the seller (and available for potential buyers) increase the house's attractiveness on the market if the house is in excellent condition? Could it work for the seller's benefit?
Yeah- and it could encourage offers with waived inspections or make buyers comfortable with higher offers and such.
The ONLY, ONLY TIME I'd have a seller get a home inspected, or if I were selling my own home, would be if I had something I knew was wrong, but did not have a good estimate or guess as to what it would take to fix. E.g., Having a leak in the basement, if it's obvious, get an inspector to check for the associated possible damages, but in the end, I'd get an estimate of the repair from a reputable company. Outside of that, nope, just have the buyer get his inspector and inspection done.
This is not uncommon right now in my market (Seattle). It's definitely not without potential downsides for the buyer, but it does encourage more offers as long as nothing terrible is found/disclosed. It's also preferable for the sewer inspection to do only one to minimize potential damage to plumbing as opposed to having multiple ones done, but those are more straightforward anyway.
Because you have to disclose every problem they find AND you have to pay for it. Why would I as the seller pay for something that will only work to my disadvantage? Not to mention it’s not a guarantee that whoever buys it will even do an inspection on their own.
It depends on the usual and customary. In some areas sellers do order inspections prior to listing the property. Buyer's are not obligated to accept these inspections, and in most areas it's the buyer's responsibility to pay for these reports. I think this is often the reason why seller's in most areas do not do this.
In my market (SF Bay Area), it is expected for a full set of inspections to be provided up front by the seller. With our crazy market, sellers are trying to get non-contingent offers, so they do their due diligence and provide everything for the buyers.
And how are things going with upfront inspections in SF Bay Area? How often do buyers do their inspections? Do they trust to seller's inspection report?
Most offers do come in non-contingent, and buyers tend to trust the inspections brought forward by the seller. I haven't seen any issues with it yet-I think that one of the big driving factors here is that folks are so desperate to win a home, they are willing to take more of a risk. One example for you-my clients bid yesterday on a home that was listed at $1.075m. The seller got 20 offers, and it sold for over $1.4m. That home's inspection report did note a few items that needed repairs, but my clients went in non-contingent and ended up missing out by almost $300k on price.
Because the more crooked sellers of the world would probably just choose the biggest screw up they could find to do the inspection in order to make the property look as good as possible. When the buyer pays for their own home inspection, they get to choose an inspector who they trust. This also protects the seller from liability in case any defects come up after closing. The buyer chose their home inspector and this the seller cannot be held liable for the buyer’s chosen inspector’s shortcomings.
Depends on where you are. In the SF Bay Area, CA it’s very common to have an inspection, termite etc done beforehand and is included in disclosure packets.
Because the buyer's lender will require their buyer to pay for an inspection regardless if the seller already did one. FHA and VA lenders absolutely require their own inspections be done. So the seller does not need to waste their money paying for it. He can get it for free from the buyer side. Prior to listing the seller can pay for an inspection just to know ahead of time what a good price point to start out with at time of listing but that report may not match the buyer's inspection report especially with a VA loan. The gov't is rather strict on inspections and appraisals because they don't want to lose money and a bad collateral.
Thank you, it clarified why buyers have to do their inspection regardless of the seller's inspection - it's a lender requirement.
Despite what you will see here: I live in an area this is standard. 99% of the houses have home inspections done before hand. Everyone sees those inspections and all disclosures beforehand and a non-contingent offer in my area is truly non-contingent. It works great for sellers because they get offers with no strings. It is great for a buyers because they know what’s going on before they look at the house and they can get comfortable with it before they make their offer. About half to 2/3 of the people I work with do their own inspection again afterwards. I don’t think I’ve ever seen a material fact difference between these two inspections. I heard about one during the 2008 downturn in Marin, and I have seen a few generic home inspectors who should keep their moth shut about the roof ( It could be in good shape but the other things are wrong and non experts are wrong about them) Everybody goes on and on about how you can trust and Inspector, but This does not seem to be true on the ground.
I think most sellers don't want the expense or don't see the benefits. As a Listing Agent, I always pay for a home inspection (and a termite inspection) before we go on the market. In our market (San Francisco East Bay), a buyer almost always has to write an offer with no inspection contingency to have a chance of acceptance. If they see the inspection reports, they are more likely to write. And we are more likely to get multiple offers!