Pre-listing Payoff

[hausdok]

Originally posted by Les

Do you really want to do a pre-list inspection and have to answer a couple hundred questions?

Will you talk to the potential (23 of them) buyers about your report?

Mike, do you really want to subject your self to a peer review from a dummy?

Do you really think the average buyer is going to get their own inspection?

Do you really think the real estate salesperson is not going to market the pre-list inspection?

Hi Les,

I'm not sure how many of these were meant for me - only one has my name on it - but,

• Except for my client, a seller, I've never had to answer any questions on any of these I've done.
• I don't talk to buyers, I tell the seller that my report has answered the necessary questions. If they have additional questions, he'll have to answer them because the report is done for him - not them.
• I don't worry about a dummy coming in behind me. If he finds that I screwed up, I deserve whatever the consequences are. I worry more a competent guy coming in behind me and finding that I screwed up. That will kind of sting and it will mean that I'm getting complacent. So far, neither scenario has occurred.
• Yes, it's been my experience that the average guy will distrust the seller's inspector and get his/her own inspection. Like Gary said, it's twice the revenue for the inspection business, regardless.
• Hell no! I fully expect that they're going to say that they've had the place pre-inspected by Mike O'Handley of Your Inspector LLC., and I fully expect that the buyer won't trust them (Do any of us really trust real estate folks. Those of us that aren't married to them, that is.) When they do, and the transaction doesn't stall due to a lot of undiscovered crap that ambushes the seller, the buyer will probably say to himself, "Crap, I should have hired O'Handley to do a pre-offer inspection for me," and the agent on the other side is going to say, "Man, that went pretty smoothly. What a kewl idea!"

Do I do a lot of these? Nope - probably only about a couple of dozen in nearly 12 years, but it was taught by the franchise I used to be with and I have to admit that it seems perfectly logical - to me anyway.

ONE TEAM - ONE FIGHT!!!

Mike

[Chris Bernhardt]

It seems like I do more pre-listing inspections every year. I hated doing them at first; worrying about all the little stuff that some other guy would report on and make a big deal out of.

I've got one scheduled this coming Friday.

I have done enough of them that I don't fear them anymore. Now, inspecting small commercial buildings, I still hate doing those. In fact I pretty much now pass on them and give them Jim K.s name and number.

Chris, Oregon

[hausdok]

In the same vein - it appears that with their recent mandatory HIPS (Home Information Packs) that alphabet soup has now landed in the UK. Please welcome, tada! NARHI! Click here!

[Steve Rush]

As an inspector of almost 18 years now in the California SF Bay Area, pre-listing inspections are the norm of which is 85-90% of my business. I am one of the more successful inspectors in my area. Several years ago, I co-wrote a very informative powerpoint presentation presented at both CREIA and ITA conferences, CREIA state chapters as well as to the regional and local real estate boards on the benefits of having pre-listing inspections.

They are actually incorrectly named as they are seller's inspections. There is no inspections usually before the agent lists the property. Maybe this name came from before the property is listed in MLS.

Much of info I have compiled for presentation has been plagerized by other associations for their personal exploitation to market pre-listing inspections. I was scheduled to present at the New Orleans ASHI conference but did not get all of the necessary info to out in time. I think I was burn out on taking about it so much to be honest.

Bottom line I consider myself one of the most knowable resources on this subject as I currently and have been performing this in both the hot and slow markets. I am still performing 10 inspections a week in this "down market". I catagorically reject the notion that a pre-listing inspection is anything but thorough. In fact. you have to be extremely thorough in reporting of conditions as you may likely be followed. There is no liability to the inspector if another inspector follows behind as there is no harm until escrow closes. There may be moral responsibility but no legal. If you are thorough in your inspecting for a buyer, why would you be less thorough for a seller?

A brief history:

A previous third party lawsuit in Calif. called Leko V Cornerstone made inspection reports a disclosure item that can be passed from the buyer to buyer. During the dot com boom in the mid nineties, the agents used pre-listing inspections to have buyers either go into a transaction non continguent or reduce their contiguency periods. Homes were and continue to be sold as is. This is where the agents actually increased everyone's exposure. They sought the inspections for all of the wrong reasons.

But what came about from this was the agents understanding of risk management. After the boom ended, it became normal and is considered negligient not to have the inspections performed up front.

By having inspections up front the buyer knew what they were buying. This did not prevent them from having their own inspection which is wise.

They will usually have the most thorough inspectors as having additional findings when a buyer has there own inspection leads to negotiation and embarrassment.

A pre-listing inspection is basically writing a report for an unknown buyer used to supplement ( not substitute) seller disclosure requirements, prevent frivileous negotiation and prevent inspectors from being pawns in negotiation.

No more are the agents contacting a less thorough inspector for the seller and a more thorough inspector for the buyer. Not in this area anyway!

I will do a sellers inspection and either do another inspection for the buyer or a walk-through consultation. What better way to increase your bottom line 1 1/2 times.- 2 times I have inspected the same house for the seller, the buyer, the buyer who now becomes the seller and then for another buyer on several occasions.

Personally, I feel that when a buyer knows what they are buying there is less likelihood for buyers remorse and civil suits. We as inspectors are now taking on the responsibility of added disclosure. The buyer is more likely to sue if they feel they have been lied to. The buyer has more of a comfort level when all reports, invoices for repair and disclosure documents are provided up front.

I have not had one civil suit in over 15 years. I do not feel that performing these inspections has increased my exposure as I am thorough in my reporting. If you are a lousy inspector, it doesn't matter whether you work for a buyer or seller. Sometimes it really doesn't matter, frivileous suits are part of doing business. Having a limitation of liability clause in a contract creates a speed bump in litigation, but that is for another thread.

What is changing in this profession of the role of inspectors as being white knights on white horses being strictly buyer's advocates. We are purveyors of information and should write conditions that are non biased but factual to the conditions seen. We are real estate inspectors not strictly home inspectors. I inspect properties. They may be commercial or residential.

If you limit yourself to one role and purpose you will not be able to compete long term. Successful inspectors learn to diversify and see looming market changes and adapt before the market change.I have added additional inspection services that are not strictly for the buyers of properties.

If one wishes further information on pre-listing/ seller's inspections, please contact me directly via email.

Steve Rush

On-site Inspections

email: on-siteinspections@rcn.com

www. on-siteinspections.com