Sticking your head firmly in the sand.

By
Real Estate Agent with Coldwell Banker Residential

Today, Charlie Buell wrote a post that advocates the value of pre-listing-inspections.  While Charlie readily admits, or at least begins to admit, and then has a convenient case of amnesia, it's a fairly self-serving stance... although I don't think that Charlie intends it that way.  He's really looking out for the well being of both sides.

That's just the kind of guy Charlie is.

There are a few who've taken issue with Charlie's stance, some of them at high-volume... (including she-who-says-"HA"), and I was going to begin the same... when I decided that it might make a better post on it's own.

I'm not advocating the head-in-the-sand philosophy that Charles mentions... rather watching out for the seller's own good.

Let's start with the premise that not every inspector is Charlie Buell, in fact I think we can agree that very few out there live up to his standards, unfortunately.  And for every Charlie Buell out there, there are a couple hundred that strive for his quality, but fall short.  Let's call them "strivers".  And for every striver our there, there are a couple thousand who don't even "strive", they're just phoning it in.  Let's call them "phoneys".

The Charlies, the Strivers and the Phoneys all come from different backgrounds and different specialties.  Some of them were general contractors, others were electricians, or plumbers, or carpenters.  They each focus on different aspects of the inspection, and while many of the things they find will overlap, I think we can agree that some of them will find unique problems and issues that some of the others might not notice, or might not think are a problem.

So... my client (let's call him "Seller")... spends a somewhere around $500.00 to have a pre-inspection done by a Mr. Buell wannabee.  The pre-inspector finds seven issues that he feels need addressing prior to listing the property.  They include things like, a crack in the foundation, a handful of double-taps in the electric panel, a garage-door opener sensor that isn't tripping, and a missing GFCI on the whirlpool tub.  So the Seller spends about two-thousand dollars fixing the seven issues and feels pretty good about the product he's placing on the market.

We're very fortunate, and along comes Mr. and Mrs. Buyer, and we get an accepted offer.  They bring Mr. Striver to the inspection, and he notes a few new inspection items found ... including Mold in the attic, the electrical panel has some out-of-code aluminum wiring and the box isn't properly grounded, and while in there he comments... "and it appears that you have a GFCI circuit breaker in here for the whirlpool tub in the master suite, but I'm not sure why they have one, since the tub is plugged directly into a GFCI.

So, what's happened here?  The two inspectors found different things of importance.  Might Mr. Striver have found all of the same things that Mr. Buell Wannabee found?  Maybe.  But in this case, my client spent a lot of money, and thought he was done... and instead the second inspector has found more... and my seller feels kinda cheated.

And I get to have the conversation with the seller about "Hey, I've already spend about $2,500.00 on items at your recommendation... and now there's MORE?"

And personally, I feel that it's a good idea to leave some things for the inspector to find.  If the house appears too clean, with too few infractions, it's my own personal feeling that the inspector may keep looking until they find something so that they can demonstrate their value to the buyer... it's just human nature to want to show your worth.

I surely won't talk a seller out of conducting an informational pre-inspection... but I'm also not going to recommend one.  Less'n one of you rainers can convince me of their value.  I'm not saying that I'm right, and Charlie's wrong... just two different approaches to the same thing.  There's no question that he's right that it's awful when a deal falls apart due to an inspection issue that should have been apparent to the seller (and possibly the agent) before listing.

But personally, rather than advise spending money on a pre-inspection, I'd rather advise my sellers to anticipate that the inspection might bring up a few issues... almost every home has SOMEthing that will tweak an inspector's spider-sense... and that they should be prepared, emotionally and financially, to address them when they arise.

- 12

Posted by

 ALAN MAY, Realtor®
Specializing in Evanston Real Estate and North Shore Real Estate

Coldwell Banker Residential Real Estate, 2929 Central Street, Evanston, IL 60201
847.425.3779      Cell: 847.924.3313      Email: Almay@aol.com

Evanston Real Estate & North Shore Real Estate
Licensed in Illinois

   

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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

Melissa - that's the goal.

Sharon - why thank you.

Donald - that is one of the problems with this industry... you don't know if you have a good inspector, nor a good Realtor, until it's probably too late.

Jul 31, 2012 05:12 AM #27
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Silvia Dukes PA, REALTOR
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living

Alan, haven't read Charlie's post yet but will right after this.  It's a good discussion with many valid points. 

Ultimately, it really is up to the seller to decide whether he wants to do an inspection prior to listing or not, provided of course, he is aware that more issues may come up later. 

That indeed is nothing unusual, any of us who had deals fall through for one reason or another and gone through more than one inspection on the same house, know that were will be additional issues even if only small ones.

Jul 31, 2012 05:20 AM #28
Rainer
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Mark Delgado
houses for rent, Solano County & Glen Cove - Benicia, CA
Benicia and Vallejo, Property Management, rental h
Inspectors may not always find the same things but they should, hypothetically, find nearly the same things. Yes, they have different backgrounds but now have the same license and should provide very similar service. Perhaps a little standardization is needed?
Jul 31, 2012 05:22 AM #29
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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

Silvia - ultimately, it's all up to the seller.

Mark - it won't happen until houses are standardized... and that ain't about to happen.

Jul 31, 2012 05:38 AM #30
Rainmaker
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Jeanne Dufort
Coldwell Banker Lake Country - Madison, GA
Madison and Lake Oconee GA

I also prepare my sellers for the probablity that any home inspection will result in a "honey do" list of sorts.  Depending on the home, I like to see then budget $1K to $2K, so that we can say yes to reasonable requests.  I'll also tell them that every so often a "really big deal" is discovered during a home inspection - active termites, for example, or high radon readings.

Pre-inspections can be helpful in estate-type sales, where the seller I'm dealing with does not have a good working knowledge of how the home has been maintained.

But generally, we wait for the buyer to bring in their own expert, and ask us to address whats important to them.

Jul 31, 2012 05:47 AM #31
Rainmaker
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Coral Gundlach
Century 21 Redwood Realty, Arlington Virginia - Arlington, VA

I agree Alan, 3 inspectors will find 3 different sets of issues.  Talk to your sellers about this, and prepare them for repairs that will need to be made when the buyer does their inspection rather than having them pay an extra $500 for their own.  Pre-sale inspections are required for relos and I have found this very phenomenon, where the relo inspection comes up with a different punch list than the buyer's inspector and the seller ends up paying for a bunch of stuff the buyer doesn't even care about.  And the price of an inpsection.   I like to save my sellers money, not have them spend more.

Jul 31, 2012 05:56 AM #32
Rainmaker
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Michael Setunsky
Michael's Commercial LLC - Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Alan, I'm up in the air on this one. I can see where a pre-inspection may be benefical for the seller to avert large potential problems. However, in your example I can see where the seller would be very up set paying for an electrician to run a CFCI circuit to the box when one wasn't necessary.

Jul 31, 2012 06:01 AM #33
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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

Jeanne - I would think that even a high radon finding would fit within your $1,000-$2,000 budget.

Coral - or sometimes the inspection raises a number of issues, but we go into multiple offers and nobody asks for any repairs/credits.  So why pay for the inspection and credit/repairs until someone asks for them.

Michael - and what about the scenario I just mentioned to Coral??  Does that bring you back down to the ground?

Jul 31, 2012 06:35 AM #34
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Charles Buell
Charles Buell Inspections Inc. - Seattle, WA
Seattle Home Inspector

Alan, in your scenario to Coral, even with multiple offers would not "some" of the many roadblocks be removed making the road to closing easier?  Of course if you have a buyer that is waving inspection---that is a problem :)  Would not the cost of the inspection just be built into the sale price of the home?  Is there any room for "full disclosure" simply being the "right thing to do?" 

Jul 31, 2012 07:01 AM #35
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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

Charles - not a buyer waiving inspection... but a buyer deciding that since they're in multiple offers, and they really, really want the house, they're not going to make any requests, even though there are two foundation cracks, and the furnace is from 1902.  They did their inspection, but decided they're willing to foot the bill for those defects, and will correct them once they move in, rather than jeopardize the deal they've already made by requesting a credit.

Jul 31, 2012 07:10 AM #36
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Charles Buell
Charles Buell Inspections Inc. - Seattle, WA
Seattle Home Inspector

Alan, I have to concede on that one---if the seller knows ahead of time that there are going to be multiple offers, why bother.  On the other hand since they are going to be making a landfall profit---nothing would really be lost :)

Jul 31, 2012 07:23 AM #37
Rainmaker
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Gary Frimann
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
California Broker and REALTOR

I can see a pre-inspection on an older  home, perhaps, especially if there looks like there have been modifications.  I agree that let the buyer's inspector find (or not find) things that are wrong.  It is what it is, and negotiate repairs from there.

Jul 31, 2012 07:24 AM #38
Rainer
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Kathryn Maguire
GreatNorfolkHomes.com (757) 560-0881 - Chesapeake, VA
Serving Chesapeake, Norfolk, VA Beach

I guess it really depends on what the seller wants to do.  As long as we provide them with the scenarios for how the inspections can play out, they can make an informed decision. Either way, you could get stuck.

Jul 31, 2012 08:32 AM #39
Rainmaker
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Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

The problem is no 2 inspectors are alike and therefore you are right on when they may not find the same things wrong with a home. I find it more beneficial to walk throuh the home with my seller after they sign the listing agreement and stress that items that can be seen with the naked eye be fixed first. I tell them if they are aware of other issues the buyers inspector may find them and then ask for them to be fxed. On the other hand some homes I list where they are selling as a short sale the seller doesnt have $5 nevermind $500 for an inspection or to make repairs.

Jul 31, 2012 09:38 AM #40
Rainmaker
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Donald Hester
NCW Home Inspections, LLC - Wenatchee, WA
NCW Home Inspections, LLC

Alan, This is very true about being too late. One of the greatest issues is that most buyers and sellers really do not know what to expect from all the players.

I get calls from buyers looking for an inspection that I am too booked to take. I give them a breif tutorial on what they should expect from a home inspector (my opinion of course). I try to arm them with information so they can make a good decision. These are big dollar decision and should not be taken lightly.

I think a good Realtor does the same. 

I have several Realtors rib me if they know I am inspecting the home they are listing, they also state when certain inspectors come in they are on easy street. I do not try to make any extra work for anyone but if you are doing a good job things may come up.

Jul 31, 2012 10:37 AM #41
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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

Charles - oh, we rarely know "ahead of time".

Gary - sometimes the newer homes need it more.

Kathryn - it's always up to the seller.

Scott - with a short sale, there's no question that they will not be performing a seller's inspection.

Donald - we are all aware of "who" are the inspectors that "phone it in"... and which ones are thorough, yet non-alarmist.

Jul 31, 2012 10:49 AM #42
Rainmaker
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Karen Feltman
Cedar Rapids/Iowa City, IA Skogman Realty - Cedar Rapids, IA
Relocation Specialist
Love all your points. Just like no two agents are alike, no two home inspectors are alike either. If I have a seller that is demanding the top of the market price and I can see issues looming, I may suggest a pre-listing inspection to get those items addressed before listing to make sure that we can obtain the high market price and keep the buyer going towards the closing table. The last thing you want is for a buyer to surprisingly pay their price and then walk away when the inspector gives them 23 reasons NOT to buy. Bursts their bubble, you know?
Jul 31, 2012 01:18 PM #43
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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

Karen - I am all too familiar with bubble-bursting.

Jul 31, 2012 01:19 PM #44
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R.E. Renée Hoover, Salesperson
Century 21 Geba Realty, Milford, PA; Licensed in PA & NYS - Milford, PA
Poconos, Pike, Wayne, Monroe Counties, PA; PA/NYS

I look at it this way, the pre-inspection resulted in about half the amount of items to be found by the buyer's inspection, and therefore may have kept the buyer in the deal because not as much showed up.  This also lends to the impression that the home has been in the hands of an owner who took good care of it over the years because certain issues were resolved prior to the buyers' inspection.

Jul 31, 2012 01:41 PM #45
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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

Renée - you could be right.... or, it's possible we just wasted a bunch of money, and time.

Jul 31, 2012 04:02 PM #46
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