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ADDITIONAL ARTICLES
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Should Sellers Have Reports in Advance?
A Seller has many advantages in having both a termite and a home inspection done prior to marketing his/her property. While it has become more common, many Sellers still do not understand why they would do these inspections prior to putting their property on the market. These tow reports cover separate areas of inspection and do not take the place of one another.
The truth is without these inspections and reports most Sellers don't really know, for sure, what they are selling. Each year many code requirements change. (For instance, while the mandatory strapping of hot water heaters is relatively new, the requirements have already changed once in the way they need to be strapped.) Most Sellers are not contractors or specialists that understand the current standards for all of their home’s systems. Obtaining this information in advance can determine a Seller's decision or ability to sell their property.
Even in the current hot market we are experiencing, information discovered or brought to light by a Buyer after an offer is made is never as well received as information and disclosure prior to a Buyer writing an offer. In addition, a Buyer may use information he or she uncovers as a negotiation factor on the price or terms after the Seller thought they had an agreement.
If a seller purchased their property prior to 1987, advance inspections are confusing to many Sellers, since prior to that time, the majority of real estate purchases were completed with a "Buyer beware" attitude. In 1987, Seller and Agent disclosures became more stringent and legally required on property sales. Since some of today’s Sellers bought prior to 1987, they often expect Buyers to come to a current transaction with the same attitude as held prior to 1987.
This is not the approach of most real estate Buyers today. They are educated and careful in making the very major purchase of a home in our area.
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Most Buyers make sure they get both a "termite" (Structural Pest Control Report) and a Structural Home Inspection prior to removing their inspection contingencies in any home purchase.
Some Sellers don’t want to do so because the Buyer may get his or her own report. Having the reports done in advance, allows other benefits to the Seller:
If, for instance, the Seller finds that some minor work needs to be done prior to accepting an offer, they may do it themselves or hire a handyman. Once an offer is written, most of the contracts used in our area provide that a licensed contractor must be used.
If the repair is major (such as a new roof), and the Seller cannot, or does not want to, do the repair prior to marketing the property, the Seller can get written estimates and include a credit in escrow. This makes a much smother transaction for a few reasons.
First, many Buyers cannot afford to both buy the home and make a major repair.
Second, if the Buyer holds out enough money to do a major repair from his or her down payment, the loan ratios, rate or even qualification for the loan may be affected.
Third, the Seller knows in advance what kind of costs he or she will be facing and can limit his or her liability in the purchase contract.
As a Seller, you may easily spend $500.00 or more on these inspections. This is often some of the best-spent money in the entire transaction. Pre-inspections have saved many a Seller 10, 20 or even 100 times the cost of the inspections in the sale of their property.
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