SKIP KELLEY ASSOCIATES
Joys of Ho
Abstracted from: Joys of Home Inspection, Oakland CA Montclarion
by Bob Blomberg
OK, you're ready to sell your home. You did everything by the book: you painted,
cleaned, sorted, de-cluttered, pruned, and scaled down. You cleared the surfaces, washed
the windows, cleaned the curtains. You got a termite inspection. Heeding the wise
columnist's advice, you interviewed three local agents, asked them all the right
questions, selected one and decided on an asking price. You are primed and ready to roar.
Right?
Well, Maybe.
How is this for an idea: Invite a professional home inspector to come through your
home. The sole purpose of his life during the three hours he spends in your home is to
identify every defect he can find. He then writes it up and packages it in a neat little
binder, so you can disclose it to all your potential buyers. For this privilege, you get
to pay "X" amount of dollars. Sound like a pretty good deal?
The theory is that pre-sale inspections best serve the interests of all parties, but
particularly those of the seller. How is this possible? Here is why:
 | Fewer surprises: If a buyer knows most or all defects up front, the defects take
on their proper perspective. If the buyer is the one who discovers the defect during
inspections, that defect takes on ominous proportions and suggests a plethora of unseen
horrors. He wonders, "What else has not been disclosed that I haven't
discovered?" |
| Fewer renegotiations: If a buyer is not aware of a defect prior to making the
offer, quite naturally the tendency is to renegotiate the price once the defect becomes
known. With prior knowledge, he should have already taken the defect into consideration.
If not, he has little leverage for renegotiating. |
| Helps fair pricing: Prior knowledge of defects helps the seller to determine a
realistic asking price in the first place. If the asking price reflects the true condition
of the property, buyers are more likely to complete the sale as originally contracted. |
| Less litigation: Problems disclosed up front defuse future litigation. If
litigation should occur, the seller has a better defense. |
| Higher sales price: Yes, you read that right. Prior knowledge of defects leads to
a higher, not lower sales price. When the buyer knows about defects, he feels more
comfortable. He knows what he is buying and does not "hold back" for unexpected
problems. |
| Seller has more leverage: The seller's strongest point of leverage is at the time
the buyer first presents an offer. This is particularly true in a hot seller's market.
When there is renegotiation during the escrow, the buyer has more leverage. At that point
the seller is already mentally set for a sale. He is more inclined to give concessions to
avoid the risk of having the house come back on the market. |
| Seller controls options: If a seller has prior knowledge of a defect, the seller
can choose to: 1) ignore it-offer the house "as is" with the defect intact; 2)
repair it, either with his own hands or with a contractor of his choice or 3) downgrade-he
can, for example, remove that rickety old deck altogether rather than repair it. |
| Screens disqualified buyers: If a buyer is the sort who doesn't want a home near
an underground creek, better to disclose the creek up front and let him pass. |
Obviously, pre-inspections do not circumvent the need for the buyer to conduct his own
investigation. The buyer should still hire his own professionals and come to his own
conclusions. The existence of a pre-sale inspection, however, should at least touch on
most areas of concern which will be discovered anyway during the buyer's inspections. The
more advance knowledge the buyer has, the less likely that buyer will turn and run
somewhere down the road. |
