The future of real estate?
* Home inspections have traditionally been for the benefit of the purchaser.
* Pre-inspected listings benefit all parties – purchasers, vendors and Realtors.
Deals are less likely to fall through.
Home inspections, performed as a condition of the offer, can kill deals – and often needlessly. Sometimes this is because the purchaser gets cold feet; sometimes there's a big problem no one knew about. Sometimes it is because the house has been misrepresented; sometimes it is because the home inspector scared the purchasers by not explaining that minor and typical problems are just that – minor and typical.
If the home inspection is performed prior to the house being listed, all parties will be aware of the physical condition of the house before an offer is drawn. There will be less likelihood for surprises after the fact. Deals will be less likely to fall through.
Pre-inspected listings can avoid renegotiation.
In a buyer's market, most homes have to be sold twice. It takes a lot of work to get a signed Agreement of Purchase and Sale … then the home inspection is connected and the purchaser wants to renegotiate.
If all parties know the condition of the house prior to the offer, there is generally a lesser need for renegotiation. As most Realtors know, renegotiation can be very difficult. Vendors have already mentally sold the house; purchasers are suffering from 'buyers' remorse'. Egos, pride and frustration can muddy the already emotional waters.
A vendor who pays for a home inspection will be further ahead than one who has to renegotiate. He or she may even sell their house faster.
An inspection at the time of a listing can also help a Realtor deal with a vendor who has unrealistic expectations. The inspection report is good amnition for explaining why you can not ask top buck for a house that is not in top condition.
Repairs prior to sale.
Sometimes, the home inspection will reveal items which should be repaired immediately. A pre-inspected listing allows the vendor to repair the problem prior to putting the house on the market.
If the inspection occurs after the Agreement of Purchase and Sale, the purchaser could walk, renegotiate or depending on the inspection clause, the vendor may have the option to make repairs. A repair made by an unmotivated vendor to satisfy the condition may not be the best repair and may not meet the purchaser's expectations. This has caused more than one deal to not close.
Peace of mind for the purchaser.
There is no doubt that part of the value of a home inspection is a guided tour of the house for the prospective purchaser. Perhaps the inspection company could return to do a walk-through with the purchaser, if requested.
Reputable inspection companies.
Pre-inspected listings will only have value if the home inspector and / or company is perceived to be reputable, qualified and properly insured. Prospective purchasers might have little or no faith in a report created by someone they consider to be working for the Vendor or Listing Agent.
Editor's Note: This article is for discussion purposes only and does not represent any policy or opinion on the part of Electrospec or it's representatives. It is intended only as “food for thought”, and it is loved that no one will be offended by the suggestive nature of any parts of the article.
Does the future of home inspections lie in pre-inspected listings? Will offers be cleaner and deals less likely to be renegotiated or fall through? Will pre-inspection afford purchasers, vendors and Realtors a new measure of economic protection?