The Future of Real Estate? June 1998 Home inspections have traditionally been for the benefit of the Purchaser.
Pre-inspected listings could benefit all parties - Purchasers, Vendors and Realtors
Deals Wont Fall Through
Home inspections performed as a condition of the offer, can kill deals. Sometimes this is because the purchaser gets cold feet; sometimes theres a problem no one knew about. Sometimes it is because the house has been misrepresented; sometimes it is because a home inspector scared the purchasers by not explaining that minor 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 presented. There will be no surprises after the fact. Deals will not fall through.
Pre-inspected Listings Avoid Renegotiation
In a buyers market, most houses 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 done and the purchaser wants to renegotiate.
If all parties know the condition of the house prior to the offer, there is no need for renegotiation. As most real estate agents already know, renegotiation is very difficult. Vendors have already mentally sold the house; the purchasers are suffering buyers' remorse. Egos, pride and frustration can muddy the already emotional waters.
A vendor who pays for a home inspection could be further ahead than one who has to renegotiate. He or she may even sell the house faster.
An inspection at the time of listing could also help a Realtor deal with a vendor who has unrealistic expectations. The inspection report is good ammunition for explaining why you can't 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-list inspection gives the vendor a chance to make repairs prior to putting the house on the market.
If the inspection occurs after the Agreement of Purchase and Sale, the buyer could walk, renegotiate or depending on the inspection clause, the vendor might have the option to repair. A repair done 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.
Reputable Inspection Companies
Pre-sale inspection reports will have value only if the home inspection company is perceived to be qualified and reputable. Prospective purchasers will have little or no faith in a report prepared by someone they perceive to be unqualified or unprofessional.
The Bottom Line
There are obvious pros and cons to pre-list inspections, and it is difficult to predict whether the future of home inspections lies in pre-inspected listings. It could be that, despite pre-list inspections, purchasers may still prefer to enlist their own inspector...If you have questions you would like to see answered in All Around The House, send them to Electrospec at 16852 Telephone Road, Trenton, Ont. K8V 5P4
All Around The House is distributed monthly by Electrospec Home Inspection Services, in east-central Ontario. Call (613) 391-8515 or toll free 1-888-394-6954 for information or bookings.Back to Top
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