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Pre-Listing Inspection Advantages

Seller Inspections: Streamlining Real Estate Transactions
by Nick Gromicko
Former REALTOR and Founder of the International Association of Certified Home Inspectors

Seller inspections (sometimes referred to as pre-listing inspections) are becoming more popular because they virtually eliminate all the pitfalls and hassles associated with waiting to do the home inspection until a buyer is found. In many ways, waiting to schedule the inspection until after a home goes under agreement is too late. Seller inspections are arranged and paid for by the seller, usually just before the home goes on the market. The seller is the inspector's client. The inspector works for the seller and generates a report for the seller. The seller then typically makes multiple copies of the report and shares them with potential buyers who tour the home for sale. Seller inspections are a benefit to all parties in a real estate transaction. They are a win-win-win-win situation.

Advantages to the Real Estate Agent:

•Agents can recommend certified InterNACHI inspectors, as opposed to being at the mercy of buyer's choices in inspectors.
•Sellers can schedule the inspections at seller's convenience, with little effort on the part of agents.
•Sellers can assist inspectors during the inspections, something normally not done during buyers' inspections.
•Sellers can have inspectors correct any misstatements in the reports before they are generated.
•The reports help sellers see their homes through the eyes of a critical third-party, thus making sellers more realistic about asking price.
•Agents are alerted to any immediate safety issues found, before other agents and potential buyers tour the home.
•Repairs made ahead of time might make homes show better.
•Reports hosted online entice potential buyers to tour the homes.
•The reports provide third-party, unbiased opinions to offer to potential buyers.
•Clean reports can be used as marketing tools to help sell the homes.
•The reports might relieve prospective buyers' unfounded suspicions, before they walk away.
•Seller inspections eliminate "buyer's remorse" that sometimes occurs just after an inspection.
•Seller inspections reduce the need for negotiations and 11th-hour re-negotiations.
•Seller inspections relieve the agent of having to hurriedly procure repair estimates or schedule repairs.
•The reports might encourage buyers to waive their inspection contingencies.
•Deals are less likely to fall apart, the way they often do, when buyer's inspections unexpectedly reveal last-minute problems.
•Reports provide full-disclosure protection from future legal claims.

Advantages to the Home Buyer:

•The inspection is done already.
•The inspection is paid for by the seller.
•The report provides a more accurate third-party view of the condition of the home prior to making an offer.
•A seller inspection eliminates surprise defects.
•Problems are corrected, or at least acknowledged, prior to making an offer on the home.
•A seller inspection reduces the need for negotiations and 11th-hour re-negotiations.
•The report might assist in acquiring financing.
•A seller inspection allows the buyer to sweeten the offer without increasing the offering price by waiving inspections.

How Agents Can Limit Their Liability with Regard to Home Inspections
by Joe Ferry, Esq., and Nick Gromicko, InterNACHI Founder

In a world where litigation is the preferred method of resolving even the most minor conflicts, it should come as no surprise to real estate agents that they are increasingly finding themselves named as defendants in lawsuits wherein purchasers of residential real estate are claiming damages as the result of the alleged fraud and/or negligence of one or more of the participants in the transaction.Therefore, when selecting a home inspector for your client, you should bear uppermost in your mind that the home inspector is your first line of defense against a meritless negligence claim.

Top Nine Ways You Can Sharply Reduce Your Professional Liability Exposure:

1.Insist that your client hire a professional home inspector to inspect the property.

2.Have the home inspected before the sale so that it is "MoveInCertified." MoveInCertified homes have been pre-inspected by InterNACHI-certified inspectors, and the sellers confirm that there are no major systems in need of immediate repair or replacement, and no known safety hazards.

3.Take the time to manage your clients’ expectations of what can reasonably be discovered by a limited visual inspection of a property that is full of furniture, carpets and stored items that further physically limit the scope of an already limited inspection.

4.Be sure to carry your own Professional Liability Insurance to protect yourself from allegations that you should have independently verified that the property was defect-free.

5.Review the inspector’s Pre-Inspection Agreement to make sure that it contains a Notice Clause that requires the buyers to notify the inspector within no more than 14 days of the discovery of any defect for which they believe he is responsible.

6.Avoid conflicts of interest. Never recommend an inspector who participates in preferred vendor schemes. All major inspector associations prohibit participation in such undue praise-purchasing schemes. You have a fiduciary duty to recommend the very best inspectors based solely on merit, not money. And it goes without saying that you should never recommend any inspector with whom you have a close personal or blood relationship.

7.Recommend the high-value inspector, not the low-price inspector. Good inspectors charge accordingly. Trying to save your client $100 on an inspection could cost them $10,000.

8.Only recommend inspectors who adhere to a strict Code of Ethics and Standards of Practice, such as members of InterNACHI.

9.Always attend the home inspection. Many real estate agents have been advised never to attend a home inspection, allegedly by real estate attorneys. Agents who say that they have received such advice are never able to articulate its rationale. You are no less likely to be named in a lawsuit by hiding during the inspection, and the reasons for attending the inspection are quite compelling. First, your presence is a clear indication of your professionalism and concern for your client’s interests, two factors well-known to engender referrals. Secondly, it affords a very cogent opportunity to refocus your client’s attention to the limited nature of the inspection. For example, you could note the numerous obstacles, such as furniture, carpets and appliances, that can obviously inhibit the inspector’s ability to see certain areas of the home. Finally, should this transaction come to grief, your interests are usually perfectly aligned with the inspector’s, and your recollection of such limiting factors would provide powerful corroboration of the exonerating reasons that a defect was not discovered during the inspection.

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