20
Jan
2010
Pros & Cons of a Seller Obtaining a Home Inspection Pre-Listing
Purchasers of residential property routinely will obtain a third-party home inspection report. However, sellers and listing agents have called us asking about the usefulness of the seller obtaining such a report.
PROS of Obtaining an Inspection BEFORE the Seller Puts a Home on the Market
- Gathering an inspection report before may avoid the situation of the seller having to negotiate repairs 30 days (or so) into the escrow; and therefore placing the seller in a weak negotiating position. This can be less of a problem with a market turnaround often giving rise to multiple offers.
- Before accepting an offer, the seller is in a stronger negotiating position. Before a contract is entered into is the time for the seller to let the buyer know what the seller will fix and will not fix. Once the seller accepts an offer and is then subsequently presented with the buyer’s “wish list” of repairs or replacements, the seller is then in a weaker position to negotiate.
- By having the inspection done up front, the number of surprises or latent problems are reduced, both to the buyer and the seller. Less surprises means less opportunity for disagreement and therefore less likelihood that the transaction will fall apart.
CONS of Obtaining an Inspection BEFORE the Seller Puts a Home on the Market
- The listing agent could unwittingly open himself up to liability by interpreting the findings of the home inspection to his principal. Where the listing agent helps the seller “figure out” or interpret the inspection report (e.g., what is major vs. minor); the listing agent may have opened himself up to a potential breach of fiduciary duty claim by the seller.
- If the seller obtains a pre-listing inspection, but decided to replace something in his home with less expensive materials or had a handyman do the work in a “temporary fix” manner, you may have a disgruntled buyer on your hands who, after closing, will pursue a claim against the seller, and/or both agents involved in the transaction.
- The belief that by simply obtaining an inspection up front will somehow fulfill a seller’s duties to disclose could be a comfortable trap for the seller. It may falsely minimize or dilute his true legal disclosure requirements (i.e., the Transfer Disclosure Statement, matters of actual knowledge, etc.)
THIS IS A VERY ABRIDGED VERSION OF THE ARTICLE; TO READ THE COMPLETE ARTICLE, “PROS AND CONS OF A SELLER OBTAINING A HOME INSPECTION PRE-LISTING”, PLEASE CLICK HERE OR EMAIL MR. STAVROS DIRECTLY AT mds@mrsvlaw.com
Copyright © 2010 by Mark D. Stavros, all rights reserved
Mark D. Stavros, Esq., a partner with Maxie Rheinheimer Stephens & Vreivh, LLP, is a member of the C.A.R. Strategic Defense Panel and represents real estate brokers/agents (residential and commercial) in trial, litigation, arbitration/mediation, DRE Accusations, and other matters affecting Realtors. Mark authors articles for various publications, provides seminars and acts as panel counsel and consultant to major carriers and other insurance intermediaries. Mr. Stavros is available at (619) 515-1155, or via e-mail at mds@mrsvlaw.com
The information herein is not intended to offer legal or financial advice. Please consult with author or another appropriate professional for specific and/or more information. The information below provides varying degrees of perspective and may vary with market conditions. While some are legal points, many of the guidelines are marketing or practical points.