Just about a month ago I did a post offering tips for sellers who are doing home inspections prior to listing. Well, here’s a good reason why sellers should always inspect before their home goes on the market. Some clients of mine found a house they loved and, wanting to do some investigation about it asked for the disclosure packet on the place. There wasn’t any….just the sellers standard transfer disclosure statement. We negotiated back and forth for awhile and came to an agreement on price that was in fact a very good deal for the buyers. Following our opening of escrow we did inspections. The pest inspection came in around $15,000 and featured dry rot in various places, including several windows. The property inspection showed issues such as an unbolted foundation, unsafe modifications on floor joists done to accommodate some duct work as well as a variety of other smaller items that would indeed need attention. The bottom line when it came to all repairs was around $38,000.

Here’s the thing…once you’re in escrow this all amounts to and enormous amount of leverage in favor of the buyer! As a seller wanting to market your home you now have entered into a brave new world of disclosure issues that include multiple new reports from contractors and engineers that will certainly diminish the value of the property going forward if the buyers are not satisfied and back out. If you’re thinking that you can just say no…forget it. The seller will undoubtedly have to fix the lions share of the discovered issues anyway just to eliminate massive value erosion at the home.  If you think you’re protected by that “As Is” addendum you signed…forget it. The “As Is” addendum only is relevant to those items known and disclosed. Nobody is expected to take a property “As Is” without knowing all the details about the issues of the home that will effect it’s value. This reason alone is possibly the best one for doing your own inspections up front. You will then have the ability to negotiate a true “As Is” sale when the opportunity arises.

If you know the facts it’s going to be alot easier to negotiate an idea like splitting the costs of these fixes when the initial offer comes in, versus when you’re 2 weeks into an escrow. You may end up fixing everything anyway, but your chances are better for saving some money doing it earlier rather than later.

Seriously, who cares if you need to spend $750.00 to do the inspections up front. It could be the best investment you can make. Also, it’s quite possible that having discovered some necessary work you can simply get it done right away and really give yourself more leverage from a marketing standpoint. There really is no downside for doing inspections up front.

For several years it’s been a common event in this area for a seller to initiate home inspections (pest inspections too) prior to listing their place on the market. The rationale for that is to avoid any surprises in an escrow, via a buyers home inspection, that could place a seller at a negotiating disadvantage. It’s was also a great way to minimize or even eliminate contingencies in hot markets where there were multiple offers. Having inspections done up front by the seller is still a good idea in my mind, not only for the reasons mentioned above, but for the simple fact that often inspections bring up areas that a seller can easily correct with minimal expense prior to marketing their home. I found a little check list from a home inspection company that I thought could be helpful if you’re contemplating preparing your home for sale sometime in the near future. It’s worth mentioning as well that buyers might also find this useful if they choose to have their own inspections done once in escrow.

• Confirm water, electric and gas service are on, with gas lights burning
• Ensure pets won’t hinder the inspection. Ideally, they should be removed from premises or secured outside.  (I was at a house once where the inspector discovered a nest of skunks as he crawled under the place…we all departed REAL fast!)
• Replace burned out bulbs to avoid a “Light is inoperable” report that may suggest an electrical problem.
• Test smoke and carbon Monoxide detectors, and replace dead batteries
• Clean or replace dirty HVAC air filters.
• Remove stored items, debris and wood from foundation. These may be cited as “conductive conditions” for termites and other critters.
• Remove items blocking access to HVAC equipment, electric service panels, water heaters, attics and crawl spaces
• Unlock areas the inspector must access – attic doors or hatches, electric service panels, closets, fence gates and crawl spaces
• Trim tree limbs to 10′ from the roof and shrubs from the house to allow access
• Attend to broken or missing items like doorknobs, locks and latches, windowpanes, screens and locks, gutters, downspouts and chimney caps.

These are incredibly useful tips…I can’t tell you how many times I’ve needed to return to a property with the inspector later because of an inability to complete an inspection as the result of one of these elements being overlooked. You’ll really save yourselves some time…and potential heartache if you do these things up front.

Things have sure changed in the real estate business. Once upon a time…and it wasn’t that long ago, a seller exposed their home to the market for the first time via the broker tour. In Foster City the tour takes place on Tuesday morning. The home was entered into the market through the MLS and Realtors would visit the place on Tuesdays to determine if it was right for their clients. Tour day, in my experience was maybe the biggest day of the week since a group of us would drive around and see houses. It was important to me for another big reason too…because listing agents would very often entice more traffic by serving lunch in these homes. Nobody can graze quite like a pack of hungry Realtors!

Well things have sure changed. Since the inception of the good ole Internet the entire method of exposing the listing has shifted. The single biggest element is probably the virtual tour. When a listing is entered it’s almost always accompanied by a link to 9 still photos and another to a larger display of 360 degree panoramas along with more still shots. The first exposure of the home is now the Sunday open house where actual buyers, who have already seen the home via the virtual tour, come to check it out first hand. The broker tour still takes place but the dynamic has shifted so that the client see’s the place first on Sunday and the agent merely follows that up with their own inspection on Tuesday morning.

Here’s the truth…not very many agents go on tour anymore. The virtual tour has replaced the old function the brokers tour once provided. If my client hasn’t seen the place I can tell just from looking at the pics if it’s something they might be interested in. That’s particularly the case if the listing is somewhere outside of the local area. Agents used to come to inspect the house from many other communities if they had clients interested in Foster City…but why drive all the way over if they can preview it online? Now a days, even food isn’t much of an enticement. I can’t tell you how much food is sitting on the counter in my office every Tuesday afternoon because it’s gone uneaten at the house on tour! Maybe 20 people come in the three hour time period. It used to be 100.

The broker tour is an after thought now and the biggest benefit of it is the fact that I get to politic with agents that might have a buyer…because they’re the ones who typically show up.

Here’s a little slice of life. I’ve got some buyer clients who are qualified up to $900,000 looking for a house with minimum 3 bedrooms, one level, good area and not a tear down and, of course, a good deal. We were planning to go look at some places one Saturday recently. All of my clients are plugged into an automatic property search that’s part of my website and they receive listings as they come on the market. This on-line organizer allows them to mark homes they’re interested in or delete those they’re not too hip about. ( It’s not uncommon for a client to delete a real gem and mark as interested a real dump…but that’s what I’m here for…to educate them). Typically clients will express an interest in living “somewhere in the Mid-Peninsula”. It’s actually kind of unusual to hear someone insist on living in only one city, so again, it’s my job to cull down the choices to a selection that the client will like based upon the education they’ve been giving me during our relationship. It’s also common for a client to mark 15 to 20 houses as interested but I discovered a long time ago that once people get past the 5th or 6th house their memory of what they’ve seen blurs a bit and they find it hard to keep track of the many details of the houses they’ve seen. Consequently I almost never show more than 6 houses at a time, there’s a natural, human point of diminishing return if we do…for everybody. It’s important to note that if you’re looking in more than one community there’s always going to be something to see in any given price range at any given time. It does happen that one house stands out way over and above all of it’s competition but it’s much more rare than you might think. My point? If you’re a seller chances are your house is not unique…there’s other houses comparable to yours on the market too.