Pre-Listing Inspections

**Michael Thomas** · 04-10-2007, 03:28 PM

Just did my first pre-listing inspection - lots of work needed on this property, starting with re-roofing .

I'm sitting here about to write the report, and it's dawning on me that I'm not certain if the recommendations should be different in any way than if this was an inspection for a buyer.

Comments or suggestions?

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**Rick Hurst** · 04-10-2007, 03:40 PM

Write it up as if Jerrry P. was your client. Or he was coming in behind you to inspect it for his daughter that was buying it.

**Bruce Breedlove** · 04-10-2007, 03:49 PM

Last week I did a pre-listing inspection on a house that I inspected for the buyers 2 years ago. It was an 1890 house, stone foundation, post WWII addition, etc. I did the same inspection I did before - inspect and report what I find. In this case very few things I reported 2 years ago had been repaired. Par for the course.

**Michael Thomas** · 04-10-2007, 03:56 PM

That's another aspect that's interesting: knowing that another inspector will be coming in a month or two behind me ---- as the listing agent is the person who referred me, there is a good chance I'll be able to discover if they found anything I missed, or vice versa - something I often wonder after an inspection on a rough property causes a deal to fall through and the property goes back on the market.

Tim Moreira · 04-10-2007, 06:41 PM

Michael,

I have done pre-listing inspections before for the seller.

I only know of one way to inspect.

Doesn't matter if it is for the buyer or seller in my opinion.

Yes there will most likely be another inspector coming in after you. Maybe he's another Jerry P. and will find stuff you never thought of or came across or maybe he'll be the $99.95 one hour inspector.

Doesn't matter. Inspect it like you would for your mother.

Joseph P. Hagarty · 04-10-2007, 09:47 PM

Pre-List is the same as any other form of Inspection.

Do not deviate from your normal protocols with regard to report findings.

Steve Gladstone · 04-11-2007, 05:29 AM

I find I'm doing more and more pre-listing inspections, end of builder warranty inspections and Safety & maintenance inspections for people not interested in selling. The inspection and report are identical. The major difference is at the beginning of the inspection I sit with the owner and ask them what they need and get a background on the home. While I do not necessarily have to run everything... I often will, to see if something is operating poorly or malfunctioning and the client is not aware of it.

I don't really worry about another inspector following after us. We do go way beyond standards leaving little to be missed by testing every window, every outlet and opening every panel. We budget for 3-3 1/2 hours on site and typically deliver the report on site. (We do team inspections)

I believe this is a great opportunity for the owner to learn of deficiencies and fix them before sale. Or disclose the information to take it off the negotiation table. Most sellers will add the price of the inspection and repairs to the selling price of the home so there really is little if any loss to the seller.

Frankly it's win, win, win. Most buyers feel they are getting a better home. Most sellers get more money for the home. And the higher the selling price the higher the Realtor's commission check is.

**Jim Luttrall** · 05-05-2007, 07:15 AM

Dan you are correct about loosing business, but I too try to explain the possible ramifications to sellers doing a prelisting inspection. In TX there is a space on the disclosure for that asks about inspections performed in recent history and calls for the attachment of the report. The few I have done have resulted in repairs done, disclosure of non-repaired items (foundation) and the seller being able to sell with little taken off of their price for repair issues. As Steve said, it takes the disclosed items off of the negotiation table.
Win, win if the seller is ethical...

**Jerry Peck** · 05-05-2007, 08:39 AM

Originally Posted by dan orourke

I always let me cleint know this on the phone and say something like: "I'm going to put the pedal to the metal on your home, like I would with a buyer. So hiring me can be problematic as you must disclose my findings and sometimes it makes selling your home difficult. However, often buyers love that you took the time to have a pre-inspection and see that you made a lot of repairs...."

80% of the time the seller doesn't hire any inspector after I explain this to them. Yes, I loose business (short term) but long term, the majority of sellers uses me for their purchase of their new home because they loved my honesty.

Dan,

Only 80% of the time?

I think my percentage of not being hired after explaining that to them was more like 99.99999% of the time.

I think I remember doing 1 or 2, 'maybe 3', pre-listing inspections in a little over 16 years. Most of the time, the seller acknowledged that ... maybe, just maybe, they did not want to know and would be better off 'taking their chances' when the sale and inspection happened.

I did not 'intentionally' convince them 'not to do a pre-listing inspection', but after I explained the facts of life regarding disclosure and what was found on the inspection report would either need to be corrected or disclosed ... the result was virtually always 'Thank you for taking your time to explain that to me *before* the inspection. I will call you when I buy the house I will move to so you can inspect that one.'

Time wasted? No. I usually got 'their' inspection out of it. And I did not have to worry about them correcting or having to disclose everything I was sure I would find.

Maintenance inspections? I would consider them the same a 'pre-listing inspections'. *IF* they do not correct what you find, they now know about it, and it must be disclosed when they sell. A 'maintenance inspection' is simply a 'pre-listing inspection' done months or years ahead of time.

**Thom Walker** · 05-05-2007, 11:32 AM

Originally Posted by Jim Luttrall

Dan you are correct about loosing business, but I too try to explain the possible ramifications to sellers doing a prelisting inspection. In TX there is a space on the disclosure for that asks about inspections performed in recent history and calls for the attachment of the report. The few I have done have resulted in repairs done, disclosure of non-repaired items (foundation) and the seller being able to sell with little taken off of their price for repair issues. As Steve said, it takes the disclosed items off of the negotiation table.
Win, win if the seller is ethical...

Jim,
Actually, there is no space on the disclosure from TREC that has a place for prior inspections and the attachment of the report. Look at the next one you see and you'll notice that it is a TAR document. Because of the size of the TAR lobby (obviously my opinion) the wording in the TREC rules allows them to make their own disclosure forms. They must include as a minimum the attached information which is the actual TREC form. Realtor's PRESENT their document as a required legal document, but it is not.

It has always frosted me. TREC thought Inspectors were so incapable of clearly speaking to their Clients that they mandated a report form. Yet a document as important as the seller's disclosure is allowed to be manipulated by the Realtors. Before someone goes off about this, understand that I am pro licensing and pro SOP. But the mandated format for inspections was a successful lobbying effort by TAR to make all inspections appear similar for the benefit of Realtors, not the consumer.

The attachment of prior inspections within the past four years was yet another way for Realtors to add Inspectors to the food chain when they get sued. It presents another opportunity for the Realtor to say, "It was just inspected last year, month, week. I always recommend an Inspection, but it was just inspected last year, month, week." And worst of all, it presumes that all inspections are equal or even accurate. How would any of us like to be a seller in the position of "having" to attach a copy of a prior inspection that was now known to be unreliable?

In several cases where my Clients have not bought the house I inspected for reasons other than the condition of the house I have had Realtors contact me to tell me I needed to send them a copy of the report because my Clients had not completed the transaction and the sellers needed to provide my report for the new seller's disclosure.

Isn't it odd that I have never had a Realtor ask for the same thing when my Clients didn't buy the house because of the conditions found at the house?

I have never accomodated the requesting Realtor. I politely tell them that any copies of the report must be obtained from my former Client, not from me.

When working for the seller as a presale Inspectior, I do not instruct or advise my Clients to comply or not to comply with TAR's request to attach the report. I do encourage them to review all documents regarding the sale of their house with their attorney, to include all requests for attached documents.

Which all leads back to: We should not be under the authority of TREC. We are independent of the sales transaction and should be licensed under the TDLR.

**Thom Walker** · 05-05-2007, 11:40 AM

I forgot to attach the code section.

If you don't think TAR wrote this section, take a look at all the exceptions for disclosure. Also note that it doen't include the clause, "unless the excluded party has knowledge of..."

**Jim Luttrall** · 05-05-2007, 12:27 PM

Right you are Thom, I never realized there were different disclosure forms out there. I am guessing this would mean that the STATE does not require the attachment of the inspection report, this is the choice of the individual broker. Of course, the need for disclosure is still there no matter which form is used. The bottom line is my client on a pre-sale/pre-listing inspection will be liable for disclosing all information I give them regarding defects in their home. I think they need to know that before I take their money and put them in position they might not appreciate.

Richard Moore · 05-05-2007, 12:36 PM

I do pre-listings occasionally. I found the first 2 or 3 a pain to write up as I would feel that my normal narrative phrasing sometimes just didn't fit the situation, even though I pull no punches and report everything. So, I came up with the following that I add to my report preamble.

Seller’s Commentary:Although this is a pre-listing inspection, most of the report is written as if you were actually purchasing the home. The issues mentioned are likely to arise with any subsequent, competent inspection. FYI, I have added blue italic “seller’s commentary” in a few places.

I now use my normal language (boilerplate where applicable) and just add the "commentary" whenever it might be helpful to a seller. That commentary never suggests "hiding" anything.
I have to say they aren't my favorite inspections. Homes are often very cluttered, the reports can be lengthy as nothing has been touched yet, and it can be difficult to maintain my "flow" with the homeowner tagging along.

**Thom Walker** · 05-05-2007, 02:38 PM

Sneaky Devils, that TAR bunch.

Absolutely, a seller should disclose every known defect. I couldn't agree more. I also agree that it is my responsibility to tell them what my reputation is and just how thorough they can expect me to be.

Since I have chosen to bill hourly, they may follow me, but not to the attic or roof. And they may not be anywhere near me when I am at the service panel. I will call them if I need to show them something there. Other than that, they can slow me down as much as they like. They are billed for inspection and write up time. If it's 50 miles away or more, I pick up time one way, they the other.

If the house is already listed, it is identical to a report done for a buyer. If it is not listed they may omit items, but that section is marked "This item was omitted from the Inspection report at the request of the Client."

Since most of my seller Clients are prior buyer Clients or referrals from them, most of the time they already know what my inspections are like.

Jack Ahern · 05-10-2007, 10:01 AM

I approach pre-listing surveys the following way. Same tools-same intensity-same method-NO WRITTEN REPORT. The client is encouraged to take notes and pictures. The client and I can then have a frank/brutal discussion about the condition of the house, without the various Societies and the Comm of Mass. breathing down my neck. My client understands that when I leave the building, I will not/can not return to conduct a buyers inspection. That's a Jack Ahern Rule.
Any verbal discussion is between my client and myself. My client may be a Real Estate Agent or Family Member or Concerned owner. Any of my recommendations regarding that property is verbal and confidential.
Any written report usually is sold to the next buyer.
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