APRIL 2021 VOLUME 25 • ISSUE 12
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Are Pre-Listing Inspections A Good Idea? Here’s What Your Sellers Need to Know
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written by RIKI MARKOWITZ The way a home inspection typically works is that after a buyer gets into contract with the seller, during an agreed-upon option period, the buyer schedules a home inspection. A few days later, with the inspection report in hand, the buyer can initiate a round of negotiations, if applicable, or simply accept what’s on the report and move forward with the purchase. But recently, a non-traditional way of handling home inspections has been gaining in popularity. And that’s if the seller gets a pre-listing inspection. Most real estate transactions are still not handled this way, but in Central Texas, it’s not uncommon either. That’s because a pre-listing inspection can speed up the sale and in a hot real estate market, there’s no downside to being non-traditional. Not every agent or broker completely agrees with pre-listing inspections. Karin Chappell, a REALTOR at Coldwell Banker Realty, says when she starts working with sellers who already had their inspection, then it’s time for a frank conversation. It’ll go along these lines: “Now that you’re knowledgeable about everything, as per the seller’s disclosure, you have to share a copy of the inspection report with any buyer.” Chappell says it can complicate the transaction. In ordinary real estate transactions, about 85 percent of homebuyers order a home inspection. By contrast, according to their 2018 Consumer Housing Trends Report, Zillow reported that a quarter of “do some of it yourself” sellers secure a home inspection. Most of them still hire a real estate agent, but opt for a pre-listing inspection to get a jump on the transaction. “It’s the third-most common pre-listing, pre-agent activity,” says Zillow. This isn’t the only shift that the inspection industry — at least here in Austin — has been seeing. Some clients are calling inspectors with a lot more urgency. Brian Meyerdirk has been inspect-
ing houses in Austin since he was 6 years old. His father, Billy, started Austin Inspection Services in 1989 and the younger Meyerdirk recalls testing light switches for his dad. Now an adult, and a licensed inspector since 2001, Brian says that the real estate market here is so hot that a lot of clients are shortening their option period, sometimes from 10 days down to one day. “Customers call me all the time and ask, ‘Can you come out today?’ The housing market is flipping that fast,” says Brian. “It’s been like this [for] probably a year or two.”
Phase Inspection with Austin Inspection Services
KB Home - West Canyon Trails
Brian has noticed that more buyers are also skipping inspections, too. But that doesn’t mean that the Meyerdirks are having trouble filling up their schedules. That’s because sellers are filling the gap. Home inspections are crucial. That point is not debatable and sellers, buyers and agents know that. When an inspector comes out to a property, he or she conducts a visual examination of the home, surveying defects, hazards and mechanical issues indoors and out. Traditionally, this process occurred during the agree-upon option period and if the report came back with any issues, the buyer could ask for repairs or try to knock some money off the asking price. The strategy to conduct pre-listing inspections has made it easier to reduce the option period and that’s something that both sides have benefited from. Sellers can flip their property faster and buyers can move in faster. It hastens the entire sales process.
Chats with Floor King pt. 2
Santa Rita Ranch pt. 2
How it Works A pre-listing inspection report lets sellers know what they’re working with. They have the option to address any issues they want pre-sale, or they can adjust their asking price if there’s a problem they don’t want to deal with. For example, says Meyerdirk, if a homeowner needs a new roof but they don’t want to deal with it, they can just take $20,000 off the asking [Pre-listing inspections continues on page 14]
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