Unless you’ve been living under a rock in Seattle the past 5 years, you are probably aware of the fact that real estate in Seattle is beyond hot. We’ve been riding the wave of an increasing market since 2012. For the last 2 years in a row the homes have been selling on average 2-3% over list and our Diva Team average has climbed to between 5-7% over list price. In the first few months of 2017, we’ve seen some neighborhoods hit almost a 20% increase in prices since 2016. With almost every home sale involving buyers having to waive financing and appraisal, scrape up a minimum of 20% and pay in upwards of $100,000+ over asking just to have a chance of winning a home. On top of all this, the excepted trend is to pressure buyers to either spend thousands of dollars on home pre-inspections or to waive their inspection altogether and just take their chance. The question is, are we really doing a service to our sellers and buyers by encouraging pre-inspections? Multiple offers may be the standard in this market but pre-inspections do not have to be. Team Diva strongly believes the practice of pushing pre-inspections limits a sellers’ pool of buyers based on who can or cannot pre-inspect and who is willing or not willing to waive. Limiting your buyer pool means limiting the sellers ability to get top dollar.
In the 2000’s we established this crazy trend of strongly encouraging buyers to pre-inspect every time they wanted to compete in a multiple offer. Frankly, it pretty much became a must if you wanted your buyer to be even slightly in the running for a home. As listing agents we advised our sellers that it is better for them to allow buyers to bring any Tom, Dick, or Harry inspector to paw through their home because they will get the best offer. But will they? Have we deluded ourselves into thinking pre-inspections are a good thing for our sellers? Are we really getting them the best buyer possible by pushing buyers into pre-inspecting? Well after 16 months of non-stop multiple offers – we Divas finally said “Enough!” We are no longer encouraging our sellers to allow pre-inspections on their homes. Pre-inspections are not necessarily what is best for our sellers and they are definitely not good for buyers. So let’s stop the madness and let the pre-inspection have a quick and painless death!
Why say good-bye to the pre-inspection?
For us it is simple – that many people roaming through a seller’s home increases risk and liability. Allowing numerous inspectors to crawl through the sellers home and dissect its pros and cons before the home is even under contract is completely absurd. The seller does not know these inspectors and we do not know these inspectors. Sure the buyer may sign a “pre-inspection” MLS form but when there are 3 inspectors, 5 buyers and 4 selling agents tramping around a house in one day, let alone at the same time, how does one know who to hold accountable if something goes wrong? In the past year we have heard stories from our sellers and others of gas being left on, minor home damage, water left running, and of inspectors bad mouthing the house at a pre-inspection to other buyers! Personally, I have seen an inspector tip a stove over in a home just to prove that there are no brackets to prevent tipping. The crazy stories go on and on. Is all this really worth avoiding some potential post contract negotiation? We think not!
How is saying no to the pre-inspection better for the sale? Well, beyond protecting the seller from risk, it also allows them greater access to ready, willing and qualified buyers. Making the pre-inspection a “must-have” for an offer to be competitive means driving away strong buyers who are fed up with spending thousands of dollars fighting for homes they might not get. There are many excellent buyers with stellar financing willing to pay top dollar for a home, but not willing to throw away their hard earned downpayment money on pre-inspection after pre-inspection. So why limit the pool? We are doing a disservice to our sellers by restricting the number of buyers willing to jump into the game by insisting on a pre-inspection. We say, “Open the gates and bring on the offers!”
Case Study House: Recently, we listed this West Seattle Belvidere house. Our sellers agreed that we should not allow pre-inspections. In the end we received over eight offers and let’s just say, it sold WAY over list price. Happy buyers – they got to do a thorough inspection after they had a signed offer in hand! Super happy seller – they received top dollar, had a strong back-up offer, and the house went pending in 2 days! Plus, these stellar buyers more than likely would not have had time to pre-inspect had we been encouraging it. Which would have meant no offer from them and less money for the seller.
Maybe it’s time we closed the door on risk to our sellers, eliminate this financial burdened on buyers and open the door to ultimately GETTING TOP DOLLAR for our sellers by saying no to pre-inspections. Ultimately – it will be their choice but let’s make sure our sellers have ALL the information about the pros and cons of pre-inspections before they list their home.