Why Would a Home Seller Have an Inspection of Their House Before Putting it on the Market?

"From the Trenches - A Marvin Gardens Story"

Sandra and Jane found the home of their dreams. Up in the hills, it had an amazing view, a sweet garden, and looked clean and bright. The seller, Steve, had never lived there, having inherited the home from his parents. Steve rented out the house for a few years, but the tenants moved out, and Steve decided he no longer wanted to manage the property. He listed it for sale with an agent who was a friend of his, who recommended he get a pest report to check for termite damage before putting it on the market, and he did. In just one week in this hot market, Steve received five offers, and Sandra and Jane’s was by far the highest, with the best terms.

Sandra and Jane’s agent recommended they have a home inspection report by a certified inspector, and an inspection contingency in their purchase contract. After crawling out from under the house, the home inspector removed his dust mask, and took them aside to talk about the foundation. It was rotated, not bolted, the concrete seemed “sandy,” and the crawl space was damp. He recommended having an engineer look at the foundation. Sandra and Jane were crestfallen. None of this was revealed by the pest report.

Sandra and Jane had not planned on replacing a foundation and considered backing out of their contract. By law, now that there is that new inspection report, it had to be disclosed to all other potential buyers. After seeing the report, the other four buyers who put in offers also weren’t sure they were still interested, and the seller most likely will have to adjust his price expectations. 

What if the seller had obtained inspections and written reports before putting the house on the market? He then could have shopped around to find lower bids for the repair work, and gotten a second opinion as well. Or perhaps he could have fixed the problem before going on the market. 

Knowing if there are any hidden issues can make a huge difference to a seller. In a sellers’ market like ours, a home with a well-documented disclosure package, including a home inspection and a structural pest control report, by locally respected and certified firms, will get the best offers and are most likely to avoid the necessity for further negotiations.

I will be happy to answer your questions on the above article or other real estate needs. Please feel free to call me at my office (510) 527 - 9111.

- Herman Sun