We’re talking about Home Inspections….Last week’s column included a list of reasons why anyone thinking about selling their home in 2017 should begin scheduling their inspections now.
I can already hear the faint chorus of squawks coming from Sellers-to be out there who aren’t keen on the idea of paying for inspections this far in advance: I don’t want to waste the money! They won’t be any good by the time I get ready to put my house on! Won’t a Buyer want their own inspections? Doesn’t the house get tented anyway? I want an as-is sale! I don’t want to fix anything!
Sometimes old real estate myths die hard. They hang around way past their useful shelf-lives to confuse new people entering a process that’s very different from the one they remember. Here’s an example of some of the left-over baggage still rattling around out there:
A surprising number of people still think a house has to be termite-tented before it closes escrow. They honestly believe the big circus tent has to go on before the calorically-enhanced lady can sing. But that fractured bit of history hasn’t been true since the early 1990s when lenders often insisted on it, before standard language in the real estate contract changed.
So, back to those inspections you really should be ordering… Why? Because if you don’t, you’ll almost certainly pay for it later on. And you’ll be fair game for every Buyer and Buyer’s Agent that comes along. Here’s how to think about it…
Virtually no sane Buyer has been happy about what they’ve had to pay to buy a home in Santa Cruz over the last four years. The market is at an all-time high and Buyers are kicking themselves for not getting in when prices were at their lows in 2011.
Most Buyers are stressed to the max these days or stretched to the limits of the qualifying ratios on their loans. They’re looking for ways to redress the balance and right the wrongs of this kind of Seller’s Market. So how can a Buyer leverage some degree of power when they’re competing against other Buyers who may have more money than they do?
The answer is simple: By promising whatever a Seller wants to hear when they make their offer. And then by utilizing the inspection process to squeeze concessions out of them later on. True, Sellers are in total control during the offer process. But once escrow is open, Buyers have control for as long as their Contingency Period lasts.
Contingency periods are a get out of jail free card for Buyers. They can get out of any deal if they change their mind or have a change of heart before their contingencies are released. All they have to say is: “I don’t like the school district the house is in.” Or, “I never knew there were that many registered Republicans in this neighborhood.” Virtually anything is fair game. That’s why they’re called “contingencies”.
So why would any Seller want to wait until the middle of escrow to figure out what inspection issues are going to come up for the average buyer? Why would they allow a future Buyer the opportunity to control the information about their house and spin it in a direction that was useful in gaining them extra concessions. What happens when a “bad inspection” gets generated? Or a property falls out of escrow and has to be put back on the market?
Next Week: Control the information before it controls you.