Why do some home listings have inspections up front and others don’t?
Well in short, one party understands how contingencies and negotiations work, and the others?… well they’re lacking understanding — to say it kindly.
Take us back to the mid 2000s in the Bay Area, specifically on the Peninsula, a small group of Agents realized how hot the market was getting, and how fast buyers wanted to move on properties they had listed. They took note that the bottle neck of every transaction was during the inspection phase, and negotiations to follow. The not so obvious answer? Do the inspections up front and give the buyers all the information they need to submit their final price, the first go around.
What was to follow? Non contingent offers. No post ratification negotiations, no repairs. Faster closings. And a significantly more transparent and smooth process. The buyer understood what they were buying up front. Their ability to leave the deal or negotiate down the line was taken away.
Want to know what is crazy? MOST markets across the country still do inspections after accepting an offer. The home seller has no clue if any major repairs are needed and now they have to battle negotiations on who pays for what after already coming off the active market and agreeing on a price. Its wild.
If they can’t come to fair terms, the buyer bails, the seller goes back on the market and now has to answer the WHY the home is still on the market, and WHY did the previous buyer bail? This hurts that seller.
Moral of the story – if you are a buyer and there are no pre inspections – consider that a gift. You can lock the home up for asking price, with your inspection contingency, and then hammer the price down based on findings. Or leave the deal. There is very little to lose when putting in an offer.
If you are a seller? Do pre home inspections. Do everything in your power to get a non contingent offer in. This is a sure way to get the highest price, with the least risk.
As I always mention- Your Realtor play a pivotal role with strategy. It blows my mind how much money people leave on the table without ever even knowing. Us Realtors are not all cut from the same cloth. If you need great counsel, high level strategy, call me. If I don’t service your market I will personally vet and refer you to the best in your area.
In service-
Danny Burgess
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