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Listing Realtors Recent articles in the national appraiser’s magazine and in the American Home Quarterly newsletter from the American Home Warranty Company focused on prelisting home inspections. There was also an extended discussion of the pros and cons of pre-listing inspections relative to buyer disclosure requirements in Maryland at the last dinner meeting of the Mid-Atlantic Chapter of the American Society of Home Inspectors. During the past “seller’s market,” many homes that came on the market received multiple offers with no contingencies and often at prices above the asking price. Today, there are many more single-family homes on the market than two years ago. November 2004 ended with 1366 and November 2006 ended with 3255 singles available for sale in Montgomery County and the same is true in other local jurisdictions. In addition, many Realtors believe buyers have taken a breather, which leads to a slower pace of business. A home seller’s goal is to maximize the home’s value while minimizing the length of time on the market. A home needs to be staged effectively to appear attractive to a potential buyer, including highlighting its strengths and lessening the impact of any weaknesses in the floor plan design or current decorating. Unclutering is the first step. In many cases, a fresh coat of paint will soften the impact of older decorating and there are many other ideas a knowledgeable listing Realtor can suggest to help achieve the seller’s goals. Needless to say, the condition of a home, especially one with older components, can be a subtle detriment to attracting a buyer if there are too many worn or out-of-date features. A home inspector can be a true ally in this respect. To begin, an independent home inspector will view the home dispassionately. A seller is always emotionally involved with the home, as he or she should be. Let someone who sees through the smoke of emotion give the seller a realistic view of the home’s condition. Having an accurate assessment of the property will facilitate a Realtor’s discussions with the seller regarding establishing a realistic offering price for the property. Properly priced homes sell faster than aggressively priced homes. A recent survey showed homes that received pre-sale inspections sold faster in a slow market. The inspection report assists the seller and the listing Realtor to properly market the home’s features. Deficiencies that are found can be dealt with. As compared with a seller who must make repairs two weeks before settlement in a panic mode, the pre-warned seller will be able to deal with repairs in a more relaxed manner. Bids from multiple contractors can be obtained, which provides cost savings and superior work quality. Properly maintained facilities in a home make a statement to potential buyers. Equipment that is replaced on a timely basis tells a favorable story. That seventeen-year-old water heater may be producing hot water, but it is clearly at the end of its useful life. Psychologically, it is a stronger sell to a buyer to know that the water heater has been recently replaced, rather than knowing that soon after settlement there will be the possible inconvenience of no hot water and an unwanted expense. Realtors tell me that money invested in home improvements prior to sale, if properly focused, returns more than a dollar of increased sales price for every dollar spent. If a recently replaced heating system impresses a buyer and produces a faster sale, the improvement was worthwhile. Seller disclosure obligations are another area in which a professional home inspection report can very beneficial. Occupants of a home very often overlook serious problems due to lack of attention or lack of expertise. An issue reported in writing and made available to the purchaser will eliminate complaints after settlement. An added benefit is that the report, disclosed to the purchaser, will also alleviate Realtor liability for these issues. The “ostrich” approach to disclosures makes lawyers rich. As with all disclosure considerations, more disclosure is better than less. Lastly, Mike Crow, a Texas-based real estate and home inspection marketing consultant, recently estimated that eighty percent of homes with pre-sale home inspections are not re- inspected by the buyer. Having a home inspection and disclosing that the deficiency list was resolved is very reassuring to buyers, who may then waive the home inspection contingency to encourage the seller to accept their offer. Listing Realtors should not overlook the advantages a pre-sale home inspection offers both to the seller and to the Realtor.
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From the Desk of
The Standards of Practice and Code of Ethics are now posted on the Commission’s website for public review and comment, with the Commission scheduled to review public comment and adopt a final form during their April or May 2007 meetings. There is a controversy that Realtors need to be aware of. One non-ASHI member of the Commission has taken exception to the obligation that a home inspector must inform clients of any component that is nearing or at the end of its useful life. ASHI’s standards require the inspector to report “those systems and components inspected that, in the professional judgment of the inspector, are not functioning properly, significantly deficient, unsafe, or are near the end of their service lives.” The Standards of this smaller organization merely requires that each inspected component be “performing their intended function without regard to life expectancy.” This particular person fears some perceived liability from having to identify the ages of equipment and apply that age to statistical standards to determine where components are in their life cycle. Your future clients need your help with this issue. The ASHI Standard in this regard assumes that clients should to be advised what future expenses in the near term they are facing. I agree. Review the Standards on the Commission’s website and please write or email the Commission in support of the Standards of Practice as currently proposed. Do your future clients a favor! Winterize Your Home The
mild weather in December meant that
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