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UPFRONT PROPERTY INSPECTIONS & REPAIRS: A true value

Typically, a property sale runs as follows: The seller has received an offer and has agreed upon a sales price with a willing buyer. The seller now makes plans to move and turn over the property. Now the buyer begins their due diligence, or inspection process. At this point, the seller is no longer in complete control of the sale, because they are operating without complete information.

Most buyers today employ many different experts and professionals to help them evaluate the property they are considering acquiring. Ultimately, the information and reports generated by these experts are factored into their final go/no go decision. Just as importantly, these reports are often used to further negotiate the transaction, usually at the seller's expense.

The process of selling a property can be divided into four general components:

Preparation of a Comparative Market Analysis ("CMA").
Clean Up and preparation for actual sale.
Marketing Period.
Escrow and Closing.

1. Preparation of a Comparative Market Analysis ("CMA").
2. Clean Up and preparation for actual sale.
3. Marketing Period.
4. Escrow and Closing.

The preparation period consists of components 1 and 2, and typically includes determination of an offering price, and minor repairs such as leaky faucets, torn screens, touch up paint, yard clean up and plantings, interior clean up, and possibly pre-move packing to reduce clutter. The initiation of sale, inspections, report review and evaluation, and negotiation occur in component 4, once escrow is in process.

It is clear that there is a better way to go through the property sale process. Completing the inspection process during the Price Determination and Clean Up component has very distinct advantages for the seller and buyer.

The Seller has greater control over the transaction because of more complete information and this translates into the following benefits:

1. More accurate pricing reflective of true property conditions.
2. Increased showings, due to more accurate pricing.
3. Increased probability of offers due to more accurate pricing and better showings due to completed repairs.
4. Increased probability of quicker sale and higher sales price due to more accurate pricing and more informed buyer.
5. Less potential of sales falling out of escrow due to unknown conditions.
6. Potentially less liability due to more proactive disclosure stance.li>
7. Smoother escrows with significantly less probability of surprises.
8. Shorter escrow with fewer inspections/reports and resultant repairs.
9. Reduced repair costs due to negotiation of repair costs and better selection of repair providers.
10. Reduced potential for escrow extension and interference with moving timetables. li>
11. Reduced potential for escrow extension and interference with moving timetables.
12. Tighter document/contract control, with no need to limit potential repairs because they are known, or even better, completed.

The Buyer can make a more informed decision in their offer price because of more complete information and this translates into the following benefits:

1. Buyer more likely to make offer because they are more fully informed.
2. Greater probabilities of initial offer acceptance due to more accurate pricing by seller.
3. Less potential of sales falling out of escrow due to unknown conditions.
4. Smoother escrows with significantly less probability of surprises.
5. Fewer lender issues due to more complete property information.
   Shorter escrow with fewer inspections /reports and resultant repairs.
6. Reduced potential for escrow extension and interference with moving timetables.
7. Less upfront, or at risk, cash expenditures for buyer, since inspections and repairs already completed.

Inspections that could be considered for up front completion include; preliminary title report, obtaining permits on file at building department, pest control report and certification, septic report, well test for productivity and potability, corner and property line identification, home inspection, chimney inspection and others. Many of the costs for these inspections and identified repairs can be reflected in the asking price of the property. Perhaps more importantly, the elimination of further contract negotiations over easily avoidable issues during the escrow period will significantly reduce anxiety and stress for both the buyer and seller.