A real estate agent who let herself into a house to undertake an inspection was savagely mauled by two bullmastiff dogs seconds after she stepped in the door.
How does a real estate agent talk to a client about an inspection?
In any real estate transaction, the agent’s “client” may be the seller or the buyer, in most states. Representation laws change from State to State. But let’s assume you are accurate as to “client” and not “customer”.
When my client is the Seller of the home:
Seller BEFORE Inspection:
- Have the furnace (if you have one) serviced and tagged. A current date on the furnace service tag and a nice clean filter installed goes a long way to creating a better result. Of course if during that servicing a repair is recommended, then do let them make that repair as well at time of service and tape the service invoice to the furnace. Usually in a clear plastic sleeve with all service reports from the past. Best to do this before you list the property for sale. If it was already serviced, or new, within 12 months of sale, that is good enough.
- Provide a CLEAR path for the inspector, and preferably with room for the buyer to stand with the inspector, at the electric panel(s), furnace and hot water tank. Moving shelving to get to the electric panel or a stack of boxes to get to the furnace, is all too common. Remember that these main major system points, usually in the garage, should not be blocked. Often sellers load the garage from top to bottom when getting the inside of the house ready for market. Be sure to clear an area around these items in the garage before the inspection. The inspector unscrews the entire electric panel cover and does not just open the door as you would, so he needs some room to work and for the buyer to stand next to him so he can point out what he is concerned about or even so the buyer hears how happy the inspector is with what he finds when he unscrews that panel cover. I try to wash the surfaces, particularly the top of the hot water tank. The inspector is often impressed with surfaces and pipes and wires that are not caked with years of dust and translates that to “a well maintained home” and it helps color his inspection accordingly.
- Other than DO NOT BE anywhere near the house during the inspection, that is all the seller needs to do usually.
Seller AFTER inspection:
- Do NOT expect to come home after the inspection and hear the result. The normal process is that while the buyer was present at the inspection and heard many things, there is usually a full written report with photos sent to the buyer the following day. Even if the report is delivered to the buyer after the inspection (sometimes hand written, sometimes printed in the inspector’s truck), the buyer and the buyer’s agent need to review it, decide if they are going to ask for something or not, and put the formal response in writing (usually on an addendum to the contract form).
- The seller almost NEVER sees the Full Inspection Report…nor does their agent want them to see the full report. The seller will see the Buyer’s response to the inspection…not the inspection report that goes to the buyer. How the seller responds will vary, but do ask your agent what they think before deciding on a response. WORST thing a seller can do is start fixing things before the buyer is firm about what “remedy” they want. That is why the seller must wait for the formal request. Remember, this is about concluding a sale…NOT about your house per se. Sometimes the buyer wants 3 of the 6 things fixed that you think are not as important as the other 3. It doesn’t matter. Wait to find out what the buyer wants and consult with your agent to finalize the response on the property contract form and format. HOW you respond CAN impact the buyers loan. When a sale fails on financing at the end of a transaction, sometimes it is due to the way the seller replied to the inspection. Lenders do NOT like to see specific “defects” of a home in a real estate contract. So how this is negotiated is very important, and often not what you think at all.
Buyer BEFORE Inspection:
1. This MAY be your LAST opportunity to be IN the house you are buying until the very end. The inspection usually last 1.5 hours to up to 5 hours depending on the house and the inspector. 2 to 3 hours the norm. While you do need to stay with and pay attention to what the inspector is saying most of that time, you also need to do anything you might want to do before closing, especially if the home is owner occupied.
Buyer AT Inspection:
1. For the inspection itself, you mostly only need to bring the payment for the inspector. Make sure you know if that needs to be by check, and often that is the best way as many home inspectors don’t run around with the means to process a debit or credit card. Paying for the inspection AT the time of the inspection, is one of the only things buyers “have to” do at an inspection.
2. Back to 1. of BEFORE, BRING A TAPE MEASURE. Buyer’s erroneously assume the can go in and out of the house many times before closing. Not so! Usually the ONLY time you can go back in after the inspection is for a “final walk through”, which is a quick walk around to be sure nothing was damaged in their move out. So make the most of those approximately 2 to 3 hours of home inspection time for other things. If you are planning to buy new appliances before closing (check with your lender before doing that. Another reason for loan failure at the end can be racking up bills for appliances prior to closing. Some buyers, though pre-approved, can end up with a failed loan if they add debt to their credit before closing. Not a good time to buy big things like cars or major appliances for the home. They usually run the credit again prior to funding the loan at closing. Measure for curtains, measure the refrigerator opening from side to side, depth AND from top to bottom. Older homes usually have a cabinet above the fridge space that is lower than today’s refrigerators. Also don’t play it too close as to side to side as you need door swing and the “french door” style usually needs more swing on both sides. If one door, pay attention to swing right or swing left. MOST of the time, you should not be planning to get estimates or measure until AFTER you own the home. Even if the property is vacant, the contract does not contain language permitting a buyer to go in and out except for inspection (during a finite, early period) and a final walk through (right before closing).
Buyer AFTER Inspection:
1. IF you are going to “Cancel ON Inspection” be VERY CAREFUL. Honestly I have never in 26 years had a buyer cancel on inspection for something we didn’t already have a concern about at time of offer. When the Inspector arrives if you are concerned about something specific and important to that house, tell him up front and have that checked first if it is a “deal breaker” type issue. Usually that is a foundation issue. While many Inspection Contingencies are very broad as to “satisfactory inspection”, that does not mean you get your Earnest Money returned if you cancel for something that is NOT about the inspection. You usually do not have to give a “why” as to specifically what was not satisfactory, and while sellers will beg to know, often you shouldn’t tell them as they just want to tell you that your are wrong. As to “BE CAREFUL”, I have heard things like the “house isn’t large enough”, the traffic on the road is too noisy and even that the buyers changed their mind about wanting to buy the house. IF in fact you are using the Home Inspection Contingency legal out to cancel and get your Earnest Money returned, be VERY careful what you AND what your agent says to the agent for the seller. The “legal out” is specific to the inspection and saying you decided you didn’t want it for reasons that have nothing to do with the inspection can (and should) cost you your Earnest Money deposit. Hopefully and most always you can find something from the inspection to pin the cancel on, even if not 100% why you are actually cancelling. Honesty is not best in this situation, unless you are willing to lose your Earnest Money because you simply changed your mind about buying the house. Because you SHOULD lose your Earnest Money if the reason you are cancelling is merely because you changed your mind about buying the house without any new information presented by the inspection itself. So be careful what you say, even to your own agent. Be sure to reply on the appropriate form and in the timeframe allowed!
2.If you are going to make an inspection request, and this is the case 98% of the time you should wait, if time permits, to have the written report in hand. Sometimes the inspector has things in the report that he did not say within your ear shot (when he was up on the roof without you) or that you just didn’t hear correctly. Review the report and verbally tell your agent what you want. The agent needs to convert what you want to a formal and proper request on the appropriate contract form in a way that will not negate your mortgage funding.
Very Important to remember that there is a DROP DEAD date AND TIME OF DAY by which you need to reply to an inspection. That is in your contract and every contract varies. Sometimes you asked for 10 days and that is what you remember, but the seller changed it to 7. BE acutely aware of that day and time by referring to your contract. If you try to cancel or ask for something an hour after the drop dead day and time…you are SOL. All too often a buyer thinks they need to DO an inspection by that time, when in fact they need to RESPOND to the inspection by that time.
Now to the question as asked: “How does a real estate agent talk to a client about an inspection?”
First and foremost, everything above. In fact create your own document to give to clients, the one for a seller client will be different than the one for a buyer client and give it to the seller when you are listing the house and again as soon as he accepts the offer if needed and to the buyer immediately after acceptance when you are scheduling the inspection and again the day before the inspection.
When it comes to a Home Inspection, the agent has to react to the situation in real time. You can’t anticipate what you are going to say to your client until you are AT the inspection. You will know if there is a “deal breaker” item by the end as you will better understand what the inspector is talking about (hopefully) than the buyer or the seller. IF there is something your client SHOULD be walking away about, then you need to tell them that AT the inspection and discuss it with the inspector as well to be sure you are hearing him right.
DO NOT FORGET WHO YOU REPRESENT!!!
If you represent the buyer, it is NOT your job to try to “close the sale” by making light of problems.
Be obective! Be the professional in the room who is representing your client well, not trying to keep the inspection from blocking your paycheck.
Also, and most importantly, don’t write a formal response to the inspection that is going to cause the loan to fail!
So many agents don’t understand financing. There is a LIMIT to the amount of credit a buyer can receive…without causing the loan to fail. There is a limit to what a lender can read as to defects, without causing the loan to fail.
The roof is likely the #1 issue in that regard. A seller can not give a buyer enough money AT closing to put a new roof on AFTER closing…in most all cases…without causing the loan to fail. The cost of a roof almost always exceeds the allowed credits, after considering all other credits including the lender credit, seller credits and agent credits in place prior to the inspection.
What you SAY to your client is the wrong question. What you DO for your client as a response to what that client SAYS TO YOU about the inspection is the correct question.