Everything started out as usual.
Client called asking about my inspection choices, prices and qualifications. Set the inspection for a couple days later at 5:30PM per the client's request (he didn't want to take a day off work).
Began the inspection with my usual "rap" about what to expect during the inspection. The agent chimed in that this was a "pre-offer inspection".
The back-story is that this client had an offer accepted on a previous home (foreclosure) and decided not to complete the deal (he didn't get into details of why). Apparently, he had to jump through all kinds of hoops to get his earnest money back. This must have been last fall, as his previous inspector did not renew his license (IL renewal was Nov 31, 2008).
He and his agent thought that having an inspection BEFORE they made an offer on this property (a short sale) would alleviate the headaches if this property also was not up to the clients needs.
With the abundance of foreclosure/short sale properties out there, I was wondering if anyone else had used this method and what y'all think of it.
Inspect BEFORE you make an offer
7 comments • Schaumburg Home Inspector - Rick Maday • May 23 2009 04:22PMComments
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Rick, I haven't run into a REO or Foreclosure buyer that was willing to spend the extra money until necessary. But I get pre purchase from investors all the time. Usually the pre purchase inspections are major system type.
One thing to consider in our area is that a large percentage of "short sales" do not sale, which means that a buyer may hire an inspector many times before actually getting into a contract that closes escrow. The REO market for buyers is pretty competitive so there usually isn't enough time to inspect prior to making an offer.
In my opinion, the REO market is a poor choice for new home buyers. It's a specialized area best left to the pros. Sure, the tempting low price can be a huge draw, but as I pointed out in a previous post;
http://activerain.com/blogsview/1096396/buying-an-reo-better-look-closely- it is fraught with dangers.
I agree, forgoing the home inspection prior to the offer is foolhardy. It is unlikely that the neophyte buyer is willing to spend $300-$400 or more to "go fishing" prior to the offer. As Steve points out, it can be difficult to unwind a deal once an offer is made.
Thanks for the replies.
I think the whole idea is that the buyer does like the property and intends on making an offer.
Which generally means that they will (or should) get an inspection after the offer is accepted. As Steve and Dana both point out "it can be difficult to unwind a deal once an offer is made".
Inspecting before the offer makes it easier to unwind. I agree, the REO market may not be the best choice for the first time buyer.
Good suggestion Rick. If a buyer feels uncomfortable at all we do the inspection first on REO's. Makes me feel more comfortable too knowing the buyer goes in with their eyes totally open.
Rick, excellent, well written blog!
Shawn Blaney, President, West Coast Home Inspections
http://www.westcoast-inspections.com/