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Andy Wojtowski

How to sell your home with fewer problems: a case for pre-listing inspections

Twenty-five-year real estate veteran Rhonda Wilson joins the show a second time to discuss pre-listing inspections. Rhonda has been encouraging her sellers to get pre-listing inspections for the past decade, and she has become quite accustomed to having her listings sell faster and with far fewer hassles than most other real estate agents are accustomed to.

She explains how frustrating it is to have a home get put into “pending” status, wait to get the home inspection, have a bunch of surprises come up, and then potentially have the home go back onto the market because of a bunch of unknown issues.

Rhonda addresses all of the arguments that people make against pre-listing inspections, and the gang leaves the show convinced that they should all have pre-listing inspections on their own houses, even though they’re not listing ;-).

The show closes with Rhonda sharing a success story where a pre-inspection and listing photos were used to help her clients buy a home contingent upon the sale of their home, despite the strong seller’s market that we’re experiencing right now.

TRANSCRIPTION

The following is a transcription from an audio recording. Although the transcription is largely accurate, in some cases it may be slightly incomplete or contain minor inaccuracies due to inaudible passages or transcription errors.

Rhonda Wilson: We’re having your home pre-inspected because it puts you in the driver’s seat. You will learn what’s wrong with your house, you will be in charge of being able to make repairs that would bother a buyer, and you will provide an inspection report.

[music]

Bill Oelrich: Welcome, everybody, you’re listening to Structure Talk, a Structure Tech presentation. My name is Bill Aldrich alongside Tessa Marie and Reuben Saltzman as always. And today, again, in studio with us, we have Rhonda Wilson with us. And on today’s episode, we’re gonna talk to Rhonda all about pre-listing inspections. This is something that is in the real estate world, they’re available and not a lot of people use them. We wish everybody use them, because it would increase our market by 50% overnight. But it hasn’t been fully embraced by the greater community of real estate agents, so we’re gonna talk to Rhonda about pre-listing inspections. But before we dive into that, Rhonda, let’s have you re-introduce yourself. Tell us who you are, where people can find you, and what company are you with?

RW: Sure. So Rhonda Wilson, and my license is held by Coldwell Banker Realty, formally Coldwell Banker Burnet Realty. So the world has to get used to that.

[laughter]

BO: Okay, very good.

RW: Including myself. And I’ve been selling real estate for 25 years, I’ve always been with the same company, and I go all over the place, I sell all price ranges, all types of housing. I don’t do very much commercial, mostly residential. And I do some new construction, and I just go wherever my clients take me, have been doing it for so long. Most of my business is repeat and referral business.

BO: Great. So at some point in your real estate career, you decided that you wanted to get involved in pre-listing inspections, why was that important to you?

RW: I can’t remember the first time I thought it might be a good idea, well, it must have been a home that really needed it, and I thought, how am I ever gonna sell this house? But then I think I’ve been doing it for about 10 years.

BO: Okay.

Tessa Marie: And just to define pre-listing inspection for someone who’s listening and they’ve never heard, what does that even mean? Why is this different? Why are we even talking about it?

RW: You want me to answer that?

TM: Yeah, yeah.

BO: Yeah, you’ll give your version, yeah, please.

RW: Alright, okay. Okay, well, as a real estate agent, most agents, I don’t wanna speak for everybody, we both list houses and we sell houses. So we wear different hats depending on what we’re doing. In some cases, we get to list somebody’s house and then sell them at their next house. So you have to know both sides of the coin in order to serve, sometimes, the same client very well. And having a home pre-inspected just… I think one day I just… I think I was just laying in bed and I thought that would be so smart to have my listing that’s coming up pre-inspected. And that means that the seller is… You’re asking the seller to pay for the inspection and they don’t really… They go, “Doesn’t the buyer pay for that?” And I said, “Well, sure they do. But you might strongly consider doing it yourself, because it puts you in the driver’s seat. You will learn what’s wrong with your house, you will be in charge of being able to make repairs that would bother a buyer, and you will provide an inspection report in writing with pictures and links to how to fix things to your buyer, and then the buyer can still have their own inspection, you never wanna take away that right.”

BO: That was my next question.

RW: Yeah, yeah.

BO: Is this in lieu of that?

RW: No, it’s not, but it protects a seller from being… Let’s say you put their house on the market, and this is a typical thing, you put their house on the market and you sign a purchase agreement, now you’ve taken your house basically off the market. It’s sold subject to an inspection, and you can say whether or not you wanna still allow show-ins, but basically you don’t get very many show-ins when your home is in this inspection contingency period. ‘Cause most people think, “Oh, it’s sold,” and they don’t come and look at it. So you’re losing days on market, and time is money, unless you change the status to something other than sold subject to inspection, there are options to do that. But in any event, you’re losing time. And someone has tied up your house during this, usually it’s a 10-day period, and once you’ve signed that purchase agreement, now they’re in the driver’s seat.

BO: Yeah, that was what I was gonna say, is they’re controlling the situation.

RW: That’s right. And they hire an inspector and you don’t know who the inspector is. In the purchase agreement, it says that it will be a qualified inspector.

TM: What does that mean?

RW: What does that mean?

Reuben Saltzman: What the heck is that?

BO: That’s Reuben, that’s Reuben.

[laughter]

RW: Yeah, yeah, exactly. And so, on my listings, if I don’t know who the inspection company is, I insist that they’re ASHI certified at least, so that it’s somebody that there’s some credibility to. But having an inspection available for a buyer at the time that they see the home before they sign the seller’s property disclosure statement that the seller has completed, the inspection report becomes part of the seller’s property disclosure statement.

BO: Sure.

RW: And so now the buyer writes an offer based on what they know, they know what’s wrong with the house, and they write their offer based on that and not tying you up, and then they can cancel the purchase agreement, and now you’ve lost your precious initial days on the market. Now you get to start all over again. So there’s a lot of argument that can be made to say, “Well, now you have to disclose all the material facts you know about your house.” And by having inspected you’re gonna learn more than you knew before, and so you only have to disclose what you know. Well, do you wanna sell your house and do you wanna get the highest price and in the shortest amount of time? Then find out what’s wrong with your house.

TM: That seems such a simple concept.

RS: You don’t need to say anything.

BO: You mean to say people don’t really know what’s going on inside their house?

RW: Well, of course, you know they don’t.

[chuckle]

RW: They either don’t know or they don’t care.

TM: Don’t want to know. [chuckle]

RW: Don’t want to know. But the truth is a buyer is gonna find out for them. So having a home pre-inspected just makes complete sense to me. And since I’ve been doing it, I have never had a bad regretful experience. It’s been nothing but positive. I’m telling the seller, you’re gonna be in control. Number one, if you don’t do it and you have to leave for the buyer’s inspection, you are a nervous wreck, ’cause you don’t know what they’re gonna find. And if you’ve already had it pre-inspected and the buyer is gonna have their own inspection too, then the argument is, here’s what I know is wrong with my house, and you can have your own inspection done, but if you find something different, we’ll talk, but don’t come and ask me to fix something I already disclosed, ’cause you could have asked for it at the time that you wrote the offer.

BO: Oh, I like that a lot because now you’re putting it… I’m bearing my soul to you, whatever this purchase agreement is better have included what’s in this document here.

RW: And the other thing is being able to be in control and… Well, first of all, you have to use, it doesn’t work if you don’t use a very credible inspection company, ’cause there’s some inspection companies that hand write their reports and they’re three pages long and there’re check marks and they’re not thorough. And that’s not credible to a buyer, it has to be… And I always use… Now, this is a commercial for you guys, but I really, truly believe this, I always use Structure Tech, because you guys are like the best in the industry, and people actually fear you.

[music]

RW: Because you’re so good.

[laughter]

TM: We’re working on that.

BO: I like that. The most feared inspection company in town.

RW: That’s right.

BO: It’s our new slogan.

RW: So your reports are so credible that that’s the important thing, if Structure Tech did the report, then they’re the best in the business. So there’s no question about it, agents understand that. So that’s, for starters, it doesn’t work if you don’t use a good, really good reputable inspection company.

TM: And how much does it cost, Rhonda, like is that a hurdle that you have to get over with a seller when you talk to them about doing this, because…

RW: Yeah, a good question Tessa, ’cause when I ask them, I tell them, it’s based on your square footage and stuff, but this is gonna cost you $500 or $600 or $800 or $1000 or whatever depending on what you’ve got here. You’re gonna make up more than that in the savings. Time is money, it’s gonna go way smoother. And personally, what I do is I get my hands on the inspection report either because my client gave you permission to give it to me or they send it to me, and I send it off to a licensed contractor, and I have a deal with him and I pay him for his time to go through the inspection report. He doesn’t come to the house, he just goes through the report and he gives me a quote to fix everything he’s capable of fixing.

BO: I like that.

RW: And then I sit down with the seller and I say, okay, here’s what’s wrong with your house, so should we fix this? Yes or no. Well, let’s look at how much is it gonna cost to fix. And we come up with a plan, and then the seller can do some of the repairs themselves if they’re capable, or maybe they have a son or maybe they have a friend or somebody who can fix it or their own contractor.

BO: A guy.

RW: Or a woman, and it’s not a buyer saying, “I need you to have people in Hazmat suits come out and the mold off the sheathing in the roof of my house, because my bathroom fan has been pouring hot air in the attic for years and I didn’t know it.” And that was the deal that was $4000 for this seller because he’s somebody who didn’t listen to me, and if he would have, he would have been… He’s a fireman and he would’ve been totally capable of doing it himself, but the buyer wouldn’t let him. He had to hire professionals to do that.

TM: Oh man. Fixing that. Yeah. Wow. Wow.

BO: Speaking of lost control, right there is… That’s a great. The ball is no longer in your court.

RW: Yep, that’s right.

TM: The seller can make demands, and they can either have you fix it or request a certain amount off.

BO: You mean the buyer. I don’t mean the…

TM: Yeah the buyer, sorry.

RW: Yeah. It’s so easy and it works like a charm every time for me, it really does. And then I think that I’ve had… Agents are usually surprised to find that there’s already an inspection report, and I get a lot of thanks for doing that. It makes it so much easier for us to understand the house, it makes the seller seem they care.

BO: Transparent.

RW: Yeah. Transparent. They’re not hiding anything. And so the buyer feels good about it.

RS: Now, I’m wondering, have you ever had a situation come up where you had the home inspection, and I’m kinda… You can be honest here. You get the home inspection and then here’s all the stuff that’s wrong, but then the buyer gets their own inspection and they find stuff that was missed. Does that ever happen?

RW: From time to time, and if that happens, then bring it up, nobody’s perfect. And it’s a big deal to inspect a house, and hey, maybe at the time that you inspected it, the seller had a dresser in front of it or something, I mean that could change.

BO: Rhonda is like our best advocate.

TM: I was gonna say why can’t all the agents be like Rhonda.

[laughter]

RS: And then what about the opposite? You ever have a situation where you had a pre-inspection and the buyer has just decided, we don’t even want to get a home inspection, like look this is thorough enough.

RW: Oh, that’s like the candy on the cake if that happens. I think every buyer should have a home inspection, and in this market where…

RS: Amen, amen.

[chuckle]

RW: This market where there’s so many homes that are selling with multiple offers, and there’s so many buyers that want the house so badly that they will forgo a home inspection. I tell my buyers, if you lose it because you’re gonna have an inspection, then so be it, it’s just not a good choice to make. But if I was showing a house that there was a Structure Tech home inspection pre-done, I might say, you know, I know this company, they’re very credible, they wouldn’t hide anything, and it’s up to you, but let’s go through the house with the inspection report and see. And maybe my buyer would forgo, I’d at least feel better if they made that choice, ’cause I can’t tell them whether or not they have to have an inspection, but certainly if there was a report there. And I have actually found that in… When I have a house listed, and I’ll give you an example, I had a house listed and I had 43 showings in two days, and you guys pre-inspected it.

TM: Oh, my gosh.

1RS: Wow.

RW: And the seller had you do the inspection like two months prior to going on the market, and he’s real handy, and he and his dad fixed a whole bunch of stuff. And then I take that inspection report and I write on it before we give it to the buyer next to the items that were completed, I say that it was completed by the home owner or it was completed by a licensed contractor, or a plumber or whatever. And in the report, so the buyer gets to read what still isn’t fixed as well as what was fixed. And I had seven offers, and I had three of them with no inspection.

TM: Wow.

BO: Oh that’s awesome.

RW: And so the buyer that, one, not only paid the highest price, a lot way more than the list price, but they also weren’t contingent on an inspection, and we were done.

TM: Wow.

RS: Sure.

RW: We went from active depending in MLS and happily closed.

BO: If that inspection report, that process added value to the…

RW: Without a doubt.

BO: Okay.

TM: Yeah.

RW: And two of the agents said that was… “I thank you,” because we’re not supposed to recommend that our buyers not have inspections, but it was okay because you provided this report.”

TM: Gosh. It just seems like I mean it alleviates so much stress for both parties, having all the information out there and saying, “Here’s what we know is wrong. He’s what we’ve done to fix it. Take it as it is now, or let’s talk about that.”

RW: Well sellers get excited when they accept an offer because, “Oh good, I’d sell be selling for this price,” and then after the inspection, they also well, maybe have to make a concession or worse yet the buyer backs out. And now you’re starting all over again.

RS: Yeah you get this rollercoaster, just eliminates all that I would think.

RW: Yes.

BO: I talked to a flipper, I live in St. Paul, South West of St. Paul. And this guy he flips houses, but he’s not your typical flipper, they do a really nice job, they do high-end work. And he was just frustrated by… He’s like, “They tie up my house, and then they come back with this laundry long list of items they want me to re-negotiate. I’m done with it, I’m not doing it anymore, I’m just telling them, “This is the price, I’m not negotiating.”

TM: Yeah.

RW: That’s exactly the situation, that’s the tenor of the whole situation, becomes very tense. It’s stressful anyway, for the seller, and most sellers are proud of their homes, and so.

BO: Rhonda, you’ve been doing these pre-inspection listings for quite a while, I’m guessing you have a small percentage of the agent population who does this, I don’t know if you would venture to guess what that would be?

RW: Yeah, I can judge it by the number of listings that I show that I’ve seen a pre-inspection, and I’d say less than 5%.

BO: Wow.

RW: I mean they’re not… I upload the inspection report to the agent, supplements, the public can’t see it but the agent can. So they have quick access to it. I also on the seller’s property disclosure statement, I write on there that the buyer has received and reviewed the Structure Tech home inspection report dated such and such, and I create an additional place for them to sign on the seller’s property disclosure statement.

BO: Awesome.

RW: So, I’ve got written proof that they have it and they’ve reviewed it prior to writing an offer. The other thing in this market, not to get ahead of you, but this is something that I figured out recently, is in this crazy market, there are so many people with low interest rates that want to move, but they don’t know what to do because they have a house to sell. How do I do that? Nobody’s gonna accept my contingent on the sale of my home offer. And they feel kind of stuck. So I actually have two clients right now that are in the process of doing this, and it actually worked really well on the house that I had pre-inspected that had the 43 showings and seven offers. So a couple of months prior, I said, let’s have your home inspected. They had identified a house that they wanted to buy, and I said, “Let’s… ” I called the agent, “Would you sell or accept an offer contingent on the sale of my buyer’s house?”

RW: No, not really. We don’t think we need to.” And that house wasn’t on the market yet, but I knew it was coming on the market. So I went back to my client, so I said, “Let’s get your home inspected, get things repaired, get it de-cluttered, let’s stage it and let’s have professional pictures taken. And then I went back to that agent and I said, “So I know your sellers don’t want a contingent offer, but I want you to know that my buyers went to all this trouble in hopes that you would accept their contingent offer. We already have pictures taken, here they are, we already had it inspected by Structure Tech, and repairs have been made. So we’ll be able to go on the market and be totally prepared, and I’m hoping this is… It’s a great house, I’m hoping this house won’t last more than five days on the market, and we’ll be non-contingent,” and that’s exactly what happened.

RS: Drop the mic.

BO: Oh wow.

TM: Wow, Rhonda, wow.

RW: They went from being contingent to in… We had seven offers, no contingency on inspection. It was contingent on financing, almost everybody else is, and we were able to get over there and remove the contingency on… They did accept their contingent offer with a short leash, a short timeframe, that than if somebody else wrote an offer, and there was no way that they were gonna lose that house and we’ve we closed on both of them.

TM: Wow.

RS: Oh how cool.

RW: So that’s my new thing…

RS: That’s a win.

RW: When I get to encourage buyers who own a home and wanna move, be prepared and show the seller if you find a house, any house, “Hey, we’re prepared to sell our house and this is gonna go fast.”

BO: That testimonial is awesome.

TM: Yeah.

BO: You’ve laid it out like that. It’s not even now, you’re not giving them guidance, you’re just like, “This is how it work.”

RW: It is how it works, right, absolutely, yep.

TM: It’s how you sell it, yeah.

BO: When you were getting going with the pre-inspection listings, did you get pushback and did you have to really be committed to wanting to employ this as part of your…

RW: No, no, I just start with telling sellers, “Do you wanna be a perfect seller?” Because a perfect seller has their home pre-inspected, they know what’s wrong with it, they make certain fixes. It’s not like you have to make it perfect, it’s not new construction. But you might have some things wrong with your house that you don’t even know. Let’s find out and you can fix them before you ever try to go on the market.” I got one right now, where you guys did a pre-inspection and the chimney, it’s done.

TM: It’s falling apart.

BO: No way. Surely, A wood-burning chimney’s in bad shape?

RW: Yeah, a wood-burning chimney, yes. And if we would have gone and written an offer, they wanna write an offer contingent on the sale of their home, and there’s no way. If we would have done that, the sellers… Even if they said yes, then when we get an offer on theirs, it takes time. So we’re holding off writing an offer on that house they wanna buy, and getting their house in order so that we can deliver an easy-to-sell property, and tell the seller, “Hey, here’s our contingent offer, but we already had it inspected and we made these repairs. We don’t expect any issues with our buyer.” And by the way, we already had the pictures taken. And by the way, when you talk to a seller about having a pre-inspection, it’s a precursor to telling them you need to de-clutter, because you guys can’t do your inspection if they’ve got their basement full of boxes, and the garage full of boxes, and you can’t get out there some furnace and their electrical box. So it’s a whole listing appointment, maybe more than they expect. But that’s what I go through. It’s, “We’re gonna have professional pictures taken of your house. That’s gonna be when everything’s all done and pretty and nice and ready to go. We’ll stage it, but the very first thing you have to do is de-clutter, then call Structure Tech.

BO: That’s awesome.

TM: Gosh, I love that.

RS: Thank you for doing it in that order. We sure appreciate that.

[laughter]

RS: I know, I know, but I mean, I’ve used you guys for years. Years and years.

RS: It’s been a long time, yeah.

RW: And sometimes when you haven’t been available for one reason or another, and I’ve had to use somebody else, it’s just not the same. It’s just not.

RS: I Love you too. [laughter]

RW: And I’m not being paid to say this. [laughter]

BO: Yes, Rhonda is not being paid, but we really, really appreciate the good publicity. [laughter]

RW: It’s true.

TM: Yeah.

BO: In fact, one of my questions was, How do you handle the objection that we might find a material fact that’s gonna cost us money? Well, that chimney that you just talked about was worst case scenario. ‘Cause I’m guessing that was a number with four zeros after it.

RW: Oh, definitely. They’re coming out today. They’re out there today to give them a quote, and I’m thinking it’s 10 or 20, or more thousand dollars.

BO: Yeah, and that’s a big…

RW: And the sellers of the house they want a buyer who would have accepted had we written a contingent offer, which we haven’t done yet. If they would have accepted it, then they might have to back out simply ’cause they can’t afford the house because they have to spend so much. And it’s not my fault or Structure Tech’s fault. It just is what it is, and it’s just better to know what you’ve got. You’re not gonna try to sell your car if you know… I mean, you know what you know.

BO: Not with a straight face if the transmission is going out.

[overlapping conversation]

RW: No. And your house is even more important, and you can feel good when you do sell it because you did all the right things.

BO: Well, and this is probably an unintended consequence, but my guess is your clients are so satisfied after an experience with you. There were no surprises, you laid it out, it happened just the way you said it was gonna happen, and if nothing, a worst-case scenario might turn into a positive. They might actually get more for their house with the new chimney than with the old chimney.

RW: Absolutely. The buyers spend money on inspections and then they’re really disappointed if they can’t buy the house, ’cause the sellers, they discovered a $20,000 bad chimney and then they’re gonna walk away.

BO: ‘Cause they don’t have money in their budget to fix it.

RW: Right. Exactly.

TM: Deal falls apart.

RW: And then it gets canceled and then you start all over again. You may as well, just right out of the shoot, if you’re gonna sell your house, have it inspected.

BO: I love it. And we’re gonna end on that note right there. Get a pre-listing inspection. That would be awesome for us as a company, and I’d love to see it happen in the real estate world every day.

TM: It’s a win-win-win for everybody.

RW: That’s right.

TM: Buyers, the sellers, the agent. Everyone.

RW: It is.

BO: Absolutely right. Thank you, Rhonda, so much for your time, it’s been awesome. Just to hear your perspective, we think this is a great idea. You think it’s a great idea. Now everybody’s gotta believe, right?

[laughter]

RS: That’s right.

BO: Alright. You’ve been listening to Structure Talk, a Structure Tech presentation. Thank you, Rhonda. Thank you, Tessa. Reuben, We will catch you next time.