I've seen incompetent Greater Cleveland home inspectors sink a transaction faster than dropping a cement block in water. Some inspectors are subjective, interject emotions, opinions, and do their buyers a great disservice. Some inspectors behave like everyone is the enemy including the buyer's agent, the seller and listing agent and even other service providers such as waterproofing companies who have done work previously in the home. In turn, some buyers put blind faith in a home inspector and believe everything they say, after all, they hired this person so common sense dictates that they have to validate their choice and believe this person is doing a competent job.
Many buyers choose a home inspectors recommended by their agent, which is the most common way inspectors are hired. While I recommend three or more very good, competent and experienced home inspectors, the process is only is good as an agent's recommendations. From an objective standpoint, this is a flawed process, and I wish there was an accurate database (like Angie's list with third party independent research and evaluation). Unfortunately, one does not exist. That said, either the buyer has to know how to choose a home inspector, via friends, colleagues, or their own research, or use their agent for guidance. While I believe most agents want to do right by their buyers in recommending home inspectors they like for some reason, some inspectors, in my opinion, do an inferior job either due to lack of knowledge, making inaccurate statements, or getting emotional and making inappropriate remarks.
So how do you find a good home inspector around Greater Cleveland, Ohio? The American Society of Home Inspectors (ASHI) is a good place to start ( http://www.ashi.org/). Also, the number of inspections an inspector has conducted is also vitally important. You should ask about the background of the inspector, the number of inspections he/she has conducted, how long he/she has been in business and whether he/she is specially licensed in any area(s). For example, one of many good inspectors I recommend is also a licensed architect and evaluates structures.
Remember, a quality home inspection is essential for making a well-informed decision about purchasing a safe, sound home.
There is no right or wrong answer. Most listing agents do not discuss this with sellers, so most sellers are unaware this option exists. Many sellers will ask the question: Why in the world would I want to pay $300-400 for a home inspection when the buyer is going to have one and pay for it, regardless whether I have one ahead of time?
While that is a very logical position for a seller to adopt, and it does make sense, the answer lies in "reducing the risk once a home seller is in a valid and binding purchase agreement with a buyer." Listing agents generally don't have hard, frank planning conversations with sellers on things that might occur once there is a valid purchase agreement. These conversations aren't fluffy, marketing-oriented and full of pizzazz, but are sobering and may involve the expenditure of dollars.
The #1 reason a valid purchase agreement falls apart is because of a home inspection. If a buyer feels a home will be way too costly to repair, due to major issues, or there is an extensive list of items to repair due to deferred maintenance, the costs, whether great or small, may overwhelm a buyer who may request a release from the purchase agreement. To further complicate matters for sellers, if a seller is in receipt of the home inspection report, the information MUST be given to all prospective purchasers and agents as requested. Generally, if agents perform due diligence, they will know via the MLS that a home was under contract and subsequenly fell apart and will inquire about the home inspection report if their buyer is interested in the home. Will buyer #2 feel the same way as buyer #1? So, it now becomes much harder to sell this home. A pre-listing home inspection and correction of many of these issues simply eliminates putting a purchase agreement at risk.
In addition, items that are identified in a pre-inspection report may need to be stated on the four-page State of Ohio Residential Property Disclosure Form. However, these items can be corrected pre-sale so as to prevent issues from arising. If something really major is identified, such as extensive mold, structural issues, extensive water damage, etc., then the sale will be much harder and may impact the initial asking price. Many times, sellers are not even aware of these issues.
The question is: Would you rather rest comfortably knowing the results of a pre-inspection and correcting items as necessary or wait for a buyer's home inspection?
Even if a buyer is willing to try and stay in the transaction and negotiate with a seller to repair all or many items or ask for a large financial credit (I have represented buyers who have asked for 20K or more), most sellers are unwilling to do either, which is totally unbelievable. I have tracked many properties over time and my assumptions are always validated, the seller ends up with far less money due to numerous price reductions, a longer time on the market, decreased negotiating power and in a worst case scenario, no sale at all. In a strong buyer's market such as in Greater Cleveland, it can mean the difference between success or failure.
Going back to the seller's initial question of why should I spend the money for an inspection when a buyer is going to have one anyway? This is a question that warrants a discussion with a listing agent. A competent, experienced agent raises these types of options and provides good information on which a decision can be made.
When a listing agent goes on a listing appointment to meet with a prospective home seller, the actual "selling" that goes on here is absolutely insane, illogical, contains hype, spin, and is so focused on how wonderful the real estate company and the agent are, and focuses so much on "marketing" a seller's home, that's it's just flat out ridiculous and degrades the value a truly educated and competent real estate can bring to the table.
Having worked for three of the largest real estate companies in the world, as well as now owning my own small-by-design real estate brokerage, I have seen first-hand this ridiculous attention focused on marketing.
The short answer is: marketing does not, I repeat, does not sell your home. Location, price and condition do. You should pound these three words (location, price, condition). I could spend $10,000 marketing an over-priced home and it still won't sell. I can spend $10,000 marketing a home that may have condition issues that cause buyers not to want to buy it, given the price-point the home is being offered at, and the list goes on.
Then why, you might ask, is so much focus placed on marketing then? The answer is: this is how real estate companies and agents obtain your business, because they spend an inordinate amount of time trying to differentiate themselves from each other, when they should be trying to educate you on your asking price and preparing your home for market.
We spend 90% of our time with sellers on how to competitively position their home in the market, price-wise and also on the various techniques (home staging, redesign, renovation) we can employ to ensure their home out competes their competition. If you have ever sold a home, I bet your experience validates this.
Be wise, be informed, be skeptical, make sound choices...you will be glad you did!
Newspapers around the country have seen their advertising revenue plummet this past decade, thanks in large part to the Internet, no surprise there.
But if buyer's are looking in the Sunday paper for open houses to attend, shouldn't my agent advertise my home there? I receive this question all the time from home sellers. After all, many home sellers know some story about their 2nd cousin, once removed, from their Aunt Margaret who once sold her home via an open house back in 1977, or some play on this scenario.
The short answer to this question is answered by an answer to this question (I posed it this way for you logic folks out there that wanted a play on words): If the probability of selling your home via an open house is roughly identical to winning a million dollar winning lottery ticket (odds being 1 in 4 million for example), is this a strategy you should bank on? The easy answer is no. So, why would you then as a homeowner, or from the the real estate agent's perspective as well, put so much emphasis on the Sunday open house and advertising it in the local newspaper? The answer is three-fold:
There is nothing wrong with this, but this information needs to be communicated to sellers so they understand who the primary beneficiary of an open house is, the real estate company and the agent, not the seller.
What else is the newspaper good for if it's not to advertise a home for sale for an open house? Well...an agent can place an ad showing it as a "new listing", or to show that it is for sale. Again, the branding and potential future business is the likely outcome, not a buyer for the home being advertised. Real estate agents know this inside out, but rarely do they communicate this to their seller, and rarely do sellers ask hard questions of their agents.
If a new listing goes into the MLS, and within 48 hours is plastered across major Internet portals (provided the real estate company and/or agent) knows about real estate syndication, and a host of other technology capabilities, how do you think your buyer is going to find your home?
If you think I'm off-base here, ask your real estate agents how many homes they have sold in total and how many directly came from an open house? Ask the real estate company the same thing? I can just about guarantee you that this data was not collected, nor is available. Even if it was, it would be suspect without a rigorous and scientifically valid data collection process and analysis, with independent design and verification.
If you think I'm off-base, why are the newspapers around the country, including major markets, seeing their circulation numbers decline year after year, and are spending more resources allocating to beefing up their service offerings online on the web for free? Why are their adversting revenues, both classified and display advertising decreasing? Why has Google's fortunes increased from making the majority of their revenue off of advertising.
<Seller speaking here...> Okay...we just listened to three Greater Cleveland real estate agents who all came up with different asking prices for our home. One recommended 300K, another 315K and the 3rd agent said 350K. What should we do? I think we should go for 350K, this extra money will allow us to pay off some debt and save for Johnny's future college tuition someday.
Okay...you may have been there...done that. If not, be forewarned...it's maddening from a seller's point of view. What do I do? Whom do I trust? The data doesn't seem clear? The agents used different comps or different methodologies...and a whole host of other questions and issues arise.
Be forewarned...there is a phrase that is coined "Buying The Listing." It is a trick that some (definitely not all or even the majority of good agents) may sometimes use to lure a seller to sign with them. They know if the market doesn't respond, the seller will wear down, lower their price, and hopefully, the home will sell. This results in a very unpleasant experience for everyone, but the agent got the listing, and eventually, the commission.
If there is a large difference in asking price, you should put the brakes on, slow down, and determine how to resolve this issue so you start competitively and not overprice your home from Day 1.
Inside Scoop: You should always select an agent to represent you based on their service offerings which should document what techniques they use to maximize your sales price, reduce your expenses, evaluate your condition with options for improvement, and setting a realistic asking price. You should not just base your decision on the agent with the highest sales price.
After all, it's the buyer who determines the price, not the listing agent.
In fact, your final pay off will be far less than if you priced it competitively from Day 1.
I have lost many listings where my price recommendation was exceed by an absolutely ridiculous amount.
One example: I thought a home's initial asking price should be 375K and another agent said close to 500K and it went on the market at 475K. As of the writing of this entry, this home is still on the market 2.4 years later and has been reduced to 399K and the seller is on his third listing agent. I have run into this on many occasions. Even if I recommend an initial list price of, say 200K for example, and another agent comes in at 215K, the seller, incorrectly so, thinks they will end up netting 15K more if they go with the listing agent who recommends 215K, regardless of what the final sales price may be. Remember, ultimately, a buyer will set the price for your home.
A thorough analysis of recent sold comparables is critical, along with a keen understanding of the current market conditions, the trend underway (either up, down or flat), and what your current competition is. This analysis is very hard to do--it is not a 5 minute printout of the MLS data, as many agents do. Since there is software built right into the MLS to help with CMAs, many agents choose a few properties, run it through the software program, and wala, you have a price recommendation! I sure bet if this agent had to have open heart surgery, they would not be so cavalier with finding the best heart surgeon.
Since these are your dollars on the line, this is one of two (the other being condition), that directly affects how successful you will be in the marketplace, plain and simple. As a former commercial real estate appraiser, who has a very in-depth understanding of the many (and oftentimes conflicting) components that goes into market value, I spend an inordinate amount of time researching, choosing appropriate instruments (such as price per square foot analysis, qualitative and quantitative adjustments, and other ways to compare and contrast a property's potential value) if direct comparables cannot be easily identified and quanitifed, documenting data and communicating with a seller so they can easily understand where they should "position" their home in the marketplace.
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Broker/Owner of Olsen Ziegler Realty. Expert home staging. Technology expert (B.S. Computer Science). Innovative, progressive, transparent. Professional designations: CRS, CLHMS, ABR, ASP, e-PRO, GSA.
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