Part 1: Why the Pre-Listing Inspection Report is Critical to Home Seller Success

April 1, 2022
Just like a regular inspection, a pre-listing inspection will take a non-intrusive view of all of a home's systems plus its structure, and deliver a detailed report on the findings.

This process creates better transparency and can help ease the burdens of a tight market. Watch Dylan Chalk of Orca Inspect explain.

Seth: Housing inventory remains tight because of this. There are certain challenges associated with the selling process that many are overlooking. Dylan Chalk is an inspector and an industry expert whose take on the pre-listing inspection is one that can help ease some of the burdens associated with this stiff market.

Dylan: I first, remember, tight inventory problems in 2006 and a whole new thing came up and out here they call it a pre-inspection. That was a term that I really didn't ever care for. I call them a verbal consultation.

So a house comes up on the market. You and 20 other people want to buy it. The offers are due in two days and there's going to be 20 offers on it and you don't want to pay full price for like a real Cadillac type home inspection with a gorgeous report and pictures and videos when you have a one in 20 chance of landing the house. It just doesn't make any sense.

And so you know your options would be to just waive your inspection and hope for the best or maybe get a cheaper version of an inspection. That's just kind of like, you know I'm going to look for things that are going to get you killed or that get you to go broke. Right?

Seth: Sure.

Dylan: And that's it. You know, it's like there's no like, you know, your window hardware is loose, right? There's just like things are going to get you killed or make you go broke. That's what we're doing for you.

That's that was kind of the first solution that came in our market was these verbal consultations. And there was a lot of uproar about them that they didn't even comply with the standards practice for a home inspection.

There were insurance agents in the home inspection market who were blindsided because it was like, how do you ensure somebody that's not even delivering a report? So there were a lot of questions for years -“how are we going to handle this?” And I would say we sort of in our licensing law in Washington state, we did allow for verbal consultations and we managed to sorta scab together a process to handle tight inventory but, you know, that was not a very good process.

Those home inspections are very thin. They're very quick, and you can miss a lot of stuff. One thing that I think the average consumer doesn't understand is that just because I'm a home inspector and I've done it for 18 years doesn't mean I walk into a building and big problems have a sort of neon sign on them that only I can see.

Seth: Right.

Dylan: I mean, I've run into things all the time that are huge problems that I just barely found. You know, things can be latent and concealed, and when you're moving at that speed, you're going to miss a lot of that stuff. So we ended up then with a whole bunch of buyer's remorse, despite the fact that we were doing these kinds of short inspections.

And in my mind, I actually tried to not do verbal consultations because I thought it was sort of degraded our industry, it made it less than professional. So, you know, we fast forward a bunch of years and we hit the 2008 recession. And, you know, and that's coming out of that. I saw a lot of people that bought houses either without inspections or verbal consultations and now they're trying to sell their house and they're underwater.

And I'm inspecting it and finding big problems that they didn't even know existed. And that was really heartbreaking.  I do worry we're getting into another situation like that in certain markets around the country.

The idea of the pre-listing inspections started not by me, but by real estate agents where I live, I, I live on an island which has one advantage and that everybody kind of knows each other a bit in the industry. So, you know, one could have a reputation as being doing a good job and working really hard and you know.

One problem with a pre-listing inspection if you are a buyer Seth, is like, well, if the seller produced this, how can I trust it?

Seth: Sure.

Dylan: You know, and frankly, some pre-listing inspections aren't even worth the paper they're printed on. There's no information in them. They're very thin.

The pre-listing inspection has been a big thing where I am, and I actually think it works pretty well. I really work hard to try to do the exact same process I would do for a buyer. And occasionally sellers can get sort of upset about that.

Look, the house is going to sell and it would be better if people knew about all this stuff up front. And the amazing thing about when we do them for the seller is that when you if I were to find like boy Seth, if I found, you know, of moisture control problem in your crawlspace, you know, and and I don't know how far it goes, I can only see what I see here.

And if I were working for a buyer you would have three days to try to get somebody out and figure out what's happening. And that's going to be a nightmare. And so then you're going to say, well, I'll tell you what, I can't get somebody to come out, but you knock 50,000 off the price and we'll be it, right?

I mean, that's the kind of thing that traditionally happened. And so a great real estate agent that I work with said about the pre-listing inspection that, you know, you're completely in the driver's seat as the seller. If we find stuff, we've got time. We can get contractors out. We can look at it, we can handle the complicated stuff.

And by and large, you just ignore all the little things that we talk about of, you know, loose receptacles and leaking aerators. I mean, those are kind of nice to know the things. But in the world of buying and selling houses, they're kind of irrelevant. So, you know, and that same realtor once said to me that, you know, he's been doing pre-listing inspections on his sales for like three or four years now.

And he did one with it. The seller refused to do one and so it was the old way where people were coming up and and he suddenly panicked when he got an offer because he realized that, wow, now the work's starting you know, before when I did my normal procedure of doing a pre-listing inspection and we get the septic guys out and we get the well guys, we clean the chimney and we service the furnace.

And boy, the realtors out here work hard. They're like general contractors getting this house ready for the market. And by the time when you do all that and then you put all your cards on the table, by the time you get the offer, you're just done. You spike the ball and you walk away. Touchdown. And. And what he realized when you go the old way is that you get an offer.

But now all the negotiations happen and you think about it. When was the last time you bought something that you really had no idea what you were buying, but you agreed to a price, and then you'll agree to a second price once you figure out it was what you were buying or so, you know, I mean, it doesn't make sense. It's like it's all it's all backward now.

Now, that said, if I'm going to go on the other side, I would say that in my experience, when I talk to real estate attorneys about this and realtors in other parts of the country, by and large, the attorneys for the big brokerages do not encourage anybody to do pre-listing inspections.

They want the old "buyer beware" model. And, you know, I don't. That's not my area of expertise I'm not a lawyer. But, you know, to take that for what it's worth, but I know that where I am, the pre-listing inspection has really taken off for, you know, despite the fact that all the attorneys are not recommending it, it's taken off because this sort of forthcoming approach, it allows 20 people to make an offer on the house and all of the information is just sitting there and thinking, oh, here's the septic inspection, here's the home inspection, you know, here's who service the furnace last year, here are the receipts for the new roof we put on and it's a much more sort of pleasant process.

By the time you show up at the table ready to make your offer for sure.

Seth: Awesome. Well Dylan, we will absolutely hear more from you. You've got a lot of knowledge to be able to share. And we're really excited that you have taken the opportunity to share a little bit with us right now. But people want to get in touch with you or learn more about you. How can they do that?

Dylan: Yeah, you can find my home inspection website, just My home inspection company and Orca inspections like the whale. And if you're interested in software, you can check out Scribeware it's where you can check out report writing software.

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