It's been my practice in the past to have Buyers Agents not do inspections until after the Written Approval has arrived.  I know that some other "Superstars" recommend getting the buyers to do inspections earlier, to get some "Skin in the Game".  I met with a person from Pillar to Post yesterday.  He states that he has been doing inspections for Short Sales, and the lien holders are actually paying for this.  Of course, there are documents signed in advance that if the lien holder doesn't pay, they will still get paid.  I love the concept of have an advanced inspection, but it's a very expensive endeavor.  Anyone using this concept? If yes, how do you end up not paying for this process out of commissions?

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This exact scenario has happened to me with two different buyers.  It could be argued that the listing agent didn't know what he/she was doing when helping the seller set the price.  Or, he/she did know what they were doing to generate interest in the property by putting an unrealisticly low price on the listing.  That being said, your buyer agreed to do the inspection upfront and there obviously weren't any contingencies or discussion of reimbursement if the short sale didn't go thru.  Sooooooo, your buyer is stuck.  I learned this lesson the hard way.  I never advise my client to do an upfront inspection unless its a preapproved HAFA short sale and we see the agreement letter and suggested list price.  I also do my own valuation on the property and if it comes back where the list price is too low, then we know there's trouble ahead.  Unfortunately, pricing the listing low is a strategy used by agents that should be stopped.  In your case, did the listing agent dispute the bank's asking price or just break the bad news to you.  If the latter, I'd never show their listings again because they are unethical.

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