When to do Inspections?
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?
Replies to This Discussion
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Permalink Reply by Darlene Dunn on
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I usually wait until I hear from the short lender after the bpo is done that the price is good and that everyting is looking good. Then I will tell buyers agent that its ok to do their inspection. It would be nice if the lien holder would pay for the inspection because its still a chance things could go wrong.
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Permalink Reply by Kim Eisen on
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I've talked to BPO agents that are doing 'many' BPO's a month (sometimes 50 or more) and have no idea about each market area cuz they're doing them all over the cities. I think if there is something that comes up in the inspection, that info could be relayed to the BPO agent along with some comps to help them, especially if the are not familiar with the area. It's easier than trying to tell a lender 'after the fact' that it's way off and get it changed or redone.
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Permalink Reply by Bill Sloss on
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To me its all pretty much useless buzz words. Comps and appraisals. Neither of which accurately generally reflect the propertys condition and are only detrimental to the SS process and can be misleading for all as is the representing the seller tenet. The best representation of a sellers interest is getting the house sold as quickly as possible. All the back and forth is a waste of time when the real issues are condition and price. If a serious buyer raises the issue its in the sellers best interest to get it addressed and move on. Theres too much time wasted for everyone involved. Serious buyers arent going to play around when theyre looking for a house. You dont go to any restaurant and say bring me something to eat.
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Permalink Reply by Team Musser on
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On $100,000 purchase, a physical inspection is approx .25% of the purchase price. To me, if not willing to invest that little, someone isn't committed. As a Realtor(c) I explain my views to buyers and sellers and allow them to decide. Of course, I presume I was hired for my expertise, and I make it clear when we start working together, that I expect my advice will have meaning for them. Frankly, I do not have any issues with inspections getting done. I have had buyers walk because of this, only to get other better buyers, or have the same buyers come back. It makes sense to do it this way, and it speaks to mind set. If you think it's not going to close, and you're worried about .25% or less of the purchase price, then you likely ought not to be writing an offer.
As to not knowing the adequacy of the short sale agent, the MLS does a pretty good job in answering those questions. Check stats!
I am so pleased at this wonderful dialogue and exchange on the subject!
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If you show me 100% success on your buyers bids in short sales and guarantee mine Ill be willing to put up as much as you want. Until then please dont conclude a buyer is not committed in a short sale as youd be doing yourself a short service and its not your money. Heres where we may respectfully disagree. You are my employee. A professional employee in hopefully a professional relationship but an employee nevertheless. Whats all this talk of committed buyers? When the contract is signed you have a committed buyer. Why the talk after the fact? Why isnt it in the contract? Until the contract is signed no buyer is committed.
"If you think it's not going to close, and you're worried about .25% or less of the purchase price, then you likely ought not to be writing an offer." I think you should post that for all your clients to see. Bad idea?
Oh yes its far better to be wasting my time and money on a short sale that may not close while I could be elsewhere buying a house on my terms.
Again with all due respect youre speaking about a purchase price. There is no purchase price until you have an approval. Ill wait thanks. Again strictly as an aside the buyers that walked each had friends and relatives who wanted houses and they had friends and relatives. If they walked would they be coming back to you and refer their associates or going elsewhere?
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That's why we're all independent contractors and are having a dialogue. But yes, I've had 100% valuation success, buyers and sellers may agree or disagree with my view, and my referal business is doing very well. Hostilities are needless in a professional forum, you don't even know me.
I have no issue with my statement, I stand by it. If short sales seem iffy to some, they ought not to engage in short sale purchases. There are many other kinds of listings out these that could fall more weithin their comfort range. There is something out there for everybody, and a professional representative with business practrices to suit everyone's comfort zones and risk tolerances. I do the best for my clients in my view, and if I was purchasing a short sale, I'd treat myself exactly the same.
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Hostilities? I found your comment "and you're worried about .25% or less of the purchase price, then you likely ought not to be writing an offer" inappropriate, condescending, overly judgemental, offensive and generally insulting to someone who feels $ 250.00 may be a lot of money for them to gamble. It doesnt serve you well and was disrespectful to hardworking people who need a SS to have a home. Its not me but I can sure appreciate peoples financial strains.
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Permalink Reply by Mike Rizzo on
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You go Bill. Realtors ought to take notice of your opinion since you're a buyer, rather than believing they know how you feel as a buyer. To suggest you're not committed because you don't like the idea of paying for an inspection that may be worthless if the short sale doesn't go thru is a know-it-all kind of attitude that gives everyone a bad name. Just because someone has been in the business a long time doesn't mean that they are an expert in buyer attitudes. Lastly, if someone is buying a $100,000 house, its also likely that a few hundred dollars for inspection is very, very important to them. If the price of an inspection is pocket-change to some of these realtors, then maybe they should put up or shut up. Pay for a few inspections when the SS doesn't close, then they will be more credible.
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Our useless buzz words are all what we have to work with (and deal with). If comps/appraisals are detrimental, then we are at a loss of 'what' to use to compare and value. If you'd like it to work, then you take the bull by the horns and do the best you can. It is fluid and exciting and that's what makes us longtimers stay and newcomers welcomed (although they should team up with someone experienced in shortsales to get the experience under their belt or refer it out). Sometimes the SS house is the perfect home for the buyer. So, they are ordering exactly what they want.
My apologies, as I may have not understood the intent or 'moral to the story' behind the response.
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Certainly no need to apologize for anything I appreciated your comment and the kind words.
Youre right on. My point was a buyer and the lender are at a disadvantage to know the actual condition and "value" of the property without help. Personally I dont think either buzz word helps much and to me can be hurtful to the deal if relied on too much. So whats a poor fella to do but cross ones fingers and hope the selling agent gets it.
Ill quote a longtimer and think youll get the point "Yes, there are incompetent agents whether there is a short sale or not" Buyers usually dont get third party authorizations to speak to the lender so the selling agent really has to make the deal go.
Someone said "As to not knowing the adequacy of the short sale agent, the MLS does a pretty
good job in answering those questions. Check stats!" Id hate to deny someone the business based on stats. I dont think thats fair.
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This thread is starting to crack me up ; ) I thought the horse was dead a long time ago. I hope ya all don't mind a little levity.
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Thats so funny I was thinking the same thing. I believe the question was when should the buyer get a inspection before written approval or after. In other words when should the buyer feel that its safe to start spending money.
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