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The funny thing is there are people in the Home Inspection industry really pushing the pre-inspection thing. Of course they are generally setting it up so they make money to have a website where the buyer pays for an inspection and makes it available and then each potential buyer pays a small amount to get a copy or some such. I don’t see it working personally. And they also have it set so they get in with agents and pull all the lead data from everyone looking. So, it’s really just an information play. I think in general people buying want to have their own inspection and I think some people selling don’t want to know what’s wrong for plausible deniability.
I’ve always been amazed at the way the disclosure lists plumbing pipes. Why do they even have the generic “plastic” on there? Gives people with polybutylene an out to not list it. There aren’t that many kinds of plumbing, just put the real names on there!
And for sure lots of people wouldn’t know what was under their house if you put a gun to their head. I’ve had two buyers that ever got into a crawlspace with me and even they didn’t go all the way around it. You can tell for sure no one has been there when the spiderwebs are like Indiana Jones level.
But I’ll say I I imagine the worst houses for there being a disconnect are the 25-30 year old original owner, bought new. They still see it as a new house and likely have done little to no maintenance beyond when things break. I imagine they are in for a shock when the buyer’s agent sends a repair request over. Or when the sales sheet on the counter says things like “perfect condition”, “move-in ready” or “immaculately maintained”. LOL, challenge accepted.
I get a kick out of disclosures that are pondered down to a molecular level, with "No Rep" for water lines.
Caveat emptor.. If buyers care, they should know what the water lines are before writing an offer.
.... I'd suggest that the Realtors on here would approve of stricter "policing" of agents.
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Originally Posted by TarHeelNick
Here here! To all of this...but especially the bolded part.
Lots of self-regulation....
It is hard, particularly when it is just as profitable to have a whole posse of unsupervised agents as it is to invest in training and supervision.
Add in that many marquee rainmaker agents are some of the worst operators and in high volume, but you have to stay on their good side to do business, and it is even harder.
I'm in agreement that the whole due diligence fee has gotten out of hand.
That's refreshing.
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As for first time homebuyers, they are not putting down as much due diligence because they don't have it and they can't always afford to pay the difference if home doesn't appraise.
Correct. And the flippers know it. (Why do I keep saying flippers? Of the ten houses my son has viewed, at least half of them are by flippers.)
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Back when we first started with due diligence, we were in a buyer's market and most of the due diligence fees were $100! Imagine how unhappy sellers were with $100 for taking their home off the market for 3 weeks while buyer did their due diligence.
My daughter paid $300 DD 3 or 4 years ago. When we found there were foundation problems, we got her $300 back. I would have sued over it just like the seller would have sued if everything didn't go right in the transaction.
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Keep in mind, that BUYERS ALWAYS GET THEIR DUE DILIGENCE FEE CREDITED BACK TO THEM AT CLOSING.
That's not the question. If the buyer discovers, say, a foundation crack that the seller supposedly didn't know about, the buyer walks, and the seller keeps the DD. Who deserves to lose in this situation? The buyer or the seller? I say the seller.
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I have sellers that bought their home 5 years ago and haven't been in that crawl space since! How do they know if there are any issues in there? Yes, I DO take a look in there before listing.
Did they have an inspection done? If so, they should have to notify the buyer of every problem on the report that has not been corrected. A little honesty goes a long way. I had a home inspection done before I sold me last home (in 2016), and I had an inspection done before I even listed it. My buyers knew EXACTLY what they were getting. We had a couple of conversations with them since then, and they have never mentioned that we were anything less than honest and forthcoming.
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I feel much more comfortable with my buyers putting down more due diligence on a newer home or a home that sellers moved into 5 years ago and had inspected than a 30 year old house that hasn't been inspected in 30 years!
Agreed
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To the poster that suggested Buyer's Agents push the buyer to put down more due diligence, what is the point to that? Again, the due diligence fee is credited back to the buyer upon closing.
The buyer's agent puts her client at greater risk by having her put down a larger DD even with the inherent risk in doing so all such that their client will get the house. "Oh, but the buyer wants the house." But would the buyer want the house if he knows everything the seller and the buyer's agent know, at least from experience? I don't think so.
My attitude is puzzling to some here based on their triggered responses, but as I said before, I get really pissed when people take advantage of a little guy. I was a little guy once, and I had people try to stick it to me. About 15 years ago, I sold my wife's car for $1,000 to a guy I knew in a local retail store. He was a good kid trying to make a living. The car had 250,000 miles on it, but it was in good shape for its age and mileage. A month later, I was in the store to buy something. I asked him how the car was doing. He said the transmission went out two weeks after he bought it, and he sent it to the junk yard. I took out my checkbook and wrote him a check for $1,000. I didn't legally have to do it, but I wouldn't have been able to look myself in the mirror if I had sold him a lemon and walked on him.
Apparently there are people here who are satisfied that "a deal is a deal", and let the poor, inexperienced buyer beware. If that's true, that's really sad.
You want the government to specify details of residential property transactions to infinite degree.
Why not just run all inventory/title through the government and get the citizenry out of it.
Sell my house to the government.
Government set the prices.
Government resell my house.
Government say "When" and "How."
Government pick and choose winners and losers.
Geeee... Let's go full commie. I can rent from the government for life. Keep it fair!
Makes a DD fee look pretty palatable in comparison.
As a seller I plan to pay for a pre-inspection, um, inspection to figure out what needs to be fixed beyond what I know needs to be fixed.
For a couple hundred bucks I know what would hold up a sale, and can address it on my own time vs being under a gun to do so come sale time. I figure I'd get the money back doing the work myself, or at least being able to take bids.
The only concern I have is things that the inspector thinks are issues that really aren't, or for example have existed for a decade when we bought the house, that are still the same (we have a small 1'x4' section of vinyl siding that has been partially melted a bit by the sun reflection, but it hasn't changed since we bought it). I wouldn't want to fix that, as it's cosmetic, and will just go back to being melted.
I guess what I'm asking is, would stuff like that end up scaring off buyers, or would they appreciate the honesty? We have nothing to hide and except for not updating the home, it's extremely well maintained and I've gone above and beyond in materials when doing so. New roof and paid another $1,500 for "pro" shingles, HVAC two years old done by local contractor not lowest bidder, new water heater professionally installed, etc. Heck I replaced all the electrical plugs in the home as the ones that came with the home (original) were the $0.50 ones and were all dingy. We used quality paint so re-painting will be easy...list goes on.
Home is in the $250k-$260k range. 3/2.5 w/ garage, NE Raleigh outside 540.
I never exaggerate on important topics like this. Your posts indicate you are a fan of extreme intrusive
government over-reach. You may reasonably infer that I am not.
I might be a bit sarcastic, but your playing of the silly "scam" card to support your current desire to have your government order the details of transactions merely to serve your family hankerings is clear.
As a seller I plan to pay for a pre-inspection, um, inspection to figure out what needs to be fixed beyond what I know needs to be fixed.
For a couple hundred bucks I know what would hold up a sale, and can address it on my own time vs being under a gun to do so come sale time. I figure I'd get the money back doing the work myself, or at least being able to take bids.
The only concern I have is things that the inspector thinks are issues that really aren't, or for example have existed for a decade when we bought the house, that are still the same (we have a small 1'x4' section of vinyl siding that has been partially melted a bit by the sun reflection, but it hasn't changed since we bought it). I wouldn't want to fix that, as it's cosmetic, and will just go back to being melted.
I guess what I'm asking is, would stuff like that end up scaring off buyers, or would they appreciate the honesty? We have nothing to hide and except for not updating the home, it's extremely well maintained and I've gone above and beyond in materials when doing so. New roof and paid another $1,500 for "pro" shingles, HVAC two years old done by local contractor not lowest bidder, new water heater professionally installed, etc. Heck I replaced all the electrical plugs in the home as the ones that came with the home (original) were the $0.50 ones and were all dingy. We used quality paint so re-painting will be easy...list goes on.
Home is in the $250k-$260k range. 3/2.5 w/ garage, NE Raleigh outside 540.
You surely will not scare buyers away with your plan. Well, anyone you would scare away really isn't ready for homeownership. As Vicki said, seller inspections prior to selling was one of the original intents of the current DD process.
If you want to communicate even more clearly to buyers, you lay out the home inspection summary, marked up with, "Repaired" on all items that you have taken care of. With receipts, as applicable.
And, you may also clarify to buyers agents that you will address real dealbreakers like foundation issues, or whatever, but don't bother you with a sticky door or other nickel-dime stuff their inspector may indicate.
It is great you want to do right by your buyers, and want to give a great product to market.
Honestly, you hardly would have to do much in the current market. Junk is flying off the market. If the market tilts to favor buyers for some reason before you sell, you just put yourself in a stronger position than most other sellers.
Oh, and provide other docs...
Your disclosures, your survey, HOA docs or links, the plat map. Online and on MLS.
A floor plan is great, if you have one, or can sketch one.
I can see letting the potential buyer “rent” the property during the due diligence period. Conventional rule of thumb might be 1/240th of the purchase price per month. That should be the legal limit of the DDF.
Other than that it is simply a bribe to have the seller take that offer.
First time buyer or experienced buyer the whole system is ripe for abuse. And abuse is what is happening.
I can see letting the potential buyer “rent” the property during the due diligence period. Conventional rule of thumb might be 1/240th of the purchase price per month. That should be the legal limit of the DDF.
Other than that it is simply a bribe to have the seller take that offer.
First time buyer or experienced buyer the whole system is ripe for abuse. And abuse is what is happening.
1/240th.
So, on a $400,000 listing, you would propose a legal limit of $1666/month rent/DD Fee.
Would you expect a daily pro rata, or just a monthly fee?
Gee...
I wonder how folks might feel about someone then writing a $480,000 offer on that $400,000 listing?
--with a small or no DD Fee
--with an $80,000 EMD
--a 3 day DD Period,
--AS IS, "Seller will make no repairs"
--closing in 22 days
--with an addendum stipulating buyer will pay contract price if an appraisal comes up short,
--maybe even a cash sale
--offering the sellers 6 weeks possession after closing for $1.00
DD Fee is hardly the only competitive factor in a successful offer.
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