Before a seller places a property on the market they need to have all property inspections performed before they self market or list for sale thru a Realtor.
The reasons that performing these inspections before you seek a buyer are so important include:
- Establishment of price
- Learning the exact nature of the property
- Misrepresentations
- Avoiding price renegotiations
- Error and omissions insurance coverage
- Maintain arms length negotiations
Reason #5 is entirely for the Sellers self-protection.
The inspection companies (and every professional) that the seller hires, must possess and show proof of proper error and omissions insurance or general liability insurance coverage. These insurance certificates are to be requested and obtained by the seller before any work is paid for.
The property inspection company is providing the seller with a fairly in-depth report concerning the exact nature about the property condition. This report will become the basis by which several different groups will form some very important decisions upon. The sellers shall base the worth of the property on the condition of how the property does or does not compared to other properties. Buyers will use to it formulate what they believe the property will need for repairs or improvements in the immediate future.
If the analysis of the inspection company should contain any incorrect information the sellers must have the security in knowing that they reiterated information that came from a reliable and fortified entity and that they are protected not just by the inspection company themselves but also by the insurance company that insures the inspection work.
Coldwell Banker Residential Brokerage, part of the largest real estate sales companies in the country has customers sign a “Disclaimer regarding service providers” which states the following “Coldwell Banker has not conducted an investigation into the qualifications or financial status of these service providers. So if the largest sales company feels the need to use this disclaimer the seller should demand that the service provider has adequate insurance coverage.
”It is nice to believe that the firm that is hired will stand up and cover their work by making good on any errors or oversights. However a seller needs to be guaranteed that this is actually the case? Sellers do not know the financial shape or ability of the inspection company as to whether they are able or not to make the seller whole after an unexpected issue arises. The seller is on a completely different footing if they know, in advance, who the actual insurance provider of the inspection company is.
At some point in the sales process it will become inevitable these reports are performed.
It is entirely in the SELLER’S BEST INTEREST to maintain this control and have these inspections performed at their own expense. In the long run it will always save the seller time, aggravation and money.
By demanding that the home inspection company a seller chooses to use has proper insurance coverage, a seller is in the position where the work will be guaranteed by two companies, the inspection company and their insurance company. Sellers cannot afford to risk their home sale to inadequate risks and hoping an inspector has insurance is just not good enough, they need proof.
James Joseph