Sometimes you really don't want to know.
Here's a hot tip for all you aspiring newspaper reporters out there (both of you): don't ever call an article "What Kind of Fool Am I?"
Because someone might tell you.
Alas, this advice may be too late for one June Fletcher, Wall Street Journal housing reporter, who in the May 15th edition of that august and incredibly credible publication uses that catchy title (or maybe it was her editor's inspiration) in response to a reader questioning the wisdom of pre-listing inspections. Reader is miffed that her real estate agent "told me to get my 16-year-old house inspected before listing it". Right away we get Reader's drift: what could possibly be wrong with a 16-year-old (or as agents like to say, 16-year-new) house?
Perhaps like many, Reader thinks that homes don't age, at least not during their first sixteen years. Perhaps like many, Reader thinks that new homes are delivered to their owners without blemish or defect. Perhaps like many, Reader has never been a plaintiff in a lawsuit against a homebuilder for thousands or even millions of dollars in construction defects that appeared before the new-home smell wore off.
Well, wouldn't you know it, but that darn inspector does find a few small things wrong with her 16-year-new house that Reader wouldn't mind fixing, but he also finds a biggie, a roof near the end of its useful life (although "it has never leaked", according to Reader, which doesn't mean it won't leak like a sieve the day the new owner moves in) that'll set her back eleven grand. "I don't want to spend that, but now that I know about this problem, my agent says I must either do the work or disclose the problem on a form. Was I foolish to have this inspection done?"
No, consoles June, but Reader's experience is why June doesn't like pre-listing inspections. Sure, "an inspection gives you a head's [sic] up on what's wrong with your home, and a chance to fix problems before buyers notice them". Sounds good so far, June. But "on the minus side, knowledge of a home's un-repaired flaws can put you at a distinct disadvantage when it comes to negotiating". Why's that, June? Because disclosing "un-repaired flaws" (is there any other kind?) "often scares off buyers or encourages them to make low-ball offers".
So here's the straight skinny from June, WSJ housing reporter. You, Seller, just sit in your rocker "blissfully unaware" of any problems your home has. Then, of course, Buyer's inspector finds every single one and a few more. But that's bad, right June? No, she insists. In fact, you've got Buyer right where you want him: "you're actually in a strong position to negotiate what, if anything you'll pay for repairs". How's that, June? Because by then, Buyer "has made an earnest money deposit, and is both emotionally and financially invested in your [sic] acquiring your home".
Slick, huh? And what a lesson! In a real estate transaction, slick is better than full disclosure. I'm sure any arbitrator, judge or jury would agree.
After reading this exchange, I guess my first question would be, did Rupert Murdoch fire all the editors and proof-readers when he bought the Journal? (And would anyone notice?)
My second question would be, what housing market in what parallel universe does June, WSJ housing reporter, report on?
My third and final question would be, just how dumb and passive does June think the average buyer is?
Now let's run through what'll really happen when Buyer finds out that the house of his dreams, the house he's scrimped and saved for years to buy, the house that'll commit him to big-time long-term debt, the house friends assure him is a maintenance black hole and veritable snake pit, the house everyone tells him he should buy next year or a hundred years from now but not now no no no not now, the house that's Hoovering up every spare nickel he's got for the down payment and closing costs and maybe a few essential upgrades like granite in the kitchen, yes friends, that house, needs an $11k roof.
That's what's they call a blindside hit. As you'll recall, Seller was "blissfully unaware" of the condition of her roof, which conveniently relieved her of her duty to disclose it. But we can't call Buyer "blissfully unaware" of that tired roof, nor can we call him "blissfully aware". No, we can't. What we can call Buyer is "apoplectic". Because Buyer's been feeling fight-or-flight ever since he got in contract, and Buyer's blood pressure spikes forty points when he reads the inspection report. Because it's all true: the seller's out to screw him, and maybe his own agent is too, and buying a home is a nasty business that can and should be deferred indefinitely or until the next dream home pops up.
That's the "flight" part of fight-or-flight: adios, Seller, I'll take my fully refundable earnest money deposit ("certain conditions apply", as they say), the one June thinks handcuffs me to this lousy stinking transaction, and go skipping off. That's Seller, the one with the shocked look on her face.
And then there's the "fight" response: okay, Seller, it's hardball time. I want a new roof before close of escrow, of course, and then I want all the small items on the report taken care of as well and, while we're at it, I'd feel a whole lot better about you and this whole transaction if you threw in a few grand to cover my closing costs. That's Seller, the one with the shocked look on her face.
And all of this panic and nastiness would have been avoided if Buyer had simply known, before making his offer, that the home needs a new roof.
Here's June: "So I think sellers should avoid pre-listing inspections. I realize that this advice runs counter to that of many real estate agents, who say that a pre-inspection is a great marketing tool that shows sellers care about maintenance. [We do? I thought it was to keep our sellers from having shocked looks on their faces. And to keep them out of court.] But I can't help but suspect that the enthusiasm of agents for pre-inspections is also a bit self-interested, since if buyers discover a defect that wasn't disclosed up front, they'll be more inclined to blame (and sue) the inspector than the agent."
Two questions: first, what housing market in what non-litigious parallel universe does June report on? Second, whose pockets do you think are deeper, some home inspector who's President, CEO, lead independent director and head janitor of his own one-man outfit, or Joe Agent with MegaBroker Realty, offices in all fifty states? And if a certain housing reporter can't answer that question, I know a whole bunch of attorneys who can. And while we're at it, let's drag Seller into court too, not for any good reason, but because we're mad and we can and we want to.
Which brings me to June's other objection to pre-listing inspections: "They're costly". In Pittsburg, PA where Seller lives, June is reliably informed that home inspections cost between $300 and $500. Since June is up-to-date on the cost of services in Pittsburg, PA I wonder if she knows how much a good Pittsburg real estate attorney costs per hour?
But what's really ironic is that the only actor in this farce who knows his lines and delivers a credible performance, Reader's agent, is the one who comes out looking dirty. In the pages of the august and incredibly credible Wall Street Journal.