Home inspection findings by Frank Schulte-Ladbeck, Professional Real Estate Inspector TREC# 9073

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A way for Sellers to Inform Buyers:  “About This House” Book

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Have you noticed sellers offering binders that contain information about their home? This trend is growing, and buyers are asking for information from sellers that have not been traditional, so here is what I think should go in an “about this house” binder.

Selling has changed. Marketing has changed. Yet they have not really changed all that much. The principles are the same, but the how and what have shifted. In the housing market, this may take a bit longer, but you can already see signs of what may become standard practices. Video tours of the home posted on the web. Home listings on the web and real estate search engines are already common. The fad of creating a specialty website for that specific home is not going anywhere, but a web page dedicated to that home on a site is sticking around. The aspect of house for sale marketing that I find growing is the need for information. A home inspector is an information source, and the idea of having an inspector investigate the home has become common place. However, this need for information is increasing, and we may see energy raters becoming a consistent part of the process. We do not have a standard system for rating a home for energy efficiency (there are several standards in use, but we may see an optional system codifying energy rating on a national basis soon). In the mean time, buyers are asking questions that were not too common in the past, but may be questions sellers may want to answer. An aspect of marketing has always been to take facts about your product to present them in the best light. What has changed in the housing industry is the growing concern about energy efficiency, so why not give this data to a potential buyer. This can be accomplished by producing an “about this house” binder.
    The idea for a binder or book describing the house or giving information to a potential buyer is not new. I will admit that this is not a common practice, but I do see more of these binders showing up in homes for sale. The other trend is sellers or their Realtors wanting to be in the house when buyers appear (or their home inspectors are there) to head off questions by answering them on the spot. Two problems with this method: 1) the buyer knows that you are trying to show everything in the best light, so they do become suspicious; and 2) you or your Realtor may not always be present. A binder can present facts that the buyer may wish to know, and you can explain these facts, which can help you to seel this house. So what should go into this binder? That is up to you, but here are my suggestions.

1) The seller’s disclosure- I have sellers ask me all of the time if I had read the seller’s disclosure. This document is not often presented to the home inspector, and we have the tendency to see such documents with suspicion; however,  you as the seller may have declared something major, and the buyer should be aware of it. On a recent home inspection, the seller was annoyed that I had come back to complete the inspection (I could not complete it the first time due to the fact that he had decided to have a garage sale which went through the entire home, along with a sleeping daughter in a room). One item that I had to inspect was the cooling part of the air conditioning system. He asked why, because he had stated that the upstairs unit was shot and needed to be replaced, and that the downstairs was working (turned out not to be working at its best). I understand his annoyance, but I had to inspect more than that system.  I am not sure that my clients had read the seller’s disclosure, and that may have affected them placing an offer on the home, and the seller could have moved onto a more interested party.

2) A seller’s disclosure may not be the best document for a seller. You are laying out the cold facts of what is wrong with the home, and you would like to focus on the positive. Maybe the section after the disclosure should detail what you know. For example, if your air conditioning unit has to be replaced, why not go into the story as it were. Show the documentation from the professional who worked on the unit, and then have an explanation piece, stating that is why you have lowered the value of the home from what others in your neighborhood are selling their homes. This helps place the positive spin. I would start with an explanation page, and then the documents.

3) Utility bills- many buyers are thinking about what will it cost them to live in this home. We know that fees for a homeowner’s association could exist, and yard care can vary, but we should have an idea of cost. The home inspection report can lead us to discover other possible repairs, which we can discover a repair cost. Utility bills are the means for buyers to understand energy efficiency, so buyers are asking about what those costs could be. Showing them your utility costs is a good first step, but this may be misleading. My suggestion is not to present the buyers with a utility bill, but rather a sheet listing your expense with a little explanation. Have two columns: one for gas; and one for electricity. Have twelve rows for the past year. List how much you paid, and then have a space for a little explanation. All my children came home for Christmas, so the electricity bill went up. We had record breaking heat in August, so we used more electricity because of the higher strain on the air conditioning. This month was low, because we were gone on a month long vacation. The explanations do not have to be very detailed, but a basic indication as to the reason for the cost can be helpful. You will especially want to explain high jumps up in the cost, while price decreases may not matter as much.

4) Highlight improvements- maybe this section should be first, and the seller’s disclosure last. Not every buyer is going to like your taste in decorations or design choices, but they may not notice some design choices that can benefit them. For example, my son’s room has shutters, as does my front room. Many homes have plastic shutters, or some other material that seems flimsy. I could point out that the shutters in my son’s room have a wood exterior with a foam insulation interior, which is great for energy efficiency. The front room shutters can be highlighted for being wood. I can point out new hardware for door handles, and I can make this section into a tour of how the home was improved. Buyers may not spot or appreciate these features, but you can cause them to focus on these improvements.

5) You may wish to have a section that highlights the neighborhood. Some consumers are wondering if they can move around the city without a car. The buyer may have children, so the school’s are important, or the local park. We do not live in a vacuum, so knowing about the neighborhood could not hurt.

6) This seems a funny thing to add to a book which is meant to convince the buyer that this is the right house for them, but having the equipment manuals sends a message. One question that I am often asked is “how does this work?”.  We live in a house, and we forget that the equipment is not something which is common. I have seen only three homes with whole house vacuums in my career as a home inspector. How many people would know what these are, or how they work? That is an extreme example, but I could also point out thermostats. There are so many types on the market, and older homes may have the latest invention from twenty years ago, which is not used anymore. Trust me, thermostats can become confusing. The real benefit of this section is that it gives a positive impression: “this house has been maintained”.

What would you put in the book to convince a buyer that your house is right for them? I think that the book/binder should be basic. Overwhelming a buyer with information will cause them not to look, even though may want certain pieces of information. I have six sections, and only one section may become big, and that is the equipment manual portion. If this is to bulky, separate the manuals into their own binder. Place this second binder near the first one, and you will continue to give the same impression. If the manuals are in another binder, then the first binder may contain items like a survey, or the home inspection report that you had done when you bought the home. You can then write what you have done to address those issues. Perhaps you can suggest what you think would help sell your home.

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© Frank Schulte-Ladbeck Professional Home Inspector Houston, Texas
Frank Theodor Schulte-Ladbeck
home inspector, TREC# 9073
Houston , Texas , 77063 United States

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