Are Seller-Provided Inspections a Sign of Market Weakness?

After hosting a Ballard open house and scoping out several others over the past couple of weeks, I wondered if the neighborhood might be losing some of its luster.

Back when my old house was on the market last July, open houses seemed to packed with super eager out of towners and recent transplants. Almost all of my visitors last Sunday were nearby apartment and condo dwellers who didn’t emanate that sense of “must buy now” urgency.

Out of curiosity, I did a quick comparison of existing single family homes near my old house that were put on the market between June 1 and July 31 of 2016, versus 2017. I excluded off-market sales as well as new construction homes and focused on the area bounded by 85th Street, 15th Avenue, 65th Street and 24th Avenue NW.

At first glance, market conditions seem similar:

  • Of the 21 homes listed between 6/1 and 7/31 last year, 7 stayed on the market for 10 or more days. Of the 22 listed during the same time period this year, 5 stayed on the market for 10 or more days.
  • 12 of last year’s 21 listings sold above asking price. Only of this year’s listings, only 7 have closed as of this morning. 3 were over asking.

One interesting thing I noticed was, more sellers have been paying for pre-inspections and offering the information to potential buyers: 8 this year, versus 4 last year.  As a result, 8 buyers demanded inspection contingencies in their purchase and sale agreements last year, versus only 1 this year.

That’s huge! Inspection contingencies give buyers the option to bail out and often lead to negotiations for sellers to perform or pay for various repairs. Removing this contingency lifts a huge cloud of uncertainty for sellers, especially in cases where there is only one interested buyer.

The question is, have seller-provided inspections become more prevalent because it’s a smart practice? Or are sellers compelled to take this extra step because they are feeling less confident about buyer interest? We may have a clearer picture once more of this summer’s sales close. I’ll keep you posted!

Posted on August 1, 2017 at 1:00 pm
Isabel Wang | Category: Uncategorized

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