Traditional Transaction vs. The Clear House

Traditional Transaction
The accepted routine of a real estate transaction is for a home-seller to hire a realtor to put his/her home on the market. The real estate agent does a comparative price analysis for similar homes in the area and determines a listing price. The house is then placed on the market, and the seller waits for potential home-buyers to make an offer. Offers are made, and are most often below the asking price to engage in bargaining, but are occasionally above the asking price for a very desirable property.

Regardless of the offer on the property, the general ASSUMPTION is that the house is in acceptable condition, meaning the roof is intact, the plumbing meets building code, etc. The condition of the house is absolutely critical to the sale, and the only way to know the condition is to complete a home inspection (traditionally at the expense of the home buyer). This occurs after an official offer to buy has been made and rarely, if ever, is a home in perfectly acceptable condition. The deficiencies can vary greatly from house to house, and they can range from a few hundred dollars to tens of thousands of dollars for major problems.

This is the beginning of the most difficult stage of the transaction and can be a painful experience for all parties involved. The home buyer uses the information from the home inspection to compile a list of items that the home seller must either fix, or deduct from the asking price.

The transaction is then usually delayed while the home seller gets individual contractor quotes for each of the deficiencies to assess the total cost, a delay which impacts the home seller, the home buyer, and the real estate agents.

Impacts to home buyer:

• The home buyer can begin to have doubts about the property, even though many of these problems will arise in any transaction
• They can feel trapped after having already paid $350 for an inspection AND made a deposit (usually $3,000-4,000 which is not always refundable).
• They are potentially missing out on other houses going on the market, should they decide to back out of this transaction.

Impacts to the home seller:

• The house, which is listed as “under contract,” is basically “off the market” and is no longer being viewed by other potential buyers
• The important “days on the market” figure steadily increases (a lower number is usually more desirable to prospective buyers)
• They may have another home purchase contract in process that is contingent upon this sale
• And worst-case scenario the buyer backs out, which means the process starts all over.

Impacts to realtors:

• The realtors have spent weeks on this transaction, all of which will be lost if the buyer backs out.
• They are in the difficult position of acting as intermediaries between two potentially frustrated parties
• They will have to repeat the experience if the buyer backs out.

Now, imagine a process in which all of this can be avoided. That is the Clear House process, the backbone of which is the PRE-SALE INSPECTION. This type of inspection is identical to the standard home inspection, it simply occurs before the house goes on the market. Savvy home-sellers have been purchasing pre-sale inspections for years, which allow them to know all the deficiencies of their property and make the necessary fixes BEFORE they put it on the market. The logic is simple: Problems with the house WILL SURFACE ANYWAY (during the home-buyer’s inspection), so avoid the frustrating surprises altogether with a pre-sale inspection.

This type of inspection is recommended by ALL of the accredited home inspection authorities, including:
-The American Society of Home Inspectors (ASHI) www.ashi.org
-The California Real Estate Inspection Association (CREIA) www.creia.org
-The National Association of Certified Home Inspectors (NACHI) www.nachi.org


The Clear House
The Clear House uses the basic idea of the pre-sale inspection, but takes the process a few steps further, adding much more value and transparency for ALL parties involved.

While a pre-sale inspection is of great value, the standard means in which it is conducted has its limitations; limitations which are avoided by using The Clear House.

First: The inspection report gives the seller a chance to fix deficiencies before putting the house on the market, but it cannot necessarily be used as definitive proof in the eyes of potential buyers. Buyers should not and will not necessarily believe the legitimacy of the inspection report due to the seller’s potential conflict of interest in hiring an inspector, and should still have their own inspection completed. In the case where the home seller hired a legitimate inspector, few or no additional deficiencies will surface, and the transaction will proceed smoothly. But in the case where a sub-par home inspector was initially used, all of the hang-ups mentioned above will still hinder the transaction. Regardless of the outcome, two independent inspections will have been purchased.

Second: As alluded to above, not all home inspectors are created equal. Did you know that most states (CA included) do not even require home inspectors to be licensed? Considering the amount at stake in the average home transaction, the home inspection industry is one of the most un-regulated around. Click the following link to see a complete state-by-state listing of the minimal requirements for being a home inspector…you might be surprised by what you find: http://www.home-inspect.com/legislation.asp . Taking a realtor's or friend's word on the quality of a home inspector can work fine, but there are only a few criteria in which the quality of a home inspector can be objectively gauged:

-Having successfully passed the National Home Inspectors’ Examination (NHIE)
-Certification from ASHI: passed NHIE and competed at least 250 insp.
-Certification from CREIA: same
-Certification from NACHI

The Clear House takes all of the confusion, stress, and delays out of home inspection process, and provides a simple solution to ALL parties involved in the process.

First: The home seller signs up with The Clear House before placing the home on the market. During the sign up, they list available time slots in which they (or their realtor) can be present for home inspection.

Second: The Clear House uses its pool of pre-approved inspectors, ALL of which meet the above criteria, and randomly selects an inspector. Inspectors can and do miss things, which is demonstrated by most of them carrying Error and Omission insurance. The Clear House is a completely independent third party, and we only sub-contract the top 20% of inspectors who meet ALL of the aforementioned stringent criteria. This negates the need for a home-buyer to have their own inspection completed.

Third: The inspections are completed and published on The Clear House website (only viewable by the home seller at this point), so the home seller can view and print a summary of all the inspection findings.

Fourth: Two options: A) The home seller has all of the work completed (which they can show on the website) and lists the house for sale, referencing the The Clear House as INDEPENDENT CONFIRMATION of the home’s current condition. B) the home seller lists the home at a lower price relative to the existing deficiencies, aka: ACTUAL MARKET VALUE. The lower price can be very helpful in attracting buyers! Both of these options are powerful marketing tools, and will give buyers much greater confidence when placing a bid.

Fifth: When shopping for a home, the home buyer will see a listing that advertises The Clear House’s PRE-SALE INSPECTIONS COMPLETED. By logging into The Clear House they will be able to view an inspection summary and the complete inspection report for the house. The summary will also show what repairs the seller has completed in response to the inspection.

Sixth: The home buyer places a bid, has no need for another inspection after reading and understanding The Clear House’s objective non-conflict of interest system, and the transaction finishes smoothly and promptly. Since The Clear House collects a flat fee for each transaction, we have no incentive to engage in unethical practices. We are determined to add efficiency and transparency to the home inspection industry, and have no motive to provide inaccurate information. We neither lose nor benefit from a home’s final sale price. Home inspectors are currently most often referred by realtors. Most realtors quietly refer to GOOD home inspectors as “deal-killers.” Thus, they have incentive to recommend inspectors that will not find many problems. These inspectors can then count on plenty of return business from the realtor because they grease the wheels of the sale, directly benefiting the realtor and the inspector, all at the expense of the home buyer.