What Is A Pre-Auction Building Inspection?

 A Pre Auction Building Inspection (PAI) is a critical element of real estate investing. In the case of a real estate investment, the value of the property could be significantly reduced if a building is not properly inspected prior to listing it for sale. A good PIA will determine the presence of any conditions that may affect the ability of the property to sell and the condition of its exterior as well as interior. A significant finding in a PIA is an issue that would substantially decrease the price of the property.

A Pre-Auction Building Inspection is performed by trained professionals who are skilled at identifying the presence of various types of conditions that can negatively impact the ability of a property to meet the demands of the buyer. These conditions include pest infestations, structural or electrical problems, visible signs of wear and tear, visible deterioration, and many other issues. While these conditions may not typically threaten a new property's resale potential, they still have the potential to reduce the overall value. When a property's condition is discovered well in advance of listing it for sale, it can significantly increase the amount of money that the seller receives for the property.


Most buyers are eager to buy a home without making a commitment to do so. A prospective buyer may not be able to verify that the home is in excellent condition. If a buyer chooses to proceed with the inspection without having the property inspected by a professional inspector, there are a number of problems that could occur. Buyers could pay more than is necessary for the services and the seller could receive negative publicity for a reportable problem that was allowed to go unchecked. The seller may also be held liable for injuries or property damage that occurs on the property due to the negligence or substandard condition of the home.

In most cases, a seller must prepare the property for an inspection by obtaining a Pre-Auction Building Inspection prior to listing it for sale. If the seller fails to obtain a PIAI prior to listing the property, the buyer has the right to inspect the home and make an offer at the public showing. If a buyer discovers major problems with the property prior to the showing, the buyer must notify the seller must cure any issues before listing the property.

Once a buyer is fully informed about the expected costs and the responsibility of the seller to correct problems, the buyer can make an offer and proceed with the inspection. It is important for sellers to hire a qualified inspector who will determine the general condition of the property and make reasonable offers. The inspector will provide a detailed report of the issues found and a suggested course of action. The seller may reject the offer, but if there is an inspection offer, the seller must accept it if the inspector determines that it is justified.

While the inspector is conducting the inspection, you will be kept informed of progress by written reports. You can request certain conditions to be addressed during the PIAI. A pre-approved plan of operation will be provided if requested. If problems are found after the completion of the PIAI, they will be addressed prior to closing. As a real estate investor, you have a right to a fair price. Your real estate agent will be able to assist you in obtaining a fair price based on the property as well as other surrounding homes for sale in your area.




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