Pre-bidding: property inspection

Most real estate auctions have between one and three open house sessions prior to bidding. These generally occur some days before the auction itself, and at the very least, the day of the auction immediately before bidding.

These open houses provide both the agent and buyer a chance to examine the property first-hand, and are an integral part of forming an accurate sense of the property’s value (and ultimately, what maximum price to bid). Much like a buyer’s agent showing a property to a prospective buyer in a typical transaction, this opportunity provides the agent a chance to scrutinize the interior and exterior of the property for material facts (those adversely affecting its value), and bring these observations to the buyer’s attention.


Prior to listing the property, listing brokers also need to conduct a due diligence investigation, gathering all the property facts any prudent buyer and his agent might want for a determination of the property’s value. The listing broker provides these property disclosures, such as the TDS and NHD, to the buyer and buyer’s agent at the open house, as this is the first practicable opportunity for the broker to make these disclosures mandated by statutes. [Calif. Civil Code §2079.14]

The prudent agent poses extensive inquiries to the listing broker or listing agent present about their knowledge of the property during the open house. The listing broker and his agent are legally required to respond honestly to all questions to the full extent of their knowledge when asked by the buyer’s agent or buyer. Transparency in brokerage is agency law.

The agent uses an Open House Agent Interview Sheet to guide his conversation with the broker and ensure all relevant questions are asked and answered. The interview sheet systematically covers information concerning:

  • the seller/owner/occupant, such as his reason for selling [See first tuesday Form 320-2 §1];
  • the property itself, such as its age, specifications, zoning uses, service providers of the property and whether the property is located in a common interest development (CID) [See first tuesday Form 320-2 §2];
  • the location of the property and its surrounding area, such as a description of the property’s neighborhood, area amenities and impressions of traffic/parking conditions [See first tuesday Form 320-2 §3];
  • third parties with knowledge of the property, such as neighbors and police information on neighborhood security [See first tuesday Form 320-2 §4];
  • terms of sale, such as sale price expected, whether the property was previously listed, and if so, at what price and when [See first tuesday Form 320-2 §5]; and
  • miscellaneous property facts, such as whether a tenant occupies the property and information about the listing broker. [See first tuesday Form 320-2 §6]

While reviewing the interior of the property and filling out or confirming a TDS form, the agent checks for:

  • the condition of walls, ceilings, floors, floor coverings and windows;
  • signs of mold damage or musty odors and unusual dampness;
  • properly installed insulation and ventilation;
  • the size of living rooms, bedrooms and bathrooms, as well as natural light sources to these areas;
  • kitchen layout and ease of upgrades;
  • the size and dimension of storage and attic space; and
  • water pressure and signs of damage from leaks in the kitchen, bathroom or laundry rooms.

During the open house, the agent conducts his own physically examination of the exterior of the property and neighboring area. As part of his due diligence investigation, the agent specifically examines:

  • the condition of the paintwork and exterior walls;
  • the condition of the roofing, gutters and downpipes;
  • the condition of any gates, fences or walkways;
  • the condition of any pools or outdoor spas on the property;
  • the landscaping of the property;
  • any exterior buildings, such as a garage, casita/granny flat or tool shed that is sold with the property;
  • noise levels of the neighboring area;
  • traffic in the surrounding area and available street side parking;
  • effective drainage; and
  • proximity to neighboring schools and local amenities. [See first tuesday Form 320-2]

A TDS is best filled out by the buyer’s agent as a simple checklist containing all the important property elements and conditions to look for during their review of the property at the open house. [See first tuesday Form 304]

Editor’s note – For more information concerning the agent’s and buyer’s bidding strategy prior to auction and the role of the buyer’s agent during the auction, see the upcoming Part II of this article series.