Pre-Listing Home Inspection
One of the most stressful steps in the real estate transaction—for both buyers and sellers—is the home inspection. I have seen too many deals fall apart because the home inspection reveals a need for repairs about which parties just can’t agree. It’s frustrating for everyone. In many cases, this situation is preventable. So I thought I’d share a blog about how sellers can be proactive and get a pre-listing inspection. This blog will outline some benefits of having a licensed home inspector go through the home before it goes on the market. This is not done very often. But in my market, we’re seeing it more specifically on homes that have been gutted and renovated by investors, and I think it should be more widely utilized.
I want to appeal to sellers especially in this article because this task is ultimately their responsibility. Sellers, when you have your home pre-inspected it shows buyers you’re serious about selling and fair in your expectations for the sale. It also helps potential buyers feel assured that “what they see is what they get” as it relates to their new home.
In my experience, sellers have not been very receptive to the idea of having the pre-inspection, and they are also concerned about the added cost and whether it will really benefit them in the sale of their home. In short, my answer to that is a resounding YES, this extra effort will help tremendously in the sale because of a few important advantages.
Let’s go over my top five benefits of a pre-listing home inspection.
It removes surprises. This is huge if you’ve ever been through the inspection process. Both buyers and sellers just wait to find out what defects and issues might be hiding within the house. Sometimes there are only minor repairs to address, but other times major components of the home like the roof, foundation, or plumbing have problems of which the owner was unaware. If the home has been pre-inspected, any issues can be outlined and shared up-front which will lower stress on both sides.
Pre-inspection can speed up the transaction process. Many times, the results presented on the buyer’s inspection can take a great deal of time to plan, get estimates, have work done, and then get re-inspected. Remember, all of this has to be negotiated as well. If the sellers have done a pre-inspection, they can be open and informative with buyers and address issues ahead of time. Additionally, the sellers can share maintenance tasks that will need to be addressed by the buyers in the coming years.
Sellers can price the home fairly. With information from a pre-inspection, sellers can factor in updates and repairs when they list the home. In addition to considering current market values, sellers have to be aware of what certain projects and repairs will cost on the buyers’ end. At this point, sellers can choose to lower the asking price to accommodate the tasks buyers will have to invest in, or they can have repairs and updates handled and roll that cost into the asking price. My recommendation is to go over all of these decisions with your agent. It is best to handle specifics on a case by case basis, depending on the condition of the home.
Pre-inspection can give sellers a boost in negotiations. Having pre-inspection information and repairs completed really helps sellers justify their asking price and “stick to their guns” if needed. When data is in-hand, it provides the proof sellers need to get the most value out of the sale. When buyers sense potential issues or problems with the home, they are much more likely to offer a substantially lower price for the home. They’re just giving themselves a cushion, but if issues are well-documented and especially if they’ve been repaired, buyers will be more inclined to agree to a price closer to asking.
Removes a major buyer road block. Agents and investors discuss “road blocks” all the time. These are the thoughts buyers have throughout the process that: 1) prevent them from touring a home; 2) make them hesitate to make an offer; 3) cause them to back out for whatever reason; and 4) ultimately prevent them from making it to the closing table. A major road block for buyers is the unknown issues that are sure to pop up during the home inspection. While it is recommended that all buyers still get their own inspection done after the home is under contract, a pre-inspected home becomes much more attractive and realistic because a major list of “what if” situations has been revealed. When buyers can see exactly what they’re buying, whether the home is brand new, renovated, or needs some work, they will feel much more comfortable and confident going ahead with the transaction.
I hope these points have helped show you how a pre-inspection can pave the way for a smoother transaction. Sellers, make your property stand out among the others by taking this extra step and providing transparency and helpful information. I promise it will lead to a quicker sale.
As I mentioned earlier, investors have been a bit ahead of the rest of the market because they already have their flip properties pre-inspected in most cases. If you know an investor, I suggest talking to him or her to get some insight related to your specific market. Real estate agents are also a fantastic resource because they can provide several reliable inspectors. Also, a note to other agents: If you’re not at least suggesting the idea of a pre-inspection to your clients, consider doing so moving forward. It can alleviate a lot of stress for you too!
As always, I hope this information has been helpful and relevant. Feel free to reach out with questions anytime!