Real Estate is not easy.
The decision to sell is not an easy one. Will the home sell in a reasonable time? How much money will I be able to roll into my next house? Will I even find a good, next house? Selling a home really boils down to real estate demand, condition the individual home and pricing strategy. Some sellers wonder if having a property thoroughly inspected before it goes on the market is a smart strategy. In certain scenarios conducting a pre-listing home inspection will allow the seller to address condition well enough to support the most advantageous pricing strategy.
Home inspections have traditionally been bought and paid for by homebuyer’s. Most inspectors report better than 99 to 1 buyers to sellers as clients. While this is what agents are used to, it does not preclude the occasional effective use of a listing home inspection.
If you are in a “seller’s market” cycle, you may consider a pre-listing inspection pointless. On the surface, when there are more buyers than sellers that idea holds true. In reality, every house is different and must be considered on it’s own merits within the prevailing market conditions. Experienced agents have examples of homes that languished when they should have sold. It is also possible for different price brackets to have different conditions in the same market (e.g. sellers market below $300,000, buyers market above $750,000, even market in between).
It’s a Matter of Condition.
Having a home inspected by an independent professional helps the current owner identify in advance those issues that a buyer’s inspector will find. A seller can then address those issues, which may cause concern for a potential purchaser. Additionally, it supports the idea that the seller is honest and forthright in providing condition information or disclosure on the home. It can eliminate worry about last-minute inspection repair delays and future risk for both parties.
Stay in Control of your Property.
When a seller has a home inspected, they stay in control of the repairs. There will be no need to negotiate repairs with a buyer or consider his repair preferences. As long as the seller uses reputable professionals and insists on quality work, there is no reason for a seller to worry about future buyer concerns. Additionally, the seller is not working against the clock created by a scheduled closing. This allows more time for biding repairs and careful work.
Based on the understanding that no home is perfect, it is important to note that a seller need not repair everything found by a pre-listing inspection. Any inspector will find relatively minor, routine repairs. These are items that will not cause any significant failure or damage if not repaired or items that could be scheduled later. It is not unusual, even, in a buyer’s inspection scenario for a seller to repair or compensate for only the major items.
Is Disclosure Mandatory?
A major concern that Realtors have about pre-listing inspections is the need to disclose the findings to any future buyer. They are concerned that buyers will offer less for the house. That can happen. Alternatively, a pre-listing inspection, followed by appropriate repairs and bids for non-repaired items allows the agent to accurately price the house and defend his or her position. Rather than look at it as a negative, it should be viewed as providing better information. Many buyers make a “gut calculation” on the cost to “fix” a house and factor that into their offer. Pre-inspected houses can eliminate that calculation and can be sold as less risky to a buyer than a non-inspected house.
Critically, you must be honest about your homeowner skills and finances. Pre-listing inspections are not a good idea for home sellers with no funds to make repairs, no “handy” skills or a tendency to buy cheapest repair work at the last minute. If a pre-listing inspection is conducted in a “challenged” seller scenario, it should only be with the acknowledgement that the home is being priced under market to compensate for the issues found.
One word of caution: If the seller and their agent expects a buyer and their agent to respect the pre-listing inspection, a well-respected inspector must be used. Sadly, many buyers will wonder if they can trust the quality and objectivity of the seller’s inspector. The only way to address this problem is for the seller to hire a well-respected inspector who is considered to be thorough and fair. Home inspectors have a risky profession. A well-reputed inspector will call it how he sees it because that is the best way to protect all parties, including himself.
It is not a Perfect World.
If a buyer does hire their own inspector, there is a 100% chance that the buyers home inspector will find things not found by the seller’s home inspector. Reasons include that time changes conditions and that each inspector has a different experience and background. Ultimately, as long as the report differences are small items it is not important.
Occasionally, however, a buyer’s inspector will beat up a house for the sole purpose of making his competition look bad. Not all inspectors are professionals.
A pre-listing inspection carries some risk, however, it can also carry the reward of setting your home apart. One large national home inspection franchisor claims to have conducted a study indicating pre-inspected homes sell 30% faster for 3% more. While this is a ten year old study, the general trend jives with our experience. No risk, no reward.