About Pre-listing Inspections
There’s a reason why pre-listing inspections are becoming more and more commonplace in real estate transactions. Sellers and listing agents want to have the house inspected before it is listed because they want to know the condition of the house. This makes perfect sense. Not only does this give you an advantage, it can also help sell your home quicker. Homes that have been pre-inspected can allow potential buyers to go from skeptically liking a house to falling in love with it.
Before getting your home inspected there are 5 things you need to know about pre-listing inspections.
1. Know Your House Better Than Your Buyers
Many people put their house on the market thinking their house is in decent condition or simply assume the “as is” clause will satisfy buyers. However, there’s a lot that can go wrong with a house and you don’t want to get the negative news from a potential buyer and their inspector. I once had a realtor tell me why all his listings are pre-inspected. He said, “I want my clients to know their house better than the buyers.” Knowing the condition of your house before it goes on the market ultimately gives you the advantage in the transaction.
2. Minimize 11th Hour Negotiations
Since buyers typically use their inspection report to justify renegotiations, it’s important for you to know your home’s condition. Getting blindsided by significant or even mediocre unknown issues can make an otherwise smooth transaction tip in favor of the buyers very quickly. Buyers have little room for late negotiations for items disclosed before the offer was received.
3. Disclosing the Inspection Results
The downside to pre-listing inspections can be disclosing a report on a house with lots of issues. Remember, when you have a home pre-inspected the results, whether good, bad or ugly, must be disclosed to potential buyers. This ultimately protects you and your agent. I had one client tell me that the inspection report made their house look like a teardown. Yes, sellers can be overwhelmed by this and end up blaming the inspection for driving buyers away. However, you have to remember that, in the end, the buyer’s inspection is going to find everything anyway. Again, sellers have an advantage when they know their house better then the buyers.
4. Strategies for Handling Issues Discovered
So, what happens when the pre-listing inspection reveals serious issues that might affect the sale of the house? There are a few ways of going about this. You can adjust the price of the home to reflect the issues and sell “as is”, or you can make repairs before the home is listed. Once repairs are made, the inspector can return to the house to verify repairs are adequate and provide an amendment to the report. Sellers can also simply provide receipts to potential buyers to show their good faith efforts at resolving the issues.
5. Comparing the Inspection Reports
In the end, the pre-listing inspection report will be compared line-by-line with the buyers report. It is important to understand that no two inspection reports are the same, so brace yourself for some variation. Inspectors vary in their judgment and professional opinion. Some inspectors go beyond the Standards of Practice and call out every possible code infraction and deficiency (for example pointed vs. blunt screws in electrical panels) and some inspectors choose to report simply what is required. However, when it comes to the overall condition of the primary systems of the home, the reports should be similar.