The benefits of a pre-listing inspection
Many sellers might not realize that they have the option to get a pre-listing home inspection – a home inspection that they pay for themselves before ever putting their house on the market. In general, the home buyer adds the completion of a successful home inspection as a contingency to an offer on a home. Once buyers conduct the inspection, they have the power to negotiate with the seller regarding who pays for any necessary repairs, and they even have the power to walk away from the deal altogether.
When sellers have a pre-listing home inspection, they can get ahead of issues a buyer might find in the home and reduce the likelihood a deal will fall through. A pre-listing inspection serves many benefits not only for the seller, but also for his or her agent.
How a pre listing inspection benefits sellers
A pre-listing inspection brings a great deal of advantages to a seller:
It helps the seller and his or her agent more accurately price the home
Sellers who do not wish to fix the issues revealed during a pre-listing inspection can factor the repair costs into the asking price of the home and explain to buyers that while the home has certain issues, they will be getting it for a lower price as a result. Conversely, sellers who do decide to make repairs or who come up with a clean home inspection can ask buyers for more money.
It ensures a smoother, more efficient transaction
When issues are discovered during a pre-listing inspection, the seller can either have them fixed ahead of putting the home on the market or choose to disclose the issues to potential buyers. Either choice will make the home sell faster because it will prevent the buyer and seller from becoming entangled in long negotiations after the buyer has an inspection.
To understand the condition of their home
When a homeowner decides to list their home for sale, typically they have owned the property for a couple of years and know if there are problems, which they may either choose to fix or not fix when they sell the home. These problems are usually disclosed to potential buyers when they are looking at the home, which is not a problem. However, when the buyer is getting their own inspection, they may find that there are a lot of problems with the home that the homeowner was unaware of. The buyers might back out of the sale, or demand that the seller fix them before the deal goes through.
Ability to do repairs in advance
If the home inspector does find defects during the pre-listing inspection, the seller will need to make the decision of whether to fix them or not. If the seller does decide to fix the defects, they have the freedom of making decisions. Sometimes when a buyer’s inspector finds these defects, they want to have their own contractors fix the problems with the home, but on the seller’s dime. This often results in contractors hired for more money than they should be, with preferences that the buyer wants and that aren’t always necessary.
Less likelihood of negotiations.
Quite often buyers will use the home inspection as a point of asking for additional concessions. They will use the home inspection as a means to renegotiate the sale. That’s because they know that there will probably be one or more issues that will come up warranting reconsideration of the price. Negotiating home inspections is a common hurdle in the real estate process.
Not many people enjoy it and for some if can become extremely stressful. You’ll find this to be especially true if the buyer and seller don’t see eye to eye which isn’t unusual. Quite often buyers ask for inspection repairs they shouldn’t because they don’t get proper counseling from their buyer’s agent. There will be a long list of knit picking.
A pre-listing inspection helps you avoid the typical interactions that follow the buyer’s inspection. You are unlikely to learn anything new about your home from the inspection, and neither is the buyer because you have already had an inspection done. Both you and the buyer have been aware of any issues and all repairs from the beginning of your interaction. Negotiations still may occur, but they will probably be minimal.
Reduce the stress of selling your home.
By getting an inspection before listing, you can help eliminate a lot of stress surrounding the sale. It is normal to worry that your home may have some hidden problems that you are not aware of. With an inspection, you will know if any such problems exist and have the opportunity to address them. You are also able to work on your own schedule with a pre-listing inspection as well. There is not a rush to get it done, because you only have to list when you want to list. With an inspection after the listing, you will have to meet the requirements of the sales agreement. This means making sure all of the issues are taken care of before the closing takes place. The home inspection will be one less reason why your sale could possibly fall through.
Disadvantages of a pre-listing home inspection
Just because your inspector caught something doesn’t mean the buyer’s inspector would have. So, when you do a home pre-inspection, it’s possible you’ll find issues that may have otherwise gone undetected. And once you know about them, you’re usually obligated to fix them — more on that below.
Do you have to disclose a pre-sale home inspection?
Yes, you do have to disclose property condition issues that you are aware of (whether you know of them because of the pre-inspection or for another reason). What you are required to disclose depends on where you live, but in general, you’re required to let a buyer know about any major flaws in your home. Even in states with less-strict disclosure laws, you are still required to disclose an issue if you’re asked directly about it.
Ask your real estate agent for a list of the required disclosures in your state. They are usually related to major systems in the home, structural issues, health concerns or items that would be very expensive to fix. Here are a few examples of common disclosure questions:
- Are you aware of any lead-based paint in your home?
- Are you aware of any past flooding?
- Are you aware of foundation issues with the home?
Note that anything found during the pre-sale home inspection would be disclosed at the same time as any issues you already knew about in your home. Disclosures are usually shared upon receipt of an offer but can also be made available to interested buyers before they make an offer.
Do sellers disclose repaired items?
Technically, if the issue has been remedied, the seller no longer has to disclose. However, the rules vary state by state, so consult your real estate agent or attorney. Keep in mind, though, that disclosing certain items you’ve repaired can actually be a positive for buyers.
Repairs to point out in marketing
Buyers know that maintenance and repairs are just part of owning a home. So anything that you can point out as recently repaired or upgraded can be very attractive to buyers. Here are a few repairs that buyers love to see:
- New roof: Replacing a roof is a big-ticket item, so if your roof is new, make sure it’s noted front and center in your home’s listing description, e.g., “Roof replaced in 2019!”
- New wiring: If you did work to bring your electrical system up to code, call it out — especially if you’re selling an older home and buyers might be wondering about the electrical anyway.
- New furnace or AC: Every major system in your home has an expected life span, and having to replace a furnace or air-conditioning unit shortly after buying is a worry for buyers. If you’ve recently replaced one or both of these items, it can put buyers at ease.