Should I do a Pre-Listing Inspection?
It’s time to decide if you want to do a pre-inspection on your home. To help with this decision we wanted to cover what inspections a buyer may order on a purchase agreement.
As a buyer, the home inspection serves as a safeguard against potential issues with the home. It allows the buyer the chance to back out of a sale or renegotiate terms based on what’s found during the inspection. Below are the options available in a purchase agreement on the different inspection/tests.
The most common option taken by a buyer is the “Whole House Inspection”. This inspection includes but not limited to, structure, exterior, roofing, plumbing, electrical, heating, central air conditioning, interior, insulation, and ventilation.
We consider most home inspectors generalists because they are looking at every part of the home. If there is a specific issue, they recommend it be further reviewed by a qualified contractor. For example, the roof appears worn or has some divots then the inspector would recommend it be looked at by a qualified roofing contractor. Another example, they see a crack in the foundation and recommend a structural engineer review the foundation. Other inspections that could be ordered are Radon, Termite, Structural, Mold, Sewer, well, septic, pool, etc..
Our goal is to help guide you through a smooth transaction but for most sellers, the home inspection can one of the most nerve-wracking parts of the process. Why, because of the unknown. The buyer’s inspection is out of their control plus having to wait one or two weeks to get the inspection addendum back can seem like an eternity. This puts a seller on edge wondering if they missed a flaw in the house, it doesn’t matter how clean or updated the home might be. Doubt sets in. When a seller has a "Pre-Listing Inspection" done on the property it’s a chance to have more control over this process.
A Pre-Listing Inspection will not eliminate the Buyer's right or desire to have inspections done on the property. However, we have seen it reduce the stress of the selling process by uncovering some of the unknowns prior to going on the market. We are here to help guide you to make an educated decision, one that’s right for you. It’s not cut and dry on whether a pre-inspection is worth it since it involves both time and money. Here are a few pros and cons to help with your decision.
- LESS STRESS: You will know any items that exist in your home and can be proactive in getting them repaired or replaced without the stress of doing it in a short closing timeframe.
- MAKING REPAIRS: If you choose to do repairs you can choose to do items yourself or get multiple bids for the best pricing without having to work with a buyer on an approved vendor. From our experience, when buyers look at a home they typically exaggerate the cost of any updates, changes or repairs that need to be completed by 2 to 4 times the actual cost.
- BUILDS TRUST: If you have any repairs that are identified but will not be repaired, they will be disclosed ahead of time. This provides notice to any potential buyers and if it is a concern can be negotiated at the time of the original offer.
- PRICING YOUR HOME: Getting the home ready and making repairs may enhance the value of the home. We will always price the highest we can to attract the most buyers.
- RENEGOTIATION: If the buyer chooses to use the pre-inspection or still order their own we see less renegotiation after you have come to terms on the original offer. Another advantage, during a neutral or seller’s market we have seen buyers accept the pre-inspection and the house “as is”.
- MONEY: There is an expense to have a pre-listing inspection. The size of your home will determine the cost of the inspection. Inspections start around $400 and go up from there. This is before any repair costs or any other additional inspections that may need to be done. A little bonus, we will cover half of the cost of the whole house inspection if you choose to do one.
- DISCLOSURE: If you choose to have a pre-inspection you will be made known of any defects or unsatisfactory items in the home. Since you have this knowledge this information will need to be disclosed to any potential buyers.
- INSPECTIONS: No matter how much work or inspections you do upfront the buyers or the buyer’s lender may require their own inspections. This could lead to a difference in opinion on the condition of any of the components of the home or they may uncover a repair that was missed during the pre-listing inspection.
- UNAVOIDABLE REPAIRS: Sometimes a big-ticket repair might come up that you didn’t expect. These might include a cracked heat exchanger on the furnace, roof needs replaced, or foundation issues. You can sell as is but will impact the price of your home.
At the end of the day, the decision to move forward with a pre-listing inspection largely depends on your personal preference, the current market, and your risk tolerance.
Our goal is to create ‘perceived value.’ There are things that make people ‘feel’ good about the home (curb appeal, open layout, light, color schemes, kitchen, etc.) and there are things that are more practical (foundation, roof, number of rooms). Either way, we work on creating pricing and marketing strategies to get your home sold.
This information provided in this article is meant for information purposes only and is not intended to constitute legal, financial, tax, or insurance advice. Twin Advisers encourage readers to contact their attorney or other advisers for advice regarding these matters.