Imagine for a moment. You find the perfect buyer for your home. The offer is clean, the buyer is making few demands and the transaction begins humming along. Then, the home inspection results come in. To your chagrin, negotiations begin anew and that formerly speedy progress toward closing comes to a massive halt.
This isn’t too far fetched of a scenario. It is the reality of thousands of real estate transactions across the country as well as some right here in our backyard. It doesn’t have to be like this, however. Have the home inspected before you put it on the market, even if you have no intention of fixing the problems the inspector finds. The objection that most sellers voice to me when suggesting this option is, “I don’t want to spend the money on an inspection when the buyer’s inspector will find something different.” Yet here are a few reasons why you should at least consider a pre-sale home inspection.
A pre-sale inspection prevents delays
The pre-home inspection gives you an idea of what needs to be repaired before putting the home on the market. Getting these fixes out of the way now will prevent delays later on.
If you can’t afford to make the needed repairs, the home inspection results can be used as a list of “items the seller will not be fixing.” As long as they aren’t required by the lender, the buyer can then either accept the home as-is, walk away or negotiate with you for a lower price. It’s much better to have the walk-away happen before you remove the home from the market under the assumption that you have a deal.
Once again, we know that the buyer is most likely going to order a home inspection. The problems you’ll learn about during a pre-sale inspection are the same ones that will pop up weeks after you’ve accepted an offer and taken the home off the market. Without a pre-sale home sale inspection, you can only guess what might end up on the buyer’s inspection report.
Hand in hand with this gamble is the closing date and the sales price. Bickering over repairs or price will hold up the transaction and you may end up making concessions that will lower the offering price, just to get the transaction back on track. If your purchase of another home depends on the successful conclusion of the sale of this one, on time, you may be in big trouble.
To share a recent story, I had an inspection come back on a listing of mine just the other day where the upstairs air conditioning was suffering. It was not working well, and as summertime temps kept rising, the unit was working overtime and not keeping up. The buyer’s agent called me as part of their due diligence to say that this was one of two repairs the buyers wanted. She said the fact that the air conditioner was not working was a worry for her buyers, but they’d offer to let the seller fix the problem or the seller “could credit them back $2500 at closing since it might be an expensive repair.”
If my seller had done a pre-listing inspection before putting it on the market then he’d have known about this and been able to fix it upfront. You see, it’s agreed that the buyer’s inspector “will find something else,” that the pre-listing inspection didn’t, but what we are focused on here is knowing and taking care of any major issue of concern that the buyer’s inspector most certainly will find! The result was that the seller agreed to have this repaired (along with the other item), and I just received the invoice from the HVAC repairman that said,
“Checked the HVAC systems for operation. Systems were correct on Freon charge. Adjusted the fan speed on upstairs system and it has the correct temperature drop across the coil. ALL LABOR AND MATERIALS $145.00″
So in lieu of the $2000+ potential cost this worried buyer had (along with their agent), it cost almost nothing to repair and everyone is happy. Yet for a period of a few days, this buyer was overanxious about this issue. Thankfully that did not cause them to get cold feet and terminate the deal. We got lucky, but that’s not always the case.
A pre-sale home inspection keeps the buyer honest
Somewhere along the line during the purchase process, many buyers begin to get cold feet. “It’s ok,” their agents tell them, “you can cancel the contract by refusing to remove the inspection contingency.” They’re led to believe that the home inspection is their get-out-of-the-deal-free card and some buyers will use it as such.
Of course your pre-inspection report won’t replace the one that the buyer will most likely order, but it will help weed out those buyers who are most likely to get cold feet, before an offer is accepted.
A pre-inspection is a marketing tool
Remember when you bought your home? The seller was most likely a complete stranger and most of us are a bit wary of buying anything from strangers, let alone something as large and expensive as a house. Now, imagine that the seller had a recent home inspection report. Especially if it shows items in need of repair, the report shows good faith on the part of the seller. You are, in essence throwing all your cards on the table, with nothing to hide.
Now, does the buyer get as much from your competition? Of course not; few sellers will take on the expense (although it isn’t prohibitive) of a home inspection. Yours becomes a way for you to stand apart from the competition.
The disclosure conundrum isn’t really a conundrum
Once you receive the results of the inspection, some “issues” uncovered will possibly be disclosable to any potential buyers. I say possibly, because a lightbulb that’s out for example or a loose toilet isn’t. Remember however that these blemishes will most likely also appear on the buyer’s inspection report. Isn’t it better that you’ve informed them of the problems ahead of time, rather than they find out later on and hold up the transaction?
As an experienced real estate marketer, I understand that in the sales cycle, the best time to get rid of possible objections is upfront, when the buyers are “hot,” so to speak – when they are at their most enthusiastic.
As the transaction progresses (especially right after the offer is accepted), buyers tend to question their decision to buy. The reality of a 30-year commitment sets in and they become stubbornly adhered to ensuring they aren’t getting cheated.
This is right about the time the home inspector releases his or her results. For you, it’s the absolute wrong time for the buyer to learn that the sprinkler system needs repair or that the HVAC system is in its waning years.
When considering whether or not to order a pre-sale home inspection, keep in mind that it won’t mitigate your responsibility to fix or replace lender-mandated items and you may still end up taking less for the home than you’d hoped, if you can’t afford to repair what needs fixing. What you will do, on the other hand, is get rid of the main reason residential real estate sales fail.