Saturday, May 27, 2017 / by Dustin Dammeyer
Picture this: 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 screeching halt.
This isn’t a scenario; it is the reality of thousands of real estate transactions across the country and, yes, 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. Here are a few reasons why you should consider a pre-sale home inspection.
1. 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.
Let’s face it: 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.
2. 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.
3. 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, any “warts” uncovered will need to be disclosed to any potential buyers. But, remember, 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.