Pre-Listing Inspections

By
Home Inspector with Pillar To Post® Professional Home Inspection

Imagine this, there are so many houses on the market in your area that your house is just another in the great heap of houses being offered.  What can you do as a Realtor or as a buyer to make your house more marketable anf more valuable? 

Benefits of pre-sale inspections

Some sellers wonder why they should conduct pre-sale inspections. Won't the buyers want to hire their own inspectors? What if an inspection uncovers defects that you have to disclose? Wouldn't it be better to wait to have inspections done until after the buyers have committed to buying the property?

The main reason home-sale transactions fall apart is because of defects discovered during the buyer's inspections. Buyers often try to renegotiate the price after they receive their inspection reports. Their argument is that they weren't aware of the problems when they made their offer. By ordering inspections before you market your home, you decrease the odds that you'll have a failed transaction due to inspection-related issues. Buyers can evaluate pre-sale reports, and take the information into account, before they make an offer.

Another reason to have your home pre-inspected is that it gives you a better understanding of the issues that could effect the sale. You can then decide if you want to make repairs before marketing your home. Even if you decide not to make repairs, you will have a much better idea of how much you'll net from the sale.

Disadvantages of pre-sale inspections

Whether or not to let buyers pre-inspect your property is another issue. The benefit to allowing buyer pre-inspections is that you might receive offers that don't have an inspection contingency.

However, other buyers might be put off if they preview your home while it's being pre-inspected for another buyer. It could discourage other buyers from proceeding. At the least, it will be distracting, which can impede the sale process.

Additionally, there's the issue of timing. Let's say you're waiting a week or so before you hear offers. Meanwhile, interested buyers are pre-inspecting your home. Just before you're to listen to offers, a buyer shows up who falls in love with the property. He becomes aware that there are multiple offers from buyers who have already done pre-inspections. He decides not to make an offer because he figures that he can't compete without having had the home inspected. In this case, you'd never know if this buyer might have made the best offer.

It's usually in the seller's best interest to level the playing field. If you discourage pre-inspections by buyers, then all buyers have an equal advantage insofar as inspections are concerned. And, if you provide your own pre-sale inspection report, done by a reputable local home inspector, buyers will be aware of any significant defects before they make an offer.

The closing: The point of providing pre-sale inspection reports is to educate buyers about the condition of the property. It is not to deny them the opportunity to inspect the property themselves after an offer is accepted. Buyers should then be encouraged to complete any inspections they deem necessary. A well-inspected home protects both the buyers and sellers.

Comments (11)

Adam Tarr
MavRealty - Phoenix, AZ
PC -GRI, ABR, CDPE, RSPS, ePro - Designated Broker

Well put!

We have a listing coming up that was a rental for 2-3 years, and the home is about 15 yrs old - so big stuff is starting to go wrong...we are battling with the sellers (who, of course, are out-of-state) regarding having an inspection NOW, rather than wait until we have a contract.  We're afraid something major will come up, and scare buyers off.   Since they are doing light remodeling now, it'd make sense to do it all at once...but what do we know?  ;)

SK

Jan 05, 2007 11:06 AM
Kelly Cox
Pillar To Post® Professional Home Inspection - Melbourne, FL

Adam and Sharon,

Pre-lisiting inspections are a vaulable tool for sellers.  Especially, a rental property that they've not actually lived in!  A Pre-listing inspection will identify the potential deal stoppers in advance! 

Jan 06, 2007 03:45 AM
Mike Jaquish
Realty Arts - Cary, NC
919-880-2769 Cary, NC, Real Estate

This is a great article.  But, I see no downside.

Client had home preinspected prior to listing.  Inspector told him it might be best not to fix everything; "If you don't leave them something to find, they will keep looking until they find something."

NO! NO! and NO!     Take care of it all.  On a 13 year old tract home, another inspector, another set of eyes, will still find something and if you make him work for it, he will generally give the home a thumbs up!

I'm an advocate of pre-inspection being as strong a tool as staging. 

Nice paint and decor may get you a contract.  Minimal surprises from contract to close may get you a commission! 

Why have a deal on a pretty home and have it fall apart on a repair contingency?  Now the Buyer is shaken,  possibly feeling misled or angry about putting $400 into learning that pretty house might just be pearls on a pig.

Jan 07, 2007 09:54 PM
Caryll Miller
Saprinc Corp - Mount Vernon, NY
Well put mike.  I have seen times my clients considered walking because of the results of an inspection why not fix the problem before it becomes an issue.
Jan 09, 2007 11:50 AM
Andrew Cox
Cox Property Services - Kissimmee, FL

Mike -

"Nice paint and decor may get you a contract. Minimal surprises from contract to close may get you a commission!"  That's a GREAT line.  Can I use that???

I just did a Pre-List inspection today.  I found a few items, but 1 that surprised the homeowner - a smoke alarm near their young daughter's bedroom door is inoperable - meaning she may not get out if (God forbid) a fire broke out.  They were shocked, and I believe were on their way to Home Depot  as I was leaving... 

An inspection may not just be about selling the house - it's really all about making sure it's a safe place where your kids can sleep at night.

Jan 27, 2007 02:07 PM
Erol Kartal
Schaumburg, IL

Hi Kelly,

Since the date of your original post, the drawbacks are few if any. In this tough market a seller needs to stand out from the others or the home may never sell.

Home Inspection Chicago

May 01, 2008 04:03 AM
Kevin O'Shea
Coldwell Banker - White Plains, NY
White Plains, NY Real Estate

I think there are pluses and minuses to a pre-inspection.  The truth is I have seen different inspectors come up with different things on the same house. 

For a buyer, I would want them to have their own inspection anyway.

If we can educate the sellers to negotiate or remediate the problems that come up, we can save the deals.

All the best

May 10, 2008 05:43 AM
Anonymous
Anonymous

Kevin,

You are correct - you will most likely get different results from different inspectors.  Different inspectors have different experiences, different training, different personalities.  Much like different realtors will market a home in different ways.  And any defects could easily be missed from one day to the next - for example moisture if 1 inspector visits the day before rain, and the next the day after...

A pre-inspection is aimed at finding any deficiencies before the contract.  This does several things:

  1. Makes any prospective buyer just a little more comfortable.
  2. Helps the seller in his disclosures.  After all, how can you dispute a disclosure when a seller has hired someone to find all the deficiencies.  For this, show the pre-inspection report, along with any repair receipts, and you have your seller's disclosure.
  3. You're disclosing any deficiencies up front - and using the inspection results to fine-tune your asking price - considering any repairs needed or already done.  What is left for the buyer to negotiate?

I think before marketing a home, an inspection is a great idea.  If not before listing, then at least having a seller's inspection would be very wise.

May 10, 2008 05:03 PM
#8
Kevin Corsa
H.I.S. Home Inspections (Summit, Stark Counties) - Canton, OH
H.I.S. Home Inspections, Stark & Summit County, OH Home Inspector

Having a pre-inspection is a great idea, and so far very under-used in most parts of the country. I have been doing them and marketing them for a couple years now, and finally there is a little more interest since the downturn in the market.

The marketing angle is basically the driving force. If you can list the home as being Pre- Certified, or Pre-Inspected Move-In Ready, then that house has a great market edge on most of the competition.

May 11, 2008 10:28 AM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Great post. Relocation companies usually do a prelisting inspection. There are positives and ngatives. But I would expect the buyer to do their own inspection.

May 29, 2008 10:45 PM
Gary J. Rocks
Juba Team Realty - Jefferson Township, NJ

Kelly

Awesome information thanks so much for sharing it, always a good idea to offer this service or to mention it to a seller.

Jun 03, 2008 09:12 AM