Pre-Listing Inspection - A Good Idea

By
Mortgage and Lending with Right Trac Financial Group, Inc., NMLS# 2709 NMLS #1012303

The idea of a pre-listing inspection performed by a seller before putting a home on the market seems like a prudent thing to do.  An article in the December 2014 issue of RIS Media Real Estate Magazine (Pages 46-47) recommends the idea as a way for sellers to get better offers for their properties than they might otherwise receive.  The seller can fix minor things and can get estimates for bigger repairs and upgrades to help a buyer, and is better prepared to negotiate the transaction.

The article suggests that a seller is going to lose more on the purchase price inspectionthan some of the repairs disclosed by a pre-listing inspection might actually cost.  The article's author suggests that a seller loses between $3,000 - $5,000 for every repair that would cost a $1,000 to make. 

Just from looking around my own neighborhood, I see that there are repairs that need to be made by various people who have been long-time neighbors, but they seem to be oblivious to the condition of their property.  Many sellers may be in the same position and not have a real good idea of what repairs and maintenance needs to be done to their properties that are fairly inexpensive and perhaps even cosmetic in nature, which if made would increase the value of their property.  I think the same concept might even be a good idea for someone who is planning a refinance of their property.  A refinance is obviously going to entail obtaining an appraisal so why not do the little stuff and cosmetic maintenance and repairs to increase the property's value when refinancing.

A home inspection is not an expensive proposition when compared to the loss the seller might suffer on the purchase price.  The inspection, as suggested in the article, will also benefit the seller by alerting the seller to major repairs which may be best left for a buyer to perform.  The seller can obtain estimates for these larger matters so that the seller is in a better position to negotiate the sale, and can share the estimates with the buyer to help them get started. 

Finally, the seller is in a better position to make disclosures regarding the property's condition and can speak intelligently about various mechanical and other components of the property.  The inspection will also be a great tool for the seller's real estate professional in preparing the listing and in dealing with potential buyers.  This is an idea whose time has come and should be a recommendation that is made by all real estate professionals.

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Posted by

Your Dedicated Mortgage Consultant!

Randy Kirsch, NMLS #1012303

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 X120

Fax: 860 647-8940

Cell: 202-827-6434

Email: randy@righttracfg.com

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The blogs written and published by Randy Kirsch are not in any manner whatsoever to be considered as legal advice or as a legal opinions.  If you have legal questions or concerns regarding any area of real estate law or mortgage law you are advised to consult a licensed, competent real estate attorney in your local area to address your concerns and questions.

 

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Comments (10)

Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

I used to be on the fence about pre-listing home inspections, but I agree completely with you now. REcent exeriences have shown me that they are a great idea. Sometimes a seller doesn't know what is behind those walls! 

Dec 04, 2014 09:47 PM
Jenna Dixon
Momentum Real Estate Group LLC - Marietta, GA
55 & Over | New Constructions | Horse Farms

It's really a tough call.  Once you know it, you must disclose it.  I certainly think for some properties, it makes a lot of sense.  

Dec 04, 2014 09:51 PM
Randy Kirsch
Right Trac Financial Group, Inc., NMLS# 2709 - Manchester, CT
(NMLS# 1012303) Your Dedicated Mortgage Consultant

Lise Howe - I think it is a great way for a seller to avoid problems and get more money out of their property.  They can take care of minor things and be better prepared to deal with the bigger stuff one way or another.

Thanks for sharing.  make it a great day.

Dec 04, 2014 09:54 PM
Randy Kirsch
Right Trac Financial Group, Inc., NMLS# 2709 - Manchester, CT
(NMLS# 1012303) Your Dedicated Mortgage Consultant

Jenna Dixon - Good morning. You are right that once you know you need to disclose.  However, I would rather see a disclosure upfront and the parties resolve the issue then rather than having a buyer discover the issue post-closing and go after the seller for damages for non-disclosure, fraud and worse.  The real estqate professional are better protected as well with a pre-listing inspection, in my personal opinion.

Thanks for sharing.  Make it a great day.

Dec 04, 2014 09:57 PM
David Popoff
DMK Real Estate - Darien, CT
Realtor®,SRS, Green ~ Fairfield County, Ct

Hmmm as a homeowner you should be relatively aware on what condition your home is in... that being said maybe consulting your local experience contractor might be enough... or then again your local home inspector, cheers

Dec 04, 2014 10:11 PM
Randy Kirsch
Right Trac Financial Group, Inc., NMLS# 2709 - Manchester, CT
(NMLS# 1012303) Your Dedicated Mortgage Consultant

David Popoff - good morning.  I would have thought that people would generally be aware of the condition of their property as well, but when I look around I can only conclude from my neighbors that some, most(?) people are not really aware of maintenance items that need to be done on a regular basis, like paintiung the outdoor trim or having it encased, etc.  We are in the real estate business so it may be something that is obvious to you and I, but not to people who are not involved in real estate on a regular basis.  You could use a general contractor if you are wanting to save a few bucks, but I would go with a professional inspector, they are trained to know what to look for.

Thanks for sharing.  Make it a great day.

Dec 04, 2014 10:22 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Randy I have always thought a pre-inspection was a great idea, but it is something I rarely see done or even suggested.

Dec 05, 2014 08:31 AM
Randy Kirsch
Right Trac Financial Group, Inc., NMLS# 2709 - Manchester, CT
(NMLS# 1012303) Your Dedicated Mortgage Consultant

George Souto - likewise, I rarely see these being done.  I have seen a number of times when sellers get sued for not disclosing conditions however, whether they knew about the condition or not.  I am guessing that most of the time the seller really did not know of the condition, but should have.  An angry buyer who is facing an outlay of cash to fix some condition on a "new" home will go after anyone and everyone.

Thanks for sharing George.  make it a great weekend.

Dec 05, 2014 07:13 PM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Randy. On all the home that we purchase and then renovate, we will always do a pre-inspection. It saving a lot of hassle and the transactions close quicker.

Make it a great weekend!

Dec 05, 2014 07:50 PM
Randy Kirsch
Right Trac Financial Group, Inc., NMLS# 2709 - Manchester, CT
(NMLS# 1012303) Your Dedicated Mortgage Consultant

Joe Petrowsky - good practice to follow, and I would guess that it helps in making decisions as to what renovations to make as well.

Thanks for sharing.  You make it a great weekend as well.

Dec 05, 2014 08:16 PM

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