There was an interesting article that appeared in my "inbox" this morning entitled "Selling Homes Quickly". Now, working in an environment today where that is a particular challenge, it seemed like a good idea to check it out. So I did.
The argument presented in the article was that, when selling your home, you should prepare for the process by having a professional Home Inspection done BEFORE you list your property for sale. The rationale for this, according to the article, is that you can address any issues immediately (particularly significant ones) thereby avoiding having them come up at a buyer's inspection, alarming the buyer and perhaps derailing the contract. And if they don't derail the contract, the writer argues, the buyer will magnify the financial impact, asking much more in compensation than the remedies would likely require. Now, in the interest of full disclosure, the article was authored by a Home Inspector, so it could be argued that his perspective might certainly be biased.
The fact remains, however, that the topic IS worth considering. When I run the pros and cons of the "pre-listing home inspection" through my mind, there are a number of things that come to mind on both sides of the question.
Advantages of the Pre-Listing Home Inspection:
- Takes much of the "guesswork" out of what will likely come up AFTER you've negotiated a contract on your home, when you think you know how much you'll be getting from your sale.
- Gives you the opportunity to correct items that might deter buyers from offering on your home, or might cause them to reduce their offers in the first place
- Enables you to discover safety issues of which you may not have been aware (faulty wiring, low level gas leaks, leaky roof that may not have yet gotten bad enough to be noticible from the interior of the house
- Reassure potential buyers that you are "not hiding anything". People tend to be most anxious about "the unknown"
Disadvantages of the Pre-Listing Home Inspection:
- In most states, sellers are required to disclose what they know to be defects with the property. However, they are protected from having to investigate to find defects about which they had been aware. Once the "discover" an issue, they must disclose it
- Buyers will generally still insist on having their own home inspection, and their inspector will be trying to uncover additional issues
- Buyers often place little or no value on the "seller's" home inspection because they feel the inspector would be trying to discover "as little as possible" on behalf of the seller
- If your pre-listing inspection reveals issues that you DO wish to remedy, will that remedy be the "proper" one, or the "cheapest" one? Sellers often look for the "cheap fix" which can often backfire.
Over the years I've discovered that some agents insist on the pre-listing home inspection. They believe these inspections minimize the surprises that often occur after all of the work of marketing a home, securing that buyer, negotiating that contract have occurred. I certainly can't argue that view - it certainly has value. I suspect it may have more value in some areas than in others. For example, some types of properties might be better "candidates" for the pre-listing home inspection than others. If I were looking at an 80 year old home versus a 5 year old home, I might view the importance of that inspection somewhat differently.
Several considerations have thus far prevented me from requiring home inspections on my listings as a matter of policy (though there have been individual circumstances where I've recommended them). Each recommendation I make to a home owner has a cost/benefit component. In the case of the pre-listing home inspection, there are a few items to consider:
- The actual cost of the inspection itself
- The seller's required "Property Disclosure" (an inherent liablity) will likely be impacted
- Having had one inspection generally does not mean the buyer won't have their own
As to the premise of the article, that a pre-listing home inspection helps homes sell more quickly? Can't say I believe that (if I did, I'd require them!) Generally the inspection will reveal things that the "casual observer" (ie, all of the prospective buyers and their agents who walk through the home) would not notice. And the items that they WOULD notice don't require a professional inspection to uncover. It's the things about the house that they do notice that impact how quickly a home sells and how much a buyer is willing to pay for the property. That's a whole other discussion (about staging a home, preparing it such that when it's exposed to the marketplace it "shows" its best).
What do you think? If you're an agent, do you recommend the pre-list home inspections? What have been your experiences? If you're a consumer, weigh in with your thoughts! I'd love to hear from you on this subject as well!