Many sellers might not realize that they have the option to get a pre-listing home inspection - a home inspection that they pay for themselves before ever putting their house on the market.
In general, the home buyer adds the completion of a successful home inspection as a contingency to an offer on a home. Once buyers conduct the inspection, they have the power to negotiate with the seller regarding who pays for any necessary repairs, and they even have the power to walk away from the deal altogether.
When sellers have a pre-listing home inspection, they can get ahead of issues a buyer might find in the home and reduce the likelihood a deal will fall through.
A pre-listing inspection serves many benefits not only for the seller, but also for his or her agent.
How a pre listing inspection benefits sellers
A pre-listing inspection brings a great deal of advantages to a seller:
1. It allows the seller to make repairs before listing the home
If a seller has a pre listing inspection, he or she will then be aware of every issue present in the home and can make repairs to make it easier to sell. The International Association of Certified Home Inspectors explained that making repairs before listing a home can help it show better.
If the seller chooses not to make the repairs, he or she can at least be aware of issues present in the home, which allows him or her to fully disclose this information to potential buyers. It also gives the seller more leverage during negotiations because he or she will not be unprepared.
NACHI also said sellers may be able to convince buyers to waive their home inspection contingency if the seller presents them with a copy of the pre-listing inspection.
2. It ensures a smoother, more efficient transaction
When issues are discovered during a pre-listing inspection, the seller can either have them fixed ahead of putting the home on the market or choose to disclose the issues to potential buyers. Either choice will make the home sell faster because it will prevent the buyer and seller from becoming entangled in long negotiations after the buyer has an inspection.
Because the issues have been disclosed ahead of time, the buyer will not be surprised by anything and will be less likely to walk away or demand a lower price for the home.
As explained in Home Gain, a provider of online marketing programs that connect real estate professionals with buyers and sellers, homes that provide buyers with the results of a pre-listing inspection give the buyer the opportunity to decide well in advance if he or she wants to purchase a home despite its issues.
3. It helps the seller and his or her agent more accurately price the home
Sellers who do not wish to fix the issues revealed during a pre-listing inspection can factor the repair costs into the asking price of the home and explain to buyers that while the home has certain issues, they will be getting it for a lower price as a result. Conversely, sellers who do decide to make repairs or who come up with a clean home inspection can ask buyers for more money.
4. It saves the seller money
When issues are discovered during a buyer-initiated home inspection, the buyer and seller will enter into negotiations to determine who will cover the costs of repairs. In general, buyers tend to significantly overestimate the costs of these repairs, and the seller loses far more money than he or she would have paid to have completed the repairs before listing the home.
5. It makes the seller more trustworthy
NACHI called a pre-listing inspection "the ultimate gesture in forthrightness on the part of the seller." By disclosing any issues in advance, the buyers can feel confident they are making a deal with a trustworthy person who is not trying to hide anything.
How a pre-listing inspection benefits real estate agents
There are a few ways that a pre-listing inspection specifically helps sellers' listing agents:
1. It helps them market the home
NACHI explained that when a pre-listing inspection reveals no issues, real estate agents can use it as a marketing tool to help sell the home.
2. It helps the sellers appreciate them - and it may even legally protect them
The Foundation of Real Estate Associates explained that real estate agents are obligated to of their clients, and failing to at least discuss the option for a pre-listing inspection with them is not doing so. If clients lose time and money that could have been saved with a pre-listing inspection, they may blame the agent for not telling them about the possibility. Conversely, sellers will appreciate an agent who takes the time to discuss every possible option.
FREA said discussing pre-listing inspections with a client may even protect the agent from being sued for failing to act in the client's best interest.
3. It helps them smoothly broker the deal
NACHI explained that when a buyer and seller enter into negotiations following the buyer's home inspection, the real estate agent generally has to figure out repair estimates and schedule repairs in a very short amount of time. A pre-listing inspection will eliminate this last-minute rush as buyers, sellers and agents will be aware of issues far in advance of these negotiations. As a result, the deal will go more smoothly and is more likely to be completed.
Robert MacFarlane, a real estate broker in San Diego, emphasized to FREA the importance of time when it comes to making these deals.
"Time is of the essence in contracts, and scrambling to find reasonable bids for repairs may leave my seller with no option other than to offer funds to the buyer at the close of escrow," MacFarlane said.
A pre-listing inspection might cost the seller a few hundred dollars, but it could save him or her thousands. Even more, it will save the seller tons of time and stress, and it will help the agent provide the best possible customer service.
Get the Latest Insights!
Sign up to stay up to date with latest tips, trends and updates from WIN.