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Health & Fitness

Listing Your home Soon? Should you do a Pre Listing Inspection?

If you're planning to list your home for sale in the near future you should seriously consider a pre-listing inspection.  Right now there isn't that much on the market, but in the spring you'll have a lot of competition.  I believe a pre-sale general property inspection, which costs $400 to $500 from a reputable, reliable inspector, should go hand in hand with staging, cleaning and property preparation.  Here's why.

I don't like surprises...do you?  I'm not talking about fun surprises like birthday parties or visits from friends...I'm talking about surprises like this scenario:

A home I've listed at $400,000 which appears to be in good condition goes under contract with the standard inspection contingency in place.  The price and other terms are agreed upon, the offer gets ratified, and status changed to "under contract" in the MRIS.  Everyone is happy until 7 days later when the inspection is completed and there's a long list of problems/issues found including some big ones like a leaky roof and electrical problems.  Buying a house is an emotional and scary experience, especially for first-time buyers, and if the home inspection comes back with a major repairs needed, it could scare them off, even if the seller agrees to fix the issues. This is the kind of surprise I DON'T like!

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There are several possible outcomes: The buyer walks away from purchasing the home altogether, so it has to be re-listed on the MRIS.  The Realtors and perspective buyers will see that it was under contract and now active again and ask why.  At this time it has to be disclosed that the contract fell thru due to inspection items.  Not good.  Or…an agreement is made through an addendum to the sales contract that certain or all inspection items will be fixed before closing.  Or…instead of these items being repaired a credit is given to the new buyer.  Warning to seller's: buyer's get freaked out by homes that have a laundry list of repairs that need to be made, no matter how small or insignificant they might be.

It's often cheaper for you - the seller - to make the repairs or replacements on your own, ahead of listing, than at the negotiation table.  Some repairs might be covered by warranties you already have in place.  Some repairs you can make yourself.  Also, many buyer's may want to have their own licensed contractor do the necessary work, which may be more costly to the seller.

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Do I think every home being readied for sale should have a pre inspection done?  No.  Many homes are very well maintained or fairly new, so paying for a pre-inspection could just be a waste of money.  Or maybe the seller's market is on fire in your area, and it’s a sure bet that there will be multiple offers and no inspection contingency.  But be careful – sometimes overconfidence in the market can backfire.  Also,  even if the buyers promise to purchase your home “as-is,” they can still back out based on inspection items, or renege on their promise and ask for repairs or credit. 

Do you have to provide the inspection report to potential buyers?  No.  Will they do their own home inspection with an inspector of their choice?  Probably – and they should if they’re savvy buyers. But remember, once you've had repairs made, you don't need to discuss those issues with potential buyers, though your Realtor should emphasize new or upgraded features, such as appliances, roof or HVAC systems, since they enhance the appeal of your home. 

Based on many years of home sale transactions, and problems I've encountered with inspection items, I'm becoming a big fan of the pre-listing inspections.  It's better to be proactive! That's my motto!

As always, feel free to contact me any time if you have questions about the local real estate market. I also sell homes!

Ellen Moyer, RE/MAX Allegiance    www.ellenmoyer.com

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