Find out why more people aren't using this valuable tool.
So, You're Thinking of Selling
Selling your home can be daunting. Why add one more step to the process? As a Home Inspector, I know that the sellers are often just as nervous about the inspection as the buyers are. Many homeowners never explore the dark and uncomfortable spaces in their house like attics or crawlspaces. As a result, many don't know what an inspection may reveal.
Knowledge is Power
In a real estate transaction, knowledge can make a huge difference. Sellers are required to fill out a Disclosure Statement describing any known issues with the property. This allows prospective buyers to gain more insight into the condition of the home before making an offer.
So why would you want to make your house look bad? The answer is simple: a Home Inspector will find the issues either way.
The buyer either finds out about issues now, or later when their inspection is performed.
Avoid Re-Negotiation
Pre-Listing Inspections (or Seller's Inspections) help avoid re-negotiation. Houses are often "sold twice", once when the initial offer is made, and again when the inspection is completed and the buyer wants to change their offer. It takes a lot of work to get signed Purchase and Sale agreements - so why do the work twice?
If all parties are aware of the issues with a house when an offer is written, there should be no need to re-negotiate.
Let's say, for example, that a Pre-Listing Inspection reveals a rotten floor joist that is only visible in the crawlspace. Bad news, right? Not so fast...
The buyer's inspector would have found it either way. But since you knew about it, and put it on the disclosure statement, that means the buyer had full knowledge of it when they made their offer.
Should I Fix it?
There are a few ways to approach the results of your Pre-Listing Inspection.
Don't Fix - Disclose
This is the easiest route. Simply put the defect in the disclosure statement. The seller will adjust their offer accordingly, and you shouldn't have to re-negotiate later.
Include Estimates
In addition to disclosing the issue, you can provide an official estimate from a qualified professional. This will help the buyer feel more comfortable moving ahead with the sale, since they know approximately what it will cost to fix.
Fix It
If you choose to correct the issue, make sure you keep the receipts and all official documents like permits, municipal inspection reports, or engineering reports to include with the sale.
What You Shouldn't Fix
While it may be useful to correct any larger issues that could affect the deal, there is no need to fix the small stuff. All homes have defects, and minor ones like a loose toilet or clogged gutters aren't going to scare away a buyer. Make it easy for yourself - don't sweat the small stuff.
Still Useful in a Seller's Market
One common misconception is that Pre-Listing Inspections are only useful in a Buyer's Market, where out-of-contract re-negotiations are more common.
On the contrary, in a hot Seller's Market, Pre-Listing Inspections can be just as useful. While we never recommend anyone purchase a house without getting an Inspection, we understand that this does happen.
Some buyers aren't making a Home Inspection a condition of their offer. Wouldn't those buyers be more willing to make an offer if they knew that the home had already been inspected and the issues had been disclosed?
The Rules in British Columbia
For better or for worse, the rules in British Columbia do not allow a seller's Pre-Listing Inspection report to be used by a buyer for obtaining insurance or financing. A new Inspection will have to be performed for the buyer.
Peace of Mind
If you're thinking of selling a home, why not give yourself some peace of mind? Find out what may be wrong with the house before you get into the middle of a negotiation. If you would like to talk with us about a Pre-Listing Inspection, you can contact us for a consultation.
Key Points
Sellers are often nervous about what the buyer's inspection will find.
The more you know, the more power you have in negotiations.
Pre-Listing Inspections help eliminate re-negotiation (don't sell the house twice!)
You don't necessarily have to fix any issues that come up.
The buyer's Inspector would have found it either way.
Pre-Listing Inspections are still useful in a Seller's Market.