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Get a Property Inspection Before You List

by • September 12, 2011 • BlogComments Off143

Many real estate agents and home sellers focus on staging, cleaning, and painting a property so it will ‘shine’ for potential buyers. They spend a good deal of time looking at comps and pricing it attractively. All that’s essential, of course. But they often don’t bother to do something else that’s really important: get a pre-sales property inspection.

Property inspections, once upon a time, were just part of a checklist. Buyers, eager to get into the market, would sometimes turn a blind eye to the issues that came up during an inspection. Or if a buyer balked at issues uncovered by an inspection, the seller, knowing there were others waiting in the wings, simply moved on to the next buyer. Sellers were less likely to offer credits or do any improvements based on the buyer’s findings during the general property inspections.

How things have changed.

Today, there’s a lot more inventory for buyers to choose from. As a seller in the current market, you need to overcome as many possible objections buyers may have and do what it takes to get your property ready. I believe a pre-sales general property inspection (about $ 250 to $ 500) from a reputable, reliable inspector should go hand in hand with staging, cleaning and property preparation.

Three reasons to get a pre-sales property inspection:

1. It will help you properly price and market your property.

A pre-sales inspection will help you address glaring home improvement issues so you can properly price and market your property. If you know the house needs a new roof, either fix it before going on the market or factor that into the list price. It will save you headaches when you have a buyer in escrow.

2. It makes buyers more confident in your property.

Having buyers see the inspector’s report up front will give them the added confidence to make an offer on your property. You’ll weed out the buyers who may not be into small fixes, too.

Too often, the scenario I see play out is this: The seller has no inspections or reports. The buyer makes an offer, assuming that the property is in good condition. The seller accepts the offer, they go into escrow, the earnest money is deposited, and then the inspections and loan processes begin.

And then, the buyer’s inspector discovers a variety of small issues: the electrical panel needs updating, some plumbing needs to be changed to copper, and the HVAC system is near the end of its life. The buyer may not be up for home improvements and, after having spent a week or two in escrow, the seller is back on the market. Their property now seems flawed in the eyes of buyers and the brokerage community. Or the buyer may negotiate a credit of up to $ 30,000 to accommodate for these fixes — money the seller probably hadn’t intended on forfeiting. If the seller had done a property inspection before going to market, these issues would have been obvious to the buyer prior to their offer, and a lot of wasted time and energy could have been avoided.

3. You’ll have the upper hand in negotiations and save time.

The idea of documenting your property’s flaws up front may seem counter-intuitive to a seller. Ultimately, though, it can give you the upper hand in negotiations. The possibility that a serious buyer won’t eventually learn about these flaws is very low. Why not take the high road? Red-flag the issues from the get-go and negotiate from a place of strength.

I can’t stress this point enough: Having these inspections done up front can save you weeks, if not months, in the sales cycle. Plus, that buyer who asks for a $ 30,000 credit after they have an inspection done may have been OK paying your list price, or closer to it, if they’d known about the issues when they made their offer. So you would have potentially saved yourself money in addition to time.

Brendon DeSimone is a Realtor and real estate expert based in San Francisco and New York. He is a contributor to Zillow Blog, has collaborated on multiple real estate books and is often quoted by major media outlets. You can follow Brendon on Twitter.

Photo via Flickr user gsf747

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