What is a Pre-Listing Inspection?
A Pre-Listing Inspection is a home inspection completed for the home seller before the house is listed on the Real Estate market. A Pre-Listing inspection is completed for a multitude of reasons. Here are two of the biggest reasons why a pre-listing inspection is completed:
- To help market/sell the home that is in good condition.
- To find issues before a buyer’s inspection does.
Ultimately, a pre-listing inspection tells you the exact condition of your property so a buyer’s inspector does not catch you off guard. Your knowledge becomes your power giving you an upper hand during negotiations.
Be sure to read the entire blog for an incredible statistic about inspection ROI!
Inspection Cost
How much does this type of inspection cost? A pre-listing inspection is usually the same cost as a regular home inspection which is about $400 on an average sized home.
Side Note: You may want to purchase Radon Testing or Mold Air Quality Testing depending on your home location or the home’s current condition. Having these inspections completed as well ties into all comparisons mentioned below.
The biggest question is, is it worth it? Will I receive my return on investment? As a listing agent, should I tell my seller to get the inspection?
Comparison
Let’s look into the pros and cons of getting a pre-listing inspection.
Pros of a Pre-Listing Inspection
Understanding Your Home
Perhaps the biggest reason to request a pre-listing inspection is so you can understand your home! You have been living in this home for some time and while you may think you know it, you don’t.
As a home inspector myself, the majority of homeowners fail to properly maintain their home which leads to expensive repairs during the home sale process. This leaves the seller frustrated as their home value was understood to be more.
Understanding Home Value
As mentioned above, you can understand the defects with your home. With that knowledge you and your listing agent can work together on properly pricing your home. Yes, of course you want the most money for your house. However, you can price your house more than what it is worth then, when a buyer’s inspector comes through you can actually understand/negotiate the price since you understand the defects.
Just imagine if you knew the roof had about 5 years of life left. That affects the home value! If the buyer states the roof is old and will need replacement, you are educated on the topic.
Statistic Alert! – Average Return on Investment from a Buyer’s Inspection is $14,000!
The statistic is pulled from a report from Porch.com that states the average list price is $226,600. Post-inspection, the average closing price is $212,400.
Now imagine if you put that money into your pocket as a seller!
Better Negotiations
Since you are educated on what the buyer’s inspector will likely bring up, you can negotiate the price of the home better.
For instance, if you know the A/C is older and may need replacing you can understand if the buyer wants to negotiate that into the deal. Furthermore, if you know the roof has 10 years of life left, but the buyer is exaggerating the truth, you can tell him/her to go pound sand.
As mentioned previously, knowledge is power. Fully understanding your home can easily return an investment of $400.
Marketing Your Home
What if your pre-listing inspector does not find anything wrong with the house? That’s great news! This means you can release the report to potential home buyers to help sell it!
A buyer is already stressed looking at investments. Having a document that shows the property’s condition as outstanding will definitely help him/her trust you and want to make you an offer.
Improved Buyer & Seller Confidence
With everything about the home being on the table, you give confidence to your buyer that you are not trying to make an extra buck off of them. It’s comparable to going to a car dealership. If the salesperson is able to gain your trust and get you to like them, you are much more likely to purchase a car from them.
As a seller, you should use your home to gain the buyer’s trust and get them to like you. No you don’t need to take the buyer out to dinner, but having a clean home with the home inspection report on the kitchen counter says: “I have nothing to hide, buy me.”
Realtors Love It
The job of a Realtor is to help you sell your home for the best price possible. Therefore, if items are found on the inspection report that need fixing, you can fix them before negotiating.
Since a Realtor’s job is to help you with negotiations and help you price your home accordingly, you give your Realtor more power and ease during those processes.
Cons of a Pre-Listing Inspection
Paying for the Inspection
Yes, you will have to spend about $400. If money is tight, this might not necessarily be an option for you.
Disclosure
If, or when, you find issues from the inspection you may be required to disclose them to potential buyers.
Two Inspections
There is a good possibility there will be two inspections on your home with two chances to find things wrong. If you initially hire a good inspector, you may not have to worry about missed items, but hiring a bad inspector might miss key home issues or present a different opinion.
Concluding Thoughts
For most home sellers, a pre-listing inspection makes total sense. The inspection can help market a good home or help you fix key issues before a buyer’s inspection finds them which ultimately makes you more money on the transaction.
Knowledge is power here. Therefore, you and your agent should attend the pre-listing inspection so you can listen to what the inspector has to say. Simply reading the report afterwards may not give you a full understanding of the home’s condition.
Here’s another great read about pre-listing inspections from Zillow.
If you are selling your home, you need to read what to do before you sell your home.