Ask one hundred home inspectors if you should get a home inspection before selling your home and one hundred will say yes. Of course their answer does not come without a conflict of interest: they make money if you do one, otherwise they don’t.
Ask one hundred real estate agents if you should get a home inspection before selling your home and fifty (a total guess) will say yes. Their motivation is that if you do the pre-listing home inspection and you fix the items that are potential deal killers, it will make their prospects for selling your home better. What real estate agent doesn’t want to list a flawless home?
We are not talking about visually obvious problems with a home. That is not why someone hires a home inspector. If you have a hole in the middle of your living room floor, you do not need an inspector to tell you to fix it. You hire an inspector to find problems that lay people, like most buyers and sellers, could not find just by walking through a home.
Now you see how the inspector benefits from a pre-listing home inspection and you see how the agent benefits. But what’s in it for the seller? Turns out, not much. Actually there are three exceptionally good reasons for a home seller to not do a pre-listing home inspection, all three of which can, unintentionally, cost the home seller thousands of dollars.
It can only scare home buyers away. I recently paid for an inspection of a home I was getting ready to buy. (I strongly recommend buyers get a home inspection.) Other than one or two minor things, the inspector told me it was one of the “cleanest” homes he had ever seen. There was almost nothing wrong with it. So, you can imagine my surprise when I actually went through the home inspection report in fine detail and found fourteen items reported as Deficient. Fourteen! In a problem-free home.
What I have come to learn is that even with a home in really good condition, there are a lot of inspection deficiencies. Many of them are no big deal, just areas where the home does not meet the code. The problem comes when the seller shows this inspection report to a potential buyer. The buyer is not going to look at the report to see what is right with the home, they are going to look for deficiencies. And no matter how perfect the home, there are going to be deficiencies. And each deficiency is just one more reason for the buyer to lower their offer (or not make one at all).
It is much better to wait until an offer has been made, and the buyer is emotionally attached to the home, before they see it “warts and all.” Plus the buyer has to pay the (approximately) $400 for the inspection.
You must disclose deficiencies to buyers. Real estate law stipulates that you have to disclose, to any potential buyer, problems you know about your home. If the neighbors have an annoying, barking dog, technically you have to disclose that. What you do not have to disclose are problems you know nothing about. By performing a pre-listing home inspection, not only do you now know all the problems in your home, but you are required to tell potential buyers about them. In other words, if you conduct an inspection, you have to turn it over to them for review.
There is nothing wrong with buyers finding out the problems with your home. As I have already mentioned, I strongly suggest home buyers get a home inspection. I just do not see any reason why the home seller should pay for it, especially when they are most vulnerable: before they have an offer in hand.
It can never cost you less, only more. The most important reason of all to never do a pre-listing home inspection is that it can never save you money. It can only cost you money.
Imagine you perform a pre-listing home inspection and find a $10,000 problem with your home. To make your home more sellable you decide to go ahead and spend the money to fix the problem. You are now out $10,400 (don’t forget the inspection fee). How do you get this money back?
Now imagine you do not perform the inspection, what are the possible outcomes?
a) One possibility is that the buyer waives the inspection contingency. This is not typical, but in a seller’s market like we have today, it does happen. In this case you saved $10,400 by not doing the pre-listing inspection and fixing it.
b) Another possibility is that the buyer does the inspection, but wants the home so bad, they choose to not make it part of the negotiation, for fear of getting rebuffed. Once again you saved $10,400.
c) A final possibility is that the buyer does the inspection and insists that you fix it. As the seller, you can choose to say yes, no or let’s split the difference. Even in the worst case scenario, where you agree to pay the full cost of the repair, you will save $400 (the inspection fee).
Could the buyer walk away after they see the $10,000 problem? They could, but if they are willing to walk away when they are already under contract, there is not much chance they would have even made an offer before hand had they known about the problem.
I cannot see any scenario where the home seller benefits from a pre-listing home inspection. If a Realtor or home inspector knows of one, I am all ears. In the meantime, save yourself the trouble and let the buyer pay for the inspection.
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