Most people hear the word “Home Inspector” and an image of a technically competent professional working for a home buyer. They think of a guy making sure the buyer isn’t moving into a financial disaster. They think of a guy looking out for the safety of the new home owner and their family. Some folks even conjure up a report filled with defective items that will cause added negotiations between the buyer and seller. This last part is the focus of this article.
Most real estate transactions, don’t involve a home inspection until after the buyer has an offer accepted. I’ve heard many real estate agents say (paraphrased) “we don’t want to find items, let the buyers inspector find them” This is an outdated, and less efficient way of doing business. These Realtors will have likely more deals fall apart on them as well. .
Every SELLER should have the best home inspection possible before putting the house on the market. They should hire a CMI (certified Master Inspector) Its odd that many of the real estate GIANTS preach this, but most Realtors do not embrace it. …The best, savvy Realtors out there actually do this. This is why: Selling your home is a business transaction. This is a large, sometimes complex transaction. It’s actually just business. What’s one of the most important things to have when negotiating or selling anything? KNOWLEDGE! Knowing your product (your house), is a great advantage. This is everything from cosmetics, to structural mechanical items, landscaping, site characteristics, etc…Before the deal is through, you can bet the buyer will. They may just hire a CMI, as they should.
It doesn’t make good business sense to negotiate uninformed. When you buy or sell a car, you check the blue book, accident history, preventative maintenance history, etc…When you sell a car, you check the same things, you get your repair and oil change receipts to show how valuable your car is. A home is a bit more complex, and a lot more expensive, why do less research? The best time to negotiate is when you have the most information. Waiting until your purchase and sale agreement is in place is advantageous only to the buyer. You’ve already agreed to the lowest price you are willing to take, up to 25% below your list price in some cases. Then the buyers home inspector reveals things that surprise you! The buyer frequently, and understandably, demands all the repairs or a full allowance for them or cancels the contract. Now you’re in a less than desirable spot. Your home has been off the market during this process, weeks to months. You have already come down to the lowest acceptable price. Now you have to renegotiate or put your house back on the market. This negotiation is often pretty one sided, the other party has all the information, you have none. One simple prelisting step could have prevented this state of events. If you have had a great inspection before you listed the home, you know all there is about it. Aren’t you feeling stronger? You know there won’t really be a big surprise later on. You might just repair some of the revealed items prior to listing the house. You now have the option of taking your time and choosing the contractor you want, not get stuck with whoever is available to fit you in prior to your closing date. You can disclose items you don’t want to repair and, generally not have then brought up later on.
You can REALISTCALLY price the home based on its condition. You negotiate from an informed, powerful position over the remaining items before agreeing to a sale price. The buyer’s inspection report will not surprise you, delay your closing, or bust your contract. In short, a thorough, detailed prelisting inspection will decrease market time and increase your net dollars. The few hundred dollars your pre list inspection costs, will nearly always pay for itself. Having a pre-list inspection does make your home more desirable to potential buyers too. There is benefit to the buyers. The buyer is typically under pressure to find a home, just as the seller is to sell it. This is often financially and emotionally stressful. Of course, the buyer should hire their own home inspector. Imagine, as a buyer, having more information from the seller and not being surprised by serious negative findings on a house you want. If the house is not what you thought it was and the deal is not tenable, you the buyer are back to square one in your search. In closing, a thorough detailed pre-listing inspection helps both the seller and buyer. It streamlines the whole process. Typical hang ups are from home inspection surprises, which will likely be greatly reduced. Consider having your listing clients have their home inspected prior to listing it.
Mike Auger, CMI
RI Home Inspector
Certified Master Inspector
RICB # 32856
HUD 203k P1729
Auger Enterprises, Inc.