Pre-listing home inspections

There is a saying that comes to mind when I think about pre-listing home inspections: “forewarned is forearmed.” A pre-listing home inspection is an inspection procured by the seller of the home, typically paid for by either the seller or listing agent (or the cost is split between the two), and obtained prior to the existence of a buyer. The pre-listing inspection is performed in an identical manner and with the same impartial reporting methods as a buyer’s home inspection, but the information is provided directly to the seller. This serves to inform the selling party of possible defects, aging systems, or areas of the home that require attention or service, and this information is provided before the house is even put on the market. The benefits of a pre-listing inspection to the selling party can be critical if understood properly.

Sometimes home inspections uncover issues that can cost thousands or possibly tens of thousands of dollars to address (think polly B plumbing, defective tile roof or crumbling brick foundations or those Lennox G series furnaces). When “big-ticket” items like these are uncovered during the inspection before subject removal, they are brought to light after a sales price has been negotiated and agreed upon by both the buying and selling parties. These unwelcome surprises can result in a deal falling apart, or desire on the part of the buyer, not unwarranted, to renegotiate the sales price through a credit for the repairs, or to have the issue addressed and repaired prior to the closing.

This always struck me as being backwards: that the home inspection, and thus crucial information on a home’s condition, is obtained after the sales price has been agreed upon, which can act like a wrench thrown in to the gears if big issues are discovered during the inspection.

A pre-listing home inspection allows these issues to come to light not only before a sales price is agreed upon, but even before a listing price is determined. Knowing what you are selling in detail can inform you intelligently on how much to sell your product for and how to possibly better your product before it is put on the market.

The pre-listing inspection can be used in two ways: it can allow the seller an opportunity to address and correct an issue before the home is listed, and it can provide insight on how to more accurately and fairly price a house to be sold. The pre-listing inspection can then be included as part of the offering package as evidence of the due-diligence performed in determining the listing price. Knowing what the problems with a house are and setting a listing price accordingly can help to reduce or even eliminate the need for renegotiation headaches. Remember, the problems are going to come to light regardless as the buyer will be performing their own home inspection. The question is whether the buyer’s inspection highlights new revelations that can possibly turn a deal upside-down, also if it reveals old news that the seller has known about since before the house was put on the market and has already disclosed, or lastly, little-to-no news if a seller has already addressed any major issues present.

The need to make certain repairs—such as to mechanical systems (heating and air conditioning, plumbing, and electrical) and to address safety issues (broken locks, loose handrails)—almost goes without saying. But the prelisting inspection can help the owner and Realtor decide which, if any, of the remaining projects to address before putting the house on the market.

Even if sellers decide not to make any of the suggested fixes, a prelisting inspection can still prove beneficial, For example, it allows sellers to obtain cost estimates for needed work, so they can offer potential buyers an appropriate, not excessive, discount off the listing price. Once again, forewarned is forearmed.