Should I get an inspection to list my house?

This is an often asked question when you are ready to sell your Albuquerque area home.  Should you get a pre-listing inspection?

I’ll try answer this question based on today’s market.

When you sell your home, there are at least 3 times that you negotiate.  The first part is, what I think, the easy part – finding a buyer.  Marketing, proper placement into the market with accurate pricing, and market conditions will drive the buyer to the property.  The buyer will offer what they are willing (with what they know) to pay for your home.  That’s negotiation number one!

The buyer will then order inspections that they seem necessary to satisfy their curiosity about the home.  These are usually conditions you may have lived with for years, but the buyer will want to discover those conditions as well.  They will then base the next phase of the purchase on those inspections.  The due diligence period.  The buyer gets to decide whether these conditions are something they can live with, they can ask you to repair some of these items, or if you cannot negotiate the repairs, the buyer can terminate the contract.  This phase of the purchase can take weeks to complete.  During this time the home is “off market” and not getting actively marketed to prospective buyers.  These inspections are going to turn up items that you may or may not know about, and once you know about them, you must disclose these items to any prospective buyer in the future should this transaction not move forward.  If the items that come up are quite expensive, your net gain on the sale of the property may have just been reduced if the buyer wants these repairs to be made or an adjustment to the price of the home needs to be made in lieu of you performing the repairs.  (I will speak to this strategy in an upcoming post!)

This part of the transaction is absolutely the most frustrating part of the transaction.  Ask any REALTOR or seller, and this is what brings the most pain.

What I have seen happening in what looks to be a seller’s market in Albuquerque, is what I call a “claw back” of the purchase price by buyers.  Since it is a seller’s market, the buyer may have had to make a quick decision to purchase the house and then when their inspections result in repairs to be made, they “claw back” the price, resulting often in a transaction failing to close.  As a seller, you already have in mind what your net proceeds are going to be, and the surprise of a substantial price reduction is painful.

So what can you do to prevent this?  I now recommending a pre-listing inspection!  The cost of a pre-listing inspection is between $395.00 and $500.00.  The inspector will issue a written report to you.  This report may point out simple items such as plumbing or electrical repairs that should be made, the roof may need some maintenance work, or you may need to repair or replace a garbage disposal.  These are items you may have lived with for a long time, but a buyer armed with their own inspection report may be the first to discover them.  As a seller, you will know about the good, the bad and the ugly so that you can address the items with a repair, or we can have a realistic idea of correct pricing of the home to overcome these objections.

Some inspections may turn up bigger items that need to be addressed.  An example would be a broken sewer line.  You probably have no idea what is under your yard or in the street, but once you do, it’s a fix that must be performed.  The City does not cover sewer line repairs and a buyer is probably not going to buy this kind of repair for themselves.

 The fact is, there are items to fix in your home that you can’t sell to someone else. 

• But doesn’t the buyer get their own inspections anyway? Yes, but this way you find out about anything of major importance.

The fact is, you want to be in control of the bad news first – your expectations are set, and you can move forward.

A buyer is going to feel more comfortable making a fast decision to buy your home if they can at least see that you have put in the work of getting your own inspection, have written reports available, and taken care of some or perhaps all, of the items that were indicated in the report.

• Do you recommend that buyers accept a seller’s pre-listing inspection? I recommend that any inspection that is important to a buyer be obtained by that buyer.  Whether it is the existing pre-listing inspection provided by the seller, or a report submitted by another inspector, I advise that the buyer read it over thoroughly and make their own decisions based on the content of the reports.

So in summary, yes I advise getting a pre-listing inspection.  Home inspection, sewer line, there are numerous inspections that are advisable and it does depend on your area, the type of property features you have, your utilities and your amenities.

Should you have any further questions, do not hesitate to contact me!