5 Tips For Home Sellers Regarding Home Inspections
If you are thinking about selling a home sometime soon, then you probably know that the odds are highly likely that a buyer will order a professional home inspection prior to committing to the purchase of your home.
When I started in the business 23+ years ago, this was not something that happened all too often, but oh how times have changed.
So knowing that a home inspection is inevitable, here are my top 5 tips to make sure home sellers make the most of what will inevitably occur.
5 Home Inspection Tips For Home Sellers
- Order and conduct a home inspection immediately - Sure, you'll have to pay the fee. But think about this. That fact that you can promote your home as "pre-inspected and repaired" could very well break the tie when a buyer is considering your home and another. More than 1/2 of all contracts in the Tallahassee MLS fail to close, and the top reason is that buyer's get scared after an other-than-perfect home inspection. You can greatly reduce the odds of your sale falling through by inspecting and repairing your home before a buyer gets the chance to see it.
- Ask your real estate listing agent which repairs should be done right away - A good home inspector is going to find far more wrong with your home than you need to fix. I like to break the list down into 3 sections. First, the set of items that you cannot and should not ignore. If your home needs a new roof, or a new heating/air conditioning system, a buyer will not pay top dollar for your home without these being treated up front. Secondly, there are many items that will appear on your home inspection that current market conditions will dictate whether or not you should fix them. If you are trying to net the most money from the sale, sometimes lowering your price and letting the buyer handle the repair will save you money over making the improvement up front. This is why having a seasoned real estate listing agent is critical and worth money on your bottom line. Finally, there is a list of "honey-do" items that I would not recommend you worry about. They will not diminish the home's value, and they will cost you more money or time than the money they would yield for you at the sale. Make sure you discuss these items with your agent as well.
- Make the home inspection (and the subsequent repairs) part of the marketing materials and disclosures - This might "go without saying," but it is very common to see homes with no special attachments in the MLS when they are marketed. Your real estate company should include comments in the MLS indicating that a home inspection and subsequent repairs have been made and are available upon request for a serious buyer. Copies of receipts from a licensed contractor will satisfy most buyers.
- Price your home to compensate for above or below market conditions identified in the report - Some repairs should be made right away, others should be used to offset the asking price. Because of the way the internet dominates the marketing of real estate, with the initial asking price being perhaps the most important issue, a seller is often prudent to reduce the price rather than pay for a repair. Consider this: You own a $200,000 home that needs a new roof (roughly $14,000). You could pay $14K to a roofing company and hope to get the full $200,000 for your home, or you could simply reduce your asking price to $186,000 and include a comment that it needs a new roof. Instead of your home competing against similar homes during buyers' property searches, your home will appear in side-by-side comparisons against inferior properties. Your likelihood of getting the full $186,000 is far greater than the likelihood of you getting the full $200,000 after doing the roof repairs.
- Order a seller's home warranty, transferable to the buyer at closing - This is the biggest "no brainer" for home sellers. First of all, most warranties do not need to be paid for until closing, so as a home seller, your home will be covered during the listing period and could very well save you a lot of money if a major system goes kaput. Secondly, when skittish buyers are ready to make a final decision, choosing a warranted house over one that is not warranted could very well tip the scale in your favor. Go ahead and order a home warranty today so that you can benefit from the coverage during your listing process.
Real Costs Of Selling A Home
You might think that paying for an inspection and a warranty adds to your costs, but my experience tells me that they also reduce expenses that result when others take control of these two critical matters.
It's interesting, but often times sellers do not realize that the buyers have all the control when they are requesting repairs. A seller might stubbornly say "I won't do it," but don't they ultimately have to either repair them for this buyer or repair them for the next one? Once a repair requirement is known by the seller, it must be disclosed to any and all buyers. Do you really think you'll find a buyer who doesn't care if the house is functioning properly? If the repair work has to be done either way, wouldn't you save money if you got to pick the company that performed the repairs?
If you would like to know more about selling a home, home warranties, or home inspections, just drop me a note and let me know the best time for us to discuss these issues.