What is a pre-listing inspection?
What is a pre-listing inspection?
Written by David McMillin April 29, 2022
" If you’re preparing to sell your home, you already have plenty of items to check off your to-do list. One more task you might want to consider before putting your home on the market is a pre-listing inspection, also sometimes called a pre-sale inspection. Here’s what to know about this special type of home inspection.
What is a pre-listing inspection?
Pre-listing inspections are exactly what they sound like: Before you officially list your home for sale, a professional home inspector examines your property to identify any potential problems or repairs that need to be made. Think of it as an opportunity to know what the buyer might request before an offer is made or a purchase agreement is signed.
“A pre-listing inspection will make sure the seller is aware of any issues prior to the buyer becoming aware, allowing them time to fix the issues,” explains agent Angelica Olmsted of Denver RE/MAX Professionals. She adds that this can help sellers understand the cost of any repairs, too: “It can also assist the seller when it comes to determining a price to sell or negotiating / accepting an offer.”
What does a pre-listing inspection cover?
You can decide how thorough you want your pre-listing inspection to be. If you have one main concern, such as a crack in the foundation, you can limit things to just that area. Or, you might opt for a comprehensive job similar to a standard home inspection.
Areas a pre-listing inspection could cover include:
Evaluating the anticipated lifespan of the roof/
(This information is especially needed to get insurance on the property.)
Check Electric panels/add missing brakes/ remove cloth wires if any. Also very important to buyers and insurance companies.
Investigating the presence of hazardous materials, mold or pest such as termites evidence, and suggest options to treat or remediate.
Inspect A/C
Address plumbing problems, discover active leaks, etc. Is it PVC or Cast Iron plumbing?
Discover Non-working windows
Appliances will be checked too.
Home inspection vs. pre-listing inspection
The key difference between a pre-listing inspection and a typical home inspection is who’s paying for it. If you’re selling your home and you’d like to do a pre-listing inspection, you’ll be footing the bill for it. For a home inspection, it’s generally the opposite.
“The main difference between a pre-listing home inspection and a traditional one is whom the report is being completed for,” Olmsted says. “A pre-listing home inspection is typically completed by the seller, while the traditional home inspection is for the buyer, so they know what they are getting into.”
It’s important to note that neither type of inspection is a substitute for an appraisal. An appraisal is an assessment of the fair market value of your home, which includes external factors such as the neighborhood and local real estate market. In most cases, a mortgage lender will require an appraisal in order for the buyer to obtain a mortgage.
When to get a pre-listing inspection
While this report may benefit a seller stay a few steps ahead in the process, a pre-listing inspection isn’t always necessary. For example, if your home is relatively new and you’ve been the only owner, you’re most likely already aware of any big issues that could impact a sale. But if your home is older, failing to get a pre-listing inspection can be a mistake.
How much does a pre-listing inspection cost?
The cost of a pre-listing inspection is extremely dependent on local market conditions, as well as the size and age of the home. A 5,000-square-foot historical home, for example, will clearly cost more to inspect than a new-construction, 800-square-foot condo. Average price ranges $500+ in Broward County.
If you are limiting your pre-listing inspection to a specific area (ie, the roof), you can expect to pay less than a full home inspection. If you want a comprehensive evaluation, expect to pay the same rate as a standard home inspection in your area.
Pros and cons of a pre-listing inspection
Pros
It can eliminate buyer requests for credits. Let’s say your pre-listing inspection turns up some issues with the home’s plumbing. If a buyer finds those same issues and asks for a $3,000 credit or concession, you’d ultimately be making less on the sale. With a pre-listing inspection, you can fix it or be prepare to negotiate.
It can augment your home’s marketing to attract buyers. If your pre-listing inspection report looks like an A+, advertising this to prospective buyers can be beneficial to you as the seller, because they see that your home is in excellent condition.
It can speed up the selling process. Closing a real estate transaction can take some time, even in a seller’s market as fast-paced as we have right now. A pre-listing inspection can help you proactively fix issues that could otherwise create hiccups as you near the finish line on the deal.
Cons
It’s another cost. Selling a house comes with plenty of costs already, so tacking on one more might not be worth it to you. In today’s hot market, many buyers are waiving inspections entirely, so a pre-inspection may not be needed.
It could conflict with the buyer’s inspection. The buyer will hire an inspector to do a regular home inspection, and that inspector might have a different view of your home than what your pre-listing inspection revealed.
It might mean paying for unnecessary repairs. For instance, if the buyer’s home inspection is less thorough than your pre-listing one, you could wind up paying to fix some items that would have otherwise gone unnoticed.
Are you required to disclose your pre-listing inspection?
When you sell your home, you’ll need to sign a Sellers disclosure form that indicates your knowledge of potential issues. In some states — Illinois, for example — the disclosure form requires the seller to acknowledge any defects in walls, water leaks and issues with the HVAC system. With that in mind, sharing the pre-listing inspection report with the buyer can provide additional evidence to support why the home is a good purchase.
What if the pre-listing inspection turns up issues? Should you proactively pay to address them? Olmsted calls this a tricky question: “Each situation is different when it comes to a pre-listing inspection,” she says. “The seller should review each line with their real estate professional in detail and determine the issues that should be addressed.
Florida Law Requires a Seller of a home to disclose to the buyer all known facts that materially affect the value of the property being sold and that are not readily observable or know by the buyer.
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