If you’re selling your home, you should get a home inspection before listing your property. You’re probably asking, “Why? Isn’t it a seller’s market? Aren’t buyers waiving the home inspection contingency to make their offers more enticing?”
The answer to both of these questions is “Yes, but…” It is a seller’s market, but every property, especially niche properties, should be treated differently. It is a seller’s market, but luxury log cabins on 40 acres of land aren’t flying off the market as quickly as in-town homes. Buyers are waiving the home inspection contingency on some in-town residential properties, but generally not on homes that require a bigger investment.
Are Home Inspections Really Necessary?
If you’re a buyer asking, “Are home inspections really necessary?” I say, “Absolutely.” Home inspections reveal current problems and future issues with a property that the naked eye usually cannot see.
The same goes for sellers, but I actually encourage sellers to pay for a home inspection before listing their property for sale. Most home inspections range from $250 to $600 and many inspectors will offer sellers a discounted price on a pre-list inspection because they generally do not need the full detailed report that a buyer would want, and that’s well worth saving a deal!
When to Get a Home Inspection
Here’s a look at how a typical real estate transaction goes down:
- A seller engages a broker.
- The broker runs a competitive market analysis to determine the listing price for the seller’s property.
- The seller lists his property for sale.
- A buyer makes an offer on the seller’s property contingent upon the home inspection.
- The seller accepts. (What happens after you accept an offer?)
- The listing broker engages a title company to perform a title search.
- The buyer contacts their lender.
- The buyer orders a home inspection.
I’ll stop there because this is when things get tricky. If the home inspection reveals a laundry list of problems, the Buyer can demand that the seller fix them or back out of the offer entirely.
If the Seller would have gotten a home inspection before listing his property for sale, he could have:
- Fixed the issues upfront so as not to delay closing or have to renegotiate the deal on the way to closing.
- Listed the property for a lower price or offered the allowances to make the repairs so the issues would not deter the Buyer.
- Let potential buyers know that the home inspection had already been completed to make his property listing more appealing.
How Does Home Inspection Affect Appraisal?
While a home inspection and an appraisal both evaluate the condition of a property, home inspections are for the buyer’s benefit, and an appraisal is for the lender’s benefit. A home inspection is a deep dive into the condition of a property, visually and functionally. An appraisal is required to approve financing and determine whether the list price is fair based on a general assessment and relies mostly on data from comparable property sales.
The home inspection does not affect the appraisal, and the appraisal does not affect the home inspection, however, the results of both can influence the buyer. If the home inspection reveals too many problems, a buyer can back out of the contract. Likewise, if the appraisal comes in lower than the listing price and the buyer can’t or won’t pay the difference, they may also back out of the contract.
Get a Home Inspection, Get More Security
As a seller, getting a home inspection guarantees that you understand the condition of your property, can appropriately price it, and are transparent with buyers. It also removes the problems before they can become objections for a buyer.
In addition to getting a home inspection, there are several other things you can do to optimize your listing, get better offers, and more money for your property. Check out my other blog post, “The Key to Getting the Most Money for Your Property” to learn more!