Many novice buyers try to save a little money by skipping home inspections when purchasing a property. This typically ends up costing them more money in one of two ways: they either pay more for the property than it is actually worth or they inherit some issues that could have been corrected by the seller if they had been caught during an inspection. Pre-sale inspections by sellers are under-utilized by novice real estate investors and even those who have been in the business for many years. Many people do not want to know what issues might be present in the property they are selling. They just don’t see how using a pre-sale inspection can bring them more profits when selling.
How pre-sale inspections help sellers
Buyers negotiate their price and terms prior to having their own property inspection. Any savvy real estate buyer or purchaser with a decent realtor advising them will include an inspection contingency in their purchase contract. This means that after they have negotiated down the price and reached terms that are suitable to them, there is still an inspection period. The seller has invested time in the process, has taken the property off the market, and is now waiting for the results of a third-party inspection to learn if additional repairs are needed to hold the deal together. By having a pre-sale inspection, sellers know the condition of their property beforehand and can add the cost to the price of the property after making the necessary repairs.
Information gained from pre-sale inspections
Home inspectors will thoroughly check the same components and systems during a pre-sale inspection that they check for home buyers. Home inspectors do no have a vested interest in the end results of an inspection. An inspector should be thought of as a qualified, knowledgeable third party who provides an objective opinion on the property’s condition. Having this information before any potential buyers view the property arms the seller with additional information that can improve their negotiating position. To an experienced landlord, some minor repairs might not seem like a big deal, but a lot of small issues can add up and scare away qualified buyers. To them, it appears the property has not been well maintained. When a real estate investor has owned a property for a while, it is easy to overlook minor details that can dissuade buyers from placing an offer.
Statistics support pre-sale inspections
The National Association of Realtors (NAR) found that property owners who ordered pre-sale inspections prior to placing their property on the market sold more quickly and at a higher price than sellers of comparable properties who opted to not have a pre-sale inspection.