The Seller's Edge: Understanding Pre-Listing Inspections

Jamie: 00:00:01

Welcome to Thoughts from the Crawl Space, a podcast where our goal as home inspection experts is to support and serve our community.

Whether you're a homeowner, home buyer, real estate agent or investor, we believe everyone deserves solutions to their homeownership challenges and inspiration along the way. Your path to success starts here. Welcome back to another episode of Thoughts from the Crawl Space.

Today we are going to talk about pre listing inspection inspections. As the title might suggest, pre means before, before you list the house. A pre listing inspection is something that is popular in some areas.

It's more beneficial in certain markets than others. And today we're going to talk about the ins and outs of a pre listing inspection, why it's a good idea for you.

So if you're thinking of selling your house, listen up today and you'll get some good information on why you should do this and some steps to take to get the ball rolling. So what is a pre listing inspection? Well, simply it's an inspection on your house before you sell it.

It's becoming not a must do, but it's coming very important. In a market that's very competitive, you have a lot of buyers coming for one property.

Especially in those markets, there's going to be the chance that one buyers skip their own home inspection. But also the market is just going to be tough to navigate in. And so a pre listing inspection can give you an advantage.

Get a leg up and we'll show some reasons why. How do these, first of all, how do pre listing inspections benefit sellers? Well, it's transparency.

Sellers can address issues before the actual contingency period of a home inspection, the normal home inspection between an offer and closing.

All right, and so this is a way for you to hire somebody to get into your house and look at the things that are going to be looked at in a normal inspection. This is a normal inspection. We're going to be just as thorough and we're going to check all the same things.

We're going to check on a, quote, regular inspection. And this will give you the information you need before you list the home. So you are demonstrating your transparency.

You're demonstrating to potential buyers that you want what's best for them. You're trying to get things done. Right?

Okay, so let's say we get in there, we do a pre listing inspection, we, we find some plumbing leaks, we find some repairs needed on the roof, maybe you have bats in the attic, whatever, and you can now take the steps to correct those things before it even gets listed. And so as you'll see Later. This takes a lot of the emotion out of it. Number two, you can use your own contractor.

Let's say there are repairs that need made.

On a normal inspection with a buyer, if there's repairs to be made, typically the response is going to be written up in such a way that they are choosing the contractor. They're going to recommend he be a license this or professional that or whatever. Not bad things, but it does limit your options as a seller.

And so a pre listed inspection, come in, find the problems and then maybe you can fix them. Maybe you know somebody that can fix them. It could be done much more inexpensively.

It could be done in a timely manner, one that fits with your schedule. And there's not that pressure of the buyer and the window, the time period between inspections and repairs and closing that typically comes up.

So it shows your transparency. It helps limit surprises. Now, to be fair, you may be surprised at some of the things that come up on a pre listing inspection.

We've heard numerous times, well, I've lived here 15 years, I never knew that. Well, that's because you don't go typically into areas that home inspectors go to.

Maybe you have a duct that is an exhaust duct from a bathroom fan that's disconnected in the attic, or a bird flew in the end of it from outside, got in there, they've made a nest in it, it's destroyed. Who knows, you may have mice everywhere. Mice trails, they're droppings.

You might have little nesting holes, whatever is up there, maybe you didn't know about that, but now you have the chance to get that fixed so it doesn't look bad to the buyer when they come through. As I mentioned previously, you have control over these repairs. And so again, let's go to the mice issue.

If your attic is severely contaminated by mice, almost any pest professional is going to tell you you're going to need to remove all of the insulation, get it cleaned out and re insulated. Now that's not an easy task and it's not a cheap task, but at least it puts you in control. You know this ahead of time.

The buyer isn't even there yet. So they're not going to walk over the issue. All right? So that gives you a chance to get you decide what you're going to do. You're in charge.

What this pre listing inspection does the most is it gives you control. It gives you the ability to say, I'm not going to do this, I will fix this.

Maybe we have to concede on price a little bit because of this, but it puts you in control. You're setting the terms, and that goes to pricing power.

So if you find issues that are a problem and maybe you don't want to deal with them, okay, you got holes in your roof, your roof's leaking, you have severe granular loss, the roof really needs replaced, and you just don't feel like ponying up the money for it. Okay, let's find a buyer that maybe can absorb that cost.

But in turn, you choose to reduce the price based on what your real estate agent would suggest. And so again, it gives you the power. Now, how does this benefit buyers?

We talked about it, Just a few things about how the pre listing benefits sellers. How does it benefit buyers? Well, you're not the buyer, but you might be a buyer on the other end of it. You're selling your house, you gotta buy.

Unless you're moving in with somebody, you have to buy as well. So how does this benefit the buyer? Well, one of the same things is true on both sides. Less surprises.

That buyer shows up to your house, you can have the report laid out on the desk or on the kitchen table or wherever, and it's going to state what was found and you can state what was repaired. Maybe you even had a reinspection done after the repairs were made. And so that can be crossed off the list.

And so the buyer is going to be feeling confident that, hey, the seller of this house really wants this to be done right. They're not hiding anything. They're not trying to just sneak through the process. This is also going to help the speed of the transaction.

If you do a, don't do a pre listing, you sell your house, you get an offer, and then they come in and there's significant repairs. The time required to get all these done is going to drag out and it's going to slow down the process.

Whereas if you got it all done ahead of time, the buyer comes in, the buyer sees, oh, these have already been done. There's really nothing here to do then. We don't have any contingencies here. We don't have to get any repairs made.

So really, pre listing inspections are there to build trust there. I mentioned the word transparency, but they're showing responsibility. They're showing, I'm the seller, I'm responsible for this house.

I want to be honest about what's going on out there. I want, I don't want anybody to move into my house and have a serious unforeseen issue that would cause them to look at me in a negative way.

Or worst case scenario, come after me in any legal way. And this is a way to get that out of the way.

So what about the buyer market advantage in a competitive seller's market, Pre listing inspections give the seller a competitive edge by offering smoother transactions and demonstrating due diligence. Now you'll have those that will say, well, we're in a seller's market.

I got 10 people beating down the door of this house, why do I need to get this thing inspected? And in fact, they might even encourage you not to get it inspected. Right, but look at it the other way.

This gives you a leg up on the other houses that also have the same amount of buyers coming to their door. And this shows that you are being responsible, you're being transparent, and you, you want what is best for that buyer.

So common issues found in pre listing inspections. Now these issues are going to be pretty much the same as any inspection.

The only difference I would say is probably the issues that we find in a pre listing, especially if you are living there, may not be as significant as you would get in a normal inspection because you've lived there, you've taken care of the place, you already know what's wrong and you're going to try to take care of some of that.

Mostly what we find with bigger issues is times when maybe this is an estate sale or whoever's selling this house never lived there and they really have no idea what's going on. This is when a pre listing is really valuable in that kind of scenario.

So typically what we're going to find is, is minor repairs that the seller may want to address. Leaky faucets, small cracks in the walls, worn out caulking, maybe around tubs and faucets and things like that.

You may have major issues such as foundation problems, roof damages, electrical system damage, maybe plumbing pipes that are closed up or blocked off or damaged. Additional services like a sewer line scan may reveal that. And so those are some of the things we can find.

And so with aging homes, what you'll typically see is just an assortment of electrical or plumbing issues.

When we go into an older house that has not been updated, it's not been significantly renovated, probably the two biggest systems that we see problems with are the electrical system and the plumbing system. And so you need to get a pre listing so it can highlight these issues.

And if you choose not to fix, not to fix them, at least you know about it and at least you can decide what to do about it. And you might reduce the price of it or you Might not.

But either way, you have that knowledge upfront and you don't have a buyer getting a little bit spooked over the home sale because of things that come up. If you wait until you do a buyer's inspection. So it saves everybody really some time and at least one site is going to save you money.

If you take the time to do this ahead of time, it's very unlikely the buyer is going to come back and try to renegotiate. If they see an inspection has already been done, they may get their own inspection. It happens. They maybe don't trust everything.

But if you had a pre listing inspection done by a quality company and they are very thorough, it is highly unlikely that if a buyer gets their own inspection a week or a month later that there's going to be any significant differences or any big defects found that weren't found on the first one.

Every inspector does things just a little bit differently, but as far as finding the major defects, highly unlikely, if you get a pre listing, that the buyer's inspection will get that anything different. Another point, a pre listing inspection can reduce the risk of a deal falling through.

I think for all the reasons I've already mentioned, here's what we see. You go through a buyer's inspection and you find defects outside. Maybe the gutter is loose and falling off the fascia. You find nail pops in the roof.

You find a crown of a chimney that's deteriorated and so it's leaking down the chimney walls and breaking the brick up. You see mice in the attic.

You see stains around the plumbing vent that have come through into the bathroom, an exhaust fan that doesn't work, exhaust fan that's dumping into the attic. You see where I'm going? We're already at, we're only at the attic and there's already six or seven significant issues.

And in this, in the head, the buyer's already made the, they've already made the offer. And now all these things are starting to build up in their mind is what's wrong with this house.

Now, in and of itself, any of those issues may not be a significant detail, but they build up in the buyer's mind. And that's where from our experience of inspecting, we've seen the biggest issue with buyers walking from a house.

As we morph into a buyer's market, buyers are going to have a little more choice in the matter. All right.

In some cities and some states, we're starting to see that where it's more of a buyer's market than a Seller's market, there's not 10 people for every house anymore. It's maybe two to one or one to one or four to one. Either way it's better than it was. Right. And so that buyer starts to get spooked a little bit.

And you know what, they got different options now. They can go to a different house and they can walk away from this deal.

So if you allow an inspector to go in there ahead of time, you can find these things, get them taken care of, and that way all these, these things aren't building up on the report and in the buyer's mind during the inspection. So let's talk about a little bit about pre listing and pricing strategy. Home inspectors don't deal with price.

We don't really know what the house is worth. We don't care what you are listing it for. We don't give advice on that.

But what we can say is that if we go through and find these items and you fix them, and if it's a minor issue, maybe you just say, no, we're not going to fix that.

It gives you an advantage when it comes to pricing that home because you're not, you're not going to have to automatically cut the price, you know, 10,000 or $20,000 because you didn't go through and do some repairs. So what happens after a pre listing inspection?

So what we would suggest, first of all, if we do a pre listing inspection, there are some things to know. Number one, if we find a defect, then you are required to disclose that.

When you fill out that seller's disclosure and we find, okay, your roof is leaking and you have to fill that line out on the disclosure, no longer can you say I don't know, which is normally what everybody writes. So you might think ignorance is bliss. If I don't know, I don't have to say I know. Well, that's one way to look at it.

But I don't think that's the best way to look at it. I think you're trying to be transparent.

You're trying to be up front and someone can always come after you later and say you did know about it even though you didn't and you don't want to get into that. So let's find that out up front.

So we're going to do the inspection, we're going to give it to you, we're going to put it in a nice three ring binder and then you decide what you want to do. You may call us back two weeks later and say, hey, I Fixed these things. Can you come out and reinspect them and update your report? Of course.

We have a pre listing program that we do just for that and we would love to show you that and how that works and how that builds confidence with the buyer. Here's some tips before a pre listing inspection. Number one, prepare the home.

And we would say this for anybody that's getting an inspection done on their home. Whether you're getting a pre listing or it's a buyer inspection and you own the home, prepare it. Create accesses to crawl spaces and attics.

We think of a crawl space as something under the home. Some people think of an attic as a crawl space. In theory it could be right.

Either way, if you're crawling around and it's in a space, so make sure there's access to it. If you haven't been in your attic for years and you got a closet full of stuff and the access has been caulked shut, take care of all that.

Clean the closet out, cut the caulk on the access. Allow easy access for the inspector to get in and see what he needs to see.

You don't want them to have to come back because it's additional fees, additional charge on that. Well, you know, here's kind of an important thing. Choose the right inspector. How do you know what the right inspector is? Well, I think one thing.

Reviews go a long way. Look online, call some friends, see if you know anybody that knows that company. See if they're thorough.

Do they do an hour and a half inspection or are they there for three hours? There's unfortunately a limited amount. Fortunately. But there are companies out there doing hour and 15 minute, hour and 30 inspections.

I've done inspections for 20 years. I think I'm pretty efficient, I think I'm pretty thorough and I don't want to be there any longer than I have to be.

nd on a normal size home, say: 1800

Maybe there's the occasional beautiful house that's pristine and has been maintained awesomely, maybe a little bit sooner, but at least two and a half hours on a house. If it's a brand new thousand square foot slab, yeah, you're probably going to get through there in less than a couple hours.

But in general, be wary of the inspector that says he's going to take an hour and a half because I just don't see it. We've talked about preparing the home creating access 2. Choosing the right inspector 3. Making the most of the report.

It's one thing to order an inspection and it's another thing to do something about it. So if you're selling the home by yourself or using a real estate agent, use this to your advantage. Now you got the power.

Use that, fix what needs fixed, display it for all to see. You can advertise that the home's been pre inspected and that can give confidence to buyers and make them gravitate toward your house.

Is a pre listing inspection right for every seller? I don't think there's ever a wrong time to get a pre listing inspection.

I think the most beneficial times are when buyers can or sellers, excuse me, haven't lived there or maybe there's been a couple living there for a long time that maybe physically could not do work, maintenance work, they didn't have the money to do it, et cetera. That's a good time if you're a real estate agent and listening to this, to get that pre inspected, at least you have the information up front.

Even if the seller can't do anything about it financially, at least you have that information and can go from there. So is a pre listing inspection worth the investment? What's the bottom line on all this? I would say without hesitation, yes, definitely it's worth it.

There's going to be things if a buyer gets the home inspected, let's say a week, two weeks, three weeks later. Remember I said not all inspectors look at homes exactly the same way.

There may be some things that come up, but by and large you doing a pre listing inspection gives you the control. It gives you a jump on the process. It shows that buyers, it shows buyers that you are taking care of your house. It shows transparency and honesty.

It's going to help you get really the top value for your house. It's going to provide peace of mind for you and the buyer. And so I think these issues, these points really point to that.

There's only one way to go on this, get it pre inspected. If you're buying a house on the other end that hasn't been pre inspected, get it. Get your regular buyer inspection.

Call us, we'd love to do that for you. These are things just to help you out navigate the real estate process in a timely and safe way. Have a good day everybody. Thank you for listening.

This week you can catch up on the latest episode of the Thoughts from the Crawl Space podcast on Spotify, Apple Podcasts and YouTube. For more information about Gold Key inspection services, go to goldkeyinspect.com.