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Most home buyers and mortgage lenders prefer — or even require — a home inspection before finalizing a real estate deal. For home sellers, this can be nerve-wracking. What if a buyer uncovers a major defect — or worse, what if the deal falls through altogether?
A pre-inspection report aims to alleviate these concerns. With a pre-inspection report, sellers can uncover — and resolve — possible issues before their house even hits the market.
However, it's important to keep in mind that a pre-inspection report doesn't replace a general inspection. Before you spend several hundred dollars commissioning one, read on to weigh the pros and cons.
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What Is a Pre-Inspection?
A pre-inspection (also known as a pre-listing home inspection) is an inspection that a home seller pays for out of pocket before listing their home on the market.
It’s basically the same thing as a general home inspection and has a similar purpose – to uncover any hidden problems so the home can be accurately listed and priced. The only difference is that it happens before the listing instead of after an offer.
Sellers can give potential buyers the pre-inspection report so the buyers can make more informed, confident offers. Just remember, even if you order a pre-inspection the mortgage lender will likely order their own inspection — which will be folded into the buyer’s closing costs.
Read More 👉 Read This BEFORE Your General Home Inspection
A pre-inspection costs $300–500 on average — usually closer to the lower end of that range. According to HomeAdvisor, the average cost of a home inspection in the U.S. is $341.
Any licensed general inspector can handle pre-listing home inspection. If you want a more in-depth look at your home, you may need to pay extra for professional specialists trained to look for issues like termites, radon, mold, or other specific problems.
Is a Pre-Inspection Worth it?
It depends on a few factors: if you think there might be significant issues you’ll need to disclose, you’re short on time, or you’re in a strong buyers’ market, then getting a pre-inspection might be a good option.
If the buyer’s inspection uncovers serious issues with the home that you didn’t know about, it could make them have second thoughts about the sale. Even worse, it could even make buyers feel misled about your home's condition. Disclosing any issues up front could help you avoid a lot of later turbulence.
If you’re after a fast, smooth sale, it’s best to get any surprises out of the way with a pre-listing inspection, so you can disclose any issues and figure them into the list price.
If you’re in a strong buyers’ market, it can be a nice incentive if you can present buyers with an inspection report right away so they know your home doesn’t need repairs, or has already had needed repairs done, and will be more inclined to make a confident offer.
Pros of a Pre-Inspection
You May Avoid Buyer Negotiations
Sellers can skip some of the negotiations and purchase price reductions with a pre-inspection by tackling the needed repairs before the home hits the market.
After a general home inspection, sellers often have to make costly repairs or take purchase price reductions. In these situations, the buyer typically chooses the contractor, so the seller doesn’t have much control over cost.
With a pre-listing inspection, you can fix the problem your way and with your own price tag.
Your Listing Price Might Be More Accurate
If your pre-listing inspection uncovers problems, you can either address them or take them into account in your listing price. During negotiation, you can be confident that your listing price is accurate and will be more likely to be met.
You Might Close Faster
When you provide these inspection reports and estimates to buyers, you can shrink escrow times, eliminate inspection contingencies, and avoid costly, time-consuming repair requests. This can save you weeks or months of valuable time!
You May Attract More (and Better) Offers
Providing buyers with a transparent pre-inspection report allows them to bid more confidently, without worrying about hidden issues that may surface late in the transaction.
Cons of a Pre-Inspection
You’ll Have to Pay for the Inspection
If you opt for a pre-listing inspection, you’ll have to pay around $340 out of your own pocket. A general home inspection that comes after the offer is included in the buyer’s closing costs.
You Might Find Something You’ll Be Required to Disclose
Your pre-inspection might uncover hidden issues with your home — anything from termites, to a leaky roof, to foundation problems. In many states, sellers are required to disclose “known defects,” so in most cases you’ll have to pass this information on to buyers that could turn them away.
You May Have Less Opportunity to Negotiate
Pre-inspections can help you avoid negotiations down the line, but while that might save you time, it might come at a loss. For example, say you uncovered an issue during your pre-inspection and spent $5,000 repairing it, but you could’ve negotiated a repair concession of only $3,500 for the same issue, negotiating actually would’ve benefited you.
Of course, it’s impossible to know ahead of time whether negotiation or pre-listing repairs are the better path, since so much depends on the negotiating skills of the agents’ skills and how motivated each party is to close the deal.
Addressing Repairs After a Pre-Listing Inspection
After identifying issues in your pre-listing inspection, you have two options:
- Decide to handle the repairs yourself before you list, or
- Provide the inspection report to your buyers along with repair cost estimates so they can consider the cost of repairs as they put together their offer.
Handling the repairs yourself, before listing, has a number of advantages. If you’re capable of performing professional-quality repairs yourself, this can save you a lot of money. And if you hire a contractor, you’ll be able to pick the contractor and negotiate prices.
Even if you only put together cost estimates and include them with the inspection report, this can give buyers a ballpark idea of how much the repairs might cost, which can help inform their offer.
In both of these situations, you’ll have quite a bit more control over things and most likely save a lot more money than if the buyer’s inspection uncovered the same problems.
A good listing agent can help you navigate whether or not you should schedule a pre-inspection before listing and offer customized advice to help you make the right decision about your inspection timeline. We highly recommend working with a local real estate agent to help you effectively price and list your house.
Frequently Asked Questions About Pre-Inspections
Do you inspect before or after an offer?
Most home inspections happen after a buyer makes an offer, but sellers can also order a pre-listing inspection to get a handle on any needed repairs before putting the house up for sale. Learn more about pre-inspections and if you should get one.
What should be done after an inspection?
After an inspection, you should carefully go over the report and address any issues that the inspector found. If you’re the seller, you should look into whether or not the issue is a deal breaker. If you need to fix it, work with contractors and specialists to find the most efficient solution. If you’re the prospective buyer, you should work with your realtor to negotiate the price down or ask for a stipend to repair the issues. Learn more about inspections and pre-inspections.
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