A home inspection is an important step for the person buying your home. Your buyer wants to make sure they aren’t purchasing a home that will need expensive repairs before they even move in. In fact, most offers you receive will be contingent on a home inspection. The thought of the inspection may cause anxiety for you as a seller, but if you understand the process and the things you can do to make the inspection a good one, you don’t need to worry.
A professional home inspector will look at various components of your home to determine if there are any defects. No home is perfect, so the inspector will usually find some issues that need attention. Many of the issues will be minor, and they won’t disturb your buyer. However, if there are major problems, your buyer may want to negotiate with you to complete the repairs.
- Building structure
- Doors and windows
- Heating and air conditioning
Let’s say that the inspector thinks your deck needs staining. In most cases, cosmetic issues like deck staining are the result of normal wear and tear on a home. Your home buyer probably won’t be upset about that, and it won’t trigger new negotiations. But, if the inspector finds evidence of black mold, that can be very costly to remediate. You can probably plan that the buyer will want to talk to you about completing that work.
The home inspector will typically spend two to four hours inspecting your home. Afterward, the inspector will prepare a written report of the findings.
Before you sell your home, it’s a smart strategy to prepare your home to attract buyers. Typically, that includes things such as spiffing up your home’s curb appeal, cleaning everything thoroughly, removing clutter, and neutralizing wall colors.
While you’re doing that preparation, it’s a good idea to do a walkthrough of the areas the inspector will evaluate. The fewer things a home inspector has to report on, the better the report will look to your buyer. Therefore, it’s worth the trouble to find and fix minor issues before you list your home.
Home inspection costs will vary depending on the size of your home, the part of the country where your home is located, and whether there are specialized inspections required. Typically, a standard home inspection will cost between $300 and $1,000, but you’ll need to check with your real estate agent or local home inspectors to get more exact pricing.
In some situations, a specialty inspection will be required. These specialties include checking for termites, mold, soil analysis, septic tanks, radon, and more depending on your location. Some specialty inspections are required, while the requirement for others may stem from the standard inspection. For example, in some areas a termite inspection is required. But, it would be wise to have a specialized inspection if the home inspector suspects a problem with a septic tank.
Typically, the person who orders the inspection will pay the cost. But, you’ll need to check with your real estate agent or inspector about the specifics since it can vary from state to state.
If you’re concerned about the condition of your home’s foundation or electrical system, for example, you may want to pay for your own home inspection before you list your home. That pre-listing home inspection can be valuable to you in a couple different ways. If no major defects are found, that may make your home more attractive to a home buyer. If the inspection uncovers major defects, you’ll have the opportunity to develop a strategy.
One thing to keep in mind is that if you do a pre-listing inspection, you will need to list any major defects as part of the disclosures required by law in almost every state. That may not really be a problem because most buyers will make their offer contingent on a home inspection and they will uncover those issues anyway.
If you do a pre-listing inspection, you may choose to correct major defects yourself. For example, buyers sometimes avoid purchasing a home that needs a new roof. The buyer doesn’t know what that replacement will entail. If there are already four layers of roofing on the home, the cost of replacement will be much higher than usual. On the other hand, buyers are usually attracted to a listing where the home has a brand new roof.
If there are major defects that you can’t or don’t want to repair, you can set your list price lower since you assume that your buyer will make the repairs themselves. Another approach is to offer an allowance for a repair. Assume that your home’s carpeting is in bad shape. In that situation, buyers may prefer to choose their own floor coverings, and will be glad to accept a dollar amount to cover the cost.
The biggest advantage of an objective walkthrough or a pre-listing inspection is that you will feel much more in control if you identify the major issues and have a plan for dealing with them.
Things to Do Before a Home Inspection
Now that you know what the inspector will be evaluating, make it easy for them to complete their work. For example:
· Make sure all light bulbs are working—even that bare bulb next to the furnace
· Make sure smoke detectors are working
· Clear areas around inspection points, for example, move boxes or furniture away from the water heater and the walls in the basement
· Make sure the entrance to the attic is accessible
· Leave keys or instructions to access areas like a crawl space under your home
· Leave contracts that describe any work you have completed recently, such as a new roof
Finally, take your children and pets and plan to spend time away from your home during the inspection.
The buyer and the buyer’s real estate agent should both attend the inspection. Your real estate agent should attend to give you feedback after the inspection. However, your presence will simply make the inspection uncomfortable for all concerned.
You may think you know your home inside and out, but even then you may get hit by surprise with a major defect found in a home inspection. So, what is your next step?
If you work with an experienced real estate agent, that person will have closed on many sales and has experience dealing with problems identified in home inspections. You’ll want to discuss:
· Whether any repairs are mandatory. If the report identifies anything that is a safety hazard or is out of compliance with local regulations, you’ll probably need to make the repair.
· What will the repairs cost? If there are major repairs, it’s a good idea to get several quotes so that you have a range of what it will cost to fix each one.
While you’re investigating the repairs, the buyer will be doing the same thing. The buyer has three options after they see the inspection report.
· Request that you complete the repairs. The buyer may come to your agent with a list of repairs they want you to complete before finalizing the sale.
· Request that you cover the cost of repairs. If the buyer would rather manage the repairs themselves, they will ask you for a credit as part of the closing costs, or they may ask you to lower the price of the home by an amount equal to the repairs.
· Cancel the contract. If the contract has a contingency clause for the home inspection, and if the buyer informs you before the deadline set for a response, they can cancel the contract and get their earnest money back.
Once you understand what the buyer wants, you can decide how to negotiate the repairs. Your real estate agent is invaluable in this negotiation, as most sellers negotiate a concession to get the deal closed. If the buyer wants you to complete the repairs, you already have the quotes and can get the work done quickly. If the buyer wants to do the repairs themselves, you can compare the buyer’s request against the quotes you obtained to arrive at a reasonable price.
If you complete the repairs yourself, the sales price stays the same, but the cost of the repairs comes out of your pocket. If you agree to the buyer’s request for a closing credit, the cost of the home stays the same, but you pay more for your closing costs.
If you can’t reach an agreement with the buyer, you will need to put your home back on the market and start the process all over. Since you will probably find yourself in the same position with a new buyer, most sellers opt to reach a negotiated settlement. If the roof is shot, there’s not much chance the next buyer or their inspector won’t notice.
Selling your home is the start of a new adventure for you and your family, whether you’re moving into a more upscale home, or your favorite neighborhood. Getting through the inspection phase just requires that you understand the process and work with your real estate agent to address any major issues that come up.
If you’re thinking of selling your home, LemonBrew can help. Just tell them a bit about your home, and they’ll match you to a local real estate agent. LemonBrew also has Title and Escrow services to make your transaction go smoothly.