What is a Pre Listing Inspection?

A pre-listing home inspection is an inspection for home sellers before they put their house on the market.

As a seller you might be thinking to yourself, ‘I thought the buyer gets the inspection’, why would I pay for one?

Well, they do.

The problem is home inspections often brings sellers back to the negotiating table based on the inspections findings. This is especially true for first time buyers who are less experienced and have less context for inspection findings. This can and does cause real estate sales to fall apart needlessly. That means the house is on the market longer AND the problems may still need to get fixed.

sold sign - Maybe

Many realtors find that a pre listing home inspection is a great tool to pre-empt any objections that might surprise everyone during a buyers inspection. The thinking goes that if there aren’t any surprises during the home inspection the transaction is more likely to go through and will result in a quicker, smoother transaction for both buyer and seller.

For this reason, over the last several years many top agents have started to encourage their seller-clients to get a pre-listing home inspection.

Pre-Listing Inspections Keep Sellers in the Drivers Seat

Sellers who have a home inspection upfront also can identify any major problems that could potentially derail a sale later on at the closing table. Any major repairs can be addressed beforehand on the sellers terms. While many sellers generally have a good idea of the neglected parts of their home, there are often surprises that even the most diligent homeowners are completely unaware of.

Normally, the pre-listing inspection report is also made available to prospective buyers as a sort of ‘seal of approval’ that there are no major red flags with the property. This allows prospective buyers to be more comfortable with their potential purchase see the condition of the home prior to negotiations being made.

The buyer is typically invited to have an ‘onsite review’ with the home inspector at a reduced cost after making their purchase offer. This provides insight for the buyer, provides the buyer with a complete inspection report and creates a contractual relationship with the inspection company. (Buyers should be advised that without the Onsite Review, the inspection company remains responsible only to the seller.)

But What should I fix?!?

panic - Pre Listing Inspection: What is it?

In general, try to avoid guessing what defects or problems home buyers will choose to care about. Every home buyer is different, its an unsolvable puzzle.

Instead have laser focus on safety issues and any major defects that may have a significant impact on the value of the property. Safety fixes are the right thing to do for any buyer and will get the most attention from buyers and their inspector. Major defects will impact your bottom line and so its best to get out front of them.

Items worth fixing before listing a home

  • Any item the inspector deems a clear safety risk

There are two may ways that inspectors look at safety issues. One, overt safety issues like live, exposed electrical wire which is a clear electrocution hazard. And two, potential safety issues, like a deck guardrail with balusters that are spaced too far apart and could pose danger to a small child. Depending on the buyer the deck balusters may or may not be a concern. The general rule of thumb here is, could this be a safety issue for an 8 year old or an 80 year old.

  • Environmental hazards like mold
  • Plumbing leaks (water or gas)
  • Any electrical defects (for safety)
  • Structural issues
  • Broken steps
  • Loose or missing handrails or guardrails
  • Inexpensive, simple-to-fix items like burned out bulbs, loose doorknobs and short downspouts
  • Heating problems like short cycling
  • Carbon monoxide issues
  • Peeling paint (FHA mortgage related)

Items best left to a buyer to fix or negotiate for

  • Cosmetic items that will appeal to a buyer’s specific taste
  • Roof shingle repairs
  • Energy enhancements like upgrading windows or insulation
  • Ventilation
  • Major appliances
  • Gutters and drainage
  • Lack of GFCI’s

These fixes are a general guideline, there are regional differences in expectations across the country and even from county to county, so your mileage may vary. Regardless a prelisting inspection keeps sellers in control of their fate in a way that relying on just a buyers inspection can not.