As part of selling your property, potential buyers will want to know anything and everything about everything and anything having to do with your listing.
There are two main inspections conducted during the sale of a property/home and they are a Pest Inspection and Home Inspection.
The Pest Inspection is completed by a certified pest inspection company, and includes looking for wood-destroying organisms, such as mold, fungus, dry rot, beetles and termites.
The Home Inspectors will come to look at the home’s systems, such as plumbing, electrical, heating systems, etc.
Both inspectors will alert you to anything that looks to their trained eye as if it needs further investigation by someone else, such as a contractor, roofer, or engineer.
There can be other inspections that can be relevant to your particular property, such as septic systems, wells, chimney, and more.
Regarding the inspection of your property, there are two ways to proceed. Some sellers like to do some or all of the inspections associated with their listing, and others prefer to let the buyers conduct those on their own. There are pros and cons to each option, detailed below.
CONDUCT INSPECTIONS PRIOR TO LISTING
First and foremost, choosing to do some or all of the inspections saves time. While you’re working on getting your property listed, having an inspector or two come through and give you the pertinent information usually isn’t inconvenient. Additionally, offering buyers and their agents this information in your listing or during showings can communicate that you are serious about selling, and typically, buyers can offer you a shorter inspection period in return. This shortens the entire escrow process.
Along these lines, if you’re the kind of person who wants to address minor issues in advance to get top dollar for your property, then knowing these key findings will give you somewhere to focus and target your efforts towards.
The main benefit of conducting inspections is that you know, in advance, what they turn up. One of the biggest upsets in the process of selling a home is having a buyer discover something dramatic or costly during their inspection period. Unless you have had an inspection recently, or unless theirs obvious structural concerns/issues with the home, it can be almost impossible to know what kind of things might turn up. It is not at all uncommon for homes in Humboldt County to have pest (wood destroying) issues. I recently sold a house built only a few years ago, and it even had some rot identified. Knowing in advance can give you the option to correct issues or to adjust for them in your pricing.
When you offer a buyer the inspection reports before they write an offer, you are subtly telling them that you’ve considered the information prior to setting your list price. You are telling them to also take into consideration the information before they write their offer.
The disadvantages of conducting inspections is primarily cost. The average Home and Pest Inspections can cost $250-$400 each – depending on location and size of the property and it’s units. Covering these costs may not be an option for all sellers.
If taking the time to coordinate and attend inspections is a hardship for you, we can assist you with that process.
ALLOW BUYERS TO ALL INSPECTIONS ON THEIR OWN
Some sellers choose to just let it be, and wait to see what happens.
As the contract is written in California, buyers are given a standard 17 day inspection period. This time period is often shortened locally, or in some cases lengthened depending on the type of property. Typical inspection periods run from 7-14 days right now. During this inspection period, as a seller, you are at your most vulnerable. The buyer can more or less cancel the contract at this time without losing their deposit, and in the meantime, you’ve had your property off of the market, may have been continuing to pay a mortgage, and also might be starting to move, or ask tenants to move.
At the end of the buyer’s inspection period, they have the opportunity to renegotiate with you based on their findings. These can include anything and everything from information about the buildings themselves, the lot, the neighbors/neighborhood and beyond. Many buyers ask for price reductions at this time, based on the findings of the Pest and Home Inspections. Sometimes this is a simple, reasonable negotiation. At other times, a buyer may request that you, as the seller pay for everything to be fixed. It’s impossible to know what the buyer thinks/feels about the results of the inspections.
So, allowing the buyers to conduct all of the inspections can leave you at risk for more than you may want to deal with, considering that conducting the inspections on your own in advance would have prevented the upset. Also, during this entire time, your contract period is lengthened, and that can add stress as well.
There are a couple of benefits to allowing buyers to do all of the inspecting. First, they pay for everything. The $500-$800 price tag that comes with basic inspections is no longer of your concern. So, it is a way to save some money.
Another interesting benefit is that buyers who attend their own home inspections are less likely to sue (according to one prominent CA real estate attorney). The fact is, that attending an inspection gives the buyers time to connect with and understand the property. Sometimes, it is at the physical inspections themselves that they finalize their thoughts about buying the property. Of course, not all buyers attend their inspections, even if they are paying for them, so you can’t be sure how it will affect them.
CHOOSING TO DO AT LEAST A PEST INSPECTION HAS EVEN MORE BENEFITS
There are some kinds of low downpayment loans that have certain condition requirements of the property they are purchasing. These are the FHA, the USDA and the VA loan products. Having a pest report on file when you list can help these kinds of buyers determine if your property is an option for them or not before they see it in person. This can save you time and hassle, and may also open your home up for offers from this section of buyers, who may have passed your listing by because of a lack of information or unknowns.
IN CONCLUSION, not all listing agents advise sellers to obtain inspections, but all agents know that they do streamline and assist the process. As a seller’s agent, I see that the practice of conducting/paying for inspections prior to listing usually saves the seller some time and stress, and for a process that’s already known to be lengthy and stressful, anywhere that we can cut back on that is a win.
For more information or questions, we’re here and happy to help – reach out anytime.