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Before we begin, let’s review:
What’s a Pre-List Home Inspection?
A pre-listing home inspection is a home inspection that is performed by the current owner before they list their property. Essentially, a Seller hires and pays for a professional home inspector (around $500 for a 3 hour inspection) to provide a written report of the condition of their house (inside and outside) and then makes the report available to potential Buyers.
We believe that pre-listing home inspections are critical to getting top dollar for your house in Toronto. In fact, we believe so strongly in the power that it gives our Sellers that we pay for pre-listing home inspections for our Seller clients. And yes, our clients get to pick their own home inspector.
Benefits of a Pre-Listing Home Inspection
Here’s why a pre-listing home inspection can be a good idea:
1. When you know what’s wrong with your house before you list it, you have the opportunity to fix it in advance, so it doesn’t become an issue for potential buyers.
Home Buyers (especially first-timers) can be easily spooked by minor maintenance issues and repairs. Toronto home inspections often identify issues such as electrical receptacles with reversed polarity, leaky faucets, downspouts that haven’t been disconnected and double taps on your electrical panel – all easy (and cheap) fixes you can take care of before potential Buyers ever have to worry about it. As a Seller, there’s nothing worse than when a Buyer backs out of an offer because of easy maintenance fixes; not only do you have to start the sale process over, but you also have to convince every future potential Buyer that your sale fell apart for minor reasons, not because the foundation is cracked and the house is about to fall over.
2. You can’t accurately price your house unless you know what’s going on deep inside.
If your house needs $15,000 in waterproofing and a $12,000 roof, you need to account for that when you set your asking price. It’s never fun to have a potential Buyer educate you about your own house during a negotiation – and that’ll cost you money.
3. Pre-listing home inspections avoid price re-negotiations post home inspections.
If your Buyer’s offer was conditional on a home inspection and it uncovers something you/they didn’t know about, many Buyers will try to re-negotiate the price. Negotiating after you’ve accepted an offer and they’ve seen all your cards, will undoubtedly result in a lower price than if you’d accounted for it upfront in the price. You can’t hide from your house – people will uncover the truth eventually. If you have an oil tank or Kitec plumbing, it’s better to know it BEFORE you list, so you can take the hassle and cost of any fixes into account and set your asking price lower.
4. Disclose, Disclose, Disclose.
As a homeowner in Ontario, the law requires you to make disclosures about things that could potentially impact the value or enjoyment of the house. A pre-list home inspection gives you all the information you need disclose. It might also help prove what you did and didn’t know in a future lawsuit.
Read More: Real Estate Disclosures
5. Encourage Multiple Offers
If you’re looking to generate multiple offers (ie a bidding war), you want to give potential Buyers as much comfort with your house as possible; peace of mind means higher offers and few, (or no) conditions. Yes! If people have to pay for a home inspection before they submit an offer and aren’t guaranteed to get the house, you’ll likely get fewer offers, which may mean a lower selling price. Buyers who pay for multiple inspections on multiple homes get frustrated – and frustrated Buyers avoid bidding wars altogether (which might mean not getting your bidding war at all). Having a pre-listing home inspection available to would-be Buyers is often enough to Buyers the confidence they need to sign an offer.
Does a condo need a home inspection? Even a new one?
Melanie Piche says:
Excellent question! In fact I like it so much I’m going to dedicate a blog to it this Wednesday…
The Home Inspection Network says:
We also wrote a blog about this which we featured today, if of interest: http://www.homeinspectionnetwork.ca/guestblogpreconstruction/
Melanie Piche says:
Thanks for sharing!