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. Here’s why a pre-listing home inspection can be a good idea:
1. Knowing what’s wrong with your house before you list it gives you the opportunity to fix it so it doesn’t become an issue for potential buyers. Home Buyers (especially first-timers) can be easily spooked by minor issues like reversed polarity of electrical receptacles, leaky faucets, downspouts that haven’t been disconnected and double taps on your electrical panel. These are super easy (and cheap) things to correct and will go a long way to giving potential Buyers peace of mind. As a Seller, there’s nothing worse than when a Buyer backs out of an offer because of a list of easy maintenance fixes; not only do you have to start the sale process over, you 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 in the 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. Avoid price re-negotiations post home inspections. If your Buyer’s offer was conditional on a home inspection and it uncovers something they didn’t know about, many Buyers will try to re-negotiate their offer price. And negotiating the removal of that buried oil tank 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. By knowing the condition of your house BEFORE you list it, you’ll be able to take into account any fixes that need to be performed in the asking price.
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. Click here to read about disclosures. 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.
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 as possible, so you can get offers with as few (or no) conditions as possible. If people have to shell out $500 each to get a home inspection before they submit an offer and aren’t guaranteed to get the house, you’ll likely get fewer offers. Fewer offers likely means a lower selling price. Having a pre-listing home inspection available to would-be Buyers (performed by a reputable home inspection company of course) often gives Buyers enough comfort to put in an offer.
If you’re considering selling your Toronto house this spring, we’d be happy to discuss the pros and cons of getting a pre-listing home inspection performed. Email us at email@example.com or click here.