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pre-inspection

Try Before You Buy? How a Pre-Offer Inspection Could Hurt Buyers’ Chances

November 22, 2019

DragonImages/iStock

You wouldn’t buy a car without kicking the tires, right? Well, likewise, there’s no reason why you should buy a house without having an inspection first.

For most buyers, the home inspection happens after their offer has been accepted by the sellers. But did you know that you can order an inspection before submitting an offer?

If you’re the type of buyer who wants to cover all of the bases before jumping in head first, you can have your real estate agent speak to the sellers and request a pre-offer inspection. However, it might end up doing more harm than good. Here’s a look at the pros and cons.

Reasons to get a pre-offer inspection

It might seem like you’re putting the cart before the horse, but there are actually several advantages to a pre-offer inspection.

“It can help ensure buyers that they are focusing on properties that fall within their requirements,” says Ruth Shin, founder and CEO of Brooklyn, NY-based PropertyNest. In fact, she recommends it for properties that seem to be too good to be true.

You don’t want to go through the hassle of putting an offer on a home that could turn out to be problematic.

“A pre-offer inspection gives you the ability to discover issues with the home that make you hesitant to move forward with the purchase,” says George Beylouny, senior branch manager and construction specialist at Silverton Mortgage in Woodstock, GA.

Especially if you’re buying a home “as is,” you’ll want to know, in no uncertain terms, exactly what shape the home is in.

For example, you may encounter major problems that could change your mind about purchasing the property.

“If the interior walls and ceilings have visible water damage, or there are uneven floors, cracks, or other signs of potential structural or foundation issues, it could warrant getting those issues checked out upfront,” says Andrew Sacks, licensed real estate salesperson at Citi Habitats in New York. “Before you become emotionally invested in the property, you need to have those potential red flags investigated.”

Additionally, a pre-offer inspection can help you submit a more realistic offer.

“You can make an offer that reflects the true condition of the home and takes into account any necessary work that needs to be performed,” says Sacks. He says that any negative findings will justify an offer below asking price.

A pre-offer inspection can also reveal the commitment level of both parties.

“If buyer and seller agree to a pre-offer inspection, it shows that everyone involved is serious about the sale,” says Beylouny.

Disadvantages of a pre-offer inspection 

Being a super sleuth may not work in your favor. Some sellers might not be motivated to schedule a time for an inspector to come through, and it could leave a bad taste in their mouth.

“You will need to get permission from the seller before pursuing a pre-offer inspection, which may be difficult to obtain,” warns Beylouny.

This action could also decrease how competitive your offer is.

“One risk of such a request is that the seller may go with another buyer who is prepared to make an offer without any preconditions,” says Beylouny. A pre-inspection is not a contract, which means the seller isn’t contractually obligated to you, and could end up selling to someone else.

Another issue: the cost of a pre-offer inspection.

“Potential buyers would be paying for this service, which can cost hundreds of dollars, without knowing if they and the current owners can come to an agreement over the sales terms,” warns Sacks. “It’s a risk to pay for the inspection before the final sales price, closing date, contingencies etc. have been negotiated.”

And if you get in the habit of requesting pre-offer inspections for every questionable home you view, you’ll end up spending a lot of money.

“Before deciding whether or not to request a pre-offer inspection, make sure you have a good reason to do so and are prepared for the possibility of losing your opportunity to purchase the property,” Beylouny says.

The post Try Before You Buy? How a Pre-Offer Inspection Could Hurt Buyers’ Chances appeared first on Real Estate News & Insights | realtor.com®.

Doing This One Thing Before Putting Your Home on the Market Can Help Sell It Faster

July 17, 2019

AndreyPopov/iStock; realtor.com

You’ve lived in your home for years and haven’t exactly been on top of regular maintenance tasks. Now, your windows are covered in plastic wrap to cut down on the cold drafts, your ceiling seems to be leaking, and those shrubs you planted to conceal a few small cracks in the foundation just aren’t cutting it anymore.

Hey, we’re not judging! But if you’re ready to put your home up for sale, know this: Buyers and their agents are going to zero in on all those things that need doing—as well as some things you hadn’t even noticed yourself.

So why not get ahead of the curve by hiring a licensed home inspector who can pinpoint what needs fixing?

Of course, most sellers don’t get their homes inspected before listing them, because the buyer usually orders an inspection during escrow, says Marc Lyman, a Realtor® with Pacific Sotheby’s International Realty in San Diego, CA. And who wants to pay for something twice?

But if you’re willing to invest the time and money, a thorough inspection before listing your property can make it easier to price your home, manage repairs, and even help sell it faster—and for more money.

So what are the some of the reasons why a pre-listing inspection makes sense? Let’s take a look.

It can save you if you’ve neglected home maintenance

If you have a busy life—or maybe even if you don’t—chances are that obsessing over regular home maintenance might not be your No. 1 priority during downtime. Trouble is, letting painting, roof repairs, and other routine chores slide can lead to bigger issues down the road, says Chicago-based Frank Lesh, ambassador for the American Society of Home Inspectors.

“In a lot of cases, people think, ‘I’ve been here for 30 years; the house is fine. There’s nothing wrong with it,’” he says. “But they’re looking at it with rose-colored glasses.”

Instead of worrying what a buyer’s inspector will uncover—and which could potentially kill the sale—be proactive with a pre-listing inspection, Lesh says. This way, rather than being blindsided, you can then decide whether to make the necessary repairs or to account for that deferred maintenance by reducing the list price. Which leads us to…

You can make more a bigger profit on your sale

Sure, a home inspection that you don’t have to do is going to cost money. (An inspection for a 1,200- to 1,500-square-foot house in an average market, for instance, will cost between $350 and $600, Lesh says.) But as the saying goes: Sometimes you have to spend money to make money.

After all, if you invest a little more to repair and spruce up anything the pre-inspection reveals, you can justify listing your home at a higher price, Lyman says. Plus, he adds, in most states, home improvement repairs you carry out before selling your house are deductible from the profit you make from the sale.

Sometimes, just knowing that a pro has given the house a proper once-over can persuade a buyer to make a bid (assuming that you actually follow the inspector’s recommendations).

“It minimizes surprises for a buyer, and can give a buyer more confidence in the property,” Lyman says.

You won’t have to scramble to fix things at the last minute

Once a buyer’s inspector submits a report, sellers are usually faced with two choices: If problems are found with the house, they can then either slash money from the sale price, or opt to carry out repairs before the closing date. That often leaves sellers in the lurch, having to get work done pronto—and sometimes paying a premium for the rush work.

After a pre-listing inspection, sellers can research contractors and make the necessary repairs within a time frame of their choosing, so that everything is ready before potential buyers even visit the property.

It’ll minimize back-and-forth negotiation

Buyers often use their home inspection as leverage, asking the seller (that’s you!) for steep discounts based on what their inspector’s report reveals. Not surprisingly, the buyer’s inspection is often where the deal falls apart.

If you’ve already uncovered the issues and addressed them, you can raise the price of your home accordingly, Lyman says. “That gives the buyer less leverage in the request for repair process,” he explains.

Also, in red-hot markets where multiple bids come fast and furious, there’s always a chance that buyers might accept your pre-listing inspection without insisting on doing their own. This can make for a quicker sale, Lesh says.

But make sure a pre-inspection doesn’t work against you

As advantageous as a pre-inspection can be, don’t forget that the inspector’s report could be a double-edged sword: Once you know about a problem, you can’t ignore it, Lyman says.

Sellers are legally obligated to disclose any problems that a home inspection unearths.

“For sellers unwilling to do repairs, their own inspection could be used as leverage to negotiate on price and in the request-for-repair process,” he says.

Before committing to a pre-inspection, find out what other sellers in your area are doing. Your agent can help guide you on whether it’s necessary to sell for more, or if there’s a better—and more affordable—strategy for getting your home sold.

The post Doing This One Thing Before Putting Your Home on the Market Can Help Sell It Faster appeared first on Real Estate News & Insights | realtor.com®.

5 Questions to Ask Before Selling Your Home—and Why Missing Even One Can Cost You Dearly

July 10, 2019

Justin Sullivan/Getty Images

Selling your house is not as simple as just putting it on the market and waiting for offers from eager buyers to roll in. (Ah, if only…) If you have any hope that your sale will go smoothly, you’ll have to sit down, take a hard look at your house, and ask yourself a few questions.

Though some steps of the home-selling process seem fairly straightforward—find a real estate agent, set a list price, hold a few open houses—there are a number of lesser-known factors that play a big role in whether your house gets sold, and how much you’re going to fetch for it.

To help you enter the home-selling process fully prepared and with your eyes open, here’s a list of five essential questions to ask yourself to get started.

Overlook these things at your own risk!

1. Can I afford to sell my house?

Although you’re going to cash a check when your house gets sold, as the adage goes, it takes money to make money. Some home-selling costs are obvious, like commissions to the listing and buyer’s agents (which typically amount to 5% to 6% of your home’s price), but there are a number of other expenses to take into consideration.

Here are some expenses home sellers often overlook:

  • Professional photographs: About 4 in 10 home buyers start their home search by looking at properties online, according to the National Association of Realtors®. And, no surprise, photos are overwhelmingly viewed first. That may explain why many real estate agents recommend home sellers hire a professional photographer to take their listing photos. While the cost varies by area and the size of your property, you can expect to pay about $500 to $1,000 for professional photos.
  • Landscaping: No doubt, curb appeal is crucial. After all, it’s what gets prospective home buyers in your front door. What many home sellers don’t realize, though, is just how expensive professional landscaping can be. The average cost of a full-on landscaping job—flower beds, plants, trees from scratch—is around $3,228, according to HomeAdvisor. But improving your landscaping can raise your home’s value by up to 12%, according to research from Virginia Tech.
  • Staging: It’s all about presentation. In a recent survey from NAR, about 83% of buyer’s agents said staging a home makes it easier for a buyer to visualize the property as a future home. In addition, staged homes sell, on average, 88% faster and for 20% more than nonstaged homes. Last year the median dollar value spent on home staging was $400, NAR reports, but costs can increase significantly depending on how many rooms you’re staging.
  • Closing costs: Closing costs will likely be your second-biggest expense behind commission fees. You can expect to spend roughly 2% of your home’s sale price, says Keith Gumbinger, vice president at mortgage information resource HSH.com.

2. What do I need to disclose to home buyers?

As much as you want to present your house in the best light, you should also be prepared to disclose some of your home’s flaws, says Rick Davis, a Kansas real estate attorney.

Though disclosure laws vary by state—and even by city—sellers should disclose any known facts about the physical condition of the property, existence of dangerous materials or conditions, lawsuits or pending matters that may affect the value of the property, and any other factors that may influence a buyer’s decision.

“Most sellers think it is in their best interest to disclose as little as possible,” says Davis. “I completely disagree with this sentiment. In the vast majority of cases, disclosing the additional information, especially if it is something that was previously repaired, will not cause a buyer to back out or ask for a price reduction.”

3. Should I hire a home inspector?

Many home buyers will include a home inspection contingency in their offer. But some real estate agents recommend home sellers hire a home inspector to perform what’s called a “pre-inspection,” where a professional inspector scrutinizes your property for problems before it’s even listed.

There are pros and cons, of course, to doing a pre-inspection. One huge advantage is that pre-inspections give sellers the ability to fix problems ahead of time—and present buyers with a clean bill of health on the property. This can be a strong selling point if you have an older house. However, pre-inspections cost money (about $200 to $500 on average), and just because you hired a home inspector doesn’t mean the buyers won’t hire their own—and their results won’t necessarily be the same.

4. Which areas of my home get the most attention?

Even if you don’t have the money to stage your entire house, many home stagers recommend home sellers, at the very least, stage their house’s living room, kitchen, and master bedroom, since home buyers focus on those areas. Also don’t forget about your home’s entryway.

According to the “Psychology of House Hunting” report by BMO Financial Group, 80% of prospective buyers know if a home is right for them within seconds of stepping inside. Therefore, you’ll want to spruce up the area they’ll see in that time frame—namely, your foyer.

Most important, make sure the foyer is decluttered.

“It can be a challenge to keep this area tidy since that’s where homeowners put their mail, keys, coats, shoes, dog leashes, and other items,” says Sissy Lappin, a real estate broker in Houston.

Pro tip: Containers are key for keeping this mess under control. Use baskets or racks for shoes, bowls for keys and change. Also, be sure to stash any seldom-used items elsewhere.

Another room home sellers make the mistake of overlooking: the garage. In fact, a recent realtor.com® survey found that 32% of home buyers said the garage is one of the most important rooms in a house! Thus, it may make sense to jazz up the space, like by adding storage space or even a fresh coat of paint.

5. What do I have to leave behind when my house is sold?

While it’s ultimately your decision what house items you leave behind for the home buyer, there are rules governing what things convey with your property.

“The law says that anything bolted to the wall or ceiling goes to the buyer unless specifically excluded in the contract,” says Avery Boyce, a real estate agent with Compass Real Estate in Washington, DC. “If you want to take your flat-screen TV, chandelier, or custom pot rack, be sure to label it as soon as the house goes on the market, so that buyers don’t bank on owning that item and wind up disappointed.”

The post 5 Questions to Ask Before Selling Your Home—and Why Missing Even One Can Cost You Dearly appeared first on Real Estate News & Insights | realtor.com®.