Pros/cons of a Pre-Listing inspection

Hello everyone.
I am a fairly new inspector and curious about the benefits of a pre-listing inspection. The benefits I see are:
The seller can see the condition of their home and has an opportunity to fix any major defects. Eliminating the unwanted haggling about the price.
It can attract more potential buyers knowing that there is a report already completed and they can use that report when going for the mortgage. Saving them from having to pay for possibly multiple inspections till they find their home.
I would like to think that a pre-listing inspection would also help the property sell faster.
Am I correct in my thinking and did I miss anything in my thought process?

They are already selling in three days. How much faster do you want?

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You will never ‘eliminate’ haggling. In fact, it is a much cherished aspect of doing business with some cultures.

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The seller may also be made aware of deficiencies which they must then disclose. Just food for thought.

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they are not selling that fast here in Canada.

Did you tell us that you are located in Canada? I-think-not!

Do mortgage companies require an inspection report these days?

Yes, it will help the seller improve the condition of their home prior to marketing. And help eliminate any big surprises.

I have also performed pre listing inspections for estate sales. Often the family needs to have a better understanding of a home prior to marketing for sale.

I always recommend that my clients never disclose the information in the inspection report to their lender. Underwriters are always looking for a reason to deny.

The issue I have with pre-listing inspections is you’re opening yourself up to additional liability when the buyer’s inspector finds something you missed. And yes you will miss something, we all do.

As for speeding up the transaction, I think most of us have clauses that limits the report to the individual that it was written for and no one else. So it still comes down to relying on the seller to representing his property and if you are will to accept his word on condition then I guess you don’t need your own report.

No one uses a home inspection for a mortgage.

The last things a home buyer should do is share their inspection report with their lender.

That said, there are no downsides to get a pre-listing inspection.

The only problem is most people don’t want to pay for them, and many listing agents just don’t want them.

The one big downside to a seller getting a pre-listing inspection is that they must then disclose issues they are made aware of.

I had one 2 weeks ago where my client told me the bank denied financing based off of my report. I did not ask how the bank got my report.

  • It allows you to see your home through the eyes of a critical and neutral third party.
  • It alerts you to immediate safety issues before agents and visitors tour your home.
  • It may alert you to items of immediate concern, such as radon gas or active termite infestation.
  • It permits you to make repairs ahead of time so that …
  • Defects won’t become negotiating stumbling blocks later.
  • There is no delay in obtaining the Use and Occupancy Permit.
  • You have the time to get reasonably priced contractors or make the repairs yourself, if qualified.
  • It helps you to price your home realistically.
  • It may relieve prospects’ concerns and suspicions.
  • It may encourage the buyer to waive his inspection contingency.
  • It reduces your liability by adding professional supporting documentation to your disclosure statement.

Remember: Explain to posable pre-listing/pre-sales home inspection clients, “Eventually, ‘buyers/purchasers’ are going to conduct an home inspection prior purchasing your home.” Get ahead of any issues to have a smooth transition while passing any liability on to me, the inspector preforming the pre-listing inspection.

Having bought and sold several homes I agree, unless the seller wants to lie on the disclosure form.

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Before we put our house on the market I had an inspection done. At the time, the house was 11 years old and in that time things will go wrong. It’s a good thing I did, too. The inspector found a leak in our master bathroom shower. Someone suggested reporting it to our insurance company. Lo and behold, they paid for a nearly new bathroom! It turns out that the shower pan was leaking. The tile used in the shower and bathroom was out of print requiring all new tile. I’m surprised that the insurance company paid off but very happy about it. The pre-marketing inspection was well worth it to me.

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Legally, a seller is supposed to disclose everything.

Regardless if you found it, or the buyer’s inspector, it was going to be found.

That’s not a downside to the inspector.

That is exactly WHY no one should ever use an inspection to get a mortgage.
An underwriter is going to see all the little things that need to be fixed and freak out and deny the loan.

The whole pre-listing inspection thing has been tried and marketed to death and, in the end, it never gains any traction. Why? Hard to say but I think sellers just don’t want to spend the money and potentially be hassled with disclosure issues. Of course, there is also the fact that EVERY seller thinks their house is perfect.

Over the years I’ve seen more pre-listing inspection programs come and go than I can count. Honestly, I don’t get the fascination. There is nothing more uncomfortable than walking through a house with a soon to be seller and having to tell them everything they’ve done to the house for the last 20 years sucks.

The only thing worse is getting in the middle of a FSBO. I once had some “genius” inspector at a conference try to sell me on a program of targeting these transactions. Most times when one of these slips onto my schedule I’d honestly give up my fee and pay $100 to be able to just drive away. Total nut jobs on all sides and they want me to be the referee. Listing inspections are close behind.

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Everything they are aware of. Many sellers may truly not be aware of issues found during a pre-listing inspection. But once they read the report, they are now aware and must disclose.

Not every buyer gets a home inspection, especially in the current market. I am not railing against pre-listing inspections, I happily do them when asked. But if we are being honest, they typically have negative consequences for the seller in a seller’s market.

Florida has no disclosure law.
Most agents will ask for the seller to fill one out, but not required.
Exception: you must disclose if it is something that may affect the material value of the property.
Like a baaaad roof, polybutylene.

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That’s how it is here in NJ. If you know about it must be disclosed (or you lie about it) but you’re not required to go around your home and try and figure out everything that is wrong with it. After all you’re trying to sell it and the onus is on the buyer to find the unknown issues.

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Exactly. And that is the wording used in many state’s disclosure law.

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