Pre-Listing Inspection for real estate agents

If you’ve been in the real estate business for more than a year or two, you’ve probably noticed a trend: More and more homes are hitting the market with a pre-listing home inspection. Of course, a buyer’s inspection has been a must-do checklist item for some time now, and 85% of buyers complete one before finalizing negotiations on a home purchase. 

But why are sellers getting in on the act? 

It turns out that a pre-sale inspection report has major benefits for real estate agents — and their clients. 

You’ll get more offers with a professional home inspection

When a potential buyer discovers that a listing has an inspection report, he or she is much more likely to give it a look. Why? In addition to inspiring confidence that the seller — and by extension, the listing agent — is honest about the property, it gives the buyer a bit of incentive to put in an offer. The idea here is that buyers feel that there’s no harm in making a purchase offer since they won’t necessarily have to invest in an inspection of their own. If someone is on the fence about the property, a pre-listing inspection might just be the slight push they need to throw their hat into the ring. Their risk is decreased because they know what they’re getting and might even save a little money on closing costs if they feel confident about skipping a buyer’s inspection.

Getting multiple offers on your listing puts your client in the driver’s seat. Sellers will be able to get the best possible price when there’s increased interest in the house, even if your market isn’t ripe for all-out bidding wars. If a quick sale is more important, multiple offers allow your client to choose someone who’s able to pay cash or willing to waive an additional home inspection. And you’ll be able to provide backup offers as insurance in the unlikely event the first deal falls through.

You’ll make more money with a pre-listing inspection

For most REALTORS®, a pre-listing inspection is worth its weight in gold. A full inspection report typically costs less than one percent of a home’s value and can guide your client into making the repairs that will bring the best bang for the buck. Some of the best investments include:

  • Broken steps, tiles, or floorboards
  • Loose or missing handrails
  • Broken screens
  • Poorly functioning doors or windows
  • Leaky plumbing

These items don’t cost much and can significantly improve the functionality of a home in the eyes of an inspector. You’ll also avoid the hassle of unexpected repairs during the selling process, as the power in negotiations shifts to the buyer if they uncover issues you didn’t know about.

Taking care of known problems helps you make money, as the result of these repairs is often more than the sum of their individual costs. That is, a clean, well-functioning home will look great to buyers and generate higher offers, which often cover the cost of the inspection and repairs — and then some.

Being able to command a higher selling price through multiple offers is, of course, great for your commission. While the seller may only be worried about covering his or her upfront costs to hit a certain profit target, you’ll always do best when you get the maximum selling price.

You’ll boost your reputation as a real estate professional

What does it mean to be a successful real estate agent? Certainly you want to close sales and earn a solid living for yourself, but there’s more to it than money. The most successful real estate pros are the most trusted, and they have a reputation for honesty and integrity in their communities.

In the discussion of the ROI on a pre-listing home inspection, one big benefit gets overlooked: Inspection reports build trust. When potential buyers see in the listing that a home inspector has reviewed the property, they breathe a sigh of relief, knowing that all issues are now out in the open. Whether certain problems have been fixed or not is almost beside the point, since buyers know that there won’t be any hidden issues that pop up during their own inspection. 

This can do wonders to build your reputation among both buyers and sellers in your region. Buyers will recognize you as an honest dealer, and potential sellers will hear great reviews about the prices you’ve been getting for your listings. Few things are as valuable as your good name in a business that is as people-oriented as real estate. 

It’s also worth noting that a thorough pre-listing inspection report (and the disclosures you make along with it) will protect you from liability in the long run. When the condition of the house is clear to all parties, disgruntled buyers are far less likely to come back with complaints about misrepresentation. And again, this helps you preserve your sterling reputation as a reliable real estate professional.

How to talk to your clients about investing in a pre-listing inspection

With so many benefits of a pre-listing home inspection, it’s easy to see why they’re becoming more common. But how do you get the ball rolling with your clients when they approach you to create a listing and get their house onto the market?

Discussing a home inspection with sellers is something you should do early, often, and honestly.

Start the conversation by your first walk-through

The most natural time to explain a pre-listing inspection to your clients is when you first see their property. As you take notes and discuss the home in question, it makes sense to broach the subject as part of your recommendations to get the home ready for sale. You probably already have a standard list of staging tips and advice for easy fix-ups that you discuss with clients: fresh paint, a visit from a landscaper, removing personal items. It makes perfect sense to suggest hiring an inspector in this conversation, as you’ll naturally progress from the importance of curb appeal to the more serious issues of structure and “good bones” that buyers are looking for.

Be prepared for some push-back

As you know, many sellers are emotionally attached to their homes and have trouble seeing their house with the fresh eyes of a potential home buyer. Acknowledge this! Let them know that you understand how hard it is to be critical of the place they live and enjoy every day — which is precisely why a professional inspection is so important. A home inspector is a completely neutral party who will describe the house exactly as it is at the time of the inspection so you can respond accordingly.

Other buyers may balk at the price, especially if they recall having hired an inspector when they were buyers. Why pay twice? In this situation, it’s a good idea to position the inspection report as a valuable investment that will help them get top dollar for the home and avoid costly and heart-breaking delays — or worse, a deal that falls through at the eleventh hour.

One Williamsburg, VA, real estate agent feels so strongly about pre-listing inspections that she requests her clients sign a waiver indicating that they acted against her advice if they decline. This may help get the seriousness of the inspection across, but it’s a tactic that might not work in every market — you know your clientele best.

In the face of significant opposition, you could always spring for the inspection yourself. If the odds are in your favor that the inspection report will come back as a major selling point, making an investment here could pay you back with a higher selling price later. As you crunch the numbers on comps and zero in on a listing price, consider a few scenarios to see if investing in an inspection makes sense for you.

Frequently asked questions about pre-listing inspections

Your sellers are going to have lots of questions about the process before they sign the listing agreement. Be prepared to answer in person, and consider providing them a handout addressing the most common questions. We’ve addressed the top five questions below to help you get started:

Q: Is a pre-listing inspection required?

A: No. There are no laws requiring inspections for buyers or sellers.

Q: How much will it cost?

A: The average inspection costs between $300 and $500, though this varies by region and the size of the home.

Q: Are repairs required if the house doesn’t pass inspection?

A: Home inspections aren’t pass/fail. The inspection report is informational, and you can make as few or as many repairs as you like. Most sellers will address the issues most important to buyers to get higher offers.

Q: Why should I get a pre-listing inspection? 

A: Knowing the condition of your home helps your REALTOR® price it correctly, which leads to faster sales. You’ll also eliminate any surprises about your home to reduce stress and streamline negotiations.

Q: Do we have to share the inspection report with buyers?

A: No, but be aware that most states have laws about providing disclosure statements to buyers. If you’re worried about this, your real estate agent can help you weigh the pros and cons.

Adding pre-listing inspections to your game plan

Once you’ve begun recommending pre-listing inspections to your clients, you’ll want to have a few good inspectors to recommend. If you’ve been in real estate for some time, you probably already have a short list of professional inspectors you trust in your area.

If you’re just starting out — or if you’re looking to boost your connections in the industry — we can help! HomeGauge has a handy search tool that connects you with highly qualified home inspectors in your neighborhood, so you can always recommend someone great to clients who are ready for that pre-listing inspection.