Is a pre-listing inspection worth it?
This is a question I get asked frequently, why do I need a pre-listing inspections. The answer is really simple, it could earn you thousands more on the sale of your home. Let’s look at how the numbers work in a simple example.
Assume you are selling your house, and planning to list it for $500,000. Of course you want to get as close, if not more than this number. Consider the following.
The inspection fee, on average, will cost you $400-$500, that is in essence 0.1% of the listing price. Yes that is correct, less than 1 percent (10 basis points). Depending on the age of your home, there are probably a number of small items that will be found during the inspection process. I have listed a few of the most common below
- New GFCI outlet needed
- Broken roof tiles need replaced
- Window screens are absent
- Tub/shower diverter leaks
When looking at the most common issues to the left, we can assume that it would be a few hundred, but definitely less than $1,000 to replace all these items. So adding the $1,000 plus the $500 for the inspection, you are out of pocket only $1,500 (this is still only 0.3%)
Now, if you assume that you skip the pre-listing inspection, and the these items are found when the buyer requests the home inspection, what do you think it will cost you on the purchase price? Well, depending on how good of a negotiator the buyer’s realtor is, I would bet that it would cost you likely 1% ($5,000) of the purchase price. When you get an offer for $495,000, instead of $500,000, that does not seem like a big loss. However, if you look at the smaller bucket, you are likely giving away $3,500 in extra incentive to close the deal than you would have to if you fixed the small items on your own prior to listing.
I always try to educate my clients that it is important to look at the details. Think about what you could buy for $3,500, and it will usually put a smile on your face!
I agree! It’s also worth it for new builds! Buywell did our one year inspection on our new build. It allowed us to submit all findings for warranty by the builder without issue!