Prelisting Inspections: Head Off Trouble

Sandy Schoon, ABR®, GRI, a sales associate with Arizona Best Realty in Scottsdale, knows firsthand just how quickly a deal can be put in jeopardy — or slip away altogether. Schoon had a listing on an older house, built in the early ’70s. Two weeks before the sale was to close, the air conditioning system broke down. After some scrambling by the sellers and a $2,000 repair, the deal went through, but Schoon says the added stress could’ve easily been avoided.“If you do an inspection and make the necessary repairs before listing a home, the house basically has a clean bill of health,” says Schoon, who has regularly recommended prelisting inspections to her clients during the four years she’s worked as a real estate salesperson. “It’s an opportunity to take care of things that could go wrong so that they won’t come back and bite you.

”Prelisting inspections — examinations paid for by the seller before a house is put on the market —are becoming an increasingly popular way for practitioners to not only reduce the possibility of last-minute surprises but also give their cli­ents’ homes a Marketing Edge. Although some practitioners suggest prelisting inspections for older homes or those in obvious need of repair, Susan Spellman, ABR®, a salesperson with Long & Foster, REALTORS®, in Williamsburg, Va., recommends them to all her clients. Her average sales price is about $700,000, and her clients tend to live in gated communities. “Just because a home has granite countertops doesn’t mean it’s well built,” she says.

She feels so strongly about prelisting inspections that if her clients don’t agree to do one, she gives them two options: sign a letter acknowledging they’re not following her advice or work with another practitioner. “I tell my clients not to be penny-wise and dollar-dumb,” Spellman says. In the end, “my clients feel it’s been money well spent,” she says.Schoon and Spellman both mention the inspections in all of a home’s marketing materials, and make the inspection reports, as well as any repair receipts or cost estimates, available during showings.

“Sellers are realizing it’s not just their market anymore. Thanks to the Internet, potential buyers are walking into homes more knowledgeable than ever before, and sellers know they must do everything they can to sell their house,” Paterkiewicz says. “A prelisting inspection helps get buyers comfortable with the idea of making an unconditional offer. There’s also a greater sense of security because the seller and practitioner are being very forthright, demonstrating that there’s nothing to hide.”The need to make certain repairs—such as to mechanical systems (heating and air conditioning, plumbing, and electrical) and to address safety issues (broken locks, loose handrails)—almost goes without saying. But the prelisting inspection can help the owner and practitioner decide which, if any, of the remaining projects to address before putting the house on the market. Even if sellers decide not to make any of the suggested fixes, a prelisting inspection can still prove beneficial, Steward says. For example, it allows sellers to obtain cost estimates for needed work, so they can offer potential buyers an appropriate, not excessive, discount off the listing price.

Prelisting inspections can reduce parties’ stress level and eliminate many of the bumps that can throw a deal off track, says Long & Foster’s Spellman. “You want a smooth, successful transaction,” she says. “If the house doesn’t sell, it’s a lose-lose for everyone.”