Nobody likes surprises — unless we’re talking about birthday parties. Or as Tony Robbins says, “we only like the surprises we want.”
Walking into an unexpected situation can be daunting. This is especially true when you encounter something dangerous. A wolf is scary if you see it approaching through the forest, but it’s even more terrifying if it jumps at you from behind a tree. At least if it’s far away, you have time to react — to deal with the problem at hand.
If there’s one thing that home buyers don’t like, it’s the unexpected. Even if a home looks great on the surface, it could still have problems hidden underneath: mold in the walls, electrical issues, leaky plumbing, broken roof tiles, etc. Surprises like these are a burden to buyers and potentially detrimental to sellers. Like a pack of wolves, unexpected problems can quickly become overwhelming — snapping at the seller’s pocketbook and chasing potential buyers away.
Offers are almost always contingent on having your house professionally inspected, so if there’s a problem to be found, it will be found. At that point, your buyer has a decision to make about how they want to proceed with the deal:
A. Your buyer’s first option is to look at the inspection report and decide what repairs they want you to make. If the requests are reasonable and both you and the buyer are comfortable with the agreement, the deal may proceed once you make the necessary repairs. It’s also common for sellers to offer credit in lieu of repairs.
B. Alternatively, your buyer’s inspector might scare them into making unrealistic demands. If your buyer feels overwhelmed by a laundry list of issues brought to light by an overzealous inspector, they might ask for a substantial price reduction. At the time of this writing, the Rob Jensen Company is in the midst of negotiations regarding a 147-page inspection report. We’re pricing everything out because if the buyer doesn’t know the cost of repairs, they’ll generally ask for more than the repairs are worth. Left unresolved, a $3,000 fix can quickly become a $12,000 negotiating point.
C. Finally, if you and your buyer can’t come to an agreement, they might choose to back out of the deal completely. If you do lose the buyer, this is usually bad news. You will most likely incur additional carrying costs as you have to start the home selling process all over again. Plus, if you live in the home, you’ll have to deal with all of the showings and preparation again. With regard to the defects that came up in the home inspection, in the state of Nevada, you’ll have to disclose those to the next buyer. When you do get a new buyer, they might not pay as much, and they will still want similar repairs or concessions. So, it might be worth a hard look at what it would take to keep your original buyer.
There’s nothing worse than spending time and going through the hassle of finding the perfect buyer, only to have that buyer demand a big discount or back out entirely. So how can you avoid this?
You’ve probably guessed the answer, but here it is anyway…
Put your binoculars on and check for wolves.
Wait, that’s not it.
Get your home inspected before you list it for sale.
Okay, that’s better. Simple, right?
Maybe, but many sellers are still hesitant to get a pre-inspection, and here’s why…
• Cost — Simply put, a home inspection is just one more unwanted expense. This cost varies by market and home size, but generally, it amounts to $250-$800. Plus, there’s the added cost of fixing issues that arise. Just remember, if you don’t want to pay to fix something, your buyer definitely doesn’t want to, so it’s better to take care of these things ahead of time.
• New Construction — If your home is only a few years old, you might think that it’s still in prime condition, but even new construction can have defects. Your home should have been inspected when it was built. If it wasn’t, then don’t be surprised when issues come to light in the inspection. Pro Tip: Get an inspection before your builder home warranty is up. That way you can get things fixed for free.
• Self-reliance — Some sellers think they can make all the necessary repairs on their own. This is sometimes true, but the problems have to be noticed first. Professional home inspectors are trained to notice a wide variety of issues. Pro Tip: If you are handy and wish to fix everything yourself, make sure you do so right away. Once your buyer is aware of a problem, they’ll likely want a licensed and insured professional to fix it, and they will ask for receipts. At that point, your opportunity to fix the problem yourself is gone.
• Obligation — In many states, sellers are legally obligated to disclose any defects that they know about. Unless your buyer’s inspector is incompetent, defects will come to light eventually. Better to deal with them early on.
• Fear — You might be afraid that you’ll find an issue too big for you to handle. Again, it’s better to know this before listing the house to avoid losing your buyer to a big surprise.
Getting your home pre-inspected is a small price to pay to avoid a big headache. You just have to think of the inspection cost as “deal insurance.” It can help keep potential buyers from backing out or asking for a lower price.
Often, a general inspector can check all the necessary boxes, but sometimes specialists are required. This is all dependent on where you live. For example, in Las Vegas, it’s common to see broken roof tiles, so a roof inspector is often needed. Getting your roof checked by a specialist kills two birds with one stone because roof inspectors can usually give you a quote on repairs as well.
Your real estate agent should be able to help you choose what needs to be inspected and will help you find the best person for the job. Once your home is inspected, your agent can also help you decide what repairs are necessary and what can be rolled into the list price as a discount.
“Knowledge is power” is definitely good advice, but it’s also a cliché, so here’s something else to chew on…
You can’t run from the wolf if you don’t see it coming.