I’m sharing part one of a series on how sellers can protect themselves and make sure escrow goes smoothly. Here’s why pre-inspections are important.

We’re seeing a really strong market in certain segments, so buyers are taking some chances and going for tactics that you, as a seller, need to be wary of. 

Before you even put your home on the market, consider doing a pre-inspection of your home. It will cost you about $500 to $700 depending on how large your home is. This process provides you with a report similar to what a buyer would get when ordering an inspection of their own once in escrow. 

Pre-inspections give you a chance to fix a lot of the items at a minimal cost. For example, San Diego is notorious for hard water, and if you haven’t changed the angle stops under your sink in the last seven to 10 years, I almost guarantee the inspector will say they’re corroded and recommend they be changed. These parts are $6 at your local Ace Hardware, and you can replace them yourself. 

However, if a buyer’s inspection catches this issue in escrow, the buyer will ask this fix to be carried out by a licensed plumber, increasing your costs. Not only can a pre-inspection save you money, but it can also provide leverage; if you generate multiple offers, you can send the pre-inspection report and a counteroffer to the buyers. 

Here’s what this communicates: “Okay Mr. and Mrs. Buyers, you’re welcome to do your own inspection, and if you find anything else wrong, we can talk about it, but we will not fix anything that’s covered in this inspection report I’m giving you now.” This avoids a buyer in escrow saying, “We found these issues, so now we want $20,000 or $30,000 back.”

“This process provides you with a report similar to what a buyer would get when ordering an inspection of their own once they’re in escrow.”

We’re seeing a lot of buyers overbidding on the house, then hoping that either the appraisal comes in low or they find things on the inspection report to hit you with. Why not lower the risk of being victimized as a seller by ordering a pre-inspection and fixing things ahead of time?

Another protective measure to consider is the termite or wood-destroying pest inspection. Whereas historically this procedure was ordered by the state and therefore written into the contract as another box to check, buyers nowadays have to specifically request one—which they do 90% of the time. However, if you order one ahead of time, you’re ethically bound to disclose the results to the buyer. 

The downside of ordering this inspection preemptively is that you may open yourself up to repairs you otherwise may not have had to do. The upside is that you have no surprises and can negotiate repairs ahead of time. 

So, in sum, proactive inspections can benefit sellers in a number of ways. In future videos, we’re going to discuss vetting the buyer’s agent and the lender, as well as how to handle the contingency periods and protect yourself from assuming undue risk the buyer doesn’t want to assume themselves. 

If you have additional questions about the information covered in today’s message, feel free to call or email me. I would love to speak with you.