Do Home Inspections Really Affect Property Value?
When selling your home there are lots of things you do not control. Buyers are finicky and you can't control whether they will like the size, shape, or colors of the rooms in your home. You also can’t control how long they will take to make a buying decision and how much they will offer.
The one thing that you do have control over is the condition of your home. You can improve its appearance by carrying out renovations and staging the home to make it more attractive to buyers, suggests Dawson Management. You can also ensure that the online photos of the property are the best that they can be.
Another thing you may also have control over is how much you choose to ask for your property. There are many things sellers look at to fix the list price of a home. They consider the price of similar homes in the area, the condition of the home, and the state of the property market in their location.
But after you have done your research and set your list price, do you really have control over how much your home will eventually sell for? Of course! You have the power to accept or reject the buyer's offers. But after you accept an offer is there anything that can still affect your sales price?
Yes there is. The home inspection can affect the eventual sales price of your home. Home inspections have become almost a mandatory part of the home buying process. Buyers insist on them because they want a neutral third party’s opinion on the true condition of a home they are about to buy.
And because the home inspection is grueling in how detailed it is, it can often uncover things about a home that even the owner does not know about. Since the valuation of your home is based on its condition, this can put a question mark on your sales price.
Possible outcomes of a home inspection
Home inspections are tasking and inspectors have a checklist of 2000+ items that they go over during the assessment. With such a long list of criteria, it is not unlikely that the home inspector may discover one or two things that are unsatisfactory.
There are three things that can happen after a home inspection:
· The buyer may walk away
Although the buyer has signed a purchase agreement with you the seller, they may still be able to walk away from the deal without losing their earnest money. That is because the purchase agreement, which the buyer signed, contains clauses that make the purchase contingent on the outcome of the home inspection.
· The buyer may ask for repairs
The buyer may choose not to walk away but insist that you fix whatever problems were detected by the home inspection. If you refuse to do this, then the buyer can resort to the first option of walking away. This is because any problem of significant importance that is discovered must be disclosed and may become a basis for the buyer choosing not to buy the home.
· The buyer can renegotiate for a lower price
Even if the home inspection uncovers major problems with your home, the buyer may still be interested in buying it. But they may not ask you to repair the damage. Instead, they will calculate the cost of the repair and deduct it from the sale price. Essentially, they can push you to sell your home for a lower price.
In essence, the home inspection can affect the value of your home. If it does not directly lower its sales price, it can keep it longer on the market, which means more carrying costs. The inspection result may also lead you to spending money on unplanned repairs. So, what can you do to avoid these possible outcomes?
What to do before the home inspection
There are three steps you can take to improve the level of control you have over the outcome of the home inspection. The more control you have over the process of selling your home, the more you can be sure of getting the price you want for it.
Here are the steps to take:
1. Do a pre-listing inspection
Conduct your own home inspection before you list the property. This will let you know the exact state of your home. Based on the inspection report, you may want to make repairs to the home, but you can factor those costs into your list price for the home.
2. Prepare for the inspection
Many homes often fail to live up to buyer's expectations because sellers don’t know how to prepare for the inspection. Learning how to get your home ready for inspection will give you the tools to make the home inspector's work easier. It will reduce the risk of the home getting a bad report.
3. Be upfront about issues
If the pre-listing home inspection uncovers problems that you are unwilling to solve, you should be upfront with buyers about those issues. This will improve buyer confidence. Also, they can't renegotiate the sales price, given that they knew of the issues beforehand.
Finally, although the home inspection does have the power to negatively affect the value of your home, taking proactive steps can prevent it from doing so.
About Dawson Property Management:
Dawson Property Management provides real estate services and professional property management in Charlotte, North Carolina, and throughout Mecklenburg County and Union County. Our professionals are dedicated to the property management industry and are always enhancing their skills. We maintain membership in the National Association of Residential Property Managers in order to keep up with the latest industry processes and trends.