Negotiating a purchase agreement is just one step among many in the home-sale process. Before the transaction closes, buyers usually have the property inspected to check for defects. If inspection issues crop up, the contract can be subject to renegotiation, which can derail the transaction altogether.
Real estate law and practice vary from one area to the next. Sometimes the buyers complete their inspections before they enter into contract to buy a home. But regardless of how homes are sold in your area, it’s generally thought to be a good idea for sellers to conduct presale inspections before they put their home on the market.
Some sellers do pre-inspections to make sure that they completely disclose defects that may affect the value of the property. Others inspect so defects that might detract a buyer can be repaired before the property goes on the market.
Even if repairs aren’t made before marketing, presale inspection reports can help you by making any bad news about the property known to a prospective buyer before he makes an offer. You can lose precious marketing time if you take your home off the market for a buyer who then backs out after he sees a home inspection report.
HOME SELLER TIP: In addition to obtaining presale inspections, consider contacting reputable contractors to provide repair estimates for significant defects that are noted in your inspection. Inexperienced home buyers often have no idea how much it will cost to replace a roof or remove asbestos from the heating system. Fear of the unknown is intimidating. A reasonable repair estimate may assuage the buyer’s concern.
Also consider that a buyer whose experience with home maintenance is limited is more likely to estimate on the high side to be safe. Often actual repair costs are less than a buyer might imagine. Asbestos abatement is a good example.
Finding a contractor who will give you a realistic opinion of the condition of your property can be an issue. Many contractors would rather replace than repair. You want contractors who will do the job correctly for a reasonable price. Ask your real estate agent and acquaintances who recently had a good experience with a contractor for recommendations.
Unless you have the expertise to know if an estimate is reasonable, you should plan on getting more than one estimate. Estimates vary widely depending on variables like the contractor’s workload. Recently, a homeowner who was preparing his home for sale was told that his tile roof needed replacing. The first bid he received was for more than $75,000. The second estimate was for $20,500. Both estimates were from reputable, licensed roofers.
If the estimates you receive vary significantly, as in the example above, think about having the work done before you put your home on the market by the contractor who issued the more reasonable bid. This way you are in charge of how much you spend on the repair. Just make sure that the contractor will warrant his work for the buyers.
In a hot seller’s market, sellers can often sell “as is” regarding property defects. In a buyer’s market, like we are currently experiencing in most parts of country today, you could find it difficult to sell your home if there is a lot of deferred maintenance.
It is a good idea to have as much repair work as possible done before you market your home. This will put you in a much better negotiating position. Your home will also appeal to more buyers, which should result in a timelier sale for a higher price.
THE CLOSING: Sellers who are unwilling or unable to complete repair work before they sell should be prepared to discount their list price accordingly.
Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.