In the hot Seattle market we’ve had the past few years, many sellers are giving buyers the option of conducting a pre-inspection before submitting an offer on their home. If you’re a seller, this may sound like a great option. When the offers come in, you know that it will be unlikely that the agreed upon sales price will be reduced later because of issues found in the home.
But it’s really not that simple, AND buyers hate doing pre-inpsections. A typical inspection costs around $500. And add a sewer scope in for another $225. In a multiple offer market, buyers may have to submit offers on many homes before winning out on one. With pre-inspections, it’s not just the $725 inspection on the house you’re buying, it’s a $725 inspection on each offer. I know of buyers who have spent thousands of dollars just on pre-inspections.
For a seller, you might receive an offer that states something like: “We were going to submit our offer for $600,000 but then we discovered the roof has serious defects and has to be replaced, so now we’re only submitting it for $590,000.” As a seller, you are now legally obligated to disclose this material fact to all other buyers submitting offers, and this may decrease those offers or turn away potential buyers. (I had this happen recently where my seller learned of a plumbing issue from a pre-inspection and had to disclose it, resulting in a lower sales price.)
The other downside of pre-inspections for sellers is there is risk of damage from the pre-inspections. I know of a house that had 18 pre-inspections. And if there are multiple sewer scopes, there is risk of the scope damaging a line.
So what are the options for sellers. Put your home on the market, review the offers, and let the buyer you choose then conduct an inspection. Another option is to do your own inspection before listing the home, disclose the issues, and put it on the market. The seller should still encourage the buyer to do their own investigation of the property and not rely solely on what is provided by the seller.
Questions, comments, give me a call at 206-790-0081 or an email.