Let me start by saying that I am a firm believer that everyone should be able to conduct an inspection from a qualified home inspector before they purchase a home. For your average new buyer entering the market; discovering that in most cases, a “Firm Offer” is a necessity to secure a property in Ontario these days, comes as a shock to anyone who hasn’t tried to purchase real estate in the last five years. It’s a conversation that I, as a Real Estate Agent, encounter almost daily.
A house purchase is often the largest transaction that an individual makes in their lifetime, so you can understand why some security in knowing that you’re dealing with a quality product would be valuable to agents and home buyers alike. Yet the vast majority of homes listed in Ontario today are not listed with a “Pre-Listing” Home Inspection.
This would normally not be an issue if homes took some time to sell, but with homes selling sometimes as quick as a couple hours after they are listed it leaves a lot of questions left to those that are not qualified to give complete answers.
It really does make for an interesting conversation about “Risk Management”
So why do so few listings come with these pre-listing inspections? The most common reason is that people are scared of uncovering problems in their home, and don’t want to deal with the “fallout”. However, as you will see below, getting ahead of these problems only creates beneficial circumstances and minimizes risk on all sides of the transaction. At the end of the day, that should be a main goal of anyone on both sides of any real estate deal.
For Agents:
My team of agents (The Storey Team) consider ourselves full service agents. It is a standard inclusion to cover a lot of the transaction/marketing costs associated with selling a home. This can include staging, professional photography, inspections, videography, advertising, etc..However, the reasons we are so adamant on including an inspection for most homes are that it has so many benefits for everyone involved.
1) You increase the odds of firm offers.
In today’s age of the “bid date” there’s nothing worse (as a listing agent) than seeing an otherwise great offer with a clause that doesn’t need to be in there. In a multiple offer scenario this can mean taking a lower offer just because it’s a sure thing. A pre-listing home inspection provides buyers and agents the added security that a professional has done their due-diligence
2) You create a competitive advantage
Even if you believe that you’re going to get firm offers no matter what, providing a relatively clean pre-listing inspection increases a buyers likelihood to get more aggressive on a property. Ask yourself the question, “Would I pay more for a property if I knew the likelihood of unexpected expenses was less than other properties?” The answer is yes, and in a multiple offer scenario the difference can be 10’s of thousands of dollars to your seller.
3) You can get ahead of problems
I can’t stress this enough. Unexpected issues kill deals. Having more information about a property allows you to get ahead of everything that sends chills down a realtor’s spine when it comes to closing a deal. Avoiding lawsuits comes to mind. However, when you’re committing to marketing a property and setting expectations about the fair market price of a home, going in blind presents a huge risk on all fronts. Pricing a home pooly shoots you in the foot in every way imaginable. The property spends more time on the market, which takes up more of your time, which means you spend more on advertising, and may the realtor gods help you if you paid for a 45-day staging contract.
If you get ahead of problems you can either choose to remedy them, or price the asset accordingly. Hey, you might even get a referral now because your clients aren’t boiling mad they’re getting 60k less than you promised them.
For Sellers
Selling a home right now feels like you have the world in the palm of your hand. What often gets lost in the headlines of Ontario real estate is the reality that strategy and approaching things the right way can be a monumental difference in the price someone is willing to pay for your property. Getting a pre-listing home inspection is absolutely part of that, as you will see below.
1) You minimize your risk
If you’re selling your home and buying another, the normal chain of events in a hot market is to secure a home first and then sell yours once the deal is firm. Conducting a pre-listing home inspection helps you set a reasonable budget (expectations) and uncover any issues that might prevent your home from selling on the same timeline as your neighbour down the street.
2) Your ability to be sued decreases dramatically
I’m not saying this is a “Get Out Of Jail Free” Card, but conducting a pre-listing home inspection has the ability to help draw a pretty clear line in the sand in the conversation about what you did, and didn’t know about your home going into a sale. In the unfortunate event that a lawsuit arises because of a problem with a home – an inspection can be an important tool in absolving yourself of perceived wrongdoing.
3) You Can Prepare Your Home To Show In It’s Best Possible Light
The ability to do repairs in advance is a huge asset when it comes to marketing a home. Conducting a pre-listing inspection and fixing any deficiencies helps provide additional security and also shows a new buyer that you’re the type of seller that takes care of their home! Buyers are (generally) pretty lazy and this usually means that they’re going to be willing to pay more for something turn-key.
These are just a couple of the reasons that conducting a pre-listing home inspection can benefit both Agents and Sellers alike when it comes to selling a home. In the GTA we’ve started to see a shift to more agents providing this service in their commission and I hope it continues. However, until then I encourage everyone to try and create an advantage for themselves and their clients by having one done by a qualified home inspector.
Stay safe out there
Cam Woolfrey
