In the last post, we looked at the home inspection process from the buyer's side. This time, we'll look at it from the seller's perspective.
Most, if not all buyers, will include a home inspection contingency in the purchase and sale contract, which will allow them to cancel their purchase should an inspection uncover any major defects. Even with this protection, the process can be stressful for buyers. However, it could be argued that it's even more stressful for sellers, who will either find themselves having to re-list their property or be asked to cover expensive repairs - even if they weren't aware of them - prior to closing on their sale.
Often, from the seller's side, an inspection seems like a harrowing task they have to survive in order to move forward. Who knows? Your buyer may not even ask for an inspection, but don't count on that. The American Society of Home Inspectors says nearly 4 out of every 5 homes are inspected prior to being sold.
As a home seller, the first thing you need to do is provide potential buyers with a list of any known defects with your home. These will be included in the property listing sheet your Realtor will have you fill out before your home hits the market. Failure to disclose known defects could put you at risk of not only losing the sale, but of being sued by a potential buyer. So don't try to hide anything. - ever.
When it comes to the inspection itself, there's something you need to know up front about what will happen: The buyer's inspector, and the buyer him or herself, will be looking at everything, from the roof to the basement and wall to wall. They'll open your drawers and cabinets, flush your toilet, turn on every faucet in the home, run your dishwasher (and any other appliance that's included in the sale), open and close every window, crawl through every inch of your basement, check out every shingle on the roof and even trod through every inch of your yard.
All this may seem like an invasion of privacy, but you need to be OK with it. So consider yourself warned.
The good news is that once you're under contract to sell your home, the inspection will take place quickly. The seller's agent will arrange an appointment through your agent, and the inspector will arrive at that time with the buyer, and commence inspecting. This will usually take about two hours, give or take, depending on the size and condition of your home. The inspector may also perform services, such as testing for radon gas and looking for termites or other wood-destroying pests, if the buyer requests them.
The other good news is that the buyer is almost always responsible for paying for the inspection. Now for some advice on how to handle any not-so-great news that comes out of the inspection.
What happens after the inspection will normally be spelled out in the contract's contingency clause, but the buyer will report any findings of concern to the seller, who ordinarily doesn't receive a written report unless requested as proof of inspection. Otherwise, you'll probably be among the last to know about any problem areas the inspector may have uncovered.
Should the buyer have any major concerns, it will commence an additional negotiation between the two of you. In some cases, there may be an easy fix, such as repairing a leaky faucet or a stove burner that doesn't work. In others, the fix may not be so easy and may not even need to be made at the moment.
For example, your roof or your furnace may need replacing three or four years down the road. In that case, a buyer may ask you to reduce the sale price to cover that eventuality. Or they may ask you to make those replacements prior to closing. How you handle these requests is your decision, but they can - and often do - mean the difference between closing your sale or starting the listing process all over again.
In some cases, sellers choose to avoid unexpected problems by having their home inspected prior to putting it on the market. This may be the right thing for you, particularly if you have an older home. That way, you can either address the problems up front or inform buyers of the issues and price your home accordingly.
Understandably, the home inspection process can be both intimidating and feel like a violation, but the best advice is to prepare your home and ensure it's in top condition prior to the inspection. In the words of Ben Franklin, "An ounce of prevention is worth a pound of cure".