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Do Home Inspections Affect Property Value?

When selling your home, the first objective is to quickly find a buyer and get that buyer to pay as much money as possible for the home. To do this, Alliance Management team suggests that homeowners remodel their homes before putting them on the market.

The goal of remodeling a home before you sell it is to update its features and make sure they match the current trend of what home buyers are looking for. If your home closely reflects the buyer's ideal home, they are more likely to accept your selling price.

In theory, this is how it works. But the reality is often very different. This is because buyers, regardless of how nice and well-kept your home appears, will want to do a home inspection before they pay for the property. A home inspection looks beyond the aesthetics of the building to the condition of its underlying structures and systems.

Home inspections, although not mandatory, are now an accepted feature of the home-buying process. Buyers need to inspect a house before they buy it because they know sellers are only sometimes honest about the actual state of their property.

Also, most buyers need to learn more about buildings to detect hidden issues with the house on their own. To make sure they don't overpay for the property or buy a home that will be problematic in the future, buyers hire professional home inspectors to evaluate the house.

How does this affect you as a seller? Is it possible for a home inspection to negatively impact the market value of your property? The direct answer to the question is yes. A home inspection may not only lower the selling price of your home, but it can also terminate the purchase agreement.

How home inspections affect the value of your home

When they assess the physical condition of a building, professional home inspectors look at the following:

  • The home's physical structures: The foundation, roof, walls, flooring, exterior siding, etc.

  • It's major systems: Plumbing, electrical, and HVAC systems.

  • The mechanical features: Doors, windows, and all the moving parts of the building.

A professional home inspector will not tell a buyer whether to buy your property. The home inspector can submit a home inspection report to the buyer detailing the home inspection findings. Based on that report, a buyer can do one of three things.

1. Go ahead with the purchase.

This is the best outcome from the seller's point of view. A home inspection will always reveal problems with a home, but sometimes those problems are minor and not a big concern to the buyer. If this happens, the buyer must proceed with the purchase agreement.

2. Walk away from the deal.

The buyer may walk away from the deal if the home inspection uncovers many issues that will take time and cost money. The buyer can do this without being penalized for terminating the purchase agreement. Once again, from the seller's point of view, this is the worst possible outcome of the home inspection.

3. Negotiate a lower sales price.

The third outcome of a home inspection is a compromise between the seller and buyer. This happens when the home inspection reveals serious issues with the home, but the buyer is unwilling to walk away from the deal because of those issues. Instead of terminating the agreement, the buyer pushes the seller to sell their home at a lower price.

In this third scenario, the home inspection has effectively reduced the market value of your home.

Of course, instead of selling at a lower price, you can choose not to sell the home. Alternatively, instead of selling at a lower price, you can decide to fix the highlighted issues before the sale of the house can be finalized. If you choose this second option, you will still make less money on your home.

What is the best way to avoid a home inspection forcing you to sell your home below your desired price? The key is to do a pre-listing home inspection. This is a home inspection ordered by a homeowner before they list their property for sale. What are the benefits of doing a pre-listing home inspection?

  • It helps you avoid unpleasant surprises from the buyer's home inspection.

  • You can fix all the highlighted issues with your home before you list it.

  • A pre-listing home inspection inspires buyers' confidence; some buyers will even waive their right to do a home inspection.

  • Buyers will be drawn to the home since there are no underlying problems to be wary of.

  • Lastly, you can sell your home for much more money than you thought possible.

If you are on the verge of listing your home for sale, a pre-listing home inspection by one of the industry's most-trusted home inspectors will help you avoid the anxiety that comes from not knowing what a buyer's home inspection will turn up in your home.


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