What’s a Pre-Inspection and How Does It Matter?
You’ve probably heard of a home inspection, but a pre-inspection is often talked about as something completely different. While a home inspection is typically expected, a pre-inspection is somewhat more controversial.
What is a pre-inspection, and what is the difference from a home inspection, exactly? We’ll answer all these questions and more below.
Home Inspection vs Pre-Inspection
What’s the difference between a home inspection and a pre-inspection?
The home inspection everyone means when they say “home inspection” is paid for by the buyer and happens after the seller accepts an offer. Buyer’s home inspections (as they’re often called) are part of a buyer’s due diligence. They’re mandatory with some home financing but highly recommended in any case – if any major problems are found, the buyer has the right to negotiate a lower purchase price or back out of the deal altogether.
When people say “pre-inspection,” what they mean is a “pre-listing home inspection.” Pre-inspections are paid for by the seller and happen before they list the property (or, at the very least, before they accept an offer). They’re also called seller’s home inspections, for obvious reasons.
So, a big part of the difference between a buyer's inspection and a seller's inspection is the "when" and "who." However, pre-inspections may also have a different level of thoroughness.
What Does a Home Inspection Cover?
A buyer’s home inspection is always very thorough. It’s a non-invasive evaluation of all home systems. The inspector examines key elements, ensuring proper operation, observing the condition, and noting damage, including the following:
- Exterior
- Structure: Foundation and framing
- Interior: Windows, doors, ceilings, walls, floors, attic, and basement
- Plumbing and electrical systems
Some agents recommend pest and roof inspections, as well.
With a seller’s inspection, the seller has more discretion over how thorough the home inspector will be. You can opt for a thorough inspection, or you can focus on one aspect, like the roof or foundation. A more limited home inspection costs less.
Benefits of Pre-Inspection for Sellers
The worst time to discover something significant, like a foundation problem, is after you’ve got a contract and are almost ready to close. Many real estate sales contracts contain a home inspection contingency, which makes the contract conditional upon the outcome of the home inspection report. Additionally, the buyer’s agent might negotiate a provision requiring the seller to complete repairs identified by the inspector before closing.
This means that an entire deal can be derailed by the discovery of problems lurking in the house.
A pre-offer inspection can identify problems and give you time to repair them. Also, sellers can boast a “clean bill of health” and be upfront about the condition.
A pre-inspection can also help when pricing the house.
Disadvantages of a Pre-Inspection
You’ll likely be required to disclose any defects the inspector finds to potential buyers. If you’re in a hot housing market where you can convince buyers to waive an inspection, this likely means settling for a lower price.
Additionally, a pre-inspection doesn’t guarantee a lack of problems before closing. Different inspectors may have different findings for the same property, and most buyer’s agents advise buyers to hire an independent home inspector before closing. A seller could fix defects identified in the pre-inspection and still have the buyer’s inspection identify new problems.
Finally, selling a house comes with many required costs, but a pre-inspection is optional. As a result, some agents think it’s a waste of money.
Should You Get a Pre-Inspection?
As you can see, it’s a good idea to stop and ask yourself, “Should I get a pre-inspection?” rather than just jumping in with both feet.
It depends on the circumstances.
Under certain conditions, a pre-inspection is probably a waste of money, like when you’re selling a new build that’s still under warranty. On the opposite end of the spectrum, a pre-inspection is unnecessary for homes that are clearly tear-downs or fixer-uppers. If you’re in a hot seller’s market, it’ll get you nothing but potential liability.
There are other circumstances where it’s prudent. If you’re trying to sell on a very tight timeline, it’s a good idea. If you suspect a major problem that could halt a sale in the future, it’s better to know sooner than later. If you’re selling an older house that you’ve lived in for more than five years, a pre-inspection is worth consideration.
But the simplest answer is to ask your real estate agent. They undergo extensive training and continuing education, and they’ll have the experience to tell you about the local market, the economic climate, and the likelihood of problems based on the age and condition of your house.
Whether you're a buyer or a seller, understanding the importance of pre-inspections can make a significant difference in the success of your transactions. Agent Campus by 360training offers comprehensive online pre-licensing courses designed to give you the knowledge and skills needed to thrive in the real estate industry. Start your real estate journey today!
