When you sell a house, the last thing you want is for the deal to fall through right before you sign the papers. But Redfin's most recent data shows that this is happening a little more often these days. The good news is that you can entirely prevent it if you ask an agent for help understanding why it happens and how to avoid it.
Fifteen percent of homes that were supposed to sell this June didn't. That indicates those buyers broke their contracts. It's not much more than the average of about 12% from 2017 to 2019, but it is an increase. And it's one you don't want to have to deal with.
Knowing what problems are making a buyer walk away is the key to preventing this trouble. A recent poll by John Burns Research and Consulting (JBREC) and Keeping Current Matters (KCM) found that the home inspection is the main reason deals are breaking apart right now (see graph below):
Here's why. Buyers don't have much room (or desire) for unanticipated repairs because prices and borrowing rates are so high.
And purchasers have more choices now that there are more homes for sale. So, if the inspection finds a big problem, they can decide to walk away. They could always buy an other house instead.
A buyer might also back out if the seller won't fix things since they don't want to deal with those problems themselves and pay for them.
As a seller, you can avoid any bad surprises by arranging a pre-listing examination. The National Association of Realtors (NAR) says that even if it's not required, it's a good idea right now:
"To keep deals from falling apart, it gives the seller a chance to fix any problems before the For Sale sign goes up." It can also help buyers avoid surprises like a broken roof, an expensive plumbing problem, or an old electrical panel that could make them leave before closing if they are short on cash.
What is a Pre-Listing Inspection?
It's exactly what it sounds like: a professional examination of your home that you set up before you put it on the market. What it can do for you is:
Give you time to mend the things that matter. You'll be aware of any problems that might come up during the buyer's inspection. So, you'll have time to deal with them before anyone ever comes in.
Don't try to change the terms of the deal at the last minute. If buyers find problems after you've signed a contract, you may have to make compromises like lowering the price or making repairs, or even worse, the purchase may fall through. A pre-listing examination helps you keep ahead of such things before they become problems that stop the purchase.
Let buyers know you're serious. Buyers can tell whether your home is tidy, well-kept, and has already been checked out. It helps you sell faster with fewer back-and-forth negotiations and fosters trust.
What does it all come down to? Paying a few hundred dollars up front can save you thousands afterward.
Should All Sellers Do This?
Not always. Your real estate agent can help you figure out what is best for your position, your home, and the market. Your agent will help you every step of the way if you choose to go through with a pre-listing inspection. They will:
Tell you whether to fix or tell about each problem
Help you decide which repairs are most important to buyers in your area
Make sure you know the rules on disclosure in your area.
The Bottom Line
A pre-listing inspection might be a good idea if you want to avoid problems with your deal. Talk to an agent, such as the Hersey Group, to find out if a pre-listing inspection is the best thing to do for your house and the market.