When you are planning to sell you may want to consider having a physical home inspection performed before you list your home or condo. The main reason for this is to make the escrow process run more smoothly and to avoid any costly surprises that could cause you to have to reduce your price to facilitate the sale. If you know and disclose any deficiencies up front, you will be able to avoid costly negotiations later on.
The prime candidate for this is a property that you have owned for more than 5 years and have not made any improvements to. Maybe you’ve used the property as a second home, nightly rental or income property. Properties that are rentals tend to have the most wear and tear and deferred maintenance.
A home inspection will cost about $350 – $550 depending on the size of the home. The inspector will tell you of any major health and safety issues that should be repaired. If you can afford to take care of any code violations, plumbing or electric problems before the home is listed, you will be ahead of the game.
Most inspection reports will come back with small issues such as leaky faucets, electrical wiring not to code, and carbon monoxide detectors not installed. These are the basics, but every so often an inspection will turn up a larger issue such as major code violations that prevent a space from legally being able to be classified as living area, or a hidden leak with major damage to the drywall or subflooring. These are the deal killers that need to be avoided during an escrow. Now that we have moved out of the major forclosure market, buyers are expecting to see properties in good condition and will ask for many repairs if they are paying top dollar for an upgraded home.
As a seller you need to be prepared to spend about ½% – 1% on repairs, if it is a second home or rental property, if you want to get the highest price for your residence.
A second issue of major concern lately is the measurement of accurate square footage. It is of extreme importance that the square footage be listed correctly. If you are unsure of the square footage, it would be wise to have it measured by a local appraiser who is licensed to do this. The cost is usually a few hundred dollars, but can save you thousands during an escrow. Recently I had an escrow cancel due to a misrepresentation of square footage by over 15%. Buyers today are cautious about cost/sq ft and won’t overpay on that sticking point unless there are improvements to warrant it.