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"House Selling for Dummies" Pre-Listing Summary

The following information is from "House Selling for Dummies"

Count on it. Prudent purchasers will have your property thoroughly inspected before they buy it. Expect inspectors to poke into everything — your house's roof, chimney, gutters, plumbing, electrical wiring, heating and cooling systems, insulation, smoke detectors, all the permanent appliances and fixtures in your kitchen and bathrooms, and the foundation. They'll also check for health, safety, and environmental hazards. If you live in a temperate climate, you can bet that they'll also look for damage from wood-destroying insects (carpenter ants, termites, and powder-post beetles) as well as dry rot and fungus infections. Whew!

Flowers, fragrances, and all that other staging stuff aside, smart buyers know that a house's physical condition greatly affects its value. No matter how beautifully your property is staged, buyers won't pay top dollar for a house that needs extensive, expensive repairs.

Dummies Tip The best defense is a good offense. Beat buyers to the punch — get your inspections before they get theirs. Discover everything wrong with your house before putting it on the market. Defusing a crisis begins by discovering that a problem exists.

Don't be an ostrich

Some real estate agents argue against getting a house inspected before putting it on the market: Many states now require that sellers disclose any known property defects to prospective buyers. These agents point out that you can't tell buyers about problems if you don't know that the problems exist. Handing buyers a long list of repair problems as they enter your house will turn many of them off. They recommend getting buyers emotionally committed to the property first, before their own inspectors drop the bomb. That line of reasoning is based on an ostrich-like logic: What you don't know can't get you in trouble — for a while, anyway. Agents may use a second argument to convince sellers not to get their own property inspections: Buyers generally won't believe anything in reports paid for by sellers. According to these agents, buyers suspect that you'll hire a go-easy inspector to falsely report that your house is as solid as the Rock of Gibraltar. Why spend several hundred dollars on an inspection report that buyers won't believe? Again, you can find a nugget of truth in this argument. Only a suicidal chicken would ask the fox about how things are in the hen house. More than one unscrupulous seller has paid an equally unscrupulous inspector to write a false inspection report.

Look at the rewards

Consider these four reasons to have your property thoroughly inspected before putting it on the market:

  • Damage control: Suppose that your house needs a new foundation. The problem is there whether you know about it or not. Why wait passively for an ultimatum to fix the foundation at a cost established by the buyer's inspection or kiss the deal good-bye? If you discover the problem before marketing the house, you can either disclose it to prospective buyers with a repair estimate or, although it's not recommended, you can do the work before putting your house up for sale. Your negotiating position is much stronger if you know about problems in advance — and accurately know the cost to correct them.

Dummies Remember

    You can't lose what you never had. Some buyers won't want to tour your house if they know that it needs a great deal of repair work. Those buyers don't want a fixer-upper. Even if you paid for all the repairs, they still wouldn't buy your house. Forget them. Concentrate on buyers who are willing to do corrective work after the close of escrow if your price and terms are fair.

  • Financial planning: Having a realistic estimate of your present house's net proceeds of sale before committing to buy a new home is important. Asking prices aren't sale prices. If your house needs major repairs, you'll pay for them one way or another — either by doing the repairs yourself, by reducing your asking price to reflect the cost of repairs, or by giving buyers a credit in escrow to do the work.

  • Latent defects — flaws hidden out of sight behind walls or concealed in inaccessible areas, such as under your house or up in the attic where you can't see them — are time bombs. Defects you can't see and don't know about (such as faulty wiring, termite damage, a cracked heat-exchanger in your furnace, dry rot, asbestos insulation, lead in your water pipes, and so on) are potential deal killers. A good premarketing inspection can reveal all these problems.

  • Fine tuning: Professional property inspectors can help you spot minor defects, such as dirty filters in the heating system; ventilation problems in the basement, garage, or crawl space; blocked gutters; loose doorknobs; stuck windows; a missing chimney hood or spark arrester, and so on. Eliminating small maintenance problems like these gives prospective buyers who tour the property a favorable — and correct — impression that your house is extremely well-maintained.

  • Peace of mind: The inspector alerts you to health and safety precautions you should take. Installing smoke detectors, grounding electrical outlets, and keeping flammable products away from furnaces, heaters, and fireplaces, for example, make your house safer for the next owner and safer for you as long as you continue living in it.

Investigate inspectors

Quite a few so-called house inspectors have neither the background nor the special training required to do premarketing house inspections. Compounding your problem of finding a qualified inspector, few states certify, license, or regulate house inspectors. And, as we all know from personal experience with government regulation, states that do regulate house inspectors don't always do a good job. Anyone with a clipboard, a pickup truck, and a decent houseside manner can instantly anoint himself or herself a house inspector nearly anywhere in the country.

Dummies Warning

Avoid contractors who graciously offer to inspect your house and then do repairs that they discover during their inspection. If you're mechanically challenged, unscrupulous contractors can use your ignorance to fatten their wallets by billing you for phony corrective work they create themselves.

Dummies Tip

The best way around this conflict of interest is to hire someone who performs only property inspections — a professional property inspector, not a contractor wearing two hats. Doing property inspections requires special expertise that not all contractors, engineers, and architects have. Good professional property inspectors earn their living solely from inspection fees and do not do corrective work. This restriction removes any temptation to find unnecessary corrective work during inspections.

New homes are sometimes inspected by local officials and rarely by the architect. These inspections have little to do with the quality of the work done. They generally have to do with local codes and construction methods.

You can protect your new investment with construction monitoring which consists of three inspections. One at the time the concrete is poured, one after all of the rough in work has been done but before the wall covering is installed and a final inspection that is done before you accept the building for occupancy. Your final inspection will include information on how to maintain and operate many of the system in your new home. You will also receive a complete punch list of defects for the builder to address prior to you accepting the home.

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