Buying or selling a property is a major financial decision, and as a broker, you want to ensure that your clients make an informed decision.
One crucial step in the real estate process that can save both the buyer and the seller from potential headaches down the road is a thorough property inspection. Here are a few reasons why brokers should encourage their clients to get a property inspection before closing a deal.
Identify potential problems
A property inspection can reveal any underlying issues with the property that may not be apparent during a casual walk-through. From leaky roofs to outdated electrical systems, a qualified inspector can spot potential problems and provide recommendations for repairs or maintenance. This can help the buyer avoid unexpected expenses down the line and provide a more accurate picture of the property's overall value.
Let's take the case of a seller who decides to list their house without first having it inspected. The buyer learns during the sale process that the house's foundation has significant cracks and needs expensive repairs. This finding may result in discussions about who will foot the bill for the repairs, which could delay the sale or even result in it falling through. The seller could have addressed the problem in advance and prevented this situation if they had obtained a property inspection in advance.
Increase transparency and trust
In order to build trust between the buyer and seller, it can be encouraged that the property be inspected. The seller demonstrates their dedication to being open and honest about the condition of the property by ordering an inspection and disclosing any problems up front. This could ease the buyer's concerns about the deal and result in a faster sale.
Let's take the case of a buyer who is considering a property but is worried about potential electrical problems. The buyer may feel more at ease and be more likely to proceed with the sale if the seller has already had an inspection performed and can provide a report proving the system is in compliance.
Protect buyers and sellers from liability
An inspection of the property can shield both the buyer and the seller from future legal problems. A buyer may be able to file a lawsuit after purchasing a property and learning of a problem that was either not disclosed or that the seller was aware of but failed to fix. Similar to this, if a seller conceals a known problem with the property, they risk being held responsible for any losses the buyer suffers.
Let's say, for instance, that a seller knows their house has a mold problem but chooses not to tell the buyer. The buyer finds the mold after the sale is completed and develops health issues as a result. If the seller didn't disclose the problem, the buyer might file a lawsuit against them, which could cost the seller a lot of time and money. The seller could have completely avoided this situation if they had obtained a property inspection and disclosed the problem up front.
Provide leverage for negotiations
A property inspection can give the buyer and seller additional negotiating power. The buyer may use this information to demand that the seller make repairs before the sale is finalized or to demand a lower price if the inspection reveals serious problems with the property. The inspection report can also be used by the seller to show that the house is in good shape and support a higher asking price.
Let's say, for instance, that a buyer is considering purchasing a property, but an inspection reveals that the roof requires major repairs. The buyer can use this information to demand that the seller make the repairs before finalizing the sale or to bargain for a lower price. As an alternative, the seller may use the inspection report's findings that the property is in excellent condition to support a higher asking price or to show that the property is a wise investment.
In conclusion, a thorough property inspection is a crucial step in the real estate process that can provide significant benefits for both the buyer and the seller. As a broker, it is your responsibility to ensure that your clients are aware of the importance of getting a property inspection before closing a deal. Not only can it save them from potential financial and legal headaches down the line, but it can also increase transparency and trust between the parties involved.
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We'd like to give credit where credit is due and list down the following websites that provided the inspiration behind this blog post, go give their articles a read as well:
National Bank of Canada: https://www.nbc.ca/personal/advice/home/pre-purchase-home-inspection.html
NAR Realtor: https://www.nar.realtor/home-inspections
Investopedia: https://www.investopedia.com/articles/mortgages-real-estate/08/home-inspection.asp