When flipping a house, a pre-inspection is one of the best ways to stand out from other home sellers. On television, people who buy homes at bargain prices, renovate them, and then sell them for a profit appear to follow a straightforward process. The numbers always add up well, and even the most extensive renovations are somehow completed on schedule.
These shows may lead people who have never invested in real estate to purchase an investment property and tackle the rehab themselves in the hopes of selling for a huge profit. However, reality TV is, of course, not an accurate reflection of reality. Flipping a house can quickly turn into a money-guzzling nightmare. Even people with many years of experience can encounter problems they didn't anticipate before they purchase a home.
One reason many bank-owned properties are available at bargain prices is that they have known issues or even potentially unknown problems. Before you flip a home, you'll work to fix those problems. However, to obtain the optimal price when you sell, you want buyers to feel confident they are buying a home with no hidden defects. A thorough pre-inspection with a detailed report by a certified home inspector can address potential buyer concerns and show them you have nothing to hide.
Why Investors Should Get a Pre-Inspection
The longer you hold a house you've renovated, the more money it will cost you. If you did most of the repairs yourself to save money, you'll probably want to sell the home yourself without the services of a real estate agent. This means it's your responsibility to schedule a showing and speak with all interested parties. However, your time is valuable, and a pre-inspection report should answer many of the questions potential buyers may have. It can also reduce the amount of time your investment property spends on the market.
When flipping a house, you compete with home sellers who have lived on their properties for many years and have lovingly maintained their homes. These sellers provide a seller's disclosure to potential buyers and can discuss the property's history and the neighborhood with buyers. Buyers often feel more comfortable purchasing a home from people who have lived there. When they consider purchasing from an investor, they're usually looking for a special deal or bargain, such as financing or a rent-to-own option. Having a home inspection report available to buyers can save them money and improve your position among other available homes on the market to ensure you obtain the sales price you want.
If home buyers use traditional financing, they can feel confident the house has no unforeseen issues that could delay the closing or prevent the home from qualifying for financing. The subject property must meet certain standards to qualify for loans, and after a pre-inspection is conducted, both the seller and buyer will have a better understanding of which financing the house qualifies for.
Having a home inspection completed before your house flip goes on the market expands the pool of potential buyers for your property and speeds up the selling process, making your investment that much more worthwhile.