Every time you buy or sell a property, you need to protect your investment. One of the best ways to do this is by having an inspection done. Whether you are a seasoned investor or looking to close your first deal, there are often items that an inspector will find that you may overlook. Instead of paying a few hundred dollars for the inspection, the cost of overlooking a major item or not replacing something a buyer would want will cost you thousands more. You don’t know what you can’t see, and unless you are an appraiser or inspector yourself, it is easy to overlook seemingly small housing items that can come back to haunt you. Having a professional inspector check a subject property is absolutely critical.
Knowing exactly what you are buying is the most important thing you will do before you make an offer. You don’t need to have an inspection on every property you are lukewarm about, but for those you have genuine interest in, an inspection is necessary. Issues regarding the foundation, plumbing and structure aren’t picked up by every investor. An inspector is trained to look for certain things that you may not even think about. Anyone can find mold in the basement, but not every investor will be able to detect sewer line problems or potential issues in the basement foundation. These are the items that will be the most costly and can greatly alter your purchase price or even if you want to make an offer at all.
Most deals in today’s market have a time consideration involved. Even if you are buying a bank owned property with cash and have agreed to waive inspections and close in a week, you should have an inspection done. Unless you are knocking down the house, the inspection is done to protect you. Time is still of the essence, but by having your inspector find a major issue that you may have overlooked will greatly reduce the chances of buying a lemon of a property. Instead of discovering issues after you take ownership, you can avoid them and focus on quality properties.
Even if you omit the inspection on the buying side, you should consider it when you are selling. Some investors may feel that this is a waste of money and should be the responsibility of the buyer, but they are missing the big picture. When selling, you are looking to maximize the price. To do this, you need to make your home as appealing as possible. By having an inspection, you will get the jump on any potential issues your buyer may have and take care of them before you put the house on the market. Instead of a buyer looking to get a $5,000 credit on work that may cost $2,000, you can do the work before you list and get a higher sales price. If a buyer finds one item, they usually assume that there will be more coming. This will either impact their offer price or it may even lead them to not make an offer at all. If you can get the jump on any repairs before your home is listed and offer a property without any work needed, you will always get a higher asking price.
Another reason to get an inspection, if you are selling, is to verify that any work done was up to code. If you are using a new contractor or if you have doubts about the quality of the work, an inspection will point those out. This may seem like a waste of money, but spending it will save you more on future deals. Buyers will look at every single inch of a house. If your contractor missed something or did the work quickly, it will come back to haunt you. If you have confidence that your property is free of any defects and the condition is sterling, you can command a higher price. More importantly, you won’t be as willing to take the first offer that comes your way.
Having an inspection should be viewed as the cost of doing business. Items like the inspection, title search, comparative market analysis and even appraisal are all done to give you a better idea of just what you are buying. An issue that costs thousands will impact not only the current deal, but also everything else in your business. There will be instances when you have a title search or inspection done on a property you do not end up buying, but that shouldn’t be looked at as wasted money. If a couple hundred dollars prevents you from taking a huge loss on a deal, it was a wise investment.
Whether you are considering an inspection before you buy or before you sell, it is an important process that can save you money. Knowing what you are buying gives you the best chance to make the best possible decisions. Likewise, knowing what you are selling will give you confidence to get the highest possible price. An inspection will do this for you and has to be considered on every deal you get involved in.
