Do Home Inspections Really Affect Property Value?

by guest blogger Laura Hendershot

The physical condition of a property is particularly essential in determining its habitability, which directly impacts its value, warns the Central FloridaTeam. Because of this, most home sellers spend more money on curb appeal, staging, painting, landscaping, upgrades, and so on. They tend to avoid one of the crucial tools that affect a property’s value: home inspection.

For investors looking to maximize returns on their home sales, conducting a home inspection may initially seem counterproductive. That is because home buyers often use this tool to negotiate the price of a property. However, this article addresses home inspections’ common concerns and explores how they can positively impact property value.


Factors that determine a property’s value

By understanding what factors determine a property’s value and considering the influence of potential buyers, investors can make informed decisions regarding home inspections. In real estate, a property’s price is closely linked to value.

The higher the value, the costlier the property, and vice versa. It is beneficial to boost a property’s value to achieve the best possible price when selling it. Home inspections play a crucial role in determining a property’s value by assessing the following:

  • Renovations, upgrades, or remodeling
  • Age
  • Physical condition
  • Size
  • Amenities
  • Usable space
  • Comparable properties
  • Season
  • Location


What happens after a home inspection?

Several things can happen after a home inspection. Some of them include:

  • Homebuyers may negotiate with the seller in the event of significant issues discovered during the home inspection. They may request the seller to perform the repairs or reduce the property price, enabling buyers to allocate the funds for vital repairs.
  • After a home inspection, the buyer may choose to terminate the purchase due to the high cost of the property and the realization that extensive repairs are necessary. That allows the buyer to avoid further financial loss by withdrawing from the transaction.
  • In some cases, homebuyers may proceed with the property purchase when the problems identified during the home inspection do not significantly impact the home’s price.

Home sellers are often uncomfortable with the first two events. That is because they negatively impact the property’s value. However, experienced real estate investors know how to use the home inspection tool to their benefit.


How to make home inspection boost your property’s value

While some sellers fear that inspections may lead to price negotiations, they can enhance a property’s value by addressing any issues and improving its overall condition. Below are what you should do if you want a home inspection to improve your property’s value.

1. Perform a pre-listing Inspection

A pre-listing inspection is an inspection ordered by the home seller before putting up the home for sale. This inspection aims to help the seller know if the property has hidden issues. If that happens to be the case, the seller may fix all these issues before listing them. In that case, the property maintains or improves its value. Remember to keep receipts of the repairs you performed on the property because they will be helpful during the home sale.

Sometimes, a home inspection may not uncover any serious issues with the property. That will positively impact the property’s value because the seller will be proud to present this report to the homebuyer during the selling process. Although most homebuyers will still conduct their home inspection, they feel more comfortable with properties that already had a pre-listing inspection. It assures them that the seller is transparent about the property’s condition.

2. Conduct strategic repairs based on the pre-listing inspection

From the pre-listing inspection report, you will know if you have significant issues that can affect your property’s price. We advise that you identify such issues and fix them. You can ignore minor issues that do not impact the property’s value more.

3. Be transparent about findings

Let prospective homebuyers know you have conducted a pre-listing inspection on the property. Inform them beforehand if you have performed repairs and the extent of the repairs you did. Let your receipts serve as proof of this. If there are problems you failed to fix, let them know about them and why you ignored those issues. By doing so, buyers will see that you have factored all these issues into the home’s price. As a result, prospective homebuyers will not pressure you to renegotiate the property’s price.

Apart from boosting your property’s value, home inspection can make the selling process smooth and seamless. That is because it gives you confidence about your property and reduces the likelihood of unwanted surprises when buyers perform their home inspection.

Laura Hendershot is a guest blogger who works for Central Florida Property Management in Orlando.