Selling Your Home? Kill The Inspection Report Price Drop!

Inspection reports are one of the easiest ways buyers squeeze sellers after contract. In this episode, Tim shows you how to stop that price-reduction play before it starts with a pre-listing inspection and a Truth Binder.

You’ll learn:

• Why inspection week creates massive seller leverage problems
• How a pre-listing inspection protects you before buyers attack
• The 3 buckets for sorting inspection issues
• What to fix, quote, disclose, or ignore
• How a re-inspection makes your home look cleaner and safer
• What to put inside your Truth Binder
• How repair quotes stop inflated credit requests
• Why transparency turns buyer suspicion into trust

Bottom line: fix what matters, document everything, and remove the ammo before buyers can use the inspection report against you.

Intro

Outro

Transcript

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SPEAKER_00 0:27

Hey, if you've ever sold a home and had a buyer use the inspection report to just hammer you down on price after you went under contract, you are not alone. It's the most effective price reduction play that buyers' agents run on sellers, and it works for one reason. The market saw your home go under contract. So if the deal falls through during the due diligence period and you have to go back on the market, the assumption is that there must be something wrong with the house. So, in order to avoid that stigma and the associated price hit that would come with it, most sellers concede to those demands. And I have seen some of these demands hit tens of thousands of dollars. While that ends today, after you watch this video, you are going to be aware of the most common inspection traps designed to scare you into staring down the barrel of a loaded inspector report. But even better, I'm going to start off by showing you the reverse psychology ninja move. It's called the truth binder, and it's beautiful because it removes the ammo from that report before they can even point it at you. I mean, it almost feels unfair how much this strategy is going to shift the negotiation leverage in your favor, almost. But thankfully, I'm on your side here. So let's get into it. Now, the first move here is called a pre-listing inspection, and it's where we have a home inspection done before our home even hits the market. Now, I know this might sound backwards at first because after all, the buyer is going to get their own inspection anyway, but you need to hear me out. This is what is going to allow you to find out what is truly going on in your home from somebody who you know for a fact isn't best buddies with the buyer or their agent. Now, if you don't have any relationships with home inspectors, that's totally fine. Most of us don't. You can go to uh ashi.org or naci.org to find one in your local area. Call a few up and ask these four questions when you call. Number one, how long will the inspection take? Number two, will you provide a written report with photos? Number three, can I attend? And number four, how much for a reinspection after we address the issues you find? And that fourth one that matters more than you think. And we'll come back to it in a second. Now, as far as timing goes, you're going to want to run the inspection three or four weeks before you even plan on listing. This is going to give you enough time to fix what is found on the report, but it's still recent enough that it feels current when buyers see it and they are going to see it. A little foreshadowing there for you. Step two, after you get the report, we're going to triage the inspector's findings into three different buckets. Now, bucket number one, these are safety and code violations, active leaks, electric wires sparking up in the attic like a cobra. You know, the big stuff. You should absolutely fix these immediately. Hire a licensed contractor, get the receipts, keep the photos for sure. Now, in bucket two, we're going to put aging systems that work, but they're sort of approaching the end of their expected useful life. Maybe the HVAC is 18 years old or some worn-out carpet and maybe a water heater old enough to remember the Bush administration. So for each of these, we're going to get two or three contractor quotes. And you're not necessarily doing that because you're going to fix these items right now, but you're putting a stake in the ground as to what they actually truly cost to repair. And that information is going to do more work for you than you could imagine. And then in bucket three, this is what I call the handyman bucket. These are deficiencies like caulking, paint, loose doorknobs, drawer poles that are just hanging on by one single thread, gouges in the drywall, whatever. Either DIY those things or pay a handyman. And this is my favorite bucket, by the way, because it happens to be the single highest ROI move in the entire video and it's not even close. Here's why. When a buyer walks through your home and they see dozens of small problems, well, they don't see small things and just walk on. They actually combine all those things and they think, Wow, there's a lot of deferred maintenance going on here. And they start thinking, this guy didn't have time for the small stuff, he probably ignored the big stuff too. So preventing that single thought from forming in a buyer's head is going to save you tens of thousands in mental price reductions before they even write an offer. Now, remember a little bit ago when I told you that we're going to explain why a reinspection matters? Well, we're here, and here's why this matters. After you fix the items in the appropriate buckets, you're going to ask that home inspector to come back out to perform their reinspection so you could get an updated, cleaner inspection report. It's not necessarily clean, but it's cleaner. And this is the foundation of what we're building here that I refer to as your truth binder. Just grab any three-ring binder with tabs from your favorite office supply store and you're going to start organizing. Tab one is going to be your updated pre-listing inspection report. Tab two is receipts and photos for completed repairs. Tab three, we're going to put the contractor quotes for those disclosed issues that we talked about earlier. Tab number four is going to be all of the records that you have of past improvements. And by the way, if you want to be super thorough and helpful, you could even add a fifth tab and list the links of all the warranties and manuals for the items in your home. That's just a really cool thing to do, but it's really not part of this. Now it's a great idea to not only digitize all this as a PDF that you can share with prospective buyers, but also make sure you have a few physical copies. And it would be great to just leave one on the counter at every showing and let kind of people thump through it and carry it along with them as they tour your home. Now, here's the genius of all this: the first time a buyer's agent or a buyer makes any noise about a price reduction because your HVAC is old, you simply slide that binder across the counter to the quote on Tab three and just watch their face fall when they realize that they can't bully you with fake numbers to ask for price concessions. You tell them you've already noted the condition of the mechanicals in the home and you factored them into the asking price. But what's even better is the buyers at this point stop digging for reasons to devalue your home. What you're really doing with this binder is you're changing the buyer's mental model. All right. I mean, think about this. In every other home they've toured prior to yours, they find people trying to conceal or hide their problems and all the flaws. And they just hope you're dumb enough to believe that their home is the single one that's perfect out there. Well, now they walk into your home and instead of having their intelligence insulted, they find an upfront homeowner who acknowledges that, yeah, my home has flaws, just like every other home out there. But unlike every other home out there and every other seller out there who tries to hide it, I'm going to not only reveal them to you up front so you know what you're getting into, but also I'm going to show you the steps that I took to ensure that my problems wouldn't be inherited by you. This just shifts the entire tone from suspicion to trust. And trust is what gets you to closing at full price or sometimes even more than that, because you're now positioning your home in a way that's going to attract multiple offers. Now, if you're curious about some of the other ways I could save you tens of thousands of dollars when you sell your home, you could, like a lot of other my viewers, book a strategy call with me at the link below. I look forward to talking to you then. All right, so if you're curious, I want to show you what traps we just disarmed with that truth binder that would have been lying in wait for you had you not seen this video. Trap number one, this is the recommended referral. You see, some buyers' agents have working relationships with specific home inspectors. Does this always mean they're collaborating behind the scenes to I don't know, find problems to use against you in the negotiations? No, not always, but these relationships do exist. And as a smart, educated seller, you need to know the incentives at play here behind the scenes. And here's how this works the inspector, they're going to learn early on that if they find enough things wrong with the home, the buyer's agent is likely to use him again because that thick inspection report works wonders for price negotiations. Now, the agent knows that their buyer will sing their praises to all their friends and family for every dollar they negotiate off the Aspen price. So they will keep using that same inspector. You see how that works? In that scenario, the buyer wins by paying less for the home, the inspector wins future jobs, and the agent wins referrals. Everyone wins in that scenario, except for the seller who doesn't know exactly what happened, but they're pretty sure they got hosed. And here's why this trap is not going to be able to hurt you anymore. No matter what the next home inspector finds, your binder on the counter is likely to show the exact same problems that were already found, they were already fixed, and they were verified by a third party. Their price reduction argument crumbles if they come in complaining about items on their inspection report that they knew about before going under contract. Pretty simple. Now, trap number two is being told to leave your home during the inspection. Look, it can be a good idea because some sellers they get chatty and they let things slip in front of an inspector who's already there looking for reasons to ding your home. But I urge you, do not, because if you do, you give up an opportunity to capture a very valuable piece of intelligence. And this is the conversation that the inspector has with the buyer's agent as they walk through your home. Now, while researching this video, I came across a comment with hundreds of upvotes. You see, the seller was in the kitchen when they overheard the inspector coaching the buyer on how to use this over-dramatic inspection report to negotiate a price reduction. That is not their job. So two days later, when the credit request from the buyer's agent inevitably came in, the seller was empowered to decline it for the Hail Mary that they knew it was. And when the seller also told the agent that he overheard their little strategy session, that price reduction request disappeared almost as fast as it was presented, mostly out of sheer embarrassment. Had he not been there to overhear that discussion, he might have given in to that price concession for no other reason than fear. Now, trap number three, and this is the most common, it's how, for no reason, a $200 drain repair becomes an $800 credit request or a $300 electrical outlet replacement issue just blossoms into a $1,000 repair bill. Buyers know for a fact that sellers prefer credits over actual repairs. And there's good reason for this. Credits are easier to accommodate and they close more cleanly at the table. So this means they often ask for credits but kind of inflate the numbers. They ask for credits worth three or four times the real actual cost, and they just hope you're kind of so much over it, right? That you're just not going to push back anymore. But once again, we get to go back to our truth binder. You remember we went in there and for all of the discrepancies we found, we inserted three repair quotes from licensed contractors. See, those quotes are not only an act of kindness to the buyer, but they also anchor the reality of the price to something real and true rather than some wild inflated number being pulled out of thin air because they think you're desperate. Now, before just blindly agreeing to any price concession, I would actually push back. You need to remind them like, hey, I've already taken the condition of the mechanicals and everything into this home when I consider what the asking price is going to be. And I also was very upfront about any defects before you made an offer. However, if against all odds you truly feel that they're going to walk, you could always offer to credit them the amount of the lowest quote in the binder. When confronted with three real numbers from licensed pros, the buyers typically accept the offer and sometimes they even back off the inflated request entirely. Now, if there's still any confusion about what we should and shouldn't repair, I made this video right here. And it's where we go through the top 10 repairs that waste money when selling your home. I want you to absorb everything you can from there. If there are still any questions, you know how to get a hold of me for a strategy call. It's in the link down below. And we'll see you there.