The Huge Risk Home Buyers Take When They Waive Inspections
When you're trying to make your offer as attractive as possible, skipping the inspection may seem like a good idea. Here's why it's not.
If you’re buying a home in a competitive market and your offers keep getting beat out, you may be tempted to resort to desperate measures. In addition to offering more than the asking price or a quick closing, some buyers agree to waive inspections. This is never a good idea. The home may look OK to the naked eye, but it’s what’s beyond the surface, or items that you can’t identify as problematic, that cause the biggest issues. For example, the typical buyer won’t be able to spot asbestos, nor will they see evidence of termite infestation or a leak inside the HVAC system. No matter how badly you want the property or how emotionally attached you are to it, you don’t want to buy a home without having it thoroughly inspected. Just imagine six months down the road, when you’ve closed on the sale and moved into your new home. You will kick yourself when you go to turn the heat on and realize it doesn’t work — and the fix is $20,000. When you’re in the thick of a bidding war or in your seventh month of searching for homes, you might not be able to see or think clearly. Don’t get caught up in the hoopla. Waiving an inspection can cost you a fortune. Here are some alternative solutions to satisfy your need to inspect, while remaining competitive.
If you love the home, inspect before you make an offer or sign a contract. Worst case scenario, you spend a few hundred dollars delving deeply into a home you don’t purchase. Better to be safe than sorry. If you do inspect the home and it passes muster, then you can waive your inspection contingency because you’ve inspected already.
The seller’s inspection
Often, the seller will have the property inspected before listing. They do this so that they can either iron out any issues in advance of listing, or so buyers know upfront exactly what they’re getting. It protects the sellers from future negotiations, and allows them to price the property correctly from the start. The only issue is that the inspector is liable only to the person who paid for and ordered the inspection. That is the seller. If that inspector missed something, you don’t have any recourse.
Often there is a small window of time between when offers are due, and a deal starts to go forward. Sellers don’t want to lose momentum, particularly when there are multiple offers.
If the market moves fast and you need to get your offer in so quickly that there isn’t time to inspect, pre-schedule an inspection for a day or two out. If you work with a good local agent, they will have relationships with an inspector who will do that. Writing a one- or two-day inspection contingency into your offer gives the seller comfort that they won’t lose momentum if you walk away. You get peace of mind in the meantime. Don’t get caught up in the drama of a bidding war. If you’re getting frustrated, keep in mind the larger picture. You’re purchasing the biggest asset of your life. Markets change, and you don’t want to find yourself in a home you can’t afford or, much worse, can’t sell because of structural or engineering issues you missed by waiving inspections.