Facebook
X
Pinterest
Copy Link
Waiving a home inspection is a risk that many buyers desperate to find a home have been taking in hot markets.
In the flourishing housing markets of 2021 and 2022 where sellers dominated through unprecedented buyer demand, competition was greater than ever. Due to a historic lack of inventory many listings were receiving multiple offers, many much higher than the asking the price. Buyers and buyer agents had to get creative in many ways while attempting to minimize huge increases in the offer price.
Price is important but the terms will frequently dictate the winner. While most sellers would likely prefer a cash offer with no contingencies and a quick or at their convenience closing, few people can afford to go this route. Most people need to take a mortgage. While I always suggest that every buyer have a home inspection, this was frequently the first contingency to be waved in order to strengthen offers that were already at their financial cap. Waving an inspection is not something that should be taken lightly.
A home inspection is important especially when you’re at the top of your budget in a competitive market. An inspection can uncover potential major structural and safety issues in the home that you should know about before purchasing. This is a deeper dive into what may not be present to the naked eye. Beyond cracked panes of glass or loose door handles: things that are not apparent and need to be more carefully reviewed by a professional. It’s a matter of protecting the investment and making a smart purchase. Being one of the largeat purchases most people will ever make, buyers need to make sure that they are educated and as aware as possible regarding defiencies they may be willing to live with, and potential expenses down the road. It is safer to have one now that there is a bit more inventory and a building increase of competition amongst sellers.
When interest rates began to rise and inventory slightly increased we saw mortgage contingencies returning frequently. Buyers are feeling slightly more confident as traditional, less radical offer terms reemerge and mortgage contingencies become routine once again.
It is easy to become overly eager; especially when buyers have lost out over and over in multiple offer situations. Keep in mind, you’re going to be in your new home for a long time: focus on getting as much as you can at your price point and less on competing toward a smart win. Set yourself up for long-term success.
If you are in a competitive / multiple offer situation you can present an inspection contingency with a willingness to assume a certain amount of potential inspection findings in the offer. This is a reasonable way to let the seller know that you’re not seeking perfection. Home warranties are also offered by many companies and can cover major systems and appliances for a period of time (usually with a deductible.)
An inspection is a critical protective step when making a large financial investment in property. Waving one to acquire the property should be carefully considered. It’s always best to consult with an experienced local agent to discuss the risks and benefits on a property by property basis.
To learn more contact John McHugh, Senior Sales Associate with Coldwell Banker for over 20 years.
