The housing market has been frenzied for the last few years. As such, buyers interested in purchasing homes are facing difficult odds. In a market saturated with all-cash, over-asking offers, many buyers are desperate to find ways to boost the chance of getting their dream home. One strategy many buyers choose is to waive a home inspection in their offer.
While this may seem like a good idea, choosing to waive a home inspection is always a bad choice. In addition to leaving buyers vulnerable, it can also be dangerous. In this post, we’ll discuss why a home inspection is such a critical tool for buyers and sellers alike.
Let’s dive in.
What Does it Mean to Waive a Home Inspection?
An inspection contingency is a standard part of most offers to purchase real estate.The home inspection contingency is in place to protect buyers.
Here’s how it works: a home inspection is meant to uncover any drastic problems with the home, like a cracked foundation, extensive mold, or dangerous building issues. If issues like these are present, the inspection contingency also gives the buyer the right to have the issues repaired or to back out without sacrificing the earnest money they’ve already deposited.
What is a Home Inspection?
A home inspection is an inspection conducted by a professional. The purpose of a home inspection is to observe and report on the condition of a home, typically in the period right before a sale.
During a home inspection, a qualified home inspector will assess the condition of the property, including elements like:
The HVAC system
Fire suppression and safety systems
During the inspection, the home inspector will look for evidence of damage or defects that may impact the value or safety of the property. They’ll also note positive attributes of the home, and provide a detailed report for both the seller and buyer.
The Biggest Risks of Waiving a Home Inspection
The choice to waive a home inspection is common. Back in December of 2020, real estate brokerage Redfin reported that more than 30% of successful offers put in by its agents in Boston, Portland, Oregon, and Washington, DC opted to waive the home inspection.
While it may be common, though, waiving a home inspection is not a good idea. Here’s why:
You waive your legal rights
An inspection contingency gives buyers the opportunity to verify the good condition of the home before signing a purchase agreement. If you waive the inspection contingency, you’re agreeing to purchase the home “as is.” In the process, you sacrifice your legal avenue to cope with problems the home may have at the time of sale.
You assume financial risk
When you purchase a home “as is,” you have no way to recover costs or recoup earnest money if the house turns out to have serious problems. Instead, all costs are yours to resolve and pay for.
You’re putting yourself in danger
The purpose of a home inspection is to uncover issues that could be dangerous, expensive, or problematic for you and your family. If you waive your right to an inspection contingency, you’re essentially agreeing to live in the home without knowing about its major issues.
If the problem is something like mold, which can impact the air quality in your home and cause health issues for your family, this choice could be dangerous.
While waiving a home inspection may seem like it can make you more competitive as a buyer, it also makes you much more vulnerable. Home inspections are a critical part of the buying process for a reason. Choosing to waive yours only leaves you without an avenue of recourse if you find something wrong with the home or property later.
Fortunately, there are ways to make your offer more competitive without sacrificing your home inspection.
How to Make Your Offer More Competitive (Without Waiving Your Inspection Contingency)
Don’t put yourself, your family, or your investment at risk by waiving your inspection contingency. Instead, make the strongest possible offer with these tips:
Before you make an offer on a home, have a mortgage pre-approval letter in hand. This demonstrates that your offer is serious and that you’ll be able to secure the financing needed to seal the deal.
Do your market research
Before you put an offer in on a property, look around at similar properties in the area to make sure you’re making a competitive offer. Your real estate agent should be able to help you in this process, and should provide you with several “comps” to research.
Make a larger down payment
While this may mean saving up for longer before you buy a home, seeing more cash upfront is always attractive to sellers. Not only does a larger down payment put more money in their pockets right away, but it’s another indication that the deal will close.
Add an escalation clause
An escalation is handy for sellers. The clause ends the back-and-forth negotiation between competing buyers. For example, if a client uses an escalation clause to automatically bid $1,000 over any other offer, up to a certain amount, it can result in a faster, more streamlined sale for the seller, and a competitive edge for the buyer.
Choosing the Right Home Inspector
Now that you know why a home inspection is so important, it’s easy to understand why finding the right home inspector is so important, as well. In addition to providing peace of mind for you as a buyer, a home inspection also protects your investment and your family.
Here at 406 Home Inspection Pros, we pride ourselves on inspecting your home like we were buying it. When you work with us, our team will provide the peace of mind, security, and transparency you need to make a smart purchasing decision. Contact our team today to learn more about our services, our qualifications, our certifications, and more or book your inspection now.