Does it make sense to waive a home inspection to strengthen an offer?

___

Published Date 4/29/2019

Okay. It may sound bureaucratic and boring. But there are a number of precautionary contractual conditions for any purchase agreement recommended by the Realtor community that protects homebuyers from liability as well as poor decision-making. And no matter how competitive the bidding for a home, they'll advise you to include them. One of them is a home inspection.

Even though your Realtor will urge you NOT to waive that contingency and even make you sign a form disclosing they made that recommendation, however, many buyers will still plow ahead and waive the inspection in an effort to make their offers the strongest of the bunch. We do understand: if you’re buying a home in a competitive market, and your offers keep getting pushed to the bottom of the pile, it’s hard not to resort to desperate measures — offering more than the asking price, pledging to close on the home in lightning quick speed, or even waiving the financing contingency and risking your entire earnest money deposit.

But waiving a physical inspection of a house is never a good idea unless the house is close to brand spanking new, which, of course, ups the odds that nothing costly or bothersome might be revealed during the inspection. The problem is, even in newer homes, what you see is not necessarily what you get. It’s what’s beyond the surface, or items that you can’t identify as problematic, that cause the biggest issues, as anyone who watched rehab/remodel programs on HGTV will tell you.

The typical buyer would have a tough time spotting asbestos, knob and tube wiring, lead paint, evidence of termite infestation, a leak inside the HVAC system, how the house is being propped up on jacks, or be aware of how a single toilet flush could change your morning shower from warm and toasty to arctic and shocking. Imagine moving in and trying to turn on the heat, nothing happens, and the fix is $10,000. Picture standing there buck naked in your bathroom, and the power goes off all over the house when you turn on your hairdryer. Traipsing down a flight of stairs to that electrical panel outside the back door semi-dripping wet in 25-degree weather is not something we would wish on our worst family members.

We realize bidding wars can cause buyers to spend an inordinate amount of time finding the right home, making them crazy-desperate, asking themselves “how bad can it be?” when considering waiving the home inspection. But when do you ever hear any GOOD stories about people who took that leap? And waiving an inspection can cost you a fortune. But there are a few things you can do to hedge your inspection bets while remaining competitive.

If you love the home and the buyer will permit it, inspect it before you make an offer or sign a contract. At best, it passes muster and when you offer you can waive the contingency. At worst, you’ve spent a few hundred dollars on a house you don’t end up buying.

If the seller already had their own inspection performed (which is a wise thing to do in order to make a home as marketable as possible), you have the luxury of scrutinizing that report without spending a dime. Even then, however, many buyers will get an inspection of their own because, like an attorney representing a client, the inspector is liable only to the person who paid for and ordered the inspection. And if that person missed something in their report, you would not have any recourse.

Because Realtors understand that time is vital for good outcomes, they will encourage you to get your offer in quickly and advise you to pre-schedule an inspection even before the ink is dry on your offer. Seasoned agents have relationships with inspectors at the ready to ring the seller’s doorbell within a day or two of acceptance. And writing in a short inspection contingency timeframe into your offer assures the seller that momentum is alive and well.

Bidding wars are rife with emotion as well as fear-of-loss, but it’s wise to keep the bigger picture in mind when purchasing what may well be your life’s biggest asset. Your goal is to wake up in that house morning after morning knowing you did all you could to ensure a mostly problem-free investment in yours and your family’s future. Because money pits are no fun.

Source: Zillow/TBWS

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

NMLS #113731

ADVERTISEMENT | an Equal Housing Lender (www.nmlsconsumeraccess.org) | Terms, conditions, and restrictions may apply. Loan products are subject to availability and credit approval. Not a commitment to extend credit.

Important notice regarding recent wire fraud attempts: Cyber criminals are hacking email accounts and sending emails with fake wiring instructions. These emails are convincing and sophisticated. Your lender will NEVER provide you with wiring instructions and will NEVER ask you to wire funds. Please contact the settlement company and get wire instructions directly from them. Never trust wiring instructions sent via email. Always independently confirm wiring instructions in person or via a telephone call to a trusted and verified phone number. Never wire money without double-checking that the wiring instructions are correct. Also, ask your settlement company if bringing a cashier’s or certified check is an option, instead of a wire, for your funds needed at closing.