With 5.7 million U.S. homes expected to sell this year, as reported in Fortune, buyers may be tempted to forego a home inspection in favor of enticing the seller away from competing bids.
Prospective buyers can make their bid more appealing in a competitive market by electing to waive an inspection, and doing so speeds the execution of the transaction. However, the advantages stop there.
Speaking from Experience
I advise buyers to never waive the inspection, even when it comes to familiar homes. Personally, I purchased my family’s estate home without an inspection. With the home family-owned, I thought I knew the house intimately. I knew it had been properly maintained, and walking through it, I could not see any reason for concern. However, less than two years later, the house required a complete roof replacement to address leaks. Without an inspection, I did not know what I was getting myself into.
An Expensive Risk
In today’s real estate environment, most buyers find themselves in a cash-poor situation. Between closing costs, moving expenses, and the price of purchasing a home, many buyers come close to overextending themselves financially, leaving little in their bank accounts. That could be very problematic if less than two years later, they need to purchase a new roof. In this cash-poor situation, the homeowner lacks the funds for the repair, leading them to borrow additional money. Although the improvement may be critical and time-sensitive, is the homeowner able to cover the additional monthly payments? Buyers should keep these risks in mind when purchasing a home blindly without an inspection.
Tempting Alternatives
Some buyers may think that conducting an informal inspection themselves may uncover issues. But as I shared with my own experience, sometimes problems are not readily apparent. Furthermore, if the buyer waives their right to an inspection, the seller can choose to not provide them with access to the home before completing the transaction.
Home Certification
Although a home certification does not replace a professional inspection, it does communicate some valuable information. Pearl Certification, for example, not only identifies a home’s high-performing assets, but it also provides a monetary value to those improvements, conveying their worth to the buyer. Given that energy-efficient upgrades are a relatively recent development, they’re usually newer enhancements and tend to last longer. Certification can indicate a well-maintained home, which typically translates to low maintenance costs. A comprehensive home certification report can illuminate buyers on the home's heating and cooling system, smart technology, structural attributes, and other key features that the buyer may not have otherwise considered.
The Seller’s Perspective
Granted, an inspection does pose a risk to the seller. If an inspection reveals a problem with the home, such as mold, and the interested party chooses not to buy, the seller is required to disclose the findings of the inspection when the home is re-listed.
A Declining Trend
Waiving inspections declined to 19% of buyers in December 2021, down from 29% in June 2021, according to the National Association of REALTORS®. Even with the decline, nearly a quarter of buyers waiving inspections suggests the practice is still quite commonplace.
Play It Safe
When competing with multiple bids, buyers may be tempted to waive the inspection, but they may literally pay the price in unknown maintenance costs. Buyers may face significant regret if they purchase a home without first knowing all of its issues.
If your buyer is considering waving the inspection, share this article. Buying a home is one of the biggest decisions a person ever makes. Don’t cut corners by waiving an inspection when the stakes are so high.
