You ask, we answer: Should I Waive a Home Inspection?
As a buyer in a competitive market, you may have heard many tips and tricks for writing a winning offer. A common suggestion is to waive your home inspection, which can come with many questions and uncertainties. You may be wondering what your options are for home inspections when it’s time to buy so you don’t end up with buyer’s remorse. Here are our top tips for buyers when it comes to navigating home inspections in a competitive market.
The Home Inspection Procedure
A home inspection is a standard procedure in typical real estate transactions. After a seller accepts a contract, home inspectors, licensed professionals hired by the buyers, perform a detailed inspection of the entire home. They will examine the home’s structure, HVAC systems, plumbing, electrical work, and more to ensure they function properly. The property’s overall condition is also inspected for safety issues, damage, or other defects. The home inspector will put all this information into a report that you and your agent will review together. A home inspection intends to protect a buyer financially and physically. Financially, if a home inspection reveals that there are required repairs that the buyer cannot afford, it could cause them to back out of the purchase or ask the seller to help cover the cost by lowering the contract price or making the repairs themselves. Physically, if a home has a severe structural issue or faulty wiring, a potential buyer may be in danger while living there. With these factors in mind, experts agree that having a home inspection is critical.
Understand The Risks
Buying a home is likely the largest purchase you will ever make. It is important to ensure you do your due diligence, including having a home inspection. Before you choose to waive your home inspection, you should understand the risks that come with making that decision. The home may have serious defects, and obtaining homeowners insurance may even be more complicated. It also takes away any leverage for negotiating a lower price. If a home inspection reveals a need for a new hot water heater, the buyer can negotiate that the seller needs to either have one installed before the closing or deduct the cost of one from the contract price. Without a home inspection, the buyer will be in for a cold and expensive surprise the first time they try to shower in their new home. With this in mind, experts recommend waiving only the home inspection contingency instead of the whole inspection. The home inspection contingency is part of your contract that allows a buyer to terminate the contract and get the deposit back if the home inspection comes back with a negative report. If you are up to the challenge, you can waive only the contingency and make your home inspection for informational purposes only. By waiving only the contingency, you will still get your home inspection, but it will only be for your information, and you cannot ask the seller to make repairs or lower the sales price. If you are purchasing a newer home that is owner-occupied, you and your agent may feel confident that waiving an inspection contingency is the right choice for you. However, if you are purchasing an antique home that has been vacant for a few years, it may be in your best interest to keep the inspection and contingency.
Your Other Options
If you and your agent decide that you do not want to waive your inspection or the inspection continency, there are other options for writing an offer that stands out to a seller. One option is to get pre-approved rather than pre-qualified. The process for pre-approval goes beyond the typical pre-qualification and may show a seller that you can most likely go through the mortgage process without much trouble. A pre-approval will look favorable to the sellers and may cause them to pick your offer over others who may only submit a pre-qualification. Another attractive option to sellers is to offer a larger down payment. Similarly to the pre-approval, this will show a seller that you have the financial stability to purchase a home. A larger down payment means a smaller mortgage, which means you may have an easier time obtaining a mortgage, which is attractive to a seller. Using a larger down payment may mean waiting a bit longer to buy while you save up, but if you have the time and ability, it may help you land a home more quickly. Another way to appeal to a seller is to have a flexible closing date. A closing date of the seller’s choosing can help you stand out, and your offer may be picked for its convenience over offers with a closing date the seller does not like. In a competitive market, even the best offers may be rejected. Patience is key, and you may have to make several offers on different homes before yours is the one accepted.
When purchasing a home in a competitive market, you want to ensure you have a great agent on your side. Calcagni Real Estate prides itself on being a trusted guide for buyers every step of the way. Reach out to us if you are ready to begin your search.
