Buyer Tip: Should You Waive Your Real Estate Inspections?

Buyer Tip:  Should You Waive Your Real Estate Inspections?

It depends.  There are situations where it could make sense to a buyer to waive their real estate inspections.  Below are some of the reasons that you may choose to spend your money on something other than home inspections.

1.  The home is an estate/foreclosure/bank owned property and is being sold as is-where is.  There is an as-is addendum or rider that is signed with your offer.  This means that you are either:

a. not allowed to perform a home inspection after the offer is accepted  ( meaning that you will have a contractor or inspector take a look at the property for you prior to making an offer)  or

b. you can have a home inspection but the information found can be used for your knowledge only and not as a reason to renegotiate your contract with the seller   or

c. your inspection findings may allow you to void your contract and have your earnest money returned to you.

There are several considerations for each of the options above.  Specifically with foreclosure or estate properties, there is no disclosure provided with information regarding the history of the property.  The only disclosure that is required is a lead based paint disclosure if the property was built in 1978 or older.

2.  The property is less than 3 years old or the seller is providing their home inspection from when they purchased the home just a couple of years ago.  Let's face it.  Home inspections are not "cheap".  Neither is an unexpected repair.  But many buyers may waive their real estate inspections if they have copies of the previous report and if the property is in like new, well maintained condition.  Everything can be a risk, it just depends on whether or not you like to gamble with your security.

3.  You are competing with multiple buyers and want to make your offer difficult to refuse.  I have seen this strategy work for a buyer.  All other things considered equal where there are several buyers with very similar prices and terms, being the buyer that has no inspection contingencies can mean getting the house.  But at what cost?  A buyer may have spent a total of an hour in the house.  You are assuming that the seller is telling the truth about the mechanicals in the house.  It is summer time.  You can clearly feel that the central air works, but does the furnace work?  What about the dishwasher?  It might spill water all over the floor.  What about the water heater?  And so on. 

Home inspections are one of several possible contingencies of the contract.  They are there to protect buyers from unscrupulous sellers that are "hiding" defects either purposely or unknowingly.  Even newly constructed homes can have issues....a wrong sized breaker can mean your central air does not kick off and the motor burns up.

Purchasing a home is one of the largest assets the average person possesses.  Doesn't it make sense to spend a few hundred dollars to make sure that there are no "money pit" ugly surprises waiting for you a month after you sign on the dotted line?

For solid advice that minimizes your risk, call me for a free buyer consultation.  We will discuss the pros and cons of every contingency in your contract to make sure that you are protected.

Keep smiling!

Karen