Is An Inspection Really Necessary?

I was recently asked if the cost of an inspection was really necessary. This came from some buyers who were hoping to buy a property advertised as an “AS IS” sale. The cost of the home was a little on the steep side for their budget, and they were trying to work out the associated closing costs and wondered if there was any point in doing an inspection as a) the seller wouldn’t move on price and b) the seller wasn’t prepared to fix anything.

I explained that an “AS IS” sale is often seen as a red flag to buyers, it certainly is to me, especially if I don’t know the sellers motives.  It should make the potential buyer and their agent do a lot more due diligence, and the cost of the inspection could in the long run, save thousands or even hundreds of thousands of dollars.

Seller’s motives for wanting to go to market with an “AS IS” status can mean different things.  Most often it’s because the value of the property has dropped to a place which they feel is low enough. They don’t want to further negotiate after the agreed price should the inspection show that work needs to be done.

“If that’s all I can get, then I’m selling As IS,” is a common phrase I hear from sellers. Or it may be that the sellers are hiding something, which they haven’t disclosed to the selling agent. When sellers ask me to market "AS IS" all of my red flags go up and I question their motives thoroughly.

One thing is for sure, an inspection is a key element in the purchase of any property “AS IS” or not. The purpose is to provide the potential buyers with an in depth report which can be used to make a prudent, informed decision about what may be their largest investment, and should uncover any “Hidden” potential expenses. In my experience a hefty percentage of buyers use most or even all of their liquid assets in a home purchase, leaving little for any major repair. Expensive structural issues such as a crack in the foundation, the need for a new furnace or new roof, a mold issue or high radon count, are not necessarily obvious to the lay-man.

It may be that the home of your dreams is a little less than perfect, as it needs repairs beyond your budget. That knowledge will allow you from making a huge financial mistake giving you the option of walking away relieved that the inspection saved you from financial ruin. Or you may consider taking advantage of a 203K loan to finance the repairs, either way, the cost of an inspection is certainly worth its weight in gold.

Finally, the inspection also serves as a thorough education to the buyers as to how the home is constructed. A good inspector will often give useful tips and advice as to how manage systems and best protect their largest asset going forward.

GPS has compiled a list of highly recommended NYS Licensed home inspector’s, they can be found under the Useful Local Knowledge tab on our WeSellNY.com  website.

originally posted at Is A Home Inspection Really Necessary?