If you have spent more than 3 minutes looking for a home to buy you already know what a tough market it is for buyers these days, with inventory at record-setting lows and prices at all-time highs.
There are many examples of bidding wars, cash offers, homes routinely selling far above the asking price, and sometimes going the same day it is listed. An agent told me recently that her buyers sweetened their bid by offering to buy the wedding cake for the newly engaged sellers. (See what I did there? Sweetened? Cake? No?)
Along with these crazy stories, many buyers are also waiving contingencies to be more competitive -- including the home inspection.
Is it worth the risk?
Consider this: mortgage lenders typically require an appraisal (distinct from an inspection) as part of their loan approval process. Why do they do that? To make an informed loan decision, of course. When you’re about to go hundreds of thousands of dollars into debt it also makes sense to make an informed borrowing decision! What can happen if you don't?
Well, here’s one example: Ken recently did an inspection for an agent’s personal potential purchase. She and her fiancé were very excited about the character and potential of the home they successfully bid on. They stretched nearly to their limit to get an accepted offer and were able to keep the inspection contingency. They backed out during the inspection process after significant structural problems in the framing were discovered, including rot, extensive fungus, improper repairs, and powder post beetle damage in multiple areas. Imagine finding that out after closing and then suddenly being saddled with many tens of thousands in unforeseen repairs.
Also, just search the interwebs for “should I skip the home inspection” or similar phrases and see the results. Here’s an article from the National Association of Realtors®: Should I Waive a Home Inspection?
Hopefully there won’t be a wave of buyer’s remorse among the many who waived the inspection in desperation and closed without one.
It's Not Too Late
If you felt compelled to waive the inspection and closed without it, the good news is that you can have any inspection you want afterwards. That’s why Kensa offers a post-closing inspection or consultation, the next best thing to a normal pre-closing inspection. A number of recent clients booked their inspection for the day after their closing. It still makes sense to do it even after the fact because you still don’t know what you don’t know. You will get the knowledge you need to understand what you just bought so that you can start budgeting and planning for any necessary maintenance and repairs.
But you’re biased!
True! …well, partly. The thing is, your inspection is definitely not just a transaction to Kensa -- see our About page to discover Kensa’s Why. Knowledge is power, and Kensa Inspections gives you the objective knowledge you need about your new home.
It can be difficult to be competitive when you try to include an inspection, but there are ways to be competitive and still reduce your risk. This is one of many ways a great real estate agent adds value, by advising you on effective strategies to do that. Ken is not a licensed agent (or even a pretend agent), but here are a few things that can help make your offer stand out:
- Be fully preapproved for your loan, not just pre-qualified
- Increase your "earnest money"
- Decrease the inspection timeframe
- Don’t waive the inspection, just waive repair requests
Talk to your agent for more ideas!
Just Don’t Skip It!
Always protect yourself in advance whenever possible, or at least get an inspection right after closing. You’ll understand the biggest investment of your life with an inspection either way. Don’t skip your inspection.