Waiving Home Inspections | The Benefits and Pitfalls
Waiving Home Inspections – The Benefits and Pitfalls
Home inspections are traditionally one of the many parts to buying a home. However, with the current real estate market in South Carolina and elsewhere across the United States, some buyers are choosing to waive the home inspection as a means to speed up the purchasing process and make their offer appear more favorable to sellers. While this may place you in a favorable position over other home buying contracts being offered, you need to understand the benefits and pitfalls.
What is the Benefit of Home Inspections?
Home inspections are intended to provide accurate information on the current condition of a home. This information is vital to both buyers and sellers. The major systems and areas of a home are inspected by a licensed, trained professional, usually with many years of experience in the construction industry. Home inspections can reveal serious problems with a home, as well as smaller issues that are more easily dealt with before or after a sale.
Common areas covered in home inspections include:
- Property drainage
- Outer surface materials
- Walls, ceilings, floors
- Windows and doors
- Electrical system
- Plumbing system
- HVAC system
- Attic/inner roof components/insulation
- Attached structures (porch, garage, etc.)
- Safety issues
Serious problems with any of these areas could mean costly repairs. Armed with this information, the seller may choose to make certain repairs and offer a lower price to compensate for the other, smaller issues. Buyers may choose to offer a lower price if they have to make repairs, or may shy away from the deal altogether to avoid costly, time-consuming projects.
The most significant benefit of home inspections is the advance information about the home’s condition. Buyers can negotiate and make a purchase deal armed with facts, and not get stuck with huge, unexpected repairs and monumental expenses down the road, after the purchase.
Why the Trend Toward Waiving Home Inspections?
The 2021 Home Buyer Report from NerdWallet indicated that about 21 million Americans planned to buy a home in 2021. The number of available homes in many locations, including the Southeast, is insufficient for the number of probable buyers. With slowdowns in construction due to COVID-19 and the ongoing supply chain problems, construction materials are scarce and at a premium, making new construction difficult to find and even harder to buy.
This means existing homes are going at a premium and going fast. Many home buyers have expressed frustrations with seeing a new listing for an existing home for sale and calling about it, only to learn it is already under contract. Desirable real estate is going fast – and buyers are doing whatever they can to make their offer more desirable.
Some measures buyers are using include offering premium pricing, as much as $20,000 or more, over the asking price to shut down bidding wars and lock in their offer. Others are making sure their financing is locked in and showing proof as a guarantee to the seller that the money is in hand, making for a quicker sale and closing.
Another trend has been to waive home inspections. This eliminates one element of the selling/purchasing process to speed up the transaction. And, since the real estate boom is causing delays in everything, including home inspections, this can be a significant factor in closing a sale. While this trend actually began during the height of the COVID-19 pandemic for health reasons, it persists as a means to make a buy offer more attractive.
I’m Buying a Home – When Would I Safely Choose to Waive the Home Inspection?
Is there any time when waiving home inspections is safe, or even recommended? Most experts say no, that the small investment, even the delay in the process, is warranted because of the potential savings. Even new construction can have problems from hurried contractors, shoddy workmanship, safety issues, out-of-code issues and more.
If the real estate you are buying is new construction and comes with a builder warranty, it might be conceivable to skip a home inspection. Another situation would be buyers purchasing a home they have been renting for some time. They would already be familiar with the home and know of any major problems.
An experienced real estate investor or home flipper may feel confident skipping home inspections due to already planning significant renovations. Plus, many of these investors keep up to $50,000 in an emergency fund to handle the unexpected. They can still recoup their investment even with major repairs, especially in the current real estate market.
Get Seasoned Guidance When Buying a Home
Regardless of how many home buying contracts you have negotiated, it is always wise to get advice from a seasoned real estate professional. Specific questions like waiving home inspections can only really be answered accurately according to the unique situation, and a Realtor® is best equipped to provide answers.
Jeff Cook Real Estate can help you perform your due diligence when buying a home in the Carolina communities of Myrtle Beach, Greenville, Charleston, Columbia, Rock Hill and Charlotte. Contact us today with your questions about Carolina real estate, home inspections, home buying contracts and more.