Home Inspections In A Seller's Market: Is It Worth The Risk?

Home Inspections In A Seller’s Market

Right now, we’re in a seller’s market and I am hearing from many Realtors that many current home buyers are waiving inspections (and sometimes even waiving the appraisal) and offering well over list price in order to make their offers more attractive in a competing offer situation. One thing that buyers may or may not understand is what a gamble they are taking without knowing what they are buying. Some homes are getting 10 or 15 (or more!) offers, but what peace of mind are many buyers opting out of by waiving one of the best home-buying protections they have?

A home inspection is generally done by the buyer to determine the true condition of their new prospective home. Making a huge purchase (the biggest purchase most people will ever make in their life time) without this critical information is indeed a gamble. Sort of like having 2 pair in your hand and going all in and hoping the seller’s hand doesn’t include 3 aces. The “3 aces” could be faulty wiring, a leaking roof, a compromised foundation, mold in the attic, or any of the many things that home inspectors find day in and day out. Not knowing these things up-front, when the buyer can negotiate with the seller for repairs, can potentially spell disaster for the buyer soon after moving in or years down the road. Also, the things that the buyer didn’t find out about (and get repaired) when they bought the home because they waived the inspection, may very well be their responsibility to repair when they go to sell and the future buyer’s inspector finds all of these issues.

In some states, doing a pre-offer verbal consultation inspection is an option. That allows the buyer to do an oral ‘consultation’ with the inspector without the normal cost of a home inspection since a written report is not provided. This is not an option in Pennsylvania, however, as PA Act 114 (‘The Home Inspection Law’) requires a written report.

Some buyers may opt to have the inspection done after they take ownership so they know what they bought, but obviously at this point, they can’t negotiate repairs with the prior owner or back out of the home purchase if a serious issue exists. A post-settlement inspection, at least, can help prepare the buyer regarding where to allocate maintenance dollars.

In some cases, certain inspections can’t be waived such as if the buyer is getting a USDA, FHA, or VA loan. If the home is on a well, these loans will still require water tests be done and for VA loans, a WDI inspection is still needed.

Matthew Steger is a Certified Level 1 Infrared Thermographer, an ASHI Certified Inspector (ACI), and an electrical engineer. He can be reached at matthew@thehomeinspectorsnotebook.com. No article, or portion thereof, may be reproduced or copied without prior written consent of Matthew Steger.