Guest post from Gabrielle Hodge of Ken Perry Realty, serving Northern Kentucky and Greater Cincinnati.
Let’s get right into it. What is a home inspection used for? It’s there to provide an opportunity for the buyer to identify major issues with a home before closing. The potential problems in a home can have serious backlash and you need to know everything before you potentially lock into a real estate purchase contract. Because a home purchase is such a large expense, it seems obvious to get an inspection and have all your bases covered.
Let’s first talk about why someone would waive such a vital part of the process and then we will cover the risks of this choice. The cost of a home inspection can run from $300-$1000.00 dollars. If you fin additional issues that need further professional opinions, then the cost increases.
For example, if the house needs electrical work, that’s a separate inspection. Same with plumbing, structural issues, and roofing. These are all costs that are borne by the buyer. These are costs that are risky because the prospect may end up walking away from the deal altogether. If your buyer is feeling like they spent all this money for nothing, remind them that they’d rather cover the cost of required inspections upfront rather than the cost of the home itself plus the repairs.
Some buyers choose to incur risk and have someone unqualified inspect the property. That’s when they run into bigger issues down the line. Another reason people might waive an inspection is when there are multiple offers involved in the deal.
Inspections are the right of every home buyer. However, one way to drastically increase your chances of winning in a multiple offer situation is to waive your right to an inspection. In my opinion, this is rarely advisable. However, everyone is different. If the buyer has done due diligence in reviewing the seller’s disclosure of property condition, believes it to be accurate; and feels the value of the property outweighs the risks, they may pursue this route.
This is highly desirable to sellers because the weight of any repairs has now been lifted from their shoulders. Even an offer that comes in below asking and has chosen to waive inspections is generally given higher
consideration. It eliminates any financial commitment to make repairs or offer closing costs in lieu of reparations. It streamlines the process as there is no inspection period (typically 7-10 days) or settlement period (typically 5-7 days).
If the client is an investor who is accustomed to properties in need of some typical repairs, waiving the inspection is commonplace. A major caveat is that even if inspections have been waived, the appraiser can still potentially flag certain items that the seller will have to address to proceed with funding the loan and making it to the closing table.
Now let’s go over the risks of to continue reading please click here.