3 reasons why you should avoid skipping a home inspection
In the current housing boom, homebuyers are scrambling to do whatever they can to get their offers accepted.
One way to sweeten an offer is to skip the home inspection because it removes a hurdle in the closing process. In March 2021, real estate brokerage Redfin found that 13.2% of successful offers waived this contingency within the previous six months.
But when homebuyers decide to forgo a home inspection, it puts them at risk of purchasing a home with underlying issues. Here are some reasons why you should avoid skipping a home inspection.
You may need to foot expensive repairs
A home inspection is your last chance to uncover potential damage in a home before you buy it, which is why so many homeowners get one.
During the inspection, a certified professional will look through every corner of the home — inside and out — to check the home’s condition and help you understand what you’re getting into. They’ll also provide a report, which you can use to negotiate the purchase price or ask the seller to fix any damage.
Going without an inspection “can cost a fortune if later you find out the house needed certain repairs,” said Leslie Tayne, founder and managing director of Tayne Law Group. “The main risk is hidden defects or even visible ones that an inspector could find but a layperson could not. … This risk is higher in older homes.”
The home may be hazardous
Inspectors can also check for hazardous conditions — such as lead paint, unsafe heating equipment, bad wiring, and structural issues — that you might not notice when you first walk through the property.
That means forfeiting the inspection may put your family’s health and safety at risk.
And while you might think disclosure laws will help you uncover problems, “it’s sometimes possible to get around the requirements,” Tayne said. “In New York, for example, the seller can choose to pay $500 at closing to the buyer to avoid having to disclose certain problems with the home.”
It may affect your homeowners insurance
You might decide to forgo a home inspection and deal with potential issues down the road.
But having the information from an inspection can help you avoid homeowners insurance issues, said Bill Martin, CEO and president of Plymouth Rock Home Assurance Corp.
“The standard home insurance policy generally does not cover wear-and-tear type of damage that existed prior to ownership,” Martin said. “Also, many insurance carriers will perform their own inspection after closing, and if a buyer waives an inspection, they may not be aware of problems the insurance company could find.”
Make a strong offer without waiving the inspection
If you’re not comfortable cutting corners on the home inspection, there are other ways to make your purchase offer appealing:
Get a pre-approval. A mortgage pre-approval is a letter from a lender that shows how much you can borrow, based on information like your income, debts, assets, and credit profile. It shows sellers you’re serious and have a lender onboard, which can help ensure you get to the closing table.
Ask for an “informational inspection.” You can tell the seller you plan to get a professional inspection but won’t use it to negotiate for repairs or a lower price. Instead, you’ll use the information to guide your budget. “Be sure to look at the entire contract,” Tayne said. “It could mean that the buyer is waiving the inspection contingency, meaning that they can’t back out of the purchase based on the inspection results.”
Increase your down payment. Sellers may give more weight to an offer with a higher down payment because it provides more cash upfront and signals a solid financial situation. If you don’t have the full 20%, consider whether you can put down 10%.
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