First-Time Home Buyer Risks of Waived Inspections

In a competitive market where homes have multiple bids, home buyers can be tempted to cut certain contingencies in order to make their offer stand out to the seller.

However, the risks of waived inspection contingency could be more devastating to the buyer than just losing the home to another bidder.

What is a Home Inspection Contingency?

A Home Inspection Contingency permits a buyer to assign a home inspector to look over the home for any damages before the deal closes.

If some real issues are found in the home, the buyer has the privilege to negotiate with the seller for repairs or retreat from the deal.

If a purchaser opts out of the home inspection, sellers may be drawn to this offer because they can sell the home “as is” and they are not responsible for issues that aren’t obvious.

But this also means that the buyer is purchasing the home “as is” and has no way of knowing for any potential damages until they become the new owners of the home.

Common Home Inspections

Inspectors don’t only check on the unseen parts of a home. They can provide an in-depth analysis which can pinpoint things that may become a problem down the road.

A costly roof repair may not be needed immediately, but it makes a big difference to know how soon it will need to be repaired or replaced.

Common home inspections also include:

• Structure
• Exterior
• Interiors
• Roofing
• Plumbing
• Electrical
• Heating and Air Conditioning
• Ventilation and Insulation
• Fireplaces

If borrowers waive the inspection, they could easily end up with a home which requires thousands of dollars for repairs. Unfortunately, if that happens, they won’t be able to back out or ask the seller for help with that.

Biggest Risks of not Getting a Home Inspection

Whether you’re in the market to buy your first home, second one or for upsizing you need a home inspection for several reasons. If you miss it, you’re opening yourself up to the real possibility of purchasing a lot of buyer’s remorse. We gathered some of the biggest risks of not getting a home inspection you need to be aware of:

• The home might not have insurance. There are insurance companies who will not issue a policy if a home does not have a four-point inspection and/or documented wind mitigation. Your lender won’t give you final mortgage approval, without an insurance policy covering your property.
• You’ll have less legal contractual outs. One of the biggest advantages of a home inspection is it gives the purchaser a legal contractual out through a contingency clause. Still, if you skipped a home inspection, you’ll have several options to legally walk away with your earnest money deposit.
• Unpermitted work won’t be discovered. Usually, it is not something home buyers are generally concerned about, but unpermitted work can present sizable problems. Experienced home inspectors often detect signs of DIY work and it can be further investigated to learn if it’s legal and up to local building regulations.
• You’re giving up a handy negotiation tool. If small problems ор material defects are found during a home inspection, a buyer can use these to his advantage by negotiating the selling price, repair costs, and share of closing payments. Without knowing, it will be you in most cases, who will have to care of said problems well after the seller is gone.
• Protection from costly repairs and replacements. Even if you’re buying a home in “as-is” condition, whether it’s a short sale, a foreclosure or a newly built property, a home inspection is crucial to put you in-the-know about the house’s actual condition. At the very least, even if the inspection statement is positive, an inspector can alert you for potential future repair or replacement scenarios.