You’re on the prowl for a new home in Lancaster. You find it—your dream home is on the market! You schedule a tour with your real estate agent right away, and on that same day, you decide to put in an offer. However, when you submit your offer, your real estate agent finds out that there are five other offers on the table after just one day on the market. Will your offer come out on top? What could you have done to sweeten the deal?
In the current market, many buyers are turning away from the pre-purchase home inspection that was once standard, in order to entice sellers and close the deal. We sat down with expert Matthew Haughery of Precise Inspecting, LLC to discuss the pros and cons of this increasingly popular negotiation tactic.
At this moment, the real estate market is piping hot in Lancaster. It is supply-and-demand at its most pure. According to a survey by Pew Research Center, 22-percent of American adults say they’ve changed their residence recently or know someone who has. As we’ve seen in Lancaster, there are too many buyers and not enough homes to meet the demand—putting the power in the hands of sellers. According to Haughery, “In this environment, sellers are receiving multiple offers and the advantage to sell can often go to the buyer who waives the inspection.”
While opting for an inspection after you purchase your home may close the deal, you need to be prepared for the risks that come along with this approach. Haughery elaborated, “[Foregoing a home inspection pre-purchase] is risky for at least two reasons. One, the buyer doesn’t have first-hand knowledge of the quality of the inspection. But, more importantly, the seller’s pre-listing inspection offers no protection for the buyer. A home inspection protects the buyer because it is a legal contract between an inspector and the buyer. A pre-listing inspection is between the seller and the inspector.
So what are the pros and cons of foregoing a pre-purchase home inspection? It can help the buyer snag their dream home in a seller’s market, but according to Haughery—the pros stop there.
Haughery insisted that buyers cannot assess the health of a home based off of a few walkthroughs—they need an expert eye. “Like our physical bodies, a home is in a constant state of dynamic change. Environmental influences constantly test a home’s construction quality and resilience. In the same way that we periodically use a doctor to evaluate our physical condition, a home inspection benefits a home and improves its longevity,” said Haughery.
Another important factor to assess before considering foregoing the pre-purchase home inspection is how it will affect your mortgage approval. Haughery strongly suggests consulting with your loan officer before making this risky move. “Every bank has their own rules for lending and the requirements they have for inspections. Before making the decision to waive inspections, talk with your loan officer first,” said Haughery.
The important thing to know is that you are buying a house “as is” when you waive the pre-purchase home inspection. In this seller’s market, Haughery shares, “Ignorance is not bliss. Every home has issues, and these issues translate into money spent on repair and maintenance. Without a home inspection, there is no way to tell which issues will be costly and which ones will not be. The cost of a home inspection pays for itself multiple times over in money saved.”
So will you roll the dice to purchase a home in a market where the seller seems to hold all of the cards? That’s a gamble you’ll need to assess personally. But for Haughery, the decision seems clear—and he can speak from personal, as well as professional, experience. “When I purchased my current home, I waived inspections,” Haughery shares. “Purchasing and renovating several homes previously gave me the confidence to take that risk. Since entering the home inspection profession, I now realize what a risk that was. A home inspector sees hundreds or thousands of homes. They have a perspective that encompasses and crosses over multiple trades. I would now encourage everyone to take that knowledge and use it to make a solid purchase.”
By Allison Rohland