People do crazy things to buy the home of their dreams in a hot market. They purchase properties sight unseen. They offer well (well) above asking price. They get caught up in FOMO (fear of missing out) and make quick decisions on huge purchases. In today’s market with low inventory of properties for sale, waiving the home inspection contingency to strengthen a purchase offer has started to translate into bypassing the home inspection process altogether.
While a competitive market often requires quick thinking, advance planning and a potentially higher purchase price to win, it doesn’t mean your clients should (or have to) give up insights into the home they’re purchasing. Waiving a home inspection contingency doesn’t prevent your clients from getting an inspection done – either during the sales process or after they’ve purchased the home.
What’s the harm in having working knowledge of the home they’re about to purchase—the investment that’s often the single most expensive in most people’s lives? Not much, but they could face plenty of risk in not knowing.
Four Reasons Not to Waive a Home Inspection Altogether
Danger could be hiding in plain sight. From recalled electrical panels to faulty plumbing to structural issues, any number of systems or items in your clients’ house could be affected, posing potential danger to them, their family or their new home itself. With an inspection done, especially from a trusted and thorough company like Insight Home Inspections, your clients will know if there are any defective or recalled systems or other potentially hidden issues in their new home.
The things your clients don’t know about could cost them significantly when they go to sell the home. Patrick Bain, president of Insight, recalls the boom of 2007, when many buyers waived inspections to get their homes only to encounter issues a few years later when they went to sell.
“The market had turned, so buyers were getting home inspections again. Many inspectors found serious—although hidden—problems with properties that their owners didn’t know about because they’d never had a home inspection,” Bain said. “It cost them with their sales prices, but had they known about the items, they could’ve fixed them and saved—or even made—more money when they sold.”
Your clients are missing out on a “homeowner’s guide to their new home.” Insight, which recently launched in the greater D.C. and Baltimore metro areas, goes beyond the normal home inspection process to deliver not just one, but two reports for homeowners and their agents—their Inspection Insights report (what you’d consider the traditional home inspection report) plus their Home Insights report, which is like an owner’s manual for a new home.
“Home Insights helps your clients learn about and maintain their home after they move in. Not sure how to turn off the outside water? Check the Home Insights report. Want to know what type of filters to use in the home? It’s in Home Insights,” said JB Haller, Insight’s managing director. “We inventory all components and systems in the home and show your customers how to enhance their comfort, ensure their safety and maximize their investment. It’s a truly invaluable resource for homeowners.”
Their home warranty claim might not be covered, leaving their home and its systems (plus their wallet) unprotected. When your clients get a home warranty, coverage is dependent on all systems being in good working order. If an inspection was never done, it could create challenges with validating whether a system was in proper working order at the time of purchase and effectively void the coverage purchased in the home warranty.
Likewise, Realtors should consider the risks to their livelihoods when their clients waive the home inspection contingency and don’t get a home inspection. Imagine what selling a home with significant issues could do to your business reputation and sales, let alone how it would affect your clients—many of whom become friends during the process of buying their home.
If you are helping a client buy a home—whether it’s for their primary residence or an investment—make sure to get a home inspection. Even if their purchase isn’t contingent on the inspection, at least they’ll know what they’re getting into when making one of the biggest investments of their life.