Gabbi knew that real estate was the right career from the start. She is now dual licensed in both Kentucky and Ohio. She had her first sale within a month of getting licensed and hit her first million in volume within her first 6 months. She will have her real estate license for the rest of her life. Call her anytime if you have questions about becoming a real estate agent. She loves to share her passion for real estate with others!
The importance of real estate inspections
Here are the reasons it's important to consider a home inspection.
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 find 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 land on the buyer. These are costs that are risky because they 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 spend a couple of thousand dollars upfront rather than the cost of the home itself plus the repairs. Some buyers want to take the 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 TLC, 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 purchasing a home without a home inspection.
- No turning Back- A home inspection provides an out that is critical if you want to keep your earnest money and walk away from a contract scot-free. The inspection clause allows you to make that choice for yourself, waiving an inspection takes that away.
- Safety -Who is living with you in this home or are you renting it to others? Are you willing to risk injury or unknown molds in a home that you did not have inspected? Peace of mind is worth the penny every time if you ask us.
- Reveal Illegal Additions or Installations- A home inspection can show you things that are not visible before deeper digging. If a home has illegal room additions that are un-permitted, it affects the insurance, taxes, usability, and most of the overall value.
- Negotiating Tool- The best way you can represent your client is by negotiating on their behalf. Don’t throw this tool away because your client wants to save $500.00. Having inspections allows you to negotiate with the seller making repairs on different items found in the inspection report.
The bottom line is to educate yourself and your client on the risks and options you are presented and honesty is always the best policy!
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