Waiving Inspections: Good for Bidding Wars – but Worth It?
An inspection costs a few hundred dollars now yet could save buyers tens of thousands of dollars later. Still, bidding wars and an inspector shortage have stifled demand.
CHICAGO – The hot housing market is prompting an increase in waived home inspections. But while in the past it has been an option for buyer concessions, it’s now not always being done to make an offer more enticing in a bidding war.
In some areas, a home inspection must be booked weeks in advance because inspectors’ services are in such high demand – and buyers’ contracts may give them only seven days to get an inspection completed. The tight deadlines are prompting some buyers to waive the inspection – a potentially costly mistake.
The overbooked-inspector issue is a growing problem, realtor.com notes in a recent article. From March through May, many states weren’t allowing home inspections to occur due to stay-at-home restrictions from the COVID-19 outbreak. While home inspections have mostly resumed since then, pent-up demand and hot housing markets have resulted in a backlog that’s slowing down real estate deals in some parts of the country.
Some homebuyers in very active markets are also tempted to waive the inspection in multiple offer situations in an attempt to make their offer more appealing to a seller. In June, nearly 20% of successful offers submitted by Redfin real estate agents in large U.S. markets waived the inspection contingency, according to a brokerage report.
But a home inspection “is a few hundred dollars for your peace of mind,” Jean Rosalia, a residential and commercial real estate professional based in Virginia Beach, Va., told realtor.com. “As opposed to maybe tens of thousands of dollars down the road for something that you could not detect on your own.”
Source: “Should I Waive a Home Inspection? Why Buyers Are Willing to Right Now,” realtor.com® (Sept. 18, 2020)
© Copyright 2020 INFORMATION INC., Bethesda, MD (301) 215-4688