Should You Waive A Home Inspection?

Buying in a seller’s market can be stressful. With available inventory much lower than average, making an offer on a home comes with the fear of being outbid and rejected. While it is tempting for buyers to waive a home inspection in hopes the sellers will accept their bid, it’s important to consider the peace of mind a home inspection brings. Will you need to make big repairs down the road – or even sooner? Is the home safe to live in? And is it worth such a huge investment? 

Before deciding to check NO in the home inspection contingency box, follow this advice.

A home inspection is designed to protect the buyer’s investment. A licensed home inspector checks things like the roof and electrical, plumbing, and HVAC systems for functionality and safety. If a contract includes an inspection contingency and issues are found, the seller usually has to fix them before closing or lower the price of the home so the buyer can fix them later. If major issues are found, the seller has the right to back out of the contract without losing any money.

However, a home inspection is usually not required. While federally insured loans often require an inspection as part of the appraisal to make sure the property meets minimum standards for health and safety set by HUD, conventional mortgage companies don’t require them. Lenders only need an appraisal to let them know the market value of the home – and that it is worth the loan amount. The buyer’s inspection, along with termite, radon, and sewer inspections are recommended, but optional. All can be waived if a property is being sold As is.   

Other inspections may be required depending on the location of the home. For instance, in St. Louis City, real estate cannot be occupied until it passes the City Housing Conservation District Inspection. The inspection checks for interior and exterior building code and maintenance violations. Every city in Illinois and Missouri has its own occupancy inspections, which your realtor will know about. 

If a buyer signs a contingency to waive a home inspection, the seller will not need to make any improvements to close on the home. This could entice a seller to accept a no-inspection offer over one with an inspection contingency.   

Forgoing a home inspection also can result in a faster closing. Without having to wait for an inspector to come, or for the seller to make repairs, closing can happen within weeks instead of months. If buyers are in a hurry to move in, they may see this as an advantage.

And then there is the cost involved. Buyers are responsible for paying for the $300-$500 home inspection. Sometimes they think skipping that expense is a good idea when they are about to make such a huge purchase.

Home inspections are done for a reason. It’s impossible to know if a house is a good investment without knowing how much work it needs. Structural problems and potential safety hazards that show up after closing could add up to thousands of dollars – and that money will come out of the buyer’s pocket if an inspection is waived. 

Without a home inspection, buyers may not know about major issues such as:

1. A damaged roof. Knowing the age and condition of the roof is a must since roof damage can cause leaks and mold issues. A roof replacement after closing could cost around $10,000 or more. 
2. Cracks in the foundation. Major cracks and sunken areas in the foundation indicate structural problems. Finding these before closing could help identify a money pit before it is too late.
3. Faulty windows and doors. If windows do not close right or seal tightly, buyers could be looking at expensive energy bills. 
4. Pest infestation. Termites, mice, rats…all of these could cause major headaches including crumbling walls or wires that are chewed through. 
5. Electrical problems. Outdated wiring that does not pass code could be a fire hazard. 
6. Outdated plumbing. A plumbing inspection checks for more than a leaky toilet. It could reveal lead pipes that were common in homes built before 1986. It could also identify roots growing through pipes and causing leaks.
7. Mold. If mold is present in the basement or anywhere in the home, it can cause breathing issues and aggravate asthma. It is better to have whatever is causing the mold taken care of before moving in.

Making an offer on a home is exciting, and it can be tempting to waive a home inspection to get your offer ahead of the rest. But it is important to keep a clear head and realize these potential problems could change how much you love the house in the long run.

Instead of skipping a home inspection entirely, you can protect yourself by adjusting some wording in the offer. For instance, you could write in the contract that upon inspection, the seller will make any repairs worth up to $500. Or it could say that if an inspection finds a faulty foundation, mold, or radon, you can back out if the seller will not fix the problem. This may bring peace of mind to a seller who does not want to be nickel and dimed. 

If you decide to make an offer that is not contingent upon a home inspection, it is still a good idea to get an inspection so you know what you are getting into. This will help you budget for  future repairs, such as a new roof, and for fixing minor issues before they become major. If critical problems do come up during inspection, you can cut and run. Losing earnest money is less painful than being stuck with expensive repairs. 

For advice on your unique situation, ask a real estate agent at Berkshire Hathaway HomeServices Select Properties. We will help you make a strong offer on a home without giving up the peace of mind an inspection brings. 

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