Should Buyers Waive Home Inspections?

Should Buyers Waive a Home Inspection as a Buying Strategy?

Buyers often need to make concessions to get their dream home. For example, Buyers may pay more than the asking price and sometimes go over their budget. But is waiving a home inspection a concession your Buyers should make? Let’s look at some of the implications of waiving a home inspection and whether it could be a strategy for your Buyers.

Should Buyers Waive Inspections?

No. Waiving inspections typically introduces avoidable risks that Buyers may regret down the line. In the worst case, they may try to blame their real estate agent for not warning them of the consequences of waiving an inspection.

What Does a Home Inspection Do?

A home inspection helps Buyers uncover less obvious issues in a home they’re considering for purchase. It can also give Buyers the option to back out of a deal and recover their earnest money if the inspection reveals such problems.

Why Do Buyers Do Home Inspections at All?

Buyers do home inspections to protect themselves and their budgets against unforeseen problems. Many homes appear to be in good shape. But sometimes, homes have underlying issues, some of which can be serious. Problems like mold, water damage, and roof issues can be costly to fix and even make the home unsafe.

An inspection can give Buyers important information about the home before they’re contractually obliged to put a large chunk of money down. It can also show Sellers issues that could prevent a sale.

For example, say an inspection discovers that the home’s HVAC system is faulty. The Buyer can request that the Seller replace it or credit them for a replacement through a price reduction. Keep in mind that the inspection doesn’t require Sellers to do anything at all. However, many Sellers don’t want to put their home back on the market based on reasonable inspection issues, as it tends to raise red flags.

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Why Would a Buyer Waive One?

A Buyer might waive an inspection to make their offer look stronger to Sellers. Without an inspection, the Buyer agrees to purchase the home as is. That means the Seller has no obligation to invest any money into the home or offer a credit for improvements to make it more sellable.

What Happens When a Buyer Waives a Home Inspection?

Though waiving an inspection can be a strategy Buyers use to make their offer look stronger, it comes with plenty of consequences. For instance, if a Buyer waives an inspection then discovers that some of the electrical outlets don’t work, it’s the Buyer’s problem. The Buyer may need to hire an electrician and pay for permits to rewire the house. That can cost a lot of money and put Buyers in a tough spot so soon after making their down payment.

Similarly, if a Buyer waives a home inspection and signs a purchase agreement, there’s often no going back. Even if a major problem, like a large crack in the foundation, appears after a Buyer signs a purchase agreement but before the sale is final, the Buyer is still responsible for abiding by the terms of the agreement. That could mean massive repair costs on top of a down payment.

In short, waiving a home inspection can be a huge gamble for Buyers.

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Unless Buyers have the financial means to address the house as is, waiving the home inspection is probably not a good strategy.

Though it may be tempting for Buyers to waive an inspection in a Seller’s market, Buyers agents can help them reconsider. Educate your clients about the consequences of waiving the inspection. Inform Buyers that a home inspection protects them while they consider one of the biggest investments of their lives. But also stress to your Buyers that a home inspection isn’t a means to get a better deal.

You may also consider letting Buyers know that Sellers aren’t eager to put their homes back on the market. If a home inspection comes back with issues, many Sellers will be motivated to address them within reason. An inspection that uncovers issues isn’t necessarily a deal breaker, and you can help your Buyers understand this.

As your clients approach the home inspection phase, consider recommending a Home Service Plan from 2-10 Home Buyers Warranty (2-10). Even if everything is in good working order, systems and appliances breakdowns can occur in the future. Buyer’s Coverage can help your clients pay for unexpected repair and replacement costs. This can protect their budgets when they need it most and turn happy homeowners into your greatest advocates.

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