Why Homebuyers Should Never Waive a Home Inspection

After losing countless bids on other homes, Brad, a new home buyer, felt panicked. As he walked into another open house filled with other excited buyers, he began to wonder, "How will my contract offer compete this time?  Will I lose this home too?”   

Brad told his agent that he wanted to waive his home inspection contingency to make his offer more appealing to the seller. He was convinced that waiving his right to renegotiate or withdraw his offer based on the results of a home inspection would be the key to getting his contract finally accepted.    

Brad and many other home buyers are choosing this risky maneuver to get sellers to accept their offers. Recent data from the National Association of Realtors reveals that one in four buyers choose to waive their home inspection contingency to get their offer accepted. Without this contingency, however, buyers are at risk of incurring the expense of repairs which could run into the tens of thousands of dollars. 

Home inspections not only provide the buyer with a general assessment of the home’s condition, but they can also uncover major structural defects and safety hazards. Inspectors will also suggest that additional inspections be done by specialized contractors if they think it necessary. A good home inspector will cover basic evaluations on the following areas: 

Roof 

Heating and Air conditioning System 

Electrical 

Chimney 

Radon 

Mold 

Lead paint  

Structural  

Plumbing 

Foundation 

Windows and Siding  

Appliances 

Brad’s offer, which waived his home inspection contingency was accepted. The sellers were delighted that they avoided making the many repairs they knew their home needed. Brad moved into his new home and was soon met with the first of many unexpected expenses. After a hard rain blew against the roof and siding, he noticed water dripping from the ceiling’s recessed lights. Brad received an estimate from a roofer for $32,000 to install a new roof. This estimate included removing two layers of shingles as well as replacing several areas of plywood in the attic that were rotted.  Brad’s contract offer may have gotten him the home, but at what cost? 

If you are in a competitive market and there are multiple offers on a home, consider writing a property inspection addendum which states that you won’t ask for repairs less than a certain amount of money. For example, Brad’s contract could have agreed to not ask the seller to make repairs unless the items recommended by the inspector totaled more than $5,000.00. This would have given Brad the benefit of having a home inspection and the ability to negotiate a new roof. The sellers would have benefited by knowing that they wouldn’t be nickeled and dimed with endless low expense repairs.   

If you’d like to learn more about how to negotiate your best offer while protecting yourself from unexpected consequences, sign up for Todd’s Simple Home Buying Course today.