To Get An Inspection Or Not? What’s The Risk?
Have you been looking for homes or just hearing about the real estate market over the last few years like everyone else? You may have heard that buyers are making offers on properties without doing a home inspection. In this quick video, I’ll explain if a home inspection is required and what happens if you choose not to get one so you know what the pros and cons are before considering this option.
If you’re in a real estate market similar to the Great Portland market in Maine, then you know it has been a pretty hot market for a few years and you likely have heard about multiple offers on properties and houses going with no contingencies and over asking price, etc. While this is certainly this case in some situations, it is not necessarily what is happening with every home. But, there are times when buyers are choosing to waive their inspection contingency in an effort to make their offer more attractive to a seller.
What does this really mean when you choose to do this? Despite what many may think, a home inspection is not required to get a home loan. An appraisal is required (you can find out more about what that is in my previous video Appraised Value vs. Assessed Value). The purpose of a home inspection is for the home buyer to learn everything they would like to know about the home before agreeing to move forward with the purchase. When you put an inspection contingency in your offer, you get a set amount of days to inspect what you would like about the property. This may include a general building inspection, a septic inspection, a water test, testing for hazardous material, looking into the heating system, etc. During your inspection contingency you have a set amount of days to do these inspections and determine if you would like to move forward with the purchase or try to renegotiate with the seller.
When you decide to waive the inspection contingency, you are giving up the opportunity to inspect the house and negotiate or have the opportunity to terminate without potentially forfeiting some money. When you remove this contingency you are telling the seller that you are willing to move forward with buying the property based on the information the seller has provided you and based on the condition of the home as you have seen it. The reason that many buyers remove this contingency when in a multiple offer scenario is because it can be really attractive to sellers to have one less contingency. Although this can make your offer attractive, it’s also something to discuss in depth with your agent to make sure removing that contingency is a risk you’re willing to take in your purchase.
If you have more questions about real estate or the Portland market, please feel free to reach out and follow along for more tips.