You’ve finally found the right home for you. It seems perfect! You sit down with your agent to write the offer. That’s when you’re asked... “What do you want to do in regards to the home inspection?”
Your mind might start spinning. You want to make sure the home you purchase is in good shape with no hidden defects. You also want them to choose your offer on their home and you’ve heard that waiving inspection can help. The house looked fine from what you saw on your showing, so do you really need one and is waiving the inspection an option?
There’s a lot to consider when it comes to deciding how you want to proceed in terms of a home inspection. It’s true that there are different options available to you, and it’s ultimately up to you how you decide to proceed. Keep in mind that each option has its own set of pros and cons. To help get you started as you make your decision, we’ve outlined some of the common home inspection contingencies that we see in this market. Keep in mind, it’s important to have a conversation with your agent about home inspections so they can provide you with assistance based on your specific scenario.
What is a Home Inspection?
Generally, most people view home inspections as a time where you uncover hidden defects of a home. However, home inspections are not there to simply be the bearer of bad news. In fact, home inspections can be extremely beneficial, especially for first-time homebuyers. Why? Because a home inspector does more than just looking for things that are wrong. They will walk you through each aspect of the home, from electrical, to heating, to plumbing, and much more. They’ll be able to estimate the age of big-ticket items such as the roof or furnace. They’ll also be able to let you know if you should start to budget for a replacement. Ultimately, they’ll show you how to properly care for and maintain your home, which will result in fewer headaches for you down the line and a better payoff when you go to sell. If you have any questions about the property, now is your chance to ask! It’s a great chance to learn about your soon-to-be new home.
What Are Your Options When It Comes to Home Inspections?
Similar to other contingencies, when you’re making an offer on a home, the home inspection doesn’t have to be all or nothing. There are a number of options that you can choose from in order to come up with an offer that fits your comfort level pertaining to inspection.
Full Home Inspection
This is what you probably think of when it comes to having a home inspection. By including this contingency, you have the right to renegotiate your offer or walk away from the deal based on anything that comes up during the home inspection. This can be due to any issue, big or small. Keep in mind that it’s always best not to nitpick - but if there are areas of concern, you have the right to bring these issues up. The main con to this option is that, in this market, it’s not all that competitive. Compared to the other options, this one poses the most risk to the seller but the most protection for you.
Waived Home Inspection
We are seeing this option being utilized more frequently in this current market. Before you decide if this is the right option for you, it’s important to understand what exactly it means for you. By waiving home inspection, you are solely relying on the information that’s been provided to you (via MLS or seller’s disclosure) or that you’ve personally seen during your showing as your guide to what work may need to be done on the home. If you waive your home inspection on your initial offer, you cannot turn around and later change that decision. There is always a chance that issues are discovered down the road after the home purchase is complete. Those issues could be small or be a large undertaking - there’s no real way of knowing if it was not previously disclosed. This option poses the greatest risk to you but the least risk for the seller, which is generally what makes it so attractive in offers. Proceed with caution if you go this direction and be prepared to face some of these challenges.
Home Inspection for Informational Purposes Only Unless Repairs Exceed $$$
This is a very popular option in this current market. It provides a bit of middle ground between the full inspection and completely waiving your rights to one. This contingency allows you to commit to taking on some repairs but up to a certain dollar amount. This will show the sellers that you’re not going to ask for a laundry list of minor repairs but are mainly concerned with big-ticket items. In this scenario, it may be worth consulting a contractor prior to submitting an offer. Let them know what items you are most concerned about (roof, furnace, electrical, etc) and have them provide you with an estimate of how much those repairs would cost. This can serve as your baseline for the dollar threshold that you use in your offer.
Home Inspection for Informational Purposes Only Unless Structural, Safety, or Mechanical Issues
Similar to the previous example, this option falls somewhere between the full inspection and waiving it completely. In this case, you will have a good amount of protection in regards to issues that most people are concerned about. There is a lot that can fall under these exception buckets, so chances are you will be able to renegotiate if you find something that’s a red flag. However, keep in mind that this is a little broader and may not be as appealing to some sellers as other inspection offers.
Bottom Line
Home inspections can be incredibly helpful, especially for first-time homebuyers. They will help you find any potential issues and they’ll also help you understand how to properly care for your new home. When it comes to deciding what you should do in terms of inspection contingencies, it’s important to remember there will always be some sort of risk/reward. Know what the risks are so that you are not taken by surprise. Be clear with what you expect to happen if issues are found so that your agent can make sure that it’s properly laid out in the offer. Communication is the key to deciding what the best option is for you. Take time to sit down with your agent and discuss what you’re most concerned about. They’ll help you settle on a solution that will work for you.
If you have any questions about home inspections, reach out! We’re happy to talk through home inspections in more detail and help you decide what makes sense for you.