07/12/2023
Is it ever smart to waive a home inspection?
At the height of the market frenzy, as homebuyers vied for a limited supply of properties, many shoppers made a concession that’s almost unthinkable in a normal housing market: They waived inspection, assuring sellers that they wouldn’t use a home inspector’s findings to haggle for repair costs or wiggle out of the deal. While the market has largely calmed down since then, sellers are still very much in the driver’s seat in this era of scarce housing inventory. It’s not as common for buyers to waive inspections anymore, but it does still happen.
Key takeaways
In a home inspection, a professional inspector visits the property in person to assess its safety and functionality, checking the electrical and HVAC systems, roof, plumbing and more.
• A home inspection protects your financial interests as a buyer, helping you to make an informed decision about the purchase — especially if serious issues are uncovered.
• In a highly competitive housing market, buyers will sometimes waive a home inspection to gain leverage and make their offer more attractive to the seller.
It’s in the buyer’s best interest to have a home inspected before they become the new owner. Inspections alert you to existing or potential problems with the home, giving you not just an early heads up but also a useful negotiating tactic.
Risks of waiving a home inspection
A home inspection is a standard part of the homebuying process. After a buyer’s offer is accepted, the buyer hires a licensed professional who checks the wiring, flushes the toilets, peers into the attic and tests the heating and air conditioning systems (and more).
In a buyer’s market or a more balanced market, buyers often use the inspection as a bargaining chip. For example, a toilet that runs doesn’t affect the underlying safety and soundness of the home, but it does present an opportunity for the buyer to ask for a repair or credit from the seller.
Under normal circumstances, you would never want to waive a home inspection. Buying a home is the biggest purchase many people ever make. Having an inspection conducted before finalizing the purchase protects your financial interests. This is because inspections are designed to uncover any problems with the home. If you skip it, you risk serious issues that could cost you a great deal of money down the line, such as asbestos, mold infestation or cracks in foundations or support beams.
Home inspection vs. appraisal
Most people buy a home only once a decade or so, and the details can get confusing. Many buyers — particularly first-time buyers — don’t fully grasp the difference between an inspection and an appraisal, says Christian Adams, a former real estate broker and CEO of Repair Pricer, a company that estimates the cost to repair an inspection’s findings. Both require an industry pro to come inspect the property in person, but for different reasons.
An inspection focuses on the systems and the structural soundness of the house. The aim is to identify problems that, if neglected, can create major issues while you own the home. “A $1,200 plumbing repair can turn into $1 million,” Adams says. If an inspector identifies potential problems, particularly significant problems such as toxic mold or a cracked foundation, he might call in experts for further study.
Bottom line
As a buyer, the home inspection exists for your protection. It can alert you to minor problems before they become major ones, and major problems before they become your problem. You should always have a home inspected before buying it. But in a very competitive market, waiving the inspection contingency — meaning you still want the information, but you won’t hold the seller responsible for making or paying for repairs — can be a smart move. This makes your offer more appealing while still keeping you informed.
