April 13, 2020 –
In a sellers’ market, it is tempting to waive the home inspection and buy a property “as is.”
But, that’s a very bad idea.
In an aggressive sellers’ market like we often experience in Northern Virginia—and are likely to again despite the coronavirus—buyers can get frustrated by losing out to the competition. I get it. You fall in love with a house, do everything you can to put together a great offer only to lose—again. It can be so frustrating.
But, I am concerned about the number of offers I am seeing that are waiving the buyers’ right to a home inspection. As a real estate agent, I totally get the appeal of offering to buy a house “as is,” especially if it seems new-ish and well-maintained. But, as a general contractor, I know all too well what could be lurking under that fresh coat of paint or inside the crawl space.
The Benefits of Home Inspections
A home inspection conducted by a certified inspector is your best defense against buying a “money pit” full of unexpected and costly surprises. A thorough inspection will give you a candid assessment of the age and condition of a home’s infrastructure (roof, foundation, electrical and heating systems, plumbing, etc.) as well as any damage that may require expensive repairs, such as that caused by termites, carpenter ants, mold, or water.
Even well-maintained homes can have structural issues that could cost an unsuspecting buyer to invest far more in repairs than they had planned. So, my advice to buyers—even in hot sellers’ markets—is to find other ways to make your offer more attractive.
Other Ways to Sweeten the Deal
There are several other options for making your deal irresistible — or at least more attractive. Here are a few I like:
*Get pre-approved. This is virtually a requirement in a strong sellers’ market. Get a bank’s preapproval on a mortgage amount. It won’t guarantee that you’ll get a loan, but it will show sellers that a lender has verified your income and credit score and determined that you can afford the payments.
*Make your best offer first. You may not get another chance, so offer the best price you can.
*Add an escalator clause. This tells the seller you will increase your offer if there’s a higher bid from another buyer.
*Pay cash. Sellers love all-cash offers because they’re less likely to fall through before the sale closes.
*Let them stay. If the sellers don’t have a new place yet, offer them a “rent-back arrangement,” which means that they will pay you rent to stay in the house for a set period of time after closing.
*Pay for extras yourself. Offer to pay some of the closing costs, the HOA dues that must be prepaid, or for a home warranty.
*Offer more earnest money. Try doubling the amount that the seller requests or that is customary in your area.
If you are interested in discussing the pros and cons of waiving a home inspection or of these options for improving your offer, give me a call. As both a real estate agent and a general contractor, I have a unique combination of expertise and perspective to share with you.