Should buyers waive a home inspection contingency in hot seller market?
In a hot seller’s market like now 2020 in Phoenix, buyers often need to make creative offer to get their dream home. For example, buyers may offer more than asking price, some even willing to pay seller’s closing cost. Waiving inspection contingency is one of the strategy in today’s market. But it is a good idea? Let’s look at some of the implications of waiving a home inspection and whether it could be a strategy for buyers.
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What is home inspection?
A home inspection is an all-encompassing visual examination of the condition of a home buyer is considering for purchase. As home is one of the most important purchase one will ever make, a home inspection is an inexpensive way to discover the overall condition of a home.
Why do buyers need home inspections?
Buyers do home inspections to protect themselves and their budgets against unforeseen problems. Many homes appear to be in good shape. But sometimes, homes have underlying issues, some of which can be serious. Problems like mold, water damage, HVAC and roof issues can be costly to fix and even make the home unsafe. Read: Common Problems Found During Home Inspections
Read why you should get an inspection when buying a home in Phoenix AZ?
What is home inspection contingency?
Home inspection contingency state that buyers have the right to cancel the purchase and get back their earnest money if the results of the inspection aren’t satisfactory. Home inspection contingency also allow buyer to back out if the seller refuses to remedy any problems requested.
What happens when buyers waive home inspection contingency?
By waiving home inspection contingency, it means buyers are willing to buy the home AS-IS. You give away your chance to ask seller for any repairs. Read Buyer’s Inspection Notice and Seller’s Response – BINSR. Although waiving an inspection contingency can be a strategy buyers use to make their offer look stronger, it comes with plenty of consequences. For example, if a buyer waives an inspection then discovers that the roof has issue, it’s the buyer’s problem. Buyer may need to hire roofer to repair to roof or maybe have to replace the entire roof. That can cost a lot of money and put buyers in a tough spot so soon after making their down payment.
Conclusion
Waiving a home inspection contingency can be a huge gamble for buyers. Unless buyers have the financial means to address the house AS-IS, waiving the home inspection contingency is probably not a good strategy.
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