Ask most experts, and they’ll likely tell you it’s not a good idea to waive a home inspection. A home inspection is of paramount importance when purchasing a home. By having your home inspected it will help ensure that it’s worth the price you are paying for it. Plus, it will help you understand how much money is needed to have the property repaired, if necessary. For most people, a home is the largest purchase made in their lives. And it’s important from a business and financial perspective to understand the true condition of that home before moving forward.
What’s a home inspection contingency?
A ‘contingency’ is a condition that has to be met for the real estate purchase contract to be binding. A home inspection contingency permits a buyer to have a property inspected, and enables the buyer to terminate the transaction if the inspection reveals defects that the buyer does not waive and the seller does not repair.
This means that a contingency provides an “out” for you if your home inspector discovers defects or issues that sour the deal. It gives you the right to cancel the contract unilaterally during the inspection period for any reason. Keep in mind that you have the option to waive this contingency and proceed with a purchase. But you should only do so after discussing the implications with your real estate agent and real estate attorney.
Is waiving a home inspection allowed?
Unless your mortgage lender requires a home inspection, you are allowed to waive it if you choose. The home inspection is almost always completely optional. It is rare for a lender to require you to have a professional home inspection done. Lenders typically don’t care whether the property is inspected, although they may encourage you to pursue a home inspection.
So what do lenders care about? Well that is the value of the property – which is determined by a home appraisal. This means that lenders will require you to get the home appraised, and they’re much less likely to require an inspection. So if you want, you can opt to waive a home inspection to make your offer look more appealing to the home seller.
Keep in mind that by doing so, you might overlook issues that will be costly to repair. And you’ll definitely miss the opportunity to have the seller pay those costs for you.
When waiving a home inspection might be ok
Generally, experts only recommend waiving a home inspection if you have a trained eye for real estate, and you’re certain you can pick out potential issues without a professional inspection. For the average home buyer, that won’t apply, but experienced contractors, investors, or real estate professionals might be comfortable doing so. Typically buyers only opt for this route when they are fairly confident that the house is in good condition or are fairly confident in their ability to handle the obvious repairs on their own.
For example if you personally know the home builder who constructed the property, you might feel more confident about the quality of the home. Additionally, savvy investors and experienced home flippers often choose to waive inspections.