Why more homebuyers are waiving inspections
Simplified: Sioux Falls' tight housing market has led more people to waive contingencies – including home inspections – in order to make their offers to buy more attractive. But, experts warn, foregoing inspections could mean costly repairs come as a surprise down the line.
Why it matters
- Sioux Falls has more people looking to buy homes than homes available, which means sellers are often faced with multiple offers or bidding wars. One of the ways to make offers more attractive is to keep them as simple as possible by waiving contingencies.
- It's a national trend. A recent survey from the National Association of Realtors showed that among buyers waiving contingencies, about a quarter of them chose to waive an inspection.
- Buyers who waive the inspection as a contingency on the offer can – and in many cases do – still get an inspection, but they don't have the leverage they might in a less-tight market to say, "You need to fix this, or we're walking away from the deal."
"Eighty percent of the time in a multiple-offer situation, you're competing against (an offer with) no inspection," said Destinie Marshall, an agent with Discovery Realty Group at Keller Williams.
What's the purpose of a home inspection?
It's a way for a potential buyer to hear from an expert the condition of the home they're eyeing.
Inspectors look for things that might not be as visible to people walking through a house, including the condition of the roof, attic, foundation, etc.
"We are there to give the buyer, plus their real estate agent, the facts about the house, and then they decide how they want to go forward," said Brian Shabino, owner of National Property Inspections.
What's the risk of skipping the inspection?
Without an inspection, you don't know what you don't know about the house you're potentially buying, Marshall said.
"You don't notice a foundation repair that can cost you $25,000," she said. "It's kind of those hidden items that you might not think about."
Is there a way to get an inspection and still have an attractive offer?
The agents I talked to are so glad you asked.
In an increasing number of cases, inspections were still part of the deal, but buyers agree not to be nitpicky.
- That is to say, if the inspection finds problems that cost under a certain amount – say, $5,000 – the buyers won't back out of the deal because of them.
Inspections can also be a consideration for those selling houses.
- Ashley Lindquist, an agent with Hegg Realtors, advises her clients to get an inspection before they put the house on the market. Then they can show buyers everything they've learned and hopefully receive offers with fewer strings attached.
At the end of the day, purchasing a home is never going to be risk-free, Lindquist said.
"It all comes down to the comfort level of the buyer," she said.