A startling trend I see more and more in real estate purchases is when the would-be buyer forgoes a home inspection. In this competitive market, would-be buyers do all types of things to make their offer stand out…shorter close times, all-cash offers, higher earnest money deposits, low appraisal contingency clauses (buyer agrees to pay $10,000 over the low appraised value not to exceed the purchase price)…and finally waiving the opportunity to inspect the property and be able to walk away without losing their earnest money deposit and/or ability to renegotiate the contract.
A home inspection is incredibly helpful in many ways-they can give helpful tips on home maintenance, spot recalls on appliances, and help you gauge the life expectancy of items throughout the home. However, their largest advantage is in discovering large repair items that might cost you tens of thousands of dollars. In addition to the cost, you may now be stuck with a property that has a stigmatized defect in the property (think mold or structural issues) and that you will have to disclose to the next buyer.
In my recent experience, a purchase for a client revealed several water leaks in the roof and the central air unit was low in refrigerant. Our home inspectors, MD Home Inspections, found roof leaks in a way only a home inspector would have seen. Using an infrared camera, they were able to spot heat signatures in the ceiling revealing a water leak. None of this water could be seen with the eye. They followed up with a moisture meter, showing it was indeed water. After roof repairs and mold mitigation, my clients would have been out $15,000 in repairs. The air conditioner was a separate issue-the unit was from 1996 and its refrigerant runs on the old R-22. This type of refrigerant is no longer allowed to be used, meaning if you need a recharge (typically a small charge), it might cost you as much as an entirely new air conditioning unit. This unit after testing was extremely low in the refrigerant, requiring enough that would force the homeowner to spend $3,700 on a new unit. This home was incredibly updated throughout with very high-end finishes. Just looking at the house, you would never guess it had all these issues.
While being competitive with your offer is of utmost importance, forgoing a home inspection is easily the worst way idea to make an offer more competitive. Spending the time on due diligence could be the difference between buying your next dream home versus buying a money pit nightmare.
We would love to help you through the home buying process, whether it is selling, buying or appraising. Contact me for more information.
Brian Kirksey, MAI, ASA, SRA, FRICS
(248) 336-2086 x. 101