Home Buyers Are Getting Royally Screwed By Dropping Home Inspections
Buyers are dropping home inspections out of their offers in order to get the house of their dreams
Buying a home has actually gotten to this? Are buyers really bartering away their right for protection by dropping home inspections from their list of “must do’s”?
So, I remember as a kid growing up my parents didn’t hand us money like these kids nowadays. I was lucky if I’d get five bucks for 40 hours of hard manual labor. in these times, it seems like my daughter gets 50 bucks a week for basically talking on her phone, texting on her phone and posting pictures to one of those instabookgram places. Yes, she’d be the chick that as a kid, all the guys would call loaded. But for us, if we wanted something, we basically bartered or traded our way up the materialistic chain of life. It seems as if nothing has changed from 30 somthing years ago to today has it? Well except for the fact that we didn’t have cell phones or the ability to speak to your friends like they did on the Jetsons… and thinking, “that will never happen“!
Here we are ending 2016 and the Los Angeles market seems just as crazy as it was in the summer. Multiple offers, more buyers than property and bidding wars? Ironically, two days after thinking how ridiculous the market is here in Southern California, I saw an article about how buyers were dropping their inspections just to get a property and I was stunned because this was a conversation I just recently had and I knew then, I had to share my thoughts about this unbelievable idea.
Home Buyers Have No Clue
Some home buyers have absolutely no clue as to what it means to forgo a home inspection just to get first dibs on a property. For the first timers, the elation of that first house, the park-like back yard, the smell of fresh cut crass that was actually their own, the lull of just laying in their own tranquil swimming pool, open space , freedom, leaking roof, mold, leaking water heater or old pipes, old hazardous electric panels, undersized electric systems, old HVAC equipment, unstable soil, sewer pipe damage, septic system damage, chimney damage… the list really is endless. Home buyers who have never in their life, owned a house wouldn’t necessarily know to expect any of these potential issues while buying and then living in a house. But these issues are real. And, the crazy part is, you never ever know what you’ll find! Check this… I was at a house just recently in the city of Tarzana, for those of you in Los Angeles it’s a small town 20 minutes north of downtown. Anyhow, this house was built in 2004 and was very clean except for one thing. The house had these unusual cracks in very distinctive patterns throughout, and for us that are General Contractors we recognize these cracks as settlement damage. So to make this long story shorter, we employed the services of an SE or Structural Engineer who confirmed the cracks as “very significant” and would thus require repairs in excess of $50,000. Whoa! So I ask you, how bummed would you be if you didn’t get an inspection just to find this out later? Even as a GC, I’d be pretty bummed too.
Why buyers want to drop the inspection
I can see why the buyer would want to drop the inspection contingency from the deal, and yea on it’s face it seeks like good thing, but not knowing what you are buying is NEVER a good thing. If you have never owned a house a word of caution. When there is a problem, it is expensive to fix. Not like living in a apartment where everything is fixed for you… no. You will call the repair guy, and pay the repair guy. Here’s an example,… a new sewer can cost between $10-$50K depending on your lot. A new roof is never less than 10K and chimney repairs seem to always hoover around $5-$15k for some reason. These are things that if gone unnoticed, will need to be either fixed or replaced ON YOUR WATCH. My advice… go ahead and drop the inspection from your offer but still get a home inspection, if nothing else, for piece of mind. But NEVER EVER use an agents list. Duh.
Why the agents and home sellers want you to drop the inspection
So if you want that house more than the other guy and you’ve done all the you can with giving the sellers what they want in the form of more money, less concessions or whatever, the last item on the chopping block is your right to a home inspection. So how this will happen is that your agent will confront you and say something like…” you know, if you really wanna beat out the other buyers you really should waive your home inspection, that will seal the deal for
me I mean you for sure.” Or, it may happen this way… “hey buyer of mine, the seller and their agent are requiring that you remove the home inspection from the offer if you really want this house cause there are 50 other cash offers that they’ll take in a heartbeat, it’s really no big deal… I mean look the house is sooo clean and it was just re- done (remodeled or flipped= potential POS)… this place is amazing right?” So it’s at this point the agent has you pumped, and you’re actually starting to feel as if they’re right.. so you start thinking “how bad can this place be right? The seller is the nicest most honest-est investor flipper ever and the agents… wow, they really care for my money oops, I mean care about me.
The real estate agents and home sellers all in unison, have a completely different agenda in mind that they will never disclose to you. Wanna hear it? Yes, I knew you did. These people… which is ALL OF THESE PEOPLE (and I say this from experience and without prejudice towards these lovely 😉 individuals, and you know how much I love all real estate agents), have one, no two goals in mind and only two.
- Sell the house
- Make that money
So I ask you the home buyer… If you were an agent and the buyer wanted to get an inspection which has the potential to extend the time in which to close the deal, expose issues which are significant that may cause the buyer to ask for repairs, concessions or worse back-out of the deal and must now be disclosed to ALL FUTURE BUYERS, how happy would you be if they agree to waive their home inspection? Pretty happy right? I mean you pretty much dodged the proverbial bullet.
It is in the best interest of the seller and all agents involved to hope an pray that you agree to waive the inspection completely. Or at least do it yourself, have your self-proclaimed contractor friend or your pops do it instead. But trust me, they are hoping that you agree to waive it completely. It’s one less obstacle in the way of that eagle landing for them.
DO NOT FEAR… YOUR HOME WARRANTY WILL FIX EVERYTHING. HA!
So after your agents convinced you that placing your offer with the understanding that NOT getting a home inspection is no bid deal, they may offer up a $350 home warrantee to ease your anxiousness and keep your nagging dad off their back. The agents will sell it as a fix-all solution to ANY issue that may arise during your tenure within the confines of your newly acquired dwelling.
What they fail to tell you is that home warrantee companies like most insurance carriers live to decline services due to any number of excuses such as, the item is too old, it’s not listed therefore not covered, pre-existing conditions… My favorite is one I heard the other day…” You don’t need a sewer inspection… the sewer is covered by the home warrantee that the seller so graciously provided you“. HAHAHAHAHA…HA. Idiot…, thats a great way to get yourself sued.
Now, there are great uses for a home warrantee and to their defense they can be useful, actually very useful in fact. BUT THEY ARE NO SUBSTITUTE FOR A HOME INSPECITON…EVER.