A professional home inspection is highly recommended when purchasing a home. It is a great way to
uncover any unexpected defects, learn about maintaining the home, and understand what you are
buying and with that knowledge, budget for potential replacement of items discovered.
With the wild and crazy real estate market we currently have in Colorado Springs, we have noticed
several offers that have come in on our listings which have WAIVED the property inspection! They are
doing this to try and put them at the top of the heap of offers. As a seller, this might seem like a great
idea, since they think that the buyer will buy the house “as-is” with no repairs or credits. However,
there are several problems with this scenario;
- The potential for a lawsuit down the road, after the house closes. After the buyer moves in,
they then will discover issues with the home, perhaps water leaks/damage, foundation issues,
roof damage, electrical issues, etc. Then they contact a lawyer to sue the seller for defects not
disclosed to the buyer.
- Often, when a seller takes an offer where the buyer has WAIVED the home inspection, the buyer
will many times end up backing out of the deal, figuring that they “over paid” for the house, and
were forced to take it with any and all defects. In this market, we are seeing a large number of
homes going under contract very quickly, only to come back on the market a few days later!
- When a buyer waives an inspection, they may miss finding out about SAFETY items that could be
dangerous, such as double-tapped breakers in the electrical panel, or safety issues with railings,
or decks, the presence of mold or asbestos, radon, and other potential health issues. These can
be very dangerous to the buyer!
- A buyer who WAIVES a property inspection could miss finding out about MAJOR structural
issues like foundation problems, flooding (past or present), discovering old appliances that
either do not work properly or are at the end of their life cycle. This can cost a buyer thousands
of dollars in replacement costs, not included with the loan on the house!
- Undiscovered issues with a roof can cause the NEW Insurance Company to DECLINE coverage of
the roof on the Homeowner Policy! This can cause the buyer to have to replace the roof, at their
expense, in order to obtain insurance.
- WAIVING a home inspection also removes a valuable contingency in the contract to get out of
the deal and in most cases get their money back if they find inspection items that warrant
backing out of the contract. Without that contingency, backing out of the deal could cost the
buyer their earnest money!
I recommend ALWAYS leaving the right to a property inspection, and the contingency date in the
contract to be able to back out of the deal if unacceptable items are discovered. In a competitive real
estate market, I recommend then adding a clause in the contract that states that “the property
inspection is solely to determine the condition of the home being purchased. Buyer will only request
potential inspection items that are related to SAFETY, HEALTH or the INSURABILITY of the property.”
In this scenario, should the buyer find big ticket items that they are not willing to accept responsibility
for, they can still get out of the contract! When you waive the right to an inspection, you are agreeing to
an unacceptable risk just to get a house!
In my 32 years of experience in real estate, I always take care of my clients! When I represent a buyer,
if a seller does not accept our offer, there are always other homes to buy! If I represent a seller, I advise
them that we want to take the offer that will get us to the closing table! This may NOT be the highest
offer, or the one that waives an inspection, but it will be the one that will end up closing and getting the
seller their proceeds.