In hot real estate markets like Vancouver, a recent trend has been for homebuyers to skip home inspections. If you’re been searching for a home for months and you find your dream home, you might consider ditching the home inspection, especially if you’re in a multiple offer situation. While a home inspection can lose you a house, you’re taking a big risk by not getting one.
Clean Offer vs. Conditional Offer
When house hunting, it’s important to understand the difference between a clean offer and a conditional offer. A clean offer, otherwise known as a firm offer to purchase, is when you’re willing to purchase a property without conditions. A conditional offer to purchase is when you include at least one condition in the offer. The two most common conditions are subject to financing and a satisfactory home inspection. As long as the offer price is reasonable, sellers usually prefer a clean offer; once the offer is accepted the house is yours. With a conditional offer, the seller is left waiting a few days until the conditions have been met.
When you’re in a multiple offer situation, including too many conditions can cost you a house. As the saying goes, “A bird in the hand is worth two in the bush.” Even if your offer price is higher than everyone else’s, if your offer includes too many conditions, while an offer of only $2,000 less includes no conditions, the seller might just go for the lower offer. In a buyer’s market you can typically get way with including more conditions, but in a seller’s market when there are many buyers and few houses, including conditions could lose you a house.
Reasons to do a Home Inspection
As a first-time homebuyer you might feel pressured to forgo the home inspection. Not only is it risky to skip a home inspection, you’re giving up a valuable negotiating tool. Here are some good reasons to not skip your home inspection.
- By skipping a home inspection you’re taking a lot of risk. Although a house may look fine, you may be overlooking costly repairs that a certified home inspector would recognize. Repairs such as a leaky roof, slanted chimney and cracked foundation can cost thousands.
- Home inspections are one of the top two conditions for a good reason. They provide you with a valuable negotiating tool. If you discover costly repairs, you can negotiate with the seller or get out of the deal all together.
- Home inspections are a great learning experience for first-time homebuyers. If you’ve never lived in a house, they provide an excellent opportunity to ask your inspector about the ins and outs of your house.
- A home inspection is a great way to budget for maintenance and repairs. Your inspector can tell you how old your furnace is, so you’ll know when you budget for a new one.
Home inspections are a must, especially on older homes. You never know the problems that can lie behind the walls. If a seller is giving you a hard time about requesting a home inspection, it might be worth walking away from the deal.
Getting a Home Inspection without including it as a Condition
Sometimes sellers provide home inspection reports for buyers. This is a great way to assess the condition of the house. Although, it’s important to understand that there’s a confliction of interest since the seller paid for the home inspection. Relying solely the report is often not enough. For around $100 you can usually do a walkthrough of the property. This is well worth the money and will give you an idea about any potential problem areas.
Pre-inspections are another option. Instead doing an inspection after your offer has been accepted, you can pay for an inspection ahead of time. This will allow you make an informed decision about whether you want to bid on the house. If you discover any costly repairs you can walk away from the house, although if you like what you see and want to make an offer there’s no guarantee your offer will be accepted.