— Recommendations are independently chosen by the editors of Reviewed. Purchases you make through our links may earn us a commission.
Real estate investing is a risky enough proposition on its own. Buy a property without doing a home inspection first, however, is tantamount to swimming with sharks.
Still, that hasn’t stopped many eager buyers from foregoing the possibility of an inspection with their offers in hopes of enticing sellers, who have the upper hand in a market with limited inventory.
Get deals and shopping tips straight to your phone. Subscribe to SMS alerts experts from Reviewed.
Matthew Atwood, broker/owner of Century 21 Atwood in Mankato, Minnesota, notes that foregoing the possibility of an inspection is one thing if you want to sweeten the deal. But you should always have a home inspected at some point, preferably before you move in.
“I’m still a big fan of inspection, even if you don’t make it conditional on the sale,” he says. His recommendation is to get an inspection immediately after buying the home, even if you can no longer hold the issues found against the seller as leverage.
He compares moving into a house without an inspection to never going to the doctor for a checkup. “It’s a pretty hefty insurance policy that you take out,” he says.
If you’re considering making an offer on a home without doing a home inspection first, here are six ways to protect your own bottom line.
1. Look for property red flags
Unless you’re a home improvement professional yourself, you won’t know what to look for beyond cosmetic fixes. If you’re eliminating the home inspector, plan to work with a seasoned real estate agent who’s seen enough homes to recognize the warning signs.
Kristina Morales of Kristina Morales Real Estate, who works with clients in Ohio, Texas and California, recommends keeping an eye out for these red flags when buying a home:
- Water spots on the ceiling, walls, or floor that may indicate a previous flood
- Missing roof shingles or other signs of wear
- Drafty windows that do not open/close properly
- Leaks or water spots around the furnace
- Age and working condition of HVAC systems and hot water tanks
- Cracks in the foundation or walls – it could just be the house settling or something worse
- Leaking kitchen/bathroom sinks
- Large trees with extensive root systems – they could cause problems with foundations and even sewer lines
“I always discourage customers from forgoing inspections,” Morales says. “The rare circumstance where I would feel comfortable is on a new build with a reputable builder.” She notes that new builds are generally a safer bet because warranties are always in place for everything. But even then, the navigation is not always smooth.
“Even in a brand new construction, objects are always found during an inspection,” says Morales. “However, these are usually punch list items [a list of minor repairs and issues] that the builder would quickly resolve.
2. Confirm the age of appliances and home systems
If you’ve been raised to think it’s rude to ask someone’s age, know that the same etiquette doesn’t apply to the question of how old a home appliance or system is. In fact, you’re doing yourself a disservice if you don’t make this request when buying a home.
But don’t rely on the seller to give the correct answer, says Mike Leggett, real estate strategic advisor at Real Estate Bees and owner of The BrickKicker, an inspection services company in Athens, Georgia.
“Sellers often guess when estimating age or major systems like a roof or HVAC,” says Leggett.
He notes that while they’re not intentionally misleading buyers, they might instead remember the last time the appliance or system was serviced or the estimated date on the disclosure when they purchased the home for the first time.
Repairs can certainly help extend the life of a device or system, but Leggett says not to rely too much on what the seller says. Often sellers resorted to cheap repairs on expensive systems and devices that really needed to be replaced instead.
“We frequently find heat pumps whose interior and exterior components are not the same age or the same efficiency,” says Legett. “These systems will fail.”
3. Set aside part of your budget for renovations
It’s all too easy for homebuyers to find themselves at the top of their budget when bidding on a property, especially when homes regularly sell above their asking prices.
But Leggett reminds buyers that when they forgo an inspection, they could soon be faced with significant expenses they can no longer afford now that their cushion for renovations has all but disappeared with a higher offer.
Atwood says that in a market where homes regularly sell above asking price, you’ll need to factor in up to an additional 10% of the purchase price for needed repairs. He recommends asking yourself this question when buying a home: “What’s the maximum liability I can take on a house that I don’t inspect?” and consider that when you make an offer on a house
4. Request Seller Disclosure
If a buyer decides to forego the possibility of a home inspection, they should obtain disclosure from the seller, says Walter Kunstmann of ASC Home Inspections in Colorado Springs, Colorado, who is also a strategic real estate advisor at Real Estate. Bees. “Waiving an inspection is giving up all bargaining power for any repair costs,” he says.
For all conditions disclosed, there must be receipts or other evidence of service as part of the conditions of purchase.
It is important to know that even with a disclosure, buyers are not assured that everything is perfect; more often than not there is something that needs to be fixed.
“We call a salesperson’s disclosure ‘the book of lies’ because they are so often incorrect,” says Leggett.
5. Buy a home warranty
In addition to a home insurance policy, Leggett recommends that homeowners purchase a warranty that covers, with limitations and exclusions, their home systems and appliances.
“It may not cover the replacement of systems that are past their lifespan or improperly installed,” Leggett mentions as an example. Still, it’s a good move, especially for beginners.
“First-time homebuyers may not understand how to operate their homes and may miss important information that inspectors provide about known safety issues and life expectancies,” says Leggett.
6. Remember the purpose of the home inspection
Buying a property is a big decision and a home inspection is meant to make it easier for the buyer. Removing it as a contingency puts the buyer in an even tougher decision, especially when buyer’s remorse is entirely a possibility – and much worse with a house than with a car or other heavy purchase. .
“Home inspections shouldn’t be used just to beat a seller on price or to renegotiate a contract,” says Leggett. “They are best used to understand the current condition of the home, to find major faults and safety issues, and to predict the cost of ownership.”
Especially in a market where the seller has a lot more to gain than the buyer, there is someone who is on the buying side. “Let’s also not forget that the building inspector is the only person who really works for the buyer,” he says.
Atwood continues to recommend that its customers retain the possibility of an inspection as part of their offering. He sees contingencies coming back into play for buyers as the real estate market begins to cool. If the seller declines a good offer with an inspection condition, Atwood says, “There’s probably a good reason they don’t want you to have an inspection.”
There’s a lot more where that came from. Subscribe to our weekly newsletter to get all our reviews, expert advice, offers and more.
Prices were accurate at the time this article was published, but may change over time.