This week’s Q&A column is sponsored and written by Hope Peele of The Peele Group and Corcoran McEnearney, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact The Peele Group at 703.244.6115 or email [email protected]. You may also submit your questions to Corcoran McEnearney via email for response in future columns.
Question: When should you get a home inspection?
Answer: Many buyers, especially those who have never bought a home before, have a lot of questions about the inspection aspect of the contract process. While it is ultimately up to the seller to decide if they will allow home inspectors to enter their home, the buyer has a few options to ask for.
The most common choice is a “home inspection contingency.” This is a time period set forth in the offer that allows the buyer to bring in a licensed inspector who will inspect the home & write up a report listing items that need to be repaired.
Other inspections may also occur during this contingency period. Home inspectors are generalists, and can advise you when you need to get a specialist – such as a chimney inspector or a mold remediation specialist. They will not diagnose an issue, but let you know what to look out for. For that reason, it is always best to complete the inspection on the earlier side of the contingency so that there is time for additional inspections, if needed.
While this probably sounds fairly straightforward, there are actually two inspection contingency options to consider.
The first option is inspection contingency to negotiate or void. This gives the buyer the most flexibility, and is also the most risky to the seller. With this option, the buyer has a few choices after conducting an inspection – they can move forward with no changes to the contract, void the contract due to items found during the inspection, or request that the seller repair certain items or provide a credit at settlement.
The second option is an inspection contingency to void only. This means that the buyer is agreeing not to ask the seller for any changes after the inspection – they only have the option to void the contract. The general understanding with this choice is that the buyer is mainly inspecting to understand what they should budget for, and will likely only void the contract if there are major defects uncovered.
In competitive offer situations, buyers can make their offer more attractive by either shortening the contingency time period, making the contingency to void only, or waiving the contingency altogether.
In situations that are not competitive, I would never advise a buyer to waive an inspection. Home inspections can be very helpful in estimating future costs, as well as establishing the condition of the home. Sometimes, even in homes that have been recently built or renovated, inspections can find things that may not be immediately visible to the average home buyer.
When should you consider waiving the inspection contingency?
Waiving the inspection contingency doesn’t necessarily always mean no inspection. In some cases, sellers will allow a pre-offer inspection or an inspection for informational purposes after the offer is accepted. The home can only be entered with permission from the seller, even if it is under contract, so either of these options require the seller to allow entrance to the home.
If it is a competitive situation, sometimes it is worth considering a pre-offer inspection. This is, of course, risky because you are paying for an inspection without knowing for sure that you will get the home under contract. However, it can be very helpful when deciding if a competitive home is really worth going all-in on.
In my opinion, investing in a pre-offer inspection can allow a buyer to feel much more comfortable – whether their offer is accepted or not. A pre-inspection gives a full picture of the home before the buyer decides on an offer price. This enables them to put in their highest offer that they are comfortable with, while knowing about projected costs down the line. Then even if the offer is not accepted, it is with the understanding that the offer was the highest possible.
When should you consider no inspection?
In competitive offer situations, some buyers will choose to waive their inspection contingency or do no inspection at all. A buyer may feel more reassured if a home is in an HOA or condominium that covers exterior or system maintenance – or the sellers have recently replaced all of the major systems & appliances, and they are all under warranty. On the flip side, perhaps a home is in need of major repairs and the buyers are planning on a full renovation. In that case, an inspection would not be necessary because the buyers are already budgeting for a large expenditure. Sometimes the home is being sold “as-is,” which means that the seller will allow inspections for information only – if at all!
It is important for each buyer to evaluate their own needs, and plans for their home, before deciding whether or not to have their new home inspected. It is truly a case-by-case basis that is different for each buyer, and each home. Be sure that you discuss all of these options with your realtor, and don’t be afraid to ask questions!
If you’d like to know more about home inspections, or the home buying & selling process, call The Peele Group for a coffee meeting – we’d love to chat with you!
If you would like a question answered in our weekly column or to set up an appointment with one of our associates, please email: [email protected] or call 703-549-9292.
Corcoran McEnearney, 109 S. Pitt Street, Alexandria, VA 22314, corcoranmce.com. Each office is independently owned and operated. Equal Housing Opportunity.
