The mentality is in favor of taking risk because property values are quickly rising, but the reality is buyers don’t understand how expensive what they don’t see could get.
Home sellers around the U.S. are jumping for joy. Housing prices are up 5.8%, the sharpest rise in a few years. And the mere fact that they have a home to sell puts them at an advantage in a real estate market that seems woefully low on inventory. The time on the market for U.S. houses has plummeted from an average 84 days in 2011, to 45 days in 2017, according to CBSNews.com.
The resulting bidding wars are incentive for buyers to do what it takes to win those wars. Often, agents say, the buyers’ strategy is to forgo the home inspection.
Buyers take the risk, home inspectors lose business
Real estate agents in hot housing markets in the U.S. and Canada suggest waiving the standard home inspection is a trend. Submitting a conditional offer when there’s one buyer in the game is expected, but when several buyers have put in their offers, submitting a conditional offer is more a luxury, according to an article by Kim Chipman on Bloomberg.com published April 3, 2017.
Forgoing the home inspection can help buyers’ offers rise to the top in a bidding war. It’s an obvious win for sellers who no longer have the threat of losing buyers or having to go down on price because of what the inspectors find, according to an April 15, 2017 article on TheNewsTribune.com by Matt Driscoll.
This is a concern to some real estate agents, and, of course, to home inspectors who are seeing declines in business. The risky practice of forgoing the home inspection can lead to undiagnosed problems that put buyers in over their heads. Even the well-studied handyperson is unlikely to detect eroding foundations, termite infestations or a roof that hasn’t yet leaked but soon will, according to Chipman’s article.
What looks good on the outside…
It’s not unheard of that a buyer sues after moving in despite not having a home inspection, but it’s unlikely the buyer will win. Buyers who forgo home inspections typically take on the financial burden of having to fix what’s broken in a home, according to Bloomberg.com.
The trend to skip standard home inspections suggests speculation has entered the real estate market. The mentality is in favor of taking risk because property values are quickly rising. But the reality is buyers don’t understand how expensive what they don’t see could get, according to Bloomberg.com.
Have you experienced a decline in business because of homebuyers skipping the home inspection? Share with us!