by John Donlon
In this molten real estate market, it's increasingly common for the seller to ask the buyer to waive the home inspection contingency. Is this financial suicide? This is not an easy question to answer.
New marketplaces call for new strategies. At GoldCoast Mortgage we know you need to live somewhere and buying a home comes with many risks. If your personality type cannot handle risk. The following strategy is probably not for you.
While any attorney might unilaterally say no to the waiver. We adopt a pragmatic approach.
We met Jay Mercier, one of the home inspectors we recommend, this week for coffee. He recently completed a post purchase inspection. The hardest of his life. He unearthed $35,000 in urgent repairs and devastated the home buying experience for a young couple. Most of the expense he could spot from the bottom step of the stairs down to the basement.
In a warm market, we've seen the home inspection used to renegotiate price. A broken dishwasher and ungrounded outlets used to mean a price reduction.
In a hot market, there are backup buyers ready to take your place. Renegotiation isn't an option but using our strategy at least you know not to buy a lemon.
In a molten market, buyer beware, the buying process is akin to an auction.
So, what can you do?
Train yourself as your own home inspector? This can be tough as laws and rules change. A successful inspector is an observant, experienced, investigator. We like service providers that have done thousands of inspections.
If you're forced to waive the inspection contingency in order to buy your dream home consider the following strategy:
A) Don't get set up. Homes that are fatally flawed tend to become blended into the crowd in a molten marketplace. This "slip it through" phenom is more likely in a For-Sale-By-Owner setting.
B) Don't ignore your instincts. Be wary of smells, taste of the tap water, recent renovations or fresh paint without expansion or improvement.
C) Consider a home inspector in tow. Schedule a meeting with a reputable home inspector, explain your dilemma and create a strategy. The strategy is you don't want to get roasted. Set your definition of roasted with the inspector. Is it a new roof, infestation, mold, asbestos, defunct furnace, structural integrity or failing chimneys? Then hire the home inspector to accompany you to the showing. A thumbs down means your definition of roasted is met. Thumbs up means "all clear" on major issues (no visible fatal flaws).
This strategy is not a home inspection; you're renting the inspectors experience. If you cannot handle the expense of smaller items or if you think $1,000 in inspector fees is expensive, this strategy is not for you. We use $1,000 as an example of needing to rent the inspectors experience more than once in the home buying process.
Home ownership and competitive buying represent risks. Do the best to minimize yours.
John Donlon is the Co‐Founder of GoldCoast Mortgage, one of the 70th earliest licensed mortgage corporations in the nation. They were founded, and fiercely protect, their extreme service model which puts the client’s needs ahead of corporate needs. In an age of technology based applications you will find their guidance, knowledge, and process very enlightening, comforting and efficient.