Alyse Storzieri and her boyfriend Robert Engel were shopping for their first home in New Jersey and faced a difficult market. When they found a home they loved last June, the couple followed their real estate agent’s advice to highlight their offer. They went over the asking price, tripled their deposit amount, and agreed to waive the home inspection.

In view of the bidding wars for limited residential real estate, more and more home buyers are foregoing home inspections in order to make their listings appear hassle-free.

The tactic helped Storzieri and Engel beat 12 other offers but left them worried there might be problems with the nearly 50-year-old house.

The couple planned to have Engel’s uncle, a professional building contractor, view the house while it was in an escrow account. But that failed when the sellers refused to let her in for another look. Ultimately, the deal failed when sellers couldn’t find a place to move, which is common with home sales contracts.

“After all the stress, I’d say don’t skip your inspections,” says Storzieri, who is now a real estate agent at Century 21 Mack-Morris in central New Jersey. “While it helped us get the bid, I wouldn’t suggest it.”

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A standard home inspection can increase your confidence in the condition of a property before you sign on the dotted line. If you get a professional opinion, you can also negotiate repairs with the seller or withdraw from buying a property with major problems altogether.

If you are planning on buying a home this year there are a few things you should know before you agree to waive an inspection.

Why are buyers willing to forego?

According to the NerdWallets 2021 Home Buyer Report, an estimated 28 million Americans plan to buy a home in the coming year. At the end of 2020, the supply of available homes in the U.S. was just 1.04 million units, according to the National Association of Realtors – the lowest number since the NAR began collecting data in 1982.

When multiple buyers are vying for offers, the pressure to come up with a compelling offer can be very high. In the fourth quarter of 2020, the National Association of Home Builders Housing Trends Report found that overbidding was the number one reason buyers reported they hadn’t bought a home.

It is therefore not surprising that eager buyers can forego the home inspection. Real estate agent Redfin found that as of December 2020, more than 30% of successful bids submitted by its agents had the home inspection waived. However, this data covers offerings in four areas – Boston; Portland, Oregon; Washington, DC and the state of New Jersey – it’s more than twice as much as Redfin RDFN. + 1.60% state that they waived the inspection in December 2019.

Kish Munjal, an agent at Century 21 All Homes & Properties near Orlando, Fla., Says she also sees many buyers who simply want to skip the inspection to save closing costs. Regardless of the reason, Munjal is not comfortable without home inspections.

“You are buying the most expensive thing in your life when you buy a home,” she says. “We always advise you [to] Make sure you do a home inspection. ”

How home inspectors adapt

Nick Gromicko, founder of the International Association of Certified Home Inspectors, admits that many of today’s shoppers see this critical step in the buying process as an obstacle.

“If you’re in a hot market and include an inspection driver on your contract, your offer is worth less in the eyes of many sellers,” he says. At the same time, according to Gromicko, a home inspection should help buyers avoid buying a home that could turn out to be a “financial disaster”.

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For buyers who feel pressured, Gromicko suggests closing this gap with a “pass-through control”. In this scenario, buyers would take a home inspector home to do a visual assessment during the first pass rather than a full inspection at a later time.

Gromicko developed this solution, and a basic contract inspector can define the scope of a pass-through inspection for customers on an emergency basis.

“It’s not in the best interests of my industry [buyers] Do a little less than a full house inspection, ”says Gromicko of the transit inspection. “The customer doesn’t really have a full home inspection to rely on, and the home inspector doesn’t have the full three hours and all of his tools and gauges to rely on. But it’s better than nothing. ”

How to make a strong offer without sacrificing the inspection

If you’re not keen on sacrificing the home inspection, know that you can use other tactics to make your listing more attractive to a seller.

• Be fully pre-approved. Having a mortgage pre-approval letter in hand from a lender not only shows that you mean business, but also that you can get the funding to close the deal.
• In your offer, ask for an “information inspection” and not for an “inspection option”. This language informs the seller that you are going to receive a full professional review, but it is for your information only: you will not ask them to pay for any issues they may discover.
• Make a larger deposit. Yes, this can mean saving longer before trying to buy a home, but seeing more cash upfront can be tempting to sellers. There’s more money in your pocket instantly, signaling that your funding is solid and the deal is about to close. You don’t have to pay the full 20%, but an offer with a 3% deposit cannot stand up to bids with a 10% deposit.
• Add an escalation clause. Sellers like this clause because it removes the need for back-and-forth negotiation between competing buyers. For example, Munjal had a client who offered to automatically bid $ 1,000 over any other listing up to $ 200,000 on a property listed at $ 189,900. The client’s offer was successful and brought the house for $ 201,000.

Even with a carefully crafted offer, you can still get turned down in this difficult market. Brush yourself off and try again and you will eventually find your happy home.

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Storzieri and Engel had accepted another offer last fall and this time they opted for a full inspection. Several problems arose, most dramatically a leaking shower on the second floor with water flowing through a kitchen light. But they were able to negotiate a credit note with the seller to make the necessary repairs – yes, in this market too.

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