Buyers used to pay for inspections. However, that trend has shifted. Now, listing agents want sellers to give all the facts to buyers up front. A well informed buyer can make better decisions. Likewise, informed buyers write better offers. Bottom line, sellers want to know they will close with the cash promised at the beginning of the transaction.
Because the housing market is so competitive, buyers are removing their inspection contingencies prior to going into contract. Since buyers have all of the information up front, why would they need more investigation time? As a matter of fact, there are some very good reasons buyers should beware using this tactic. In some cases, it makes sense to remove contingencies. But not all cases.
Beware of Holes in the Reports
For instance, if the reports are lacking important information, a buyer may need more time to get solid answers.
That said, an agent recently pressed early contingency removal. As a matter of fact, listing agent wanted my client to remove inspection contingencies with the offer. The agent told me we would win the bidding war if we removed out investigation contingency up front. I relayed the information to my client who became quite stressed at the prospect.
You see, the inspections had gaping holes. These holes created questions which needed answers. Consequently, we had every intention of bringing in a contractor to review the reports. My client had questions. If my client removed investigation contingencies up front, the deposit would be forfeited if cancellation was decided due to physical inspections.
Removal of Investigation Contingencies is Expected
Unfortunately, listing agents often expect buyers to remove their investigation contingencies up front. Knowing this, buyers’ agents commonly use this tactic to win fierce bidding wars. Sometimes, it makes sense to comply. In this case, an early inspection contingency removal seemed rash. Because we were in a hurry, I enlisted the help of my husband, Michael. He was able to answer some of our questions regarding the inspection reports.
Yes, the home was EXTREMELY affordable in today’s market. And so, the need for future repairs was definitely understood. But, to what extent did this freshly painted, beautifully staged, home need help?
Get Advice from Someone Who Knows More Than You
For one, we had noticed one of the gutters dangling. Was it due to years of neglect or was it recently struck by a tree? We dug a little deeper for clues of possible deferred maintenance. Sure enough, there were other signs to give us evidence that this freshly painted home had been propped up.
Michael was able to help us understand the deeper issues. He helped us understand electrical, foundation, and mold remediation problems. These issues pointed to deferred maintenance that bordered on neglect. Though these problems could likely be remedied, they needed immediate repair which would be costly.
Consequently, this home was better left to a contractor. Even with its issues, the home was an excellent value for the right buyer. It just wasn’t suitable for my client.
My client very smartly rescinded the offer and we’re off to find another remarkable home!