The real estate market for 2022 shows it is going to be much of the same. What does that mean to a home buyer that hasn’t bought in many years, or a home buyer entering the market for the first time?
I met with a buyer looking to buy a condo who hadn’t bout a home in almost 20 years. When I described the market and what buyers are willing to do to compete for good homes, they were taken aback.
The buyer was completely against giving up their home inspection. This lead to a conversation about a pre-offer home inspection.
What’s Happening With The 2022 Real Estate Market?
Before we delve into talking about a pre-listing home inspection, let’s look at what is happening in the market.
The 2021 real estate market will continue into 2022. What does this mean for home buyers?
Well, many homebuyers are willing to take aggressive steps to get their offer accepted. Those steps include:
- Offering over asking. Many home buyers are willing to offer over asking to compete. On average Essex County homes went, on average, 4% over asking.
- Offering appraisal gap coverage. Appraisal gap coverage is where a buyer guarantees the buyer will buy the house even if the appraisal comes inf low.
- Waiving Home Inspections. Aggressive offers include waiving home inspections. Meaning, the buyer, is willing to take the house as-is without doing their due diligence with the home inspection.
These are some drastic measures, homebuyers are willing to take to get an offer accepted.
Waiving Your Home Inspection Is A Big Deal
It’s a catch twenty-two. As a homebuyer, you want to make sure your offer is accepted on the home you want. But on the other hand, you want to make sure you are buying a safe and sound home.
The reality is, if you keep a home inspection contingency in your offer, it probably won’t get accepted. There are many home buyers willing to waive the home inspection contingency and offer a competitive price as well.
Why is that important to a seller?
Any contingency is a risk to the home seller. And a home inspection offers plenty of risk to the home seller. A home inspection can lead to a reduction on price for significant repairs.
Or worse yet, the buyer terminates the deal and the seller is left putting the home back on the market. A home that has had a home inspection and has been put back on the market becomes stigmatized by buyers, whether it is real or perceived.
Why A Buyer Should Think Carefully
So it’s a conundrum for a buyer. You want the house, but you want your home inspection.
Yet, you know full well if you keep your right to a home inspection, you probably won’t get the house.
You also know the home you are about to buy could have unforeseen problems after you close on it. Those issues can lead to repairs that could cost 10s of thousands of dollars or even more!!
Even if there is no one major, costly repair, homes can have multiple issues that can add up to a big repair bill. Make sure you have cash on hand after you close for any significant repairs if you forgo your inspection.
Or another solution is considering a pre-offer home inspection.
Pre-Offer Home Inspection
So what is a pre-offer home inspection?
The pre-offer inspection allows for you to get an inspection done prior to writing your offer. The inspection lets you make an offer knowing what issues a home might have and give you the comfort knowing nothing major is wrong.
But, by having the inspection before writing your offer, you can now waive your home inspection contingency. This allows you to compete with other home buyers willing to waive the home inspection contingency all together.
What To Know About Pre-Offer Home Inspections
The first thing to know about the pre-offer home inspection is that sellers may not allow it.
The seller is under no obligation to allow you to have a professional home inspection at all, never mind pre-offer. But I would imagine any seller working in good faith would allow an inspection before writing an offer. If not, you may be left wondering what is wrong. Maybe the seller is hiding something and you should walk away.
You will most likely be fighting time constraints. You may have only a day or two before offers are due and you have to work around other showings.
The inspection may be modified to fit it into a restricted time frame. Often the inspector will focus on major items and skip over the picky minute details of an inspection.
Typically because of the tight timeline, the inspection will be verbal only, with no written report.
The final thing to note about having an inspection before making an offer is you may not get the home and lose it to another offer. Doing an inspection on every home you make can get costly.
Should I Do An Inspection Prior To Making An Offer?
Whether you do an inspection before writing an offer or not is a decision you need to make.
Consult with your REALTOR the current real estate conditions in your area and what they are seeing in offers that are getting accepted. The whole point of a home inspection is to uncover latent material defects. Basically defects, that are unseen at a showing or undetected by the lay person.
In the past year and a half, I have had only one offer accepted as either an agent representing a buyer or as a listing agent, that had a home inspection contingency. All the other accepted offers had the inspection waived.
Those defects could range anywhere from minor to costing a significant amount of money to correct.
Let’s face it, a normal home buyer can’t determine the condition of a home by a 15-minute showing. It requires an expert to pick up on the details. If waiving your inspection contingency seems to be the norm, strongly consider having a pre offer home inspection to protect your future interest.
Other Real Estate Resources:
- Your credit score is an essential factor when buying a home. Bill Gassett shares some credit basics and minimum credit scores required by different loan programs.
- Some great real estate articles for the month of January compiled by Paul Sian.
- Your final walk through may not seem like a big deal, but it is. Get 5 final walk through tips from Sharon Paxson.
Pre-Offer Home Inspection- Competitive Home Buying 2022 is provided by Kevin Vitali of EXIT Realty. If you would like to sell or buy a home, give me a call at 978-360-0422 and let’s get the process started.
Real Estate Services in the following areas: Northeast Massachusetts, Merrimack Valley, North Shore and Metrowest. Including the following communities and the surrounding areas- Amesbury, Andover, Billerica, Burlington, Chelmsford, Dracut, Groveland, Haverhill, Lowell, Melrose, Merrimac, Methuen, Middleton, North Andover, North Reading, Reading, Stoneham, Tewksbury, Tyngsborough, Wakefield, Wilmington, Westford