Agent wants to waive inspection contingency. Yay or Nay?

Philadelphia, PA · Member since 2016 · 16 posts · 7 votes

Hi bp. Putting an offer in on a property that may be getting multiple offers. My agent wants to waive inspection contingency. This is my first time buying a property and going through these Steps. Is this common? Is there any benefit?

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Rob Lee

Rental Property Investor · Raleigh, NC · Member since 2018 · 4 posts · 32 votes

I would not waive an inspection contingency. What your agent should do is say "my buyer wants the home as is at the offered price, and won't haggle on seller subsidies pending the result of the inspection". That way you can still back out if the inspection shows massive costs to repairs, yet make the seller take your offer over others. That's typically been my strategy.

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Bjorn AhlbladPro Member
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
8y
The cleaner an offer is the more the seller will find it attractive provided the money is OK. I would not waive inspection; and a bidding war on top of that? You might as well go to a real auction. Just my opinion
5 Reply
Rob Lee
Rental Property Investor · Raleigh, NC · Member since 2018 · 4 posts · 32 votes
8y
I would not waive an inspection contingency. What your agent should do is say "my buyer wants the home as is at the offered price, and won't haggle on seller subsidies pending the result of the inspection". That way you can still back out if the inspection shows massive costs to repairs, yet make the seller take your offer over others. That's typically been my strategy.
31 Reply
Alex P.
Investor · Longview, WA · Member since 2015 · 94 posts · 176 votes
8y
I think it's a disservice for an agent to tell someone to waive an inspection. The agent doesn't have anything to lose if you buy a property with large capital repairs you weren't aware of. Do you?
9 Reply
Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
8y
In DC you would not be able to buy a property with an inspection contingency. 95% of the time someone is willing to buy without one. So in my market, it is very common.
Your agent is likely giving you the reality of the market.
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8 Reply
Anthony Wick
Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
8y
You better make damn sure that there isn't anything major wrong with that property, because your agent isn't going to help you with the cost of foundation fix or replacing the electrical. I know some areas mean you'll never get a property with that contingency. But taking on that kind of risk for a first or second property is not good.
7 Reply
Chris Purcell
Investor · Philadelphia, PA · Member since 2010 · 739 posts · 372 votes
8y
Originally posted by @Rob Lee:

I would not waive an inspection contingency. What your agent should do is say "my buyer wants the home as is at the offered price, and won't haggle on seller subsidies pending the result of the inspection". That way you can still back out if the inspection shows massive costs to repairs, yet make the seller take your offer over others. That's typically been my strategy.
Good advice
1 Reply
Account Closed
Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
8y
Depends. When we bought our current home in Berkeley, the market was (and still is ) super hot with multiple offers. The sellers offered their inspection reports which were quite comprehensive. There is no nickle and dime negotiating inspection items in our market and sellers report showed no major issues. Our agent was familiar with the inspector who did the seller provided inspection and was comfortable that he was competent. Under those conditions we waived inspection contingencies on the offer. But I wouldnt go in totally blind with no contingencies and probably wouldnt waive on an investment property where there are many options on where to invest my cash. Primary residence in a very competitive market is a different case.
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Gilbert Dominguez
Investor · Detroit, MI · Member since 2016 · 211 posts · 144 votes
8y
It's in the agent's interest to get your offer accepted but they are not the ones that will be flipping the bill should the property have unknown maintenance or repair issue which may mean significant money out of your pocket. No matter what, deals still have to make sense, one of the only ways to make sure you know what you are getting into is to do an inspection. Screw it , there are plenty of deals out there and you do not need to be made desperate. Nothing will take the pain away should you get yourself into a nightmare of a property. Business should not be based on wishful thinking . Things still have to be solid businesswise.
I know I would not forego the inspection. So the owner may go with whoever makes it easy for them but hey they are not the one putting money in your pocket or worked for the money you already have and whatever you do it is you who will have to work to make things work out well for you not the agent.
You know what they say, " there is a sucker born every minute", do not be one of them. I am not saying anyone is out to take advantage of you but protocal is protocal and procedure is procedure, you have to make sure because no one else is going to do it for you.
3 Reply
Dave Skow
Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
8y
depends on the property and how much you know about it ….possible to do a " pre inspection " ..this has been popular in the NW in multiple offer situations
0 Reply
Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
8y
Get the inspection...and waive your agent goodbye instead. Rob Lee covered it well.
5 Reply
Michael Gansberg
Investor · New York City, NY · Member since 2015 · 388 posts · 563 votes
8y
@Melonie Dickson - as earlier posters mentioned, the inspection contingency weakens your offer. I seldom put inspection contingencies in, because I have management go over the place with a fine-toothed comb at the first showing- so I usually know what the problems are. When I was more of a rookie, I never waived the inspection contingency.
So I'd say if you know what you're doing, and can accurately estimate any repair costs, waiving the inspection contingency will increase the likelihood of a successful bid. If you're new(as you say you are,) then you're at a competitive disadvantage to those who are able to make those estimates on the fly. So...do you feel lucky?
5 Reply
Account Closed
Rental Property Investor · Denver, CO · Member since 2018 · 21 posts · 18 votes
8y
@Melonie Dickson The sellers of the most recent property I bought also wanted me to waive inspection or they would reject my offer. The solution I came up with that they accepted was I waived all inspection damages under $5,000, but if the inspection found damaged totaling above that I was still covered. They were just worried about buyers nickel and diming them and this showed I wasn’t worried about little stuff, but wasn’t going to take the risk of completely waiving it if it turns out there are major repairs needed.
10 Reply
Sean Lambert
Investor · Pacific City, OR · Member since 2016 · 175 posts · 123 votes
8y
I wouldn't waive the inspection, especially since this is your first purchase. It might mean you lose the deal, but it might also save you if something terrible lurks. Good luck. Keep BP updated on your progress!
3 Reply
Jacob W Koelbel
Member since 2018 · 3 posts · 3 votes
8y
@Melonie Dickson If you are questioning your agent, did you choose the right agent? If you are just getting a second opinion then you need to discuss it with another agent that knows the market you are buying in. Do not take any advise from anyone that isn’t in and activly working that market.
3 Reply
Mark S.
Real Estate Investor · Saint Paul, MN · Member since 2017 · 543 posts · 474 votes
8y
@Melonie Dickson. Keep in mind that there can be a wide range in the quality of inspections. I have seen some that missed pretty obvious issues. Not to make this even more challenging for you, but if you get an inspection make sure it is from someone who has a very good reputation for being thorough.
0 Reply
Brian Pulaski
Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
8y
Your agent works for you, if you don't want it waived, tell him/her. With that said your agent is also giving you advise that without waiving it you will most likely not get the house.
For a first buy I wouldn't waive it. Personally I never have/need an inspection after my first walk thru, but someone without a construction background would probably want to bring someone in.
1 Reply
Damon Bodine
Real Estate Agent · New York City · Member since 2014 · 359 posts · 195 votes
8y
@Melonie Dickson would personally never advise a first time buyer to waive inspection contingency. The report itself can go a long way to helping you understand the systems in the House and initial repair budget.
1 Reply
Luke Sass
Accountant · Battle Ground, WA · Member since 2018 · 91 posts · 48 votes
8y
@Melonie Dickson It’s probably the reality of your market, and your agent is giving you honest advice on what it takes to win a bid in a competitive market. That being said the best deal is no deal at all. Unless you have a construction background, I wouldn’t waive the inspection contingency on your first deal.
1 Reply
Dennis M.
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
8y
Don’t be scared to do this .crossIng the street is rIsky If you dont know what you are doIng . heres how to mitigate the problem : request a second walk through tour with the realtor and explain it will take about an hour and your brIngIng a friend . You pay a local licensed contractor wIth a good reputatIon to accompany you for a second look .have him look over all the structure and systems etc.. have him do quick quotes on issues he sees on a legal pad as he’s walking through each room have him check the wiring the roof the furnace the plumbing . This way you get your inspection and also prices for the scope of work that Needs done all in one shot plus you can offer with confidence and offer strong with out a contingency
6 Reply
Matthew McNeil
Rental Property Investor · Boise/Portland · Member since 2017 · 709 posts · 742 votes
8y
I was this close >< to buying a house that looked great! Nothing visually wrong with the building. Inspector happened to find defective substrate in the asphalt shingles; a major defect not visible from the ground. Seller wasn't even aware of it.
Entire roof had to be replaced including roof on detached garage.
0 Reply
Pete Widell
Johnston, SC · Member since 2017 · 25 posts · 14 votes
8y
Never waive the inspection....Unless you can afford to rebuild the whole house and have plenty of time....
Better to walk away then to be stuck with a moneypit.
1 Reply
Blake Schreckhise
Real Estate Agent · Fairbanks, AK · Member since 2017 · 31 posts · 14 votes
8y
@Melonie Dickson I’m a Realtor and 99% of the time I strongly recommend an inspection for all the reasons these commenters have stated. However I have been in bidding wars mostly for bank foreclosures and the cleaner the offer is with less contingencies the more likely it is to be accepted. That’s how I tell my client and let them choose how much risk they are willing to take.
0 Reply
Jack Forester
Investor · Cumming, GA · Member since 2016 · 153 posts · 34 votes
8y
@Melonie Dickson I just closed on a property that I *almost* did a no contingency offer, but at the last minute, I trusted my gut and added a 5 day due diligence. The night after the offer was accepted, the HOA sent an email saying, "Just checking to make sure this isn't going to be a rental, because we are at our max rental number now." What?? Yes, this was supposed to be a buy and hold. Imagine, if I had waived the due diligence. In the end, I now have another question to ask the seller up front. I performed an HOA audit, if you will, by counting all the absentee owner houses. They were 2 houses over their limit, so I had the HOA secretary double check. Turns out there were 3 family owned properties that did not qualify as a rental. The sellers got the HOA to send a letter approving my property as a rental, until I sold it, in which case it would transfer to the new owner, if they/I applied for transfer.
0 Reply
Ian WalshBusiness Member
Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
8y
That's usually not the deal breaker for an investment property. It is usually 'waiting on appraisal' or something along those lines. Inspection contingencies are overrated for the most part in my opinion. Most people put 1000 on a deal maybe risk losing that in the event they back out. If there was a lot more of a deposit on the line I would say I would be more concerned. I am not an attorney and this is just from experience.
0 Reply
Jonathan Soto
Lender · Newark, NJ · Member since 2016 · 695 posts · 252 votes
8y
Never waive the inspection, you can put in contract you are buying as is and your attorney can help you add language during attorney review which allows you to pull out if the inspection report finds major issues. I suggest to find a new agent as he is not looking for your best interest.
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