When okay to waive inspection contingency?

[Malika Mukhamedova]

For experienced investors, in what cases it is okay to waive inspection contingency? Market is so hot like everywhere that we keep hearing agents recommending us to do this for houses that are not in horrible condition

[Zach Westerfield]

I dont recommend it. I always have some sort of inspection contingency, usually 7-10 days. Its not just the property itself, but i also like to check out zoning, property lines etc. I have also had properties that had the square footage wrong. I use my due diligence to check out things like this as well as major issues not previously seen (septic, foundation, termites). i dont do this before an offer, because i try to make 2-5 offers a week. if i did this for every one of those, my entire day would be spend inspecting properties (i have a full time W-2 job). 

I have bought from wholesalers who do not have inspection contingencies. in this case, i get as much due diligence in up front (i usually have at least 24 hours to complete once an verbal offer is accepted). I also price in worst case into my offer. Many wholesalers dont understand this. They think we will pay top dollar for a property, no questions ask, all cash and close in a week just because its off market. If im not going to have time for proper due diligence, im going to need financial incentive to accept the risk. In this market, i dont buy many properties from wholesalers. 

That being said, i would only recommend waiving inspection contingencies IF:

1) you are very experienced, and have pretty much priced in all risk in your offer

2) you are large enough to accept the risk, meaning you either have sufficient capital to take the loss if something comes up, or you do enough volume that one bad deal will wash out. 

Either way, if you are losing out on properties because other buyers are waiving inspection