rookie: Inspection contingency, help?!

First-Time Home Buyer
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rookie: Inspection contingency, help?!

Emmanuel Ivory
Rental Property Investor · Sacramento, CA · Member since 2020 · 7 posts · 5 votes

Hi BP,

So my brother and I are buying our first home in Sacramento with intention of house hacking. We are speaking with the seller who wants to sell the house as-is, which I understand but the seller also wants us to waive inspection.

As a first time home buyer and someone who has spent months saving money for a down deposit, I am afraid of pulling out and loosing earnest money.

We do have a Pest report estimated repairs of $10,000. Seller offering $4k credit at closing and home renovated with a great deal.

Am I overreacting? Please any advice would help.

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Chris Pasternak
Real Estate Broker · Pueblo, CO · Member since 2013 · 366 posts · 303 votes
5y

It sounds like you're not working with an agent to help you buy your first property. Mistake numero uno. I'm confused how you got to the point of having a pest inspection and the seller wants you to waive inspections?  Was this pest report disclosed by the seller then?  It's in the best interest of the seller for you to get an inspection contrary to what he's saying.  Otherwise, you the first time buyer are purchasing the property based solely on the sellers knowledge which can come back to bite him when you close and find out the termites ate through all the floor joists and the floors are on the verge of caving in and now he has a lawsuit from a sad first time buyer good luck in court with that one Mr seller.  It sounds like he also doesn't have an agent so you guys are playing in a circus to "save money" but now here we are in desperation. 

He wants you to buy as-is and then he wants you to waive your inspection.  YOU DEFINITELY WANT TO GET AN INSPECTION. And you probably just want to walk at this point.  One of the reasons he doesn't have an agent is because he's trying to pull the wool over someone's eyes like a lowly first time buyer.  Lucky for you you're smarter than that and at least came on here.  

Literally everyone of your problems could have been calmed by having an agent.

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  • Greg ScottPro Member
    Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
    5y

    I would never waive inspection.  Get one done.

    If you get the inspection done within the option period, you don't lose your earnest money.  You get that back. 

    However, even if you are beyond the option period, you should still have an inspection done.  What is worse, losing your earnest money or finding out the property should be condemned and the city wants it torn down?

    1Reply
  • Matthew BrillPro Member
    Investor · Boca Raton, FL · Member since 2015 · 234 posts · 103 votes
    5y

    I would not waive the inspection contingency either. If he is not wanting to negotiate the inspection, you can make it pass/fail. Either you move forward after inspection or you walk away and get your deposit back.

    1Reply
  • David Song
    Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes
    5y

    I usually waive all inspections and all contingencies, if I think the price is right.

    1Reply
  • Alecia LovelessPro Member
    Member since 2019 · 3k+ posts · 2k+ votes
    5y

    @Emmanuel Ivory I always get inspections and got $94,900 off of my currently closing deal originally priced at $294,900 because of what we found and the estimate I got for repairs.

    0Reply
  • Chris Pasternak
    Real Estate Broker · Pueblo, CO · Member since 2013 · 366 posts · 303 votes
    5y

    It sounds like you're not working with an agent to help you buy your first property. Mistake numero uno. I'm confused how you got to the point of having a pest inspection and the seller wants you to waive inspections?  Was this pest report disclosed by the seller then?  It's in the best interest of the seller for you to get an inspection contrary to what he's saying.  Otherwise, you the first time buyer are purchasing the property based solely on the sellers knowledge which can come back to bite him when you close and find out the termites ate through all the floor joists and the floors are on the verge of caving in and now he has a lawsuit from a sad first time buyer good luck in court with that one Mr seller.  It sounds like he also doesn't have an agent so you guys are playing in a circus to "save money" but now here we are in desperation. 

    He wants you to buy as-is and then he wants you to waive your inspection.  YOU DEFINITELY WANT TO GET AN INSPECTION. And you probably just want to walk at this point.  One of the reasons he doesn't have an agent is because he's trying to pull the wool over someone's eyes like a lowly first time buyer.  Lucky for you you're smarter than that and at least came on here.  

    Literally everyone of your problems could have been calmed by having an agent.

    2Reply
  • Account Closed
    Specialist · Philadelphia, PA · Member since 2018 · 26 posts · 26 votes
    5y

    @Emmanuel Ivory Hi Emmanuel, I agree with @Chris Pasternak. From the details you’ve provided, it appears the seller is trying to offload a problem property. Take it from me, if a pest inspection yields a $10k remediation, there is almost always a larger issue at hand. Think roof, plumbing, foundation, and grading.

    I just did an inspection for one of my clients who was in the market for another investment property. The seller intentionally attempted to cover up the extent of the termite damage to sell the home rather than solve the problem. Termites had eaten through the floor joist AND subflooring. This seller didn’t request inspections to be waived but did nail up plywood to cover the damage to the subfloor.

    Short story even shorter, be cautious.

    2Reply
  • Emmanuel Ivory
    OP
    Rental Property Investor · Sacramento, CA · Member since 2020 · 7 posts · 5 votes
    5y

    @Chris Pasternak

    Hi Chris thanks for the information. So to answer a few of your questions, I am working with an agent and so is the seller. This seller has gone into escrow at least 2x before the previous buyer pulled out of the deal. The previous buyer does have a pest inspection and a home inspection done earlier this month. I just learned about the home inspection after talking to my agent.

    I have reviewed both the pest and home inspection. Based on the home inspection it appears there was a plumbing leak that lead to moisture under the home but the issue has since been repaired. The inspection report does advise to have a plumber inspect the home again to ensure the issue was fixed properly.

    0Reply
  • Rumen Mladenov
    Investor · Newark, DE · Member since 2014 · 245 posts · 198 votes
    5y

    If your market looks anything like mine at the moment and this is a good deal, insisting on home inspection would mean someone else ends up buying the house. In my market, properties get sold in a matter of days to bidders who pay cash, above the asking price, and with all contingencies waived. 

    Learn to identify the major issues yourself. Cracks in the foundation? Vertical ones are not a deal breaker, horizontal ones or bowing inwards is. Check the floor joists from the basement, if they are rotten/damaged by termites or otherwise weak that is a deal breaker. A home inspector would pretty much always find enough wrong in the house to save you more than you paid him for the home inspection, and the seller knows that - in this market, they just don't have to deal with it because they will find buyers desperate enough to waive all inspections. 

    0Reply
  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    5y

    @Emmanuel Ivory

    Can you walk the property one more time with an inspector so you can confidently know what you’re buying?

    [email protected]614-363-2787
    Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
    WebsiteView Page
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