Waiving a home inspection: Is it a good idea?

As we’ve seen in recent years, a seller’s market can inflate the value of a home. 

This puts buyers in a tough position where they might have to make concessions or choices they normally wouldn’t consider. 

In the past, it was unheard of to waive a home inspection. But today, it’s a decision that more and more home buyers are making, so their offer is more attractive to sellers. 

Is it the right decision? Only you can be the judge of that based on your unique circumstances, but here are four home inspection considerations to keep in mind that can help make the choice a little clearer.

An inspection helps protect your investment in what will be one of the biggest purchases of your lifetime. 

Whether the house is new, old, or even a condo, there are always areas that you can’t see from a walkthrough: above, below, and behind the walls. An inspector will have access to all of these “invisible” spaces and know what to look for inside them. That includes electrical wiring, heating and cooling systems, and the structural integrity of the house. Inspections can also test for contaminants and indoor air quality—things no one could ever detect with the naked eye. 

An inspection could reveal repairs you’re entitled to. You might be able to work with insurance companies and get items like roofing, electrical, or plumbing services covered under warranty. 

In some cases, you could even use the cost of repairs as a negotiating tactic. For example, if an inspection uncovers repairs that would cost $10,000, you could negotiate with the seller to knock $10,000 off their asking price.

While some issues are simply cosmetic, others could be functional or structural and will eventually need to be addressed for the health and safety of everyone living in the home.

• Hidden problems like old or faulty wiring or HVAC systems may work perfectly for an unpredictable amount of time before suddenly becoming a fire hazard
• Structural issues like foundation, drywall, and roofing leaks may reveal themselves over years, snowballing into bigger repairs
• Gas, mold, and mildew can persist for years without detection, gradually making the home’s inhabitants very sick over time 

Health and safety aside, the home may have hidden costs even if its parts and pieces work just fine.

• Renovations done without permits could saddle you with the cost of getting additions like decks and pools up to code
• Electrical panels that aren’t updated could keep you from getting property insurance 

By the time these issues make themselves known, they may end up costing the same as the asking price for the house itself. Before committing to that price as a buyer, think about what else might be added to it down the road and consider that cost in your total budget.

If the home is new construction and under builder warranty, or if the seller had existing reports within the past year, you might consider waiving if it was the only way to help get your offer accepted. 

You might also skip an inspection if you’re an experienced real estate investor or renovator, provided you have $20,000-$50,000 set aside in an emergency fund—just in case a major component of the home proves to be busted. 

With a healthy financial safety net, you could move forward with a gut renovation if you understand the nuances of the property, like zoning requirements and how your budget plays into them.

An informational inspection 

Sellers don’t want to pay for repairs. That doesn’t mean you have to go in blind. 

When you include a home inspection “for informational purposes” in your contract, it tells home sellers that you won’t hold them responsible for making repairs. It may even make them more likely to accept your offer; you still get your inspection, and the seller will know that you won’t request or negotiate for repairs. 

Let’s say the informational inspection does uncover some major issues—you can still back out of buying the home. You might need to forfeit the deposit you put down with your offer, but that may not be necessary if you worded your contract wisely. 

A home inspection contingency 

If you want to keep your right to negotiate for repairs, then an informational inspection may not be enough. In that case, you would opt for a home inspection contingency in your contract. 

Also called a “due diligence contingency,” this gives the buyer the right to have the home inspected within a specified time period. As a potential home buyer, you can negotiate repairs or cancel the contract depending on the findings of the home inspection.

This option gives you more control: You’ll lay out the amount of time you have to get the inspection, then outline what happens if you do wish to raise issues. For example, a typical contingency clause will give the seller a certain number of days to make repairs or lower the sales price after you make a request. 

Keeping a home inspection contingency doesn’t always mean you’re at a disadvantage in a bidding war. There are other things you can do to sweeten your offer, like paying a certain amount above the appraised value or paying for closing costs that a seller would normally cover. 

Any of these options are an additional investment—it all depends on what’s worth it to you when you’ve got your heart set on a particular home.

There are clearly lots of nuances to each consideration. We’re here to help make the process as smooth for you as possible. 

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