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What does it mean to waive the home inspection contingency?

A home inspection is generally a significant part of the normal home-buying process. It is often written right into an Intent to Purchase Real Estate that the offer is contingent upon reviewing an independent inspector's report.

In this scenario, once a seller has accepted a buyer's offer to buy a home, the buyer hires a licensed professional inspector to look at the home. The inspector will check things like the electrical wiring, appliances, ducting, plumbing, and heating and air conditioning units. They will check whether there is visible water damage or leaking from anywhere that is accessible, including crawl spaces and attics. They will inspect whether the electrical boxes and other areas are up to code. The inspection gives the buyer a general idea about problems that either require immediate attention or may need to be addressed down the road.

Waiving or forgoing a home inspection contingency comes with big risks. A house is a big investment. The home inspection process is designed to help spot problems that could lead to your new home being uninhabitable, or a money pit. For example, an inspection might find asbestos, mold, or structural issues in the foundation or support beams. An inspection contingency can let you back out of the sale if your inspector discovers something the seller did not know about or disclose. By making the purchase contingent on the home inspection, you may even be able to get your earnest money back. If you waive the inspection contingency, you may not be able to back out of the deal without losing your deposit.

What may I want to consider before waiving inspections when buying a home?

When you waive the home inspection contingency, you give up the ability to back out of the purchase and get a full refund of your earnest money if you discover a problem with the home prior to closing. While sellers may provide their own reports in hot markets where waiving an inspection contingency is common, buyers may want to have an inspector look at a property before they make an offer.

If you are well-funded and can afford to take the risk, waiving the contingency might put you ahead of other buyers. On the other hand, if you are already stretching to afford the house, waiving the inspection might make things worse.

The main benefit of waiving the home inspection contingency is that the seller might like your offer better than an offer requiring a home inspection. In addition, buying a home without an inspection can be a much faster process because you do not have to wait on an inspector's report. You also may not have to go through the process of asking the seller to fix the various issues found in the inspector's report.

How can I lower the risk of waiving a home inspection contingency?

One way you might avoid or lower some of the risk is to get a home inspection before making an offer. But when you do the inspection this way, you generally cannot ask the seller to make any fixes or lower the price based on what the inspector finds. If the seller is providing inspection reports, you may be able to have your own professional inspector review those reports.

Even if there is no inspection contingency, getting an inspection before closing can help you decide if you still want to take the risk of buying. While this might not allow you to get out of a transaction free and clear, you may be able to walk away from the sale without your earnest money or deposit. This can be a tricky balancing act. You may want to talk to a lawyer before backing out of a sale, or making an offer without an inspection contingency, in order to understand the legal consequences of doing so.

When can I sue if I waived inspections?

There is a difference between waiving a home inspection contingency and simply agreeing to purchase a house "as is." Most states require sellers to provide certain information to potential buyers. These statements usually describe prior repairs to the house, any prior issues with water leakage, and other big ticket items. If you waive an inspection, you might lose your right to sue even if the owner did not reveal big issues with the house.

In addition, if you agree to buy the home "as is," then you are stuck with it in terms of problems and repairs. That risk is put entirely on your shoulders, and you will likely be able to take very little, if any, legal action against the seller. That is why buying a home "as is" has so much risk attached to it. 

But you might have legal rights if the seller covered up problems intentionally, or did not disclose issues legally required by law. You may want to ask a lawyer about your legal rights in your specific home-buying situation.

How can I make a strong offer without waiving inspections in a hot real estate market?

In a hot market, you have options to make your offer sound better to sellers without waiving a home inspection. These are just a handful of ideas:

  • Put more money on the table. Sellers usually want as much as possible. If you have the highest offer, a seller may be willing to accept your offer with an inspection contingency.
  • Offer a short closing time. If your lender is willing, you can push the closing time to a closer date. Most closings occur in 30 to 45 days, but some lenders will work with you to make the sale faster.
  • Make an all-cash offer and even shorter closing time. While gathering up enough cash to buy a home may not be possible for everyone, it is very appealing to sellers. Then, all you have to do is finalize the sale documents rather than wait for the bank to finance a new mortgage. All cash offers can often close within a week.
  • Include a convincing personal letter with your offer. Some sellers are swayed by a personal connection with the buyer, even if they have never met. For example, you can tell the seller how your children have fallen in love with their new bedrooms or how your dogs are going to love the yard. Perhaps you and the seller are both veterans, or share some other connection. The extra personal touch can go a long way sometimes.

The real estate market can be competitive. But remember, buyers still have options and legal rights. If you have questions about your legal rights when it comes to buying a home, reach out to a Rocket Lawyer network attorney for affordable legal advice.

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

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