What to know about waiving the home inspection
Quick insights
- The biggest reason people waive the home inspection is to make their offer more appealing to sellers, especially in competitive markets.
- Risks of skipping the home inspection include potentially overlooking safety issues, repair costs and insurance issues.
- Alternatives to waiving inspection include offering cash, making an offer above asking or asking for an informational inspection.
Some steps in the closing process are mandatory. Others, like getting a home inspection, are not. Prospective buyers have the option to waive the inspection if they choose to. However, it’s not a decision that should be made lightly. Let’s take a closer look at some of the potential advantages and risks of waiving the inspection.
Why waive the home inspection?
The biggest reason people waive the home inspection is to make their offer more appealing to sellers, especially in competitive seller’s markets. From the seller’s perspective, the deal is more likely to go through faster. Also, the buyer probably won’t be asking for seller concessions in the form of house repairs as part of the negotiation. If two offers are the same in value, waiving the inspection can elevate the winning offer.
The obvious caveat is that these considerations all benefit the seller. As the buyer, you’ll be assuming responsibility for the upkeep and maintenance of the property. If you waive the inspection, you might not discover potential issues with the home, and you won’t be able to renegotiate the purchase price if issues do pop up.
Inspection vs. appraisal
Home inspections are sometimes confused with home appraisals. An appraisal involves a professional assessing the market value of your home. While both are conducted by independent professionals, a home appraisal doesn’t scrutinize the home looking for potential defects. The home appraisal is also usually required by lenders, depending on the type of loan you’re applying for.
Risks of skipping the home inspection
Several potential downsides of waiving a home inspection can be significant and are worth reviewing:
Safety issues
Home inspections from a professional inspector will reveal things about the property that would likely be overlooked in most walkthroughs. Even if an interested buyer is thorough, inspectors have special equipment and receive training to find what the average person can’t detect.
This can include revealing safety issues, such as:
- Mold
- Carbon monoxide leaks
- Pests
- Improper ventilation
- Electrical hazards
- Safety code violations
- Potential structural failures
This list isn’t exhaustive. It’s just to give you an idea of what home inspectors can reveal that might not be visible to the untrained eye.
Repair costs
Maintenance costs can quickly soar much higher if there are pressing issues a buyer is unaware of. For example, a home inspector can suggest if a heating, ventilation, or air conditioning (HVAC) unit, roof or foundation will need to be replaced or repaired soon. The average cost to replace an HVAC system is $7,500. The average roof repair costs more than $1,000, and the average foundation repair costs more than $5,000.,
If a home inspector uncovered these issues or others, the buyer would usually have the option to adjust their offer or ask for the seller to make some of the repairs.
Insurance complications
Even if you opt to purchase a property without an inspection, an inspection may still be required for homeowner’s insurance. Conventional mortgages require property insurance, so this could potentially lead to complications.
For example, depending on the results of the inspection, the insurance company might charge you a higher premium. If the property is in particularly poor condition, they could also deny coverage entirely, which could jeopardize your financing.
Potential advantages of waiving inspection
Some buyers proceed with waiving the home inspection despite the risks. Here are some of the most compelling potential reasons to do so:
- Strengthening your offer in a competitive market
- Potentially reducing the time to close
- Avoiding the deal falling apart in negotiations over seller repairs
- Saving on the upfront home inspection cost
Waiving a home inspection isn’t for everyone. But in some instances—especially when speed, competitiveness or seller preferences matter—it could give buyers a strategic edge.
Waiving inspection vs. waiving home inspection contingency
A home inspection contingency is language included in your offer that allows you to modify your offer without penalty based on the results of the home inspection. For example, if an inspector found extensive roof damage, you could potentially lower your offer amount to account for the estimated cost of the repairs. If you’d waived the inspection contingency, you wouldn’t be able to adjust the offer.
It’s possible to waive the inspection contingency and still get a home inspection. You just won’t be able to use the results to impact your negotiation with the seller. These are sometimes referred to as informational inspections. They still have value because they can provide you, the buyer, with critical information about the property you wouldn’t have known otherwise.
Alternatives to waiving the home inspection
If you’re not comfortable with the idea of skipping the home inspection, some tactics may make an offer more appealing to sellers:
- Offer cash: A cash offer can be extremely appealing to sellers because they don’t have to rely on financing or a lender.
- Offer above asking: Even if you have to finance, offering above the listed price can push your offer to the top of the pile and still allow you to protect yourself.
- Offer an aggressive closing timeline: If you’re financing, work closely with your lender, but this may be possible and another way to set your offer apart.
- Get an informational inspection: Waiving the inspection contingency just means you won’t be able to adjust your offer based on the results, but you can still find out valuable information that might benefit you over the long run.
- Get preapproved: Securing preapproval shows prospective buyers that you’ve been vetted by a lender, and there’s less of a chance your financing will fall through.
In summary
Buying a home is a significant purchase, and a home inspection can give you critical information that affects how you evaluate a property. There are rational reasons to skip the inspection, but you should carefully consider the risks you’re taking before committing.
