Waiving home inspection? 24 hours to respond

[Diandra Duncan]

Hey bigger pockets fam, 

I have a dilemma that I really need an opinion on. I'm looking to purchase my first SFH in Queens, Ny with a plan to house hack. I found one that basically checked most of my boxes for 750k; the upper end of what I was approved for. I put in an offer just under to increase my chances of getting the property. And although I was initially told by the listing agent that my chances are slim due to my down payment (5%), I was told today that the owner accepted my offer. However, the owner wants me to waive the inspection and instead I would get an informational inspection before signing the contract. I'm able to get one in two days however, the idea of waiving an inspection on an old home bothers me a little despite my realtor advising me that it's a ‘usual' in NY and even mentioned that NY is mostly an ‘AS-IS' state. I asked my realtor if I should counteroffer by lowering my initial offer to 725k-730k to offset this but he thinks it's a bad idea as it would get rejected. I spoke to a friend who thinks 740k is too much for a sfh and that I should just walk away. I know the market is bullish right now but does anyone have experience with this? And more specifically, in buying in NY? Is that price reasonable? Should I spend money on an inspection or just walk away? Any advice would be greatly appreciated.

[Gary L Wallman]

While I agree with the consensus here that waiving an inspection is not the greatest idea, in my market, if you're not waiving them your not able to compete with other offers.

I'm an all cash buyer and that still doesn't help much, particularly if I have other contingencies in my offer.

You know what they say . . . no guts, no glory.

[Luciano A.]

@Diandra Duncan

I agree with others that said this is not a waive of the inspection just can't come back and renegotiate. I would remind the realtor who they are working for. It sounds like they are more worried they will lose the commission than to counsel you. If I were you, I would ask your agent to run comps and see what other similar places sold for. If it seems like you are paying what the market is asking then I would have the agent caller the seller's agent and tell them if we move forward with inspection being only for informational purposes only then we should get a discount that the seller would accept so that we are not playing games. Let the seller come back and tell you what amount they would be willing to accept. The seller already knows there are issues thus trying to lock someone in without inspection issues opening up renegotiations. 

If the seller isn't willing to open talks then best to move forward if the deal is just an average deal. If the deal has meat on the bones and you are getting lower than recent comps for a similar property then spend the few hundred bucks and see what the inspector finds.  And find a new agent who will advise you based on your financial goals and not theirs. 

Best of luck on that new house

[John C.]

@Diandra Duncan

Red flags everywhere.......walk away, there are other houses out there.

[Ricardo R.]

@Diandra Duncan as an investor myself and a realtor I’ll give you my advice... free of charge ha. YES and No .... counter with that you will LIMIT your inspection to just one or two things that are important to you - now personally I would do foundation and sewer - and the write in the offer that you will accept all other items AS IS — now before everyone starts going off the rails this is what you accomplish here:

1. You get to keep your contingency in place - in short you can still do a full inspection and still back out of the deal if you uncover something big, of course you can’t renegotiate for anything other than foundation/sewer but you can certainly back out.

2. The Seller will feel much better that you’re not going to use every little thing to try and negotiate and price gouge them and to most sellers foundation/sewer seems reasonable and they feel that by saying no to those two items is almost akin to admitting they are worried there is something working with either.

Buyer to limit inspection to foundation/sewer ONLY; all other items to be accepted AS IS by Buyer.

Hope this helps.

[Joseph Tjader]

@Diandra Duncan

I feel like John Goodman in the Big Lebowski...Has the whole world gone crazy!!?

Unless you are already a rehabber, own your own construction company, or your parents own one I would never waive the inspection. There's just so many functioning parts of a home that are unknown to the naked eye.

It's a sellers market, but you still have the option of a home inspection. Would you rather fork over $700 for an inspection and lose the home after finding out what is wrong or keep $700 more and possibly an additional $40k out of pocket? Plumbing, electrical, roofs...it's not cheap.

You have to remember that both agents want their deals to go through, they make $ from it via commission. They also both have liability insurance protecting them from errors and omissions on their part.

Protect yourself. Do the inspection.

[Eric James]

Inspection has nothing to do with buying as-is. Inspection is to determine if you want to buy, or at what price. Your realtor is feeding you BS 

[Shaye Carter]

@Andrew B. The is what I assumed as well. I’m in Realtor in the Bay Area, Ca, and it’s common here to write an offer as you mentioned, having a physical inspection for informational purposes only.

[Jeff Cichocki]

I think there is some confusion in your question...

Once the seller signs and accepts, there isn't any more negotiating. They're accepting the offer as it is. 

I the seller is asking for additional changes, it's not accepted, they are countering your offer. If they don't change the price but are changing the inspection clause and you have to sign and agree to it, it's a counter. It's not accepted until both parties sign the offer. 

As to the inspection... It all depends on how bad you want the house, how comfortable you are with not being able to ask for adjustments after your inspection and how experienced you are at doing your own inspections. If your not comfortable (which is where it sounds like you're not), move on. It's not worth the lost sleep and stress. 

Hope this helps. 

[Jim K.]

Reason seems to have prevailed here. I am a handyman investor with over a decade of hands-on rehabbing experience. I do put in no-inspection offers. I do so on a narrow subset of low-cost, low-value local properties of a construction type I know well and have looked at personally myself. This is a way to leverage my experience.

For a non-professional buyer in a place like Queens to do so on a building that costs three-quarters of a million dollars...that's maybe a good fifty feet past the far side of the-dog-is-telling-you-to-kill-people crazy.

[Jim K.]

Originally posted by @Nathaniel Walker:

An accepted offer without a signed buyer's contract is not a true accepted offer and the seller can walk or accept another offer. If you pay for an inspection both you and the seller are not obligated to move forward, however, if you find something significant the seller will not be able to claim that he was not aware in the sellers disclosures. I suggest review the seller disclosures prior to the inspection, get the inspection if you really want the home but be prepared to walk or lose the home. If that happens advise the seller that now that they are aware of the issues they will need to disclose them to the next potential buyer which could affect their ability to sell the house which might give you leverage with the seller.

Has this ever worked for you? Did you end up with leverage over the seller? Because someone tried it on me once and I told them to hit the bricks, simply refused to sell them the property for any price, and I blacklisted them and their agent with every local real estate person in my address book. They got the Jimmy Special for their efforts to put the squeeze on me.

[Zambricki Li]

@Diandra Duncan you can waive your repair credit request though still have a inspection contingency in place in case you find something and need to get out. Some owners just don’t want to get charged repairs after they are in contract. Others don’t want you to find out the house is a money pit. You need the contingency- I would walk if they won’t allow it after offering to waive repair credits. You can also offer to shorten the contingency to a week to sweeten the deal.

[Diandra Duncan]

Thank you all for your advice. I truly took everything you all said into consideration. In so doing, I went back to my realtor to propose a new offer 8k lower BEFORE the inspection given the sellers stipulation; since he objected to changes after the inspection. There were minor foundational issues in the basement I noticed the first time I did a walk through and I know that counter was low because who knew what else the inspector would find. But I didn’t think it was enough to ruffle the sellers feathers. But he basically rejected the offer so I walked away. It’s unfortunate and a little frustrating but a learning experience nevertheless 

[John T.]

Hi there, it is ok if he rejected the offer, and it hurts more because you are starting into this now( I assume).

Embrace it and feel comfortable with being rejected, no problem with that. You must do the right things that work for you and your numbers. Do not waive the inspection,  and if on top tit might be foundation issues that could be a nightmare for you. The owner knows that this is a sellers market and it will try to find someone easier than you. That's it.