Waiving inspection contingency?

Question

New investor here and excited to be on bigger pockets!

So I made an offer on a property (los angeles area) and the seller basically came back asking that the inspection contingency be waived as he is worried about me coming back asking for a ton of repairs.  However he did send me the inspection he had done when he purchased the property about 8 months ago.  He also claims he has addressed all of the major issues (which I will of course confirm).  Does this sound ok or normal? I guess basically the question is can I use an inspection that is 7-8 months old and that was ordered by the seller?

Thanks in advance for any help with this!

Russell Brazil · Answer

Ask to do an inspection before you go under contract.

Frank Wong · Answer

In a competitive market waiving your inspection contingency will be required to get your offer accepted.  In my area, this is pretty much standard across the entire Bay Area.  In our area, the seller provides a general home, roof, and termite inspection.  So, for the most part, a buyer has a good idea on where the house stands.

In your case, if there are no competing offers and you are still negotiating.  I would try to keep your contingency especially since the inspection is 8 months old. You have leverage here if they are still talking to you. If they had another offer with the contingency waived they most likely would have accepted it already. You can come back with a short contingency period of 5 days.  That will be plenty of time for you to get the house reinspected.

Jonathan Taylor · Answer

@Michael Schiff do not waive the contingency since this is your first property. Any time a sellers says 'ive already done the repairs or everything is fine' do not trust them. Do your own due diligence and make sure you know what you are getting yourself into.

Jason Franklin · Answer

@Michael Schiff

We waive our inspection contingencies on every fixer we buy because we will basically tear the house down to studs and completely remodel the house anyway. That being said it also helps if you bring a contractor with you to do a visual inspection when you first see the house.

Brian Pulaski · Answer

This, and if you aren't comfortable with doing it solo, bring an inspector or contractor along.

Michael T. · Answer

@Michael Schiff my recommendation is to not waive the inspection.  I inform all of my clients that they should not waive inspection unless they are going to do an inspection prior to submitting an offer.

By doing an inspection you are protecting yourself and if you have an agent that encourages you to waive the inspection they are not doing their job correctly and are in my opinion unethical.

There is definitely too much liability by not doing an inspection.

Joe Splitrock · Answer

When a seller is pushing for you to waive the inspection, that is a red flag. Assuming he has addressed everything, he should have no worries. I would just explain that you feel more comfortable having an inspector look at the property and that you have no intent being picky about small things. Reassure him that since he has taken care of issues, that the inspection should come back clean so he should not be worried.

My fear is that he is trying to cover up something major. Not only because of his push back, but also because he is selling after only 8 months. That either means he is running from the property or it was a flip. If it was a flip, then he should be confident he fixed the issues.

If your inspection finds a problem, he is required to disclose it to other buyers, if the deal with you falls through. Do the inspection.

Michael Schiff · Answer

@Jeff Pollack

Thanks that approach makes a lot of sense.  This property has 3 buildings (1 built in 1994 and the other 2 built in 2005).  They all have uneven flooring which is probably just settling but could possibly be a foundation issue.  If its the latter I definitely am not prepared to absorb those costs.

I guess my general question is as a buyer how could you be comfortable waiving inspection contingencies?  I could imagine if you are a contractor who could just fix any issue yourself it would be fine.  But for me I don't really see how I could dive into something like this with a big question mark as far as costs.

Jeff Pollack · Answer

@Michael Schiff, in an ideal world its great to have contingencies and do all your inspections. However, if you're in a hot market where you need to waive contingencies to have any hope of getting a deal that reality will dictate your strategy. I'm in Silicon Valley and although I don't buy from MLS I do sell via MLS and won't give a prospective buyer the time of day if they have contingencies. I don't need to in our current market. Here is what you need to ask yourself: "If this guy is lying and he in fact addressed none of the issues in his 11 month old inspection report, how much would it cost you to make the required repairs?" If you can absorb all those costs along with all known costs and this deal still pencils out then waive contingencies and get the house. Happy hunting!

Waiving inspection contingency?

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