Today’s housing market is definitely not in favor of the buyer, leading many people to spend more than they had planned and forego quite a few details. It’s one thing to decide you can live without crown molding, or you don’t truly need a giant soaker tub, but there are a few things you should never give up just to make the sale go through: the number one being a home inspection!
Not only have we had clients within the past year+ tell us they had to offer way above the asking price just to be considered, but we have even had some tell us that they had to agree to forego a home inspection in order for the sellers to accept. They figure that it’s worth it to finally get a house after months and months of putting in offers, and any repairs that need to be made can be done after they move in. While the buyers may think the only repairs they might have to do are patching holes in a wall or replacing outdated fixtures, most aren’t realizing just how many things could be wrong that the naked eye can’t see.
For example: we had a client come to us recently in need of quotes for a new home he was purchasing. The sellers accepted his offer, closing date was set, all he needed was proof of insurance for the home. We started running quotes through our Carriers, and the CLUE (Comprehensive Loss Underwriting Exchange) report showed multiple claims on the home within the last few years. While our client did not own the home during those years, the claims stick with the property even if it is sold. We contacted the client to let him know that the multiple claims within the last 4 years, each being a substantial water loss, had shown up in the systems. Now some Carriers refused to even offer an Insurance policy on the property due to so many claims, but the ones that were willing to offer at least a quote needed to see the recent inspection report to consider the risk.
So here our client was, unaware that there had been any claims on the home, let alone any water damage at all, in order for the sellers to accept his offer he had agreed to waive the inspection! He was already spending more on the home than it was worth due to the current market, and now he has to worry about whether previous water damage had been adequately repaired, or if more water damage is likely to occur in the future.
Any claims on the home within the last 3-5 years will affect your Homeowners Insurance policy, even though you were not the one who made the claims. We always stress to our clients just how important an inspection is on a new home. If the sellers are even asking you to waive the inspection in order for your offer to be accepted know that there is a reason for that, most likely a BIG reason!