Imagine finding that dream home, but the seller mentions it has multiple offers on it. In a super competitive or “hot” real estate market, it can take offering concessions and removing “contingencies” to place the winning bid.
A recently popular contingency waiver is forgoing the home inspection. Whether this is a good idea or not can be debated, and one should consider certain factors before choosing this path.
One factor driving the fierce competition in the home buying market is the low number of houses on the market.
According to Zillow’s monthly market report in January 2022, there were about 833,000 homes available.
That's half of the 1.5 million available in 2020 before the pandemic started. Lack of supply can cause homebuyers to want to win a bid to remove the home inspection—and other contingencies—to beat the competition.
According to Redfin, a national real estate brokerage, through February 2021, home inspection contingencies were waived in successful offers 13.2% of the time, up from 7% in 2019, and in 2021, that number jumped to 21% among successful bids from Redfin agents.
The decision to skip a home inspection to secure a home of choice can be difficult in a hot real estate market. A lower inventory of available homes can make this even more challenging.
In most cases, Realtors® ultimately say a home inspection is vital to the home buying process and should not be overlooked for peace of mind.