As the housing shortage continues across much of the nation, competition to purchase the best home listings continues to grow. In this landscape, prospective home buyers often begin to look for ways to make their offers more appealing than those of other, equally motivated buyers. While dropping some contingencies can be helpful, prospective buyers will want to insist on retaining important contingencies, like the one concerning their right to order and conduct inspections before finalizing their acceptance of the home.
If you are currently working toward the purchase of a home and are tempted to drop the inspection contingency clause in order to get your offer accepted, here are three things you need to know before doing so.
The home inspection is not the same as the appraisal
One of the most common reasons for prospective buyers to consider dropping the home inspection contingency is their mistaken belief that it provides them with the same information that their lender-mandated property appraisal will. While both processes will provide some of the same basic information, the property appraisal focuses on the value of the property in comparison to similar listed and recently sold properties for the sole purpose of establishing the current real market value.
A home inspection, on the other hand, looks at the structure and systems of the home and provides prospective homebuyers with a detailed report of their condition. Any signs of improper construction, installation problems, or safety issues will be included in the report so that homebuyers can fully understand the overall condition of the home they are trying to purchase.
An inspection contingency offers buyers the opportunity to back out
Once a home purchase contract is accepted and signed by both parties, it becomes a legally binding contract. Prospective buyers who enter into a purchase contract without the benefit of an inspection contingency can be forced to move ahead with the purchase, even if issues with the home's condition become apparent later in the process. By using an inspection contingency, buyers are providing themselves with an option to back out of the contract if serious issues are found during the home inspection.
The home inspection report provides valuable information about the home
Another benefit that prospective home buyers gain when using a professional home inspection is that the report they are given will offer them a substantial amount of information about the home they are buying. Most professional home inspectors list all pertinent data they find during the inspection, including the type and amount of insulation and the age, type, and manufacturer of basic systems, like the HVAC or electrical system.
Learning more about the home inspection process can be very helpful to prospective buyers, even before they sign a purchase offer. Prospective buyers who would like additional information can get the answers they need by discussing their situation with a home inspection service, such as Have It Inspected Property Solutions.