Across the country, the housing market remains constrained by elevated mortgage rates and home prices, creating affordability pressures that continue to shape buyer demand and purchasing patterns. Homes for sale are difficult to come by in growing and desirable areas. It’s to be expected that if you put an offer on a home, yours is likely one of several offers.
With the competitive housing market comes shortcuts buyers are willing to take to stand out and secure a property. One of the common shortcuts is waiving home inspections. According to the most recent REALTORS® Confidence Index from the National Association of REALTORS®, 17% of buyers waived the inspection contingency.
Home inspections have been a fundamental part of the home buying process for decades—protecting buyers and sellers from unknown property damage, safety issues and more. Keep reading to take a closer look at three reasons you shouldn’t skip a home inspection.
The difference between a buyer’s home inspection and a home insurance inspection
Home inspections typically happen during the home buying process by a licensed home inspector. They are designed to help buyers learn about the ins and outs of the property they’re interested in purchasing. These inspections can also be helpful to sellers who want to prepare their home for sale, but most inspections are conducted by potential buyers.
In the event a home inspection is waived, and an insurance carrier requires one, home insurance inspections are conducted. These inspections occur when insurance companies conduct their own inspection to understand the condition of the property and learn about any home insurance risks such as a faulty electrical system or roof damage.
It’s important to note home insurance is required for many mortgages, so many homeowners will need a home inspection, home insurance inspection or sometimes both.
Here are some differentiators between the types of inspections:
| Buyer’s Home Inspections |
Home Insurance Inspections |
| Conducted by a licensed home inspector, typically hired by a potential home buyer with the goal of finding safety issues, repairs needed and other risks of the property. |
Conducted by a home insurance carrier with the goal to understand the condition of the home and any insurance risks, such as a faulty electrical system or roof damage |
| Can be waived during the home buying process for a competitive advantage. |
May be required by your home insurance carrier if you have an older home or higher value home. |
|
Is helpful to determine the replacement value of your home and belongings for an appropriately valued home insurance premium. |
3 reasons you shouldn’t skip a home inspection when buying a house
A home inspection isn’t required to purchase a home, but here’s what can happen if you opt out of it:
1. Your potential new home could be at risk
Without a proper home inspection from a licensed professional, things can go unnoticed that may put your health or safety at risk on top of potential risks to the home structure. Here are just a few issues that could be looked over:
While home inspections don’t always find every risk, as a new home buyer you can secure some peace of mind knowing you’ve had a professional take a thorough look inside and outside the house. Closing the knowledge gap on the property can help you feel confident in your large investment.
2. You could remove your negotiating power during the sale
If you find a house you love and decide to put in an offer, there are several types of contingencies you can consider writing in your offer—or conditions that must be met before the sale closes.
For example, when a buyer’s offer includes an inspection contingency, that means the offer is contingent on the results of a home inspection. In this scenario, a buyer can negotiate for:
- Home repairs
- Money from the seller for the home repairs
- Protection to withdraw the offer if the seller won’t make the repairs or provide money for the repairs
With help from contingency clauses like an inspection contingency, your home buying journey can have a clear path forward with known risks and repairs necessary to give you peace of mind.
3. You can’t plan well for future repairs and replacements
Buying a home without an inspection removes your opportunity to pause and plan for repairs and replacements before closing on the house. With a buyer’s home inspection, you can take the input from your inspector and strategize what repairs, upgrades or cosmetic changes you will make when the home is yours.
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Do I really need a home inspection to purchase a house?
It’s entirely up to you.
If you are comfortable with a higher risk for potentially higher payoff, such as a home on a specific street or a property you’ve always admired from afar, waiving a home inspection may help you secure the property.
If you are risk-averse and interested in protecting yourself from potentially expensive or time-consuming repairs before or after moving into the home, a home inspection could offer you peace of mind.
At the end of the day, a buyer’s home inspection is one of the best ways to understand a home's condition before you buy. It can uncover potential issues with major systems or structural components, helping you make a more informed decision, plan for future repairs and avoid unexpected expenses after closing.
References:
- American Society of Home Inspectors (ASHI)
- NerdWallet
- National Association of REALTORS®
- U.S. News and World Report
- Chase Bank
- Investopedia
Scenarios above are not actual claims. The material provided above is for informational, educational, or suggestion purposes and does not imply coverage. WE RESERVE THE RIGHT TO REFUSE TO QUOTE ANY INDIVIDUAL PREMIUM RATE FOR THE INSURANCE HEREIN ADVERTISED. Grange Insurance policies are underwritten by Grange Insurance Company, Trustgard Insurance Company, Grange Indemnity Insurance Company, Grange Insurance Company of Michigan and Grange Property & Casualty Insurance Company*. Not all companies are licensed in all states. *Not licensed in Pennsylvania.