Do I need a home inspection in a hot market?
- Jun, 07 2021
It is no secret that in 2021 the real estate market in many areas of the country is super hot and houses are flying off the MLS the same day they are listed. When this happens there are people and even real estate agents out there that will advised against a home inspection to “make your offer stronger”. While we assume that advice is typically coming from a good place (they just want you to get the house you want), it can lead to disastrous results. Here is a brief summary of a few top reasons that you still should be getting your home inspected.
First is the same as any market conditions, to find hidden issues you wouldn’t have otherwise known about. This one is pretty obvious but in a sellers market it is still valuable. I know you just love the house you put an offer in on and you have already put offers in on 4 other houses and got outbid on all of them and just really want this one. However, do you really want it at the top price you are paying if you find out there are serous foundation issues that could cost $10,000+ to correct, faulty wiring that is another $10,000 to fix, and the roof on the 2nd story home that you can’t see is shot and leaking and will be $15,000+ to get replaced? In a hot market when we see homes going over asking price and prices skyrocketing in the first place there is often times not a ton of wiggle room in people budgets once there are finally able to contract a home to buy. This means that finding out after you purchase the home that you have to sink another $20-$50K in repairs just to keep the house safe or inhabitable can put you in a really bad place that no one wants to end up in.
The second reason home inspections are especially important in a hot markets is because of the amount of “Flippers” out there to make a quick buck. When prices are climbing rapidly there is tons of money to be made in the real estate flipping market. While this can be great as we typically will see areas that have maybe been neglected start to see more and more rehabs bringing nice houses into older neighborhoods it can have some consequences too. It is well known in construction and home inspection circles that as soon as a market heats up and the “flippers” start pumping out houses as fast as they can that quality of work goes down hill quick. This is a HUGE concern especially for non-local buyers who might not know who the reputable rehabers and construction companies are. That can lead to major headaches and unforeseen costs for unsuspecting home buyers. There are so many ways that flippers try to hide major issues to make a quick buck. It is super common around the country for flippers to use a “bootleg ground” on receptacles by having their ground wires tied to their neutral wires to try and trick electrical testers. This is done because old wiring is sometimes only wired for a 2 prong system without a ground. Instead of getting the wiring upto current safety standards they install new receptacles and tie the neutral and ground together which tricks some testers. This saves them thousands in the repair costs and make it look like quality work was done to bring the home up to current standards when in fact it has not. Often times they can install bath fans just for looks. It is super easy to just cut a hole in the ceiling and mount the fan without getting the attic and hooking up the electrical and exhaust pipe. Fresh paint on a deck is done by sellers all the time to make it look nicer, but it is also done by flippers to hide rot and deterioration. This has the potential to lead to major safety concerns or expensive repairs.
Finally all the reasons we can come up with come down to this, $$$$$. We inspect homes so that you know what you are buying. You want to make sure that you get a home that fits all your needs, or as close to that as you can get. If you go all in on your budget for a new home just to find out there are major issues you didn’t see coming it can throw a wrench into your financial wellbeing that can take years and years to recover from. It is so important to still get your inspection even in a hot market. You can get an inspection and not request any changes to the contract if that works for your situation so that you don’t feel like you are hurting your offer. That way you would have a list of the major issues you need to budget for to get fixed or get fixed as soon as the home is yours. Often times we find things like negative drainage that is causing foundation issues but they are just minor at the time of inspection. You can make sure to get that corrected as soon as possible so that the foundation doesn’t become a huge issue costing thousands of dollars. Finally if your inspection reveals too many issues and you can’t afford to buy the home and make the corrections needed, you can walk away from the deal in most cases (check with your realtor). This is the ultimate fail safe of an inspection and can save your bacon before you buy something you shouldn’t.
As always our motivation is to serve our customers and give them as much information as possible to help them make their buying decision. You should always consult with your realtor and weigh all your options. If you really love an area or a house and your budget puts you in a place that you will need to buy a house with defects and fix it up as you can that is fine, we just want you to be aware of what those defects are so you can make a well informed decision for you and your family.