When making an offer on a home, I find it quite common that buyers feel they are ‘required’ by the mortgage ‘lender’ to have a home inspection. This is not true. I often get the question, “Don’t I have to have a home inspection to get my mortgage?” I have not run into any lenders in our area that ‘require” a home inspection to approve a mortgage.
Appraisal
Lenders rely on their appraisal of the property and the appraiser’s knowledge and expertise to determine value and lending ability. If the appraiser finds anything suspicious, they will note it on their report and the lender can determine if they want anything verified, certified or corrected and will indicate their requirements on the loan commitment.
Home Inspection
The home inspection as it currently exists is for the ‘buyer’s protection’. I typically do not encourage or discourage a home buyer to have a home inspection done. It is solely up to the buyer whether to invest in the inspection. There are too many variables, but it is best to remember that your home will most likely be the most expensive investment you will make. If buyers desire a home inspection, they should ‘shop around’ and get a home inspector they feel comfortable with who is local to the area of the home’s location.
Buyer’s Protection
Some buyers who have a working knowledge of construction may feel they have enough knowledge to see any conditions in the property which would deter them from purchasing the home. These buyers will most likely not have a home inspection unless they feel something is suspicious or want verification of what they observe. Investors who are ‘flipping’ a property typically make their offers without home inspections.
Most buyers do not have that knowledge or expertise and benefit from having a home inspection. Home inspectors not only inspect for defects, but also give many helpful hints and suggestions for ongoing home maintenance during their inspection. They also point out safety points such as shut off valves, emergency switches, etc. In this way, an inspection is especially beneficial to the first-time homebuyer. It is an education as well as an inspection.
Buyer’s Offer
One of the variables listed above was the expertise of the buyer. Another variable is the ‘effect’ of the home inspection in the buyer’s offer. In markets where there are multiple offers on a single property because of the lack of supply and increase in demand, a buyer may decide not to make their offer contingent on a home inspection. They feel this makes their offer more desirable to a seller when they are considering more than one offer. Sellers consider terms of the offer, qualifications of the buyer, as well as testing requested when considering offers. Sellers do not always base their decisions solely on price.
Every buyer and seller situation is unique. A buyer should make their best offer based on their particular circumstances, knowledge and expertise. This is what I especially love about the real estate industry. I’ll wrap up by saying, although home inspections are a very good idea and serve to protect you as a buyer, do not feel they are ‘required’. It is for your protection to get a home inspection.