Total existing-home sales—completed transactions that include single-family homes, townhomes, condominiums and co-ops—rose 3.1% from December to a seasonally adjusted annual rate of 4.00 million in January.
To Inspect or To Not Inspect—That’s the Question in Today’s Hot Real Estate Market
WHITE PLAINS—Talk to any Realtor anywhere in the country, and they’ll tell you that even after more than a year, it’s still a seller’s market out there. Layla Boyles, broker/owner at CENTURY 21 Realty Center in Monroe, said she continues to see multiple offers and bidding wars for many Orange County properties, with the average sale now securing 103% of asking price.
In some cases, buyers are so desperate to purchase a home that they’re actually waiving home inspection contingencies or even the entire inspection itself. “This is merely an act of good faith that the buyer really wants the home, but I would never encourage anyone to waive an inspection,” said Boyles. “In some cases, the buyer’s attorney may step in and recommend they do have an inspection.”
Boyles noted that many instances of waived inspections are for homes that appear to be very well maintained and in great condition. “Some buyers will bring a contractor with them when they look at the house to get an idea of what to expect,” she added.
For those clients who have waived inspections, Boyles said luckily none of them have experienced any major problems with the homes they purchased. In other cases, prospective homeowners may hire an inspector but waive any inspection contingencies, so that the purchase deal can go through without the seller having to make any suggested home improvements.
“If you’re up against 20 other offers, some buyers may decide to take their chances on the home if they don’t see any obvious problems, but again, forgoing the inspection is not something I would recommend,” said Boyles, who hasn’t had a listing without multiple offers since after COVID started.
Lou Budetti, broker/owner of ERA Insite Realty with offices in White Plains, Bronxville, Pleasantville, Yonkers and Bethel, CT agreed. “The market is still very competitive throughout the Hudson Valley and most sellers are seeking highest and best offers,” he said. In some high-end markets like Chappaqua, he’s seen bidding wars bring in up to $200,000 over asking prices.
Like Boyles, Budetti has seen his share of prospective buyers willing to waive inspections, but also advises against it. “What we’ll suggest is that they do the inspection for informational purposes only, so they know what they’re going to be facing should they end up as the home buyer,” he said. “They can also stipulate that if a home has an older roof or heating system, that the buyer will not ask for a renegotiation of the asking price.”
Budetti said low interest rates and a lack of inventory are continuing to drive the high demand for homes on a national level. “We’ve seen record-setting numbers since the start of COVID,” he noted. “People need more space now for working at home and they’re willing to go a further distance for a home than they once were.”
For buyers who may be considering waiving an inspection, Budetti suggests they need to be concerned with anything structural in the home or something that could affect their health and safety.
Ron Sierra, owner of Pillar to Post Home Inspectors in Rye Brook, warns home seekers to be wary of abandoning home inspections. “It’s really not fair to prospective home owners, because once people close on a home, they inherit every existing problem and then it’s too late,” he cautioned.
A home inspector since 2015, Sierra holds a degree in architectural drafting and design and has more than 20 years of experience in real estate property investment and management. His firm services Westchester, Putnam, Rockland and Orange counties.
Sierra noted that termites and other wood-destroying insects can be one of the more serious problems for homes, as well as asbestos and old electric panels. “You have to know what you’re looking for and asbestos can often be found in floor tiles and insulation,” he explained. “If the house has an attic fan, then it can be blowing that all over the place and down the road, family members could have respiratory issues.”
While Sierra admits we’re still in the midst of a seller’s market, he alerts homebuyers to beware of forgoing the inspection process. “I know people can feel pressured with multiple bids and higher offers. It can be intimidating, but knowing what you’re walking into can save you a lot of time and money in the long run,” he said. “In fact, when I bought my home, I hired a home inspector because I wanted a different set of eyes looking it over.”
In some cases, there can be thousands of dollars in hidden costs if a chimney has to be repointed or there are gaps or cracks in the home. Even newly constructed homes are not immune to problems. “A builder is just as good as his subcontractors, and there can be flaws in materials and construction,” added Sierra.
James Carnicelli, civil engineer and owner of Carnell Building and Environmental Inspections in Valhalla, echoed Sierra’s recommendations. “When considering a home purchase, buyers should be aware of any major faulty conditions that could seriously affect their investment,” he said. “Major structural problems like the roof, foundation and grade elevations could be almost impossible to remedy or extremely expensive.”
Other expensive conditions Carnicelli noted include faulty electrical, heating, or plumbing. “The present high inflation and economic insecurities make it mandatory for buyers to beware of potentially high future expenses as well,” he added. Carnell has been serving the Hudson Valley since 1969.
Both Carnicelli and Sierra believe waiving home inspections is just never worth the risk. “Some people spend more time looking for vacation properties or cars than they do looking at a home,” said Sierra. “They should certainly have someone spend the time to really look over what it is mostly likely their largest investment.”