Why Sellers Might Waive Home Inspection

Why sellers might waive home inspection. There are valid reasons not to permit an inspection.

By Ilyce Glink and Samuel J. Tamkin

Q: In your recent article you suggested to a daughter that when selling her mother’s home in poor condition that she could just refuse the buyer’s request to have a home inspection. 

Why in the world would you suggest that? Refusing a buyer to conduct a home inspection reeks of “hiding” something.

A: Some people will certainly see it that way. As if the seller is hiding something by refusing to open up the doors to a professional home inspector. But there are a few circumstances where it makes sense to do this.

Selling home in as-in condition

Let’s back up. Most buyers will include an inspection contingency when making an offer. And, most sellers will agree to allow a professional home inspector to come through the house within a week or 10 days after the buyer and seller agree to the purchase price. 

Sometimes a seller will sell in as-is condition, which telegraphs to prospective buyers that the property likely needs work (which could range from a thorough cleaning to a major renovation or rebuild). It also telegraphs that the seller will not negotiate the price based on any issues with the condition the buyer may find with a professional home inspection.

If the seller agrees to a professional home inspection, then the buyer will have the right to cancel the deal if the property doesn’t pass inspection. In a hot market, the seller may not want to waste time, and so will eliminate the right to have the home professional inspected before the closing. 

Land is worth more than the home

Also, when the homeowner is selling the home for the value of the land, there’s no point in allowing a home inspection.  

It’s true that the sellers might get more money if they allow homebuyers to come in and see the home. However, when a home is in such bad shape or if the land is worth more without the home than with it (because there is a cost to remove the home before building something else), then the home inspection is superfluous.

You may notice listing brokers putting up a single picture of a home online. These homes are usually tear downs. There’s a good reason they don’t put up interior photos of the home. In most cases, they will turn off prospective buyers, who might not even consider looking at the home. 

Why sellers might waive home inspection

Our advice wasn’t intended to keep buyers from looking at the property. The question is really about whether there are valid reasons not to permit an inspection.

If the sellers are willing to risk getting less money for the property, they can refuse to allow any contingencies. If there is a super-hot buyers’ market, they can say they’ll take “best bid” offers and open it up like a one round auction.

The right buyer would have to come along and buy this seller’s home without a proper inspection. That buyer might be a contractor, real estate developer, real estate agent or other real estate industry professional who doesn’t need a professional home inspection to know what they’re getting into if they make an offer.

©2021 by Ilyce Glink and Samuel J. Tamkin.