Personally, I would never buy a home without an inspection. In fact, I may even go a little overboard. When I purchased my home, which was new construction, I not only had it inspected throughout the construction process, but I also had it inspected about a month before the full warranty was up so I could have repairs done. Of course, that’s just me. Since then, I’ve watched (somewhat in horror) as someone close to me purchased a home without an inspection and seen how it can go terribly, terribly wrong.
This is a true story… Pam and Bill (names changed) were looking for their first home in the rural Midwest. Like most first-time homebuyers, they were very excited, nervous, and also wanted to stretch their home buying dollars as far as they could go. They got preapproved for a mortgage, hired a buyer’s agent (not an EBA), and went house hunting. Within a few weeks, they found a house in their desired location at a price they could afford. They went to look at it and made an offer. The house was in foreclosure but after a little negotiation with the bank, they settled on a price of $65,000 – right in the price range Pam and Bill had set for themselves and while not a steal, a fair price for that neighborhood. Knowing Pam very well, I was informed throughout the process even though I live nearly 2,000 miles away.
When we discussed an inspection, she stated that the inspection was going to cost $350 and that with all the money they had to spend on the down payment and closing costs, she didn’t really feel the extra $350 was warranted or feasible. I’m sure red flags are going up in the heads of any real estate professionals!
They’re buying a foreclosed home “as-is” without an inspection. Fast forward to the first thunderstorm after closing. Pam and Bill are getting drenched…in their bedroom…in their bed. The roof has a serious leak. Bill and his dad put some tarps over the roof to temporarily keep out the rain and call a roofing contractor to assess the damage and give them an estimate on the repairs. The roofing contractor comes. The roof needs replaced, but that’s not the bad news. The bad news is that there is an active hornets’ nest in the roof and he can’t replace the roof until the nest is removed. Now, the exterminator comes. This is a big, very active nest and it is mid-summer when hornets are most active.
There is no way for him to remove it all until they go dormant in the winter. Great. At least four months with a very leaky roof and huge, active hornets’ nest. Not exactly their dream home. Fortunately, winter came a little early. About three months later, the exterminator returned and got rid of the nest. Then, the roofer came and they got a new roof. At what cost? $14,000. Over 20% of what they paid for the entire house! If they thought $350 was expensive, I can’t imagine what they thought about $14,000. Lesson learned. With an inspection, it is highly probable that they would have known about the leaky roof and the hornets’ nest. I’m not sure what options they would have had at that point but I can think of at least two: they could have bought a different home or if they were really set on that house, they could have negotiated a lower price to help them cover the huge repair bills.