I just can’t stay away from this topic for very long. It has just become a concern for me because of the potential harm for home buyers, especially first time home buyers. A recent survey by Hippo Insurance found that 81% of homeowners had unexpected issues that required costly repairs in the first year after purchasing a new home. I discussed reasons to not skip the home inspection and how to make offers more attractive without skipping the inspection in part 1. I want to dig a little deeper into why people are skipping inspections, the risks involved in skipping this contingency and what to do if it’s too late and you already purchased a home without an inspection.
First let’s review the Hippo study and the costs often occurred in the first year of home ownership.
Buying a home is decidedly exciting, but our survey found that 77% of homeowners dealt with an unexpected issue that needed repair within the first year; 53% of those homeowners said the cost of those repairs ranged from $1,000 to $5,000.
The study also showed that 33% of new homeowners were unprepared for homeownership. This is a 2021 study. The number of home inspections has dropped significantly over the last year so I can imagine that that percentage has risen. Because home inspectors not only point out issues with your potential new home but also go through the mechanicals and maintenance of the house, can you imagine how unprepared people feel when they don’t have that education pre move-in.
Why are home buyer’s skipping the home inspection?
It’s simple. There are more buyers than homes on the market and buyers are in bidding wars to get an accepted offer. They are skipping the home inspection with the hopes that sellers will put priority on bids without contingencies.
What are the risks involved in skipping the home inspection?
Buying a home is often the largest purchase you will ever make. It is an investment in your future. Prices are already sky high and now buyers are skipping the one step that ensures they are making a good sound financial investment. There are many dangers for you financially and otherwise if you skip this crucial step in the home buying process
- Money Pit
If all your home inspection finds are a few minor repairs under $1000.00, it may be worth it to just cover those repairs yourself. However, it is a big gamble that there aren’t serious structural issues or major repairs needed that can end up costing you far more. Money Magazine details one family’s tales of bats, termites and asbestos in More Buyers are Skipping Home Inspections. Even those costs are minimal compared to structural repairs.
- Safety Issues
Home inspectors often find safety issues like fire and electrical hazards. We spot home projects that were done that aren’t up to current codes. There are many items we check that keep your family safe and healthy in your new home.
- Future maintenance and care
New homeowners, especially first time home buyers don’t know all the maintenance and upkeep that homes require. They have usually had parents or landlords to take care of those issues. Walking through your potential new home with a home inspector helps you understand the mechanicals of the home. It helps you know the expected lifespan of major appliances and equipment. Those things are critical in regular maintenance of your home which will prevent unexpected future expenditures.
We already purchased a home without an inspection. Now what?
For many new home buyers, it is too late. You’ve already closed or are going to close on your new home without an inspection. It’s ok. Don’t panic. You should still consider having a home inspection in the near future. The investment you will make now can keep your family safe and healthy, help you budget for maintenance and future repairs, and just give you peace of mind that you fully understand what kind of investment you’ve made. A home inspection may guide you to take care of maintenance or repair items now rather than putting in that new flooring or updating a bathroom. It will guide you to make the best decisions with the care and upkeep of your new home.
As I said in Part 1 of Why Skipping the Home Inspection Isn’t Worth It, doing so places an unfair financial risk on buyers. I understand that you want that new home, but please think twice before purchasing a home without the due diligence it should require.