When to walk away from an inspection

Written by Posted On Thursday, 05 December 2019 19:48
Inspection Inspection

INSPECTIONS ARE AN EVIL NECESSITY

An inspection is often the necessary evil that calls to every home buyer. It is difficult to swallow that inspection price tag of $350 to even $800 for an inspection on something you may not even decide to buy. What other circumstance do we put up that kind of money with the full possibility that we don't even buy something? It doesn't happen often so it can be a hard pill to swallow. However, walking away is an absolute MUST sometimes. Recently I had a client get an inspection on a property and the total cost was about $1,000. Mold test, asbestos test, radon test, sewer scope, and the general inspection. That's a lot of tests and a lot of money! Most clients don't want to pay that, let alone think about paying that all for essentially nothing to show for it.

What is there to show for spending my money on an inspection?

But there is something to show. Those tests showed that the house had no mold problems, no asbestos, a slightly high radon report but nothing scary, but the general inspection revealed an issue in the foundation. So then yet another inspection was needed by a structural engineer.  Another $400 and revealed that YES it indeed had some structural issues. Now the buyer was in for $1,400 and had nothing to show for it but a bunch of tests. The seller refused to make any changes or repairs and the buyer walked away immediately and here's why. The structural issues were going to cost about $17,000-$20,000 to fix. Even more, a lot more, money to spend and that repair estimate assumed that everything went perfectly well. If it didn't all go well, then the repair could be even more expensive. A repair like this, starts making $1,400 look like a small amount when the house itself was also not up to date and needed other repairs or simple things like new carpet and fresh paint. Sometimes sellers will use cash buyers when needed in these situations.bathtub mold

What else might have happened?

Now this is an example of an extensive tests and a large expense, but had they continued with the purchase they would have had to put in a significantly larger amount of money into the property and that could have effected their ability to close the loan or even the amount of debt to income ration they needed etc. The list could go on. Even if everything was good to go with the banks, walking away was a financially sound decision. What people don't often realize is that there's always going to be another place if you have the ability to wait for it to show up and are ready to offer when it does. Sometimes walking away can be the best thing you do in the long term, even though you may be out some money initially.

But what if I LOVE the house?

If you find that you're making a decision of spending hundreds of thousands of dollars based on not wanting to spend a few hundred on inspections, then maybe you should wait until you're ready to be willing to walk away. If it's not about the money and you just "LOVE" the house, then you may be too emotionally attached and need to remember that every house is also a large investment. You wouldn't buy a stock with the same emotional attachments. Granted, you're not living in a stock, but let the investment aspect carry some weight in the decision making and try not to fully rely emotions. Remember, sometimes the best thing that can happen is letting something go and waiting for something better. It is better to have spent the relatively miniscule amount of money up front, then to end up spending thousands or tens of thousands later simply because you wanted to save money on a $300 inspection item. 

House Lights Turned on

IT MAY LOOK PRETTY ON THE OUTSIDE... BUT AN INSPECTION MIGHT TELL YOU THE TRUTH

 

Rate this item
(0 votes)
Seth Rouch

Hello! I’m Seth, of SethBuysHouses, which is a Local Colorado Home Buying Company. I’ve found a passion of helping people in Colorado with a houseing solution for them. My wife, Stephanie, and I have a combined experience of almost 20 years in Real Estate and have found that if you’re not happy… well then what’s the point? Coming from being a 9-year public servant-teaching middle school, you know that I’m here to help IMPROVE your housing situation. Additionally, I am a Colorado 5th generation native. I’ve been pouring into the communities of Colorado and strive to preserve the Colorado I know and grew up in for not only myself, but my two children and future generations.

With all that to say, I am definitely not your typical “I buy houses” or “We buy houses” buyer. I have been involved in Real Estate for almost a decade and am here to help people. I truly also enjoy being a landlord in multiple states, house flipping and the process and excitement of making something come back to life. I renovate and rent every house so that I would be excited and proud to live there with my wife and kids!  – Seth Rouch

www.sethbuyshouses.net

Agent Resource

How to capture your next prospect - click here

Realty Times

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.