Because of shortages of homes, ALOT of buyers ( with help from realtors ) are waving ALL inspections.
does anyone have any ideas to combat this problem.
Jerry
JB Home Inspection
Michigan.
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Start a marketing campaign directed to buyers.
Nick had an article about this last week. In the article it said this, not from Nick but good idea.
Have your Realtors:
Ask for an “informational inspection” rather than an “inspection contingency” in your offer. This language lets the seller know you’ll be getting a full professional inspection, but that it’s for your information only: you won’t be asking them to pay for issues it may uncover.
This would keep us doing inspections… This idea is a good work around. They should tell the buyers that they still need to get the inspection so they know what they are buying.
…wait 'till they move in, the phone will start to ring.
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Same is happening here, people buying with cash and no inspection. They don’t really care, they’re willing to fix whatever the issues might be. The inspection is useless because the seller’s are not agreeing to fix anything anyway. The only option is to walk away. But then they will never find a house in their budget.
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Well, if the buyer can’t walk away then it offers little protection. A contingency is a contingency or it is not.
And, I have seen many homes advertises “as is, no repairs” but a buyer can still open up the door to negotiations if they have a savvy realtor.
I posted this on another thread the other day but it’s worth re-posting. A local realtor put this survey on facebook. 100% of the people replying chose “1.” The realtor commented that they were smart because “cash is king.” Never mind the difference in contingencies between the offers, lol.
If the buyer is pre-approved, who cares if they are getting a loan or what type of loan? “Cash” doesn’t mean anything. The seller is still getting a check for the proceeds at closing.
Cash offer closes in 1-3 weeks here, loan can take several months, and sometimes the loan isn’t finalized even when the person is pre-approved.
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Panic buying with a lot of uneducated buyers in the home buying process. It will level out soon enough.
Reminds me of folks that buy used cars that look shiny, clean, drive it around the block…and never take it to a mechanic to have it checked. 1 week later the engine or tranny blows and they are SOL. Pretty much the same here…Buyer Beware and you’ve have nobody’s shoulder to cry on.
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Jerry, if you want a signature to appear under each post you make, for free SEO, do this:
SIGNATURE: Click on your face in the upper right hand corner of this page. Then click on your name to the left of the bell. Then click on preferences. Then click on profile and scroll down to signature and fill out the information that you want to appear under every post that you make. AND LAST, scroll to the bottom of the page and click SAVE CHANGES.
What ever happen to Real estate agents code of ethics. protecting the buyer
Buyers will eventually find a ambulance chaser lawyer and take them to court.
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In my area, I know agents are warning clients that their offer will have a low chance of acceptance if it contains any contingencies. And they’re not wrong. Homes have half a dozen offers before they even get listed. The signs don’t even get put up.
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This was bound to happen. For years, people have been led to believe that the home inspections is for negotiating and not for due diligence.
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“Cash” buyers have fewer hoops to jump through compared to buyers with a mortgage.
No appraisal, no underwriter, no lender required repairs, no income or job verification etc.
Some loans are even more challenging (VA loans as your realtor post states) VA appraisers can hold up the loan over vegetation touching house, peeling paint, less than certain amount of life left on a roof, no vapor barrier in crawlspaces, etc.
If I was selling a house I would prefer a cash offer because it’s more likely to close.
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When I’m selling a home I certainly do care if there is a loan involved, and if so, what type.
If you do some research, you will understand this subject more clearly.
Patrick beat me to the post, as I was about to write the same information.
I will add that in addition to the longer process that a loan (any type of loan) will involve, there is also the element of risk. There is a risk that the appraisal comes back too low, which is especially true today when people are bidding above value to get a home. The bank won’t loan more than the appraised value so you start the process all over, with weeks wasted.
Cash buyers have quicker closing, fewer obstacles, and lower risk.
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Not to mention that if the agent talks the buyer OUT of getting an inspection, and there turns out to be a large defect, I would guess the agent is going to pay for that. JMHO
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All valid points that I can’t argue with when comparing loan vs. cash. I guess my focus on the survey was that the cash offer was the only one without the inspection contingency. Although the “survey” was for sellers, it does a lot to tell buyers not to put in inspection contingencies.
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