Nashville agents share truths about home inspections and bidding wars
Across the United States, a lack of housing inventory has created a huge seller’s market — that is, prices are on the rise and buyers may face bidding wars. What is a bidding war and how do home inspections come into play when navigating through this unprecedented real estate situation? Here is a primer to help you feel at ease and know what you might expect.
Bidding wars are good for sellers
Bidding wars are a reality of buying a house in 2020 and early 2021. In HomeLight’s Q3 survey, 87% of real estate agents said that inventory was lower than they expected it to be, compared to 47% who said the same in Q3 of 2019. Multiple offer situations are almost a guarantee — more agents than ever (88%) said that bidding wars are on the rise or at their peak. Several respondents in the survey described the situation as “insanely competitive.”
The percent of real estate agents seeing home prices escalate in their area skyrocketed from 6% at the start of Q2, to a firm 81% majority in Q3, according to the HomeLight report. Nashville real estate agents, like agents across the country, are advising homebuyers to offer above asking price and make no requests for concessions or closing costs in this market environment. Many are going so far as to write letters, bid sight-unseen, and waive contingencies. This is where questions about home inspections might come in.
Does the prospect of a bidding war mean making concessions on the home inspections?
Waiving contingencies is one way for home buyers to show that they are serious about a home, to move a deal forward quickly, and get ahead of other buyers. One of those is an inspection contingency— avoiding the typical practice to search for major home defects before moving forward with a deal. With such fierce competition overwhelming the market, agents report that potential buyers are more willing than ever to make concessions that they otherwise would never have considered. It might seem like a bad idea to waive the inspection, but it might be the way for buyers to go to get ahead of others to land the home of their dreams. If you waive your inspection contingency and then find out later that the home has serious issues, keep in mind that you could have to pay for expensive repairs once the title has been transferred.
Should I get an inspection as soon as possible?
Even with an inspection contingency, a home inspection needs to happen before a deal can close. Buyers who want to get ahead can try to get the inspection done right away. This puts a seller at ease by accepting an offer and taking their property off the market. Buyers can do this in conjunction with waiving an inspection contingency if they’re confident that they want the house no matter what. The goal here is to speed up the process as much as you can, to get ahead in the bidding war.
It is possible to buy or sell a house in 2020 and early 2021, and being aware of bidding wars and the possible contingencies that might come up can help you get ahead of the game and satisfy your real estate goals.