Hello, I’m Dr. Deena Stacer, The Real Estate Doctor with Stacer Realty, DRE #00703471. A common question for homebuyers making a cash offer when buying a home is whether a home inspection is necessary. While not required by a lender, a home inspection with a cash offer is highly recommended to ensure you are making a sound investment. Feel free to reach out to me at 858-229-8072 or Doc@DeenaStacer.com for personalized advice.
The Importance of a Home Inspection with a Cash Offer When Buying a Home
Even if you’re paying cash, a home inspection with a cash offer is a critical step in the home buying process. Here are four primary reasons why you should get one:
1. Identify Potential Issues
A home inspection with a cash offer can uncover underlying problems that may not be visible during a casual walkthrough. These issues could range from minor repairs to major structural defects.
For example: A home in San Diego might appear perfect at first glance, but a thorough inspection could reveal foundation cracks, roof damage, or outdated electrical systems. Identifying these issues early can save you from costly repairs in the future when making a cash offer when buying a home.
2. Determine Necessary Repairs
Knowing what repairs the buyer will need to do and which repairs the seller will be asked to do is crucial. The home inspection with a cash offer report will provide a detailed list of issues that need attention, allowing you to make informed decisions about the property.
For example: If the inspection of a home in La Jolla reveals significant plumbing issues, you can decide whether to handle these repairs yourself or negotiate with the seller to address them before closing.
3. Negotiation Leverage
The findings from a home inspection with a cash offer report can provide leverage in negotiations with the seller. If significant issues are discovered, you can request repairs or ask for a price reduction to cover the cost of necessary fixes.
For example: Suppose the inspection of a property in La Mesa reveals plumbing issues. You could use this information to negotiate a lower purchase price or have the seller fix the problems before closing when making a cash offer when buying a home.
4. Decision to Proceed with Purchase
A thorough home inspection with a cash offer helps you decide whether to proceed with the purchase. It gives you a clear understanding of the property’s condition and any potential future expenses.
For example: An inspection on a historic home in Old Town San Diego might reveal the need for specific maintenance unique to older properties, giving you the assurance that you are prepared for future upkeep when making a cash offer when buying a home.
San Diego County: Buyer and Seller Responsibilities
In San Diego County, buyers are typically responsible for paying for the inspections. Buyers have the right to ask sellers to repair items prior to the close of escrow or to offer credit at the close of escrow for repairs they request. However, sellers have the right to reject the request or to modify it by offering to repair all the items on the list, only specific ones, or to reject the request to repair any items.
Seller’s Options: The seller can offer a specific amount of credit, agree to some repairs and credit, or only provide credit. The seller can choose how much they will credit at the close of escrow.
For example: If an inspection report identifies several issues, the seller might agree to fix the major ones and offer a credit for minor repairs. Alternatively, they might offer a lump sum credit for the buyer to handle the repairs post-purchase.
Inspection Contingency Period
During the inspection period that the buyer has negotiated in the contract with the seller, the buyer can also choose to cancel the escrow and walk away from the transaction if they find too many repairs to fix, or if they decide they no longer want to move forward. There are specific contingency periods stated in the contract for inspections, investigations, and reviewing all documentation provided by the seller, the lender, and the HOA. If the buyer decides to cancel the escrow within this period, they can receive their initial deposit back without a penalty.
For example: A buyer might have a 10-day inspection contingency period during which they can conduct inspections and review the property. If the inspection reveals significant issues, the buyer can decide to cancel the escrow within this period and receive their initial deposit back without any penalties. This flexibility provides added security when making a cash offer when buying a home.
Additional Inspections for Specific Issues
Should the buyer find problems during their inspection, they have the right to bring in as many service providers as they want to determine the extent of the problem.
For example: a foundation under a historic home may require a foundation expert who specializes in historic home foundations, whereas a regular home inspector may not have the expertise to advise on such problems. If the buyer needs additional time for this, they can request an extension for the inspections/investigations from the seller by providing documentation and signatures to extend the time.
For example: If an inspection reveals potential foundation issues in a historic home in Old Town San Diego, the buyer might hire a foundation expert to assess the problem thoroughly. If this requires more time, the buyer can request an extension from the seller, allowing for a more informed decision.
Flipping Homes and Inspection Considerations
If the home is in deteriorating condition, a buyer who flips homes may not do a “professional inspection,” but they will spend time with their team to consider the costs of repairs for the deteriorating problems and may negotiate a lower price due to the costs for repairs they initially did not see. Recognize that as a seller, if you are selling a home that is a “fixer” or has many problems that will require significant repairs, the buyer will definitely want to negotiate until they reach a price they can make a profit on if they plan to flip the home and resell it after they have remodeled or updated it. When working with people who flip homes for a living, be prepared to have the transaction take much longer than 10 days if the home needs major renovation.
For example: A buyer intending to flip a home in deteriorating condition in Encinitas might forgo a professional inspection but will bring in their renovation team to assess the repair costs. This assessment will influence their negotiations and could extend the inspection period if major renovations are required.
Doing A Home Inspection for a Cash Offer
While not required, getting a home inspection with a cash offer is highly recommended when making a cash offer when buying a home. These steps provide valuable information about the property’s condition, protecting your investment and giving you peace of mind. For more detailed guidance and to explore your options, feel free to contact me, Dr. Deena Stacer, The Real Estate Doctor, at 858-229-8072 or Doc@DeenaStacer.com.
Thank you for reading, and I look forward to assisting you with all your real estate needs in San Diego!
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