How to Make Your Offer Stronger Using the Inspection Contingency

So what are a buyer's options when you're financing a new home in a seller's market while competing against cash buyers? Today I'm going to help you out. I'm sharing a strategy that you can implement in your offers that's going to make it stronger and more appealing to sellers in a seller's market, even when you're financing your purchase.

I want to talk to you about the inspection stage of escrow and how you can be creative when you need to be and get your offer accepted in a seller's market. If you have been in the market actively looking for a home or just following the market, you've probably seen that we are in an extreme seller's market. What this means is sellers have more options and they have less reason to negotiate or associate to negotiate with buyers and meet you where you're at.

In short, you have to do all the work to meet the sellers where they're at to get your offer considered. So when you make an offer on a house, you have to make concessions as a buyer with your offer just to get it looked at when most homeowners are getting 20 to 30 offers on their house in the first few days.

One of the areas that you can be flexible when financing is the inspection contingency period. Before I go any further.

I want to say that as a realtor who represents buyers 50 - 75% of the time. I recommend that you always do an inspection. I don't care if the house is brand new. It is always in your best interest as a buyer to get an inspection done.

And I will always tell my clients that I also want to preface that using any of the strategies I share with you today will not guarantee that your offer gets accepted. There's no way you can control what other offers are presenting. You may be going way out of your comfort zone yet that comfort zone is nothing for another buyer to toss aside just to get that same house.

These strategies are here to help make your offer stronger, but there's no guarantee that you're gonna win, but hopefully you'll learn something today. So with that said, what I want to tell you today is different strategies or different strategies or approaches that you can use when writing your offer to make it more appealing to sell it. So I kind of touched on this first method, which is basically to not do an inspection at all. Most purchase agreements have several options when it comes to the inspection contingency period.

If you're not sure what the inspection contingency period or what the inspection is, I'm sure I made a video on that. Just go dig through my archives. I'm sure you'll find now one of those things that you can again change up is the inspection. Uh, contingency. Obviously, this would probably be the seller's most desired outcome for an offer because basically, they don't have to worry about the condition of their home, causing you to walk away.

I'm sure it's like this in all states. But in Tennessee, the buyer during the inspection period until the inspection contingency period closes has the right to walk away from the offer without really giving a whole lot of reasons why. And this makes the sellers very nervous during this contingency window and it's a stressful period for everybody in the buyer doesn't know what they're going to find out about the house.

The seller doesn't know what the buyer's gonna find out and if it's going to be enough to cause the buyer to walk and they took their house off the market for nothing. So when you forgo inspections altogether, you take away this word from the seller. But here's the thing, you also lose your rights under the inspection contingency to walk away and it's one less opportunity for you as the buyer to get out from under a house. That may not be right for you.

In the worst-case scenario, you could be stuck with a house that has some major issue. Then you're financially obligated to pay for the next 10 2030 years, nobody wants to buy a lemon. And if you forgo the inspection period, there's a really good chance that's exactly what will happen to you.

Well, there's probably like a 50-50 chance, I mean, and not most houses are in good condition, but there are always issues with the house that you want to know about. Even minor. Now on the extreme end of that is to get an inspection and end and to maintain the ability to negotiate over that inspection repair. You basically have the right to do your due diligence on the home and that includes inspections, walk-throughs, and things like that.

Now a typical scenario for an inspection contingency is basically like this. Something like your request in your offer two weeks to do your due diligence and inspections and access to home and at the end of those two weeks or you know before you can turn in a repair request proposal asking to negotiate over repairs overprice something.

It's basically reopened negotiations on the house and the minute you turn that in the inspection contingency window closed. Now in an even market or in a market that's like between a seller's market and a buyer's market, it's a typical stat. A typical scenario. However, we are not in that kind of market and it's been quite a few years more than a few years since we had.

The typical scenario today is that most sellers are going to have anywhere from five 2 30 offers on at a house in the first few days. It's on the mark. Now I hate saying this out loud. I hate telling my client this even more let alone just saying it to you on the other side of this tv or computer screen.

However, it's my duty as your realtor to give you the reality of the situation you're facing so that you can make your own decisions on how you want to tackle the house to offer the situation. Now obviously I'm gonna always recommend that you get an inspection of the home that you're about to spend hundreds of thousands of dollars on.

So how do you go about making your offer more appealing while still getting a good idea and still being able to do your inspections and understand the condition of the home, that's about to be your responsibility? Okay. So we're in a seller's market and they have almost all the power, but you really want to buy a new home and you're using financing and there are certain things you cannot control in your offer when you're finding obviously if you're a cash buyer, you have a lot more flexibility on how you structure your offer and how you get to escrow.

There's no one else involved in purchasing the home. There's no bank, there's no lender, there's no government entity. So you can skip inspections, you don't have to get an appraisal. You can close weeks faster than finance. Bye.

There's you basically, it's, it's really hard to compete with an offer. That's all-cash because they are pretty much a straightforward hey, here's cash. I want your house. Do you accept my offer? Good shake hands.

You're done. It's almost that easy. However, most buyers don't have that kind of cash lying around. So if you're using any kind of financing, there are certain things that you cannot, you have to get an appraisal because the bank has to know what the house is worth or they're not gonna let you borrow that money and you can only close as fast as the lender is able to get you through the financing process and underwriting which typically takes at least 30 days and nowadays usually more.

But with that said what you can do to your offer to still protect your interests as a buyer still get a good idea of the condition of the home and make it appealing to sellers. You can use a strategy that I call inspection for discovery only. Well, I just don't call it that everybody here calls it that.

So what what what this is the inspection for discovery only is basically you as the buyer or requesting that you are able to get your inspection. You hold onto your ability to walk away from any issues that the house has that are too much for you to want to commit. But what you're guaranteeing is that you're not gonna negotiate over repairs.

So let me say this again, basically, you're gonna make an offer, for example, say you want 10 days inspection period but you want zero days to negotiate repairs because you're promising that you're only doing the inspection. So you can understand the condition of the home with that said you're also stating that you have the right to walk away if there are any major issues with the house.

Is this going to guarantee you that your offer's accepted? No, it's not. But is this more appealing than a typical inspection contingency period? That is definitely gonna end with negotiations? Of course, it is. Anything you can do in this market to give peace of mind to a homeowner who's selling their house is gonna make your offer better?

Well listen, that's it for this video. I hope it was helpful. And as always, if you need anything from me, give me a call, I look forward to seeing you next week and until then have a great day man. I really do move my hands a lot when I talk and I don't do this in real life.

It's just like a video. I don't know why. I guess. I guess I'm just self-conscious about standing like this and talking. Does this look weird if I talk this way? Hey, this is welcome to all things out to it with me. Ben barredo, your local real estate pro and relocation expert for east Tennessee.

It feels weird. Have a great day, guys. We'll see you next time.