So you aren't wasting your money on a house that you are going to have to spend thousands and thousands to repair once you buy it!! Why in the heck do you THINK people make these offers contingent? It's certainly not a negotiating tool--it's a SAFETY measure. Who wants to pay $250K for a house they can't live in because of mold, asbestos, foundation issues or septic problems? A professional home inspection is simply a SMART way to make sure you're getting your value from the money you're spending.
So that the seller will pay for whatever repairs the inspection finds are needed, or you can get out of the contract if the seller won't pay for needed repairs.
To make sure you know what you're actually buying and that you're truly ok with the condition of the house. Even if you're buying a home in "as-is" condition where the seller won't be making repairs, a thorough inspection gives you an idea of what you can reasonably expect once you start making repairs. It will also let you know about things to be aware of, even if they don't need to be fixed.
For example, let's say the house you're looking at has had significant foundation work. The work is done. You don't need to fix anything. But now, knowing that, you can ask the seller for any warranty paperwork for the work that was done. Same with other major components like an HVAC, the roof, or the siding. Having that knowledge is useful, whether you leverage it for negotiations or not.
Caveat emptor; Buyer Beware. To make sure that you are buying a house in a condition that the seller is pretending, so you don't get caught with hidden defects. That is actually the reason you should get the inspection, making the offer conditional to an inspection is so you can get out of the contract to buy if the product is a lot different from what it seems to be in terms of quality. If you make an offer without that condition, you are bound to the offer.
It is a lot wiser to say "I'll buy at this price if it turns out that the product is in as good a condition as you tell me it is"' than it is to say "I'll take you word for it." It could be a very costly difference. Of course, if you don't care about money and losing lots is not a problem for you, feel free to just go in blind.
Basically, an offer to purchase is a legal contract. You have to fulfill the contract or suffer penalties. Offer contingent on inspection gives you a legal way out of the offer if the property is not as the seller has indicated.
So you don’t buy a house that’s over inflated. Unless you’re using your money and not a loan, the bank will get an inspection before it will let you take out a loan.
Until you pay off the loan, the bank owns the house so it wants to make sure that it’s a good investment. If you buy the house and finds out that it’s built on swamp land, the foundation is deteriorating, and it’ll take a million to stabilize the land, build a new foundation, etc. Why would you continue to pay back the loan when the house is worth nothing.
Answers & Comments
So you aren't wasting your money on a house that you are going to have to spend thousands and thousands to repair once you buy it!! Why in the heck do you THINK people make these offers contingent? It's certainly not a negotiating tool--it's a SAFETY measure. Who wants to pay $250K for a house they can't live in because of mold, asbestos, foundation issues or septic problems? A professional home inspection is simply a SMART way to make sure you're getting your value from the money you're spending.
So that the seller will pay for whatever repairs the inspection finds are needed, or you can get out of the contract if the seller won't pay for needed repairs.
so that the buyer doesn't get stuck with a big repair shortly after closing.
So you don't buy a house with a major, expensive problem with it.
To make sure you know what you're actually buying and that you're truly ok with the condition of the house. Even if you're buying a home in "as-is" condition where the seller won't be making repairs, a thorough inspection gives you an idea of what you can reasonably expect once you start making repairs. It will also let you know about things to be aware of, even if they don't need to be fixed.
For example, let's say the house you're looking at has had significant foundation work. The work is done. You don't need to fix anything. But now, knowing that, you can ask the seller for any warranty paperwork for the work that was done. Same with other major components like an HVAC, the roof, or the siding. Having that knowledge is useful, whether you leverage it for negotiations or not.
Caveat emptor; Buyer Beware. To make sure that you are buying a house in a condition that the seller is pretending, so you don't get caught with hidden defects. That is actually the reason you should get the inspection, making the offer conditional to an inspection is so you can get out of the contract to buy if the product is a lot different from what it seems to be in terms of quality. If you make an offer without that condition, you are bound to the offer.
It is a lot wiser to say "I'll buy at this price if it turns out that the product is in as good a condition as you tell me it is"' than it is to say "I'll take you word for it." It could be a very costly difference. Of course, if you don't care about money and losing lots is not a problem for you, feel free to just go in blind.
Basically, an offer to purchase is a legal contract. You have to fulfill the contract or suffer penalties. Offer contingent on inspection gives you a legal way out of the offer if the property is not as the seller has indicated.
So you don’t buy a house that’s over inflated. Unless you’re using your money and not a loan, the bank will get an inspection before it will let you take out a loan.
Until you pay off the loan, the bank owns the house so it wants to make sure that it’s a good investment. If you buy the house and finds out that it’s built on swamp land, the foundation is deteriorating, and it’ll take a million to stabilize the land, build a new foundation, etc. Why would you continue to pay back the loan when the house is worth nothing.