Home Inspections Down, Housing Market Hot
MILWAUKEE – People looking to buy a home are sometimes offering tens of thousands of dollars over the listing price – and are still being rejected because they want a home inspection.
The hot housing market is leaving home inspectors cold.
For an idea of just how hot the housing market is right now, one could look at the hours a home stays listed or the bidding wars that erupt every time “for sale” signs go up. But the best perspective may be from inspectors.
“The new element is, this year, in order to be competitive, buyers believe they need to drop the contingencies from their offers,” said Steve Bast, owner of Four County Home Inspection Services.
Bast said business came to a crawl a few months ago, cutting his bottom line in half – the result of a seller’s market.
“They are skipping inspections. They are skipping appraisals. They are actually offering $10,000, $20,000, $30,000 above asking price,” Bast said.
Shorewest Realtor Sue Derby hasn’t seen anything like this in her 27-year career.
“Personally, I’ve had 10-15 offers on a listing. But I’ve heard stories of other realtors in other areas having as many as 20 and 30 offers,” said Derby.
Sellers are looking for the cleanest deal, oftentimes in cash.
“When a seller has so many offers to pick and choose from, they are looking at the least risk for them. Some sellers find a home inspection of being a risk,” Derby said.
Derby encourages all buyers to have a home inspection and has been negotiating contingencies for her clients.
“Say there is a foundation problem, maybe the buyer will say, ‘I will be responsible for $5,000 of that repair. If it goes over that, then I would try to negotiate with you,’” said Derby.
Derby doesn’t expect the market to slow down anytime soon. Inventory should level off by the third quarter, but she said it will remain competitive.