I Overpaid for My Home, But It Ended Up Saving Me a Fortune
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- While looking for a house, my spouse and I found ourselves in a bidding war over a property.
- The competing bidder decided not to require an inspection — we chose to raise our bid by $8,000 instead.
- It worked out — our inspector overlooked a defect in the house, which made him accountable for the repair costs.
Before our relocation from Utah to my spouse Ian’s hometown in Kansas, we decided to hire a real estate agent And looked up properties in Kansas to understand the market and figure out our preferences.
Because of the highly competitive real estate scene, even in smaller towns like those found in Kansas, houses rarely remained available for more than a few days. We aimed to be ready, knowing full well that our preferred choices could sell out before we had the chance to make an offer.
Then we came across a mid-century home that we just couldn't pass up, even if we wouldn't be in Kansas for several more weeks. It was modestly sized, but it had a finished basement, a large back porch, original hardwood floors, a huge updated kitchen, and four bedrooms. It was truly a gem and we knew from our search that we were not likely to find another like it in our price range. Our real-estate agent allowed my father-in-law to tour the home, and Ian and I joined on a video call to make sure there were no glaring red flags.
Even without being able to see the house in person, any cosmetic issues we couldn't see on the video call would be worth it to have the features of this house while staying within our budget. And I felt secure that major issues would be caught by an inspector before closing.
We submitted our bid but ended up in a bidding competition.
We made a risky and somewhat unconventional decision to put an offer on the house almost sight unseen. The longer the day stretched waiting to hear if it was accepted, the more attached I became to the house we'd only seen virtually and in photos.
Towards the end of the day, we learned that another family had submitted their bid for the same house, with one that was nearly as competitive as ours. I felt my spirits drop—we would now have to participate in a bidding war If we wished to purchase our house, our competitors reacted promptly. They chose to maintain their original bid but opted out of conducting an inspection prior to finalizing the sale. By doing so, they took a chance that the property wouldn’t have any hidden issues related to structure, plumbing, or other potential undisclosed defects for which the seller could be held responsible.
My husband and I discussed whether this was a risk we were also willing to take, and ultimately, we could not take the chance that a home we'd never even seen before would also not have any big problems. Instead of waiving an inspection, we offered to pay more than the appraisal price — $8,000 more. As our mortgage lender If they only lend us funds based on the home's appraised value, we would have to cover the rest out of pocket ourselves. down payment .
Our home inspector missed a crack in our foundation, but he was financially responsible
The sellers agreed to our bid, and we were set to become homeowners with almost all of our desired features. After arriving in Kansas, my spouse joined an experienced inspector for a look at our future abode. Initially, it seemed perfect just as we had envisioned. To our relief, the inspector did not discover any hidden issues.
Perhaps for a moment, we wondered if we should have also waived our inspection and saved that money. But we reassured each other that we had done the responsible thing by deciding to pay more money instead. And we were absolutely right.
After just seven days of living there, Ian found himself in the uncompleted section of their basement, which housed the laundry facilities. While down there, he spotted light seeping through a fissure in the concrete wall and observed an opening close to the basement window, suggesting that pressure from the soil outside had caused the foundation to shift.
Although Ian has received no training in construction whatsoever, he home inspection , he knew this was a problem. In fact, while we were buying our house, a relative was having a similar foundation problem repaired to the tune of $15,000. Ian called the inspector we had hired and asked him to come back to take a look.
It’s worth noting that upon the arrival of the inspector, who noticed the gap, he promptly admitted to overlooking this problem during his initial assessment. The oversight involved neglecting to examine the exterior base of the structure, which revealed an unintended void between the foundation and the soil—a typical aspect of property inspections that remained unaddressed here. Thankfully, the inspector offered to bear the expenses for reinforcing the foundation himself; moreover, should the extent of the harm prove significant, they assured coverage under their policy would secure the purchase price of our residence.
- Check today's average mortgage rates and discover more about how much home you might be eligible to purchase.
We feel relieved that we chose not to skip the home inspection.
Although our inspector committed a significant error, it is fixable, and I genuinely cannot determine whether being aware of it would have altered our choice to proceed with buying the house. Despite this, since my spouse noticed the issue with the foundation instead of the inspector, assigning contractual responsibility to an independent third party meant that we did not bear the expense of repairs.
In today’s challenging real estate market, it might feel compelling to do everything possible to stand out as a desirable buyer. Skipping the home inspection could appear to be a practical method for beating competing offers without raising your spending at settlement time. It's likely that some individuals take this gamble and succeed. However, unless you possess ample funds ready to tackle any issues found post-closure, foregoing the inspection ought to remain off-limits.
I recommend that first-time homebuyers set aside slightly more funds than they anticipate needing for their down payment. This extra savings will allow them to submit a stronger financial offer without jeopardizing their safety and security in their future residence.
The initial publication of this article took place in April 2022.
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