Some home buyers in Columbus are making risky bet to secure dream home after pandemic

The Columbus neighborhood was quiet with a few people out working in their yards as real estate agent Alecia Biggers stayed cool in her car, waiting for a client to have their home inspection done.

This was the second time she’d gone through this same process with her client: an expensive home inspection that could reveal problems with the home that was close to being sold. But she knew it was worth it in the long run.

Ben York drove up in a small, black SUV that displayed his Pillar to Post branding, advertising his home inspection business. Retired after 35 years of service in the U.S. Army, York understands how important attention to detail and efficiency is in his industry.

After York touched base with Biggers, he began walking around the exterior of the home. He examined the roof, and made the case for why home inspections are important for aspiring homebuyers.

“A home inspector will always pay for themselves because you are never going to find all the things that the home inspector is going to find,” York told the Ledger-Enquirer. “And you’re never going to know the things that they know.”

Although this is routine for York and Biggers, both know that low inventory and increasing home prices are causing an unexpected trend in a tough post-pandemic housing market . Since 2020, a higher number of buyers have decided to waive home inspections in an effort to secure a home.

‘No competitive advantage is worth taking all that risk’

Biggers began working in real estate about 15 years ago. She said in the past year and a half to two years, after the COVID-19 pandemic, she and other colleagues at All Star Realty encountered a growing number of clients opting out of inspections.

One reason for this is because buyers wanted to make their offers more appealing to sellers.

When there are a lot of offers for the same home, the first thing people will do is offer more and more money, York said. He’d recently experienced this as a seller himself. York’s property sold for $26,000 over the asking price.

“In a market like that, some clients will choose to skip a home inspection because the market is so hot they think they want a competitive advantage,” York said. “But no competitive advantage is worth taking all that risk on yourself because you don’t know what you’re buying.”

Housing inventory dropped sharply during the pandemic, and while it has rebounded since then, it has still not returned to pre-pandemic levels.

Home prices are still rising, compounding the issue. The average listing price in Muscogee County was about $215,000 in June 2019, and was $324,000 last month, according to data published by the Federal Reserve.

In response to the seller’s market, around 22% of home buyers nationally waived their home inspections in May, according to a report by the National Association of Realtors . That was a jump from 19% the previous month, but it was down slightly from 25% from a year ago.

A lot of people are also shying away from inspections because of the cost, Biggers said. This is another consequence of low inventory in the market.

“You’ve got so many people that want this house,” she said. “And then they pay money for the inspection, and (the house) goes to somebody else. Or somebody else out-bids them.”

A 2022 survey by Forbes found almost 40% of survey respondents who bought a home in the last five years felt the cost of a home inspection or locking in a lower home buying price were reasons to waive the inspection.

But being competitive or keeping the cost low are not the only reasons people may be choosing to opt out, said real estate agent Dionne Kitchen . She’s had instances of people who signed waivers because the property had previously been under contract, and a home inspection was done then.

“They want to use that report instead of coming out-of-pocket,” Kitchen said.

This could be a risky decision to make too, said Kenyetta Gosha, a lending specialist with NeighborWorks Columbus. When a buyer uses an inspection done by someone else, they don’t necessarily know who the inspector is, if anything was missed or whether the inspector might be friends with the seller.

“It’s just like when you’re in school,” Gosha said. “Don’t trust someone else’s notes. You need to go in and get your own person who’s there for you.”

What buyers can do in a hot market

The hundreds of dollars spent on getting a home inspection can save home buyers thousands of dollars down the road if major repairs are needed, York said.

“You don’t want surprises,” he said. “And you certainly don’t want surprises that cost you $5,000, $10,000, $15,000 or $20,000.”

Inspectors can tell buyers upfront if the HVAC system needs to be replaced or the roof is bad. If they choose to buy the house anyway, they’ll know what repairs they need to have in their budget.

Real estate agents also have other strategies to help ensure buyers close on a home without sacrificing an inspection, Kitchen said. They can try to have a quick closing date or increase the earnest money, she said. Another way to make an offer competitive is to offer option money.

“It’s saying, ‘If you take my offer, I’ll give you X amount of dollars,’” Kitchen said.

Offering sellers what they’re asking for is another good practice, Gosha said.

“Under-bidding is going to hurt you,” she said. “Nine times out of 10, they’re not going to choose you.”

That being said, Gosha is also not a fan of giving sellers more than the listing price either.

Homebuyers’ best tool is being educated about the real estate process, Biggers and Gosha both emphasized. NeighborWorks offers courses and other resources to help people learn more about the process and how to be successful when purchasing a house.

Inspections are important whether it’s for an old home or a new build, Gosha said. It doesn’t matter if the home is new or appears in good condition, she said, that doesn’t make it right.

“You will never regret getting an inspection,” Gosha said. “You will only regret not getting the inspection.”