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 repairs.
In the weeks before our move from Utah to my husband Ian's Kansas hometown, we hired a real estate agent and searched for homes in Kansas to get an idea of the market and what we were looking for.
Due to the competitive real estate market, even in small-town Kansas, homes only stayed on the market for a matter of days at most. We wanted to be prepared, but we knew anything we liked would be gone by the time we were in the state.
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 a bid—and ended up in a bidding competition.
We took a bold and unorthodox step by placing an offer on the home without seeing it in person. As the hours passed awaiting confirmation, my attachment to this property grew stronger despite having only viewed it online and through photographs.
Toward the end of the day, we were told that another family had also put an offer on the house and it was very close to ours. My heart sank — we'd have to engage in a bidding war If we desired our house, our competitors reacted promptly. They wished to maintain their original bid but opted out of conducting an inspection prior to finalizing the deal. Choosing to take a chance, they assumed the property had no hidden issues like structural defects, plumbing troubles, or other unforeseen concerns for which the seller could be held responsible.
My spouse and I talked about whether we were ready to accept this potential risk, and finally decided against it. We didn’t want to gamble on a house we hadn't even laid eyes on possibly having significant issues too. So rather than skipping the inspection, we proposed paying above the appraisal value—adding $8,000 extra—to secure the property. mortgage lender If they only lend us funds based on the home’s assessed value, we would have to cover any shortfall ourselves. down payment .
Our home inspector missed a crack in our foundation, but he was financially responsible
The sellers accepted our offer, and we were on our way to owning a home with virtually everything we wanted. Once we were in Kansas, my husband accompanied a professional inspector into our home-to-be. On the surface, it was exactly as we expected. Even better, the inspector didn't find any underlying problems.
For a brief moment, we might have questioned whether we should have skipped the inspection and kept that cash. However, we comforted one another, confirming that opting to spend more was indeed the prudent choice. We knew then that we had made the correct decision.
Within just seven days of settling in, Ian found himself in the uncompleted laundry area of our basement. There, he spotted light seeping through a fissure in the cement wall and observed an opening close to the basement window, which suggested that soil pressure had caused the foundation to shift.
Although Ian has received no training in construction whatsoever, home inspection He recognized this as an issue. Actually, when we purchased our home, a family member faced a comparable foundation problem that cost them around $15,000 to fix. Ian contacted the inspector we had enlisted and requested that he return for another inspection.
It’s worth noting that upon the arrival of the inspector who noticed the gap, he promptly admitted his error for overlooking this problem. He had neglected to examine the exterior edge of the foundation, which would have revealed an opening between the base and the earth. Such scrutiny is typically expected during a property assessment, yet we remain puzzled as to why he bypassed it. Thankfully, the inspector committed to covering the expenses required to reinforce the foundation. Additionally, should the harm prove substantial, he assured that his insurance policy would purchase our residence from us.
- Check today's average mortgage rates and discover more about how much home you might be able to afford.
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've altered our choice to proceed with buying the house. Even though my spouse noticed the issue with the foundation instead of the inspector, assigning contractual responsibility to an independent third party ensured that we weren’t liable for covering the repair costs.
In today’s challenging real estate market, it might be alluring to do everything possible to make your offer stand out as a serious contender. Skipping the home inspection could appear to be a practical method for surpassing competing bids without adding extra funds at settlement time. It's likely that some individuals assume this gamble will pay off. However, unless you possess ample resources to tackle any issues that surface post-closing, foregoing the property inspection ought to remain non-negotiable.
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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