Outside of the Bay Area, and maybe a few other especially hot real estate markets, I’m sure that isn’t true.
I’m in the process of buying a home in Washington and my agent says she’s never had a client waive the inspection contingency unless they’re buying a cheap fixer-upper to flip.
I’ve participated (as a bystander, thank goodness) in some recent home offers in Washington where all contingencies (including inspection and financing) were expected to be waived if you wanted to win the bid. These were neither cheap nor fixer-uppers, but they were in central Seattle.
Edit: Also, the expectation was auto-escalating offers, eBay style. The owner set a date to take offers and picked the best one.
Buying in a developed city in the U.S. has historically been a different set of concerns than buying rural. One could generally assume that the environment is managed by the city and state, so that floods would not reach your home and wildfires would be stopped at the city limits; insurance was for accidents and freak events (hailstorms, quakes, electrical fires). Due to both developmental sprawl and the decay of state and federal infrastructure, one can no longer assume a home is in such a controlled environment so, buyers (and insurers!) have some lessons to learn.
A good example of the kind of change I’m talking about is development in 100-year flood plains in Houston[0]. 30 years ago, a naive home buyer would not have had to worry about it, because flood plains were off limits. What changed? Greedy developers? Ignorant planners? More population? Perhaps all of it. But now you have to be educated to make the right call.
30 years ago, building in flood plains had been an established routine for decades in Texas, and all over the United States.
Using Houston as an example, 50 to 100 years ago it was the norm to bring in fill dirt from other regions, flatten and grade a piece of land, and construct a gridded residential neighborhood with total disregard for natural drainage. Flooding was dealt with by artificially channelizing bayous and streams, which is why Houston's urban waterways look so unnatural. Many of these older neighborhoods along the gulf coast were unsustainable and are not being rebuilt after hurricanes.
Starting around 30 years ago, local, state and federal policymakers started to get a clue. Neighborhoods were more commonly build to accomodate the drainage patterns -- this is why developments from the 1990's, 2000's tend to have large retention ponds, (example: https://www.google.com/maps/@29.5517845,-95.4295706,3a,75y,2... )
This was definitely the case a few years ago in Seattle. The understanding was that homes would be on the market for a week and any inspections prior to waived-contingency bids would happen during that week. Everyone knew the offers were all as-is.
Aside from the stress of weekly rushes to view, inspect, bid, and bid-up, the process primarily compressed the entire process into a short period of time. The biggest inefficiency was that essentially all buyers were forced to become journeyman experts at the compressed-time process.
It is a frustrating experience. My market is starting to develop into this, in large part because of Seattle buyers flooding inland. That said, it is better than some of the alternatives. There are other highly-competitive markets where houses just never come on the market - instead they get sold in pocket listings and the only way to buy a house is to canvas a neighborhood or be in tight with an agent who is farming neighborhoods. It's ideal if houses actually come to market, the market can decide the value, and it's supply / demand that is making it possible for houses to be sold on such a short time-table. It's a better dynamic all around though than having houses sit, potentially vacant, for months and months and/or increasing the challenges where buyers want to move and may even have a house under offer but can't get their current house sold. Liquidity in the housing market is ultimately a good thing for buyers and sellers.
Agreed. Liquidity is good. The pocket listings may not be optimizing price for the seller, though they may minimize hassle.
It seems like it is healthiest for homes to be on the market for about two weeks. Part of the trouble with short-duration listings is that it is a high-stakes version of the optimal-stopping problem. I think a little more holistic visibility into the market's offerings might yield better matches between buyers and homes.
Choosing an abode for the next few decades amidst weekly auto-escalation bidding wars just doesn't seem healthy for the future dwellers.
There is no way I'd buy anything rural without extensive inspection of well and septic, foundation, property, etc.
In the last 15 years I've purchased in both Toronto and in rural Ontario with the full set of conditions; financing, inspection, etc. As a buyer I simply won't do it otherwise. We have a 6 acre hobby farm near Hamilton.
But I also just don't bother to go look at properties with language in the text like "Accepting offers on...". We won't play the multiple offers game. In Toronto maybe this is the only way to get a home, but we were able to avoid it there back in 2005 by just hunting in areas that weren't "cool."
My experience is there's always almost other places that come up, where the seller has more scruples.
We might sell our hobby farm soon. I would fully expect any potential buyer to demand inspection.
Real estate agent here, can confirm inspection contingencies are very much so a market and individual house decision. I'd also say it depends a lot on the buyer. For example - first time buyer, I'd always encourage them to do an inspection as they are going to learn a lot about being a homeowner from the experience. Someone who has a number of investment properties and knows houses inside and out? They might be able to get all the info they need with just a walk-through.
As I understand it, in competitive urban markets it has become common for sellers to do a pre-inspection and then sell / provide that info for interested parties. This potentially makes for a faster sale and may create a more competitive situation if more potential buyers see less risk in the condition of the house and are willing to make an offer. But, at least in my state, anything a seller learns about the condition of their home must be disclosed so this could also backfire.
Any time you can remove a contingency in a competitive situation it will be a potential advantage, but caveat emptor all day long - sellers seldom have a complete understanding of their home and property so it is to the buyer's best interest to do everything they can to inform themselves before completing the purchase.
We lost a bid on at least one house in Washington, DC, back about 2004 because we had an inspection contingency and another party didn't. Maybe we'd have lost it on an escalation clause the way things were back then.
I’m in the process of buying a home in Washington and my agent says she’s never had a client waive the inspection contingency unless they’re buying a cheap fixer-upper to flip.