Ready to purchase an investment property? What if you didn't know the home you were looking at was already an investor-owned or iBuyer owned property?
We already know buying a home is a huge financial investment, and why doing everything you can to ensure that investment is protected is important – right from the start.
This article is going to take a closer look at purchasing a residential resale home in a hot seller’s market from another perspective or angle that could affect a home buyer down the road.
Purchasing an iBuyer or Investment Resale Home
Having a residential home inspection is a homebuyer’s first line of defense. It can help you understand a property’s condition before purchasing it and highlight what you may need to invest in further down the road in maintenance and updates.
Even though the importance of a home inspection is obvious to many homebuyers – sometimes when purchasing a home to rent or flip you may not want to pay extra for the inspection. So, this article will reiterate the importance of home inspections when purchasing an investment property or iBuyer resale property.
Is there really a benefit to waiving that inspection in the long run?
Waiving a home inspection might offer an initial and slight advantage in purchasing a house faster or in a multiple-offer situation, but it could also lead to major challenges for the new homeowner later.
Refusing a home inspection means you’re relying on the seller's disclosures for crucial facts about the property. But what if that seller’s disclosure is not filled out with the ‘whole’ story? Or what if the seller decides to leverage their right to a Seller’s Disclosure Alternative?
Why should homebuyers be more wary of purchasing an iBuyer or investment resale home without an inspection – especially when a Seller’s Disclosure Alternative is being used – and especially with an As-Is addendum?
Homebuyers are not the only ones who find convenience in a fast sales market. Despite concerns of low inventory and housing transition timing caused by a fast turnaround, sellers appreciate the benefits the market provides in readying a home for sale in this market.
Many sellers are taking advantage of knowing low inventory means buyers are less likely to pass up a home-based solely on outdated décor, appliances, or utilities and opting to forego those updates before selling.
In fact, many are selling to iBuyers who then “fix-up” and resell the home at a higher profit margin. But why should a homebuyer be concerned about whether they’re buying the home from the original homestead owner or the investor who purchased the property, remodeled, and resold the home with a “move-in-ready” look to it? That Seller’s Disclosure waiver.
Have you ever heard the statement - “you can put a dress on it, but it’s still wolf”? – Do you understand what that means in terms of a flipped home? Just because you remodel a home’s interior with the latest colors, appliances, flooring, or cabinetry – doesn’t mean the utilities, the roofing, the windows, or the foundation is solid. But a home inspection can help.
It's a good idea to have a home inspection before buying a house – no matter the circumstance. And, if you explain your reasons for the home inspection; with the help of your REALTOR©, most sellers will not hold that against you in negotiations.
And, although an inspection may require additional non-reimbursable costs to you, ensuring the house is completely move-in ready or moving forward with your eyes wide open can save you money and heartache in the long run.
Do you intend to buy a house anytime soon? To avoid remorse, make sure you understand home inspection and how it works. Remember, buying a house doesn't only cost you money but the safety and security of your family. Make sure you protect that investment.