How buyers are getting screwed in this market

Don’t be a sucker

I just had a friend of my son call to cancel his inspection for this week. I wasn’t upset about this. I think he (and wife and kids) probably dodged a bullet. How?

They were looking to buy a lake house on a small (but nice) lake in southern New Hampshire. They submitted the highest offer, around $400,000 for a home that sold for around $150,000 six years ago. Yes, the price went from $150,000 to $400,000 with no major improvements that I could see during this period. This was a lovely spot, but it was a small house, it was not winterized, and it came with a largely inaccessible crawlspace underneath.

So why did their offer get rejected? Well, as happens all too often in this crazy market, the seller took a lower offer as those buyers agreed to waive the home inspection and the septic inspection. Essentially, the seller didn’t want anything to interfere with the sale. So what if the septic is failing and costs $40,000 to replace. Not their problem anymore. For the buyers of this property, all I can say is “good luck”. Reportedly, there have already been deals fall through due to septic system problems. When you look at the site online, it is all flat and almost at the same elevation as the lake, I don’t see any way a septic system will work, at least not with any intensive usage. (Keep the guests from visiting, I guess).

Unfortunately, many (but not all) real estate agents are counseling their buyers to skip the inspection ‘if they want to get their offer accepted’. Great advice, huh?

My advice, to anyone reading this is: if you are going to seriously overpay for whatever you are buying, at least have a home inspection so you won’t get blindsided by the unexpected costs of failing or inadequate systems. This market won’t last forever…. you hope.