As I am writing this, the current market has gone crazy for the seller, which leaves buyers scrambling in this highly competitive market to land their dream home. Bidding wars which escalate to thousands of dollars over the original asking price are commonplace. Becoming pre-qualified is a great tool, but many are still losing to buyers that are cash ready to make the deal. One of the last bargaining chips is "We'll take it as is, no contingencies, no home inspection!" That's not a gamble I would be willing to take, and neither should you.
Money Pit
As a home inspector, I actually have received a few calls that go something like this:
"Hello, Dream Home Inspections, David Maddox."
"Yes, hello, I would like to see if I could schedule a home inspection."
"Sure, I can help you. What is the time frame we have?"
"Well, any time is ok. We've already bought the house, we just wanted to see what we bought." Oh dear. Fortunately, for my clients, I've not come across anyone that has bought the proverbial money pit, which could lead to financial disaster. Knock on wood.
Informational Inspection
In the very least, when there is a no contingency clause, insist on an informational inspection. You will get the same exact service you would on a regular inspection, but there is nothing on the seller to repair or fix any of the issues uncovered by the home inspection. This helps to alleviate some of the worry over the home, as well as highlight some of the issues that the buyer may already be aware or suspicious of. I have personally uncovered a couple of issues that actually concerned the seller, and they actually helped to resolve or fix the issue themselves. Some have even offered a credit for the cost of the repair. Many homeowners still care about their home, even though they are selling it.
Other Options
Beside being pre-approved, what are other options available to help you land your dream home?
If available, increase the amount of your down payment. This sends the message to the seller that you are serious about their home. Adding an escalation clause in the offer will also keep you one step ahead of the other prospects. This will eliminate the back and forth negotiating between competing buyers. You give them your highest bid, with the option to bid a certain amount over the highest offer.
An example: You finally find your dream home, and it's priced right at $250k, but find there are people lined up eager to make an offer. Tell your agent you are willing to bid $1000 over the highest offer, with a high offer of $265k. This is just an example of how it works; your agent can best steer you with this tactic to win your home.
Hang in there
Best advice I've received, and given, is just to hang in there. I've lost count of the number of clients I have had that tell me they lost X number of bids, but realize the home they landed is truly the home they were meant to have. Be prepared, trust in your agent (but do your own homework as well), and do not skip the home inspection. The best surprise is no surprise.