SIOUX FALLS, S.D. (KELO) — Over the past two years, the real estate industry in Sioux Falls and much of the country has seen more buyers than homes available for sale.
It’s meant a busy season for many real estate agents, but the market pressure is causing a major decline in a key component of the home buying process: home inspections.
“Your water heater is a little on the older side, probably about ready to be replaced,” Brian Shabino with National Property Inspections said.
It’s been a standard step in the home buying process for years.
“If you go two years back, I would say probably about 95 percent had home inspections,” Tony Bachman, a Real Estate Broker with Coldwell Banker Tony Bachman Group said.
But right now, the roughly 25 members of the Home Inspectors of the Sioux Empire are seeing a major drop in business.
“We all brought out our numbers, we are finding that we’re having 20 to 50 percent drop from previous years in the number of inspections we’re doing,” Shabino said.
That’s because more buyers are trying anything they can to make their offer stand out.
“If you have five offers in front of you and they all have similar price points, and one says hey, we’re not going to do any inspections…the sellers are going to say, let’s go with the one that has no inspection,” Bachman said.
But it’s a tactic that comes with a big risk.
“We have had clients call us and tell us the sob story that they passed on the inspection and now they have thousands of dollars of repairs,” Shabino said.
A typical walkthrough of a potential home reveals just what’s on the surface, but a home inspection allows a professional to look at every inch of the property in detail.
“We are going to get up on the roof, going to look at the shingles, the flashing on the roof,” Shabino said.
“We’re going to get in the attic, tell you if you bats are in the attic, we’re going to look at your foundation inside and out, we’re going to look at major electrical components, mechanicals, your furnace, water heater, air conditioner, we’ll run all of your appliances to make sure they’re running ok.”
All of it is designed to give buyers a better picture of what to expect if they move in.
“As part of the biggest investment you’re ever going to make, you kind of need to know how many more thousands am I going to spend in the next year, replacing a water heater, replacing a furnace. We’re trying to give you all of the information you need to make the right decision,” Shabino said.
To stay competitive and still have some protection, buyers are finding creative ways to make an inspection happen, whether that’s a post-purchase inspection or a basic walk through inspection, but real estate professionals say a full inspection done before the sale closes is really the best way to protect your investment.