Inspections, offers, help...

[lo]

I live in a Victorian neighborhood that is mostly small cottages (what we have currently). We’ve wanted a bigger house for awhile now but have been limited because we are committed to staying in this small and specific neighborhood and there are very few larger homes that don’t come on the market frequently. Anyway, our neighbors offered us first dibs on their big and beautiful Victorian before they put it on the market in the spring. The price is very reasonable and we’d be willing to pay it, as long as the inspection came back ok. It does need a lot of work and updating. We have some room in our budget for that, so again, we would move forward as long as the inspection didn’t have any huge issues.

My question is, should we do the inspection before we put an offer in? I read that inspecting before an offer can be a good idea for older homes when major issues can be hidden and then revealed during an inspection. And then you can either walk away or put a lower offer in. The reasoning for doing an inspection before rather than just making an offer contingent upon inspection and then asking for money back or whatever, is that buyers are much less willing to come down in price after theyve accepted a potentially much higher offer. My husband thinks that reasoning is dumb and definitely wants to put an offer in contingent upon inspection and ask for money back or repairs if major issues come up. He also wants to put our house on the market BEFORE we offer which I’m really against, since that could be a crazy amount of time, stress, and money for nothing if the inspection is bad.

[k3am]

I live in an area where sellers get an inspection prior to putting their home on the market and it's really helpful in determining what price to bid. I vote get an inspection before making your offer. Especially because it's someone you know and I think it's harder to negotiate with that in the mix.

Since it sounds like a friendly-ish circumstances, would they accept your offer if your home hasn't sold yet? Again, my market is super competitive, so that would rule us out, but yours my vary... plus you have the fact that they're willing to sell to you without putting it on the market, so that might give you some additional flexibility.

TL:DR: My preference would be inspection before offer, and get your offer accepted before listing your home (assuming the sellers would accept that).

[mrs.jacinthe]

So, you need to sell your house to buy this one, right? Keep in mind that a contingent sale can take months, depending on your market. Make sure they're comfortable with that and not in a hurry. Also, include the sale of your home as a contingency in any offer you make. Also, talk to your loan agent ahead of time - pre-approval makes you a stronger buyer.

That said, either option for your inspection scenario is an option. I always recommend sellers get inspections (and either do major work or price accordingly) prior to listing, but you can always negotiate a price change or walk if you're under contract if the inspections reveal something unfortunate, provided you include an inspection contingency.

If you have more questions, feel free to pm me.