Short sales are difficult process both from the sellers side as well from the buyers side. It usually take a long, long time for the lenders to respond and then you don't know if your offer will be accepted by the lender at all. You might be wasting your money (which can be several hundred dollars) doing inspection before you put in an offer (and much before your offer is accepted by the lender).
And as Chris said, the lenders usually do allow for inspection period after the offer is accepted. Although you might not get credit back but you will have a chance to back out of contract if there are major problems with the house.
Gail Hughes Galli
Some banks will make statements like "bank will not negotiation on inspection".
More of a take it or leave it attitude... However do not hesitate to ask them to pay if the deal requires it.
Even though they say "no negotiating"... they will most of the time!
It is no wonder so many short sales do not close when Realtors give out poor advice like this to people. Once a lender approves a short sale it is rare that they will renegotiate based on home inspection issues.
As a buyer why would you want to take yourself out of the market for months to begin with only to find out you don't want the house?
From a seller's perspective it is an absolute no brainer. On any short sale I am listing the buyer has to do their inspection up front like they would in any other transaction. Waiting until after lender approval could put the seller in grave risk of being foreclosed on if the transaction falls apart There is a reason why every short sale I have ever listing received short sale approval. This is over the last 5 years!
I suggest you read the article I provided as a reference.
Is it most common to put in an offer contingent on an inspection?
YES put in the offer contingent on inspection and loan etc.
If you are willing to spring for the inspection, you could have ANY home you are looking into inspected before making the offer. It would be a wise decision to make sure you don't waste your time waiting for approval on an offer only to find out the home won't pass inspection and you are back to square one with lots of wasted time behind you. However this also equals money spent that you will not get back. Our short sale paperwork ensures that contract time periods (ie for inspections and financing) do not start until AFTER there is approval from the lender on the offer.
On the other side of the equation, keep in mind that with longer waiting periods from the lenders, a lot can happen to your property in the interim, roof leaking, mold developing (especially if empty and utilities off), break-in and theft of appliances, piping etc. So now you could potentially have a property that will not appraise well and you will still be stuck with wasted time. At least a pre-offer inspection could tell you if these sorts of problems are more likely to occur in the home while you are waiting for lender approval and you have a little more peace of mind in your purchase choice.
It all depends on how much value YOU perceive in making the inspection up front!
Most contracts which are short sales will contain clauses that the seller will not perform any repairs and there will be not credits, but inspections may be performed and the buyer's right to terminate the contract in accordance to the inspection provisions remains.
Nearly all offers allow time for the buyer's contingency periods for loan appraisal, approval, inspections. It is the buyer's right. It is expected that the buyer is writing the offer subject to/contingent on an inspection.