The reason to wave inspection is not to save money, but because the seller will refuse to sell to you if you don't. My father in law was offering to pay $5-10k over the next highest bid on a house he wanted to buy, but didn't get it because it he refused to wave his right to inspection.

Personally, the seller refusing to sell if you get an inspection is such a huge red flag I would never enter the contract. The house could be in a state where it should be condemned, and you wouldn't be able to tell.

There's no red flag. The seller doesn't demand anything. In a hot market they simply sell to the person who waived inspection.

For example, a house goes up for sale, three people bid within three days of the listing. Two of them for $300,000 with inspection waived, one for $300,000 with inspection not waived. The bid with inspection not waived is never even considered. It would be irrational for the seller to take the risk associated with the weaker bid.

Yes, that's still a red flag, at least to me. It's not my money though.

It’s not to save the inspection fee, it’s to win a bidding war on the house. Given two bids at the same price, sellers will accept the bid with fewer contingencies.

This is also why people offered all cash for a house even when mortgages were cheap (avoids the financing contingency).

Not worth it. Spending $200k (I know, I'm a good decade out of date on my house prices) on a house and then having to spend another $200k to make it habitable is a losing game.

Perhaps it's different if you're acting like an angel investor in housing, but for an average family, it's financial Russian Roulette.

We're getting off topic, but I have two points about waiving inspection:

1) In my state there's a mandatory seller disclosure. If the seller knew about a problem with the house and didn't disclose it on the seller disclosure you can sue them if you can prove they new about the defect and intentionally didn't disclose it, so there's at least that.

2) Home inspectors don't take legal responsibility if the inspection misses something important, they only offer to, at most, give you your money back on the inspection. So you have to be optimistic that the inspector has a clue what they are doing and can catch future problems when you rely on an inspection.

Buying a home while waiving inspection might be Russian Roulette, but I bet the odds are less than 16.7% that waiving inspection will financially kill you.