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10 Comments on "Home Inspection For Information Purposes Only" Hell no.
Good post. I agree, be honest and protect the integrity of the deal. Just don't try to get one over..
Frank: As I read your post it feels like I am missing something. One thing for sure, an inspection is not for information purposes ONLY. Sure we get them for the information AND to negotiate if there is anything substantially wrong that was not known at the time the offer was made. Sounds like in the situation you write about you were able to serve your client well by retaining $3,000 of the deposit ... hats off to you!
Must be very different in VA than in Texas. You pay for an option period here in Texas and it is the OPTION TO TERMINATE THE CONTRACT. For any reason or no reason at all and it is generally seen as a time to get your inspector to do your inspection and to negotiate repairs. However, even if you do not purchase an option to terminate (or option period), you can STILL have your inspector do an inspection...you just may not have a way to legally terminate the contract without losing earnest money.
Yes, in Texas the buyer, for some "consideration" (meaning money) can purchase a negotiated amount of time (usually 3-10 days) in which to have inspections done. At any time during this "option period" the buyer can walk away and get his earnest money returned. The buyer is out the cost of the option fee and the inspections, but that's better than ending up with a huge money pit of a house.
Hey Kathleen, I will make it more clear.
The Info Only in Virginia means that there is no Home Inspection contingency. No back and forth request for repairs.
Ron, Yeah that is how it should be done. The Virginia contracts probably aren't even legal because the buyer can inspect the place and walk away for NO REASON! Even if the home is perfect.
Frank
Lorrie, how much we talking? $100? $1000? I know it can vary, but I haven't a clue what that amount would be. Very curious.
The amount is negotiable. The seller wants as much as possible because it is non-refundable. The buyer wants as little as possible for the same reason. For lower priced houses, I recommend my sellers start at $50. On mid-priced homes, $100.
I aggree on dont sweat the small stuff. Bring it to attention if warrented, discuss and move on.
CONSIDERATIONS TO PREPARING INSPECTION OBJECTIONS
Although I don't get into making inspection objection recommendations to clients. When asked I always tell clients to work with their Realtor. However, I have developed some distinct observations as an experienced home inspector and former market analyst. The following generalized and categorized buyer mindsets with respect to how inspection findings are viewed/used by Buyers.
Expectations of Buyers vs. The Seller's Representation of the Home's Condition. -A real situation I just had with a client explains this well. The home was only a few years old, well maintained and decorated, and had the hardly lived in appearance. The Seller's flyer marketed the home as "better than new." My inspection found about a dozen issues to address, mostly maintenance type items and a couple of minor cost repair items with potential bigger consequences if not corrected sooner than later. The Buyer was not discouraged with the inspections findings. However, he stated to his wife (they were there with me for the entire inspection) that he (Buyer) wanted the Seller to fix everything. He was surprised the inspection discovered anything as the Seller presented his house as being defect free (the Seller stated, "I've maintained this newer home and you shouldn't find anything") and the flyer said "better than new." If you were the Buyer in this scenario, how would you respond? His expectations, as sold to him, were that the home was defect free and better than new.
Expectations of Buyers in a Buyers vs. Sellers Market - This one is self explanatory. Most Buyers are going to take advantage of market conditions and use it to their benefit. Why not? I thinks it's the Buyers (or Seller's) prerogative, depending on those market conditions. Wouldn't you?
Risk Tolerance Level of Buyers -This one I find few Realtors either fully understand or take the time to understand their client's position on risk tolerance. I use it to gage how I speak and interact with my clients in order to best communicate the inspection findings. We all have different risk tolerances and this is especially true when making a big, if not the biggest purchase decision and emotionally charged purchase of buying a home. The bottom line is some people want to eliminate as much risk as possible and others don't care as much. Where your client falls on this scale will help answer this blog's posted question. For example, a low risk tolerant Buyer with "minor" inspection items, yet with the potential to become a bigger problem regardless of likelihood of occurrence, is more likely to request the Seller correct the items or provide an allowance. I see this often, with the Realtor frustrated in trying to understand why the Buyer is being "nit-picky" or assuming the home inspector lead the Buyer to this position. Regardless, I find this to be a very common occurrence that could be a useful means for a savvy Realtor to come out as a hero for their client by simply understanding the client's level of risk tolerance.
Negotiation Savvy of the Buyer - Many Buyers just don't know what options they have or how the purchase inspection negotiation process works and are not the subject of this Blog question or discussion. However, other Buyer's are pretty sophisticated and actually look forward to using whatever inspection information they have to negotiate a better position with the Seller. This may include a strategy of asking the Seller for everything, sometimes even upgrades. Their approach is that they don't know what the Seller will do until they ask, so why not ask for everything as a starting point and make trade-offs from that point. I've often heard back from Realtors how they were surprised the Seller agreed to correct or make financial allowances as requested by the Buyer. I've seen banks with foreclosed properties under contract in "as is" condition give up concessions on repairs because the Buyer (or their savvy Realtor) simply asked for them.
Here's another noteworthy observation, investors may respond to inspection objections differently than a occupant home buyer. I've had investor clients occasionally ask me NOT to share the inspection report with their Realtor because they "didn't want the Realtor to interfere in their negotiation strategy."
Food for thought.
Contrary to popular opinion, Buyer Inspection Period is not an opportunity for a "free look". The Buyer must act in "Good Faith" when making a decision to cancel during the inspection period. Deciding they no longer like the floor plan doesn't count.....