Buyers have heard time and again from their real estate agents that they should have a general home inspection before purchasing a property. But what about a mold inspection?

Recently, one of my buyers made an offer on a home with a finished basement. (Because basement homes are not common in North Carolina, when I do see them, I automatically have concerns as to whether they are sealed/waterproofed properly.)

While writing the offer for my client, my gut instinct told me add in the contract that the home must be insurable. (I was aware that if the home was identified as having mold that some insurance companies may be unwilling to provide insurance for the property. Also, if a home has had too many claims, the home might be deemed uninsurable, as well.) In North Carolina, there is an addendum called Insurance Availability/Affordability Addendum, which can be attached to the Offer to Purchase and Contract.

I also ordered a Mold Inspection. It turns out that my client's property did have mold AND his insurance company, a large, well-known national organization, refused to insure a property. The agent informed us in writing that even if the mold was "remediated" the company would not insure the property!

We terminated the contract, and my client received his $2,000 earnest money deposit back in a timely manner. The return of earnest money is often a sticking point when the deal goes south. Buyers and Sellers often end up in Small Claims Court to resolve the issue. (A home inspector I use often recently testified in court relating to earnest money. From what I understand, this is common.)

In short, as agents trying to protect our clients, we can:

1. Not ignore our gut instincts. Advise clients to get a mold inspection if you think the property may have a mold problem. We are the clients' eyes and ears. They pay us to protect their investment and hard-earned cash.
2. In North Carolina, include the Insurance Availability/Affordability Addendum with our Offer to Purchase and Contracts. If the property is not insurable or if the rates are more than 150% above the base rate, then clients have an "out".

I'm sure glad I listened to my inner voice!

Darleen

darleen@darleenmc.com

Disclaimer: Opinions expressed by those who are part of the ActiveRain community, including those providing comments relating to this blog, are their opinions and their alone - and do NOT reflect the opinions of Darleen McCullen and Keller Williams Realty. Darleen McCullen and Keller Williams Realty are not responsible for the accuracy (or lack thereof) or content provided by others.