At our Tuesday morning business meeting, a colleague raised a situation that comes up fairly often. Here's the scenario:
An offer came in on a condo listing, where the buyer waived the home inspection contingency. The sellers thought, "Oh! Goody!"
At the walk-thru the day before settlement, the buyer brought an inspector who went over all of the appliances and systems (heating, plumbing, electrical, etc.). And that evening, they sent an email with an attached list of everything the buyers wanted repaired before settlement the next morning. In lieu of repairs, they would accept a credit from the sellers, or they would ask the seller to escrow a good bit more than the repairs might actually cost, and anything not spent would be released to the seller.
The agents relayed the 2-page list of some real and some nit pick items. The sellers thought, "Yikes! Can they do that?"
So, during the discussion, another colleague said she always insists that a contract without an inspection clause must also include an "As Is" clause.
"But wait a minute!" I pipe up. "Without an inspection, how do you know what 'As Is' actually IS?"
Without an "As Is" clause, the sellers were required to do any repairs that were covered by the property condition paragraph, and in this area, that means systems and appliances have to work. And in our current market, you really don't have to fore-go an inspection to get an offer accepted.
So, this was the final consensus:
If you're dealing with no inspection and an "as is" clause, you probably have to use the property disclosure information as a benchmark for the condition of the house or condo as of the contract ratification date, and we all know that there can be problems that the sellers are unaware of.
Then we decided that if an offer comes in on one of our listings with no inspection contingency, ask the other agent to include one with a fairly short life span, say five days. (I've been known to counter an offer by adding an inspection.)
Even with the second option, the buyers could find a new issue at the walk-thru. It's just that there probably won't be a lot of issues, and they will be easier to resolve one or two leaking faucets than an entire last-minute laundry list.