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Don't trust, do verify

By
Real Estate Agent with HomeSmart Realty West CalBRE #01458572

I was recently talking to another Realtor about "as-is" sales. She said that she never recommend a home inspection on such properties because the seller, usually a bank, isn't going to repair anything. It was obvious that she was using the home inspection solely as a negotiating tool for her Clients, which is not truly what a home inspection is for.

I explained to her that a home inspection is simply a piece of paper that documents the condition of the property so that the buyers don't get into a "Money Pit." Just because the seller isn't going to repair anything doesn't prevent the buyers from canceling the purchase contract and go looking for a better property for them that if there are too many problems uncovered by a good, thorough home inspection.

Imagine if you specifically recommended not getting a home inspection and major problems occurred after close of escrow. Who do you think those buyers are going to call, possibly even sue for professional negligence, notwithstanding the fact that they might have signed an inspection waiver.

Realtors are hired to provide advice and negotiating skills, and the wrong advice can be construed as professional negligence in our San Diego courts, as one can see if one follows court cases like my Partner and I do.

Banks, mortgage companies, and probates that are owners and have not lived in the property, as well as landlords in certain circumstances, are typically except from transfer disclosures, so on an "as-is" property, don't trust, do verify.

I think I helped her see the error of her ways, so to speak.

Comments (8)

Suzanne Champion
N.J. Realty - Westerville Ohio - Columbus, OH

Wow.  I wouldn't want to be buying with an agent like that!  You're right, she doesn't get it.  That is the buyer's way to protect themselves and get out of a contract if major problems are found.

You are also right in that an inspection is not for the purpose of renegotiating a price.  At that point the buyer's options are thumbs up, thumbs down, or write a new offer and risk someone else getting in front of them.

Sep 21, 2008 06:14 AM
June Piper-Brandon
Coldwell Banker Realty - Columbia, MD
Creating Generational Wealth Through Homeownership

Oh My!!  I wouldn't want to entrust my clients to an agent who didn't recommend a home inspection in every situation.  Like you said, what if there were major mechanical or structural defects?  I write into my contracts that the home inspection is for information purposes only, however, should the inspection reveal major mechanical or structural defects the buyer reserves the right to withdraw from the contract without penalty or renegotiate the terms of the contract.  This protects them against losing their deposit for non-performance. 

Sep 21, 2008 06:21 AM
Pamela Knight
Urban Knight Enterprises, Inc. - Phoenixville, PA

Practicing due diligence is a must.  It always troubles me how people fail to see the importance of getting home inspections performed. 

Sep 21, 2008 06:34 AM
Don Fabrizio-Garcia
Fab Real Estate - Danbury, CT
Owner/Broker/Trainer - Fab Real Estate

That agent is a lawsuit waiting to happen.  Always recommend a home inspection!

Sep 21, 2008 06:35 AM
Sidney Kutchuk - Realty Works Temecula Kutchuk - Realty Works Temecula
Realty Works Temecula - Temecula, CA
Realty Works Temecula

That agent needs a risk management class ASAP!

Sep 21, 2008 09:39 AM
Jeff Vogan
Vogan Home Inspections - Moberly, MO

Jim, I wish you would come to Missouri and explain your statement that a home inspection is not a "negotiation tool".  I see it used all too often for that very purpose!  In one county in my coverage area, no one gets home inspections.  They simply have their clients sign an inspection waiver at closing just like it is part of the normal routine paperwork.  Most people never even know they signed it.  All the RE agents simply tell me "we tried home inspections a few years ago, but we don't do them any more"!  UGGGGGGG!

Sep 25, 2008 09:45 AM
Scott Mazza
Stewart Title of California - Ventura, CA

Absolutely Jim. This is happening all of the time and you should be protected.

Sep 29, 2008 01:31 AM
Joel Weihe
Realty World Alliance - Wichita, KS
Helping you to use your VA home loan benefits

Wow. I always recommend a home inspection.  For an as-is, definitely, for several reasons:

  1. document condition at time of offer/purchase
  2. making sure property is as the buyer expects - hidden defects, money pits, structural problems - finding all those things that we couldn't.
  3. And yes, based on above, possibly for a price reduction if it's a lot more than we were expecting and the buyer still wants in.
  4. It makes a swell honey-do list!

My buyers always start laughing at the last, but it's true.  They keep that copy and can make sure they get all those things taken care of, so they're less likely to have money-pit syndrome by fixing one thing and having something unexpected constantly breaking. 

Oct 11, 2008 01:46 PM