Special offer

Do I need to see the interior of a home before making an offer? No fear!

By
Real Estate Broker/Owner with Metro Life Homes RS-78439 / BRE #01708344

Do I need to see the interior of a home before making an offer?

The answer:  No.

It's called writing an offer "Subject To Inspection"

How do these "Subject To" offers usually transpire?  Well, they are very common among investment properties that are tenant occupied.  I write these kind of offers for my clients all the time.subject to offer

The usual structure and premise of the offer is that it is coupled with an addendum to the contract that states the buyer has the right to revise or rescind the offer after viewing the interior of the property.

With investment property (and sometimes non-investment property), for the seller it creates a barrier of qualification that only allows serious buyers into the arena.  In the case of investment property, it usually is a big deal to make arrangements with the tenants to let someone into the property.  Not only does it take the cooperation of the tenant, but in most states there are legalities surrounding the entrance to the property and the proper time period of notification to the tenant in advance.

In the case of non-investment property, there are certain scenarios that would make sense.  Perhaps the property is going through renovations, or the owner of the property is out of town for a while.  In these cases, it is possible to negotiate an offer and a possible acceptance before the buyer actually sees the interior.  But once again, there will usually be language in the contract stating the buyer has the right to revise or rescind the offer after interior inspection.

Here's a sample of a simple addendum which covers this type of offer:

I've seen this scenario on occasion on owner-occupied properties.  Sometimes it makes sense, and sometimes it's just ridiculous.

Here's something to consider:  Many buyers are afraid to do it.  And because of that, writing an offer Subject To Inspection may end up working to your advantage.  It's along the lines of the theory that whenever most people are running one way, you should probably be running in the other direction.  Whenever you're writing an offer Subject To Inspection, you can do it fairly fearlessly as long as you have the correct language in the contract.

No fear!

 

 

 

 

Ralph Gorgoglione


Los Angeles Homes For Sale

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Comments(47)

Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

When inventory is as low as it is between San Francisco and the Silicon Valley, it's tough to have any contingencies in a contract at all on residential properties. Investment property is a different animal, and that is a sound tactic, even here.

Jan 07, 2014 12:31 AM
Ric Mills
Keller Williams Southern Az - Tucson, AZ
Integrity, Honesty, and Vast Real Estate Knowledge

Always a good idea if you like what you see on line and it has the qualities you are looking for.  if you wait, it may be gone.

Jan 07, 2014 12:32 AM
Jim Beitz
Keller Williams Success Realty - East Layton, UT

I've only done business in Utah and have never written an offer that wasn't subject to inspection.  Inspection and appraisal/finance are the two things every offer I've ever written have been subject to simply because it would be impossible for a buyer to see all they needed to see walking through the house, and if the inspector finds something the buyer doesn't like they're free to walk away and keep on looking.

Jan 07, 2014 12:54 AM
David Demangos
Keller Williams Realty Carmel Valley / Del Mar - San Diego, CA
REALTOR

I have written offers w/out seeing also and had great results!

Jan 07, 2014 12:59 AM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

The only way I will advise a seller in Sacramento to accept such an offer is to reserve the right to leave the listing in active status, pending rescission in MLS and take backup offers with first right of refusal. No way would I suggest taking a home off the market simply to accommodate a showing, especially if showing the home is simple to do. But then I mostly work with sellers and not buyers.

Jan 07, 2014 01:00 AM
Ralph Gorgoglione
Metro Life Homes - Palm Springs, CA
California and Hawaii Real Estate (310) 497-9407

Just want to clarify something peeps:  On a non-investment property, my suggestion to write a "Subject-To" offer are for circumstances when you cannot get a normal viewing on the property for whatever odd reason.

I recently had a client interested in a property where for whatever reason I was not getting any response back from the listing agent on showing requests.  As a result, we wrote on offer subject to inspection.  As it turns out, the end result of me sending in an offer was that I was finally contacted by the listing agent and they made arrangements for us to get us into the property.  That's just one example.

But my point is, there is absolutely nothing to fear when you have an addendum or the proper language in the contract.  No money changes hands, no property status changes, etc., until the property is viewed by the buyer and they are satisfied to the point where they want to move forward.

Jan 07, 2014 02:04 AM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

I have done these when showing is a challenge for what ever reason.  It can work.

Jan 07, 2014 02:20 AM
Kimo Jarrett
Cyber Properties - Huntington Beach, CA
Pro Lifestyle Solutions

Nothing to fear is correct, yet is it efficient, probably not since you're going to submit another offer after your contingency is completed, right? 

Jan 07, 2014 02:46 AM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

This is interesting - and it's sad that you had to write an offer just to get a response from a listing agent.

Those are the kinds of things that make me feel that the Code of Ethics protects bad agents more than consumers. It should have been fine for you to contact the seller directly when the listing agent refused to respond. But... you'd have been before the board of ethics in an instant.

Jan 07, 2014 03:26 AM
Travis "the SOLD man" Parker; Broker/Owner
Travis Realty - Enterprise, AL
email: Travis@theSOLDman.me / cell: 334-494-7846

I always include the Subject to Inspection clause in, even if the Buyer has seen it several times. The Home Inspector is the one to really "trust".

Jan 07, 2014 03:44 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

All offers are "subject to inspection."  You mean "subject to interior inspection."  You're right some clients aren't warm and fuzzy with the mention, but it can work in their favor. 

Jan 07, 2014 05:02 AM
Thomas McCombs
Century 21 HomeStar - Akron, OH

I have never had a buyer who would be willing to buy without an interior inspection. Sellers understand that contract terms may change once the inspection is completed, so any offer that comes in after the inspection is given more serious consideration.

Jan 07, 2014 08:18 AM
Karen Feltman
Cedar Rapids/Iowa City, IA KW Legacy Group - Cedar Rapids, IA
Relocation Specialist in Cedar Rapids, Iowa

It is an interesting premise.  Especially if a seller is unwilling to allow showings or if there is an anticipation of a multiple offer situation and the buyer lives out of the area.  I have used this in the instance where one of the spouses is not able to see the house until later.  It has worked in that case.  Thank you for sharing.

Jan 07, 2014 10:03 AM
Marnie Matarese
DWELL REAL ESTATE - Sarasota, FL
Showing you the best of Sarasota!

Just went under contract last week with an of state buyer with an as-is with right to inspect addendum.  He will fly down and attend the inspections and if all goes well, he will purchase the home.

Jan 07, 2014 10:08 PM
Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Eighteen Years Experience in Brevard County

I have tried this a few times through the years. So far I have not had a seller go for the wait and see the interior approach. But, if the opportunity arises I will try again!

Jan 07, 2014 11:00 PM
Shanna Hall
Real Estate Solutions - Kirkwood, MO
I love selling houses!!!St. Louis, MO 314-703-1311

As a listing agent- I always counter with the property staying active until the inspection period is over.  So if you are writing these contracts- maybe as a buyers agent- you can just write that into your offers for us;)

Jan 07, 2014 11:53 PM
John Dotson
Preferred Properties of Highlands, Inc. - Highlands, NC - Highlands, NC
The experience to get you to the other side!

Multiple times I have had sight-unseen offers on homes.  Don't think I have ever had one fall through - of course times were better then and buyers were a little more anxious to get the deal.

With the way North Carolina has Due Diligence, every offer could be sight-unseen because a buyer can walk for any reason or no reason.

Jan 08, 2014 03:11 AM
Pat Champion
John Roberts Realty - Eustis, FL
Call the "CHAMPION" for all your real estate needs

I've used this when the buyer is leaving out of town but wants to put an offer in before the property is off the market.

Jan 08, 2014 05:00 AM
Robert Vegas Bob Swetz
Las Vegas, NV

Hello Ralph ... wonderful blog with some great information!

Featured at:

EXPRESS WITH WORDS AT ACTIVERAIN

VB ;o)

Jan 09, 2014 10:33 AM
David Popoff
DMK Real Estate - Darien, CT
Realtor®,SRS, Green ~ Fairfield County, Ct

Here in Connecticut the listing is still active during the inspection period, so best to do it quick and go to contract.

Jan 24, 2014 10:36 PM