Experts comment on not having to do house inspections in a sellers’ market – Ask the Expert, Buying

Joe Aiello of Gumshoe Home Inspection in Winthrop found significant termite damage in an attached garage when customers commissioned him to inspect a 5,000 square foot home in Concord. He also discovered small leaks in the copper heating pipes in the basement (he suspects similar ones in the walls) and a dangerous situation with the switchboard.

These problems are expected to cost several thousand dollars to repair, but the cost is not borne by the seller.

His customers had already bought the house – without the need for an inspection.

Real estate agents say more potential buyers than ever are skipping home inspections to make their listings more attractive to homeowners in this frenzied sellers’ market. And many in the industry say it’s an unnecessary gamble.

Without an inspection, buyers risk spending hundreds of thousands of dollars or more on a home that could have serious defects that may not be apparent to the average person for months or years, said Dina B. Browne, Partner at Bletzer & Bletzer, PC in Boston and co-chair of the Residential Conveyancing Section of Massachusetts Real Estate Bar Association.

“I’ve been involved in property closings since 1998 and have never seen a market like this,” said Browne. “I think we haven’t seen the impact that will come with all of the waivers as these buyers are moving into their homes. There are many first-time buyers who can forego these inspections and only pay a 5 percent deposit. If they come in there and the stove breaks down, they probably won’t have the money to replace it, and that scares me. ”


Why a home guarantee can help when you forego your home inspection

Typically, a buyer’s offer includes the option to have the home checked by a professional within seven to ten days of acceptance. If the inspection reveals defects, the buyers can usually either renegotiate with the sellers, continue the sale or simply walk away and claim their deposit back. Foregoing the possibility of control could make an offer attractive even if it is not the highest bid, because it shows that the buyer is serious and reduces the risk that the sale will fail.

Many agents advise against not going through an inspection Steve Medeiros, President of the Massachusetts Association of Realtors and agent at Keller Williams Realty. “The responsibility of a real estate agent is to provide the information and help buyers make the most informed decision about how to approach a home purchase, and this is true in all market conditions,” Medeiros wrote in an email. “Our members can and will recommend homebuyers to carry out an inspection, although our customers have a legal right to object to this recommendation and to forego the emergency due to their personal willingness to take risks.”

Buyers have come up with a few workarounds to make their customers’ deals more competitive while still protecting them: a home inspection before the bid is submitted, hiring an inspector to take them to an exhibition to look for red flags, or the property After their customers sign the purchase and sale agreement, inspects the more formal contract signed after the initial quote. However, according to the Massachusetts Association of Realtors, there is no guarantee that the seller will allow an inspection after the contract is signed. If the buyer has the property inspected after signing the purchase and sale contract, they have only a few options. You cannot renegotiate to include the repair cost. They could continue the transaction and fix the deficiencies after they own the home or they could try to get out of the sale and almost certainly forfeit their deposit. And the buyer’s liability must not end here. “Depending on the scope of the concluded contract, the seller may have additional options to assert further claims for damages,” said MAR in an email.

Paul Cottone, owner of The Cottone Co., Newton Real Estate, said in an email that he encourages all of his buyers to consider a home inspection in their offer, “although I know that it can significantly reduce their chances of success in the offer because it is clear that they will lose, if they do, he said he strongly encourages them to do a pre-inspection if possible.

Cottone feels so strong that he has often offered to pay for the home inspection of customers who refuse to include one in their listing or before they do one. It would only be taken off his commission if they shut down the property, he said.

Some agents encourage a pre-bid inspection, he said, and some admit that they are unlikely to prevail in a bidding war if the buyer does not forego the inspection. “Most of these pre-offer inspections usually need to be shortened [shortened time frames in which less investigation occurs]. ”

Rona Fischmann, an exclusive buyer representative at 4 buyers real estate, not only suggests to their buyers to sign a sales contract. She demands it – in writing.

“Buyers don’t have to go without their inspection,” said Fischman. “You may need to seek advice prior to the inspection, or you may need to receive your inspection very quickly. … I received more offers this year than in the last two years. “

Jay McHugh, Co-owner of LAER Realty Partners in Chelmsford, has sold more than 1,000 homes in 30 years. He said his buyers sometimes forego the inspection facility, but they almost always have the house inspected before or even after the purchase and sale agreement is signed.

“You can skip your home inspection,” said McHugh, “but when you have a great buying agent, don’t skip the home inspection. When I work for the buyer, it means that I am working in their best interest. We insist on the right to view the house before it closes. We have the right to visit the house to check that everything is still in order. ”

He said one of the agents on his team had clients who waived the inspection of a townhouse. After moving in, they discovered that the stove had failed, allowing the combustion products of the gas burners to enter the house, a life-threatening condition and an expensive replacement.

Alex Steinberg from JBS Home Inspections conducted an inspection on a couple after buying a condo in a renovated two-story building dating from 1898. They knew they were competing with at least one other bidder who had done a viewing with a home inspector, so they made their offer and waived the contingency. They subsequently hired Steinberg on the advice of friends.

When Steinberg got there, he found a hole in the main sewer system through which sewage gases were being led into the apartment. The owner of the other unit had lived there for two decades and hadn’t known about it. Steinberg estimated it could cost $ 5,000 to $ 10,000 to replace it.

MAR emphasized the importance of having a sales contract checked by a lawyer.

Scott Kriss, President and CEO of Kriss Law / Atlantic Closing & Escrow, said that any buyer protection must be included in the offer, as the purchase agreement is “just a more detailed letter of intent” of the offer.

“Some agents are religious when it comes to making sure that [the offer is] reviews before filing, ” said Kriss, “but it can take a few hours … and market competitiveness requires quick action.”

He said that only about 5 percent of buyers who work with his law firm see their offers checked by lawyers. “Because time is of the essence, buyers sign deals without lawyers reviewing them,” he said. “While this is historically not uncommon, consumers should seek legal advice on waiving all eventualities.”

This could backfire.

“We recently had a client who is viewing a property for informational purposes only and uncovered a structural problem for $ 250,000. Then he came to us and we had to tell him there was nothing we could do. “

Jim Morrison can be contacted at [email protected]. Subscribe to Globe’s free real estate newsletter – our weekly roundup on buying, selling, and design – at follow us on Facebook, LinkedIn, Instagram, and twitter @globehomes.

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