To all my real estate friends, home buyers, and home sellers.
The inspection industry and the inspection process gives agents, sellers, and buyers a layer of legal protection.
In today’s hot Sellers market, some Real Estate Professionals are telling, advising, or pressuring clients to waive their inspection in order to make their offer more attractive. That’s a great way to get sued if you are a real estate professional. And it’s a great way to own a lot of unforeseen deficiencies if you are a buyer. And believe it or not you can be sued as the home seller after closing.
The entire reason the inspection industry was started was because Buyers used to purchase a house without an inspection and walk into a money pit. They suddenly owned a house with structural and safety issues and Real Estate Agents, “back in the day”, were getting sued for selling houses with these undisclosed deficiencies. Waiving inspections opens that door back up!
My Agent friends, I can show you a court case that held the Real Estate Agent responsible for damages and the client even signed an inspection waiver. The appellate court ruled that clients are making the biggest investment of their life and the Real Estate Professional has a very high standard of care. Convincing someone to waive an inspection is not caring about the client after they move into the house IMO.
What if there is a carbon monoxide leak that was not detected because the inspection was waived?
What if there is some faulty wiring and the house catches on fire?
What if spindles on a second flooring handrail are six inches apart and a baby crawls through the spindles and is seriously injured or dies?
If you are the Real Estate Agent do you really think some lawyer is telling the client not to sue you because they signed a waiver?
What’s going to happen is the client is going to say, “My Agent pressured me into waiving inspections to make my offer more attractive”. Or the clients will say, “My Agent ADVISED me to waive inspections to make my offer more attractive “. Either way you will be legally liable for damages because some sympathetic judge or jury isn’t going to care about some signed waiver. And moreover and more importantly you are not sleeping good at night if your client or their kids were injured.
Now, somewhere along the line the real estate industry developed the sellers disclosure as a way to protect Agents, Sellers, and Buyers. Let’s be honest, that form does not really limit the listing agent or sellers liability. It certainly does not protect buyers or give them good information about the house. Hell 90 percent of that form has the “Don’t know” box checked on it. Now how can someone live in a house for ten years and not know if their foundation or roof leaks? That disclosure form is BS!
A court case I read about shows how a listing agent and Seller were sued because everyone just relied on the sellers disclosure form. You probably know about Sellers and agents in your own market being sued after closing don’t you?
Here is the bottom line! The inspection process should never be skipped.
It’s only $500 on average.
IMO, The best thing to do in order protect everyone in the transaction and streamline the process is for the house to be inspected before it’s listed, and that report needs to be used as a form of full disclosure.
The befuddling thing I hear from a real estate agent, “I don’t want to do pre-listing inspections because I don’t want my sellers to have to disclose what’s wrong.” WTH/SMH. Ok imagine standing in front of a judge and saying, “Your honor I only relied on the sellers disclosure vs getting a pre listing inspection done”. Judge says, “Well from what I understand many agents across the country have houses inspected before they go to market. Why didn’t you advise a pre listing inspection be performed?” “Well your honor I didn’t want my Seller or myself to have to disclose everything that was wrong with the house.” Great defense and reason to not advise a pre listing inspection huh?
With a pre-listing inspection sellers can dictate up front what they are fixing or not fixing. And they don’t have to be worried about the deal falling through or being blindsided by unknown deficiencies. The Seller and Agent are absolutely more legally protected because they can say, “Not only was a disclosure form provided but we hired an independent inspector to verify the condition of the house, AND we didn’t prejudice the buyer from getting their own inspection....in fact we encouraged the buyer to get their own inspection.”
Buyers can and SHOULD still get their own inspection but no big surprises will be found!! The entire reason buyers are waiving inspections is to make their offer more attractive by taking away the possibility of the dealing falling through or a bunch of repair requests being made at the last minute. Well the Pre Listing Inspection does that!!
BUT if buyers do waive their own inspection the Agent can at least demonstrate he/she met a higher standard of care by having an independent inspection performed by a neutral 3rd party, licensed or certified, home inspector. And this was done to fully disclose what was wrong with the house vs just relying on the sellers word/disclosure statement.
This practice of Pre Listing Inspections are becoming more and more popular and in some areas of California every house which is listed for sale has a Pre Listing Inspection performed.
Now you can listen to my advice or not. I am just trying to help and be a voice of reason.
But if you are a Real Estate Professional and you are advising clients to waive inspections and get sued, then don’t say your were not warned.
And if you are a Listing Agent and are only relying on the Sellers disclosure form, without a buyers inspection being performed, in this super hot Sellers market and get sued don’t say you were not warned.