There’s a new home inspection trend emerging that could be a great solution for your clients when it comes to buying/selling properties – and, in particular, during a sellers’ market. By changing the offer language to an “informational inspection” from a traditional “inspection contingency” condition, the deal is firm – the buyer is waiving their right to cancel the transaction based on the outcome of the informational inspection.

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In this situation, the seller understands the buyer will be ordering a full professional inspection, but that the transaction isn’t dependent on the results of the inspection or any information that’s uncovered during the inspection. In addition, the buyer won’t be asking the seller to pay for any issues that may be revealed during the inspection.

Bidding wars resulting from limited inventory have seen many homebuyers opting to forgo home inspections altogether so their offers are more attractive, since many sellers have stopped accepting offers that contain conditions.

The focus on inspections over the years has somehow gone from being an educational tool for buyers to, instead, becoming a negotiating tool that sellers dread. It’s important to take a step back and look at other options, since buyers need to prepare for what they’re facing after closing regardless of whether they make a firm or conditional offer. Buyers are often purchasing the property regardless, so the answer should be to ensure the deal isn’t contingent on inspection findings as opposed to completely waiving the inspection.

The informational inspection option has evolved from the need for buyers to make appealing offers on homes in hot markets while at the same time ensuring they can have an inspection and be prepared for future repairs based on the findings. This is a great piece of information for Realtors to use to your advantage, regardless of which party you’re representing.

This one change in the offer protects buyers while also lowering litigation risk post sale for sellers and Realtors who could otherwise be seen as bullying buyers into blind buying, whereby the buyer fully waives the home inspection in the offer because there’s no other choice if they wish to win the bid.

As home inspectors, it’s always our preference for a full inspection to be completed prior to closing – either ordered by the seller/Realtor as a pre-inspection service before listing or the buyer before making an offer. But, that said, we also recognize the need to continually evolve to better meet the needs of buyers, sellers and their Realtors in any type of market.

An informational inspection still empowers the buyer to better understand the property and exactly what they’re purchasing. After all, the value a buyer derives from an inspection includes:

  • Information that empowers better planning
  • Mitigation of risk for unexpected surprises
  • Full disclosure on the property so they can prioritize and budget upon possession
  • Inspection report acts as an instruction manual for the new home
  • Education on how the property operates

As long as the homebuyer is equipped with the right information to address ongoing issues and maintenance of the home, we feel that our job has been done to the best of our abilities to protect homebuyers, sellers and Realtors.

17 COMMENTS

  1. Any realtor that allows such a clause is not protecting their vendors whatsoever. Imagine a buyer finding out about a problem that the vendor was not aware of and now they are ? What buyer would want to close such a deal now knowing that there are problems? If there are competing offers then this is one offer that i would throw out immediately. I once had a purchaser want to bring a contractor into the house after making a cash offer and before closing. Remember that potential purchasers can walk a home inspector of their choice through a house before making an offer. They can also walk a contractor through prior to making an offer. This is clause that appears to be harmless is actually a problem waiting to happen.

  2. Not a chance! If you bought my listing without a condition, you’re not doing an inspection till closing, information or not. Caveat Emptor.

  3. As a lifestyle and gourmet maven for nearly fifty years, first writing my recipes in 1972 and first newspaper published in 1976, I initially published in REM in 2010, just as a hobby give back (and a real estate networking opportunity) to the many REM readers who over the years, unbeknownst to me at the time had followed my career since 1980.

    Periodically I feel the need to remind readers that REM does not pay me to contribute my Recipes for Realtors (column named by editor Jim) Gourmet Columns; neither do the brand names I note in my recipes pay me (I name brands so my readers know exactly what is used in my recipes), although occasionally I receive sample spirits for testing purposes (disclosed). Others I buy for test purposes to share in my recipes. When I have spectacular results, I share. On and off line I receive appreciated comments.

    I don’t drink as such but found particular spirits over the decades I occasionally drink at a special meal; never more than an ounce. I’m sure I would fall asleep. But I’m so in love with what is commonly called the nose or bouquet; the fragrance that permeates my kitchen, sometimes the whole house (like my Marsala Chicken, for example).

    It is my understanding that other REM article writers are actually paid. You can confirm with editor Jim. REM is a privately owned company therefore can certainly choose those they pay, and really it’s no one’s business how they run REM I suppose. Since REM is free to read by both agents and the public I’m guessing it might be disrespectful to criticize whom they choose to pay, even if seen by some as an advertorial.

    REM is a great networking opportunity and those who don’t ID their operating location certainly miss the boat (or a possible transaction opportunity).

    Carolyne L 🍁

    https://www.realestatemagazine.ca/columnists/recipes/

    • REM hires, and pays, journalists to write our news and feature articles.
      We do not pay columnists. People in the industry write for us for exposure to our audience of real estate agents and brokers, or in Carolyne’s case, as she says, as a hobby and a way of giving back.
      Guest Columnists such as Rick Mayuk write articles to let our audience know about goods and services that may interest them. They are also not paid for these articles but are given a bio with a link to their email and website. We strive to make these articles informational and not promotional.
      We do also have Sponsored Content that is completely controlled by the writer/company, and is paid advertising. These articles are clearly marked as sponsored content.

  4. As trusted Realtors, we are expected to offer a “responsible second or third pair of eyes” and encourage “awareness” when visiting/showing properties to clients. Though, not expert home inspectors, we realtors are professionals who have experience and training to know what to look for in the case of clear and obvious signs of defects; for example: signs of water damage, condition and age of windows and doors, condition of shingles, age of heating equipment, not to mention, odours and age and condition of appliances etc. Moreover we should know the right questions to ask of sellers’ representatives and have the wisdom to consider and research obvious neighbourhood/environmental histories. Though we are not “licensed” home inspectors we can and should provide our clients with informed advice. On the other side it is, and should be emphasized, illegal for a seller and seller’s realtor to withhold evidence of known material OR latent defects. Buying a “used” car has many more potentially hidden dangers to avoid which sellers are not obliged to disclose. A home inspection can be very useful but does not replace the experience and powers of observation of realtors their informed questions and their well prepared, observant buyers

  5. Further, I wish REM would stop accepting comments from readers who do not identify themselves with their full registered name, brokerage and location.
    Are we part of a professional association or not?
    Does this forum hold itself out as accurate, forward-looking and informational or a weblog filled w comments from anon social snipers?

  6. But, the author is a Home Inspector. Won’t his idea create more business for his colleagues? Can you see why he must attempt to get this promo into hands/eyeballs of registrants?
    Should be an advertorial – then no one would pick holes in the idea/ object (as above)

  7. If the purchase is not conditional on the results of the inspection, no seller would be advised to permit an inspection after reaching a firm agreement and before closing. Any significant defects found during an inspection between a firm agreement and closing could be raised by the buyer as items the seller was aware of and concealed, complicating closing. If a buyer is going to hire an inspector for informational purposes, they can do so after closing. Certainly buyers may want to try adding an informational inspection pre-closing to an agreement, but I can’t see any seller agreeing to it.

  8. Informational inspection is useless. Whatever they discover, they can’t cancel the deal. Completely no sense…

  9. Well this guy advertises on REM and seems to be a regular “contributor”. Also offers a quick walk through not following industry standards of practice and no Error and Omission Insurance company would insure such practices. Buyers are quickly realizing all roads lead to a successful sale and big commission for realtors and buyers are stuck with many issues and often some very costly repairs. When pressured to buy without a proper inspection just ask your agent “did you test drive your Mercedes before you signed the lease”. Over extended buyers can’t pull together $15,000 or $50,000 to fix issues. When did realtors stop putting their clients best interests in the trash? A post closing inspection that uncovers undersized electrical, vermiculite, leaking roof, vermin, foundation problems, aluminium wire, rotted windows, to name a few can be costly to repair and its too late.

    • My buyer clients are always given the opportunity to inspect, and usually do, prior to making their offer in competition. If you’ve experienced an agent coercing you into buying without inspecting, the weakness is yours for putting up with it and not hiring a better agent. And no, I did not test drive my BMW before buying it. Didn’t test drive the previous one either.

      • Just one more dreadful piece of paper to file. Make sure buyer acknowledges having received a copy: time and date noted at signature.

        I had buyers sign a liability disclaimer saying it was their personal choice not to pay for a building inspector, or to have one attend at the offer subject property; a specific separate document naming each property in turn in an offer, disclosing that the buyer had been offered the opportunity and declined to have the property inspected, at their own risk. (Don’t blame me.) This liability disclaimer should accompany every offer and absolutely for sure in a multiple offer situation where the buyer is feeling forced to not have an inspection clause in his offer.

        I had only one instance where I had sold an MLS property to a fellow who declined to hire an inspector stating he and his dad built rec rooms for people and knew all about inspections. Had his dad do a walk through, but declined to allow me to put an inspection condition clause in the offer.

        I insisted he sign my liability disclaimer, and explained to him why. The transaction closed. Several weeks later I got the call. He had gone to the attic and discovered the house had literally NO insulation. NONE, apparently. It was electric heat, about 35-40 years old. Original owners.

        Beautiful clean home. Spotless! Well-cared for, visually; owned by an elderly senior widow lady, listed on MLS with a most reputable local brokerage by a neighbour, her late husband’s friend an agent of many years.

        Next call: he had tried to remove kitchen cabinets mounted on the back to back adjoining dining room / kitchen wall only to discover the beautiful house had been built using plaster on lath construction and had gorgeous Italian craftsmanship plaster swirled ceilings.

        It all came tumbling down and he blamed me for not “forcing” him to have a building inspection. My liability disclaimer he had signed saved me. When he signed it he was very sincere believing he didn’t need a formal inspection. I was there when the dad did a walk-through but that’s exactly what it was: a walk-through with big compliments for the owner’s good care of the property.

        He admonished me, saying I sure knew how to save “my” skin. Without my liability disclaimer it would have been my word against his for perhaps encouraging him no inspection was needed, especially due to how the property looked so great, visually.

        He likely would have been in his mid-forties, and sincerely believed he knew what he was doing and didn’t need an inspection. I genuinely felt bad for him. He even called the listing broker saying the listing rep should have explained in detail the need for a home inspection.

        This topic is something I have never seen addressed on REM except when I mentioned it previously. Newbies need to take particular note, perhaps.

        Carolyne L 🍁

  10. I agree with the above. This doesn’t make any sense. The seller still is going to feel uncomfortable allowing the inspection to occur before showing, and what’s stopping the buyer from having the inspection after closing?

    This seems like an unnecessary nuisance.

  11. Not much point if they’re going to buy the property anyway unless a latent defect comes to light that the buyer can show the seller new about.

    Might as well just have the inspection before closing.

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