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.
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.