The Risks to Buying Sight Unseen

With today's hot sellers' market, some buyers consider making an offer on a property without personally viewing it. In a Webinar by OREA and RECO, the question posed was, “Can an offer be submitted without viewing the property and can a property showing be done online?”

What the agreement says about buyer inspections

Clause 13 of the Agreement of Purchase and Sale says this about inspections: “Buyer acknowledges having had the opportunity to inspect the property and understands that upon acceptance of this offer there shall be a binding agreement of purchase and sale between Buyer and Seller.” Clearly the clause does not say that the buyer has inspected the property but rather has had the opportunity. Most people do inspect a property before submitting an offer and the sellers, unless told otherwise, will likely assume that a buyer making an offer has seen the home.

Both seller and buyer should acknowledge

In the interests of full disclosure, it is strongly recommended and only fair to all concerned that a clause be inserted in the offer in which both buyer and seller acknowledge that the buyer has not viewed the property. This disclosure can also be prepared as a notification separate from the offer to purchase. When we become aware of this we discourage offers without buyer inspection. If the buyer insists, we direct our salespeople to add an acknowledgement as follows:

1. The buyer and seller acknowledge that the buyer has submitted this offer without having seen the property and the buyer understands that upon acceptance of this offer there shall be a binding agreement of purchase and sale between buyer and seller.

Alternatively, we recommend a conditional clause similar to the following shortened version:

2. This offer is conditional upon the buyer inspecting the property within five (5) days from acceptance of this offer, failing which this offer shall become null and void and the deposit shall be returned to the buyer without interest or penalty.

A third and accompanying approach is to advise the buyer to at least have a family member, their lawyer, or a trusted friend view the property on the buyer’s behalf.

So why the extra steps?

If a buyer buys without viewing a property it can become a major disappointment for them and a liability for the realtor. As pointed out in the Webinar, if there are problems later, the buyer can say, “That’s not what you told me.” Moreover, if the buyer is relying on the MLS and online listing information, photos and video, these methods fall under the category of advertising. They won’t necessarily reveal a property’s deficiencies or their extent.

The Element of Feel is Lost

A buyer’s emotions to a home continue to be a key ingredient on whether to move forward. Buying without physically viewing first puts the cart before the horse and can create false expectations and disappointment later, and it can cause problems for both the buyer and the realtor.

 

 

Barbara Grumme

Barbara Grumme

Sales Representative
CENTURY 21 Today Realty Ltd., Brokerage*
Contact Me

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