No Home Inspection Condition in Order to Compete
Condition-free offers are common when buyers are competing for the same property, especially in a hot seller’s market with high demand and low inventory.
One due diligence condition buyers continue leave out of an offer in order to compete and gain favor with the seller is that of obtaining a home inspection to help uncover possible deficiencies.
Buyers do this at their own risk
The Agreement of Purchase and Sale (clause 13) says that the buyer “acknowledges having the opportunity to include a requirement for a property inspection report...and agrees that except as may be specifically provided...the Buyer will not be obtaining a property inspection or property inspection report regarding the property.”
Without a property inspection condition in the offer the buyer gives up any further opportunity for a home inspection. What’s more, he does so at his own risk as “Buyer Beware” would prevail if he later discovers a physical defect in the home. Fraud or misrepresentation by the seller would be an exception to this.
The Buyer’s Final Walk-Though Clause
In a recent purchase, the condition-free agreement had a standard clause added allowing the buyer to re-inspect the property one further time before the deal closed. This clause is typical and gives the buyer a final walk-through to determine whether anything has changed from when they viewed it at the time the offer was made. That is the only purpose of the clause. The home was empty and the buyer and buyer’s agent obtained consent from the listing salesperson to see the property one last time.
Home Inspector Attends Final Walk-Through…Ouch
Afterward, the listing salesperson discovered that the buyer invited a home inspector to the final walk-through, not a provision of the offer. The inspector performed a three hour property inspection, a deceptive tactic which was not allowed as it was not contracted for in the offer to purchase. What’s more the buyer now wanted a large reduction in the purchase price because of cited defects. Needless to say, the transaction closed at the price and terms originally agreed to.
Additional Inspections Should be Specified in Offer
Clearly unless the Buyer includes a condition for a property inspection and report in the offer, he removes any further right of such inspection.
If the buyer wants additional inspections, for example, to show the house to family, to take measurements, or to obtain quotes to renovate, a further clause specifying such inspections needs to be inserted in the agreement.
To prevent this type of contravention of the agreement, it’s a good idea to have the seller or seller’s representative present during the final walk-through.