Using Home Inspections to supplement disclosures

  • Post author:
  • Post category:Blog

I see the following situation regularly.  The MLS listing had the usual flowery language about, “Get ready to fall in love!”, “…great neighborhood…”, along with the requisite statements about all the new items and equipment.   “…new HVAC…new appliances..”

The client is having second thoughts about the deal, even though it was won during a bidding war, in which they made considerable concessions.  Now they want out.

If the seller or the listing agent had simply done a minimal amount of research and used some honesty, the client would be in a different situation.  In this composite example scenario, all the agent had to do was open the refrigerator and microwave to see the manufacture date.  Refrigerator is 2013, and the Microwave is 2009.  These aren’t from me researching the coding in the serial number.  It’s printed right on the appliance data plate.

As for the HVAC.  The AC condenser is clearly marked with a manufacture date of 2006.  The water heater has an inspection sticker dated 2010.  The data plate says it was manufactured on 3/20/2010.

Again, in this composite example of a potential purchase, the agent misrepresented items on the MLS listing.  Perhaps by accident, perhaps willfully.  Whatever the reason, the dates were printed right on the data plate!  I didn’t even have to know how to decode the serial number. All the listing agent had to do was walk through the house and take a few notes.

In addition, there were representations made the house had a working wood-burning fireplace. My examination of that assembly revealed so many material defects, I told my client to absolutely NOT even consider a fire because there is a very real danger the house could burn.

There’s no heat source in the main bathroom.  The gas furnace and water heater flue vents are connected to a chimney that was cut off at the roof when it was replaced.  (On this item I called the city building department.)

Why am I harping on this? My client is about to renege on the purchase contract, and they have a legitimate basis to do so, as I understand and as their agent does.

How could this have been circumvented?  On this property, the listing agent either needed to exhibit better due diligence, or should have not lied.  So, this is unusual, right?  Wrong.  These items are a compilation from multiple inspections done over the last year. But they are all very real, and the desire of my clients to get out of their purchase contracts was also very real.

Why does this happen?? DOES IT HAVE TO HAPPEN?  Thousand times NO!  I have preached to realtors and their office multiple times, get the seller to contract with the most anal, picky SOB home inspector you can find for them and then disclose the WHOLE report.  Obviously, this dramatically minimizes the possibility of you having to go through TWO negotiation sessions.  If you disclose it, then it’s built into the cost, and they have no legitimate claim to argue when their inspector comes back with the same items.

There are all sorts of physiological games to think about here, but the bottom line is, a large portion of the homes you list will end up in a renegotiation when the home inspector’s report comes in.  Would you rather put in that time upfront and lock in a stable price, or take a chance your buyer has an inexperienced inspector?

My advice is; bite the bullet and sell your owner on the advantages of a pre-listing inspection, then use that to limit the buyer’s attempts to cut the price after the fact.

And when you DO get that buy-in, remember, you want the most thorough person you can find, so the buyer’s HI has less they can find which was missed in the disclosure.

If you have questions as an agent, about a property you are listing, and need some advice, give me a call.  No obligation.  I’m banking on a good experience that will sell you on my services for your sellers.

Leave a Reply