Buyer Beware!

Thursday Oct 01st, 2020

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The term Caveat Emptor is a Latin term that means "Let the Buyer Beware". Similar to the phrase "Sold as is”.  When we see this and accept it, the Buyer assumes the risk that a house may have defects.

 

In our current “Sellers’ Market”, it is hard to get an offer accepted with a Condition.  You’re right, this is scary.  The “Big 3” Conditions:  Financing, Home Inspection and Home Insurance are included in an offer to protect you, the Buyer.  For today’s blog, I want to focus on the Home Inspection, as I’ve recently experienced some real eye-opening situations. 

A Home Inspection is not simply a pass or fail.  If you’ve never had one before, you can expect to learn all about your home, how it ticks, I like to say.  You’ll learn about each system and what items/areas you’ll want to watch and/or repair.  You’ll get a report with pictures and explanations, so you can build a priority check-list. As a Realtor, it is my job to protect you and simultaneously win the house. I vow to always do my best to educate, discover and disclose for you.  Without a Home Inspection, this can be challenging as we don’t know what we can’t see and I am by no means a Home Inspector myself.  Now, keep in mind, each house and situation is different.  If we're looking at 5 year old home compared to a 100 year old home, the concerns are vastly different. 

Let me share a story.  On a recent Conditional Offer accepted, we found some concerning issues during our Home Inspection.  Concerns that, unfortunately, could not be overcome without further investigation, within the timeframe of our Agreement of Purchase and Sale (conditional period).  Luckily, we were dealing with a good Listing Agent and caring Sellers.  Here’s what happened: We conducted our Home Inspection and uncovered concerns with the structural integrity of the house.  We needed a Structural Engineer to diagnose and provide a remedial solution, including the dollar amount necessary to resolve.  We requested and were granted an extension of time to our conditional period. Thank goodness the relationship I had with the Listing Agent allowed for a smooth negotiation.  We booked the Structural Engineer and it was determined there would be substantial costs necessary in order for us to move forward and firm up the deal.  I wasn’t about to let my client purchase a house she was not comfortable in.  Negotiations ensued to reduce the sale price to account for the necessary remedial work.  Success!  We were able to amend the purchase price and both Buyer and Seller were happy to move forward.  The whole process took 4 visits to the property, 3 experts in the field and a week of negotiations.

I share that story, because we’ll often be in a situation that won’t allow us a Home Inspection condition.  The best way around this is with a Home Pre-inspection.  If there is a date set for the Sellers to receive offers on the property, we can schedule this Pre-Inspection during a showing, before the offer, so that you know what you’re getting yourself into.  I personally love this option.  Yes, it will cost you money and you run the risk of not winning the bid.  However, imagine you won the bid, paid more money for the house than you were anticipating because you were in competing offers, only to find out that the house you bought needs a lot more work than you budgeted for? Especially with older homes and houses that have had a lot of renovations done to them, I will ensure there are no open permits remaining and dig into the municipality to discover any pending or alarming issues. I have experienced several properties that a Buyer Client of mine was interested in only to find out there were issues not advertised.  It is so important to work with a savvy Buyer’s Agent and not the Listing Agent on a specific property.  The Listing Agent represents the best interests of the Sellers.  You should always ask yourself, “Who is looking out for me?”

I hope this helps! 

Always here for you, Jenna

 

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