Home inspections and the real estate market
When we visited the Providence Rhode Island area in April 2022 to look for a house, we bid on three houses. The first bid had an inspection contingency and was rejected out of hand. For the other two, we left out the inspection continency and were still outbid. It was a seller’s market.
In the event, we were contacted after we returned home about a house that hadn’t been on the market. It was in the neighborhood we were interested in and at a price we could afford. We ended up buying the house. Within a couple of days, we discovered that the cast iron stack pipe that drained the 2nd floor bathroom was cracked and leaking, necessitating $2000 in repairs. There were several less emergent repairs totaling thousands of dollars more. At least some of these would have been disclosed on inspection.
“In recent years, some home buyers who waived their home inspection contingencies have discovered surprising and sometimes expensive repairs after the sale. Morgan Cohen, owner of the home inspection firm MKC Associates based in Watertown, said he’s done post-purchase inspections for homeowners who waived their right to have their house inspected before they bought and later regretted it.“We’ve done post-purchase inspections where we’ve found [dangerous] knob and tube wiring and others with underground oil tanks,” he said. “One of my colleagues inspected a house that was clearly built on a concrete foundation that contained pyrrhotite [which can cause concrete to fail]. A year after the owner purchased the home, he had it inspected and found out the foundation was crumbling and needed to be rebuilt.”
OK, the house we lived in for 35 years in St. Louis had knob and tube wiring and it was never a problem for us. But when we sold the house, we had to knock $17,000 off the price when an inspector discovered it.
Now, a new Massachusetts law says real estate agents can’t discuss inspection contingencies with sellers.
“. . . the new regulations . . . [include] language barring any contract provisions from frustrating the purpose of the home inspection, including “unreasonably limiting a prospective purchaser’s ability to schedule, receive, and review a home inspection.”
“If the inspection reveals the need for expensive repairs, the buyer can proceed, renegotiate the contract, or simply walk away from the deal. Without an inspection, the buyer doesn’t know exactly what they’re getting until after they own it and have no other option but to foot the repair bill themselves.”
We would probably have made inspection a contingency in every offer if there were such a non-disclosure law in place in Rhode Island. Of course, the seller could just refuse to change the price and accept a bid from a buyer who decided to eat the cost. But I would have liked to know upfront what I could expect.
MA law bars home inspection continency as a negotiating tool
In the event, we were contacted after we returned home about a house that hadn’t been on the market. It was in the neighborhood we were interested in and at a price we could afford. We ended up buying the house. Within a couple of days, we discovered that the cast iron stack pipe that drained the 2nd floor bathroom was cracked and leaking, necessitating $2000 in repairs. There were several less emergent repairs totaling thousands of dollars more. At least some of these would have been disclosed on inspection.
“In recent years, some home buyers who waived their home inspection contingencies have discovered surprising and sometimes expensive repairs after the sale. Morgan Cohen, owner of the home inspection firm MKC Associates based in Watertown, said he’s done post-purchase inspections for homeowners who waived their right to have their house inspected before they bought and later regretted it.“We’ve done post-purchase inspections where we’ve found [dangerous] knob and tube wiring and others with underground oil tanks,” he said. “One of my colleagues inspected a house that was clearly built on a concrete foundation that contained pyrrhotite [which can cause concrete to fail]. A year after the owner purchased the home, he had it inspected and found out the foundation was crumbling and needed to be rebuilt.”
OK, the house we lived in for 35 years in St. Louis had knob and tube wiring and it was never a problem for us. But when we sold the house, we had to knock $17,000 off the price when an inspector discovered it.
Now, a new Massachusetts law says real estate agents can’t discuss inspection contingencies with sellers.
“. . . the new regulations . . . [include] language barring any contract provisions from frustrating the purpose of the home inspection, including “unreasonably limiting a prospective purchaser’s ability to schedule, receive, and review a home inspection.”
“If the inspection reveals the need for expensive repairs, the buyer can proceed, renegotiate the contract, or simply walk away from the deal. Without an inspection, the buyer doesn’t know exactly what they’re getting until after they own it and have no other option but to foot the repair bill themselves.”
We would probably have made inspection a contingency in every offer if there were such a non-disclosure law in place in Rhode Island. Of course, the seller could just refuse to change the price and accept a bid from a buyer who decided to eat the cost. But I would have liked to know upfront what I could expect.
MA law bars home inspection continency as a negotiating tool
This is but one side of a double-headed coin: I have alluded to in the past the root of the housing crisis is in a lack of qualified inspectors. Well, ok, a lack of qualified builders but … just this week my son had to pull off a job, find something else to do, for two days because that’s how far behind inspections are in Portland Oregon. He got lucky, it’s usually a week
(we’ll just leave out of this post how you can get certified as a “home inspector” without ever having picked up a hammer, sawn a board or read a tape)
I still don’t know how our second home passed inspection. No support for a load bearing wall, discovered when we remodeled 3 decades after it was built. Fixed the sagging roof when we put supports under the right beams. Amazing how that works. Not only had the home passed initial inspection, but we were the third owner and none of the buyers inspectors had noted it.
@Jane,
In addition to live knob-and-tube wiring, we had asbestos in the basement of the house we lived in for 35 years in St. Louis. After we moved out, we had the asbestos abated before the house went on the market. Also, we had to pass a city inspection before the house could be sold. But it was the buyer’s inspector who caught the wiring issue.
This is interesting: supply is fifteen, in some places thirty to forty, years behind demand