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Does your pre-purchase home inspection report actually say, “DON’T BUY THIS HOUSE”?



Finally, after suffering through way too many open houses, and with eyes bleary from online searching, you found the house you really want, and the seller has accepted your offer. So, you have “mutual acceptance” pending a home inspection. What happens next?

Typically, homebuyers will ask their realtor for a referral to a home inspector, to identify potential problems with the home so that the defects can be repaired at the seller’s expense, or they can be used to negotiate a discount on the sale price.

But here is the problem:

  • Regardless of whether your real estate agent is a fierce advocate for your interests, or is simply hoping to close the deal as fast as possible, the reality is that your realtor has a financial interest in getting the deal done. That is fine, and that is how he or she earns a living. But it nevertheless creates an incentive for the realtor – at least at a subconscious level if not overtly – to ensure that nothing gets in the way of your buying the house.
  • So, when a realtor refers you to a home inspector, she or he is not necessarily looking for the best expert who can and will find every single thing wrong with the house. That would be contrary to the goal of closing the deal.
  • And remember, most home inspectors get their business by referral – from buyers’ real estate agents. You can easily imagine which of two inspectors gets more referrals: The inspector who systematically and diligently inspects the house and, if the problems are bad enough, advises the homeowner against buying the home, or the inspector who performs a more cursory inspection and treats every defect as if it is not a big deal.
  • So, at least some of the incentives driving both the buyer’s realtor and the home inspector who gets referred business by that realtor is counter to the buyer’s goal. The buyer wants to make sure that she is not buying a lemon, and that she understands everything wrong with the house so that she can make a truly informed decision as to whether to go through with the purchase.

This is why, as real estate and construction defect lawyers, we rarely if ever see pre-purchase home inspection reports in which the home inspector cautions against buying a home. This is true even when the conditions documented by the inspector should have been huge red flags to any buyer. Even the best inspection reports never say, simply, “I caution against buying this home” – in part because that is not the inspector’s job. But don’t take a chance. Buying a house is a huge investment, and it is worth a little extra money to have us review your inspection report and see if we spot any red flags that warrant at least following up with further inspection, if not walking away from the deal.

The risk of proceeding under what may be a false sense of confidence in the home’s condition is that you may later discover something seriously wrong and you will probably have no recourse against your realtor, your inspector, and maybe even the seller. Current Washington law provides greater protections to the seller of a home than the buyer, and limitations in the inspector’s agreement with you will limit his liability, if any, to the cost of the report. This gives real meaning to the concept of “Buyer Beware”.