The Potential Dangers of Waiving Inspections

Now that we’ve been through this seller’s market for 2 years and seen so many buyers waive inspections and gamble on what they are buying, many home inspectors are seeing a negative result of this situation. In the past 9~12 months or so, I’ve received well over 25 calls from new homeowners who recently bought a home, waived their inspection, and then moved in and soon found problems that they feel were either not disclosed or were not accurately disclosed by the seller. They are calling me because they want a home inspection performed to document these issues as a first step to start suing everybody involved in the original home transaction, including their Realtor®, the seller, as well as the seller’s Realtor. The first inclination of a home inspector upon hearing this request will naturally be ‘no, I am not interested in getting involved in something that’. I’ve talked to several other home inspectors across the country who have received similar calls in the past year or so and they had similar reactions about getting involved.

Once I started hearing back in the spring of 2020, when real estate in Pennsylvania was forced to shut down for 2 months due to being considered “non-essential”, that more and more buyers were buying homes and waiving their right to a home inspection, one of my first thoughts was ‘this is going to come back to haunt some of these buyers and some will end up feeling that they were duped’. Many buyers at the time were putting offers in completely sight-unseen or sometimes only seeing the home’s interior via listing photos or a video. I performed lots of inspections once real estate was able to re-open in late May 2020 for buyers who had still never seen the home. Some who were out-of-town buyers had their first actual tour of the home via me FaceTiming the clients at the end of their inspection to provide a real-time summary and answer questions while I was still onsite.

Whether any of these buyers who are looking at bringing lawsuits against the Realtors and sellers involved will actually succeed remains to be seen. I would imagine that PAR has a form that required buyers to sign once submitting their offer with inspections waived that declared that their agent was to be held harmless if what I described above happened.

Another side of this situation has resulted in many buyers opting to have a home inspection performed after closing to find out what they bought. I’d estimate that maybe 30% of the inspections that I’ve performed in the past 12~18 months were these post-settlement inspections. We perform the same exact home inspection as if it was performed pre-closing. Of course, whatever issues that I find are now up to the buyer (the new homeowner) to address since they can no longer negotiate with the seller post-closing.

Just a few examples of things that I have found in these post-settlement inspections include:

1.      Leaking roofs or roof coverings at or beyond their design life requiring full roof replacement.

2.      Faulty electrical (much of which was obviously DIY work) as well as numerous Federal Pacific Electric (FPE) and Zinsco brand breaker panels that need to be replaced due to well-documented fire and safety hazards.

3.      Multiple damaged foundations. One home that I inspected post-settlement appeared that its foundation was literally been struck by a car. This foundation wall had a section of concrete blocks pushed inwards approx. 18~24” approx. 20” above floor level which seemed to line up with a car’s bumper. This was a shared foundation wall (duplex) that abutted directly to the neighbor’s garage. In this case, the new homeowner actually went next door and asked their new neighbor who showed us the damage from their side. Yes, a car had definitely struck the wall from the neighbor’s side and damaged the shared foundation wall.

4.      At least 2 dozen basements with water issues ranging from multiple small or large puddles (not related to plumbing leaks or a faulty sump pump) including 3 fully flooded basements. 2 of these basements had standing water up, at least, 4”. Several others had no standing water or puddles yet had moderate or severe mold growth on their foundation walls or fixed wall coverings (finished basements). Most of these buyers showed me the seller’s disclosures and the majority of these documents had answered “no” where it asks about prior water entry.

These examples show how important it is for home buyers to have a home inspection performed, even if it’s a post-settlement inspection performed right after closing. Of course, having the inspection performed as part of a sales agreement (before closing) is best since it most often allows the buyer to negotiate issues with the seller. Obviously, not every home that the buyer waived their inspections in order to buy will have major issues but, without a thorough inspection, you never quite know what a buyer is buying.

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