What is an Informational Purposes Only Inspection, and Why Omaha Home Sellers Need to Know
In the process of buying and selling Omaha real estate there are several details. When it comes to making sure you know what you are doing in a real estate transaction to protect yourself much of the information is focused on homebuying. But there are some things that Omaha home sellers want to be knowledgeable of when putting their home up for sale to ensure they are protected and selling to the right person.
One of these areas is home inspection. Over the last three years, there have been a lot of crazy things happening where home inspection is concerned. There have been a lot of buyer beware articles written and with good cause. The majority of inspection news was centered around buyers waiving their right to an inspection in a highly competitive buying market to help get their home offer accepted. These articles focused on protecting buyers from buying homes without the ability to have an expert look at the condition of the home.
This sparked a rise in clever strategies to still have an inspection performed, and make a purchase offer that was appealing and competitive. This has led to a rise in the "For Informational Purposes Only" home inspection. This is where Omaha home sellers need to be cautious.
What is A For Information Purposes Only Inspection?
In the last few years, more and more homebuyers have been waiving the very common inspection contingency on a home purchase offer. The inspection contingency before 2020 was pretty much 100% of the time included and expected to be included on a purchase offer. This contingency states that the buyer reserves the right to have a professional licensed home inspector look at the home before closing to determine the condition and if for any reason they find something they don't like they can back out of their offer without losing their earnest money.
Buyers began waiving this contingency in a hot and competitive real estate market as a way to entice home sellers to pick their offer. It essentially told the home seller if something is wrong with the home the buyer would not try to negotiate a different price on the home or for the seller to fix it and that there would be no hold up trying to perform the inspection. They would purchase the home without one.
Since then buyers have found new ways to still have an inspection performed while also trying to offer a more appealing purchase agreement to the home seller with an information-only inspection. This essentially means that the buyer will have an inspection conducted but only to let them know what condition the home is in without the right to rescind their offer or negotiate fixes.
Why Sellers Should Be Cautious
Many real estate lawyers are hesitant about finding this type of inspection in a purchase offer for a home. They advise the home seller to proceed with caution and make sure to include clarifying statements about this in their counteroffer. This is because the whole purpose of an inspection is for informational purposes and things can become vague. It is not uncommon when a buyer includes this to go forward with an inspection and if they find something they feel is a large issue they then try to find loopholes to get out of the purchase.
Be especially cautious if the offer has come through without arrangements for earnest money and without a signature on the offer. Lawyers will suggest that if this is included in a purchase offer and you are considering acceptance of that offer you should counter and make sure you get clarification of what can happen after the inspection.
The suggestions include having the earnest money deposit of at least 5% secure in the escrow account and the buyer's signature on the contract before signing the first purchase agreement and going into the due diligence phase. It is also suggested that you as the seller counter offer with a monetary limit of what the buyer can ultimately ask the buyer to address if they feel something is so big they can't ignore it. For example, the estimated cost of repairs has to fall between $5,000 and $10,000.
Ultimately it is best to consult with a real estate professional on how to make sure you are protected when seeing an information-only inspection on an offer to ensure that terms are solid and the buyer cannot work around what the seller thought was originally agreed to after the inspection is performed.
For more information on selling your Omaha home please contact me any time. I am here to help you sell your home with as little stress as possible for the best price.
