Q: If I declined my right to a home inspection when I purchased my home, can I still sue the Seller for undisclosed defects I’ve discovered post-sale?
A: Let me first start by saying, I am NOT an attorney, and you should probably speak to a Florida real estate attorney if you are having a real estate related issue.
But common sense people – why would you decline a $400-500 home inspection when it comes to purchasing what is probably your largest, most expensive asset EVER?
I always insist that my buyers get a home inspection. And if I’m representing a Seller – I still always tell the Buyer’s Agent involved that their Buyer either needs to do a home inspection or sign a waiver that they declined.
Let me tell you a true story. I represented the Seller of a lovely home in St. Petersburg. We had the home under contract with a lovely couple who wanted to purchase it quickly. They did their home inspection and by golly, it was surely one of the cleanest home inspection reports I have EVER seen. I was thrilled, as the listing agent. Unfortunately those buyers had their financing fall apart, and thus we put the listing back to ACTIVE in the MLS system and started looking for a new buyer.
A week or so later another lovely couple came along with their Realtor. They loved the house and wrote an offer, which the Seller counter offered and the Buyers accepted. We had a deal! Hooray!
Then came time for the buyers to inspect. Their agent requested a copy of the prior buyer’s inspection report. I asked the previous agent if that would be okay, and she agreed, so we provided it to the new buyers. Then I asked the new buyer’s agent when the buyers would be doing their own inspection. She wrote me an email and said “the buyers are declining to inspect”.
I responded that I understood they had reviewed the prior report but that it is always recommended that they get their OWN inspection done because every home inspector is different and may notice something the last one didn’t. They still declined. “Fine”, I said, “but we’ll need that in writing”. So had the Buyers sign a form stating that the Buyers were offered a home inspection period of 15 days but that they were declining to inspect.
The deal closed.
About, oh I guess a year later, I got a call from the Seller, who is very upset. He tells me that the Buyers are suing him. “For what?!” I asked incredulously. “For some undisclosed defects, they think I knew about some problem they are having now. I didn’t know about it, I didn’t build the house with my own hands – I had contractors build it! And they didn’t even do an inspection!”
Surely, I thought, after my Seller spoke to a real estate attorney that the case would be dropped immediately upon hearing that the Buyer had declined their home inspection. It was not. It dragged on and on and on – until the Seller’s attorney – and I have no idea why to this day – dropped my Seller as a client right before a trial date was set. The Seller then found himself a new and totally awesome real estate attorney who was a bit of a shark, and immediately got in touch with the Buyer’s counsel and said “C’mon really – you have no case, you declined the home inspection and we have proof of that!”
The buyers and their attorney backed down and dismissed their case – but not before the Seller spent a lot of money defending himself. I’m a bit shocked that the slimy Buyer’s attorney even took the case.
One of the first things I recall from taking my pre-licensing real estate law course was the definition of the Latin phrase “Caveat emptor” – which means: Latin, “Let the buyer beware” (from caveat, “may he beware”, the subjunctive of cavere, “to beware” + emptor, “buyer”).
The phrase caveat emptor arises from the fact that buyers often have less information about the good or service they are purchasing, while the seller has more information. Defects in the good or service may be hidden from the buyer, and only known to the seller. Thus, the buyer should beware. This is called information asymmetry.
In this case, the buyer did not “beware” and do their due diligence, so why should the Seller be faulted?
A normal (fictitious) conversation between a real estate attorney and their Buyer client who declined a home inspection might look like this:
Attorney: “You had a home inspection done correct?”
Buyer: “No we DECLINED the home inspection.”
Attorney: “And your Realtor advised you that you should get a home inspection?”
Buyer: “Yes but we thought we didn’t need it/had a prior inspection report from another buyer.”
Attorney: “Was this issue you are having now on the Seller’s Property Disclosure Statement?”
Buyer: “No”.
Attorney: “Did you do a final walk through and turn everything on/off and test everything as an inspector would?”
Buyer: “No, we didn’t think we needed to.”
Attorney: “And if you had done and inspection, what would the cost have been?”
Buyer: “$450.”
Attorney: “Which you declined, a $450 inspection for a $450,000 house was too much?”
Buyer: “Yes.”
Attorney: “And you think you can prove the seller INTENTIONALLY hid this latent defect or knew about it?”
Buyer: “No but maybe we think you can. That’s why we are here.”
Attorney: “No! Next…”
Just kidding – this is a fictitious script, but really, if you were an attorney would you take this case? Of course some money hungry attorneys might, and do, as they are often paid hourly. But as the Buyer, realize that it will cost you more in attorneys fees to sue someone (to whom you may lose your case, and then have to pay your attorneys fees AND theirs if you are proven wrong) than if you’d just fixed the problem yourself.
MORAL OF THE STORY:
Buyers – never – EVER – should you DECLINE a home inspection. Pay the $450 for the home inspection, even if one was done by a previous buyer.
Any questions? Read more Ask a Realtor questions here!