Beware Buyers Bearing “Informational Purposes Only” Inspection Contingencies
Okay, maybe that’s a little aggressive.
But, in this historic seller’s market buyers are trying to stand out. This monster is now created.
The standard language is simple, but generates some concerns.
“Buyer’s inspection is for informational purposes only” is probably the most common language.
First question: Is there another reason for having a home inspection? It’s always for information. The difference is; what we’re asking the buyer to do with that information. Seemingly, this offer language is meant to tell the Buyer to take this information and use it later. Or, at least that’s what the buyer promises the seller they’ll do with the information.
This creates confusion.
Often, a buyer will come to me (after an offer like this has been accepted) and say, “The inspection was for informational purposes only…but…” Or, they’ll say, “But, if it’s a big ticket item, I can still ask for them to fix, right?”
Well, you can always ask… The seller can say “no” and the buyer is still on the hook.
Too often, this language is essentially a promise the buyer doesn’t intend to keep. What’s dangerous is that promise the buyer doesn’t intend to keep is connected to a much bigger obligation, the breach of which could have significant financial consequences.
In this current climate, buyers need to stand out. For years, sellers have been handed a post-inspection “to-do” list or a request for price reduction. So, having no home inspection or home inspection contingency certainly looks pretty good to a seller.
But, the inspection contingency is one of the most important and fundamental protections afforded to a buyer. The home inspector is there to provide the buyer with vital information about how to live in the house.
So, what can we do?
My suggestion is to set a monetary limit as to what the buyer will ask the seller to address, and make it realistic. Generally, such a limit falls between $5,000.00 and $10,000.00. This addresses the buyer’s apprehension about “big ticket” problems, and it also clarifies things for the seller.
Either way, if you have clients that have this language as part of their offer, it’s okay, call me.