Caveat Emptor is a Latin phrase many of us are familiar with which translates to “let the buyer beware.”
In real estate, this is similar to the idea of a house being sold in “As Is” condition. Meaning, the buyer gets what they get, even if it is not what they are expecting. What are some things buyers need to be aware of when purchasing? Let’s explore when a buyer needs to beware and who can help them throughout their real estate journey.
Should a Buyer Waive Inspections?
Having a home inspection contingency gives the buyer the ability to change or end their contract without penalty if their licensed inspector finds issues with the house they are purchasing. Waiving inspections may make for a more competitive and favorable offer to a seller; however, a buyer could be exposing themselves to significant risks.
‘When competition is hot and buyers are vying for a limited number of homes on the market, concessions need to be well thought out and thoroughly understood prior to making them. According to Bankrate, “it is possible to waive the typical home inspection contingency without getting burned.” A smart idea is to request an inspection for informational purposes only. This allows the buyer to have the inspection and garner all necessary information related to the property while waiving the inspection contingency.
As reported by Freddy Mac, “distressed homes and fixer uppers may be more likely to have significant underlying issues than new construction.” Considering the type of home being
purchased may help a buyer determine whether forgoing a home inspection is conceivable. The risk of waiving a home inspection is that the buyer has no proof as to the issues on or inside the property. For example, if a home has an issue with the furnace and it needs repair or replacement, the inspection report gives the buyer’s real estate agent bargaining power.
How Important is a Septic Inspection?
The purpose of a septic inspection is to give the buyers up-to-date information regarding the overall condition of the home’s septic system. Arranged for and paid for by the buyers, a typical septic inspection consists of performing a flow test, a tank inspection measuring accumulated scum, effluent, sludge, and solid wastes, and finally probing the leach field for hydraulic stress.
The buyer’s realtor has a responsibility to collect documents prior to an offer being made relating to the septic system from the town or district health office will give buyers an idea as to the current condition, placement, age, and history of the system. A good seller’s agent will make these documents available along with information as to where the tank and leach fields are located. When information is not forthcoming, that is a potential red flag.
Spring Homes says on having a septic inspection prior to purchasing a home, “While most systems continue to work fine for years, inspection at the time of the sale is a wise choice.” Identifying septic system issues early can help a buyer determine if this is indeed the right house for them and potentially save them thousands of dollars in repair or replacement costs.
Interestingly the State of Connecticut requires sellers that have a septic or well system on their property to provide a related rider informing potential buyers of them. This rider makes the contract contingent on a satisfactory inspection of the septic or well system by a competent licensed contractor.
Red Flags and What to Do!
The house sounds amazing online. The house looks amazing in person. But what are some red flags that buyers need to keep an eye out for? There are obvious red flags such as foundation cracks, insect infestations, and moldy smells. Then there are less obvious ones such as a freshly painted wall, strong air fresheners, and several houses for sale in the neighborhood. Not all fresh paint and air fresheners indicate an issue, but when one wall is painted and the rest aren’t or every room has an essential oil diffuser, it’s time to dig deeper. And why is everyone selling at once? Ask questions! Request a second showing, find out if all work permits have been closed out, and call the town to see if something is amiss in the area. Bob Villa says “Before you rush into anything you may regret, watch out for signs of trouble.” Bottom line, research, find out, and ask!
Why Use a Real Estate Agent?
U.S. News reports that your real estate agent “will act on your behalf” and “will add a layer of protection to your real estate purchase.” Working specifically for their buyer, a real estate agent does more than simply help their buyers choose a house. Their crucial role is to provide advice, education, and knowledge about the local market, negotiate on the buyer’s behalf, and offer technical advice throughout the inspection process.
A Buyer’s agent is paid their commission from the sellers. According to the National Association of Realtors, NAR, hiring an experienced agent to guide them through the home purchasing process allows a buyer to have an expert on their side and someone who can offer objective
information and opinions. Choosing to work with a professional real estate agent gives a buyer an expanded search power when looking for a home and someone to negotiate on their behalf throughout the purchase. A good agent will earn their commission and help a buyer find a home that best fits their needs, finances, and dreams.
WHAT IS A REALTOR’S DUE DILIGENCE?
In real estate, due diligence is the time between when an offer has been accepted and the property closes. This is when a buyer’s agent guides their buyer through the home inspection, septic inspection, appraisal, and subsequent negotiations. Experian tells us that this is the period in which a buyer and their agent will “want to give every aspect of the transaction a once-over before closing the deal.”
Additionally, should an agent learn of any issue or red flags during their research of a home they are listing, known as material fact, it must be disclosed. Basically, any information that would either affect the value of the property or the buyer’s decision to purchase it and for how much must be disclosed to a potential buyer or their agent. Should such information not be made known, an agent could be found liable for negligence. Knowledge is power, and in real estate it is required that it be shared.
As your local resource, I am here to help you through every aspect of the home buying process. When you are ready to buy, I am ready to help. Let’s talk.
Laurie Kane
860-729-5837
