There’s a lot to real estate transactions that you might not know yet.
And one such thing is knowing what an “inspection for informational purposes only” means.
Did you hear about it before? No? And you’re selling your property in Massachusetts?
Well then, you surely need to know about this unique type of inspection.
This inspection serves as a valuable tool for sellers seeking a deeper understanding of their property’s condition.
In this blog, we will discuss the significance of these inspections and why Massachusetts home sellers should prioritize and comprehend this crucial aspect of the real estate process.
What Is a “For Informational Purposes Only” Inspection?
You must already know about how inspections are common contingencies in your real estate transaction.
If you’re a seller, then your buyer must’ve offered to get an inspection done to get insights into the property’s condition.
If the inspection comes back, they might then choose to move forward with the transaction. If not, then they might choose to either renegotiate the agreement or walk away from the sale.
But, when we talk about the competitive housing market today, buyers don’t get to have relatively less leverage and make this type of strict demands out of sellers.
In case the buyer knows that the house is on the “want” list of many, then they might want to move forward with the agreement without an inspection.
Instead, there’s a chance they might ask (request) for an inspection “for information purposes only.”
Now, do they get to have this information just like that? No.
This type of inspection happens if they first provide you with a small deposit…. before signing off the agreement.
When the buyers choose the option of such an inspection, then they get the opportunity to conduct a professional inspection. And if they want to back out, they can before signing the contract. Basically, they can renegotiate the sale price.
Moreover, they can also request this type of inspection once they have already signed off on the agreement. Even in this case, they must first agree that they won’t be renegotiating the price after the home inspection for informational purposes only.
Why Sellers Should Be Cautious?
A lot of real estate professionals are cautious when it comes to this kind of inspection in a house purchase agreement.
They caution the home seller to act cautiously and ensure that their counteroffer contains clarifying words.
Why so? Because of the fact that an inspection’s primary goal is informational, things can become a little vague.
When a buyer mentions this, it is not unusual for them to proceed with an inspection. If they discover something they consider a significant problem, they will likely look for ways to back out of the deal.
If the offer has been made without a signed contract or an earnest money arrangement, proceed cautiously.
We would advise you to counter and ensure you have clarification on what can happen following the inspection if this is mentioned in a purchase offer. You are thinking about accepting that offer.
Should Massachusetts Sellers Agree to FIPO Inspections?
It’s clear that if your property is on the want list of many, then they might ask for a home inspection for informational purposes only. But, as a seller, should you really agree to it? Now that’s an interesting question.
Here, we have broken down the consequences of both the decisions that you can make – agreeing or disagreeing with the buyer’s proposal.
Not Agreeing
We won’t suggest that you refuse to get the inspection. This can turn out to be dangerous for you.
How so?
Well, the buyer will start taking this refusal as if there are some major defects within your house that you want to hide.
And let’s be practical: ideally, there’s a high chance that you already think that your property is defect-free or doesn’t have any issues. And bringing a home inspector to verify won’t draw your buyer away.
In reality, this isn’t the case; most homes need at least some repairs.
So, not agreeing will make the buyer assume that your property is something majorly wrong with your home.
Agreeing
If it’s truly an inspection for information purposes only, then you shouldn’t worry about the agreement, as it most likely won’t harm the buying process.
But, unfortunately, the buyers don’t perceive these inspections for their true purpose. They use these to help them in making their purchasing decisions.
So, there’s a chance that if the buyer asked for a home inspection for informational purposes only and found an issue with the house, then they might back out of the sale.
And, as a seller, you would’ve not only lost your interested buyer in the process but also wasted your time in catering to their inspections.
Then…What Should the Seller Do Instead?
Well, there are no definite solutions to this want of the buyers. And even many real estate agents seem to be unsure about how they should cater to this request.
Now, what we’ll suggest is to allow this type of inspection in only two circumstances. One, once the buyer has already signed the purchase agreement. Second, after you have received at least 5% of the sale deposit in your account from them.
These smart decisions will make you more cautious, and there will be less chance that the buyer will walk away from the deal.
Conclusion
When it comes to inspection for informational purposes only, you need to be extra cautious as a seller. This offer stakes not only your potential sale agreement but also your time, which you can use to attract other potential buyers.
Ultimately, it’s best to consult with a real estate agent and get their insight on how to move forward with this decision. You can cater to the ways to ensure you’re protected and how you can ensure that the terms are strongly agreed to when it comes to such inspections.
If you’re a home seller in Massachusetts and you want more information about this, then you can contact RJ Home Inspections anytime. We are here to help you clear your doubts and have a better selling experience.