What Happens If I Don't Get A Home Inspection On A Property I'm Buying?

If you're considering the purchase of a home, I've got some bad news. Things are really tough right now for home buyers, especially if you're on a limited budget or don't like to make decisions on a moment's notice.

And here's some even worse news: Home sellers are aware of the situation and they're unloading polished lemons onto unsuspecting buyers.

Caveat Emptor = Buyer Beware

I've been preaching this for decades, but there's been no point in my career as a home inspector that it's more crucial to understand the importance of the doctrine of caveat emptor (buyer beware) than right now.

If you think as a home buyer you're protected by law for deception by sellers, you'd be mistaken because the line between 'updating' or 'renovating' a home in preparation for sale versus 'hiding flaws' is a blurry one that benefits the sellers of houses. To win a legal case against a deceptive seller you must be able to prove the seller: 1) was fully aware of existing problem(s); 2) had a reasonable expectation the problem(s) would be likely to affect the value and/or cost of maintaining the house; and 3) willfully and intentionally concealed the problem(s). Without verifiable proof of all three things you don't have a case (I'm basing this on the knowledge I've gained in 22 years as a home inspector - I'm not a lawyer and this shouldn't be construed as legal advice). Making matters worse, the courts put the burden of diligence on the buyer via the doctrine of caveat emptor, thus if the buyer didn't do everything reasonable to protect their interests prior to purchasing the home, they assume the burden of a home's problems.

The ongoing increase in home values in my own community (Lincoln, Nebraska) is unprecedented. It's being driven by strong employment, a healthy local economy, low interest rates, construction material price inflation, and a small inventory of homes for sale, which creates extraordinary demand. Based on the information provided to me from others in the real estate industry, most homes being listed are getting multiple offers for well over the asking price as soon as they are put on the market.

This creates a bad situation for buyers because they have to make hasty decisions, which limits the opportunity to be diligent relative to thoroughly examining the house and neighborhood, or writing up a contract that provides the buyer any flexibility. Consequently, many buyers are foregoing home inspections to appease sellers and help facilitate a quick sale.

Here's where things get tricky for buyers: Homeowners understand the inventory of available homes is tight, and some are taking advantage of this 'seller's market' opportunity to unload defective homes, knowing the urgency of buyers will make it less likely the problems will be discovered prior to closing.

Some of defects that can be hidden and difficult for a buyer to discover without an inspection include: 1) structural / foundation problems; 2) moisture / leaks / mold; 3) defective exterior components such as windows, siding, trim, or shingles; 4) wood damage from rot or termites; 5) hail damage, and/or; 6) mechanical system problems such as plumbing / sewer issues, electrical defects, and a malfunctioning furnace or air conditioner.

Last year a hailstorm affected portions of my region of service and I recently inspected a number of hail-damaged homes that weren't repaired. I suspect in many cases the sellers cashed out on the hail claim settlements and are passing the damaged homes onto buyers. In some cases I've seen hail damaged shingles replaced, but the hail damaged gutters, trim, and siding aren't, despite being covered by insurance. These situations can affect the insurability of the home, which could force buyers to make out-of-pocket repairs to hail damaged components.

A common defect with homes is water entering basements at foundations or floor slabs. Sellers will often disclose, "we've had water in the basement, once..." with an explanation it was due to either: 1) a missing gutter downspout extension; 2) clogged gutters; 3) sump pump malfunction, or; 4) a landscaping issue, and that "...we fixed it and it hasn't happened since," which gives buyers a false sense of security. Based on my experiences as an inspector, if there's been water in the basement once, there's a 90% chance it's happened multiple times, and it's highly likely to happen again. Admitting to having water in the basement 'once' is what sellers use to trick buyers into thinking it's not a problem and at the same time provide themselves with the 'get out of jail free' card that will help them avoid the potential liability of a fraudulent disclosure statement.

Get a home inspection, and if the seller doesn't want you to get an inspection, consider it a red flag.

It makes me sick when people who don't get a home inspection call me after a purchase, having discovered significant problems that weren't disclosed by the seller. In these situations there's very little I can do to help, other than tell them what I'm telling you now - deception in home sales isn't the exception, it's the rule.

The law isn't much benefit to buyers who've been swindled, especially if they opt not to have a whole home inspection, because the 'doctrine of caveat emptor' puts the burden of diligence on the buyer, not the seller. The courts just assume that when people spruce things up in preparation for sale, they're covering up problems. If you're a buyer who opts not to have a home inspection performed and you later discover the seller didn't disclose major defects, you'll be highly unlikely to succeed in a legal claim / lawsuit because then the courts will assume you weren't sufficiently diligent via the doctrine of caveat emptor.

If you're still considering buying a property without an inspection, here are some tips: 1) ask the seller up front if there's been a hail claim, and if so obtain copies of the insurance settlement and contractor estimates / invoices / warranties; 2) look in the attic with a flashlight to see if there's mold, roof leaks, or feces from bats or rodents - some of the biggest home buying nightmares are attic-related; 3) go online to research the home's history (past listings or sales, permits / inspections, valuation, schools, neighborhood crime statistics, etc.); 4) check the main sewer stack to see if the cleanout cap has been replaced - if so there's a high likelihood of sewer problems such as tree roots or a bad sewer line, which could be costly to replace, and create a huge inconvenience when the basement is full of sewage and you can't use your own sinks, showers, or toilets to clean up, and; 5) examine walls in the basement under stairs, in closets, or in the utility room to see if there's any evidence of water staining, moisture, or mold.

I always do an online search of homes I inspect, starting with a visit to the county assessor's website to see the size of the lot, what permits / inspections have been obtained for refinishing or remodeling, what the tax valuation is (and whether it's been protested by the homeowner), and what the home sold for in the past. I also do an online search of the address to see if the home was in the news in the past. Sometimes a search will reveal a home was part of a crime, fire, or illegal drug operation, or been hit by a car (which is more common than you might think!).

This is a strange time in the real estate market. I can't predict the future so don't know what fluctuations might occur in the housing market, but if I needed to buy a house right now I'd be very cautions and consider different options, such as staying in my existing residence as long as possible, or buying something under my budget so I could stash some money away and be ready to pounce when the interest rates go up, prices level off, and the market shifts into one that's more favorable for buyers.

Either way, always remember - caveat emptor (buyer beware). It's the most important piece of advice I can give.