Home Buying in 94110>Question Details

Michael Chong, Home Buyer in San Francisco, CA

My real estate agent is suggesting that I waive structural pest inspection in order to pass fha appraisal more easily. is this in my best interest?

Asked by Michael Chong, San Francisco, CA Tue Feb 28, 2012

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Answers

30
If you check off the pest control inspection contingency, the lender will want to see a copy of the report (if you get one). Once they see it, they will want a pest control clearance. In San Francisco, pest control work is generally a negotiable item. You have a hot market right now. If you think people are standing in line for the home you want to buy, you may want to listen to your agent and not create a situation that could incline a seller towards a cleaner offer.

The contractor's inspection contingency is quite broad and you can have an inspector who does a combination pest/contractors inspection. He doesn't need to do a formal pest report, but can still call out any items of major concern. If you wind up being alarmed by what is found, you can go back to the table with the seller and negotiate work and/or credits.
5 votes Thank Flag Link Tue Feb 28, 2012
Wow. I wouldn't ever advise my client to waive any kind of inspection. I want them to know the truth about what they are buying, and if that's enough to kill a deal I might suggest that the last good deal hasn't been made.
1 vote Thank Flag Link Mon Sep 10, 2012
That is a great question and there is no simple answer.
I believe it is better to have knowledge than to go through life without it.
Some agents feel otherwise.
You have to ask yourself, do I want the property and risk the inspection or do I want the property and risk not knowing.
Just remember you are the boss and the agent is there to help you. You get to decide.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
harold@socalhomebuying.org
http://www.socalhomebuying.org
California Department of Real Estate Broker License # 01312992
1 vote Thank Flag Link Thu Mar 1, 2012
That's a loaded gun scenario. The only time a Pest inspection plays a negative role in buying real estate is when the person telling you not to do an inspection has a vested interest in you moving forward. I'm not saying your agent is giving you bad information however, unless the place is about ready to fall down, the appraiser really isn't an expert in those matters and therefore wouldn't really notice. Now, if you write into your contract that you want a pest inspection, the lender may require you and/or the seller to do the work prior to funding and closing on your loan. Remember, structural problems aren't always noticeable to semi-experts and the mistake of finding a real problem can easily cost the new owner tens of thousands of dollars if not hundreds of thousands of dollars. Personally, if I'm buying a wood structure I'm having a pest/structural inspection...period.
1 vote Thank Flag Link Wed Feb 29, 2012
The decision is yours. Agents advise - Clients decide.
1 vote Thank Flag Link Tue Feb 28, 2012
Jed Lane; Fog…, Real Estate Pro in San Francisco, CA
MVP'08
Contact
"Since inspections in general are still noted in the contract, you may still have a pest inspection performed, yet not have it explicitly stated in the contract. If the results of the report are not acceptable to you, use your inspection contingency and back out."

How can you use the contingency to back out if you have not explicitly stated it in writing?
1 vote Thank Flag Link Tue Feb 28, 2012
Our contracts have clauses to include all inspections. Their is another clause specifically for pest inspections, but the all inclusive clause also covers pest.
Flag Tue Feb 28, 2012
If you mark on the contract buyer to perform "All inspections deemed necessary" and do not specifically check the pest box then FHA will not call for a copy of the pest inspection or clearance. This covers you with the right to perform any inspection you deem necessary in order to due your due dilligence and prior to removing contingencies. You do not need to specifically waive the inspection. Even if the seller were to ask you to sign an as-is addendum indicating they will not do any repairs and the property is sold in its present condition it doesn't take away your right to do your due diligence and have your inspection period. If you find something you can't live with you can always request repairs but it's not guaranteeed... you are still covered by the inspection contingency and are able to cancel the contract if you are unhappy with the findings in any of the inspections. The seller does have a right to a copy of any reports you obtain.

Hope that helps.
1 vote Thank Flag Link Tue Feb 28, 2012
"Best interest" is subjective. Depends on your goal and how the contract is drafted. Is your agent suggesting that you actually have it written that you waive the pest inspection, or simply not include it in your offer? Big difference. It's understandable why he or she would not want it included with the offer...for the FHA approval. Since inspections in general are still noted in the contract, you may still have a pest inspection performed, yet not have it explicitly stated in the contract. If the results of the report are not acceptable to you, use your inspection contingency and back out.
1 vote Thank Flag Link Tue Feb 28, 2012
Alternatively, use a standard CAR contract and simply do not check Section 4(A)1.
Flag Tue Feb 28, 2012
agent is suggesting that i check item 12D structural pest inspection waiver on the san francisco associaton of realtors standardized contract. we have discussed getting the inspection done anyways.
Flag Tue Feb 28, 2012
Unless you are making an offer on a home with major issues, there should not be a problem with the appraisal. Always do an inspection. If your agent is concerned, make sure the inspections are not mentioned in the contract but do your due diligence during the inspection contingency period. If you waive the inspection contingency you are accepting the property in its As Is condition without learning about any problems. For example, do you want to find out that you need a new roof after you've moved in? You need to know that now so you can negotiate repairs. It is not in your best interest to waive the inspection report.
0 votes Thank Flag Link Thu Oct 31, 2013
Unless you are making an offer on a home with major issues, there should not be a problem with the appraisal. Always do an inspection. If your agent is concerned, make sure the inspections are not mentioned in the contract but do your due diligence during the inspection contingency period. If you waive the inspection contingency you are accepting the property in its As Is condition without learning about any problems. For example, do you want to find out that you need a new roof after you've moved in? You need to know that now so you can negotiate repairs. It is not in your best interest to waive the inspection report.
0 votes Thank Flag Link Wed Oct 30, 2013
It is better to buy a property without issues, and do a full inspection available to you.
Lender might ask for the copy of the WDO report - and the clearance of the house might be required by the bank, that's true.

If your seller agrees to fixing things prior to closing, you will be ok. There may not be an issue after the inspection anyway.

Hope this helps,

Irina Karan
Beachfront Realty, Inc.
IrinaKaran@gmail.com
0 votes Thank Flag Link Wed Oct 30, 2013
The easiest way, isn't necessarily the best way.......personally, I'd want to play it on the safe side.
0 votes Thank Flag Link Thu May 23, 2013
I would definitely look into getting an inspection. Try (http://www.Suburbanexterminating.com) long island pest control. They do a great job. I don't think it's a good idea to just waive it.
0 votes Thank Flag Link Thu May 23, 2013
Take advise from agents in SF. Other ones from outside of SF doesn't understand the current real estate environment in the city. It is hard enough to get a FHA offer accepted, waive the inspection but do one for your own peace of mind. If the damage is too great, back out...
0 votes Thank Flag Link Tue Apr 16, 2013
Of course! Waive the inspection and get one later. Who cares if you find out during your inspection that the deck needs to be replaced for about $35,000 and the shower pan is leaking and the whole shower needs replacing for $10,000 and then when they start the repair work they find dry rot in the subfloor, another $5000? There is a reason a lender wants the work done before close of escrow. Get an inspection prior to making an offer. If its not high and you can handle the repair costs, waive it. If not, don't make the offer.
0 votes Thank Flag Link Sun Apr 7, 2013
You can always waive it as a item on the contract. But then just go and get your own for your own information & you can review it and make your own decision on the level of termite damage. If you put it on the the contract the lender will not lend until you give them a full termite clearance.
0 votes Thank Flag Link Sun Apr 7, 2013
Hi,
I always recommend you get your own inspections

good luck!
$$$BUYER CASH REBATE 50%-60% / SELLER DISCOUNT 50%$$$

Flavio Tejada, MBA-Finance, Realtor, Broker/Owner
(415) 305-2958
Web Reference: http://americarealtyonline.com/
0 votes Thank Flag Link Sat Apr 6, 2013
Your agent is giving you bad advice. After 35years of inspecting homes for termites. I can tell You never buy real estate without complete termite inspection and a complete home inspection.........

Ron Bibler
Excellence Exterminating
http://WWW.santarosapestcontrol.com
0 votes Thank Flag Link Sat Apr 6, 2013
Get an inspection before you write the offer or get one even if you waive
0 votes Thank Flag Link Wed Feb 20, 2013
I also agree that you should never waive an inspection. I personally would have both pest and rodent control Tucson taken care of before they can become a bigger problem. Good luck!
0 votes Thank Flag Link Mon Nov 26, 2012
Oops,just noticed the date on this question. Sorry about that all!
0 votes Thank Flag Link Mon Sep 10, 2012
You can always do a termite inspection done just for your own information regardless if it is in the contract or not.
0 votes Thank Flag Link Thu Mar 1, 2012
Without seeing your contract and knowing what contract your agent used, You shoudn't have to waive the pest inspection to pass an FHA appraisal. During your contingency period, you can get any inspection you deem important, as long as your agent doesn't check the box in the contract that specifies pest inspection.

Besides that, make sure your agent checks the TDS ( disclosures) that the seller didn't check the box that states whether they got any pre-inspections.

If you still have doubts, either talk with your agents Broker or a real estate attorney.

I would be more than happy to look at your contract or discuss this with you.

Cheers.

Tap
0 votes Thank Flag Link Tue Feb 28, 2012
Hello Home Buying 9411,

FHA is governed federally, right. So the policy should be nationwide, across the board. From my understanding, FHA loans require Termite Report. Even though you did not check off the Termite or Wood Destroying Insect Inspection on the contract under the Home Inspection, the lender may want to see the report.

In my experience as a buyer's agent, I have submitted completed termite and septic report, if the property has septic system, to the loan officer.

And to answer your question if it is for your own benefit. My response would be NO. Termite inspection in CT cost around $100. To have it resolved if there is an existing infestation--easy $800 and could be higher. Do you want to inherit this problem or not know about it?

Best.

Maria
0 votes Thank Flag Link Tue Feb 28, 2012
As a note: home does not have disclosures as "buyer is out of town" and disclosures will be provided upon offer. Home is in the Excelsior and appears good, but appearances can be deceiving.
0 votes Thank Flag Link Tue Feb 28, 2012
Does the seller have a recent pest inspection report from a respected pest inspector on hand?

- If so, you may consider asking the same inspector to meet with you and review his inspection report at the property. It will cost you a fraction of a new inspection and you will receive firsthand explanation of the property condition.

- If not, do you still have time to perform a pre-offer pest inspection (with the seller's permission of course)?

Best of luck,

Oggi Kashi - 415.690.3792 direct
Broker Associate, Paragon Real Estate Group CA DRE 01844627
All data from sources deemed reliable but subject to errors and omissions, and not warranted.
Web Reference: http://www.oggikashi.com
0 votes Thank Flag Link Tue Feb 28, 2012
no they do not. may or may not have time, every other house i waited on had multiple offers. this is in the $450k range
Flag Tue Feb 28, 2012
FHA will likely ask that Section 1 items be fixed prior to close of escrow. I'm sure that is why you are getting this advice. Unfortunately without knowing the home, what kind of condition it is in, whether the area you are looking in tends to have a lot of infestation or dry rot, as well as the Seller's situation, etc, it's impossible to know the best course of action.

I'm guessing that Seller didn't get their own Pest inspection? Had they, you could potentially rely on that inspection rather than your own. The Seller's inspection would be unlikely to trigger the same FHA requirement that your inspection is likely to trigger - again, assuming there are Section 1 issues found.
0 votes Thank Flag Link Tue Feb 28, 2012
home does not have disclosures as "buyer is out of town" and disclosures will be provided upon offer. Home is in the Excelsior and appears good, but appearances can be deceiving.
Flag Tue Feb 28, 2012
Oh I can't wait for the out of state agents to try and answer this one...

Let's wait together and see what THEY say. - More later. };-)

Mike Ackerman
Zephyr Real Estate
415-307-5850
0 votes Thank Flag Link Tue Feb 28, 2012
That's a tricky area you have to consider carefully.

Is there a pest inspection report on record? If so take a look at it. Pest reports are filed with the state and are meant to be objective and unbiased. They are only 'valid' for a short period of time from when they are done however as things can and will change but still serve as a reference point.

That said, take a careful read at paragraph 12A of the San Francisco Purchase Contract. That language is broad on purpose. And looking to 12C that claudr states that while you waive the right to do it it doesn't mean you can't have an informal assessment. It doesn't mean you can't inspect the property for those types of issurs per se - it means (in my opinion) that you cannot rely on pest and structural issues as a basis of your purchase per se. It's circular on puroose to foster practicality. Think ven diagrams....
0 votes Thank Flag Link Tue Feb 28, 2012
no inspection or disclosures. but i get what you mean. we might check the box and run it anyways.
Flag Tue Feb 28, 2012
You should be able to find a pest/termite company to perform a free inspection and then you would have the report to help you structure your offer accordingly. It would help on the loan side as you would have 1 less hurdle to cross over
0 votes Thank Flag Link Tue Feb 28, 2012
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