Home Buying in 95060>Question Details

Ken Sawtelle, Home Buyer in Santa Cruz, CA

What are the risks to me signing the inspection report for a home I am about to make an offer?

Asked by Ken Sawtelle, Santa Cruz, CA Sat Jun 16, 2012

We are making a new offer on a property and are being asked to sign each page of the inspection report which came from the last buyer who walked away from the deal. Is this normal? Shoudl I be concerned? Is there risk? I mean, it seems to me that I could still ask for more considerationif we discover the costs of repairs are great, even though we were aware of them already in the report, correct?

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14
The bottom line is that signing the inspection report is merely acknowledging the receipt of the information. That's it.
0 votes Thank Flag Link Thu Dec 13, 2012
You are acknowledging receipt of the information. As a practical matter a claim on your part, at a later time regarding non-disclosure of an item that is in fact listed in the report would significantly lower the credibility of your claim. It does not however preclude you from requesting a concession or foregoing the purchase.
0 votes Thank Flag Link Thu Dec 13, 2012
Dennis Spencer, Win Home Inspection Santa Cruz

Ken, one more thing for you to consider. In my contract, and most others I have seen, you would have no recourse against the inspector in the event he missed items. The original purchaser of the inspection is the only person that has recourse, unless you pay an additional fee and sign on the agreement as well. So in this case you are not protected against errors/omissions. Also, keep in mind that a crucial part of understanding the inspectors findings occurs during the consultation at the end of the inspection. And, not to beat a dead horse, but inspectors note issues at the time of the inspection. If more than a month has passed, or if seasons have changed (roofs don't leak when its not raining) then the report may no longer be accurate or complete. So, I'm biased of course, but I say get your own inspection or contact the inspector, be added to the agreement, and know your protected. Hope this helps!
0 votes Thank Flag Link Wed Nov 28, 2012
Ken:

"We are making a new offer on a property and are being asked to sign each page of the inspection report which came from the last buyer who walked away from the deal. Is this normal? Should I be concerned? Is there risk?"

The CA Residential Purchase Agreement [Para 10B] states the Buyer, at no cost, provide complete copies of all investigative reports obtained by Buyer. The obligation to do so even survives after the termination of the Agreement. So, the Seller IS doing the right thing by providing you the report. Do not be concerned you are getting the report; however, it sounds like the contents of the report may be concerning. Your risk is really based on you not reading the report and doing the same with your own inspections performed as well.


"I mean, it seems to me that I could still ask for more consideration if we discover the costs of repairs are great, even though we were aware of them already in the report, correct?"

Absolutely, having a report that records damage is completely different than having a quote quantifying the damage via a repair quote.

-Steve
0 votes Thank Flag Link Sat Jun 16, 2012
Hi Ken,

The seller is obligated to disclose all reports no matter who they were purchased by or who paid for them. By you signing them, you are just acknowledging that you have seen the reports. This does not mean that you don't have the right to have your own reports done. You still have the right to ask for a credit, price reduction or repairs for items in the report as long as you have not released the physical contingencies. It is normal for a buyer to sign any and all report no matter where they come from.

Good luck,

Lonna
0 votes Thank Flag Link Sat Jun 16, 2012
Ken,

I'd first ask if the seller has the right to offer you the information from another buyer's inspection report...it so, they would be following correct procedure by having you sign or initial each page as an proof that you have reviewed the content.

If this report is intended to take the place of your right to conduct your own inspection....I would be concerned....regardless of being provided with the initial inspection information it is highly recommend that you have right to conduct one of your own.

Proceed with caution....

Bill
0 votes Thank Flag Link Sat Jun 16, 2012
Hi Bill,
In fact, the CA Residential Purchase Agreement [Para 10B] states that the Buyer, at no cost, provide complete copies of all investigative reports obtained by Buyer. The obligation to do so even survives after the termination of the Agreement.
Flag Sat Jun 16, 2012
Ken,

If you review their inspection and it says for example that the roof is older and will need to be replaced soon, and then you have a report that says the same thing and you try to get a credit for it after getting into contract that is unlikely to be well received. That said, there is no legal regulation preventing you from asking for it.

Sometimes what buyers do when there are a lot of items in the report they say they didn't realize until having their own inspection how much it might cost - contractor inspections don't give $ amounts, pest inspections do - and use that to negotiate.

Also, be careful about using sellers' pest reports. We once had our own on a house that delivered a clean report and our inspector came up with over $30K. We had our own because we didn't know the inspector. There is also one company here in San Francisco that routinely misses things so when we see one of their reports we always advise buyers to get their own.
0 votes Thank Flag Link Sat Jun 16, 2012
Thank you all for your repsonses, what a great community. We are absolutley going to be getting our own inspection performed if they accept our offer.The one already performed is not bad really and we are prepared for the costs and effort (there is an exception to this that we have addressed already in our new offer)

What concerns me is if there is an understanding/normal practice/precendent/whatever that keeps me from clawing back some of the costs if we later find that some fo the items in the original inspection are of more cost and effort than we had estimated for example.... or as Debbie says below "by acknowledging them, you are accepting them, as is, and will factor the repairs into your offer." - can this be true, legally or otherwise?
0 votes Thank Flag Link Sat Jun 16, 2012
None of us can comment on the legality; however, I would not agree acknowledgement is the same thing as acceptance in this case. Perhaps before making your offer your Agent should communicate with the listing agent to make it clear your investigations will include estimates for repair and that if the Seller is looking for a strict "AS IS" sale (seller expects your offer is being made with "repair adjustments" included) you might just want to move on to the next property. You can save both time and money if you share expectations.
Flag Sat Jun 16, 2012
You should ask your agent. You still have the opportunity (and likely, obligation) to do your own inspections (and to walk away yourself, if appropriate). The Seller wants you to be more familiar with the property, before they consider your offer (this way, you are less likely to ask for any credits or adjustments later on). It is normal for a Seller to give to you and to ask for your signature on any and all reports related to the property. If there is a problem in a report, you should consider the cost/hassle of repair in your offer.

You can always ask for a credit, but they can always say no. Note: There are certain situations where a Seller might not be able to change a contract later on.
0 votes Thank Flag Link Sat Jun 16, 2012
No, not necessarily correct!

I think you need to clarify what the sellers are expecting by having you sign the last buyer's report.

We have buyers, in my area, sign the seller's disclosure at the time of making an offer - if, for example, it says the AC is "as is", or there is a leak in the bathroom......the buyers are acknowledging that, and can't really turn around and ask to have those irems repaired, unless their inspection reveals more extensive problems - problems over and above - than disclosed.

It may simply be that they are disclosing any defects to you........OR.............by acknowledging them, you are accepting them, as is, and will factor the repairs into your offer.

You should still reserve the right to have your own inspection, and if additional items are discovered, that's a different matter.......BUT........I'd make sure you aren't being asked to sign off on the items that are in the report.

If that is the case, then get any estimates now, ahead of time, so that you won't have any surprises later.

Best wishes.
0 votes Thank Flag Link Sat Jun 16, 2012
Hi Ken,
The seller is doing the correct thing in providing the report to you. It is a little unusual to have you sign each page but I don't see any risk in doing it. I would still recommend you hire your own home inspector.
Good luck,
0 votes Thank Flag Link Sat Jun 16, 2012
By signing the report you are only acknowledging that you received and read the report.
0 votes Thank Flag Link Sat Jun 16, 2012
What is your agent advising...and have you considered conducting your own inspection with a licensed home inspector...
0 votes Thank Flag Link Sat Jun 16, 2012
It's hard for me to comment without knowing all the details of the deal. Signing an inspection delivered by the seller as part of a disclosure package is not in and of itself a problem, but in my view you should still have your own inspection. Most sellers understand this, and if you have to waive inspections in order to get an offer accepted that is almost always a bad idea.

Best Regards,

Lance King/Owner-Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425
0 votes Thank Flag Link Sat Jun 16, 2012
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