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Seller's Disclosure Statement - Don't Rely on it !

In July 2019 The Northwest Multiple Listing Service (NWMLS) changed the guidelines regarding the Seller's Disclosure Statement. In the past, the Inspection Report was usually forwarded to the Listing Agent who then showed it / went over it with the Seller, making them aware of deficiencies / defects with their home that may not have been revealed in the Disclosure Statement, thus outdating the Sellers information on the Form 17 which resulted in Legal issues in certain circumstances.  Washington courts have repeatedly affirmed the legal principal of "caveat emptor", meaning buyer-beware. 

 

If Changes Occur After Giving Buyers the Disclosure Form

Once you make your seller disclosures, you remain under an obligation to make sure your disclosures remain accurate until closing. If you learn, from anywhere other than the buyer or someone acting on the buyer’s behalf, about any change in circumstance or condition that makes any of your prior disclosures inaccurate, then you must update your disclosure form and deliver the amended statement to the buyer.

You need not, however, amend and redeliver your disclosure statement if you take whatever action is necessary to correct the new issue so that your disclosure statement, as originally made, is once again accurate. You have until three business days prior to the closing date to take care of this. (See, Revised Code of Washington Sects. 64.06.040 and 64.06.015.)

 

 In Brief - What is an Inspection Contingency?

The home inspection contingency is the period in which the buyer has time to perform their "due diligence" of sorts - the time to order the primary inspection, and any others which may apply to that particular property. If the buyer isn't satisfied for any reason,  then they can terminate the sale within the contingency period, and receive all of their earnest money back - unless a portion of the earnest money was actually a "non-refundable deposit" (not the case in most contracts).

In the Puget Sound Region, the "customary" inspection period for a typical single-family home is 7-10 days. However, in this strong seller's market where buyers are forced to try and "win" a bidding war, an inspection period of 5 days (or even less) is becoming more the norm. Unfortunately, so is waiving the inspection contingency completely.

Pre-Inspections Before & After Listing For Sale

A Buyer Pre-Inspection

Buyers do have the option of performing a "pre-inspection" if the seller agrees in writing. In this case, the buyer can have an inspection performed before deciding whether or not to submit an offer.

This can be quite beneficial for the seller too, as it allows them to keep the home "active" on the market. But again, in a hot seller's market where 10-20 or more offers may be expected, many sellers will not accommodate this request - obviously, they don't need to with so many interested buyers. And, it's understandable - they don't want a half-dozen inspectors with their clients picking-apart the home if it can be avoided.

To Waive, or Not to Waive

If as a buyer, you find yourself in a multiple offer situation where no inspections have been performed, and the seller isn't allowing "pre-inspections," please think twice about waiving the inspection. Don't let the emotion of the situation cloud your better  judgment. Even if the home is "new" it should be inspected, builders hire cheap labor and corners get cut all the time – I’ve seen it on numerous occasions.  Why do you think builders have their “own” addendums that usually state they “supercede” your normal  Real Estate Contracts?

The home may appear to be a perfect gem, but that’s usually not the case and it could have unseen major issues that the Seller may or may not be aware of  - which could cost you thousands of dollars. Do not rely on the Disclosure Statement ! People “Fudge” the truth all the time !

So, don't get caught up in the moment, don’t get impatient, and don't allow anyone to pressure you. Buying a home without an inspection by a Competent Inspector is like playing Russian Roulette..