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When sellers should refuse buyers’ request for a home inspection

When the homeowner is selling the home for the value of the land, there’s no point in allowing a home inspection. (Jim Watson/AFP via Getty Images)
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Q: In a recent article you suggested to a daughter that when selling her mother’s home in poor condition that she could just refuse the buyer’s request to have a home inspection.

Why in the world would you suggest that? Refusing a buyer to conduct a home inspection reeks of “hiding” something.

A: Some people will certainly see it that way. As if the seller is hiding something by refusing to open up the doors to a professional home inspector. But there are a few circumstances where it makes sense to do this.

Let’s back up. Most buyers will include an inspection contingency when making an offer. And most sellers will agree to allow a professional home inspector to come through the house within a week or 10 days after the buyer and seller agree to the purchase price.

Sometimes a seller will sell a home in as-is condition, which telegraphs to prospective buyers that the property likely needs work (which could range from a thorough cleaning to a major renovation or rebuild). It also telegraphs that the seller will not negotiate the price based on any issues with the condition the buyer may find with a professional home inspection.

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If the seller agrees to a professional home inspection, then the buyer will have the right to cancel the deal if the property does not pass inspection. In a hot market, the seller may not want to waste time, so they will eliminate the right to have the home professional inspected before the closing.

Also, when the homeowner is selling the home for the value of the land, there is no point in allowing a home inspection.

It is true that the sellers might get more money if they allow buyers to come in and see the home. However, when a home is in such bad shape or if the land is worth more without the home than with it (because there is a cost to remove the home before building something else), then the home inspection is superfluous.

You may notice listing brokers putting up a single picture of a home online. These homes are usually teardowns. There is a good reason they do not put up interior photos of the home. In most cases, they will turn off prospective buyers, who might not even consider looking at the home.

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Our advice was not intended to keep buyers from looking at the property. The question is really about whether there are valid reasons not to permit an inspection.

If the sellers are willing to risk getting less money for the property, they can refuse to allow any contingencies. If there is a superhot buyers’ market, they can say they will take “best bid” offers and open it up like a one-round auction.

The right buyer would have to come along and buy this seller’s home without a proper inspection. That buyer might be a contractor, real estate developer, real estate agent or another real estate industry professional who does not need a professional home inspection to know what they are getting into if they make an offer.

Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask" (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact them through her website, bestmoneymoves.com.

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