The difference between waiving the option period and waiving inspections.
In Texas, when we talk about the buyer “waiving the inspection”, we’re really talking about them “waiving the option period”. There’s a big difference between waiving the option period and waiving the inspection. Even if a buyer submits an offer with no option period, which some sellers might think is great, the truth is, the buyers haven’t waived their right to inspect. The contract gives the buyer the absolute right to have reasonable inspections during reasonable times. And the buyer should have inspections done because this is a huge investment.
Even if a buyer doesn’t have the leverage to negotiate additional repairs or concessions with a seller, they will still want to know what they’re stepping into. The seller’s disclosure certainly helps a buyer determine what, if any, outstanding issues might exist in a home. However, a lot happens during the inspection to identify things like deferred maintenance. The inspector can’t predict when, for example, an air conditioning unit is going to stop working. However, an inspector can identify things that a buyer might want to know that the seller doesn’t even know and, therefore, hasn’t disclosed.
Another big consideration here in our market is a home’s roof. If the roof has been damaged due to a weather-related event, there’s a good chance that the current insurance will cover its replacement. Of course, the seller has to pay a deductible, so if a buyer doesn’t have the leverage to request the repair, then the seller may not pursue getting a new roof.
I highly recommend that buyers submit an offer with a short (3-4 day) option period and a significant option fee. The option fee is nonrefundable. However, assuming the buyer moves forward, they’ll g get credit for the option fee at closing.
As a home seller, even if you get an offer where the buyer has waived the option period and, as such, you think that there’s nothing that can happen between executing the contract and closing, you’re wrong. Contracts in the state of Texas are extremely buyer-friendly. There are very few ways, if any, where the seller automatically gets the buyer’s earnest money.
There’s another reason why a home seller would want their buyer to have an inspection: if the buyer moves in to the house finds deficiencies they think should have been disclosed, the buyer will want to hold the seller responsible and possibly claim lack of disclosure (versus them discovering the item during the inspection and buying the home with full knowledge).
I believe it is in both the buyer’s and seller’s best interests to agree to a short option period and a generous option fee.
If you have any questions about structuring an offer or maximizing your equity, please reach out to me by phone or email. I’d love to have that conversation with you.