Buyer Inspection Waivers (BIW) are a pain to many agents-One more document that needs to be explained to a buyer-Ugh!
However, this handy little disclaimer protects the agents, seller and even the buyer!
Let’s take a look at what a California BIW is: It explains to the buyer their right to have inspections. There’s even strong encouragement from the agent to have inspections. Why is this important? Because there may be hidden problems with the property that either the seller or listing agent are not aware of and did not disclose. A professional inspector may be able to identify problem areas.
Using a pest or home inspector (at minimum) may help to identify any red flags and enable the buyer to determine a fair price for the home based upon its condition. Other inspections may also be deemed necessary from these initial inspection reports.
For example: if the foundation is determined to be damaged with an estimated repair cost of $20,000, the buyer may either ask the seller to pay for the repair or reduce the sales price to compensate for the damage.
If the buyer declines to pay for inspections, then waiving that right in writing makes it clear they understand the consequences of doing so.
Here is the tricky part- EVEN IF THE SELLER HAS PROVIDED A HOME INSPECTION REPORT, if the buyer opts to not order their own inspection, they should sign a BIW. This ensures the buyer understands that they still have a right to order their own inspection;
Broker recommends that Buyer obtain a home inspection, even if Seller or Broker has provided Buyer with a copy of a home inspection report/disclosures obtained by Seller or a previous buyer
On the flip side, NO waiver is needed if a seller provides a pest inspection report;
Broker recommends that Buyer obtain an inspection for wood destroying pests and organisms (whether paid for by Buyer or Seller)
So now you know!