Dealing with Contract Fallout: A Homebuyer's Guide

Should you be worried if your dream house fell out of contract due to a prior inspection? Join us on the Standing Out in Ohio podcast as Laura and I, Jim, tackle this pressing question. We break down why inspection reports can be deal-breakers for some buyers but mere blips on the radar for others. From minor foundation cracks to unusual sensitivities to chemicals, we cover the gamut of reasons behind these decisions and share practical advice on how to maintain your home to prevent such situations. Plus, we discuss the benefits of a pre-listing inspection to smooth out any bumps in the road before they become deal-breakers.

In this episode, we recount a recent experience where a seemingly good house fell out of contract over minor and common issues. We share our observations on how different buyers have varying thresholds for what they consider deal-breaking. Tune in to hear our insights on why the previous buyer's concerns might not be a reason for you to worry, and how to approach these scenarios with confidence and a level head. Whether you're buying or selling, our experiences and tips will help you navigate the home inspection process like a pro.

Transcript

Speaker 1 0:02

Welcome to the Standing Out in Ohio podcast, where we discuss topics, upcoming events, news and predictions with real estate professionals and entrepreneurs. Listen and learn what makes their companies and themselves stand out and gain advantages over the competition and gain market share. Subscribe for the latest news and discussion on what it takes to stand out from the crowd. Now here's your host, jim.

Speaker 2 0:31

Hey everybody, Welcome to the Standing Out Hot Podcast. This is Jim and Laura, of course, and you know her alias, the office goddess.

Speaker 3 0:40

Hi everyone.

Speaker 2 0:43

So I had an inspection I've been doing inspections. A buyer knew that the previous buyer canceled the contract. What?

Speaker 3 0:58

did they say about that?

Speaker 2 1:01

Well she's like well. When we heard that the previous offer was canceled after the inspection, we were a little nervous.

Speaker 3 1:11

Okay.

Speaker 2 1:13

So that's going to be. The topic of today's little episode is if you are buying a house and you knew that it fell out of contract for who knows what reason, should you be nervous? Should that steer you away from the house? We're going to talk about that.

Speaker 4 1:33

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Speaker 2 2:08

All right. So buyer told me that the previous contract fell out. I think she said it was because of what was found during the inspection. It's never because of the inspection. It's because of the findings of the inspection.

Speaker 3 2:19

And what that comfort level is of that client, which is why should another one be nervous?

Speaker 2 2:25

Yeah, because inspectors do not. We're not building a house, we're not tearing apart the house, we're reporting the house. So if you're a homeowner and you're going to sell your house, keep it in good shape, fix it up before you sell it.

Speaker 3 2:38

Have a maintenance inspection from an inspector. So this lady we inspected this house about five days before I was. I did the inspection on it isn't this the one that the inspector's like? I don't know why they walked. It was a nice house it is, it is.

Speaker 2 2:59

So the new buyer was like hey, I saw the you get you guys had inspected it before and I was wondering if I should be nervous about it. And I got. Well, let's find out.

Speaker 3 3:13

This is my first time here.

Speaker 2 3:14

This is my first time here, so we inspected the house and there really was nothing that I would consider a big deal. There are a couple little like. Always, like when we teach classes, like the foundation class, there's always little cracks in the foundation, but nothing big. I mean it's all very normal. There's a little bit of negative grading on the outside of the house. There's a concrete slab that's sloped back. You don't want that, but it wasn't like it didn't really matter, because they're going to build an addition over that space so that area would not get wet anyway. It's going to have a room built on top of it.

Speaker 3 3:55

Okay.

Speaker 2 3:56

So it doesn't matter. It doesn't really matter you're a seller or whatever agent and a house fell out of contract. That is no reason for the next buyer to go. Oh wow, I'm not going to get this house. There's something majorly wrong with it, because that is not necessarily the truth.

Speaker 3 4:19

Well, how many times have we done inspections for people that were chemically sensitive and they couldn't be around mold or they couldn't be around chemicals, and they left just because of that, not because the house was in bad shape, but you know, maybe it had been rehabbed, or there was one that we didn't know why the VOCs were that high in that house and she was very chemically sensitive, so she ended up going elsewhere. So you know, you never know why somebody walks from it either. It could be for reasons that you don't care about, maybe it's a foundation issue, but you worked your way through college fixing foundations.

Speaker 3 4:55

You're not going to care.

Speaker 2 4:56

Well, we've come up to a house to do the inspection. The buyer comes up and goes, hey, just find anything. We're not buying the house.

Speaker 3 5:03

We're done. We found another one.

Speaker 2 5:04

Yeah, we found something else we like. Or I've told this story before the guy who didn't want the house his wife did.

Speaker 3 5:14

He went out and bought a big expensive truck and didn't bring it home, left it in the shop.

Speaker 2 5:23

He did not let his wife know he bought that truck. He kept it at the dealership for that next week or two. So when it came to time for closing they rerun your credit scores and everything, and his debt-to-income ratio was way off with the debt of that truck. So that's where, also, if somebody cancels a contract, they're and it's not only because of the condition of the house or that there's anything major it could be financing. They found a different house. A husband does something douchebaggy to the wife. I mean with all kinds of reasons.

Speaker 3 6:00

We've heard of people that lost jobs. You know stuff like that, so I don't know why you would just automatically expect that, or they just found something different that they wanted. Right.

Speaker 2 6:13

So because somebody else did not buy the house? That is not a. It's not a red flag, right? And you should always get your own home inspection here in Ohio. You cannot. You're not supposed to use the previous home inspection for a different client, right? You're not supposed to use the previous home inspection for a different client, right? You're not supposed to. It's a breach of confidentiality because that client's information is on there. The client paid for it, they pay for access to this.

Speaker 3 6:42

Well, and not only that, but the conversation that the inspector had with that client to clarify stuff on there he's not going to have with the new client. He's not even going to be a client of that home inspector. So if anything happens, that client has nothing to fall back on, no legal protection, nothing, which is against the spirit of the home inspector licensing law in the first place.

Speaker 2 7:05

Yeah, so somebody used a home inspection report for a previous buyer that they received from the agent. The agent is basically taking responsibility for saying this is all legit.

Speaker 3 7:18

And we've had an attorney actually tell us that that that's a huge legal liability.

Speaker 2 7:25

Yep. So and then the inspection reports. They don't have to go. We don't have to send the whole report to the buyer's agent Well, I'm sorry to the listing agent or to the sellers. They do not get full access to that. That is not required. If you're going to get out of a contract, let's say because of the inspection, you could just show hey, this one section here we're more comfortable with, so we're getting out. Just send them a screen print of the one area that you want to use as the reason to get out. It's all you need to do. So and you got different comfort levels. So, and you got different comfort levels. You talk about a lady who's, like, chemically sensitive to VOCs, people who are sensitive to mold.

Speaker 3 8:15

Kind of outliers in the population.

Speaker 2 8:18

I've had people go no, we found a house we like better. Yep, they put off two different houses and they're just going to drop the one that they didn't like the most. So there's all kinds of reasons people drop out of contract. It's not because there's some tragedy, and some some things are, are legitimately wrong, may not matter to the next buyer, right, because the people are going to build an addition over that house or the section outside that has padded slip toward the house. Once they add that addition on that poor slope of the pavement, it does not matter, it's never going to get rained on, it's completely covered and protected, so it does not matter anymore. So, yeah, previous deal, the house that fell out contract is not a death sentence. It's definitely not a red flag, but you should still always get your own home inspection, and that's true, no matter what. If it's not a death sentence, definitely not a red flag, but you should still always get your own home inspection, and that's true, no matter what if it's been a previous contract or not.

Speaker 3 9:15

Well, Massachusetts should be close to deciding that law this year.

Speaker 2 9:19

What law is that?

Speaker 3 9:21

It has bipartisan support and it states that home inspections are a right that you cannot throw away. There is a 10-day minimum inspection period and on top of that, if the seller or an agent tries to talk someone out of an inspection, it's a $10,000 fine.

Speaker 2 9:47

Nice and this is probably going to come about. Last couple of years there was a housing shortage, so offers are crazy. People are waiving inspections. Sometimes they're even suggesting that, hey, you may want to waive the inspection to make your offer stronger, and there have been a lot of issues with that. So there's been lawsuits, people getting housed at a lot more costly expenses than they were planning on. And who are they going to blame? They can't blame a home inspector. Home inspector wasn't involved in this. It goes towards the agents who allow that to happen and even if they sign the little forms hey, I know I'm not getting away with home inspection all they have to do is say, hey, I didn't really fully understand the consequences of this. Plus agent told me my offer may not get accepted if I had the home inspection. That's all it takes.

Speaker 3 10:43

Right, and we do know of states where they have been using that and agents have been losing.

Speaker 2 10:50

Yes, they have using that and agents have been losing. Yes, they have. So, on this one, always have your own home inspection. Previous deal falling through is not a death sentence. Is there's something going on? But it may be something going on that has nothing to do for the new buyer right has no, no cares in the world about it.

Speaker 2 11:09

I think I saw one house where they just didn't like it. The colors didn't work for them. You could paint it, but no, they found something that was going to be easier for them to do and that's what they chose. So anything else, any other thoughts on this one, laura, makes me think of red flags for a home inspection, one of the big red flags of your. Well, it reminds me of that going commando class we made a couple of years ago where somebody thinks there's a chance they might waive the inspection.

Speaker 2 11:43

The buyer should take our class before they tour houses. That way they know a few big things to look for. That way, when they go to the house they go oh, that's that type of plumbing, this could be expensive. Or this is the electric panel that I know has a history of being a fire hazard. So they know, without waiving the inspection, putting their offer, and then they move in and they get. Finally, once they move in, then they get a home inspector come and take a look at, go ahead, tell them what's going on at that point that plumbing, that electrical, that foundation, it's all your issues are all your issues for you to take care of, so shoot.

Speaker 3 12:24

I had of Shoot, I had a thought and it just flitted away.

Speaker 2 12:29

About the going commando, which going commando in this context means buying a house without a home inspection. Nope, I'll think about it, because you don't want to get caught and your pants pulled down.

Speaker 3 12:41

I'll think about it. We'll do that on another podcast. We'll figure it out.

Speaker 2 12:45

We definitely got other ideas that we're going to do.

Speaker 3 12:50

But take care everybody.

Speaker 2 12:51

Take care, bye, bye, bye.

Speaker 1 12:56

You've been listening to the Standing Out in Ohio podcast. Be sure to subscribe on Spotify or Google podcast to get new, fresh episodes. For more, please follow us on Instagram, twitter and Facebook, or visit the website of the best Ohio home inspection company at homeinspectionsinohiocom or jimtroffcom. That's J-I-M-T-R-O-T-H and click on podcast Until next time. Learn and go do stuff.