Buying a New Home? What To Know Before Making An Offer
Posted on January 18, 2022 by Harman Bual
Buying a home remains one of the largest financial commitments and personal goals in an individual’s life. However, in the current market buyers are moving quickly, making large cash offers above-asking value and waiving contingencies in a rush to snap up a new home. Unfortunately, a decision to waive the inspection contingency can cause a new buyer to commit to home deficiencies for which no reasonable person would pay market rates (much less above-market rates).
Washington increasingly is becoming a seller-friendly state and Washington courts have routinely held that a seller is not responsible for defective conditions if the buyer should have known of the defects. This legal trend is particularly concerning for first time home buyers as it is unforgiving towards any buyer who conducted an inspection that reasonably indicates further inspection of a condition is necessary.
For example, a new buyer conducts an inspection of a home which indicates there may be standing water in a crawl space area, but the inspector was unable to investigate further and recommends follow up. In his haste to close on the property, the buyer disregards the fact that a full inspection of the crawl space and standing water was not conducted. Upon moving in, the buyer discovers extensive water damage and issues in the crawl space.
In such a situation, Washington courts have repeatedly held that a buyer has a duty to investigate all areas of the home and should fully investigate any defects, and any potential defects that are discovered.
In sum, it is imperative that a new buyer understand and confirm the scope of the inspection and if there is any portion of the home that has not been covered by inspection (i.e., sewer, septic, electrical work, etc.). Once confirming that the inspection covers the entire home, a buyer must review the inspection report carefully to identify any defects or possible defects in any area of the home. If the inspector missed a material defect that should have been identified, then the buyer may have a claim against the home inspector but absent the inspector entirely missing a defect, the burden in the above scenario lies with the buyer.
However, let’s change our scenario to one where the inspection found no defects or indication of any standing water damage. Upon moving in though, the buyer realizes the new home has a damaged load-bearing wall that appears to have been repaired recently but was not flagged as an issue in the inspection. The repair was a superficial repair that allowed the wall to pass inspection but actually reveals a material defect to the home. Who is now responsible to the buyer?
While the inspector may be liable in such a situation for missing an issue, a seller may also be liable for negligent or intentional misrepresentation if the seller knew of the problem and failed to disclose the problem on the Form 17 Seller Disclosure Statement. A seller may be liable to the buyer for the fraudulent concealment if the seller took steps to disguise the problem.
Navigating the purchase of a new home can be difficult and the wise buyer will work with an attorney to review all transaction documents prior to closing. The attorneys at LHSE are available to help homebuyers navigate the legal process from initial drafting through post-closing litigation matters related to a seller’s misrepresentations or breaches of contract.