#499. We put 3 Monmouth Street on the market last week. It is a beautiful old multifamily home, built in 1898 and sited on Somerville’s Spring Hill - a neighborhood between Porter and Union Squares, notable for some excellent Victorian and Greek Revival architecture. 3 Monmouth has been carved up over the years, and is a funky and cool 5 unit building. Because it is old, and the layout is unusual, we wanted to give buyers some time to understand the property and perform due diligence before we had our client review offers. And after 7 days of showings, we had 9 offers to review with our client. One of the offers had an inspection contingency “for informational purposes only”. What does this even mean? All inspections are for informational purposes only. If it is in an offer, then it is a contingency, and it exposes the seller to the risk that a buyer walks away from the deal. There’s some vague belief on the part of some Realtors and some buyers that an inspection is for the purpose of renegotiating a price. This isn’t correct. All an inspection contingency allows one to do is to evaluate the property with a qualified home inspector, and then decide whether or not to proceed with the transaction. As it turns out, many buyers will attempt to renegotiate the price before walking away from the deal - which is totally fine. An attempt to negotiate on the part of the buyer creates no obligation for the seller to participate in the negotiation. The seller can refuse to discuss the price concessions, and then the buyer decides whether to stay in the deal or walk away. In this instance at 3 Monmouth, the broker representing the buyer indicated that an inspection “for informational purposes only” didn’t actually detract from the strength/sureness of the offer. If that’s really the case - if you’re a buyer, or a broker representing a buyer, if your decision does not hinge on the results of a home inspection, then don’t include it in an offer. Do it after P&S when you’ve got skin in the game - you can get all of the information you need prior to closing, and you won’t be asking the seller to absorb the risk that the deal isn’t secure. If you do feel you need a home inspection prior to feeling good about the deal, then use the time before an offer is due to have a home inspector check out the property with you. Then you’ll be reducing your own risk and giving yourself a shot at making a strong, clean offer.
500 Notes from the Field