Dangers of Waiving a Home Inspection in Minnesota

Home Buyer Beware: Waiving the Right to a Home Inspection can be a Costly Mistake

Competitive bidding in a seller's market is nothing new. The combination of low interest rates, low inventory, and a sharp rise in sales price for single-family homes has created an unprecedented advantage for sellers in the current Twin Cities housing market. However, buyers waiving the right to a home inspection before closing is uncharted territory.

Is waiving a home inspection a good idea, and what's covered with Minnesota home inspection laws?

In short, no. Waiving a home inspection is not a good idea. While there may be immediate gain as you get to purchase the house you desire, the decision to waive a home inspection may lead to severe problems months or years later.

Electing not to have a home inspection or waiving the right to the inspection typically means that the buyer's only information regarding the property's structural condition is the seller's disclosures.

Disclosures mandated by Minnesota law require sellers to disclose information regarding the condition of the house and garage, including foundation issues, alterations/remodeling, and water intrusion. However, the seller only needs to disclose material facts that could adversely or significantly affect the buyer's use and enjoyment of the property. Minnesota law explicitly protects the seller from liability for any error, inaccuracy, or omissions that were not within the personal knowledge of the seller.

In many instances, a seller may not be aware of foundation damage or a structural defect; this is precisely why a buyer should always elect for an inspection contingency in the purchase agreement and retain a licensed inspector. Issues raised in a home inspection provide the buyer with bargaining power to negotiate the purchase price or cancel the purchase agreement if costly repairs are recommended.

Waiving a home inspection leaves a buyer with little or no recourse against the sellers. Even if the owner failed to disclose known defects, a buyer would typically need to prove the owner's conduct rose to the level of fraudulent misrepresentation. Arbitration or litigation is expensive and time-consuming. More importantly, an arbitration claim must be filed within two years after the sale's closing date, and structural defects may not come to light within those two years.

Using Good Strategy

Purchasing a new home can be stressful and sometimes exhausting, given the current market. Buyers may believe waiving a home inspection makes their offer more attractive to the seller, but it's not necessarily a good strategy. The buyer may win the battle, meaning they get their desired home, but they can still lose the war because of the structural problems they've inherited. Waiving a home inspection could result in years of costly repairs with no recourse against the seller.