March 19, 2021

Buying Real Estate? Have It Inspected!

by William D. Fergus, Jr., Esq., Northwest Title Family of Companies, Inc.

Central Ohio is in the midst of a record-shattering sellers’ market for residential real estate. Many residential properties in most price ranges are attracting multiple offers to purchase within hours of appearing on the Columbus Realtors’ Multiple Listing Service website. As might be expected in such circumstances, prospective buyers are doing everything they can to make their offers as attractive as possible to sellers.

Closing dates, long or short, are being adjusted to reflect sellers’ desires. Appraisal contingencies are being waived or mitigated with requirements that buyers cover any gap between the lender’s appraisal and the purchase price, and buyers are agreeing to not request any repair remedies following an inspection of the premises. These concessions, and others, are acceptable ways to make offers more attractive to sellers, as long as the buyer understands the potential consequences of each. Unfortunately, in our business we have seen the occasional buyer agree to purchase a residence without having the property inspected by a qualified home inspector, which is extremely dangerous.

Ohio, like most U.S. jurisdictions, is a caveat emptor state for purchasers of real property. Buyers are legally responsible for inspecting the property for patent defects, which are defects that are observable upon an ordinary reasonable inspection of the premises. Sellers must disclose known latent defects, which are defects that are not readily observable. Most sellers must complete and submit to the buyer the Residential Property Disclosure Form, which is a comprehensive disclosure document promulgated by the Ohio Division of Real Estate pursuant to RC 5302.30. False statements or omissions on the Residential Property Disclosure Form are not actionable in court, but can be used as evidence in an action brought by an aggrieved buyer for vendor fraud.

So, why the importance of obtaining an inspection prior to purchase? First and foremost, a good, professional inspection will reveal any patent defects in the property. Most buyers have little ability to spot such defects, and have even less ability to determine the potential cost of repairs, which are unknowable and potentially very large in the absence of an inspection. Second, should a latent defect be discovered following closing, having an inspection done prior to closing will increase the likelihood of success in a court action against the seller. In Ohio, all such legal actions are based on the law of fraud. To prove fraud, a plaintiff must prove (among other elements) that the seller made a false statement or omission of fact that the buyer reasonably relied on when purchasing the property. A buyer’s failure to have a property inspected is grounds for a defendant seller to claim that the buyer could not have reasonably relied upon any such misstatement or omission. While this line of attack can be overcome (i.e. by expert testimony stating that the defect in question could not have been observed upon a reasonable inspection of the premises), it is often effective in helping to secure a judgment for the seller defendant.

The bottom line: advise your buyer clients to always reserve the right to inspect the premises. The purchase offer should be contingent upon a satisfactory inspection, even if the buyer states in the offer that no request will be made to remedy defective conditions.


Fergus, Jr.
So, why the importance of obtaining an inspection prior to purchase? First and foremost, a good, professional inspection will reveal any patent defects in the property. Most buyers have little ability to spot such defects, and have even less ability to determine the potential cost of repairs, which are unknowable and potentially very large in the absence of an inspection.