Real estate agents representing buyers often have to prioritize certain financial expectations. Buyers often have a fixed budget and must ensure that the purchase price and closing costs align with the resources available for the transaction.
Buyers are often eager to minimize their closing costs. In some cases, they may put themselves at a disadvantage by forgoing crucial services to avoid additional expenses. They may waive the right to have a professional inspection or appraisal performed.
Agents may need to communicate with their clients about the outside services that help validate the value of a parcel prior to a transaction. They also need to protect themselves from exposure when clients pursue the cheapest or fastest option, rather than the safest one.
How appraisals and inspections protect buyers
Sellers have a legal obligation to disclose property defects to buyers. The buyers themselves may check for issues when they walk through the property. They may also rely on their agent to spot any concerning signs of property defects.
Even with multiple people looking over the property, people can fail to notice latent defects. Professional inspectors may be able to identify issues with the foundation, electrical system or plumbing that buyers may have missed. Appraisers can look into property values and help ensure the amount offered aligns with the market.
Inspections help buyers ensure that they can negotiate a reasonable sale price for the property. Appraisals protect buyers from scenarios where they offer too much given the current market and the condition of the property. Lenders generally require appraisals and surveys for their own protection, but buyers offering cash have the option of waiving inspections and appraisals.
Agents need to be ready to communicate with their buyers to explain why these outside services are important and how they protect the buyers in the long run.
Buyers can choose their own risk levels
Agents can only provide guidance for their clients about the best way to approach a transaction. Ultimately, the decision about an inspection falls to the buyer.
Agents may want to have buyers sign acknowledgments in scenarios where they choose to waive inspections and appraisals. Doing so can limit the likelihood of a buyer later claiming that the agent representing them did not guide them properly and is to blame for their decision to forgo formal inspections.
Agents generally need to be ready for the most common complications that may arise during residential real estate transactions and circumstances that could damage their reputations. Having appropriate documents in place can protect agents from liability when clients make choices that could increase their exposure.