Can a Homebuyer Who Waived a Home Inspection Sue?

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Dear Monty: We lived in our first home for about three years and sold it almost two years ago. We had three offers. The highest offer was at our list price, and they waived the inspection. The other two bids were lower but required an inspection, so we accepted the highest price. We had a plumbing issue a year after we bought the house and had it repaired. In the seller condition report, we reported the problem. We furnished the plumber’s receipt, stating that the plumbing was in good condition. The buyers threatened to sue us, saying we tried to hide and fraudulently underrepresent the issue because the sewer backed up for them. Do they have any ground to stand on?

Monty’s Answer: The laws regarding real estate issues vary from state to state. Whether you furnished them with a home inspection or the repairing plumber’s inspection needs to be clarified. It also needs to be explained what your problem was. Suppose we assumed a sewer backup happened two years before they bought the house. It is to be determined if that knowledge would influence a buyer. Finally, the cause of both sewer backups is unknown.

The Answer May Lie In The Sewer

The municipality or nature may have caused your sewer backup. Unusual rainfall or flooding can overload municipal systems. It is also possible that nature can interfere in other ways. Tree roots and shifting or settling soil conditions also create backups. Humans are often the cause of blockage in a variety of different ways. Understanding the source of the backup would be something an attorney may research.

The Fraud Defense

What was your relationship with the plumber? Are you related or friends? Where would a buyer come up with the idea that there was fraudulent activity? The most likely source would be a neighbor. This writer recalls an insect infestation a seller never disclosed. Still, the next-door neighbor remembered noticing the pest control truck regularly. Some states may have a deadline for filing certain types of claims.

These are your typical options:

A) Ignore Them and Wait for a Legal Notice

Pros

•  It may be an idle threat.
• No financial outlay on your part.

Cons

• Worrisome; drains energy.

B) Communicate Directly With Them

Pros

• Sometimes can have a positive outcome.

Cons

• May compromise your position or escalate either party’s resolve.

C) Seek a Legal Opinion Now

Pros

• Learn qualified information.
• It may reduce anxiety.

Cons

• You may spend money needlessly.
• It may increase anxiety.

The Message Is Clear

There may be other options and other information that would influence this response. This writer is not an attorney and has seen no documents in either party’s possession. There is a lesson here for sellers, buyers, and real estate agents. Sellers should always consider home inspectors to report the condition of their home and counter the inspection back into offers that waive inspections. Buyers who believe they gain an advantage may be at significant financial risk. Real estate agents allowing buyers to make an offer without an inspection open themselves up to litigation and may be violating their code of ethics.