Point negotiating tactic: "Home Inspection will be performed for 'informational purposes only"..

I was writing an offer to purchase for a client of mine on a HOT listing that purportedly had 6 offers in and possibly more coming.  While on the phone with the agent, I asked (as a dutiful buyer agent sometimes should) if there were any conditions that the seller preferred that perhaps I and my client may not be aware of that that the seller would "prefer"... The answer I got warranted this blog post; the agent suggested I write in the "special conditions" section the following;

"Home Inspection will be performed for 'informational purposes only"..

I have to laugh whenever I hear or read that. The above "condition is an example of what I like to call "unenforceable" entrapment"; to which anyone that writes that 'clause is attempting to show that there will be NO negotiating after the home inspection. Let's dig in and look at the absurdity of the clause.

Let's pretend I write that clause in.  In this case, the offered price of the property went up around 15% of the original asking price. Within the time allotted, my client has the home inspection. The home inspection reveals some major issues that were NOT apparent and not mentioned (the seller says they didn't know, and we have to assume they are being truthful.)  Still, my client wants the house.  Out of the 6 offers, one of the buyers is relieved; they changed their mind and are glad they didn't get their offer accepted. One prospect buyer ruined their credit in a week (Yes, it IS possible to do that...), and two found other homes.  The remaining buyer, excluding my client, offered full price, however that would be 15% LESS than what my client offered.  Of course, all of this information is unknown to either myself or my client.  My client, after getting the home inspection results, decides to back out of the offer.  Yes, they would have preferred to pay 10% over asking price, not 15%, as a "remedy" for the home inspection, however, since they feel "psychologically" strong armed into backing out, they do.  I might make an attempt to renegotiate, but I'm immediately met with resistance; "a promise is a promise, blah blah blah..."

In this case, everyone loses. My client loses the money spent on the home inspection; the seller either sells the home to the other buyer for 10% less, and the other agent probably did not do their best or give the best advice to their client, the seller. 

Don't put stupid clauses like that one in offers.  If you want to "strong arm" a buyer, ask for a $1,000 "non refundable" deposit in case they back out of the deal after the home inspection. Personally I think THAT's stupid, too. Unless the price is RRRREEEAAAALLLYY low, or there is something extremely desirable about the property, why should my client be potentially penalized for any material defects not known before the offer was submitted?

Sometimes in negotiating, I get the feeling some real estate agents are their own worst enemies.  I don't know where all these "bright" ideas come from.  This clause to me is worthless, and I strongly discourage agents and clients from "even going there."...