Is it time to wave goodbye to home inspections as a negotiation tool?

Home Buying

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New state law says real estate agents can’t discuss such contingencies with buyers, sellers.

For years now, home buyers in this super–competitive real estate market have felt pressured to waive their right to a home inspection when making on offer, knowing at least some competing buyers will likely do the same. A new state law aimed at eliminating that contention has agents and brokers talking.

Implementation of the new regulations has been extended to Oct. 15, and includes language barring any contract provisions from frustrating the purpose of the home inspection, including “unreasonably limiting a prospective purchaser’s ability to schedule, receive, and review a home inspection.”

If the inspection reveals the need for expensive repairs, the buyer can proceed, renegotiate the contract, or simply walk away from the deal. Without an inspection, the buyer doesn’t know exactly what they’re getting until after they own it and have no other option but to foot the repair bill themselves.

In recent years, some home buyers who waived their home inspection contingencies have discovered surprising and sometimes expensive repairs after the sale. Morgan Cohen, owner of the home inspection firm MKC Associates based in Watertown, said he’s done post–purchase inspections for homeowners who waived their right to have their house inspected before they bought and later regretted it.

“We’ve done post–purchase inspections where we’ve found [dangerous] knob and tube wiring and others with underground oil tanks,” he said. “One of my colleagues inspected a house that was clearly built on a concrete foundation that contained pyrrhotite [which can cause concrete to fail]. A year after the owner purchased the home, he had it inspected and found out the foundation was crumbling and needed to be rebuilt.”

Presumably, if those homes had been inspected prior to purchase, an inspector would have flagged them. The buyer could then have withdrawn the offer or negotiated a price that reflected the need for vital, expensive repairs.

A contingent from the New England Chapter of the American Society of Home Inspectors reached out to state Senator Michael Moore of Millbury for help. Moore has seen firsthand what can happen to families who unknowingly buy homes with dangerous and expensive flaws. His Central Mass. district around Worcester is home to a small but still growing number of homes with crumbling concrete foundations that contain pyrrhotite. The concrete looks fine at first, but over decades, cracks and spalls develop and eventually, the foundation becomes unsafe and must be replaced, costing homeowners $100,000 to $250,000 or more. Moore proposed a bill that was folded into the Massachusetts’ Affordable Homes Act that was signed into law in 2024.

“They inspectors approached me with concerns that home buyers felt pressure to sacrifice their home inspection, and we talked about the liability that someone could incur by not having the home inspection,” Moore said. “I’m happy that the Executive Office of Housing and Livable Communities established some regulations that the home inspectors are happy with. This is going to benefit potential homeowners. It will protect their quality of life and their future financial security.”

While home buyer advocates applaud the intention of the law — to level the playing field in what has been a years-long seller’s market because of lack of inventory — one concern that came up in every interview for this story was the difficulty to enforce it. A buyer’s agent could find a way to communicate that their client will forgo an inspection if their offer is accepted. As long as nothing is in writing, who would know?

“We’ve seen our veteran and first-time home buyer clients get shut out of the market for almost a decade because of inspection contingencies. It’s a huge problem, so I’m all for this change,” said attorney Scott Kriss of Kriss Law | Atlantic Closing and Escrow, which is based in Needham but has offices nationwide. “It always comes down to the policing of the law. It’s going to be very hard to say, ‘You only took this offer because you knew they’d waive the inspection.’ Well, how do you know that? How’s it going to be enforced?”

There are consequences for agents found violating the new law. The regulations read, “A violation or failure to comply with the provisions of 760 CMR 74.03 shall constitute an unfair or deceptive act or practice in the conduct of trade or commerce under M.G.L. c. 93A, [Section] 2 if undertaken by a Person acting in a business context, such as a Real Estate Salesperson or Real Estate Broker.”

Agents and brokers found violating Chapter 93A can be liable for triple the cost of the actual damages.

“At least it’ll put agents in the mindset,” Kriss said. “They can’t lead with, ‘We’re only taking offers with no inspections.’ And whether that will happen or not, they’re going to be in the frame of mind that this is something that they can’t do.”

Rich Rosa, cofounder and co-owner of Haverhill-based Buyers Brokers Only LLC, said removing pressure on buyers to waive their rights to a home inspection fits in with Massachusetts’ long history of consumer protection initiatives.

“This doesn’t seem like an unreasonable consumer protection, especially when the things that could be wrong with a house could have catastrophic financial consequences, especially for first-time home buyers and for more moderate-income home buyers,” he said. “If you’re buying a $3 million house and there’s a $50,000 problem, it’s probably not a big deal. But if you’re buying a $550,000 house and there’s a $30,000 or $40,000 problem, that is a big deal for a lot of people.”

Jim Nemetz, senior vice president and manager for Hammond Chestnut Hill and Coldwell Banker Brookline and Newton, said he supports the new regulations because home inspections protect everybody involved in the transaction.

“The truth of the matter is, when we get into frenzied markets where buyers who have made five or six offers and lost out, they do things out of desperation that could be really harmful in the future,” he said. “They could waive an inspection contingency out of desperation. Then, there could be something really wrong with that house that could cost them an enormous amount of money and heartache.”

Nemetz said if a lawsuit arises from a situation like that, the real estate agents involved are almost always named in the suit. So, a thorough home inspection actually protects agents and sellers, as well as home buyers.

A six-page, joint letter from the Greater Boston Real Estate Board (GBREB), the Massachusetts Association of Realtors (MAR), the Massachusetts Mortgage Bankers Association (MMBA), and the Commercial Real Estate Development Association (NAIOP) was very critical of the regulations and asked that their implementation be postponed beyond the original June 15 deadline.

“These regulations, as currently drafted, present sweeping changes that will fundamentally disrupt the real estate market, and pose serious legal, logistical, and ethical concerns for our members,” the letter reads. “The compressed implementation timeline, overbroad liability language, and the introduction of inequitable exemptions, to name a few, will not only create immediate and irreparable harm to real estate professionals and consumers alike, but also undermine the very intent of the statute.”

Jim Morrison can be reached at [email protected]. Follow him on X @jimmorrison617.

Jim writes primarily about real estate for Boston.com, the Boston Globe, and other outlets.