Buyer's Inspection Advisory article feature image of font on home renovation scene.

By Karen D. Friedman | 03.21.21

The Buyer’s Inspection Advisory (BIA) is a disclosure that is included with the Residential Purchase Agreement (RPA) when you make an offer on a home.

Simply put, it is advising the buyer to have a professional inspect the property.

Disclosures are designed to inform and protect the parties entering into an agreement. In this case, the Buyer Inspection Advisory is for the buyer.

Let’s discuss why the BIA is important, what items are on the Advisory to inspect, and what to do when your client chooses NOT to perform an inspection.

 

Why is the Buyer’s Inspection Advisory is Important

Purchasing a home is one of the most important decisions that people will make in their life. It’s a large investment and buyers will want to make sure that the home is sound. 

A buyer is given disclosures by the seller’s agent, but there is only so much that the seller can know. 

This is why a home inspection is important.  

Some buyers may be tempted to inspect the home themselves. But, they’re not usually qualified to fully inspect the property. 

There can be underlying problems with electrical, plumbing, or the foundation that only a professional can identify. Buyers will want to know about these issues before the sale is final. This avoids dealing with any major issues with the home in the future.

Disclosing that the buyer should perform inspections using the BIA, ensures that the buyer has been fully informed and can limit further liability to you as a real estate agent. 

If the home buyer purchases a home without being advised to have a home inspection and there are issues that arise later, they could sue the real estate agent for finding them a faulty home.

What Items are on the Buyer’s Inspection Advisory?

The Buyer’s Inspection Advisory is a one page document that outlines the importance of inspections. It also has a list of what to inspect: 

  1. GENERAL CONDITION OF THE PROPERTY, ITS SYSTEMS AND COMPONENTS 
  2. SQUARE FOOTAGE, AGE, BOUNDARIES
  3. WOOD DESTROYING PESTS
  4. SOIL STABILITY
  5. WATER AND UTILITIES; WELL SYSTEMS AND COMPONENTS; WASTE DISPOSAL
  6. ENVIRONMENTAL HAZARDS
  7. FIRE, HAZARD AND OTHER INSURANCE
  8. BUILDING PERMITS, ZONING AND GOVERNMENTAL REQUIREMENTS
  9. RENTAL PROPERTY RESTRICTIONS
  10. SECURITY AND SAFETY
  11. NEIGHBORHOOD, AREA, SUBDIVISION CONDITIONS; PERSONAL FACTORS

As a real estate agent, it’s important for you to be aware of the items, why they should be inspected, and the professionals that you would refer to your client. 

Let’s discuss a few of those items here as an example.

Examples of Items in the Buyer’s Inspection Advisory

Typically, a home inspection will cover the general conditions of the home like the foundation, roof, plumbing, electrical, and air conditioning.

But, the list discloses areas beyond the general condition of the home. There are inspection areas that buyers should use a professional – like a termite inspector.

What about the square footage and boundaries of the home? If it’s important for your client to know, they should confirm this with an architect. 

Also, property boundaries noted on online maps are not accurate. A licensed land surveyor or civil engineer can identify the physical boundaries of a property.

If the home is located on a hill or a slope, calling in a professional to test the soil stability is crucial.  There are companies that test the soil to make sure the home is not susceptible to slippage or movement.  

They can also identify and implement erosion control measures. 

Because your client has been informed, they can decide what inspections they want to move forward with.

Who Does the Buyer’s Inspection Advisory Cover?

The Buyer’s Inspection Advisory is designed to disclose information to protect the buyer. But, it also protects you, the real estate agent. While your client does look at you as the professional on real estate, your role is clearly outlined in the Advisory:

2. BROKER OBLIGATIONS: Brokers do not have expertise in all areas and therefore cannot advise you on many items, such as those listed below. If Broker gives you referrals to professionals, Broker does not guarantee their performance. 

This sets the expectation of what you are responsible for during inspections. Any recommendations you may make to your client about professionals are just that – recommendations.

What if My Buyer Refuses to Sign?

Despite your best efforts, you might have a client who chooses NOT to do an inspection. 

So, what do you do now? 

Have your client sign a Buyer’s Inspection Waiver. This is a one page disclosure that informs the buyer on the importance of inspections and states that NOT performing one is against the broker’s recommendation. This will remove your liability if something bad happens to the property.

Also, the waiver has a section to confirm inspections made by the seller and disclosed to the buyer.

So, if your client is electing NOT to perform inspections, the Buyer’s Inspection Waiver is to document what reports they do receive. If your client chooses not to follow any improvement recommendations, the liability will fall on them and not on you.

Final Thoughts on the Buyer’s Inspection Advisory

The Buyer’s Inspection Advisory is another disclosure that informs and protects the buyer during the transaction process. When buyers are properly informed, they can make decisions to best protect their investment.

Although the Advisory is primarily designed to protect the buyer, now we see how the BIA limits the liability of the real estate agent as well. 

So, become familiar with the items on the Advisory, why the items are important to inspect, and what professionals are most qualified to make those inspections. 

When all else fails, if your client still refuses to have inspections done, remember to use the Buyer Inspection Waiver to limit your liability.


Every week, we release in-depth videos to help viewers become successful real estate agents on our CA Realty Training YouTube Channel. Also, if you enjoyed reading this article, we would love if you could share it with a friend who you think would get something out of it.
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