What does the term “subject to inspections” mean? Why does it exist? 

When you see this term attached to a listing, it means buyers have to submit a blind offer for it. A blind offer is exactly what it sounds like—you’re submitting an offer for a property without seeing its condition. Basically, this term is for properties for sale that are tenant-occupied, and it’s there to protect both the seller and the tenant. 

For tenants, it protects their privacy. Imagine being the tenant of a home that’s for sale and having to make yourself available to show the home all the time to potential buyers. One showing is a piece of cake, right? But what if five or even 10 potential buyers want to see the home in a short period of time? You see how that can get frustrating? 

If you’re the seller, what if your tenant gets so mad at all these people walking in and out of the home all the time that they decide to move out? In that case, you’d lose a tenant and your home would sit on the market unsold, which means you’d have to start paying the mortgage. 

You can see how this arrangement benefits sellers. Since your offer has to be accepted by them before they even allow you to look at their home, they don’t have to deal with potential “window shoppers” or unqualified buyers wasting their time. 

“If you see a listing that says “subject to inspections,” don’t run from it.”

When you submit an offer that’s “subject to inspections” and you decide that you’re not interested in the home after doing your walk-through, you’re free to cancel the contract without losing a single penny from your deposit. If you don’t want to cancel completely but would like to change the terms of your offer because, for example, you want certain repairs done to the property, that’s okay too. In this case, though, the seller has the option of either countering your new offer or rejecting it altogether.

Why pursue a property that has this term attached to it? In a super-competitive seller’s market like the one we have here in San Diego, this kind of opportunity might be just right for you. Since you know there will be no competition, you won’t have to worry about entering a bidding war. This option is also appealing if you’re not in a rush to move out or you’re more interested in the home’s location instead of its condition.

So if you see a listing that says “subject to inspections,” don’t run from it. Talk to your agent and see if they have a strategy in mind to make that home yours.

If you have any questions about this topic or you have any other real estate needs, don’t hesitate to reach out to me. I’d be happy to help you.