New Massachusetts Home Inspection law makes NO SENSE!

Anthony Lamacchia:

Home inspections are now mandatory in Massachusetts according to the law that passed in the summer of 2024. Eh, not exactly. Sellers have to allow a buyer to do a home inspection. Mmm, no. Buyers must do one. No.

All right, folks. Anthony Lamacchia here, broker/owner of Lamacchia Realty and owner of Crush It In Real Estate. I am here to talk to you about – ready for this? – an act relative to the Affordable Homes Act. Yes, I’m saying that because guess what? This Section 45, Chapter 143 that passed last summer in the summer of 2012 actually doesn’t even have a name. That’s how vague this garbage law is; this section of the law here is. It’s crazy. Just for the record, I want to say to all my followers out there who’ve asked me what’s going with that?

Well, we tried to keep quiet when this passed and we said hopefully it will get reversed. Hopefully, maybe the realtor association or someone will jump in and fight this or file something legitimate. We haven’t seen any of that happen, and it’s got to the point that we’ve got people asking questions, including some realtors of our own here at our company. I said, okay, time to tear it apart and go through it. Here’s my crack at doing that. Let me read it to you.

“Section 101. The Executive Office of Housing and Livable Communities shall promulgate regulations to ensure that no seller of a residential structure or a residential condominium unit or an agent thereof shall:

(i) condition the acceptance of an offer to purchase on the prospective purchaser’s agreement to waive, limit, restrict, or otherwise forego any prospective purchaser’s right to have the structure or unit inspected-“

Holy God, the wording that they use. Let’s make it simple. No seller can make it conditional that, hey, you can only get my house if you waive your inspection. No seller can say that. Well, here’s the truth, folks. Yes, it’s been a tight inventory market and that’s part of why this came to be, because of multiple offers and people waiving inspections. Not that many sellers are posting an MLS, “No inspections allowed. Do not even come to my house if you’re going to do an inspection.” No. Some of those conversations may come up during a conversation between listing broker and buyer broker when there’s 10 offers, and listing broker may say, “Hey, I have many good offers, and many of them are waiving inspection.”

Okay. They’ve got a fiduciary duty to do everything in the best interest of seller and to communicate properly, openly, fairly, transparently to all parties, keeping all parties equal, all realtors that are representing buyers and all buyers equal, to let them know what’s going on. Buyers’ brokers, buyers’ agents have got a fiduciary duty to do everything in their best interest to help their buyer land the property and to do anything and everything that can give their buyer a advantage, obviously a legal advantage. That doesn’t really make sense. Let me keep reading.

Now it says, “-except when the sale of the structure or unit is to occur at an auction conducted by an auctioneer licensed under Chapter 100; or–” Basically, if it’s a foreclosure auction then this isn’t a big thing. Then foreclosures, banks are allowed to say non-contingent offers only, no contingency for home inspection. Unclear.

Number two, and again, this stems off of– we’re going to put it back on the screen. “No seller of residential structure or residential condominium or an agent thereof shall:

(ii) accept an offer to purchase from a prospective purchaser or an agent thereof who, in advance of the seller’s acceptance of an offer, informs the seller, either directly or indirectly, that the prospective purchaser intends to waive, in whole or in part, the prospective purchaser’s right to inspection.”

What? I’ve been quiet about this. This came out seven, eight months ago, last summer. I haven’t said anything, but I’ve been frustrated about it. Now I’m here to talk about it. That doesn’t make sense to me. A buyer’s broker, a buyer’s agent, has got a fiduciary duty to properly communicate what type of offer their buyer is making on a property. If the buyer is not making the offer contingent on a home inspection, that has to be communicated. This basically means that if a buyer who wants to buy a property and wants to waive their right to inspection or just not do an inspection– Like me, I’ve bought almost a hundred properties in my life. Okay?

I haven’t done a home inspection since 2004. I’ve bought buildings. I’ve bought homes and flipped homes, rented homes, whatever. I don’t do inspections. Now I’m not allowed to say that to the listing agent? When the listing agent says, “Tell me about your buyer,” or, “Tell me about– are they pre-approved? What’s going on?” we can’t mention, “Hey, there’s no inspection happening here.” Let’s read it again.

“Accept an offer to purchase from a prospective purchaser or agent thereof who, in advance of the seller’s acceptance of an offer,” meaning before it’s accepted, “informs the seller either directly or indirectly that the prospective purchaser intends to waive the prospective purchaser’s right to an inspection.”

You can’t communicate that. There’s a law against talking and properly communicating a buyer’s terms. Makes no sense to me. Then there are some exceptions. If it’s a spouse, a sibling, a child, parent, grandchild, obviously related parties. Then the other exception would be in a divorce situation. See where it says Chapter 208, so one spouse selling to the other spouse, they don’t have to worry about that. It doesn’t make sense. Now, notice down the bottom.

“Section 136. The Executive Office of Housing and Livable Communities shall promulgate guidance or regulations pursuant to subsection (h) of Section 32 of Chapter 23B–“

Good God. No later than – I’m going to skip ahead – December 15, 2024. That date came and went. The new date was extended to June 15th. This basically means that the regulation side– remember, there’s laws that are put in place and then there’s regulators that sort of implement them with rules. They haven’t been able to come up with rules on this.

I can see why. I’m in the business. I’ve sold thousands of properties. Our brokerage sells thousands upon thousands of properties. I’ve been involved in hundreds and hundreds directly on my own, and probably thousands, hundreds certainly as the buyer, and this doesn’t make any sense to me. We are proponents of our buyers getting home inspections, but buyers should be allowed to make their own choices. When a buyer decides not to do a home inspection and they write an offer with no inspection contingency, that needs to be communicated. That’s the other side of this.

How do the contingencies work? When you submit an offer, normally you’d put an X through the inspection contingency. When I make an offer, I don’t even use a contingency page, or I’d Xs through everything. Mortgage, inspect. Now that can’t be done? How do the contingency pages work? Doesn’t make any sense. Now I keep reading. Here are some other details that our general counsel put out. I love how he says, “Translation. Seller can’t accept offer if buyer or buyer agent communicates some sort of intent to waive their right to an inspection.”

Just imagine that one, right? I’m going to grab my phone. “Hello? Hi, Mr. Seller. It’s me, your listing broker. I have to tell you, we have an offer on your home, $27 million over asking price, but you’re forbidden from taking it.” “Why am I forbidden from taking it?” “Well, they’ve informed me that they’re not going to be conducting an inspection, and they’ve waived the right to inspection.” “But it’s 27 million dollars over asking price.” “I know you can’t take it, all because of Chapter 150, an act relative to the Affordable Homes Act, Section 40.”

What? What? This is lunacy. Buyers have a right to waive, sellers have a right to accept, counter, or deny. Remember, nothing in this statute forces a buyer to do an inspection, and a buyer should not be forced to do an inspection. That’s what I started this video with.

Listen, I don’t mean to come off like such a wise guy, although I sort of do, but come on. There’s no way to put this in place in the real practical world. Governor Healey, who I’ve met and who I know on a first-name basis, I respect you tremendously, okay, but this is insane. This got buried in a 500-page Affordable Homes Act last summer. This should be repealed. If not repealed, good luck on the regulations because I don’t know how you’re going to regulate this. First of all, from a regulation perspective, it makes no sense. It takes away buyers’ rights. It takes away sellers’ rights. Imagine, 27 million. Can’t take it. Why? Because they whispered to me that they are not doing an inspection.

Also, I’m joking when I say whisper. What? What does it matter? They have to communicate it. I don’t like it. It’s wrong. It shouldn’t go into play. The regulations that come out, no matter how good they are, they’re probably going to cause more confusion. I know the process is the regulations go out to the industry, the industry looks at them. Our Realtor Association will answer back by the time the governor signs this and it goes, well, the law’s already signed. By the time it goes into play, who knows, it might be six months or another year, and frankly, that’s part of the reason we delayed. I’m done delaying.

One of our realtors even asked a question on Facebook the other day, and I said, “That’s it. I’m putting out information on this. I’ve been quiet long enough.” This is completely crazy. Buyers and sellers have rights. Agents have fiduciary duties to follow on behalf of their clients. I will obviously be back to you, when the regulations come out, as soon as I can with another update. Stay tuned in to Crush It In Real Estate. Talk to you soon.

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