Episode 57: Listen Up Home Buyers – Massachusetts’ New Home-buying Regulations Prohibit Waiving Home Inspections

Episode Summary

On this episode of the podcast, Listen Up Home Buyers!, Rich Rosa is the co-founder of Buyers Brokers Only in the Greater Boston area. Rich talks about new laws regarding home inspections and how special interest groups have influenced the strength of the consumer oriented law.

Massachusetts home inspection law 2025 goes into effect October 15th 2025

Episode Notes

Transcript

Thank you for joining us for another episode of Listen Up Homebuyers. With me today is Rich Rosa. Rich is the co-founder of Buyers Brokers Only in the greater Boston area. Rich, thanks so much for joining me today.

Victoria Ray Henderson:
You are welcome. And I wanted to drill down a little bit on something you and I had talked about, about home inspections changing. There’s going to be a change. Let me restart that.

Thanks for joining us for Listen Up Homebuyers. Rich Rosa, the co-founder of Buyers Brokers Only in the greater Boston area, joins us today. Hi Rich, how are you doing?

Rich Rosa:
I’m well, Victoria, how are you?

Victoria Ray Henderson:
I’m good. Thanks for joining me today on Listen Up Homebuyers. You’re welcome. I was reading the article on your website, buyersbrokersonly.com, about Massachusetts finalizing home inspection rules and how there are going to be some changes. And what I found interesting is that the way real estate contracts are done in Massachusetts regarding the home inspection is very different.

Rich Rosa:
Thanks for having me.

Victoria Ray Henderson:
From how we do it here in the greater Washington DC area. So could you walk me through, first of all, how your contract works when it comes to the home inspection contingency, and then also what is going to change coming up in mid-October?

Rich Rosa:
So right now, a home buyer could make an offer on a property. And we have a two-step offer process in Massachusetts. So we don’t make the offer using a purchase and sale agreement. We have something called a contract to purchase real estate. And it’s a shorter document, about 2 and 1 pages. And that is the contract that we use when we make an offer. And there’s a home inspection contingency.

In that contract and it’s quite broad giving home buyers the ability to back out of a contract after home inspection for just about any reason. There is an addendum to that contract that is sometimes used which states something along the lines of the home buyer will not back out of the agreement.

Or ask the seller for any concessions unless the non-cosmetic issues found in the home inspection exceed X amount. And sometimes home buyers might put $5,000 or $10,000 in that addendum, essentially letting the seller know that unless the non-cosmetic issues exceed $5,000, let’s say, or $10,000,

They won’t back out or ask for any consents.

Victoria Ray Henderson:
Okay, I’ve got a question about that. You said sometimes it’s used. When is it not used?

Rich Rosa:
Well, part of the reason why we have these new regulations is that no one was using anything. I mean, we were at a point a year ago, year and a half ago, where probably 75% of offers were waiving the home inspection contingency. And that got the attention of the legislature, which got this in motion. So how this sort of originated was the Massachusetts legislature

Victoria Ray Henderson:
My.

Rich Rosa:
Passed the housing bond bill back in August of 2024. And when the Massachusetts Senate passed it, a senator tacked down an amendment requiring that the Massachusetts Executive Office of Housing and Livable Communities create regulations that basically said a seller could not consider an offer that waived home inspection.

Victoria Ray Henderson:
I like that. I like that.

Rich Rosa:
And so that amendment passed the Senate. It ultimately passed the final bill that the Senate and the House got together on and the governor signed it. It was supposed to originally go into effect in December, I believe, of 2024. Then it was delayed. And then the Massachusetts Executive Office of Housing and Livable Communities

Came out with draft regulations in April of 2025. At that point, industry groups, the Massachusetts Association of Realtors, the Greater Boston Association of Realtors, and the Massachusetts Real Estate Bar Association urged the regulations be modified. First of all, delayed.

Victoria Ray Henderson:
Okay.
Hmm.

Rich Rosa:
And then also modify to include these aggregate addendums that basically say, you know, I won’t back out unless it’s a certain amount of money. So the hope was that that wasn’t even going to be an option anymore, that you just have a regular good old fashioned home inspection. And unfortunately, the final regulations do allow for

Victoria Ray Henderson:
Okay.
Right.

Rich Rosa:
Those addendums to the contract that say, you know, I won’t back out unless non-cosmetic issues exceed X. And so that’s where we’re at now. The issue that’s going to be interesting, and by the way, the regulations go into effect now, October 15th, 2025. So less than a month from today, about 30 days or so from today. And

Victoria Ray Henderson:
Mm-hmm.
Okay.
Okay.

Rich Rosa:
One of the issues that we’re going to have to see how it plays out is that the regulations do not define reasonable. So in other words, the regulations say that you could have a reasonable amount of money that you could say you’ll put in that addendum and not back out, but they don’t define reasonable. I would suggest that reasonable is no more than 2%. For example, if you’re buying a $500,000 house, that shouldn’t be more than

Victoria Ray Henderson:
Mm-hmm.
I see.
Mm-hmm. Mm-hmm.

Rich Rosa:
$10,000. If you could afford a million dollar house, then I guess you could afford to put $20,000 in there. That would seem to me to be reasonable, but obviously you could do an end around the whole regulation, the whole new law, by just going in there and saying, I won’t back out unless they find $100,000 worth of issues.

Victoria Ray Henderson:
Mm-hmm
So that was going to be my question. So for those listening who don’t know why this matters, especially if you’re a first time home buyer, we feel it’s important to have a home inspection before you buy a house. I know your housing inventory is old as is ours. I think yours is older than ours. Boston, DC, we’ve got, you and it kind of doesn’t matter how old. What matters is that you’re making this huge investment and you should have

Qualified person looking at all the major systems in the property to make sure that what you’re buying is okay and that you’re making a sound investment. What we’ve seen in the last few years is people waving home inspections like crazy just so that they can get a house and then many people having buyer remorse because they didn’t realize that they shouldn’t have probably waived that home inspection.

Rich Rosa:
Right, certainly by remorse because hopefully if they did waive it, they at least got one after they bought the house. Just to at least get a punch list, find out what needs to be done, get some advice from a home inspector. And unfortunately, I’m sure many people found out about things that they wish they would have known prior to making that offer.

Victoria Ray Henderson:
Mm-hmm.
Yeah. And it’s too late. It’s too late if you don’t make it contingent in the contract.

Rich Rosa:
And it’s too late. And to your point about old inventory and how it really doesn’t matter how old the house is, this regulation does have an exemption for new construction, which I thought was unfortunate. Basically, if it’s new construction, it’s substantially complete and it has a one-year builder warranty, a home buyer can waive the home inspection.

Victoria Ray Henderson:
Yeah.

Rich Rosa:
For that, which as you know, inspectors find lots of things with new construction. Know, cities and towns have building inspectors that go out and give occupancy permits and things like that, and they check things and they have electrical inspectors and plumbing inspectors. But quite frankly, they’re not doing as thorough a job as a really good home inspector. And I’ve been on many new construction home inspections where

Victoria Ray Henderson:
Mm-hmm.
Yeah.

Rich Rosa:
You know, you don’t necessarily find big ticket items, but there are a lot of smaller items that you wouldn’t find on their own.

Victoria Ray Henderson:
Mm-hmm.
For sure, for sure.

Yeah, I was at a home inspection on brand new construction and drywall dirt had been caked in the brand new HVAC system because they had it running. They had the blower running during the winter. To, guess, I guess they thought the subcontractors thought they’d dry the, I don’t know what they thought, but anyway, the home inspector takes the panel off and it was like concrete in this brand new HVAC system. Now,

Would that have been covered by the warranty? Probably, but it would take a while maybe to figure that out. And then once you’re in, it’s kind of a pain to have to have that fixed.

Rich Rosa:
Right, and of course if it didn’t affect the system in the first year, it would be covered by the warranty. So it really is, even in new construction, important to have a home inspection.

Victoria Ray Henderson:
Good point, right?
What did you hope to see happen with this new legislation?

Rich Rosa:
I had hoped it would just be very simple. A seller couldn’t consider an offer with a home inspection waiver. Simple as that. Could not accept an offer that waved home inspection. That’s what the intent was. That’s what the amendment basically said when this first got started. And I think that that would have been just simple. Everyone just gets a home inspection.

Victoria Ray Henderson:
What could you said could not?

I don’t know why it would be difficult to know that it would, I would think, behoove legislators to be more consumer-oriented, especially when it comes to buyers.

Rich Rosa:
And the legislature did pass that, but they gave this executive office of housing and livable communities the task of writing the regulations. And course, special interest groups, the realtors, real estate bar, they stepped in and asked for changes. One thing that is part of the regulations that I think will be helpful is now our

Victoria Ray Henderson:
Mm-hmm.
Right.
Mm-hmm.
Got it.

Rich Rosa:
Contracts, it’ll likely be in the contract, although it doesn’t necessarily have to be in the contract. There’s going to be language disclosing to home buyers that they do not have to waive their home inspection. So that will be, I think, helpful because I think, look, as you know, part of the reason why so many people are waiving home inspection is because they’re feeling pressure from their agents to waive home inspections. I’m sure you’ve gotten calls

Victoria Ray Henderson:
Mm-hmm.

Rich Rosa:
From agents after you’ve made an offer with a home inspection asking, well, why won’t your client waive the home inspection? It’s unbelievable.

Victoria Ray Henderson:
Mm-hmm.

I know for sure, for sure. And it is unbelievable that that could be the case when people are spending, they’re probably making the biggest purchase of their life.

Rich Rosa:
Right, and look, if they’re first time home buyers, they’re very likely using their life savings for a down payment and for closing costs. And I tell this to people all the time, even well-paid professionals who could afford to buy a house,

Victoria Ray Henderson:
Mm-hmm. Right.

Rich Rosa:
Many of them, their biggest concern is, is I’ve spent all this money on a down payment, I’ve spent all this money on closing costs, they just can’t afford a $20,000 bill, because they’re basically tapped. They make good money, but they’re tapped. They’ve got nothing left. So, it’s a big concern.

Victoria Ray Henderson:
Very big. Anything else you want to add?

Rich Rosa:
No, think other than it’ll be interesting to see how it plays out over the next year, whether we’re still hearing about lots of people waving home inspections or hopefully that disclosure will…

Empower consumers to push back when agents are telling them to waive home inspections. That’s my hope is they’ll see that disclosure, say that they don’t have to do it, and then more people will do it. Because of course, as you know, you and I, of course, we’re not telling our clients to waive home inspections. We’re doing quite the opposite. But when you’ve got, when you’re competing against

Other buyers who are making offers on places and the majority of them are waiving home inspection, it gets very difficult. Many clients just throw up their hands and say, well, I’m never going to get a house unless I waive home inspection. That’s not the way it should be.

Victoria Ray Henderson:
That isn’t the way it should be, I agree with you. Yeah. So more informed buyers, know, choosing to advocate for themselves and basically making sure that they get a home inspection. That’s the way to push back on this kind of legislation.

Rich Rosa:
Yeah, and hopefully people won’t be pressured into using that addendum to the contract that I mentioned and putting in large, large amounts of money that effectively waive the home inspection. And according to regulations, if it’s an unreasonable amount, you’re basically doing an end around the regulations. One other thing that I think might give some agents some pause

To push their clients to do things like that, is a failure to give that disclosure will now result in being an unfair and deceptive business practice in Massachusetts. Yeah, so hopefully that will help as well.

Victoria Ray Henderson:
I like that.
Yeah, I hope so. Give me one second. Gotta pull this up. I don’t want to get it wrong.

Rich Rosa, the co-founder of Buyers Brokers Only in Greater Boston. Rich, it is always a pleasure to talk to you on Listen Up Homebuyers. Thank you so much for joining me.

Rich Rosa:
Thank you for having me, Victoria.

Victoria Ray Henderson:
Great. That was great, Rich. I’m going to click. Yeah, so I’m on the board again.

Rich Rosa:
Thanks for having me.

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