When the Home Inspection Kills a Sale

[hausdok]

Here's an article wherein Al Heavens, a columnist for the Realty Times, waxes eloquent about a seller with unreasonable expectations of his buyer's inspector. Heavens makes a few correct observations but then, true to form for many real estate professionals, he can't help himself and states his opinion to his readers that the listing agent should have been present at the inspection and should have received a copy of the report from the inspector(?).

This is interesting stuff, and begs the question; why is it that the real estate folk seem to think they somehow should have the right to say how our profession interacts with its clients? Can you imagine the squeals that would come from real estate sales land, if inspectors made it a habit to interfere with the interaction between real estate agents and their clients? Where do these real estate sales people come up with such outlandish ideas, and are there actually places in this country where inspectors routinely provide copies of their reports to sellers and listing agents? If so, why?

To read more and to provide your feedback to the gentleman, click here.

[Phillip]

I provide a copy of my action list and photos to my client to give to who they want to.

I also ask if they want me to answer any question from anyone that may call about the report.

I also go over my report with my client, ask them if they have any questions about the report, and tell them to contact me with any question they may have later.

[paul burrell]

I recently did an inspection and the Realtor asked me for a copy of report. I replied that the report was the property of the buyer my client. She replied that Her contract with the buyer stated that a copy of report was to be furnished to Realtor and seller?

It amazes me the length Realtors will go to interfere with the inspection process between the buyer and their inspector.

Maybe if I am to furnish three reports I should get paid for three reports. What say you.

Paul B.

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Originally posted by hausdok

Here's an article wherein Al Heavens, a columnist for the Realty Times, waxes eloquent about a seller with unreasonable expectations of his buyer's inspector. Heavens makes a few correct observations but then, true to form for many real estate professionals, he can't help himself and states his opinion to his readers that the listing agent should have been present at the inspection and should have received a copy of the report from the inspector(?).

This is interesting stuff, and begs the question; why is it that the real estate folk seem to think they somehow should have the right to say how our profession interacts with its clients? Can you imagine the squeals that would come from real estate sales land, if inspectors made it a habit to interfere with the interaction between real estate agents and their clients? Where do these real estate sales people come up with such outlandish ideas, and are there actually places in this country where inspectors routinely provide copies of their reports to sellers and listing agents? If so, why?

To read more and to provide your feedback to the gentleman, click here.

[Chris Bernhardt]

Here in Oregon its written in the preprinted earnest money agreements that if the sale fails because of the Home inspection that the buyer will provide a copy of the report to the seller in a timely manner.

The report is suppose to remain confidential and the seller is not suppose to share its contents. Yea, right.

Chris, Oregon

[Richard Moore]

FYI, although the link shows up as if it is a current article, it was actually from August 11, 2005. It might be a bit late to send him comments. There is a subsequent article two weeks after... http://realtytimes.com/rtcpages/2005082 ... nspect.htm

I guess he did get some mail. The second is a little better but he's still advising the listing agent should be present.

The last time I had a listing agent present (when the buyer had their own agent) I had to ask her to leave. The lady turned up halfway through the inspection and for the next 15 or 20 minutes didn't stop talking. Nothing to do with the house...just mindless blabbering. My clients were being polite, but it was obvious they wanted to concentrate on the inspection. I eventually took the agent aside and explained that she was making it difficult for me to discuss my confidential findings with my clients. She seemed a little surprised...I think she actually thought she was being helpful...but left with no argument.

Is it common for listing agents to be present in other parts of the country? It sure ain't around here.

As for the report...if the client has a buyers agent (the norm around here) I do always ask if they would like me to CC the link. Most say yes but if I don't have that permission I leave it up to them to forward the link, if they wish to do so. I've never been asked to provide a copy to the seller or the listing agent. I'm sure that some eventually get a copy, but that's out of my hands and I can't say it concerns me.

[Phillip]

The only time I have had the listing agent there unless they also was the buyers agent, is when the home owner did not want anyone in the house without here being there. This was even when other agents where showing the house.

[Jim Katen]

Listing agents aren't all bad. I remember an inspection where the seller, a nervous widow, kept following me around while clutching the hem of her apron and bursting into tears every time I looked askance at anything. I went out to my car, called the listing agent and explained the situation.

Ten minutes later, the listing agent arrived with a bottle of chardonnay. She dragged the seller out to the garden with a couple of folding chairs and two wine glasses.

Thirty minutes later, the agent took off and reappeared ten minutes later with a second bottle of chardonnay.

By the end of the inspection the seller was as happy as could be and didn't give a damn what I had found.

- Jim Katen, Oregon

[Lewis Capaul]

In my contract I have a clause that the client must sign giving permission and the name of the agent he wants me to send a copy to. The client can provide a copy to who ever they like, but only the person he names will get a copy from me.

I don't like listing agents at my inspections, the buyers if fine, I'm as polite as I can be to the listing agent, and I may ask them a question or so about items that may be on the sellers disclosure, in fact I ask to see a copy of the disclosure, but I don't answer very many questions from the listing agent or explain what I've found. If the buyers agent is there I ask them to get rid of any pushy sellers agents. I represent the buyer, not the seller or the sellers agent, I usually have to explain that.

When I get a call from a Realtor who says my report killed their deal, I explain that it wasn't my report, but the condition of the home and the buyers decision that killed the deal.

[Chris Bernhardt]

When I get a call from a Realtor who says my report killed their deal, I explain that it wasn't my report, but the condition of the home and the buyers decision that killed the deal.

They (listing realtors) usually tell me that I killed their deal. On one occasion the listing realtor went out of her way to call me to say that the house (an old farm house in the country) recently sold on an inspection that passed with flying colors. I would have liked to know who the inspector was.

Chris, Oregon

[SonOfSwamp]

A good while back, I had an assaholic RE agent demand a copy of one of my reports. That was because my customer followed my instructions and the terms of our contract by not handing out copies of my report.

The RE agent called me and gave me that, "you'll never work again in this town," speech. About ten minutes later, my lawyer called him, explained that besides my HI job, I was a card-carrying member of The Media, with a readership of about 100,000 souls per week, and further told him he could kiss both our asses.

Generally, I'm real happy to be accommodating, but somtimes, I just enjoy telling weasels to kiss my ass. If I wanted to take orders from somebody, I'd get a dang job.

WJ

[Brian G]

I just love the way that article starts off.

"A colleague passed along a complaint about a home inspection that went awry and succeeded in torpedoing a sale."

The inspection succeeded in torpedoing the sale? Was that its purpose then? Jeez.

I also have a place on my contract for the client to specify another party that can have a copy of the report, typically their own agent. We have the ASHI standards in law here, so if the client doesn't sign for a given party that party gets nothing from me. Once a realtor gets it the thing flys all over the place.

I love the homeowners who feel entitled to a copy. I've heard the "Well it's my house!" arguement several times. I say, "Yes, but it's their inspection and you agreed to allow it, in writing. By law I can't even discuss any of it with you, much less give you a copy."

Brian G.

Coloring Inside the Lines on That One [:-mischie

[Inspectorjoe]

Wow, this is a timely thread. Earlier this week, I did an inspection on a 4 year old house. Other than having more safety issues than are normally found in a 4 year old house, the only potentially significant concern was some rafter problems. The cuts at the ridge board were very sloppy with large gaps, some cracks in the rafters at these areas and opposing rafters offset way too much. All things that shouldn't have been too hard to correct.

The next day, I get an email from the listing agent, asking for a copy of the report. In Pennsylvania, the seller is entitled to a copy. The law (Senate Bill 1032) states: "The seller shall have the right, upon request, to receive without charge a copy of a home inspection report from the person for whom it was prepared." I don't know why she asked me for it, since the request is normally made to the buyer's agent, but I didn't have a problem calling the buyer for permission to do it, and then sending the access codes to the listing agent.

As I was speaking to the buyer, he informed me that "the house is a disaster" and he's backing out of the deal. The house wasn't a disaster by any stretch of the imagination, but if the buyer feels that it is, I'm not going to argue with him. There might be other issues, with the report being just an 'out' for him.

Fast forward to yesterday when I get another email from the listing agent, copied below, with my replies in italics.

> Thanks for forwarding the report for 157 W*****. The

> seller is addressing many of the "concerns" in the report.

> This buyer, the F****'s, however have apparently decided

> there were too many problems. The seller is very

> concerned that the concerns were presented in a way that

> alarmed them there were major problems. Many of the

> safety items are for things that likely were not required

> when the home was built.

Most safety issues are covered under building codes. While home inspectors are not code inspectors, we do use codes as guidance. It is virtually impossible to know which version of which code a particular municipality was using when a particular house was constructed. For instance, the lack of returns on the railings is in the 2003 International Residential Code (section 311.5.6.2), but goes back to at least the 1997 Uniform Building Code (section 1003.3.3.3.6). Other safety issues are not covered under building codes, but are required by the manufacturer. An example of this is the installation of range anti-tip brackets. Others are simply common sense, such as recommending the installation of carbon monoxide detectors in a house that has combustion appliances and/or an attached garage . I would be remiss if I didn’t include all known safety issues in the report, regardless of whether they were “requiredâ€

[hausdok]

Hi Joe,

I go over the pre-inspection agreement with the client before I allow the client to read it. I think that doing so helps to prevent misunderstandings.

I have a third party liability clause in my contract. When I get to that portion, I usually say something like, "Now, this third party liability clause is something that I want you to pay particular attention to. If you want to, you can share portions of this report with your realtor and even with the seller. However, if you decide to walk away from this house you may not, under any circumstances, sell, trade, barter or otherwise transfer this report to a subsequent buyer of this property. The report is done for you and for your transaction only. If someone else wants my report on this property, they can hire me to come back here, I'll execute another one of these agreements with them, I'll inspect the home again, do another report, and then they can pay me for my work."

Works for me.

ONE TEAM - ONE FIGHT!!!

Mike

[Inspectorjoe]

Mike, I also have a clause prohibiting third party use of the report, but with the sellers routinely being given a copy, I'm sure it gets ignored a lot, without me even knowing it. The listing agent who asked has been in business a long time, and really ought to have known better than to ask. Still, in that one instance, I really didn't care if the seller showed it to the other buyer to show why the first buyer backed out. Like I said, I'm sure it happens a lot anyway.

I don't doubt that I really should enforce the third party use clause in the contract when I'm aware it's going to be violated, instead of just letting it slide. In a little over 1,900 inspections, that's the first time that happened. Call me Sargent Schultz! [:-paperba

[Bain]

Chris,

I currently find myself in the same predicament described in your last post, except that the house didn't sell. The seller recently hired her own inspector who repeatedly begins every statement in his wretched report with, "Taking into account this house's age," or, "For a house this age . . ."

I've been sent a letter by the chick's attorney saying he's gonna sue me for killing the transaction because Inspector X says the house is just hunky dory, uh, for its age. Apparently there's no legal basis for any kind of lawsuit since I had no contractual or fiduciary relationship with the seller, but if her dipstick attorney convinces her to proceed so he can hose her for $250.00 an hour, I'll have to defend myself. The attorney actually said in his letter that I had, " . . . attached a stigma to the house."

The other inspector's report is by far the worst, realtor-sucking-upping thing I've ever seen. I'd upload it, but it's too large.

[Chris Bernhardt]

Attaching a stigma to the house? The report is confidential. If there is a perceived stigma they created it so why don't they go sue themselves!

Chris, Oregon

[Brian G]

Originally posted by Bain

Apparently there's no legal basis for any kind of lawsuit since I had no contractual or fiduciary relationship with the seller.....

I have no doubt the legal action is groundless John, but it would be because your report was the truth, not because you had no fiduciary relationship with the plantiff. Lots of people have successfully sued others they had no such relationship with, but were harmed by.

The other inspector's report is by far the worst, realtor-sucking-upping thing I've ever seen. I'd upload it, but it's too large.

Too bad. I'd love to see it.

Brian G.

If a Stigma Is True, You're Entitled To Attach It [:-mischie

[Lewis Capaul]

Realtors, Inspectors, and Sellers often forget that some buyers use the inspection report to get out of a purchase agreement that they have changed their mind about, maybe they found a better deal, maybe they are suffering buyers remorse, who know.

I've been surprised several times when an agent told me that the buyers have backed out over some pretty minor issues in my report, and then a couple of days later I get a call from the same buyer asking me to perform an inspection on another house with a different agent.

I've started to ask clients if the home is going through FHA and if so if I have their permission to provide a copy of the report to the FHA Inspector, who, by FHA Rules can get one on request or call for another inspection. Having me provide a copy can save them a day or two of time in their closing process. Cooperating with the FHA Inspector, with the clients permission, has also resulted in the FHA Inspector asking for me to perform inspections on homes where he needs further evaluation.

[randynavarro]

....if I have their permission to provide a copy of the report to the FHA Inspector, who, by FHA Rules can get one on request or call for another inspection. Having me provide a copy can save them a day or two of time in their closing process. Cooperating with the FHA Inspector, with the clients permission, has also resulted in the FHA Inspector asking for me to perform inspections on homes where he needs further evaluation.

Who and what is an FHA inspector?

It's been discussed several times on this board and the general consensus is that such a beast does not exist?

[hausdok]

Hi,

Well, HUD and FHA haven't required any special FHA protocol inspections for the past 8 - 9 years, although they used to. Since then, when you purchase an FHA or VA financed home it must be inspected by a competent inspector using a standard home inspection report format - whatever the heck they interpret that to mean. However, you do have to be approved as a 203K consultant and be on their approved list of inspectors to do the HUD 203K inspections. Those requirements are less stringent than they used to be. There was a time when one had to go through a formalized certification process. The current requirements can be found here.

ONE TEAM - ONE FIGHT!!!

Mike

[Lewis Capaul]

Who and what is an FHA inspector?>>>

Sorry I was thinking FHA Appraiser and typing Inspector. When performing an FHA Appraisal the appraiser can call for a Home Inspection.

I should never post until I've finished my first pot of coffee.

[Phillip]

I have had appraisers ask for a copy of my report. I guess to save them some leg work. I have had one appraiser that required the home inspector to re-inspect after the repairs where made.

[hausdok]

That's kind of ironic,

It was an appraiser out here in Washington State that won a judgment last year against some folks who shared his copyrighted appriasal with someone without his permission. His case will be the entire basis for my own suit against anyone who does that with one of my reports.

ONE TEAM - ONE FIGHT!!!

Mike

[Bain]

Since you asked, Brian--the summary page for a fifty-year-old house. The inept inspector hired by the seller did mention the water damaged windows, but not the mushy cripples beneath the windows. I removed a few of the outlet coverplates and could fully penetrate the studs with a probe.

John

[hausdok]

John,

I've removed the document from your post. It's a copyrighted work product and you left the inspector's information unredacted. If you're going to post something like that, you need to have the author's permission, lest you place TIJ in some smartypants lawyers' cross hairs.

OT - OF!!!

M.