I read a recent post on a very large Home Inspection related bulletin board that surprised me tremendously! The poster is a licensed Texas Professional Inspector who asked if it is allowed to have a home selling client dictate what would and won’t be placed in a “Prelisting Inspection” report? Read on for more about this!
In a 2/18/2011 bulletin board post a licensed Texas Professional Real Estate Inspector tells us that he has received a call from a home seller to perform a “Prelistng Inspection” on his home that he is preparing to sell. The Inspector goes on to state that the owner wants to walk with this Inspector as the inspection is being performed, and dictate to the Inspector what items will or will not be placed on that inspection report. The Inspector then goes on to state that he feels that this does not sound right but the caller is the client, is the buyer of the report, and asks if this type of action is allowed? Obviously we were not privy to the entire conversation between the Inspector and potential home seller but the question asked was quite clear none the less!
Before we talk about if it can be done, let’s first talk about the purpose of a “Prelisting Inspection” by the seller of a home. There are two main reasons that a seller will have their home inspector prior to placing it on the market. The most important of the two is so that they can obtain an unbiased view of their homes condition and learn what needs to potentially be repaired or handled for a smoother sale. Homes change over time and we don’t always catch those changes and issues requiring attention. Sometimes we even learn to live with an issue instead of correcting it. Having an inspection performed helps us identify these issues and make decisions whether to correct them, disclose them if needed and not corrected, and plan for the buyers to make repair concession requests. If you choose not to correct them, and disclose them, then you can obtain estimates for realistic repair costs and plan for those during the sale.
The second main reason that sellers have a “Prelisting Inspection” is to use as a marketing tool when selling their home. Sellers can take this inspection report, receipts for repairs, and attach it to their disclosure paperwork to demonstrate a good faith effort to provide a home as defect free as possible for a potential buyer. If they choose not to correct a defect that is subject to disclosure they can then provide an honest display to potential buyers that they are aware of the issue. They can take repair estimates and attach them as well to show a buyer what the potential repair costs are. Sellers will then generally price their homes accordingly, and expect realistic offers based on the known conditions.
Obviously a buyer should never rely completely on a “Prelisting Inspection” and should have their own performed. An inspection is a review of the home on the day the inspection was performed. Conditions can change creating new issues, the buyer’s Inspector might well find additional issues the seller’s Inspector missed, and then there is the situation that is being asked about here where a report is potentially being prepared improperly.
So let’s go back to the original question of can a seller dictate what is and is not placed in an inspection report? Select the next tab “Can it be done” to learn more.
[tab: Can it be done]
In the post the Inspector stated that the seller wants to walk with him during the inspection and tell the Inspector what he wants and does not want on the inspection report. It is quite obvious that this seller wants to use this report as a marketing tool to sell their home, and wants that report to be a glowing, positive review to draw a buyer in. That particular seller apparently wants to defraud buyers and is looking for a Home Inspector who will help him do it. As I stated previously a buyer should never completely rely on a sellers “Prelisting Inspection” report and should have their own inspection performed. This is one of the more nefarious reasons why!
But can a home seller actually dictate what is and is not placed in an inspection report? In this particular situation, as stated by the Inspector in the bulletin board post, the answer is a resounding NO! Even though Texas Inspectors are governed by rules that prevent this type of activity an ethical, honest Inspector does not even need to ask or read the rules/laws to know and understand that this seller is attempting to potentially defraud a buyer.
You should take note that I did state “In this particular situation” as it was an obvious case of unethical behavior. However a seller does have partial control over what is or is not to be inspected and reported on. The Texas Real Estate Commission (TREC) requires licensed Inspectors to provide a written report to each client, and has defined the basic outline format it will be in. The TREC required inspection form (number REI 7-2) can be found on their WEB site by clicking HERE. Take a look at this form before you move on to the rest of the explanation. TREC also has a set of rules/laws that licensed Inspectors must follow and they can be found on TREC’s WEB site by clicking HERE. If you view the form you will see that the home is broken down into specific systems, subsystems, and general areas that are required to be inspected in all homes. There is one section, Section VI. Optional Systems, that an Inspector is only required to inspect and annotate on if they contract with the homeowner to do these additional systems.
If the homeowner does not want the Inspector to inspect and report on any of the required systems, or if they only want these items partially inspected, then they do have the right to specify this to the Inspector. With the Section VI. Optional Systems items not only can the Home Inspector not inspect and report on them at the seller’s request, the Home Inspector can also completely remove those items from the standard report form before issuing the report to the seller. The remainder of the items on the form must stay on the final report and must be properly annotated in the check boxes. Also if the Home Inspector does not inspect a particular category, or only partially inspects and reports on a particular category, they MUST provide and explanation in that section why they did not inspect or partially inspected it.
As an example let’s say the homeowner only wants a foundation inspection performed. The Inspector will mark the foundation section as inspected (checkbox “I”) and make all necessary comments as outlined in the rules. If deficiencies were found then the deficient box (“D”) would be marked. All other items on the report form will be marked as not present (checkbox “NP”) if they do not exist, or not inspected (“NI”) if they are present but were not inspected at all. If the “NI” checkbox is marked then the Inspector is required to explain in the remarks section why they did not inspect any item/system related to that section. The verbiage used for the explanation of why is left up to the Inspector so be careful of what might be said there.
Now let’s use a foundation inspection example where the seller is trying to manipulate the report. A proper foundation inspection requires not only reviewing the outside of the home but also conditions on the inside of the home. In this case the seller only wants the Inspector to review the foundation condition only from the outside of the home. The seller is also not allowing the Inspector inside of the home. When the Inspector issues the report they must indicate that they inspected the foundation (checkbox “I”), must note any negative conditions found, and if the foundation is found to be deficient they must mark the “D” checkbox. The Inspector MUST also add an appropriate comment(s) indicating that this was only a partial inspection of the condition of the foundation.
So as you can see even if the seller attempts to manipulate the contents of the inspection report the Home Inspector is fully responsible to make appropriate comments that the report is not complete and why. This is to help prevent attempts at fraud and abuse of the system. So the next time you receive a second hand inspection report, either a seller’s “Prelisting Inspection” report or a previous potential buyer’s report, read it over closely. It is not often but even some buyers might contract for less than a complete inspection of a home.
If you have questions on an inspection report feel free to contact me!
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