Seller's home inspections; seller-Realtor disputes.

I have written previously about the use of home inspections in real estate transactions, including the potential for sellers to hire their own inspectors prior to entering into a sale.

One advantage for the seller of hiring his own inspector is the ability to avoid conflicts with his own Realtors. Often when a buyer sues a seller (and the Realtors) over a defect discovered after the transaction is complete, the seller and the Realtors dispute among themselves whether such a defect was disclosed. The seller often claims to have reported the defect to the Realtor, thus blaming the Realtor for failing to disclose the defect to the buyer. The seller will also downplay the Seller's Property Disclosure Statement, claiming to have written only what the Realtor instructed him to write.

Sellers and Realtors fighting between themselves often make it easier for a buyer to prove fraud









A written inspection report can limit many of these seller/Realtor disputes. When a seller hires his own inspector and provides the written report to the listing agent, both the seller and the Realtors will be limited in what they can claim the other told them. It will be clear that the seller disclosed everything that is on his own inspection report (and probably nothing more).

There are always areas where problems slip through the cracks. The Realtors and the sellers must make sure that the Seller's Property Disclosure Statement is consistent with the inspection report and that the report is given to the buyers, no matter how negative. All parties must make sure that any inspection activities are not interfered with or influenced. If the seller takes steps to influence his own inspector or prevent the inspector from finding or reporting problems, the resulting disputes will be worse than if no inspection was arranged in the first place.

Seller's home inspections.

Click here for a previous article on the use of home inspections.

I have written on the advantage to home buyers in using home inspections prior to closing on their house, but there is an advantage for sellers also. A seller can arrange and pay for his own inspection prior to listing the home for sale. The inspector will prepare a report that the seller can give to his realtor and to any potential buyer.

Many sellers resist having their own inspections done because they prefer not to know the defects in their house. They believe that if they are not told about a defect, they will not be responsible for it. But whether they know of any defects or not, they can still be sued over said defects later on. And they might lose any such lawsuit, depending on who the jury believes. It is easy for someone to say they are unaware of something. The jury is able to reach its own conclusion. If the seller provides a written inspection report at the start of the process, it is much more clear exactly what the seller knew.

There are pros and cons to this approach, which pros and cons I will address in a future post.

Home Inspections and pitfalls

I have written about the use of home inspectors to prevent yourself from becoming the victim of real estate fraud. I stressed that hiring a home inspector is only the beginning of the process. The buyer must follow through to determine what areas the inspector's report may have missed. Inspectors will not move items in the house and will not speak with the seller. Piles of boxes or furniture can easily conceal a defect.

Inspectors have missed roof leaks and other areas of water seepage. Inspectors have missed floor damage as well as mechanical failures. That the inspector missed these items does not relieve the seller of responsibility for fraud, but the buyer should not wait for the outcome of a lawsuit to protect himself.



The same policy that causes inspectors to miss concealed items often causes them to report items as faulty that have nothing wrong with them. Inspectors confronted with unplugged items have reported those items as faulty rather than plug them in before completing the report. The inspectors' refusal to alter the status quo may be quite sound from the perspective of protecting the inspector and the buyer from claims for damaged items in the home, but that policy places limits on what the inspection might accomplish.

As I wrote before, use home inspectors when you purchase your home. But know the limitations of the inspection process and work to overcome those limitations.

Home Inspectors - the beginning of the story; hidden home defects;

I have written previously about the use of home inspectors for buyers seeking to avoid being defrauded on the purchase of real estate.

If you are a buyer, do not simply send a home inspector to the home you wish to purchase and expect that any issues will be discovered with no further effort on your part. Sellers have become good at hiding defects from inspectors. Sellers will frequently leave debris piled up against walls that otherwise would bear obvious signs of water leakage or other defects. Inspectors will not move any item in the house. If a defect is somehow concealed, chances are that the inspector will not find it. The inspector will identify all obstructed areas on his report. It is up to the buyer to demand that all obstructions be removed and arrange for followup inspections.

Talk to the inspector, ask him how difficult it would be to expose common areas. Ask him how common it is for defects to exist in the particular type of obstructed area in the home you are buying.

The inspector's report is only the beginning. A buyer must follow through and make sure that the report is as complete as it can be before the buyer closes on the deal.

previous - Mortgage foreclosures - a catalyst for real estate fraud?

Home Inspector organizations; NACHI, ASHI, NAHI

I have written previously about the use of home inspectors to assist buyers in avoiding real estate fraud. Using an inspector does not guarantee that a buyer will discover every defect in the home, but using an inspector is a good start. Make sure that your inspector belongs to one of the three main home inspector organizations - ASHI, NACHI or NAHI. A qualified inspector can show you his credentials and his proof of affiliation. Do not use an inspector with no affiliation.

There are additional steps you must take to make sure that you will get the most out of your inspection process, as I will discuss in future posts.

Home inspections as a remedy for real estate fraud.

I have written about the increased risk of misrepresentation by sellers of real estate in the current economic climate. As housing prices stagnate, sellers will resort increasingly to fraud in order to rescue their expected gains from the sale of their properties.

In order to protect themselves, buyers must increasingly use home inspectors in order to discover hidden defects in the houses they would purchase. A home inspection can reveal structural or other defects that might cost the buyer dearly once the transaction is complete.

But home inspections come with limitations. The home inspector will not look in obstructed areas of the house during his inspection. Sellers know this limitation and will find ways to obscure the various defects. Inspectors are not aggressive about seeking out defects or questioning sellers. Home inspections must be performed and presented to the seller within a certain time period. Sellers may dispute the results of a home inspection and attempt to retain the buyer's deposit if the buyer backs out of a deal because of a negative inspection report.

There are ways for a buyer to deal with all of these issues - ways that I will discuss in later posts.
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update - home inspector organizations.