Thanks to all of you for answering my post. I normally would not have been in that position. If it weren't for the corroded connections on the tank, the question probably never would have come up. I have been an inspector for 8 years and an agent for 3 of those. I rarely advertise, but have several agents who recommend me to their clients. I don't work nearly as hard as I once did inspecting. I am focusing on the realtor side of the business. I will have my brokers license in December if all goes well. I will always work some as an inspector, but selectively and never on anything having to do with my office or an agent in my office. I feel that me working as an inspector has made me a much better realtor. I definitely keep my two hats seperated though. As a realtor I am bound by law to disclose if I am aware of any issues or situations. I always recommend an inspection, both pre-list and for buyers. When I first became a realtor I made the mistake of inspecting the property my buyer had contracted. It was a distressed sale, mother had to take over payments for daughter and husband. There were drugs involved. The home needed work and the price we offered reflected this, they accepted and the buyer wanted an inspection. I did it and when he got done beating up the seller, who was a little old lady, I was completely embarrassed and realized then what a conflict of interest was. It all worked out and I swore never to go there again.

I spoke with the selling agent about the water heater today, the buyer is getting an upgrade because the plumber said the tank was rusted as well as the connections. Lots of iron in the well water. I have learned a lesson here and will strive to not make it again in the future. Again, thanks for everyones' time.