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  1. #1
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    Default 2 birds with 1 stone?

    I did an inspection for a potential bidder on a forclosure auction home. It happened to be an open house during the inspection. During the inspection, there were other people in and out looking at the house. More than one of them inquired about my services an asked what it would cost for a copy of the report.

    I declined on the basis of ethics. I'm pretty sure I did the right thing but I was just wondering what your thoughts on the matter are.

    Could I have told them I could return at a later date to do it for them too? Is there an ethical way to work for two clients at the same time?

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  2. #2
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    Default Re: 2 birds with 1 stone?

    Around here we have to inform each party if getting paid for the same service by more than one party. You should also have a clause in your agreement that you retain ownership of the report. This clause also allows you to enforce a copyright against agents that sell or hand it out.

    I would tell the first client that he will get a refund based on how many other reports you sell.

    The report is an advantage to your first client on an auction house but is not a major advantage unless you also had repair costs in it. Each bidder will have his own ideas of what needs repair and the costs of each. If the house had a severe issue or several major issues then maybe no one with your report would even bid on it.


  3. #3
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    Default Re: 2 birds with 1 stone?

    Quote Originally Posted by John Dirks Jr View Post
    I did an inspection for a potential bidder on a forclosure auction home. It happened to be an open house during the inspection. During the inspection, there were other people in and out looking at the house. More than one of them inquired about my services an asked what it would cost for a copy of the report.
    The answer is "I don't sell copies of the report from someone else's inspection, however, I can do an inspection for you at $XXX.

    I know the next time you go through the house you will will pick up on things you missed the first time through, so you are not really providing duplicate inspection reports - each inspection and report builds on your knowledge previously gained about that house.

    Like when you inspect a house, the deal falls through, and then you inspect it a week later for someone else - you cannot help but start off with a knowledge base on that house which you did not have at the first inspection.

    Jerry Peck, Construction / Litigation Consultant
    Construction Litigation Consultants, LLC ( www.ConstructionLitigationConsultants.com )
    www.AskCodeMan.com

  4. #4
    Ted Menelly's Avatar
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    Default Re: 2 birds with 1 stone?

    If the first person backs out immediatly then I really do not see a concern. He is gone, next in line comes along. If it is a while then talk them into another complete inspection, too many things can change in a small period of time.

    There are no ethics involved once the original person you inspected for backs out. At the very least, a quick viewing of the property for the sake of someone changing something minor or something stolen, like an AC condeser or the like, stove etc etc etc. Again, only if it is immediate. That inspection will be 25% of the time involvement for the same inspection fee.

    Anyway you look at it you make out. No way will the second inspection be anywhere near the time involved for the first one. Go there with the new buyer (did I just say that?) do a review, put his name on the report along with anything you may find and away you go. An hours time and you are done.

    Yes in essence you are doing another inspection but again you make out. Let me see, 3 or 4 more inspections on the same property for 25% of the time......Good deal. No, no deals because you already inspected it. Liability is the same and an inspection is an inspection even if it is just a review.


  5. #5
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    Default Re: 2 birds with 1 stone?

    Quote Originally Posted by Ted Menelly View Post
    If the first person backs out immediatly then I really do not see a concern. He is gone, next in line comes along. If it is a while then talk them into another complete inspection, too many things can change in a small period of time.

    There are no ethics involved once the original person you inspected for backs out. At the very least, a quick viewing of the property for the sake of someone changing something minor or something stolen, like an AC condeser or the like, stove etc etc etc. Again, only if it is immediate. That inspection will be 25% of the time involvement for the same inspection fee.

    Anyway you look at it you make out. No way will the second inspection be anywhere near the time involved for the first one. Go there with the new buyer (did I just say that?) do a review, put his name on the report along with anything you may find and away you go. An hours time and you are done.

    Yes in essence you are doing another inspection but again you make out. Let me see, 3 or 4 more inspections on the same property for 25% of the time......Good deal. No, no deals because you already inspected it. Liability is the same and an inspection is an inspection even if it is just a review.
    Ted: I would not say such things in a public forum. TREC expressly prohibits dissemination of reports to anyone other than the original purchaser of your service without permission. See 535.20:
    (7) Inspectors shall not disclose inspection results or client information without prior approval from the client. Inspectors, at their discretion, may disclose observed immediate safety hazards to occupants exposed to such hazards when feasible.


  6. #6
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    Default Re: 2 birds with 1 stone?

    Quote Originally Posted by A.D. Miller View Post
    Ted: I would not say such things in a public forum. TREC expressly prohibits dissemination of reports to anyone other than the original purchaser of your service without permission. See 535.20:
    (7) Inspectors shall not disclose inspection results or client information without prior approval from the client. Inspectors, at their discretion, may disclose observed immediate safety hazards to occupants exposed to such hazards when feasible.

    Aaron,

    As I read what Ted stated, he would be doing a different inspection, only it would not take as long due to having just done one on the same house, and the 3rd inspection would take less time, as would the 4th.

    I don't read it as Ted "selling the report". The reason I read it that way is Ted said "Yes in essence you are doing another inspection".

    Jerry Peck, Construction / Litigation Consultant
    Construction Litigation Consultants, LLC ( www.ConstructionLitigationConsultants.com )
    www.AskCodeMan.com

  7. #7
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    Default Re: 2 birds with 1 stone?

    Quote Originally Posted by Jerry Peck View Post
    Aaron,

    As I read what Ted stated, he would be doing a different inspection, only it would not take as long due to having just done one on the same house, and the 3rd inspection would take less time, as would the 4th.

    I don't read it as Ted "selling the report". The reason I read it that way is Ted said "Yes in essence you are doing another inspection".
    JP: That is not how I read it.

    "If the first person backs out immediatly then I really do not see a concern. He is gone, next in line comes along. If it is a while then talk them into another complete inspection, too many things can change in a small period of time."

    He seems to be saying that all is fair if the first person backs out of the deal, and then goes on to vaguely state that he might want to do another complete inspection, "If it is a while".


  8. #8
    Ted Menelly's Avatar
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    Default Re: 2 birds with 1 stone?

    Quote Originally Posted by A.D. Miller View Post
    JP: That is not how I read it.

    "If the first person backs out immediatly then I really do not see a concern. He is gone, next in line comes along. If it is a while then talk them into another complete inspection, too many things can change in a small period of time."

    He seems to be saying that all is fair if the first person backs out of the deal, and then goes on to vaguely state that he might want to do another complete inspection, "If it is a while".
    Mon Sewer Aaron

    You are kind of right but wrong. I guess that is my fault. Yes he has done an inspection for a client. Yes his is *more or less passing that info off but he is passing it off to a client for the same home. So in saying that he is not disclosing his findings for one client to another but to a new client for the same house and of course the damn thing is going to be just about completely identical to the first clients report. There is no getting around that at all. Now, to hand the new client the report with the other clients info on it then he would be doing something unethical.

    You can look at it any way you or TREC wants. The report is going to be the same. Exactly the same unless something with the property changes.

    TREC can say anything they want. There is absolutely nothing unethical about it. It says no where that you can not disclose the exact same info *other than the clients info* on the same property at a later date. I have inspected many a home for the second time and a few a third time. Now, it was not the next day or the next week but was the same home with almost the exact findings because as you know many home buyers either do not fix anything or very little.

    Yes, I should have worded it better than I did but I still stand by that there is no ethical question involved at all. Review the property. If nothing changes clone the report, put the new clients name on it, presto chango, cash in hand for another inspection.

    You need no ones permission to inspect the same property a second, third or forth time. If nothing changes, what do you have? The exact same report.

    Agreed???????? Or disagree?????? That is the questions.

    I personaly say that there is absolutely nothing wrong with it.

    Are you selling the same report to another client. Nope. You are selling another client your findings on a home that a previous client backed out of. Your new clients name is now on the report for an inspection you did for the new client. Let anyone try to hold that one up in front of a judge, Jury, or my mother! No one is going after it. The next part in bold is what you chose not to read in my posting. You must read an entire post to get the entire meaning of what one is saying.

    "Go there with the new buyer (did I just say that?) do a review, put his name on the report along with anything you may find and away you go. An hours time and you are done."

    "Yes in essence you are doing another inspection but again you make out. Let me see, 3 or 4 more inspections on the same property for 25% of the time......Good deal. No, no deals because you already inspected it. Liability is the same and an inspection is an inspection even if it is just a review."

    The key words are "Yes in essence you are doing another inspection"

    Last edited by Ted Menelly; 06-15-2009 at 03:41 PM.

  9. #9
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    Default Re: 2 birds with 1 stone?

    I did an inspection for a potential bidder on a forclosure auction home.
    Just in case anyone missed this, John's original post indicates that the deal is an auction. Thus, your client will likely still be in the deal until the end and be bidding against the potential new client.
    John, you were right to question the deal. In this circumstance, it ain't right anywhere to sell the report to another person, and as Aaron pointed out, it would be illegal in Texas. If that came up again, I would tell them no, but I can recommend another inspector that could do an inspection for you.
    From the sound of it, the potential client was looking for a "deal" to get a cheap report on someone else's back. "I'm" not going there. I would tell them that ethically I can't go there on this house, at this time, but give them my card for future business. A week or a month later and a new inspection, then all bets are off, it may be faster and easier for me to do a full inspection but they won't get a discount because as Jerry mentioned, they will be getting a better inspection since I already know more about the house.

    Jim Luttrall
    www.MrInspector.net
    Plano, Texas

  10. #10
    Ted Menelly's Avatar
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    Default Re: 2 birds with 1 stone?

    Quote Originally Posted by Jim Luttrall View Post
    Just in case anyone missed this, John's original post indicates that the deal is an auction. Thus, your client will likely still be in the deal until the end and be bidding against the potential new client.
    John, you were right to question the deal. In this circumstance, it ain't right anywhere to sell the report to another person, and as Aaron pointed out, it would be illegal in Texas. If that came up again, I would tell them no, but I can recommend another inspector that could do an inspection for you.
    From the sound of it, the potential client was looking for a "deal" to get a cheap report on someone else's back. "I'm" not going there. I would tell them that ethically I can't go there on this house, at this time, but give them my card for future business. A week or a month later and a new inspection, then all bets are off, it may be faster and easier for me to do a full inspection but they won't get a discount because as Jerry mentioned, they will be getting a better inspection since I already know more about the house.
    Yes it did get a little off track. But in saying that if he goes there again tomorrow or next week then I still say the same. They are still going to get the same report, just different clients name on the report. Sorry about getting off track and ignoring the bid part for auction.

    Not an auction, then all bets are off. New client, different name on the same report. No one is going to retype the entire report for the same findings and again there is nothing stating you cannot inspect the same home for a different client.

    Oh well. Auction home.....a wee bit different.


  11. #11
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    Default Re: 2 birds with 1 stone?

    I had people asking subtle questions like this.

    "So what do you think? Thumbs up or down"?

    My response was that we are all different and we have different ideas of good and bad. I simply convey facts about what I see. I convey them to my client and they decide how the information affects their opinion.

    I got to thinking that if my client really wants this place and a competing bidder wants free information, I'll say, "Oh man, what a basket case" and scare em off to reduce the competition. I didn't because that wouldn't be right either.

    I just stay in my boundaries and tell my client (only) what I believe to be the truth. It's the easiest way.

    The truth shall set you free. People don't always like the truth but in reality, it's so friggin easy.


  12. #12
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    Default Re: 2 birds with 1 stone?

    One good answer to the question about "how bad is it" is "depends on how much your contractors charge".

    I explain to my clients that labor varies from $15/hr to $150/hr around here for repair people.

    This is one reason E&O is important, miss something and you could get hit with a repair estimate from the highest priced contractor since nothing prevents them from legally charging as much as they want. But of course, there is the very likely risk of fraud charges for the homeowner/contractor if they are trying to unfairly profit from a claim.


  13. #13
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    Default Re: 2 birds with 1 stone?

    My inspection contract says that the report is for the client's "exclusive" use. To stay within the parameters of the contract, something I'm anal about, I would not be able to share or sell the report. I suspect that many of you have such a clause.

    Eric Barker, ACI
    Lake Barrington, IL

  14. #14
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    Default Re: 2 birds with 1 stone?

    I suspect that many of you have such a clause.
    EB: Yessir.


  15. #15
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    Default Re: 2 birds with 1 stone?

    Quote Originally Posted by Eric Barker View Post
    My inspection contract says that the report is for the client's "exclusive" use. To stay within the parameters of the contract, something I'm anal about, I would not be able to share or sell the report. I suspect that many of you have such a clause.
    Same here, but I don't really care how many people use the report because each page states "Unauthorized duplication of, use of, or reliance on this report has the effect of all parties agreeing to hold harmless, individually, jointly, and/or otherwise, this inspector, the Company, their successors and assigns AND IS A VIOLATION OF FEDERAL COPYRIGHT LAWS"

    If they want to hold me harmless for their unauthorized use, so be it.

    Jerry Peck, Construction / Litigation Consultant
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  16. #16
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    Default Re: 2 birds with 1 stone?

    I would have made many copies of my inspection report and hawked them curbside as various potential buyers came and went at a very attractive price. Also, my report would have made the house not only look pristine, but the all time deal of the century.

    Jerry McCarthy
    Building Code/ Construction Consultant

  17. #17
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    Default Re: 2 birds with 1 stone?

    This reminds me of the folks who call and say "You inspected this house for the Smiths; how much does it cost for a simple update?" It's a little like updating the kid's school picture. Even by the next week he could have broken his arm, or had a haircut, or gotten braces. What things would you want to assume stayed the same? I tell them there is no such thing as an update, as it would be more costly than a normal inspection. Not only would you have to look at EVERYTHING again, but you'd also have to compare this time's results to the previous one, which would take more time and effort. But I have no problem whatsoever inspecting the same house for a different client. I simply start over as if I'd never seen it before.


  18. #18
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    Default Re: 2 birds with 1 stone?

    Quote Originally Posted by Linda Swearingen View Post
    I simply start over as if I'd never seen it before.
    That's what we tell ourselves, however, we do have that prior knowledge, information which was not available to us the first time is already in our brain.

    However, starting over simply means the second client gets a better inspection because we are not going in blind. Does not mean the inspection is going to cost less, just means the second client gets additional information.

    Jerry Peck, Construction / Litigation Consultant
    Construction Litigation Consultants, LLC ( www.ConstructionLitigationConsultants.com )
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  19. #19
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    Default Re: 2 birds with 1 stone?

    Be warned...Thread resurrection

    I rec'd this email from my client today. I did their inspection last month. Not so coincidentally, the buyer's agent called last night to tell me about this new client. The agent said he would have the new client call me about doing a new inspection because, "I don't feel comfortable giving him the report."

    I'm fairly certain that since the agent, my client and this new client are all friends, the agent has something to do with this.

    Anyway, here is the email:
    Unfortunately for us, another couple has put a contract on the house you inspected on XXXXXX Drive. I got a new computer recently and some of my documents did not transfer. Could you resend the inspection report? We are going to offer it to the new buyers at a discounted price.

    Here is an excerpt from the last page of every report:
    This report belongs to Mr. and Mrs. xxxxxxxxx. It may not be sold, given or used by anyone other than the purchaser. This report may not be used by any real estate agent in another attempt to sell the property. The report and its contents are only applicable for xx/xx/2010.

    And this is in my contract
    Exclusivity: Client gives permission to TPI to distribute and discuss report findings with parties related to this transaction including real estate
    agents. Client agrees they will not: 1) sell the report to any other party; 2) provide the report to any person who may rely on it for purchase of the
    property.

    I'll send them the report b/c it's theirs, but I'm going to mention the contract part.

    Thanks, Bruce

    Bruce Thompson, Lic. #9199
    www.TylerHomeInspector.com
    Home Inspections in the Tyler and East Texas area

  20. #20
    Ted Menelly's Avatar
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    Default Re: 2 birds with 1 stone?

    Quote Originally Posted by JB Thompson View Post
    Be warned...Thread resurrection

    I rec'd this email from my client today. I did their inspection last month. Not so coincidentally, the buyer's agent called last night to tell me about this new client. The agent said he would have the new client call me about doing a new inspection because, "I don't feel comfortable giving him the report."

    I'm fairly certain that since the agent, my client and this new client are all friends, the agent has something to do with this.

    Anyway, here is the email:
    Unfortunately for us, another couple has put a contract on the house you inspected on XXXXXX Drive. I got a new computer recently and some of my documents did not transfer. Could you resend the inspection report? We are going to offer it to the new buyers at a discounted price.

    Here is an excerpt from the last page of every report:
    This report belongs to Mr. and Mrs. xxxxxxxxx. It may not be sold, given or used by anyone other than the purchaser. This report may not be used by any real estate agent in another attempt to sell the property. The report and its contents are only applicable for xx/xx/2010.

    And this is in my contract
    Exclusivity: Client gives permission to TPI to distribute and discuss report findings with parties related to this transaction including real estate
    agents. Client agrees they will not: 1) sell the report to any other party; 2) provide the report to any person who may rely on it for purchase of the
    property.

    I'll send them the report b/c it's theirs, but I'm going to mention the contract part.

    Thanks, Bruce
    I don't think I would send it to them. If the question was asked about sending them a copy because their comp crashed and they lost the file then that would be one story. But to tell you straight out that they are going to *sell a copy of the report to another party for profit. I certainly think n ot.

    A writer of a book does not sell his book to everyone with permission that they can buy a hundred copies and sell them unless he is getting a percentage just as the store did.

    That is about the most ridiculous statement I ever heard come back from a previous climate.

    The copy of the report you did on the home was already given to them in return for your days pay. You sold them that copy of a report for the sake of the possible purchase or finance of that home not to sell copies for profit.

    Tell them that you can perform a new inspection on the home and they can get a fee for the referral of you from the new buyer.

    This whole thing about once someone pays you for a copy of the report that it is theirs has been fought over forever and only holds up half the time.

    As you said

    "Client agrees they will not: 1) sell the report to any other party; 2) provide the report to any person who may rely on it for purchase of the
    property."

    Your copy for your records is certainly not their copy to do with as they wish ab=nd their copy came with restrictions that they accepted.

    I guess they should have read their contract.

    If anyone makes money of an inspection you did it will be you, not them.



  21. #21
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    Default Re: 2 birds with 1 stone?

    I also want to be a nice guy and a good businessman. Since they aren't buying this home, they will probably want to buy another one and hire an inspector. Me.

    I've got a good relationship with them now.

    Bruce Thompson, Lic. #9199
    www.TylerHomeInspector.com
    Home Inspections in the Tyler and East Texas area

  22. #22
    Ted Menelly's Avatar
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    Default Re: 2 birds with 1 stone?

    Quote Originally Posted by JB Thompson View Post
    I also want to be a nice guy and a good businessman. Since they aren't buying this home, they will probably want to buy another one and hire an inspector. Me.

    I've got a good relationship with them now.
    I also new and understood the position you were in and exactly what you would do. I more than likely would have done the same thing but there is nothing wrong with the initial irritation and response of the complete brain dead acts that some try to and do pull off.

    I think it is a shame where we live in a world where so many act as such. I can guaranty that they did not give you the slightest thought in the process.

    Wouldn't it have been amazing if the actually said to the new buyers that it would be unethical to sell a copy to them. And more amazing if they actually plugged you for doing a new inspection for them.

    So what it comes down to is you or another inspector misses a payday but they recoup some of their money they spent for an inspection. I bet they did not even think of the thought of....Hey, why should we give it to you for less than what it cost us.

    Then you have the thought where they thought of you. This being "Well, we are giving him more money for another inspection". Well, you are going to work for it. It is not like the same value is not going to be there.

    I say this with a smile. I bet they ask for a discount for the second inspection


  23. #23
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    Default Re: 2 birds with 1 stone?

    Quote Originally Posted by Ted Menelly View Post
    I also new and understood the position you were in and exactly what you would do. I more than likely would have done the same thing but there is nothing wrong with the initial irritation and response of the complete brain dead acts that some try to and do pull off.

    I think it is a shame where we live in a world where so many act as such. I can guaranty that they did not give you the slightest thought in the process.

    Wouldn't it have been amazing if the actually said to the new buyers that it would be unethical to sell a copy to them. And more amazing if they actually plugged you for doing a new inspection for them.

    So what it comes down to is you or another inspector misses a payday but they recoup some of their money they spent for an inspection. I bet they did not even think of the thought of....Hey, why should we give it to you for less than what it cost us.

    Then you have the thought where they thought of you. This being "Well, we are giving him more money for another inspection". Well, you are going to work for it. It is not like the same value is not going to be there.

    I say this with a smile. I bet they ask for a discount for the second inspection
    I'm glad we have this forum for those quick gut reactions.

    I sent them an email explaining my position and pointing out the exclusivity clause in the contract. I told them the subsequent inspection would also be a full inspection (no corners cut).

    I also sent the report. We'll see....

    Thanks,

    Bruce Thompson, Lic. #9199
    www.TylerHomeInspector.com
    Home Inspections in the Tyler and East Texas area

  24. #24
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    Default Re: 2 birds with 1 stone?

    Quote Originally Posted by JB Thompson View Post
    I'm glad we have this forum for those quick gut reactions.

    I sent them an email explaining my position and pointing out the exclusivity clause in the contract. I told them the subsequent inspection would also be a full inspection (no corners cut).

    I also sent the report. We'll see....

    Thanks,
    I had a similar situation last year, except I was booked for the 2nd inspection when my clients asked for a fresh copy of my first report so they could sell it. They were visiting and had left their copy of the first house, the one they didn't want, at home. Now they wanted to sell a fresh copy supplied by me for $100. I wrote up a contract which said that I was not responsible in any way for the consequences of this deal. Then I brought that with the copy to the new inspection. Gave the clients the contract to sign before they could have the report copy. He pulls out his phone and calls his lawyer. His lawyer says Are you nuts? You are making yourself liable to the other party for a lousy $100?
    They dropped the deal right there. I guess the realtors were choked, but they got over it.

    John Kogel, RHI, BC HI Lic #47455
    www.allsafehome.ca

  25. #25
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    Default Re: 2 birds with 1 stone?

    John,
    I would hope that you had only a pregnant pause with the issue. And others, sorry that so many see this as a debatable issue. It's black and white. You contract for work with some one telling that they are your clients and then (usually) restricting their ability to sell your work (within the contract). In general, other posts and threads speak to how the agents try to make hay off of your work without the HI being paid.

    The fact that the property is for auction is of greater importance since the client will rely on the report for the basis of their bid which will be done at the same time others will be bidding. The time factor is a notable point. Unlike a house being offered for sale and buyers (bidders) making an offer which is usually presented in a first in line - first in time fashion. Thew auction is at one time and place. You try to discount that the client's will not be put at a disadvantage in the bidding process, if the information that was contracted for is passed around to other bidders. Your clients do have some expectation of confidential.

    Now if you,with no previous client contract, went through the property and performed an inspection (on your own) and then set up a stand offering for sale the report. That would be entirely different.

    You can not have it both ways.

    Individual inspections and reports for each client. Auctions add a twist due to the nature of the sale and the expectations of the client on confidentiality. The client would not have sent you there knowing that others would benefit at their expense.

    Splitting hairs will only make you bald.

    Short answer.
    1)At open house for auction, no to request, offer to provide phone number of another HI (if you can trust them to do a good job since you will be part of a potential law suite).

    2)Each and every client gets you to go to property and do a full inspection and personal report for client. Without respect to when you were there last. Including disclosure that you have been to the property for another client.


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