Thread: Inspecting the same home twice

First and foremost, I apologize creating a new thread if there are pages and pages out there already discussing this. I searched the forums in vain - probably because of the common use of the words in my own thread title.

On Jan. 6, 2011, I performed an inspection on a home that is going to the auction block on this Wednesday. While doing the inspection, approximately 15 people came by the home to look at it (b/c of the impending auction). I gave out a few business cards during the activity and even had one Realtor ask me what I would charge his client to "see the report".

I received another call on Jan. 12 from a person who had been at the home and who also wanted to know how much to "see the report".

I'll spare the details of what I said and did because I'd like to start a fresh discussion, but sufficed to say, I do not allow people to "see the report" for any amount of money.

I've corresponded with a few inspector friends for their opinion. I'd also like to cast my net a little wider.

What do you (would you) do in this situation?

As always - thanks in advance,
Bruce

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Originally Posted by JB Thompson

First and foremost, I apologize creating a new thread if there are pages and pages out there already discussing this. I searched the forums in vain - probably because of the common use of the words in my own thread title.

On Jan. 6, 2011, I performed an inspection on a home that is going to the auction block on this Wednesday. While doing the inspection, approximately 15 people came by the home to look at it (b/c of the impending auction). I gave out a few business cards during the activity and even had one Realtor ask me what I would charge his client to "see the report".

I received another call on Jan. 12 from a person who had been at the home and who also wanted to know how much to "see the report".

I'll spare the details of what I said and did because I'd like to start a fresh discussion, but sufficed to say, I do not allow people to "see the report" for any amount of money.

I've corresponded with a few inspector friends for their opinion. I'd also like to cast my net a little wider.

What do you (would you) do in this situation?

As always - thanks in advance,
Bruce

Tell them the truth..... Your state law does not allow you to share the findings to anyone other than the person or company that you did the inspection for. If you have permission to share the information then you will need decide on what you should do.

Who did you do the first inspection for?

What Scott said.
I did a couple of those last year and had the same thing come up. I told them that I would be happy to do another inspection for them, at the same fee, if they would like.

I never give someone a copy of a report, even if they have permission from the previous client. If my client wants to share it, its their business, and they can do it from their own copy. I want to stay out of the loop.

I would not and could not allow another potential client to 'see the report'. The second one does that you have violated your fiduciary responsibility to the 1st client who paid you to go out and do the inspection. One has also violated any trust in the relationship. I would not continue to do business with that person.
I have done inspections for new clients on the same house and don't have a problem with it. However there are certain ground rules I follow. The previous client MUST be completely out of the deal. If the 1st client is still in the deal, I will not do an insp for another client on the same house.
If a call comes in, I will call the 1st client to determine status and let them know of the situation. If they are OUT, I do the insp. If not, I refer the insp to another HI.
In your scenario there are ~6 days between insp 1 and the call. With any house it is important to do a full and proper inspection. A lot can change in a few days, especially with an REO. Thinking you just did this house and sliding through could really come back to haunt one.

I'm doing a 2nd inspection on the same house for the same client this week. When I first inspected back in April, it was a short sale but that fell through and the bank took over. It went to auction, my client rebid and got it. Now I'm going back and looking at it all over again. This is a first for me.

Thanks guys for the post thus far.

Scott: My first client is Mr. X. The second "potential" client is Mrs. Y

Here is an excerpt of what I sent Mrs. Y in response to her question about my fee to allow her to buy a copy of the report and her question regarding my opinion about cost of repairs:

As far as the inspection report, I’m unable to sell it because the gentleman for whom I did the inspection is the owner of the report.

Without overstepping the conditions of the contract between me and my client, I can say that the amount of money you spend on the home fixing it up is relative to your level of tolerance.


I know no other way to maintain my ethics and provide you a report except to perform another full inspection on the home for you. I have had to do this in the past though more time usually passes between inspecting a home the first time and the second time. Of course you could choose to hire another inspector. If you choose to hire me, I would actually spend another 6 hours in the home inspecting it for you.


Now, as it happens, Mrs. Y responded that she would set up an inspection and asked my fee. I replied with the fee and a potential day/time to inspect (last Friday); however, I never heard back from her. So the assumption is that she will not use my services and therefore the point is moot.


But....I wanted to throw this out to the forum for some soul-searching input. I have had this happen before (same house, new client) and was up front with everyone. I still like to know what you would do. "There is much wisdom in the council of many"


Thanks

Originally Posted by Nick Ostrowski

I'm doing a 2nd inspection on the same house for the same client this week. When I first inspected back in April, it was a short sale but that fell through and the bank took over. It went to auction, my client rebid and got it. Now I'm going back and looking at it all over again. This is a first for me.

Do you have a law on the books in your State called a ( HISTORICAL DOCUMENT LAW ) ? Real Estate law.
In California we have this law.

What is a Historical Document law ? Any Home Inspection Report, Termite Inspection Report, statement of fact, Photos or any other form of information to a peace of Real Estate becomes a Historical Document to that property.
From what i understand you can get into more trouble by not providing your old report ( Historical Document ).

In other words you are more likely to get sued by a new client then an old client.

Check your States Real Estate law... If you have this law then you need to talk to your attorney. There is no statute of limitation with a ( Historical Document ) We have had Real Estate agents that have been sued over a real estate deal 20years back. 2 Years from the date of discovery.

Best

Ron

Originally Posted by Ron Bibler

What is a Historical Document law ?.......
From what i understand you can get into more trouble by not providing your old report ( Historical Document ).

In other words you are more likely to get sued by a new client then an old client.

Ron

Sorry about the font issues on the post above. I had to pull my glasses to read that.

Ron, (though a slight thread drift) Are you saying that I or anyone could be required to provide their report to someone upon demand? That seems to fly in the face of several other laws. Once a home is inspected in 1978 (for example) and then sold every 5 yrs, you could conceivably only ever need the 1978 report for all subsequent sales. Doesn't make sense to me.

I did an inspection recently that fell through, then got a call from a new buyer wanting an inspection on the same property, not knowing I had just been there days earlier.

When I told them of my previous inspection, they of course asked to buy my report, which I declined but I personally hate reinspecting the same house twice, especially when only a few days apart.

I told them I'd call my previous client to see if they'd release their report (for a fee). My previous client agreed, for $100 and emailed me a release. I then emailed my inspection standards and agreement over to the new buyers, to which they agreed and emailed back, then I generated a copy of my original report with the new client details, met them on-site and went over my report details and findings.

I charged them $250. Everyone was happy.

Originally Posted by JB Thompson

Sorry about the font issues on the post above. I had to pull my glasses to read that.

Ron, (though a slight thread drift) Are you saying that I or anyone could be required to provide their report to someone upon demand? That seems to fly in the face of several other laws. Once a home is inspected in 1978 (for example) and then sold every 5 yrs, you could conceivably only ever need the 1978 report for all subsequent sales. Doesn't make sense to me.

JB. Check your state laws... And the awnser to your question is (YES) By withholding information you could get sued. If you have a Histoircal Document law. this make your report part of that Rear Estate properties Historical Recored.

If you went down to the country recorders office or look at the information in the MLS Records or look in any Real Estate office your will find files on properties with Home Inspection Report, Termite Inspection Report, Roof reports or even a Real Estate agents Inspection Report. All these reports are Historical Documents to a property.

State Law overrides your inspection agreement contract.

Best

Ron

Ron
Lets say that a survey is recorded at the courthouse.
1st In my area, we go to the courthouse and have to pay a fee for a copy of records, OR we can pay someone to get a copy.
Nothing is free.
2nd The county keeps the records. There is no law that says that the person who done the survey has to provide you with a copy. If they want to, they can sell you a copy.

Originally Posted by Ron Bibler

JB. Check your state laws... And the awnser to your question is (YES) By withholding information you could get sued. If you have a Histoircal Document law. this make your report part of that Rear Estate properties Historical Recored.

If you went down to the country recorders office or look at the information in the MLS Records or look in any Real Estate office your will find files on properties with Home Inspection Report, Termite Inspection Report, Roof reports or even a Real Estate agents Inspection Report. All these reports are Historical Documents to a property.

State Law overrides your inspection agreement contract.

Best

Ron

No Ron

In our state it is just disclosure. If a seller of a home does not present what he knows to be concerns with the home or even if he was not aware until an inspection is done then the findings or concerns at least have to be disclosed if the buyer backs out and the seller actually sees the concerns or gets a copy which he usually will not.

Even your state where you have the histerical law (it is California) it is not like the inspection gets used forever but just tells folks of the concerns in the home. It is still nothing more than disclosure.

As far as how many sellers actually wind up with the report in hand, I would say that it depends on many things. Just cause someone does an inspection on a home in your state it does not mean that the seller ever gets a copy of the report so it does not become a historical document on the property that gets passed on decade after decade or logged into the city records. That is just not going to happen.

If a listing agent gets a copy of the report and there are concerns with the home concerns with the home must be disclosed to the next potential buyer. Your Historical document amounts to the same thing.

As far as an inspector getting sued because he does not do what....go to city hall and record the inspection report into the records for that home....That is not going to happen in your state or any other state. It is just disclosure.

It seems like we're mostly in agreement...that another inspection and report needs to occur, this is what I believe as well.

Another thought that an appraiser friend of mine made: Why sell the report to someone else for $25, $50 or $100? Your liability remains the same. It's just not worth it.

Any other thoughts or real-life experiences in this matter?

Originally Posted by Rick Cantrell

Ron
Lets say that a survey is recorded at the courthouse.
1st In my area, we go to the courthouse and have to pay a fee for a copy of records, OR we can pay someone to get a copy.
Nothing is free.
2nd The county keeps the records. There is no law that says that the person who done the survey has to provide you with a copy. If they want to, they can sell you a copy.

Rick one sopena any Document.

And yes may need to pay for copies.

I have reports for years ago. don't you?

Best

Ron

Originally Posted by Joe Klampfer

I told them I'd call my previous client to see if they'd release their report (for a fee). My previous client agreed, for $100 and emailed me a release. I then emailed my inspection standards and agreement over to the new buyers, to which they agreed and emailed back, then I generated a copy of my original report with the new client details, met them on-site and went over my report details and findings.

I charged them $250. Everyone was happy.

Somehow I don't think this would fly in Texas, for several reasons.It may pass muster per the occ code and our rules, but I can see the legal staff arguing that a new inspection wasn't accomplished. In other words, in TX, if there is a real estate transaction (or potential transaction), then we must provide a report and by extension an inspection. We can't just do a walk-through and give some advice.**

I can envision TREC having a problem with this.


**although if all permissions/acknowledgments are written down up front, then much is possible

If you had a bank owned property and you wanted to buy that property but the bank say we don't have any info for you. no Disclosure for you from the bank.

So one could go down to the county and look into the recorders information and see who the listing agent was and the buyers agent was in the last trans action. and under a Historical Document law request or if need be sopena the Real Estate agents files and in these files will be the home inspection report

And if there is any miss information or something that an inspector missed say 8 years ago the inspector could get sued for that or if the prior seller gave false statements in his Disclosure he could be sued for that 8 years later or more.

Historical Document.

Best

Ron

I'm not keeping all my reports. IRS laws for record keeping are pretty low (as far as years go). I just dumped all my reports from CA (1989 to part of 1994). I figure that anything I did in CA before 94 has probably not going to come back to me anyway.

I'm thinking of only keeping records for 10 years now. I've only dumped stuff up to 96 now. Got a ways to go.

Originally Posted by Jack Feldmann

I'm not keeping all my reports. IRS laws for record keeping are pretty low (as far as years go). I just dumped all my reports from CA (1989 to part of 1994). I figure that anything I did in CA before 94 has probably not going to come back to me anyway.

I'm thinking of only keeping records for 10 years now. I've only dumped stuff up to 96 now. Got a ways to go.

I am just preparing to start on thread on that very topic. Stay tuned.

Originally Posted by Ron Bibler

If you had a bank owned property and you wanted to buy that property but the bank say we don't have any info for you. no Disclosure for you from the bank.

So one could go down to the county and look into the recorders information and see who the listing agent was and the buyers agent was in the last trans action. and under a Historical Document law request or if need be sopena the Real Estate agents files and in these files will be the home inspection report

And if there is any miss information or something that an inspector missed say 8 years ago the inspector could get sued for that or if the prior seller gave false statements in his Disclosure he could be sued for that 8 years later or more.

Historical Document.

Best

Ron

Anyone would be hard pressed to bring anything against you after multiple years down the road. No one could prove that it did not take place in the mean time.

Also if a listing agent says that she/he never received a report on the home (since it was not her/his report, it is the clients) then that ends the histerical document line.

As far as someone going to the city hall to get documentation on an old report.....I seriously doubt that is ever going to happen (one in thousands, if that). They will just have the home inspected and roll with it. To rely on an inspection report that is more than a few months (if that) is fool hardy. Whether someone had a permit to do some work that has obviously been done on a home...that is not the inspectors responsibility.

I think its extra sensitive when a house is up for auction. Those people, all of them including your client are potential buyers. I would only work for the one who hired me first and tell the others to find another inspector.

Its the only way to avoid any potential ethics issues with regard to the person you originally contacted with.

How does this sound for a business idea?
1. With approval of the foreclosure's owner, do an inspection of the home without a client.
2. Give a free report to the owner, if they want it.
3. Sell the report to anyone who asks for it . . . as many as ask for it.

Since there is no client, there is no obligation to hold the report confidential.

Darrel Hood
DILIGENT PROPERTY SERVICES

If I was considering selling a previous report to a new client, the first thing I would do is check with my E&O carrier to determine if my insurance covered the report transmitted to the second client.

I think I can guess the answer.

An old saying fits "No good deed goes unpunished" I just did an inspection on a house that I had done previously (couple of months). I informed my client and of course they wanted to be privy to the information in the first report. After explaining that the information was the property of the previous client and that my contracts specifically mentions that 3rd parties may not depend on the information in the report she lost interest. I have had clients mention selling or giving the report to others, they seem to lose interest when they are told that would be held responsible for any and all claims coming from them selling or giving it away due to a confidentiality clause in the contract.

Why Home Inspectors would ever give a discount on inspecting the same house twice is beyond me. We still have the same responsibility to check everything just like the first time and also the same liability. No client would say "No I won't sue the inspector because he gave me a discount". I treat all secondary inspections like the first one never happened.

Allan Davis
Elite Home Inspections LLC - Louisville and Southern Indiana

Originally Posted by Ron Bibler

State Law overrides your inspection agreement contract.

And most states with HI licensing laws prohibit you from discussing your report findings with anyone but your client.

The inspection and report for the property are for the conditions which exist at the time of the inspection only. Having done many home twice and several three times always do them exactly as if you have never seen the property; don't get lazy and think you can just copy the original report. It OK to review the original report for a heads up but don't rely on it any further. Always tell the client you have inspected the property before in most cases they will feel better about you looking at it for the 2nd time. Charge your normal fee.

As far as sharing a report, do it only with the client's permission; the problem arises when they want you to send a copy to the Realtor. Be sure the realtor understands the report belongs to the client. How many times have you gotten a call from a 2nd client on the same home whom the Realtor has given a copy of the report wanting to pick your brain? I don't give them any information because that would violate the client relationship you have with the original client. Be careful how you treat Realtors they will do anything to sell a property including selling the services of their spouse.

I've lost several referals and actually got black balled from an agency because I refused to work with a client who was given the report without consulting the owner. That is, indeed, the risk of the agent's position in the process. In North Carolina, the Realtors attempt to interpret the formal repair agreement as saying the seller has access to the report if the buyer checks a box allowing the seller to review the report for purposes of making agreed repairs.
Now NC has a new contract form that MAY change that. But it makes for a tense situation when I have to decline participation.

JLMathis

Since this auction is on Wednesday, I received my 5th request to inspection the home this morning!! A personal record.

The Realtor asked if I had inspected it before. I said I had on 1/6. She said, "So if my client wants to get a report on the home, what happens?" I explained that ethically I would complete another full inspection on the home with a new report. Fortunately, I have already booked this entire week and couldn't do the inspection for this new client.

She was impressed and said that her clients may call me if they do not win the bid on this home.

Overall, a pretty good conversation and education lesson for the Realtor.

Originally Posted by JB Thompson

Since this auction is on Wednesday, I received my 5th request to inspection the home this morning!! A personal record.

The Realtor asked if I had inspected it before. I said I had on 1/6. She said, "So if my client wants to get a report on the home, what happens?" I explained that ethically I would complete another full inspection on the home with a new report. Fortunately, I have already booked this entire week and couldn't do the inspection for this new client.

She was impressed and said that her clients may call me if they do not win the bid on this home.

Overall, a pretty good conversation and education lesson for the Realtor.

Bruce,

Damn good follow-through. Glad you took the high road.

To me the feedback from the agent also speaks volumes about their and their client's likely perception of your approach and ethics. You are a far better inspector and business owner/inspector for it.

It's odd how things work out. I had just got off the phone with another client (which caused me to fill up my week) and so it left me not having an available appointment for completing her inspection prior to the auction.

The way she talked about the home, I don't think her clients will be bidding on it. It does need a lot of work, but it is such an interesting and unusual home. I assume that's why there has been so much interest in it.

Thanks Nolan for the kind words.

Bruce

OK, how about a thread drift....

Several of you have discussed your position on providing reports with your client's permission or allowing them to sell their report to another potential buyer.

I currently have the following in my contract:
Client gives permission to [my company] 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.

What is your opinion of this? Am I being a jerk?

My original intention was to prevent some liability from coming back to me because of another potential buyer having access to my report. I know I cannot fully stop this when Realtors pass them around, but this was my feeble attempt to gain some control.

Any thoughts?

Bruce,

I like that clause but don't know if it will slow down the way a report travels around. I have found that frequently its not the client passing it around, its the Realtor.

In Washington we cannot discuss our report with anyone but our client. What I do is a re-inspect and create a new report. This report will have the new buyers name etc. I will also walk the property with them and go over the new report findings. Occasionally I will find something new or a repairs been made. I will update the electronic version and send that to my new buyer. Usually the walkthrough is less than an hour but I charge 75% of the original fee for the report. I rarely give anything back to the original client. In my agreement I only give my clients to use the intellectual property for that transaction, they do not own the report so I do not have to get permission to sell the report. I may give them a greater discount when they book for the next inspection.

I still hear and occasionally get questions about reports that are moving to the next buyer of a property. Its all part of being in the industry.

//Rick

One thing I have learned from doing over a decade of expert witness work is that if you do not have the file or information then you can not provide it!

I have also learned that electronic files can become corrupted and useless with no warning. I have also learned that for this reason it is sometimes better not to keep any paper records! Get my drift.........!

Again, if you do not have it then you can not provide it!

I always try to go by my "gut feeling". If you have to ask, it doesnt really pass the "smell" test.
Its insulting that someone would even ask you such a thing. Essentially, they are wanting you to give them a steep discount since someone else already paid the full fee.

Just quote the following and let it go. Im not that hard up for money that Im willing to compromise my integrity.

The responsibility of those persons who engage in the business of performing independent inspections of improvements in real estate transactions imposes integrity beyond that of a person involved in ordinary commerce. Each inspector must maintain a high standard of professionalism, independence, objectivity and fairness while performing inspections in a real estate transaction. Each inspector licensee must also uphold, maintain, and improve the integrity, reputation, and practice of the home inspection profession.

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.

JB,

You can put anything you want in your contract with you client; it only goes to make you feel better. The truth is the more stuff you put in there the more the attorneys have to work on. The will drive you nuts asking why you put that in there, what did you mean, did you client understand the terms, what are you trying to hide, etc. Best to keep it simple and do what you say and mean what you say.

I probably should have been more specific on my question. If the transaction goes south for my client and he doesn't purchase the home, do you think I should "hinder" him selling the report to another potential client? I'm not referencing Realtors or myself, merely my client.

Scott, I'm dense. I'm not sure what document(s) could get corrupted

Send me a private message.

Scott,

Those words are worth their weight in gold; dumb is what dumb does! We try to be all things to all people; the truth is the more we do the deeper we step in it. As inspectors our job is to inspect and provide a report for our client as to the conditions which exist at the time of the inspection only. What is so hard to understand the meaning of only? It don't mean tomorrow or next year; keep your reports simple, identify problems, don't provide solutions; the dishwasher is broke get it fixed! Thanks for your insight.

Here in California, there is a time limit on legal action.

California Business and Professions Code:

7199. The time for commencement of a legal action for breach of
duty arising from a home inspection report shall not exceed four
years from the date of the inspection.

I've asked former California inspectors who currently do expert witness work for the courts if someone could successfully sue an inspector (or his/her heirs!) many years later. Not too outlandish here in Cali, where people try to sue anyone for anything. They say that our courts stick with the above code, and will not entertain a suit more than 4 years later. All our insurance is based on covering those 4 years as well.

Originally Posted by Scott Patterson

One thing I have learned from doing over a decade of expert witness work is that if you do not have the file or information then you can not provide it!

I have also learned that electronic files can become corrupted and useless with no warning. I have also learned that for this reason it is sometimes better not to keep any paper records! Get my drift.........!

Again, if you do not have it then you can not provide it!

I was thinking along that way also.

2 points;
1) When I was asked for a copy of an inspection report by an agent representing another client I told them I could not do so, but I was sure if they asked my client for a copy they may get lucky and get a copy? However, as far as my sending you a copy that would be highly inappropriate much less unethical for me to reveal the name, address, and phone number of my client.
2) See Scott's answer above.

PS: Most inspectors with any reasonable length of time in this business have had the experience of inspecting the same house more than once. What's weird is when you have been retained to inspect a home you have built.

i am sorry. I lost all my files on disk and printed files to a fire or was that out of the back of the truck when I moved. Oh yeah. I cleaned up my computer for space as well so they are not on there.

Actually the sorry part is I did lose everything a couple years ago to first a fire and then a frying of my computer they were on...really, simultaneously. Nothing from a couple years back and that can happen at any time.

Originally Posted by Jerry McCarthy

What's weird is when you have been retained to inspect a home you have built.

That sounds like it might have been infringing on the grey area... tell us more!