Thread: Texas FSBO's and Disclosures

I seem to have been getting a lot of FSBO business lately. I havent had any issues yet, but Im thinking when transactions are conducted without real estate agents, problems can arise that could potentially impact my business.

I assume the same disclosure form (TREC OP-H) is required to be completed if an agent is involved or not.


I have always asked clients/agents in the past about disclosure findings, but they never actually show them to me. Should I be requesting them? Seems like if there have been past problems, they should be brought to the HIs attention so they can see if there is any recurrence or other problems.

Your thoughts/opinions?

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Originally Posted by imported_John Smith

I seem to have been getting a lot of FSBO business lately. I haven't had any issues yet, but I'm thinking when transactions are conducted without real estate agents, problems can arise that could potentially impact my business.

I assume the same disclosure form (TREC OP-H) is required to be completed if an agent is involved or not.


I have always asked clients/agents in the past about disclosure findings, but they never actually show them to me. Should I be requesting them? Seems like if there have been past problems, they should be brought to the HIs attention so they can see if there is any recurrence or other problems.

Your thoughts/opinions?

The reality is, why do you even need disclosure statements from anyone. You are there to inspect the home as to how you see it at the time of inspection. If something is disclosed to the buyer they can refer to your inspection and to the disclosure. What will a disclosure do for you. If there was a leak some where and was fixed. Well it either is or is not leaking now. If the HVAC system is operating in a particular fashion now. What would it have to do with its operation before you got there.

Just curious. I know a lot of people want to see disclosures or previous inspection reports or an engineers report on a foundation. If you find signs of movement of the foundation (cracks in the foundation, bricks, drywall, doors out of square) you write them up. If you don't see any signs you don't write them up.

Seriously, I am not questioning you but really just curious why people want to see the past. You are there now. I tell sellers, Realtors and such all the time that I do not want to see them. I do not want any influence on my findings.

Just curious

I do the same as Ted mentioned. Don't want to see the disclosure's. Prior Engineers reports, termite warranties, receipt for the 20yr. old oven, I just don't need them.

Had an agent give me an HI report today that was dated 3 yrs. ago on the home and tell me that it might help me speed things up. I politely handed it back to her and asked her did she use the prior sales contract over when she listed the home. I asked her had the price changed within the (3) yrs.

She got the hint.

rick

I very seldom see a disclosure, I might glance at it if it is available but most disclosures are flat out lies.
An engineers report carries a little more weight, but rarely influences my report.
From what I have seen of engineers reports when I have recommended them, I wonder what planet they are on, much less if they are looking at the same house.
An old report is worth even less unless it documents the repairs made.
FSBO is just the same as with a realtor except the seller is usually at the inspection.

I see some sellers/FSBO's are putting in there discloures papers to see the inspection report for any information.
thats why the get the pre-inspection reports.

Best

Ron

Why would you not want to see the past history of the property if it is available? If you went to your physician, would you want them to not know anything about your past where it could help them with their diagnosis?

Seller disclosures and previous in$pection reports are none of my business - unless I'm the buyer.

John Smith is on track. if some body covering up stuffs.
The last report may have info on an area.
I see that a lot.

Ron

Bibler

I kind of like knowing the history of the house I'm inspecting. I can guarantee you that if I see a receipt from "ABC Heating and Cooling" sitting on the owners desk or counter that I will discreetly take a look at it.

I'm at that home to gain as much information as I can in a fairly short period of time, so I will take all the help I can get. As for old in$pection reports, I have looked at them before and on a couple of occasions have gained some information that has helped me in the inspection.

As for FSBO's, I love them. Yes, they do tend to take a little more work on my part, but I don't mind. I have never had a seller not show up to let me in a home!

Most of the states that have disclosure laws only come into play when an agent is involved, or that is they way it is in the states that I have worked in. The vast majority of the real estate laws only govern the agents that work under them

In some cases people disclose just enough to ease the fear of prosecution. For example, if they disclose that there has been a previous plumbing leak, sometimes this is the tip of the ice burg that really points to interior flooding in the house. Every little bit of information helps.

My thing with disclosures is this. If I am going to look at every disclosure or previous inspection from another inspector then all my inspections would become re inspections.

I am not at my inspections to do re inspections. I am there to tell my clients of the conditions of the home at the time of the inspection. I am not there to applaud or denounce anyone elses work or guess if they did a proper job or just covered something up.

If there are no apparent signs of leaks at the time of the inspection. I am not going to tell my client that I "think" someone covered something up or give them the impression that I "think" they did a good job behind this here wall. Or for that matter I "think" they did a good job on those piers. Or I "think" they did not do a good job on those piers.

Doing re inspects are iffy enough. Why would I (or anyone) want every job to be a re inspection?????????????

I here all the time that "the home was just inspected a month ago" or "they just had some work done on the home". My response to that is, "and????" What I find at the time of the inspection is what goes into the report.

If they just had the roof done I am not inspecting anyones work. I am going to inspect it just like I do any other inspection. If I find something, it goes in the report. If I don't I am not going to write anything in the report.

I understand that the roof was just replaced. This roofer did a fabulous job. I would recommend him to everyone. Or, this roofer is not someone I would recommend. He did a horrible job. He may have just been nominated for the best roofer of the year with good reports from the last thousand jobs. One of his workers smashed his thumb and kept working on this job which affected his performance on this job. Who knows.

No, I would tell them of my findings and what in fact (if anything) the concerns are with that roof.

Man, I just have to much time on my hands with these reschedules this week.

Ring phone ring.

Your only as good as your last inspection.

Best

Ron

I don't request the disclosure, inspection reports, etc. If they are lying about at the property I sometimes take a look at them - and sometimes I don't. I certainly do not think looking at a glimpse of the house's history is a bad idea for the reasons Scott, Ron and Jon mentioned above.

Sometimes these documents are actually quite humorous, especially the inspection reports done "last month" that have 5 items total listed as in need of repair when I spotted 20 items before I made it a quarter way around the house.

Or then there's the "engineer's report" stating that the foundation is fine but there's no PE stamp or other credentials on the report other than a letterhead. Hmm.

That being said, I don't care what I see (or don't see) in a disclosure, etc. These reports never influence my thouroughness or inspection technique. It is information provided by the seller, and I don't rely on any information provided by the seller (other than "Yes the dog bites!"). IMO, looking at a previous inspection report doesn't mean that I will be doing a re-inspection, it just means that I looked at the previous inspection report.

Originally Posted by Ron Bibler

Your only as good as your last inspection.

Best

Ron

You are only as good as your next inspection. Look forward. Think positive.

Sure its directed at the client, but as an inspector, I want to know as much as possible about the property prior to inspecting it. If an addition or major remodeling was performed, it would be nice to know what year it was done, or if it was done by licensed individuals.


From the official TREC report REI 7A-0
It is recommended that you obtain as much history as is available concerning this property. This historical information may include copies of any seller's disclosures, previous inspection or engineering reports, reports performed for or by relocation companies, municipal inspection departments, lenders, insurers, and appraisers. You should attempt to determine whether repairs, renovation, remodeling, additions or other such activities have taken place at this property.

Originally Posted by imported_John Smith

Sure its directed at the client, but as an inspector, I want to know as much as possible about the property prior to inspecting it. If an addition or major remodeling was performed, it would be nice to know what year it was done, or if it was done by licensed individuals.


From the official TREC report REI 7A-0
It is recommended that you obtain as much history as is available concerning this property. This historical information may include copies of any seller's disclosures, previous inspection or engineering reports, reports performed for or by relocation companies, municipal inspection departments, lenders, insurers, and appraisers. You should attempt to determine whether repairs, renovation, remodeling, additions or other such activities have taken place at this property.

"It is recommended that *you* obtain" is directed, directly at the client that they should dig up the past history for there sake. It is telling them that you are not responsible for it, they are.

I always ask if they have specific concerns with the property. Of course I address those specific concerns. How do I address their concerns? By noting to them the conditions of the property at the time of the inspection.

All of this is up to the individual inspector.

All of this is of course is just my opinion with the exception that the contract of the first page of the report is directing responsibility to the client.

Oh my, another day off!!!!!!!!!!!!!!

Oh yeah. It is not up to you to determine whether an individual was licensed or not that did the work or for that matter, a permit to do the work. Both of those are way beyond your scope as a home inspector (unless you want to get knee deep into it).

Do you call and check to see if a permit was pulled ??????? or for that matter check on all trades involved in repairs to find out if they are a licensed tradesman?????

If you are then you are not a home inspector but possibly a consultant.

In case you do not see what I am getting at. If you check into part of the past you better do a damn thorough job and be complete. Once something is found of the past and it turns out a permit was not pulled or someone was not licensed or you are announcing that the repairs were done with outstanding professionalism, you are setting yourself apart from being a home inspector and also setting yourself up for a fall.

There are standard limits for a reason. To go by the standards is one thing. To far exceed limits of standards in one area and not the other is also setting you up for a fall. SOP's are not just there to define the minimums. They are also there to protect you.

I also have been getting lots more FSBO inpsections. My opinion is that ususally they don't know very much about any part of the transaction. Lots of them do not even have a sales contract, much less a disclosure statement. I have even had to give directons to the title company. My main feeling is that I require my money up front. I also halfway expect a cancellation call the morning of the inspection. Squirrley happenings are more the norm than not. I know most of you guys don't like real estate brokers much, but I am one along with being an inspector. I was one of those guys that was born in the real estate and building business. I have inspected for 20 years. My brokers license is 32 years old. I try to keep my professional mouth shut, do a good inspection and get the heck outa' there. My meaning is that I don't want to have to hold anybodys hand and guide them through a real estate transaction and not get paid for it. P.S. I have not practiced real estate in many years, I just have the ticket. I am very careful about conflict of intrest an, so far, so good.

Hey John, long time no see!
Good to see you posting here.
Jim Luttrall

Hey Big Jim, I've been looking over you guys shoulders for quite a while, I kinda think I should keep my mouth shut, lest I show my ignorence. I have been getting an inordinate number of FSBO's though in this wierd market, so I thought I would post. Hope biz is good for you! john bell

Good to hear from you John, I hope the wife and family are doing well.

The FSBO is about where it was, but the vacant Bank owned property has been big chuck of the business here. Where several years ago the ratio of occupied vs vacant was about 90/10, now it has flipped to 10/90 although I am starting to see more occupied stuff the last few weeks.
Maybe the worst of the foreclosure stuff is past... maybe.

Originally Posted by imported_John Smith

I seem to have been getting a lot of FSBO business lately. I havent had any issues yet, but Im thinking when transactions are conducted without real estate agents, problems can arise that could potentially impact my business.

I assume the same disclosure form (TREC OP-H) is required to be completed if an agent is involved or not.


I have always asked clients/agents in the past about disclosure findings, but they never actually show them to me. Should I be requesting them? Seems like if there have been past problems, they should be brought to the HIs attention so they can see if there is any recurrence or other problems.

Your thoughts/opinions?

John,

To answer your original question, a disclosure is required by a FSBO seller. However, it does not have to be the TREC promulgated form. The property conveyance code for the state of Texas can be found at:

Texas Property code, Title 2. Conveyances Property Code

These are really all of the laws that are directly written for the re-sale of a residential property.

As you can see from this document, the TREC promulgated form is a little different but maintains the minimum requirement.

Not asking for, or looking at, disclosures and former reports is asking for trouble, IMHO. I get copies of everything I can get my hands on.

In the event that you and the seller are sued by an unhappy buyer, you will need all the ammunition you can get. If it was a cleverly concealed defect that was not on the disclosure, the form will help you burn your co-defendant, the seller. The form is a legal document required in most transactions in TX. It has weight in a court of law and your attorney will give you hugs if you can produce a copy when preparing for battle. Yes it (and reports prepared for the seller) will show up in discovery anyway but the earlier you get it the better. Remember, you don't know the seller from adam but now you are on the same side.

And if you know seller has only been in the house for a year or two, and wont pony up a report, thats a big red flag. What are they hiding?

Ive asked agents for reports which then took several hours to appear at the house, and then turned out to be 60+ pages of engineering reports describing massive foundation and structural repairs+++, none of which was readily apparent.

Yes you can keep it simple for $199.99 but it will cost you a bunch more to defend that simple report. They can't sue you for reporting too much. They will sue you for not reporting enuf.

Originally Posted by John Brown

Not asking for, or looking at, disclosures and former reports is asking for trouble, IMHO. I get copies of everything I can get my hands on.

In the event that you and the seller are sued by an unhappy buyer, you will need all the ammunition you can get. If it was a cleverly concealed defect that was not on the disclosure, the form will help you burn your co-defendant, the seller. The form is a legal document required in most transactions in TX. It has weight in a court of law and your attorney will give you hugs if you can produce a copy when preparing for battle. Yes it (and reports prepared for the seller) will show up in discovery anyway but the earlier you get it the better. Remember, you don't know the seller from adam but now you are on the same side.

And if you know seller has only been in the house for a year or two, and wont pony up a report, that's a big red flag. What are they hiding?

Ive asked agents for reports which then took several hours to appear at the house, and then turned out to be 60+ pages of engineering reports describing massive foundation and structural repairs+++, none of which was readily apparent.

Yes you can keep it simple for $199.99 but it will cost you a bunch more to defend that simple report. They can't sue you for reporting too much. They will sue you for not reporting enuf.

Co-defender, legal documents, disclosures, unhappy buyer, red flags, what are they hiding, cleverly concealed defect.

I know absolutely positively that you are quite meaningful in your thought and mean everything you say with great passion.

All that said I still will add my own opinion.

Lets take cleverly concealed defect. How would you know if it was concealed or repaired unless you read the report and then the repair list and any disclosure and and and.

Co-defender. You have nothing to defend yourself for if you do an inspection that involves the period of time you are there and not before and not after.

If you start out trying to pursue the fact that the seller may be purposely hiding something you are no longer doing the inspection as the home stands at the time of the inspection. You start assuming the fact that they are hiding something instead of having something repaired.

You are now doing a consultation for your client as well as a home inspection as well as everything other than a generalist home inspection

You are now preparing a court case for your client instead of doing an inspection. Everything you said in your statements shows (to me) that you are preparing to defend yourself against something that needs no defense. What is that? A generalists home inspection of the condition of the home at the time of the inspection.

Hey if it had massive foundation repairs following a 60 page engineers report and you would think warranty coming with that report and work. Well, huh? That's a good thing. If someone is going to just hand it to you then it would have been disclosed anyway. The foundation has been repaired. If it is a southern slab you are not going to see the repairs (piers)anyway. There is nothing for you to prove or disprove. you might see brick mortar repairs or patched cracks in the interior (that is what you would report anyway). You will not know at all if the major work was done properly or not.

Oh well. I can go on forever.

I am there to inspect my clients possible new home at the time of the inspection as a generalist home inspector. Any form of disclosure to the client is exactly that. A disclosure to your client. If it is not disclosed and your client takes your report along with his realtor and finds non disclosure you are not involved at all and that is the way you want it.

So, saying that I will add that this is just my opinion. Don't involve your inspection in with a court case and don't do your inspection as you would be readying for a court case.

There should be nothing on your mind while performing that home inspection except performing that home inspection to the best of your ability and reporting of the conditions of the home at the time of your inspection.

Just my opinion and what appears to be the opinion of many seasoned home inspectors, oh yeah, that have not been sued in decades of inspecting and thousands of inspections.

Once you have been through the meat grinder, notions of an innocent "simple visual inspection", "fairness" in the legal system, "honorable" lawyers and judges, will be out the window. You have been lucky. So far.

There is an inspector out of Conroe TX who has just come back from the Court of Appeals just trying to get the arbitration clause in his contract enforced (it was). Inspection was in 2005, lawsuit filed 2006, on a modest 1997 house. I've seen his reports. He does good work. Didn't help. Now he still has to go to arbitration. Three years of B$ and its still not over.

Could have been you.

You are absolutely right. You can defend a simple visual inspection. But it will co$t you mucho dinero, and as you must have E&O now in TX, ins might settle and then cut you off. You are not only defending your bank account, but your ability to make a living if you cant get insurance. Not to mention a good nights sleep.

There are EWs on this board who can elaborate on how nasty litigation can be. They like it. Its good money for them. They get to go out to the house and charge $200 an hour picking you apart. Its not fair. But thats how this business can be.

Good luck my friend. I'm not trying to be hostile, just offering opinion.

I've noticed many times on the sellers disclosure's that there is a question that ask if they (the seller) has any or had inspections on the property and if a report has been furnished.

Almost everyone of these are checked off as No.

I did a HI last week and when I mentioned to the buyer that I had inspected this same home about 2 years earlier, they said the seller said they had not had any inspections.

Being that I keep about all my inspections on my computer from the past, I typed in "search documents" and pulled it up in just seconds. There it was just as I remembered.

The seller denied they had ever had it inspected yet their name was clearly on my report and the agent who had sold them the house.

When it got down to it, the seller said the agent stated that she did not want them to disclose any prior reports or they would have to attach the report to the disclosure and it could cause problems.

Curious, how many of you notice also that it seem that all sellers must have bought their home and had no inspection done also?

rick

Originally Posted by John Brown

Once you have been through the meat grinder, notions of an innocent "simple visual inspection", "fairness" in the legal system, "honorable" lawyers and judges, will be out the window. You have been lucky. So far.

There is an inspector out of Conroe TX who has just come back from the Court of Appeals just trying to get the arbitration clause in his contract enforced (it was). Inspection was in 2005, lawsuit filed 2006, on a modest 1997 house. I've seen his reports. He does good work. Didn't help. Now he still has to go to arbitration. Three years of B$ and its still not over.

Could have been you.

You are absolutely right. You can defend a simple visual inspection. But it will co$t you mucho dinero, and as you must have E&O now in TX, ins might settle and then cut you off. You are not only defending your bank account, but your ability to make a living if you cant get insurance. Not to mention a good nights sleep.

There are EWs on this board who can elaborate on how nasty litigation can be. They like it. Its good money for them. They get to go out to the house and charge $200 an hour picking you apart. Its not fair. But that's how this business can be.

Good luck my friend. I'm not trying to be hostile, just offering opinion.

Just had a post written up and it disappeared, Don't know how I do that but I am not typing it all over. Good for you I am sure. I can be a little opinionated

Some folks (very rarely, almost never) ask for a copy of my report so they can see what I inspect. I send them a blank copy of the trec report. They will say that they meant one that is filled out. I ask why, what would that have to do with the home I am going to inspect for you. Every home has something different wrong with it. As far as what I inspect for, it is right there on the blank form and further info is on my website and at www.trec.state.tx.us

I have not been sued for anything in 36 years of working for myself. I do not personally know anyone that has. That is a serious amount of people. If it happens It happens.

What is your definition of a *simple* *visual* inspection. To me it may be simple but it is very involved and complete. The term of *handling your client* is always thrown about. You have to be that to, a handler. I just got into this with a guy out of New York. The way some of you guys make it sound is we should all find another line of work because "it may not have happened to you yet, but it will" and then the very real sad story of a loved one lost, that was seriously sad but no place on here for trying to make his ground. Some people in this world do make mistakes and people get hurt BUT THAT IS NOT EVERYONE. THE ACTUAL NUMBER IS SERIOUSLY SMALL (ALMOST NON EXISTANT) FOR THE TREMENDOUS AMOUNT OF HOME INSPECTIONS DONE

Do you understand the shear multiple thousands of home inspectors there are out there and the multiple thousands of inspections get done each year and the serious small pittance of actual law suits in comparison to all those inspections.

"EW's that will pick you apart." Shoot, I'm shaking.

No disrespect intended and don't get mad but the sky is not falling.

Stop making this sound like the worse job to have in this world. I happen to love my job and have no plans to change it and some cocky ass *EW* is certainly not going to make me tingle.

That all sounded pretty bad in itself. I do things like that to express myself and go over board.

No hurt or direct reflection on any individual. It kind of hard sometimes to express yourself in written words. I am Italian and speak with my hands and cocky yankee attitude.

Oh yeah, one more thing.

"You have been lucky so far" What the hell is that. I don't call it luck about nothing. I have just been lucky I have not been sued???? Now you are just being insulting! That reflects my attitude thru this whole post.

The sky is not falling and I do not live my life like it is. If I thought I had to live my life like that I would get off this bus ride tomorrow.

If you have been sued I am sorry for you and anyone that has. Are you an attorney as well ?????

I should not have written all that