Do sellers have to disclose your inspection report to subsequent homebuyers?

(Nick Gromicko, CMI) #1

Does my buyer have to turn over his inspection report to the seller when requesting repairs?

Does my seller have to provide to subsequent buyers a previous buyer’s inspection report from a sales contract that did not close?

As a listing agent, can I shield my seller from having to dis- close information in an inspection report to subsequent buyers by not passing the report along to the seller?

Find out here: http://www.nachi.org/documents/disclosure-of-previous-inspection-reports.pdf

(Bruce A. King) #2

[quote="gromicko, post:1, topic:69541"]

Does my buyer have to turn over his inspection report to the seller when requesting repairs?

Does my seller have to provide to subsequent buyers a previous buyer’s inspection report from a sales contract that did not close?

As a listing agent, can I shield my seller from having to dis- close information in an inspection report to subsequent buyers by not passing the report along to the seller?

Find out here: http://www.nachi.org/documents/disclosure-of-previous-inspection-reports.pdf
[/QUOTE]

I have not read the article yet but plan to and hope it distinguishes the difference between sellers disclosing "problems learned" and "handing over the report" which is two different subjects really.

(James H. Bushart) #3

Does my seller have to provide to subsequent buyers a previous buyer’s inspection report from a sales contract that did not close?

Nope.

If the seller did not commission the inspection, he was only informed about the inspection third hand. How does he know the inspector was qualified or that the information provided to him accurately reflected the inspector's findings? I didn't read the article but I can assure you that the burden of proof would not fall upon the seller ... but would fall upon the plaintiff to prove that the seller knew of the actual undisclosed defects, not that he knew of some other guy's opinion (who he never met) about the undisclosed defects.

(Nick Gromicko, CMI) #4

Interesting article.

(Bob Elliott, 450.0002662) #5

Heading out but would think it depends on state laws.
If seller agrees to a Radon test and it is found to need remediation I would suspect the seller would need to disclose it to the next potential buyer if the purchase falls through.

(Russell J. Hensel) #6

Here in Florida, the seller must disclose any known defects of the property whether the buyer buys the property or not. Many times the house is sold, "as is", then the seller doesn't even want to see the report or know anything about the house. The only thing that they want to know is whether the buyer wants to buy the house or not. So with the present buyer backs out, they will not know any of the defects to legally disclosed to the next potential buyer

(Charley L. Bottger) #7

[quote="rhensel, post:6, topic:69541"]

Here in Florida, the seller must disclose any known defects of the property whether the buyer buys the property or not. Many times the house is sold, "as is", then the seller doesn't even want to see the report or know anything about the house. The only thing that they want to know is whether the buyer wants to buy the house or not. So with the present buyer backs out, they will not know any of the defects to legally disclosed to the next potential buyer
[/QUOTE]

Same in Okla

(John Onofrey, TREC#6546) #8

I would venture to guess that a large percentage of clients breach the contract by violating the confidentiality clause. Now I am wondering if a confidentiality clause might be the ultimate E & O policy. :D

(Dan Bowers, CMI, ACI) #9

Stepping Sideways a Bit ..............

Where I'm at in the glorious KC metro area, the realtors re-wrote their contract about 12 years ago to say something like that if a buyer wants to renegotiage price or repairs or walk away after inspections they HAVE to provide sellers or realtors copies of all reports.

Therefore the buyer has already signed this when you or I arrive. So I still only give to buyer BUT he/she has already contracturally agreed to give copies to just about anybody that wants one.

In my area it seems to run 50 / 50 on sellers giving copies of previous reports to new buyers. Some agents have the sellers do that, while other agents tell the sellers to hold onto the reports as its NOT the new buyers property BUT they may verbally tell or email the buyers agent what significant defects were noted (or they may decide to NOT).

(Pete Campbell) #10

[quote="dbowers, post:9, topic:69541"]

Stepping Sideway a Bit ..............

Where I'm at in the glorious KC metro area, the realtors re-wrote their contract about 12 years ago to say something like that if a buyer wants to renegotiage price or repairs or walk away after inspections the HAVE to provide sellers or realtors copies of all reports.

Therefore the buyer has already signed this when you or I arrive. So I still only give to buyer BUT he/she has already contracturally agreed to give copies to just about anybody that wants one.

In my area it seems to run 50 / 50 on sellers giving copies of previous reports to new buyers. Some agents have the sellers do that, while other agents tell the sellers to hold onto the reports as its NOT the new buyers property BUT they may verbally tell or email the buyers agent what significant defects were noted (or they may decide to NOT).
[/QUOTE]

In Port St. Lucie, FL I encourage my buyers and realtors NOT to release the reports to the seller, esp. when the seller is an AH investor.

(Dan Bowers, CMI, ACI) #11

Pete -

Like I said....in KC its already in the contract and if you don't you've breached the contract.

(Gary Farnsworth, CMI) #12

I also see a trend here where agents only give the info to the seller listing agent, that they want to give them. This comes in the form of a "renegotiation form". Often I get questions from buyers "what do you think I should negotiate to be repaired?" I usually respond that it is between you and your agent. You can ask for everything, and you never know what the response will be.

Of course here in KC, that will not happen. Less is more, for the sake of the transaction in negotiations. As for inspection reports getting passed around, inspectors here never hear about that, but we know it happens.

"Geesh. Don't use this inspector, because he has real detailed reports. Here, have a copy..........."

(Dan Bowers, CMI, ACI) #13

Not that agents do it IF the report is tuff, BUT another inspector last year called me .......... He'd done a report for a client. The deal went south. Few months later he got a call from someone saying they bought the house because of his report and now they've moved in, this wasn't mentioned, that wasn't mentioned, etc, etc. He apparently asked who are you and where did you get my report because you're NOT my past client, AND oh by the way MY clients were planning on gutting the house so some things they did not care about and were not discussed per their direction.

He was told that at an open house several months before 20-30 copies of the report were laid out for potential buyers AND when they decided to make an offer their agent told them they could save $$$$ and just use this report since it was done very recently.

The inspector wrote a letter to the brokerage telling them it was not theirs to give out and to cease and desist, etc, etc. The inspector then went on to tell me the brokerage then contacted the KC Realtor Boards attorney and asked him for an opinion, AND his opinion was that once it was provided to the seller and listing agent (they had to give it out to get out of the deal) it was public knowledge and the agents / brokerage was obligated to give it out to potential new buyers.

The inspector then showed me a copy of an email or letter (can't remember which) that the brokerage apparently distributed to MANY other local brokerages or agents talking about the inspector that was trying to tell a RE Brokerage what they could OR could not do with his report.

The inspector told me he felt he was losing business hand over fist because of that ........... Forgot who it was, but I kept wondering about the outcome. Agents can be real vindicative in cases like this when an inspector stands up and says .... You guys don't run the show.

(Gary Farnsworth, CMI) #14

I think other inspectors thoughout the nation do not really understand what goes on here in KC. Seller's disclosures are rarely correct, and get pushed onto buyers by the agents, and get placed in front of me also, so I can do the report off of the seller's disclosure, resulting in a soft, basic report. Kansas laws were created to make this legal. I pass.

This week I got a "stearn" email from a mortgage broker demanding a letter from me stating the condition of an attic on an inspection that I did three weeks ago. I found out that the "appraiser" could not go into the attic, for whatever reason, and wanted a letter from me on my company letter-head stating the condition of the attic. How did someone else's failure become my problem? Why wouldn't my inspection report suffice?

I was threatened by this lender about not being able to deliver flyers, or no longer be able to do business in the buyer's agents office, a large "major" RE north KC office.

Because they did not want to send over the full inspection, full of defects, and the attic inspection was on page 10 of 25.

Hmmm.........

(Jeffrey R. Pope, CMI) #15

Under the standard sales contract for a home purchase, the seller is ENTITLED to copies of all reports prepared for prospective buyers of the property.

Under CA law, any report prepared on the subject property becomes part of the "transfer disclosure statement," aka TDS.

As a state licensed sales person, CA agents are required to disclose any information they have received regarding the condition of the property, and/or any adverse affects that could impact the "desirability" of the property.

One of the newest additions to our TDS is "do you believe the residence to be haunted?"

(James E. Braun, CMI) #16

[quote="dbowers, post:13, topic:69541"]

Not that agents do it IF the report is tuff, BUT another inspector last year called me .......... He'd done a report for a client. The deal went south. Few months later he got a call from someone saying they bought the house because of his report and now they've moved in, this wasn't mentioned, that wasn't mentioned, etc, etc. He apparently asked who are you and where did you get my report because you're NOT my past client, AND oh by the way MY clients were planning on gutting the house so some things they did not care about and were not discussed per their direction.

He was told that at an open house several months before 20-30 copies of the report were laid out for potential buyers AND when they decided to make an offer their agent told them they could save $$$$ and just use this report since it was done very recently.

The inspector wrote a letter to the brokerage telling them it was not theirs to give out and to cease and desist, etc, etc. The inspector then went on to tell me the brokerage then contacted the KC Realtor Boards attorney and asked him for an opinion, AND his opinion was that once it was provided to the seller and listing agent (they had to give it out to get out of the deal) it was public knowledge and the agents / brokerage was obligated to give it out to potential new buyers.

The inspector then showed me a copy of an email or letter (can't remember which) that the brokerage apparently distributed to MANY other local brokerages or agents talking about the inspector that was trying to tell a RE Brokerage what they could OR could not do with his report.

The inspector told me he felt he was losing business hand over fist because of that ........... Forgot who it was, but I kept wondering about the outcome. Agents can be real vindicative in cases like this when an inspector stands up and says .... You guys don't run the show.
[/QUOTE]

I would have told this buyer who called me, to talk to his Realtor, not me, because I am not his client. I have no liability in this matter but the Realtor and broker does because of the bad advice given.

(John Cahill, TREC 855) #17

Not a bad article. It is written for Texas.

Texas does a fair job of protecting inspectors against 3rd party reliance. Its written in the State promulgated standard form.

I have had agents and buyers intentionally force the inspection upon the seller to negotiate or, in one case, to retaliate. The home had major undisclosed, but perhaps known, problems. Deal died. Buyer assured seller and listing agent had the report. Then told them, when you sell this house I am mailing this report to the new buyer. Sure that involved me in a way I did not want to participate but I never heard back on it. I did smile at how crafty the method was.

Real Estate :roll: