In the news: Nick Gromicko explains what buyers can do rather than skip a home inspection in a hot market

4 Likes
4 Likes

I just got off the phone with an agent who was asking me about this. Thanks Nick!

2 Likes

I do them fairly often for investors.

4 Likes

For those that do them, curious what your insurance said (assuming you relayed it to them). I got a big ‘not an inspection, so therefore there’s no coverage’ response.

1 Like

Nick insures me so it’s all on him. :grinning:

Sam, what insurance company are you with?

Our insurance providers are fine with it. They have copies of our contracts.

Elite. Applied via members link.

I will absolutely say that they’ve been amazing on everything. And very very helpful throughout things, including follow up on ancillary (and specifically in regard to the email exchange you and I had). But yeah, that was the (paraphrased) response. I believe the primary issue was that no report was being generated.

InterNACHI has their book of business now, so you are probably in the process of being moved over to us where you are safe. :wink:

No closer to getting into Canada, @gromicko?

2 Likes

I think maybe I’m a little confused what you mean by that. I have InterNACHI insurance through EliteMGA - having applied directly via the InterNACHI website application.
What am I then ‘being moved over to’?
And again, they’ve been great but said no to walkthroughs being covered

Nick can talk in glossolalia at times.

1 Like

A “walk through” inspection or “visual inspection” is oddly-named since ALL inspections require a “walk through” the house and an inspector can only report what he sees (or visualizes). Fifteen years ago, a “walk through” inspection was one in which the inspector walked through the home with the buyer and kept his hands in his pockets, so to speak, while answering questions and making general remarks about what could be readily seen and, importantly, there was no written report since no inspector in his right mind would permanently document and sign any descriptions or opinions made from such casual, incomplete, and brief observations. Likewise, no insurance company in their right mind would expose themselves to any risk of liability for such a casual and inconsistent stroll through a house.

Since the article did not actually define what this abbreviated form of a home inspection specifically entails it is impossible for your insurance company to know what it is you are proposing to do or to calculate their risk in insuring you to do it.

Obviously, from what little information about this process was provided, Nick is not proposing that a written report be left behind since it could only consist of 100% disclaimers. With no report, your insurance company could not defend you since there would be no record of what you saw and what you said about what you saw.

Another consideration some inspectors will have to be concerned with is the requirements by their state as to what they must or must not do when providing a home inspection service to a buyer. Will the inspector be in compliance with the law in his state under such ambiguous conditions?

Articles like this make for interesting reading but provide little useable facts. Think it through carefully before attempting to put any of this into action.

3 Likes

@jbushart1 Good info, and honestly it was all things I had already considered and/or checked into (which is why I knew the response from insurance).
InterNACHI has an agreement template specific to Walkthroughs (and what they entail), but even the insurance carrier partnered with InterNACHI doesn’t insure them, so that’s why I had asked how people were handling it.

1 Like

Even if you are told by someone selling you a policy that something is covered, always remember that anything that is not in writing was never said. Those who sell or promote insurance companies make lots of promises about coverage that underwriters will laugh and shake their heads at. Insurance policies are not used cars but are sometimes sold as one.

If you find an insurance company representative that promises to cover an incomplete and undefined action such as what is proposed in this article, ask for a written binder that details what they will cover, what they don’t, and your duties under the contract/policy.

1 Like

Maybe I’m reading it wrong, but looks like you’re trying to give me advice there (which of course is always appreciated), but you’re describing the exact underlying reasons and motivation - which I feel like I made clear but maybe not (?) - for why I asked what people were doing.

James B is the best at providing substantive information pertaining to liability.

I call them major component inspections. I mostly do them for investors, but occasionally for home buyers. But I have had success with coaching agents to point out to their buyers that even though they waived the inspection in their purchase contract, a full inspection will still inform the buyers of what they are getting into and prepare them. So, I am doing a lot of inspections even though my clients have informed the sellers that they will not ask for any repairs. The other way that many agents are handling inspections is to put in the contract that the inspection will be for only major health and safety issues. I do my regular inspection but the clients only ask for repairs involving health and safety which is actually a pretty big umbrella when you define it broadly, which I do.

1 Like

I agree that it was a thoughtful and clear set of info.

What I was saying is that I asked a question based on ‘xyz’ concerns. Having a more detailed explanation of ‘xyz’ concerns in response may help others that are reading along, but I already had those exact concerns - which is why I looked into it previously and then asked what people were doing in regard to insurance (based on the response I got from insurance).

Hoping that @gromicko will have some insight in regard to that follow up question. Would seem odd to have InterNACHI promote (through agreement template offered to members and then public promotion of the concept) a service that their partnered insurer doesn’t cover.