Question: As home sellers, we signed a buy-sell agreement that allowed the buyer to hire an inspector of his choice. The buyer’s real estate agent gained access to our home to let in an inspector who claimed major structural problems and killed the sale on the spot. It was reported to my agent that the selling agent and the inspector were on the phone to the buyer while at the house.
I have tried to find out from my agent, who works in the same office as the buyer’s agent, if the inspector was licensed. My agent was rebuffed, but she is under the impression that the inspector was a family member doing a favor for the buyer. The broker said the inspector’s name was none of my business and that I didn’t want to know what was written in the report. There is no record of a report. The entire situation was handled in a completely unprofessional manner.
It is my understanding that state law calls for a home inspector to have special training and education and must be licensed. What are the rules/laws for home inspections and the use of licensed inspectors? What are the obligations of the buyer’s real estate agent? Is the seller entitled to know the name of the licensed inspector or about any major problems that may have been found? According to two professionals, our home has no major structural problems.
Answer: You are correct that a person doing business as a professional home inspector must be licensed, but home buyers are under no obligation to hire a professional home inspector. They can have a family member or friend do the inspection for free. And the person doing the inspection for free is not required to be licensed because they are not conducting business as a home inspector.
The Northwest Multiple Listing Service home inspection addendum used by most real estate agents in the Puget Sound region states: “All inspections are to be performed by inspectors of Buyer’s choice.” Notice that the addendum does not say “licensed inspectors” it merely says “inspectors.”
So if a buyer chooses his father-in-law to do the inspection that is perfectly acceptable under the addendum, even if the father-in-law has no home inspection experience or expertise.
Furthermore, under the listing service’s Form 35 home inspection addendum, the buyers are not required to give the sellers a reason for disapproving of the inspection. They merely have to check the box that says “Buyer’s inspection of the Property is disapproved and the Agreement is terminated.” If this disapproval is received within the inspection time frame specified in the purchase and sale agreement, the buyers are entitled to a full refund of their earnest money.
Home sellers need to be aware that when they agree to an inspection contingency on a purchase offer, they are basically giving the buyers a free, no-obligation look at the home for a few days. The buyers can back out of the deal at any time during the inspection period and get a full refund of their earnest money deposit simply by disapproving the inspection.
In fact, real estate agents sometimes call an inspection contingency a “weasel clause” because it allows buyers to weasel out of the deal if they change their mind about buying the house.
That’s why many sellers refused to accept a purchase offer with an inspection contingency during the housing boom a few years ago. Buyers were literally standing in line to buy houses, so the sellers could say “take it or leave it.”
But in today’s housing market, the buyers are in charge, so sellers typically have to accept inspection contingencies if they want to get a purchase offer on their home.
Most real estate agents continue to market a property during the inspection period in an attempt to get back-up offers in case the buyers disapprove of the inspection. And it’s a good idea to keep the inspection period as short as possible so that the buyers don’t take your home off the market very long.
Of course, if you are a home buyer reading this column, you should take the opposite approach and make the inspection period as long as possible to give yourself plenty of time to reconsider your purchase offer. If you change your mind about buying the home after the initial excitement has worn off, you can disapprove the inspection report to kill the deal and get your earnest money back.
Mail your real estate questions to Steve Tytler, The Herald, P.O. Box, Everett, WA 98206, or e-mail him at economy@heraldnet.com.
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