Do you show the home inspection to the appraiser?

In California we don't conceal, it just isn't a part of our process to do that.  Now that is probably because we don't do as many of the smaller government loans here because our prices are high (even with a downturn)...but that would be true if you do the lower loans with government or special funding for first timers.  Then yes, just show it.  Sellers know if you have educated them about that risk.  Not disclosing is always a mistake. 

That absolutely stinks that you have to disclose someone's opinion of a home's condition!  We do have very loose guidelines for Home Inpsectors and how they become Home Inspectors.  You can pretty much wake up one day and decide to start inspecting homes.  The State does not have an official licensing process.  We have to be very careful who we decide to recommend and use.  If it's your law, then you have to do it, but i would still question the legitimacy of it.  What is the reasoning behind it?  If you have stricter licensing practices than we do in VA I would add alittle more weight to the report, but not much.  The VAR Attorneyt has taken the same stance I have adopted.  It is one guys opinion.  Unless he is a licensed engineer or tradesperson who is an expert in the field he is inspecting, it is just an opinion and requires more investigation.  We are not required to disclose opinions.  We are also not required to disclose conditions that have beem remedied.  So, if one of my Sellers gets a report back that says they have a leak in the roof and my client fixes the leak, the disclosure is no longer necessary.  I still don't think it is necessary to provide a copy to the appraiser, but do what your laws tell you to. 

Good luck!

 We have to be very careful who we decide to recommend and use.

 

Why not let your client pick an inspector?

Are you serious?  I won't just let my clients fingers do the walking for several reasons:

1.  It is way too easy to get a home inpsectors license in Virginia.  You can just wake up one day and say, "I want to be a home inspector!"  And you are one.  I just received a home inspection report from a Buyer's Agent who let her clients find their home inspector on the internet.  This is the worst home inspection I have ever received!  Example:  Some lights inoperable.  Okay, which lights?  I had to hire someone to go out to the house and decipher what the heck this guy was talking about.  Turns out that the lights aren't inoperable, they are on sensors.  Now any reasonably competent home inspector would have been able to figure that out.  All he had to do was cover the sensor and the light would have come on.  There were plenty of other ambiguous findings in the report.  I looked up this guy's website and it is quite impressive, but clearly he can't back it up.  I guess it just goes to show you that anyone can put anything on the internet.

2.  Many Buyers do not know what to look for in a home inspector.  I help guide their decisions by supplying my clients with a list of inspectors and their qualifications.  If my client is realy concerned about electric issues, especially when I sell an older home, they can choose an inspector who has a background in electric.  I research and interveiw the home inspectors on my lists thoroughly.

3.  Now this is the most important one:  I took an oath to perform due diligence and supply a reasonable standard of care for each of my clients and customers.  It would be unethical for me to hand a phonebook to my clients and say, "Choose one."  My clients also look to me to help guide them through the home buying process.  They ask for my recommendations and suggestions and look to me to supply them with reputable tradespeople.  Now, they can go out on their own, but I have them sign off that I did not recommend that tradesperson.  It is the reasonable standard of care in my area to supply clients and customers with a list of at least 3 recommendations.  I have a well organized and highly researched list.  I actually survey my clients after the transaction is complete and ask them about their experience with the various tradepeople we used.  If a HI gets a low score, they can be marked off the list.  I run a tight ship and I think it shows in the loyalty my clients show me. 

Of course my clients have free will and they can hire anyone they choose, can you say RESPA?  But, I am considered an "expert" for a reason.  I am involved in buying and selling houses alot more than my clients are and they do rely on me for imput and advice.  If they didn't need my imput and advice they wouldn't hire me or any other Realtor.  Make sense?   

Here in California the home inspection is used to negotiate.  Hardly anything a home inspector calls out is "required" to be fixed.  So we don't have the problem you have in your area.

I've always personally wondered how an appraiser could adequately do their job without the home inspection report.  What if the foundation needs repair, or the heating/cooling system needs repair, or the main electrical panel needs repair?  Those could all cost in the thousands, yet the appraiser wouldn't know about it.

everyone needs to do there own work.  Don't give the appraiser the home inspection.

"Of course my clients have free will and they can hire anyone they choose, can you say RESPA?  But, I am considered an "expert" for a reason.  I am involved in buying and selling houses alot more than my clients are and they do rely on me for imput and advice.  If they didn't need my imput and advice they wouldn't hire me or any other Realtor.  Make sense?"

 

Hi Sarah,

 

Surely any client with enough common sense to have the means to own a house, arrange for financing and to hire you to represent them and work on their behalf would also have the mental fortitude to choose a competent inspector. Perhaps the Realtor role should be to tell the client to choose their inspector carefully.

I've always maintained that there is a conflict of interest having a Realtor recommend an inspector  because, even if only subconsciously, the Realtor's list  may be a list of folks who are known to not rock the boat.  Further, I see a potential for increased liability for the  Realtor as a result of  having  a list of hand picked inspectors from which he or she offers to let the client choose. 

Ideally, the inspector would be completely uninvolved with any member of the transaction except for the client; free of even the suspicion of nepotism. Even worse is the temptation for an inspector that relies on agent referrals to go easy on the house to preserve the referral base. An inspector might be influenced to say: "This house presents an excellent opportunity for additional insulation"    

I know these things happen in real life.  Present company is, of course, excluded from the controversy.

 

Susan said it graciously: "Everyone needs to do their own work." 

Chad- 

I have had plenty of home inspections that went horribly bad.  It's the nature of the business. The important thing is that my clients know what they are getting into before they go through with the purchase.  If they decide to walk, they walk.  We move onto another house.  That's also why I use who I use.  The HIs on my lists aren't afraid to point out the deficiencies in the homes.  I actually had a couple who walked from 2 houses b/c of the results from the home inspections.  The 3rd house was so much better than the first 2 and the home inpection went very well.  They have now referred 6 clients to me b/c they appreciated my patience and my referral of that particular HI.  Their freinds have also requested to use that HI.  If anything, I use HIs who will find deficiencies.  Do I have some increased liability for recommending tradespeople, yes; but, do I also have increased liability for not recommending tradepeople, yes.  It is a double edged sword.  I would rather serve my clients, and represent them to the best of my ability. 

I think you are coming at this from a different angle, being a home inspector, and being from a different state.  I encourage you to contact NAR and have them change the Code of Ethics if you don't like agents recommending tradespeople to clients.  My reasonable standard of care is to be able to guide my clients who need guidance.  If they don't ask for my help, they don't ask, no big deal.  But it would be a complete disservice for me to say, "Oh, you need my help, I'm sorry, no can do.  This needs to be a decision you make blindly.  Good luck with that."  These Buyers might as well be representing themselves!  I don't use the same guy every time.  Again, I have a pretty extensive list.  I also don't like the clear accusation that I am unethical because I offer this list and that my lists would consist of people who don't rock the boat.  You don't know me personally or professionally; just as I don't know who you really are.  My job as a Buyer's Agent is to help Buyers through the home purchase process in any legal and ethical way they ask me to.  I take this role very seriously.  If I went around selling houses that were inspected by HIs that didn't want to rock the boat, I don't think I'd be in business anymore.  I am only as good as the people I associate with.  Fortunately, you aren't affected by my lists, since we aren't in the same area.

I think it comes down to different area, different standard of practice.  That's okay.  It's okay to be different.  You can still do it your way in your area.  And, I can still do it the way we do it in my area.  Doesn't make me wrong. 

Debbie - You are very fortunate that your HIs are engineers.  As you can see, VA is very different.  We do not have a set licensing process and they really aren't followed by the state, so Realtors here must do their best to weed through the not-so-great HIs.  Maybe it's a state job market thing.  Most of the engineers im VA are working for the State or the national government.  We usually get former builders becoming HIs.  My husband's boss, my husband is an engineer for the Navy, actually wrote a book on Home Inspections.  We still haven't been able to figure out what his qualifications to do that are.  His boss is a mechanical engineer who works in missle launch.  Hmmm....  It's alot to weed through.  Many of our HIs aren't in the business very long.  If we did have engineers it would make my job alot easier.              

Well for what it's worth! 

I would like to see appraisers really appraising the property instead of what is on the sales contract!  Appraisers do not need to know what the house sold for to provide a fair price for the property!  Heck, this is why the RE market is so screwed up in so many parts of the country. 

I vote for not giving the appraiser a copy of the selling contract.

Just my opinion and your mileage might differ!

It's actually funny to hear the suggestion that appraisers shouldn't receive the contract.  That has happened several times in my area in the past year.  The appraiser has already gone out to the property, has completed an appraisal report, and then calls the listing agent to obtain the contract.  I was told it was part of an audit the clearing house was performing.  The problem with the appraiser not receiving the contract is that market value is a combinatiion of variables.  It is not just about the history, or solds.  If it was we would have stagnant prices.  It is also about what a Buyer is willing to pay for a property in a "normal" market, meaning there is no distress on either side.  So, I can understand the appraiser getting the contract, but maybe as a last step in the process.  In some ways I can see why an appraiser would want to see the HI, but in my area the HI is completed much sooner than the appraisal, so all items of repair have been hashed out by the time the appraiser gets there.  It is assumed that the house is in marketable condition by the time the appraiser gets involved.  What do you guys do with "as-is" properties in AK?    

Hi Sarah

Just to jump in a little late here , but I just had one of my clients call and ask for a separate e-mail stating that the water was on when I inspected.

The appraiser had shown up some number of days before I had ,and since the condo unit had been winterized she found the water off and reported it to the bank as being such.

Apparently the bank was going to refuse my client the loan since there was no working water .

Sounds crazy but it's true.

Sarah ,I am sure you mean well but I also feel Realtors are out of place when using terms such as I use so and so.

This implies you are the client and the one paying for the inspection.

Many of my clients tell me not to share the report with their Agent as they feel the Agent was to controlling.

Remember please that you are working for them and not the other way around.

Now in my case all my business is from the web and from referrals that are increasing all the time.

So my perspective is it should be against the law for anyone involved in the transaction to steer clients away from me because I don't bring donuts and suck up like a puppy.

This is not about you but I am giving you the feelings many in my profession have.

I have run into  situations where I show up and the Agent try's to prevent me from entering the door by bringing someone they hired out of pocket to stop me from finding what defects were in the place.

I have developers that told me I have 45 minutes to inspect and then need to leave.

I have had other developers get mad at me for wanting to go on a roof because the claimed it was new and I had no reason to do so on a condo inspection, only for me to go up and find old torn material with bad flashing and missing coping .

Guess this is why Inspectors feel insulted when hearing someone say I use only so and so.

To me it is out and out unethical.It would be like me telling a client to get another Agent or a Broker and a Banker putting pressure on an appraiser to inflate the value of a home.Of course none of this ever happens right.

Anyway that is my little vent piece and please remember that it is not about anyone here.

Interesting post Debbie.

Gold for you

Debbie- Very interesting about "as-is" properties.  When we say "as-is" we mean "as-is" and that includes termite problems.  We also don't require a larger down payment for "as-is."  Your loan program is what it is and as long as you have a conventional loan, you should be good to go.  We sell lots of "as-is" and "will only remedy Paragraph 7 items."  (Paragraph 7 items were covered under an earlier post).  We also have no choice but to present the home inspection to both agents, it's in our contract.  Buyer can get in "trouble" if they don't present it to the LA. 

Bob- I would not "steer" my client away from a HI, as long as I hadn't had a bad experience with them before.  I would let them know about my first hand experience and let them make their decision based on all information.  I would also never hire my own home inspector and just show up at a home inspection with them, or prevent a home inspector from entering a home.  Remember, I have a big list!  It is not one or two guys, or the same guy over and over again.  It is a list... big list.  I also don't practice dual representation, so I have no conflict of interest in houses I sell.  Either I am the listing agent or the buyer's agent, never both.  I will say that the HI and Realtors in my area appear to have a much better relationship than what appears to be going on in other areas on this board.  I do know of Realtors that use a particular HI b/c they can be done in less than an hour.  I don't recommend those inspectors and I don't think it is unethical for me not to recommend them.  We have hundreds of HIs to choose from, not just 10.  I work in the Richmond/ DC area.  And again, most of my clients request that I help them narrow it down.  I am not saying, "Here is list.  Must pick from list."  I get absoluetly nothing from recommending these HIs, except peace of mind that is there is something to be found, it will be found.  I don't accept direct referrals or request referrals from the HIs on my lists.  I feel like I am having to over explain myself, but I have to keep in mind that you guys don't work with me on an every day basis, nor is there anyone else on this blog that does.     

Builders in my area only allow 2 hour inspections.  If I am selling new construction I negotiate a longer time frame up front. 

Also, some Realtors do pay for the home inspections in my area, and it is completely legal.  I do not.  I would much rather pay for the home warranty, it lasts longer.  Also, please keep in mind the type of area I do business in and the prices we deal with.  Bob, it is similar to what you have in your market.

It sounds like HI in other areas really get screwed over, lack of better words.  Sorry you guys feel that way.  I wish more Realtors would present this business in a better light.  But, I also don't think it's right that it appears that HIs in this post are comparing all Realtors to some of the bad ones in your area.  I haven't done that to you.  I would hope you could give me the same respect.  I believe that everyone should be treated with respect and deemed ethical until proven not to be.  Not the other way around, but I guess I am an optimist.      

Hello Debbie, I have been inspecting for eleven years and completed over Twenty Eight Hundred inspections per National and State standards (basically the same). Your post certainly generated a great deal of coversation and this is a good thing. Communication at all levels is the answer to all our issues and challenges. Professional Inspectors do not (SHOULD NOT) demand anything be changed alterd or repaired as a part of the report on the home. The inspection by design is a "Visual evaluation of readily accessible areas of the home. It is a statement of condition and should not be construed as a repair list". The report is the sole property of the "client" be it buyer or seller and should not be shared with anyone unless the "Client " gives permission. I have had quite a few appraisers arrive while I have been coming out of the attic and ask what did you find up there wating not to have to go look. I have had the listing REALTORS ask did you find anything bad. We, like you folks as REALTORS get put in some ackward situations by well meaning people and the only way to avoid it is to take the high road every time. The buyer, seller, REALTORS, inspector, appraiser, lender adn insurance folks all wan tthe same thing....sell it.

All of our disciplines have those individuals who are, well (not exactly) and we need to work together to ensure that everyone performs to, at the least, the minimum standardds. I personally like for the buyers REALTOR to come to the inspections so that they can witness the way I state a concern or condition. This ensures that there are no misinterpretation and the REALTOR can ask the question, "why do you need a CO monitor with an all electric home and no close parking or garage"? I might add that would be a very good question TOUCHE".

Blessings to you all

Mike Reel Integrity Home Inspections WV

I was never asked to show a home inspection results. Why would they ask? They are not directly related. 

But I always bring comps. Lenders are now far more careful with appraisals than they were during the last housing boom. In turn, appraisers are being very cautious with the current price run-up, especially since they rely on past sales.