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How Agents Can Limit Their Liability with Regard to Home Inspections

1. Insist that your client hire a professional home inspector to inspect the property, and strongly recommend that the inspection also include ancillary inspections for the presence of wood-destroying insects, and such harmful pathogens as mold and radon.

2. Have the home inspected before the sale so that it is "MoveInCertified."  MoveInCertified homes have been pre-inspected by InterNACHI-certified inspectors, and the sellers confirm that there are no major systems in need of immediate repair or replacement, and no known safety hazards.

3. Take the time to manage your clients’ expectations of what can reasonably be discovered by a limited visual inspection of a property that is full of furniture, carpets and stored items that further physically limit the scope of an already limited inspection.

4. Be sure to carry your own Professional Liability Insurance to protect yourself from allegations that you should have independently verified that the property was defect-free.

5. Review the inspector’s Pre-Inspection Agreement to make sure that it contains a Notice Clause that requires the buyers to notify the inspector within no more than 14 days of the discovery of any defect for which they believe he is responsible.

6. Avoid conflicts of interest.  Never recommend an inspector who participates in preferred vendor schemes.  All major inspector associations prohibit participation in such undue praise-purchasing schemes.  You have a fiduciary duty to recommend the very best inspectors based solely on merit, not money.  And it goes without saying that you should never recommend any inspector with whom you have a close personal or blood relationship.

7. Recommend the high-value inspector, not the low-price inspector.  Good inspectors charge accordingly.  Trying to save your client $100 on an inspection could cost them $10,000.

8. Only recommend inspectors who adhere to a strict Code of Ethics and Standards of Practice, such as members of InterNACHI.

9. Always attend the home inspection.  Many real estate agents have been advised never to attend a home inspection, allegedly by real estate attorneys.  Agents who say that they have received such advice are never able to articulate its rationale.  You are no less likely to be named in a lawsuit by hiding during the inspection, and the reasons for attending the inspection are quite compelling.  First, your presence is a clear indication of your professionalism and concern for your client’s interests, two factors well-known to engender referrals.  Secondly, it affords a very cogent opportunity to refocus your client’s attention to the limited nature of the inspection.  For example, you could note the numerous obstacles, such as furniture, carpets and appliances, that can obviously inhibit the inspector’s ability to see certain areas of the home.  Finally, should this transaction come to grief, your interests are usually perfectly aligned with the inspector’s, and your recollection of such limiting factors would provide powerful corroboration of the exonerating reasons that a defect was not discovered during the inspection.