Who owns the Inspection Report?

I’d love to have more time to blog, as I think sharing thoughts and ideas promote conversation and change for the better. The market it crazy and we’re all busy, so the time just isn’t there right now. However, there is one thing that over the last couple months I genuinely feel needs some attention.

 So, I ask, who owns the Inspection Report? While the answer is simple – THE CLIENT – we are seeing more and more instances of reports being given to unassociated parties to the transaction.  Unassociated parties – let me be clearer.

 Buyer’s Agents are sharing the entire report with the Seller’s Agent. If the deal falls through, then the Seller’s Agent is sharing the report with numerous potential Buyer’s and their Realtor. In my opinion this is an ethics violation. Let me touch on that.

 First, the reports are locked, and the Seller’s Agent is sharing the entire report with our Client’s name and phone number on it. This leads to phone calls from the Client to us wanting to know how this person got the report and their contact information. In three recent cases, the potential new buyer has called our client asking why they didn’t buy the house. For one particular client it was very embarrassing as they lost their job and no longer qualified for the loan. Our Client didn’t share that information, but it was painful for the person to have to relive.

 Secondly, the Client paid for that report and they own it. I can’t even release that report without written permission, yet Seller’s Agent’s take it upon themselves to forward to a number of people. This reminds me of our Code of Ethics as Realtors and, in my opinion, and in the opinion of our Counsel amounts to a breach of confidentiality of the Seller’s Agent by providing information to parties outside of the transaction. Simply put, how would you feel if the report you paid for was taken by the Seller’s Agent and disseminated to numerous other parties with your contact information on it? This just leaves a sour taste in my mouth.  There are already other inspection firms provided worthless warranties in exchange for selling their Client’s data. There are inspectors selling client data to alarm companies, and then pocketing upwards of $200 if the Client buys an alarm!

 We do not participate in any of those programs as our Client’s deserve the highest level of professional service and confidentiality possible.  Sure, it may seem easy to share a report recently completed – but at what cost?  In my opinion, you are placing a price on your ethics. There’s no amount of money you can offer me to cause me to even consider violating my core values or ethics.

 Did you know we are technically not even supposed to deliver the report to the Buyer’s Agent – only to the Client? The Real Estate Contract allows you to represent your Client, thus we rely upon that caveat to provide you the Buyer’s Agent with a copy in order to ease the process.  Once in possession of that document, if you are acting in the best interest of your Client, please ask for their permission prior to sharing it with the Seller’s Agent.  In fact, I also encourage you to stipulate to the Seller’s Agent that they are not allowed to share this document with anyone outside of this transaction.

 Back to the Client’s I mentioned above who called us. I specifically directed them to the Seller’s Agent who was sharing this document and told them my beliefs that the Seller’s Agent was sharing this document outside of what I considered to be ethical practice.  Whether the Seller’s Agents received phone calls or not I have no idea.

 How does this impact Home Inspectors?

 Each of you have your preferred inspector, sometimes it’s us – sometimes it’s others.  Sharing these reports have several negative impacts.

  1. How would you feel if another Realtor shared your Client’s information, or took that Client? Isn’t that basically what you are doing – you are hurting the market for ALL inspectors by sharing this report.
  2. Not to mention who knows the quality of the report or what’s changed? If you are a Buyer’s Agent – how do you know the current condition of the home? Is this truly in the best interest of your Client to defer an inspection?
  3. Houses are living breathing entities and as such change. That report is a snapshot on that day at that time only.
  4. When the call comes to us from the non-paying Buyer – and they do regularly – we inform the Buyer that report is now worthless, and we will not discuss ANYTHING with them period. They are directed back to their Agent with the knowledge that we owe them nothing and are not responsible for anything in that report. We further tell them to rely upon that report is done so at their own risk.
  5. We had one person hire an attorney and tried to hold us accountable. It cost them $3750 dollars in our legal fees as we filed a counterclaim for attorney’s fees. But it was $5000 out of our pocket to start. For any small business, the lost time, lost revenue, and headaches aren’t worth it. And guess what – they sued their agent to!
  6. We’ve even had Sellers and one Seller’s Agent sell a report to a potential Buyer…

 This practice hurts us all.  It’s easy but as our core values say, do what is Right – Not what is Easy? I’ve yet to see an instance where this helped anyone.  And you are fooling yourself if you think it’s helping you or your Client – regardless of which side of the deal you are on.