No. Despite the request, it is up to your buyer whether he or she would like to send a copy of the inspection report to the listing agent or seller. A listing agent or seller who receives an inspection report is charged with knowledge of the information in the report, even if he or she doesn't open it. If the report reveals material defects, the seller and the listing agent are obligated to disclose those defects to subsequent potential buyers.
I can understand NO to the Listing Agent but the Seller? What if the Seller instruct the Listing Agent he doesn’t want the inspection report. What then?
Seller is our client and we owe a fuducairy to our client. It doesn’t seem right. I would think it will be up to the court to decide who right or wrong, should it go that far. Anyway have a great day my REALTOR”S friend’s! # ENJOY!
i would think a seller would loose in court, and could face fraud charges. It would be like not disclosing a fact they are aware of. but because they don’t open the report they don’t have to revival it, I think it would make your client look like they are not being honest. That would be a tough sale then also, if you see it and don’t have them disclose it, would it make you a party to their fraud?. Everyone looks at things different and it is really different from big city to rural country area, just learned that… Read more »
over the years I have seen many inspection reports that were later proved to be just wrong, why should a seller or agent have to disclose anything that might not be true? why run off a new buyer because of a bad inspection report. Why let an unqualified inspector dictate our business?
Once the sellers agent is aware the seller is also deemed aware because of agency.
Under the concept of “imputed notice” if the listing agent received the report the seller has also deemed to have received the report.
In the past we have requested only the pages that affect the repairs requested. Also, every inspection is different and if the seller were to have another inspection it may be totally different items considered defective.
Thanks for the discussion.
So glad to see this addressed. So many agents have recently told me they feel if they don’t show up to the inspection or see the report they can claim no knowledge. Or they don’t want the seller or inspector to email the to them. But to me, that’s a disservice to any potential Buyer.
Fannie Mae Sales Guide: Do not accept inspection reports from buyers or selling agents. Reply back with a “Discarded without Reading” note, and instruct the agent to submit any specific requests on an Amendment Form. Fannie Mae will ask for reports if needed.
Thank You Sir!
Agree! Most inspection reports have a disclaimer stating the report is prepared for the buyer & the buyers use – the buyers pays for it not the seller. If the buyer would like repairs, then send an amendment & if the seller thru the Listing Broker/Agent ask for the report then provide it. Just my opinion but does not mean it is right. I work with alot of REO properties & my clients (bank) states that we are not to accept the reports of which I inform the agents of this information when the inspection is approved by the seller.
Sorry, doesn’t work that way
Foreclosed properties and properties being sold by a government entity are exempt from disclosure in Texas so it is a moot point.
Those entities that are exempt from completing a disclosure form are NOT exempt from disclosing known material facts and defects about the property. The Deceptive Trade Practices act still applies. And there is the The Statutory Fraud Act (Tex. Bus. & Com. Code § 27.01).
They are exempt from seller’s disclosures only. ANY inspection that they have received the last 4 years…even from a previous owner…They must disclose. I ran one of the largest foreclosure agencies in Texas in 2008. Also, if you send a listing agent an inspection report, and you live in the state of Texas, by law not only does your seller have to disclose the report to all buyers that request the report, they also need to update their seller’s disclosures to reflect any KNOWN deficiencies. If they believe that something is incorrect in the most recent report then they will… Read more »
I completely agree with most everything you said with the exception of these few words, ” …seller have to disclose the report to all buyers that request the report…” I don’t necessarily disagree but have a question. We agree on the TAR disclosure form that the inspection needs to be listed. Do you believe the inspection report does not have to be provided as part of that report unless the buyer requests it? If that is what you believe, please share why? In #10 of the disclosure where it asks about an inspections done in the past 4 years, it… Read more »
They may be exempt from providing the disclosure FORM, but that does not mean they don’t have to disclose knowledge of material defects. The problem is PROVING that someone had knowledge having never occupied the property, and then getting permission to sue the government. I remember a HUD repo many years ago in Grapevine that was gutted to the studs (was reputed to be a meth house), and yet there was never any disclosure. The government gets away with murder, simply because they can.
I think that’s just for REO.
The problem I have with this is the simple fact that it gives unfair power to a home buyer over a seller. If they don’t come to terms with repairs, a home buyer can just have their agent send the report to the sellers which requires them to attach it to an updated seller disclosure. Even with repairs they may or may not have planned on doing. These reports are usually quite extensive listing items that may have been grandfathered and others, both critical (ie-safety related) and non-critical (loose knob, etc). Future buyers who see this added report (usually 20-40… Read more »
Couldn’t agree more. Well said Robert.
100% agree with your comments. I’m curious to know what law or TREC rule that states the seller ir Listing Agent has to accept the report, that was not provided…???
Legal class instructor told class I was in.
Well said as note by another. The other point is that the home inspector may not be a good one. Seller has no choice in the inspector chosen nor the validity of his findings. Per an attorney who addressed our agency, we should not accept or read an inspection report. We should only negotiate on requested repairs. On my last listing the home inspector was not up to par. He stated things that needed repair that did not and when contractors came out to check it found the report erroneous or should it say overly picky. Plus had my seller… Read more »
No, the law requires the seller to disclose if they have an inspection report or not on the seller’s disclosure notice. If the seller has a report, then the seller must provide it to the buyer if the buyer requests. Attaching to the sdn is not required.
That’s like saying life’s unfair. Non disclosure is unfair.
Dear Texas Realtor Staff, Are you 100% certain about this? This does not make sense. I agree with most of the comments below. A seller should have the right to decide if they would like to see the report (which was prepared exclusively for the buyer). If the buyer has the right to decide if the seller sees the report, then any buyer (or buyer’s agent) could tarnish a future sale for a seller if they do not come to an agreement on repairs amongst themselves. I’ve found, in practice, that most professional buyers’ agents will send an amendment request… Read more »
To discuss this topic with a Texas REALTORS® attorney, please call the Legal Hotline at 800-873-9155. The attorney will be able to address your concern.
One set of rules for Fannie Mae and another set of rules for the hardworking Texas public? Is Texas now a sanctuary for federal agencies? Sounds typical now days; put the American people last. I guess Fannie Mae has better attorneys. Thank you TAR; thank you Legal Hotline!
Buyer owns the report is my understanding and they can dictate who receives a copy of the report.
Too many agents confuse fiduciary relationship with disclosing problems on a property. They think sticking their head in the sand is a good option. I would hate to see them in court when the judge says “was there an inspection” and they reply yes but we requested not to get a copy. In fact they may end up in court because their seller sues them for not handling it correctly. Always disclose.
I agree with you, David! And by the way, what difference does it make if the seller’s agent and/or the seller has received the report or not? If there was a discussion about a repair, both of them are now aware of it and it should be disclosed!
Yes, I agree with you both.
The point is that when you receive the sellers disclosure as a seller you are now aware of EVERY “issue” noted in it and all needs to be disclosed. Be it correct or be it wrong. So on a house without ARC fault that is grandfathered and no repair is requested, why would you want to disclose that? It is a grandfathered item that is not required to be repaired. A seller is not a legal mind; a seller is pointing out things they know about the house. If they had to disclose what was on the home inspection the… Read more »
Get a pre listing inspection, fix the electrical issues and disclose the rest. its what everybody wants when they are on the buyers side. funny, TREC rules for inspections only require an inspector to report as defiecient afci or gfci breakers that fail to trip or test as designed. Sept 2013 was the rule change. inspectors listing the lack of AFCI breakers can make a note or comment referencing code but the lack of AFCI breakers is not a TREC deficiency. The real issue that needs to be brought forth is better set of rules and guidelines for inspectors so… Read more »
I agree with you!
Absolutely!! Well said
Since I’m not an attorney, I won’t comment on the “legal question” involved here. But what about the opinion of the Inspector?? You could hire 3 different inspectors and get 3 totally different opinions about the condition of a house. And even though inspectors are licensed in this state, their “opinion” about something needing to be repaired is not the Gospel from on High. The Buyer hires whomever he wants to suggest to him what issues need to be addressed on a house, so why should that opinion be shoved down the Seller’s throat? ~It could be the Buyer’s brother-in-law… Read more »
Excellent point.
Agreed, Rick. I just hope TAR reconsiders this whole issue so the buyer can’t control the situation.
Because the inspector is licensed.
What if the inspector is wrong or just makes an honest mistake. I have seen inspectors give personal opinions instead of mechanical findings.
for instance, if a Foundation company sends out their own representative instead of a disinterested 3rd party or a roofing company etc….
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Example: I sold my own property and the inspector wrote me up for not having a switch for the ceiling fans
They were all on remote !!!!
Whats wrong with being honest about everything. There is a buyer for every house. Disclose everything and then there are no problems
I agree and have watched agents not disclose after a horrible inspection. Never posted the revised seller’s disclosure with foundation issues. Just wrong. Disclose disclose disclose!
The buyer gains the right to perform an inspection by way of the inspection clause in the contract form. If the law is indeed being correctly interpreted here (seller/agent can’t refuse the report) wouldn’t a lawyer-drafted or principal-drafted contract clause that prohibits buyer from sending the report without seller’s permission serve to protect the seller? Should TREC modify the contract forms?
Sorry but not disclosing is not in the seller’s best interest.
According to 15 USCS § 6602 (4), [Title 15. Commerce and Trade; Chapter 92. Year 2000 Computer Date Change] the term material defect means “a defect in any item, whether tangible or intangible, or in the provision of a service, that substantially prevents the item or service from operating or functioning as designed or according to its specifications. The term “material defect” does not include a defect that– (A) has an insignificant or de minimis effect on the operation or functioning of an item or computer program; (B) affects only a component of an item or program that, as a… Read more »
I notice it says material defect, and I don’t believe that refers to every item in an inspection that is deficient. In fact, I would say that most repair items on an inspection are not material defects. A material defect is a specific issue with a system or component of a residential property that may have a significant, adverse impact on the value of the property, or that poses an unreasonable risk to people.
I was the listing agent on a property that went under contract quickly and was inspected during the option period. The buyer terminated and would not share the inspection report. The agent told me that the termination had nothing to do with the property condition but without the inspection report we could not provide it to a future buyer. It was a difficult situation because it raised doubts and sounded to some like we were not being forth coming. The buyer’s agent told me at the time of termination that there were some repair items but probably not over a… Read more »
the reason for my comment is there’s several situations that have arisen we are the agents are not getting the disclosure updated and they don’t realize that the agent whose buyer walked away is more than happy to contact the new buyer’s agent and tell them what they found. Thank you I guess I should’ve been more to the point!
The question does NOT match the answer!!! If you read the beginning of the response it is “No. Despite the request……What Request?? I believe that this answer was tailored to a question as to whether the Seller or Listing Agent can DEMAND to see the inspection report! I do not believe that this response applies to the question at hand. We need a clarification.
Can a seller or listing agent request not to be sent the sellers disclosure ? I have had that requested on more than one occasion ! I personally welcome the inspection reports for my sellers !
They can request it, but that doesn’t keep anyone from sending it.
In addition, once the report comes in and deficiencys and defects are revealed if that sale doesn’t go through I would think the seller would be required to update the seller’s disclosure,
Per TREC they are.
Interesting reading the discussions. The above TAR Staff statement reads, “The LA or S who receives an inspection report is charged with knowledge of the info in the report, even if they don’t open it.” So that seems very black and white to me. I have been doing this a long time and only one listing my buyer almost bought scares me to this day. Did the Seller disclose or repair that the HVAC was not installed correctly and was in fact leaking CO into the house? (I shared the entire report.) I will never know. I know the Seller… Read more »
I believe you should follow up with your client
Always have carbon monoxide detectors…
The issue is a little personal to me because I knew this man for many years, don’t take the risk. It was a gas water heater leaking carbon monoxide
https://www.10tv.com/article/officials-no-carbon-monoxide-detectors-home-where-family-was-found-dead-2019-may
This is pretty murky and needs to be cleared up by TREC. I say, TREC should simply require ANY inspection report a seller receives to be posted along with a newly updated Sellers Disclosure. No more hiding behind “Unknown” in the Sellers Disclosure checklist!! However a material defect comes to light, it must be disclosed regardless of what side of the transaction you are on. FULL DISCLOSURE!! Remember, a sales price is always for a property that is “AS IS” regardless of new material defects. There should not be plausible deniability in real estate.
That’s exactly what TREC says.
Per TREC if you send a listing agent an inspection report, then by law not only is your seller in receipt of report (even if it’s not opened) and has to disclose the report to all buyers that request the report. The seller also needs to update their seller’s disclosures to reflect any KNOWN deficiencies. If they believe that something is incorrect in the most recent report then they will need to have another inspection to reflect the correct information, or correct the deficiency and report the correction on the sd’s. Here is an example. The seller (who has flipped… Read more »
To a buyer an inspection report is a very scary thing. Inspection reports should be explained to the buyer by an inspector that can put things in perspective i.e. age of home related to the report, new codes versus previous codes, etc. When a perspective buyer looks at a previous inspection report provided with the disclosure the buyer may see many items not in the Seller’s Disclosure Notice and questions begin — these items are often not material or not known by the seller and in some cases disputable. Although my mantra to our sellers (and to my agents) is… Read more »
A material defect is a specific issue with a system or component of a residential property that may have a significant, adverse impact on the value of the property, or that poses an unreasonable risk to people.