Can You Sue An Inspector After A Report Filled With Errors Kills A Deal?

Dear Dave,
We have our home under contract and the buyers ordered a home inspection.  The home inspection report contains four substantial errors in the areas of heating, cooling, plumbing and sewer system.  The inspector misidentified a sprinkler valve as a sewer service cap and reported a possible "active sewer leak" in that area which is nowhere near the sewer line.  The inspector may have scared the buyers out of this purchase through these errors, time will tell.  I was surprised to find that home inspectors are not licensed through the state of Colorado which seems ridiculous considering one unlicensed man's opinion can derail a deal for the seller's agent, buyer’s agent, sellers and buyers.  Do inspectors typically buy Errors &Omissions insurance and what has your experience been with sellers suing the inspector after a report filled with errors  kills a deal?

Thanks,
Shawn,  Loma

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Shawn,

Ugh…I hate this for you!   I hate it when things like this happen to unsuspecting and undeserving people.  The picture you are painting here is certainly an ugly one, however a painting that I have seen far too often on varying levels.  First, I am sorry about your circumstances and I truly do feel for you and your family.  It is likely that your first question was “how is this possible?” and after that answer settled in, feelings of total frustration, disbelief and outrage!  Let me start by saying that inspectors are people too and mistakes are just part of being human!  That being said, it certainly does not excuse them or make them any more forgivable when the errors appear to be as egregious as these might have been.

Home inspectors are not licensed by the state and are not governed by the state or required to have any amount of standardized or required training.  Colorado is one of 20 states that has not adopted ANY licensing requirements.  I must admit that most of the local home inspectors do a great job, but I believe they often lose sight of what they are really doing and why they are really there.  Believe me, I feel your pain… I personally believe that where home inspectors get themselves in trouble is the same with all of us…… they speak before they stop and think something through.   Often times they provide an answer or draw a conclusion without really knowing and that is where big problems can start. 

There is a life lesson in this and that is that if you don’t know something, don’t say something that may or may not be true.  Explain that you don’t know, but will find out!  Sometimes you run across things that you don’t know or are not sure of, and instead of blurting out an answer, you should dig a little deeper to gain full understanding before speaking or drawing a conclusion. We all know that it’s hard to take back words or correct an incorrect report.  When it gets to that point, many times the damage has been done.  An even bigger issue involved here is trust!

Home buyers trust their home inspectors and trust is a very powerful thing!  When you said that the inspector may have scared the buyers off, unfortunately I am confident the home inspector is clueless about his unknown super power…. Trust.  Listen, when a home inspector says it, it MUST be true, at least in the eyes of the buyer.  Many times, especially in young home buyers, what an inspector says is treated like the gospel.  I believe most home inspectors do not have any idea how much home buyer’s trust what they say and when it is wrong, it can have cataclysmic consequences on a home purchase and everybody suffers.   

I do not believe most, if any, home inspectors carry E & O insurance and, in fact, I believe it is a common practice that the maximum amount of liability for most home inspection contracts is the price of the home inspection.  That means that if you paid $400 for the home inspection, the home inspector’s maximum liability would be $400! Lastly, I do not have any experience with sellers suing a home inspector for a faulty report, although I have had many who wanted to.    Unfortunately, sometimes mistakes are made and from time to time it can have a significant negative impact that can cause a deal to crumble.

Shawn, I am sorry about your situation and I am hopeful things will work out.  Remember, things really do work out for a reason, even if you don’t know the reason.  Control what you can control and trust that the rest is meant to be! : )  I know, easier said than done! 

Dave Kimbrough

The Kimbrough Team

We Feel Lied To...

Dave,

After moving into our house, a neighbor told us that a few years before a man had committed suicide in the kitchen.  We would not have purchased our home had we know this had happened in the house.  Do we have any recourse other than simply selling the house and moving on or accepting what happened and making the best of it? Surely someone should have told us about what happened!

William, Grand Junction

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William,

I am sure the news came as a shock to you and your family and I have no doubt that it may make it more difficult to live there, knowing what happened in the home.  Unfortunately, in your case,  Colorado has no requirement to disclose such details about any property being sold.  Under and Exclusive Right-To-Sell Listing Contract, Section 5.2.5 deals with situations like this.  It specifically states the broker shall NOT disclose “any facts or suspicions regarding circumstances that could psychologically impact or stigmatize the property”, without the informed consent of the seller. 

It is at the sole discretion of the seller to disclose or not to disclose.  It is likely that your agent did not have any knowledge of the act and quite possible that the listing agent did not know.  Even if the listing agent had knowledge, he/she can not disclose it without the sellers consent.  Bottom line, if the seller chooses not to disclose, it is highly likely a buyer would not find out till after the fact.  

I believe the intent is to not stigmatize a property because of a senseless act that was not the “fault” of the home and thus seriously impact the marketability and value of the home.   You will have to decide what is best for you and your family and I would remind you that you do not have to disclose what happened if you choose to sell.  My suggestion would be to make the best of it.  It is you chance to give this home a “second chance” at being a happy home and making it a home that is filled with peace and love and turning a bad past into a bright future!!  A home is what you make of it, moving forward, not what happened in the past.  Obviously you will choose which way to proceed, but you might find it an opportunity for your family to choose a path of healing and turn the page on a past which was filled with hopelessness and fill it with hope. 

I hope this helps and I will bet you can give this home a new start!!

Dave Kimbrough

The Kimbrough Team

RE/MAX 4000, Inc.

Can We Perform Our Own Home Inspection?

Dave,

My husband is a home inspector, can he inspect our house we want to purchase?

Anita, Grand Junction

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Anita,

Absolutely!  There are no rules regarding who can and can not inspect a home!  In fact, many of the inspections performed on our listings each year are done by the buyers themselves or one of their relatives.  You can choose whomever you want to do your home inspection or even waive the inspection all together.  We always encourage buyers to perform a home inspection by a reputable home inspector so if you are married to one then you probably know one! : ) 

I hope everything checks out great and you love your new home! 

Dave Kimbrough

The Kimbrough Team

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Are Skylights a Good Idea in Older Homes?

Dear Dave,

I own an older home that doesn’t have very many windows. I have been throwing around the idea of putting in a skylight or solar tubes. I have heard of people having problems with these things leaking, but I have also heard stories where people didn’t have any problems with them. What is your experience with skylights and/or solar tubes? Would you recommend putting them in a house?

Thanks for the help-

Bob - Grand Junction, CO

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Bob,

I love them!  I love Skylights and solar tubes.   A dark home is NOT a good thing and bringing in more natural light is always a good thing!  You can’t get too much natural light, especially if your home tends to come off dark.   Skylights and Solar Tubes are a wonderful way to brighten up any home with few lingering issues.

There is always a chance for leaking when you penetrate your roof with a hole and then attempt to seal it up, however if installed properly I think you will find few, if any, lingering problems.  The added benefits certainly outweigh the risks and introducing more natural light will not only add value to your home, but also increase your quality of life!  Trust me, it will be some of the best money you can spend on your home.  It is time for you to come into the light!

Dave Kimbrough

The Kimbrough Team

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Are Pre-home Inspections a Good Idea on Older Homes?

Dave,

We will soon be selling our home and looking to downsize.  We have lived here almost 15 years and are the second owners.  We have taken good care of our home and have kept up on routine maintenance and also fixed any items needed over the years.   Our home is older, built in 1976, but has been well taken care of.  We are considering a Pre-home inspection, as one of our friends intimated that it might be a good idea.  Your thoughts on pre home inspections?  Thanks.

Dwight, Grand Junction

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Dwight,

On face value it sounds like you could go either way.   Your friend is right, it can be a really good thing and offer you, the buyer, and the real estate agents some peace of mind that the home is in good condition and free of any major problems.   The decision should be based on your knowledge of the home and how likely you believe it is that a problem may come up during the home inspection period. With any home built in the 70’s there is a reasonable chance that quite a few items will come up on the home inspection, not because you haven’t taken care of your home, but because it is old!   Generally I think it is a good idea, based on the age of your home, but it will set you back $300-$400.  This may be a very small sum in the long run, if it prevents a deal from falling apart.

One major thing that a pre home inspection will do is likely bring any “deal killers” to the surface before you get your home on the market and under contract.  If you do find a significant issue up front this will allow you to get it resolved prior to putting it on the market and getting it under contract.  There is no doubt in my mind that many things that happen during and related to the inspection period, after a home goes under contract, are blown way out of proportion and have as much to do with leverage, emotion, fear and lack of knowledge than the problems that are discovered and their remedies.  Once a For Sale sign goes up in your yard, regardless of what anyone says, everything changes and everything gets magnified, especially in a market where buyers can be difficult to find.

There are two things that I think are a great idea, regardless of the age of your home.    If you are currently on a septic system, I highly recommend you have your tank pumped and inspected prior to putting the home on the market as this serves not only as great preventive maintenance but will also put a stop to any potential septic issues before they generally get started.  Also, have a Licensed heating and air conditioning professional come and give your heating and cooling systems the once over and provide a receipt for a clean bill of health.  Septic systems and your homes mechanical systems (especially heating) are two items that many home inspectors single out and recommend buyers have those evaluated by Septic and HVAC professionals.  It is good preventive maintenance and eliminates the potential for a conflict of interest to have those things checked out ahead of time.   One more thing, if you have any question or doubts about your roof, have that inspected also.  Roof inspections are generally free and will bring any potential issues to light and notify you in advance if your roof is at the end of its expected life. 

I recommend a pre-home inspection if you have ANY concerns about a “deal killer” issue that may come to light.  If you have no concerns about that, then I would not do one.  If you do have concerns that there may be an issue there, some little nagging hunch, then I would pull the trigger on one and not even think twice about it.  You know your home better than anyone and if you think you need to have one done let me know and I will be happy to recommend a few that will do a great job!  A pre-home inspection is not for everyone, but maybe it should be….. I am finding myself rethinking the issue as I write this column.   Thanks for the thought-provoking question.

Dave Kimbrough

The Kimbrough Team

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Do you need an inspection on a new construction home?

Dave,

My wife and I are currently building a house and wonder if we need to get a home inspection even though the home will be new? We don’t want to spend money if it isn’t necessary, but also want to make sure we go through every process correctly. If we do need an inspection, at what point in the building process should we have it done?

Thanks, Josh—Grand Junction

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Josh,

Yes. It is my recommendation that you always get an inspection (especially if the home you are purchasing is NOT new), but I will say that if there is one scenario where it might be ok to skip the home inspection it would be in the case of new construction. You have to remember that any new home has been inspected over and over and those inspections have also been inspected. To put it mildly, any new construction project has been meticulously inspected from the foundation up and this ensures that each new building has been built to local building codes and is structurally sound and mechanically safe. These inspections catch most mistakes along the way and thus limit the real effectiveness of a new home inspection for anything but minor/cosmetic items. 

A home inspection will cost somewhere between $300 -$450 and my experience is that very few substantive items are discovered on new construction home inspections. Generally items that are discovered are VERY minor, but there have been times where something more significant was found and needed to be corrected. I will also point out that virtually every one of those more significant items would have presented themselves in short order without the home inspection. From a timing perspective, you should consider the home inspection sometime around the CO, Certificate of Occupancy. If you use this time frame, you can be confident that the home will be mostly complete and all that is left will  be mostly cosmetic issues. This is also a good time to do the inspection as any items identified can just be added to the builders punch list to complete prior to close.  Although there are no guarantees with getting any home inspection, they do provide some surface level peace of mind. Also remember that every builder will provide at least a 1 year home warranty for your entire home and most of them are willing to help even after that one year if the problem proves to be a material or workmanship issue. 

“Ultimately what an inspection on a new home provides is some insurance that there are no major problems with the quality of construction, workmanship or mechanical systems.”

Ultimately what an inspection on a new home provides is some insurance that there are no major problems with the quality of construction, workmanship or mechanical systems. You have to ask yourself if the peace of mind is worth the cost? I can say that I have not seen a home inspector yet that is as qualified as the general contractor you hired to build your home and the inspections your home goes through prior to getting its certificate of occupancy have been extensive and complete. It is a call you must make, but it is completely understandable if you skip the home inspector on a brand new home! Hope this helps.

Dave Kimbrough
The Kimbrough Team

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