What Happens When Your Inspection Report Gets Recycled?

 
by Nick Gromicko and Kate Tarasenko
 
It's a sad but true fact that sometimes the product of a home inspector's labor--the inspection report--will be recycled, either at the behest of an unscrupulous agent, or based on the prospect's own uneducated attempt to save some time and money.  Too often, an inspection report will be presented to prospective home buyers at open houses and other events, and promoted as an accurate representation of the home's current condition.
 
There are all kinds of problems with this situation, including the following:
 
  1. A home inspection—and resulting report—is a snapshot in time.  It conveys the home's condition only for the date and time of the inspection.  Most inspector-client agreements explicitly state as much--and if yours doesn't, it should.  See item #1.1 in InterNACHI’s Standards of Practice for Performing a General Home Inspection, a copy of which should accompany each of your inspection reports.
  2. If the person relying on the report is not the person who hired the inspector, that person is being short-sighted indeed, as there may have been all kinds of changes in the condition of the home since the inspection that were not covered in the report, including weather events, minor defects that have progressed to become major ones, infestations, and even repairs that have been performed since then.  (It's like going on a dating website and assuming that someone’s profile picture is what they look like now, when it’s actually their high school yearbook photo from 20 years ago—only the ramifications are much worse!)  It's penny-wise but pound-foolish to try to save a few bucks by using an old report, even if that report is only a week old.  The cost of an inspection is a pittance compared to the value of the home.
  3. As a corollary to #1 and #2, a home inspection is not a warranty of the home’s condition—not at the time of the inspection, and certainly not at some future date.  And as it is not technically exhaustive, it carries no guarantee.  It’s difficult enough to make these points clear to the client; imagine the unmanaged expectations of someone reading the report who isn’t the client.
  4. An outdated report can have the effect of unfairly damaging an inspector's reputation if the home's condition has substantially changed, but the home buyer makes unfounded complaints (perhaps to a Realtor, or maybe online) based on a report that s/he never contracted for.  Some bells you just can't unring.
  5. Some inspectors may try to cut their losses by negotiating a halfway approach, such as by performing an abbreviated re-inspection for a new client based on an old report.  Why would you sell yourself short, literally?  It's all right to offer a discount to a previous client, but the house is not your client, so don't allow a new client to haggle with you about the price of your services.  Nothing says "cheap inspector" like one who is willing to bargain away his livelihood, job by job.
  6. Related to #5, it may actually be illegal in your state for you to recycle your own report.  Check with your state's real estate laws to make sure you're not violating any statutes in a misguided attempt to ingratiate yourself with a prospective client.  It's one thing for an agent or buyer to be convinced to use you in the future based on your report's overall look, quality, and easy-to-read format.  To be sure, it's terrific marketing for prospects to see what your reports look like; it's exactly why we recommend putting a sample report on your website.  But you could be treading in dicey territory in terms of liability if you allow any of your reports' content to be used by those other than your paid clients.
  7. Again, the report is the product of your labor, and you should be fairly compensated for it.  Each inspection has only one client.  Read item #3 in InterNACHI’s Home Inspection Agreement.
 
We’ve come up with some simple solutions to help home inspectors reinforce these points to non-clients and other third parties who may get their hands on an inspection report, the contents of which are the property of the client and inspector, and no one else, even if permission is given by the client for others to read it.
 
Here’s what you should do to prevent problems that can arise if someone other than your client tries to use your report:
 
  1. Be sure to maintain adequate coverage through your Errors & Omissions and General Liability insurance, as your clients, and even some third parties in some states, do have a legal right to rely on the contents of your inspection report.
  2. Number each page of your report (even using the format “Page 1 of 30”) so that a page removed will be conspicuous by its absence.
  3. Note in the summary of your report that any digital photos and/or video included are time- and date-stamped, and make sure they are. 
  4. Use the header/footer function of your report-writing software to identify the property by address, and add the time and date of the inspection.
  5. Always include a disclaimer in your report and agreement stating that the inspection you performed at 123 Main Street in Anytown, USA, is valid only for the date and time of the inspection.  Somewhere within the middle of the report, insert the following paragraph:

A general home inspection is a non-invasive, visual examination of the accessible areas of a residential property, performed for a fee, which is designed to identify defects within specific systems and components that are both observed and deemed material by the inspector.  It is based on the observations made on the date of the inspection, and not a prediction of future conditions. It is a snapshot in time.  A general home inspection will not reveal every issue that exists or ever could exist, but only those material defects observed on the date of the inspection.

  1. Since it’s impossible to control who reads your report, monetize the possibility and turn things to your advantage.  Include a direct message at the end of your report addressed to any unauthorized third parties, stating something along the lines of:

If you’re reading this report but did not hire me, XYZ Inspectors, to perform the original inspection, please note that it is likely that conditions related to the home have probably changed, even if the report is fairly recent.  Just as you cannot rely on an outdated weather report, you should not rely on an outdated inspection report.  Minor problems noted may have become worse, recent events may have created new issues, and items may even have been corrected and improved.  Don’t rely on old information about one of the biggest purchases you’ll ever make.  Remember that the cost of a home inspection is insignificant compared to the value of the home.  Protect your family and your investment, and please call me directly at (000) 555-1212 to discuss the report you’re reading for this property so that we can arrange for a re-inspection.  Thank you!

 
Always look for the opportunity to turn a potential negative into a positive, and that includes being pro-active in making sure you get paid for your work.  Keep your prices respectably high, maintain sound business ethics--especially those related to protecting your clients' privacy, including the contents of their reports--and let your reputation be your calling card.
 
 
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