When it comes to inspection reports, not everyone agrees on just what to do with them. The report is a representation of the general "health" of the home, a snapshot of what was there the actual day and time of the whole house inspection. It will reveal numerous details and defects depending on the inspector used and the detail of the notes they made. Some items will be a big deal, others so minor they are completely unimportant to your clients.
Let's start with the basics. The inspector is not there to kill your deal. Sellers need to understand that the inspection is an objective third party review of the home's condition. Buyers need to understand the report should not be used a tool to "get out of the deal." That is a decision they should have made before they wrote the contract. If these are not conversations you are having with your clients, you should be.
In reviewing reports and deciding on a course of action, you must be able to help your clients view the report in the proper context (ie: caulking a window is not a major issue, replacing a furnace is, etc.). For this reason, I think not only should the buyer always be in attendance at inspections, but so should the buyer agent! Your chosen inspector should be competent and knowledgeable, so what better way to know what concerns your buyer has than discussing them right then and there with the expert they hired to render an opinion! That way you can poke it, prod it, examine it, and do whatever you need to do to make sure everyone understands the issue clearly.
At this point someone usually points out that by attending inspections as a buyer agent they think they incur more liability than if they don't. My answer to this is twofold. First, do you want your deal to close or not? Your job is to shepherd your buyer through from contract to closing, how can you do that if you are not there?
Secondly, you have liability no matter what you do. If you are not there, you are most likely not fulfilling your required fiduciary duties to your client. When the lawsuit comes 2 years down the road and you are sitting in court while your buyer is suing the seller, do you want to somehow end up paying on a technicality just because your e/o insurance has the deep pockets? Who do you really think the lawyers will go after, the person with the money or without? There is more to proper risk management than just putting on blinders. Think about what true Buyer Agency requires from you and you will understand why I say this. Represent your client properly.
When the inspection is complete, allow your clients to take the report home and study it for a day or two before making a decision. This accomplishes two things, it lets them have time for thoughtful consideration of what their real concerns are and it allows them time to make sure they understand what the inspector noted by taking time to ask the inspector questions. I know this 1 to 2 day timeframe is not always possible, but if you try to allow enough time in your contract for this 99 percent of the time you will be fine. Trust me, it is easier to deal with these issues when you aren't under pressure to get it done at the last minute.
Now that your clients know their concerns, discuss those concerns and what corrective action they would like to have taken, write up an addendum, preferably using the Standard Reply to Inspection form that was created for this purpose. Now give the corrective proposal to the seller agent along with a complete copy of the inspection report.
Seller agents should then review the entire report in context with the corrective proposal and decide whether to accept the proposal or counter it. Now the seller agents usually will start piping up about their liability. I put the same response to you. Do you want your deal to close or not? You are liable no matter what you do. Review the report with your seller and allow them time for proper consideration. Give them the report and proposal the first day you get it, not the fifth and you will have time for this step.
Like many things in our business, inspections should always be handled in a systematic way. I have found that sometimes what seems like an end of the world emergency today simply goes away when people take the time to consider it properly instead of just reacting to it the instant they know about it. Standard systematic approaches limit your liability, ensure quality, and allow you to represent your clients in the way that they deserve.
