James L. Goldsmith, Esquire
Victoria P. Edwards, Esquire
Not too long ago I spoke to a home inspector who claimed that his residential home inspections were down about 90% from what they were pre-pandemic! With the present supply/demand imbalance, buyers are making offers sans inspection contingencies. Hoping to recapture some business, the inspector questioned whether he could offer a service that consisted of accompanying buyers to showings, perhaps the original or at a second look, so that the inspector could report the conclusions gleaned from a visual assessment only. While this might fall far short from a standard home inspection, there is undoubtedly some benefit to the potential Buyer. And since an agreement of sale has yet to be executed, the buyer is free to move on or consider terms of purchase. Is this a permissible practice?
Misrepresentation is a violation of the Code of Ethics and a selling agent must therefore answer truthfully any question relating to the inspector’s business and reason for attending. Also, the multiple-listing service (MLS) rules and regulations may address who may attend showings. While the MLS serving the region where I reside does have a rule on showings and negotiations, that rule does not specifically address the question of bringing a home inspector to the showing and I presume most do not.
Can an owner restrict access to a home inspector? If an owner can choose to omit listing his or her property in the MLS altogether, couldn’t the owner restrict those who attends a showing? It makes sense that, even as COVID-19 restrictions are waning, an owner has the right to say who may enter the property. A comment in the remarks section of the MLS would be appropriate. Further, a listing agent can ask, at the time of scheduling, who it is that will be attending and can even indicate that the seller has ruled that entrance by a home inspector is prohibited.
On the other hand, why would a seller really care whether a home inspector would walk through the property? I presume that no written report will issue and since this is not a home inspection under the terms of the agreement of sale, if there is some form of report, there is no obligation to provide it to the seller. It would therefore, seem that no stigma would attach because an inspector walked through the property and said something to the buyer.
An additional benefit of the walk-through is that the seller has, to some extent, a slightly greater measure of protection in the event of a subsequent failure to disclose claim. An element of a misrepresentation suit is reliance by the buyer on the seller’s statements. To the extent that the buyer has an inspection or the benefit of an inspector’s opinion, it’s harder to claim reliance on the seller.
The hardest question to answer is whether, absent any specific limitation on buyers bringing inspectors, a seller’s agent must announce that an inspector is coming? While I cannot state with certainty that it is a violation of the Code of Ethics (only a properly empaneled hearing tribunal can make that determination), it does violate my sense of ethics. I am, of course, referring to a code of ethics other than that promulgated by NAR and that each of us carries as an internal guidance system to choose right over wrong. I believe that most owners and listing agents believe that those attending a showing are those with the most direct interest in the purchase: respective owners and perhaps a parent or so. If that is not going to be the case, then I favor making the inspectors intended presence known.
I anticipate that MLS services may someday promulgate rules and/or that listing brokers may publish limitations on who may attend. Or, I may be completely wrong and find that listing agents and sellers are happy to have inspectors do a walk through for any number of reasons including the impact on liability given the fact that the property is going to sell anyway! What’s your take? Let me know what you think.
Copyright © James L. Goldsmith, Esquire and Victoria P. Edwards, Esquire, 2021
All Rights Reserved
Mr. Goldsmith and Ms. Edwards are attorneys with Mette, Evans & Woodside. They serves as outside legal counsel to numerous Realtor Associations and were staples on the PAR Legal Hotline for many years. A substantial portion of their practice is dedicated to providing advice and counsel to real estate licensees. They defend real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. They represent Realtors® in disciplinary cases conducted before the Real Estate Commission. Jim was one of the voices of the PAR Legal Hotline for the first 27 years following its inception in 1992.