Prior to drafting an offer, the buyer should consider what inspections or testing are appropriate for the transaction. To assist with that process, the WRA Home Inspector Handout for Homebuyers includes inspection FAQs and includes a list of mandatory and optional home inspection services provided by Wisconsin-registered inspectors.
Wisconsin-registered home inspectors
A listing broker received a request for a home inspection from an inspector she was not familiar with. The broker checked the inspector’s credentials but found no listing for the inspector. How should the broker proceed?
The Inspection Contingency in the state-approved residential offers states that a home inspection will be conducted by a Wisconsin-registered home inspector. A person must have a valid active registration to conduct a home inspection. The broker could use the Department of Safety and Professional Services’ licensee lookup page online at app.wi.gov/licensesearch to assure the inspector is properly credentialed. If the inspector is not a Wisconsin-registered home inspector, the inspector should not be granted access to the property. The listing broker may contact the agent working with the buyer to inform him the inspector has no current credential, allowing the buyer to make alternative choices for the inspection and find a registered inspector.
Inspections, not tests
What should the agent do when the inspector attempts to conduct a test, for example radon testing, that is not authorized in the offer to purchase?
If there are no testing contingencies in the offer, the inspector may not engage in testing, such as sampling for radon or mold. The fact the inspector must be registered does not eliminate the possibility that an inspector might exceed his authority. One way to control the scope of the inspector’s activity is to require the buyer who hires the inspector to enter into a contract that specifically sets the parameters of the inspection and the inspector’s activities. An agent accompanying the buyer and inspector can monitor the inspection to assure that the inspector does not overstep his or her authorization.
The agent has a responsibility to stop any unauthorized procedures. The WRA does not have a definitive recommendation or statement on whether an agent should or should not attend the home inspection. This is a practice issue for each broker to decide after considering the pros and cons. More information about attending inspections is available in the article “Home Inspection Roll Call” in the June 2014 issue of Wisconsin Real Estate Magazine at www.wra.org/WREM/June14/RollCall.
The buyer is purchasing a rural property with a septic system. Can a Wisconsin-registered home inspector also conduct the private onsite wastewater treatment system (POWTS) inspection?
The home inspector cannot conduct the POWTS inspection unless the inspector also holds the proper credentials. It is recommended that POWTS inspections be conducted by a county sanitarian, licensed master plumber, licensed master plumber-restricted sewer, licensed plumber designer, registered engineer, certified POWTS inspector, certified septage operator and/or a certified soils tester.
Inspection reports to subsequent buyers
A listing agent received a copy of the inspection report from the first buyer’s offer. The first buyer and seller chose to cancel the offer based on the inspection results. The inspector said the report may not be shared. Can the seller or listing agent share a copy of the first buyer’s inspection report with future buyers in regard to the condition of the property, specifically the age and condition of the roof?
Unless otherwise agreed by the seller and the primary buyer, the seller is not prohibited from providing copies of the buyer’s inspection reports to other prospective purchasers. The listing agent should not provide a copy of the report because it may be considered a confidential transaction document under Wis. Stat. § 452.133(1)(d). If the home inspection report is provided, the agent should caution the buyer that the seller is giving the report for informational purposes only. Under Wis. Stat. § 440.997(2), the home inspector will not be liable to subsequent purchasers for any errors or omissions contained in the original report. The new buyer should be urged to have his own home inspection if he wants the inspector to be liable to him for any mistakes.
Family members conducting inspections
A seller received an offer where the buyer crossed off "Wisconsin-registered" in the description of the home inspector in the Inspection Contingency. The buyer wants his brother to conduct the home inspection. The brother is a licensed home inspector in Illinois. Should the listing agent recommend the seller allow the brother to conduct the home inspection?
When presenting the offer, the listing agent can identify the modification to the offer and the potential complications that could arise by using a non-Wisconsin-registered inspector. First, the seller can consider whether it is appropriate, given the lack of independence, for a family member to conduct an inspection. Second, per the statutes, it would be a violation of Wisconsin law for any individual who is not a Wisconsin-registered inspector to conduct a home inspection for compensation.
The buyer and seller may negotiate about the brother’s potential role. For example, if references to independent are removed, it may be possible for the brother to conduct an inspection of specific components at lines 413-414 to avoid engaging in a home inspection. “‘Home inspection’ means the process by which a home inspector examines the observable systems and components of improvements to residential real property that are readily accessible.”
Offer negotiations
A home inspector encouraged a buyer to avoid giving the right to cure to the seller in the offer. Can a home inspector give buyers terms that they should write on their contract before the inspector has seen the property? Can an inspector tell a buyer how to negotiate the offer?
A home inspector cannot, in writing or verbally, comment on the marketability or value of a property, or whether the property should be purchased. There is no authorization for the home inspector to draft offer language or give legal advice. See Wis. Stat. §§ 440.970 – 440.975.
Making suggestions to a buyer about language for the Offer to Purchase is a role reserved for attorneys and licensees. The described home inspector is apparently practicing law and/or real estate brokerage without a license.
Inspector and buyer are related
Can a buyer do his own home inspection if he is a licensed home inspector in Wisconsin? Can he do the home inspection on a home that he or a family member is purchasing?
Wis. Stat. 440.975(7) indicates that: “(7) A home inspector may not do any of the following: (a) Perform or offer to perform any act or service contrary to law. (b) Deliver a home inspection report to any person other than the client without the client’s consent. (c) Perform a home inspection for a client with respect to a transaction if the home inspector, a member of the home inspector’s immediate family or an organization or business entity in which the home inspector has an interest, is a party to the transaction and has an interest that is adverse to that of the client, unless the home inspector obtains the written consent of the client.”
Resources
WRA online resources about inspections:
Inspection contingency information:
Tracy Rucka is Director of Professional Standards and Practices for the WRA.