Home inspection report confidentiality (real estate, HOA, sex offender)

[questionquest]

We are first time buyers. We conducted an inspection on a house and our real estate agent emailed the report to the sellers agent without our knowledge or permission. Is this normal (especially since the inspection fees ~$400+ came out of our pocket)?

Thanks in advance!

[khuntrevor]

usually says on your purchase contract that they get to see the report, especially if you are canceling the deal based on it.

[rjrcm]

Yes, it's normal in AZ. The standard AAR purchase contract that you likely used requires that you give a copy of all inspection reports to the seller and their broker. Your agent was following the terms of the contract, and can point out the language in the contract for you. It's in Section 6, Due Diligence.

Khuntrevor - canceling the deal or not has nothing to do with it.

[khuntrevor]

yes it does, you will have to sign off on it, even if no inspections were done. They don't necessarily have to know an inspection was even done. I've bought two in the last two 15 months without one, and still had a 7 or 10 day inspection period.

[Captain Bill]

Originally Posted by khuntrevor

yes it does, you will have to sign off on it, even if no inspections were done. They don't necessarily have to know an inspection was even done. I've bought two in the last two 15 months without one, and still had a 7 or 10 day inspection period.

I believe there are two things being discussed here.

The OP asked about whether the buyer must submit the inspection report to the seller. As rjcm stated, the answer is yes; section 6a of the purchase contract states that the buyer will provide the inspection report to the seller on receipt.

The seller needs that report because if you ask for repairs on the BINSR then you'll reference the item number on the BINSR instead of writing out the details. The seller can refer to the inspection report to learn exactly what the issue is, and determine if s/he will repair or deny repair.

khuntrevor, I believe you're talking about signing off on a BINSR if one is canceling the contract due to something not acceptable during the due diligence period.

You are correct that the buyer does not have to have a formal inspection by an inspector. In that case there is no inspection report to submit.

One rejects and signs the BINSR and should state the reason for the cancellation. It could be because the buyer discovered a house defect he can't live with; a sex offender next door, or didn't like the HOA rules, or other reason(s).

The contract defaults to a 10 day due diligence period, and a shorter or longer period can be negotiated. Also the buyer can decline a due diligence period and bring cash to close tomorrow, or as fast as the title company can prepare docs.

[rjrcm]

Originally Posted by khuntrevor

yes it does, you will have to sign off on it, even if no inspections were done. They don't necessarily have to know an inspection was even done. I've bought two in the last two 15 months without one, and still had a 7 or 10 day inspection period.

Captain Bill gave a good follow-up response. The OP's question was not about what happens if they decide to cancel or not. Giving the inspection report to the seller is required independent of that issue. If you don't do an inspection, then obviously there would be no report to provide.

[kdog]

If the buyer backs out, do subsequent buyers get to see the report paid for by the previous buyer? Do any negative findings on the report need to be disclosed by the seller to future buyers? Thanks.

[khuntrevor]

How many sellers will update their disclosure? How many agents will let you know that an inspection was done? few and none, or none and few?

[rjrcm]

Originally Posted by kdog

If the buyer backs out, do subsequent buyers get to see the report paid for by the previous buyer?

There is no obligation for the seller to give the report to other buyers. The requirement to share the report is only between the specific buyer named in the purchase contract and the seller.

Do any negative findings on the report need to be disclosed by the seller to future buyers? Thanks.

The seller must always disclose material facts related to the property. If they are made aware of certain material issues by the report, then they must disclose them to future buyers, typically in an updated Seller's Property Disclosure Report (SPDS).

[kdog]

Thanks for the info, rj.