Monday, June 24, 2013

Home Inspections – Should REALTORS® Be There?

  For the past several years, home inspections have become an integral if not standard procedure with respect to the sale of residential real estate.  In addition, as insurers and lenders have become more selective about what properties they will or will not finance and or insure, they too often send someone out to inspect a property before making any commitment.

  The Real EstateCouncil of Ontario (RECO)  has received several questions of late regarding home inspections and who should be present during the inspection as well as how client instructions should be handled.

  First, there is no section in the Real Estate and Business Broker’s Act 2002 (the Act) that specifically requires that a REALTOR® must be in attendance at the time that a home inspection takes place. However, if a registrant has no written directions as to who will be in attendance at the time of the inspection, problems could arise that could lead to allegations of violations of specific sections of the Act.

  Here’s an example from RECO of just such a potential problem: A REALTOR® representing a seller arranges to let a home inspector into the seller’s home for the purpose of an inspection while the seller is at work. The REALTOR® representative of the seller leaves the home inspector alone in the house for three hours to attend other business. When the seller returns that evening they complain about a number of things such as mud being dragged into the home, damage to the home having occurred, or that objects have been stolen from their home.

The seller complains to RECO that their brokerage/REALTOR® representative has acted unethically because they were not looking out for the best interest of the seller and/or were not conscientious and competent in their service. According to RECO, these allegations could in fact lead to a disciplinary hearing under the Code of Ethics or any of the other remedies available to RECO under the Act.

  In response to these and other similar complaints involving home inspections where alleged conduct in contravention of the Act occurs, RECO offers these guidelines.

  In order to satisfy the Code of Ethics, REALTORS® are obligated to follow the instructions of their clients and to use their common sense in the course of trading. Both the sellers' representative and the buyers' representative should act in accordance with their clients' lawful instructions.

  In order to avoid any potential problems it would be wise for a registrant to obtain written instructions from their respective clients (buyer/seller) on how the clients would like the inspection to be conducted, (e.g. who would be in attendance and when).

  Always have written instructions regarding what will happen at a home inspection or any other service being performed in order to avoid such problems. The representation agreement with a buyer and/or seller would be a suitable document to use for this purpose.

  Keep in mind that some clients may prefer that their REALTOR® be present, although some home inspectors may prefer otherwise.  If you are there during the inspection process it may create some concerns if you become actively involved in inspection activities that are beyond your knowledge, competence or comfort level.

 I myself have always been present at home inspections that are being performed on behalf of a buyer client that I am representing.  Further, I always recommend the buyer attend as well and in most cases they have.  On some occasions I have also attended an inspection at one of my listings where the seller has requested me to attend for security purposes and or to answer any questions about the property that may arise.

  Although as licensed REALTORS® we are not technically required by law to be present at a property for home inspections, what is now being suggested is to obtain written consent from the client, buyer or especially a seller, acknowledging that our presence is not required.  

  If you have your property currently listed for sale and the need for a home and or other visitation by a non-REALTOR®  is required, make sure you cover this with your real estate representation in order to establish a protocol that makes you feel the most comfortable with whom is entering your property.

  If you have any questions or need some specific advice on this or other real estate related topics please feel free to Contact Me  

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Royal LePAGE Locations North (Brokerage)

330 First Street, Collingwood, ON L9Y 1B4



Email:
rickcrouch@propertycollingwood.com



Direct: 705-443-1037



Office: 705-445-5520 ext 230




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My Profile

Rick relocated to Collingwood from Toronto in 1985 through a transfer with Goodyear Canada. In 1987 Rick was recruited by a major client of Goodyear’s, managing their Canadian business based in Barrie before moving to Chicago in 1992 as Vice President of Sales & Marketing. Upon returning to Canada in 1996, Rick ran an industrial products manufacturing company in Stratford, Ontario. In 1998 Rick returned to Collingwood with his two children. Rick is a licensed real estate Broker with Royal LePAGE Locations North in Collingwood and holds his MVA designation (Market Value Appraiser-Residential). He is an active volunteer in the community serving several years on the Board of Directors with the Collingwood Chamber of Commerce as Treasurer, 6 years on the Board of Directors for the Southern Georgian Bay Association of REALTORS® of which he is the Past President (2008) and currently serves on a committee with the Ontario Real Estate Association. Rick is a diverse executive manager with extensive experience in strategic planning, manufacturing, finance, human resources and quality assurance management.