By Christian Ross | Ross Law, P.A. & Ross Title, Inc.
This past Wednesday, I discussed an issue that comes up far too often in real estate transactions: What happens when someone disagrees with an inspection result?
Maybe the buyer’s inspector says the air conditioning isn’t working properly, but the seller insists it works just fine. Maybe a radon test comes back elevated, or a mold inspection identifies an issue the seller doesn’t believe exists. Maybe an inspector identifies a roof defect, but the seller’s roofer disagrees.
Do you retest? Hire another expert? Ask the seller to make repairs? Terminate the contract?
There are a number of ways to address these situations, and we discussed many of them during Wednesday’s video. But the more I’ve thought about it, the more I’ve realized that many of these disputes could be avoided if we approached the transaction differently from the very beginning.
Over the past few weeks, I’ve had several conversations and experiences that have reinforced three important lessons about how we advise our clients. Although these lessons aren’t necessarily new, they’ve changed the way I’m thinking about our responsibilities as real estate professionals.
1. Give Your Clients All of Their Options. Let Them Decide What’s Worth the Money.
One of the biggest mistakes we can make as professionals is deciding what is or isn’t worth the money for our clients.
Consider a buyer purchasing a home. We routinely recommend a general home inspection. But what about a survey? An HVAC inspection? A roofing inspection? A pool inspection? A consultation with an attorney?
Each of these services costs money, and not every buyer will want or need every service. But that’s not necessarily our decision to make.
I’ve heard agents discourage surveys because they’re expensive or because the buyer doesn’t intend to make any improvements. I’ve heard people suggest that a general home inspection is sufficient and there’s no reason to bring in additional specialists.
Sometimes those recommendations may be perfectly reasonable. But what happens when the buyer discovers an encroachment after closing? Or the air conditioner fails two weeks after moving in? Or a swimming pool requires thousands of dollars in repairs?
The buyer may reasonably ask, “Why didn’t anyone tell me I could have had that inspected?”
Our job isn’t to spend our client’s money for them. Our job is to educate them about their options so they can make informed decisions.
The same principle applies to sellers.
Why not discuss the option of a pre-listing inspection? Or a pre-listing appraisal? Or a legal consultation to address a potential title, disclosure, or contractual issue before the property goes on the market?
These services aren’t necessarily mandatory, and I’m certainly not suggesting that every seller needs to pay for all of them.
But a seller who discovers a roof problem before listing has an opportunity to address it on their own terms. A seller who obtains an appraisal may have a better understanding of the property’s value. A seller who consults an attorney about a questionable disclosure issue may avoid a much larger dispute after closing.
You don’t have to recommend that your client purchase every service. But you should make sure they understand the options available to them.
Sometimes the best advice we can give is simply making someone aware of something they didn’t know existed.
And importantly, providing these options doesn’t just protect the client. It also protects you and the transaction.
2. Stop Expecting General Home Inspectors to Be Specialists in Everything.
This is something I’ve become increasingly convinced of.
General home inspectors play an incredibly important role in real estate transactions. They evaluate an enormous number of components in a relatively short period of time, often identifying issues that would otherwise go unnoticed.
But we sometimes expect them to do things that simply aren’t within the scope of a general home inspection.
Take the air conditioning system.
A general inspector may turn on the system, measure the temperature differential between the supply and return air, and identify a possible problem. But that doesn’t necessarily tell us what’s wrong with the system or what it will cost to repair.
An HVAC technician can perform a much more thorough evaluation. The technician can check refrigerant pressures, inspect components, replace filters, service the system, diagnose problems, and provide repair estimates.
And here’s something else to consider: Most buyers are going to need to service their HVAC system after closing anyway. Why not consider doing it before closing instead?
It may provide the buyer with better information, and if something is wrong, there’s still an opportunity to negotiate a resolution with the seller.
The same goes for the roof.
Many roofing companies offer inspections at no charge, particularly when they’re evaluating potential repair work. They can identify issues, explain whether repairs are necessary, and often provide estimates.
Compare that to a general inspection report identifying a possible roof problem without explaining the scope or cost of the repair.
Swimming pools are another great example.
Read the fine print in your general home inspection report. You’ll often find that the inspector substantially limits the scope of the pool inspection, excludes important components, or disclaims responsibility for certain conditions.
A qualified pool specialist may be able to evaluate the equipment, identify leaks or other defects, diagnose problems, and provide realistic repair estimates.
The distinction is important.
A general inspector may tell you there could be a problem. A specialist can often tell you what the problem is and what it will cost to fix.
And that brings me back to Wednesday’s video.
If a seller disputes an inspection finding, we’re suddenly scrambling to find another professional to determine whether the original inspector was correct.
Why not involve the appropriate specialists on the front end?
Instead of spending the inspection period arguing about whether the air conditioning works, we could have a technician’s diagnosis and estimate. Instead of debating whether a roof is defective, we could have a roofer’s assessment and proposed repair.
Will this eliminate every disagreement? Of course not.
But better information at the beginning of a transaction can substantially reduce uncertainty, minimize unnecessary conflict, and make negotiations more productive.
3. Don’t Be Afraid to Ask the Hard Questions.
This may be the most important lesson of all.
As professionals, we’re often hesitant to ask questions that might make someone uncomfortable.
Maybe a client mentions financial difficulties. Maybe there’s a potential legal dispute. Maybe someone raises a sensitive issue involving a death, divorce, family conflict, or the circumstances surrounding a sale.
Our natural instinct is sometimes to avoid the subject.
We don’t want to offend anyone. We don’t want to appear intrusive. We don’t want to ask a question that might upset our client or make the conversation awkward.
But consider what happens when we don’t ask.
A buyer has concerns about financing, but nobody asks whether they’ve actually discussed those concerns with their lender. A seller mentions a problem with a neighbor, but nobody asks what happened. A client references an ongoing legal issue, but nobody asks how it might affect the transaction.
We can’t properly advise our clients without understanding the facts.
That doesn’t mean every question should be asked without consideration for privacy, relevance, or applicable legal restrictions. It means we shouldn’t avoid a necessary, appropriate question simply because the answer may be uncomfortable.
Being professional doesn’t mean avoiding difficult conversations. Sometimes it means being willing to have them.
And this reminds me of a lesson I learned the hard way in law school.
A Lesson From Law School That I’ve Never Forgotten
When I was in law school, I participated in an alternative dispute resolution competition.
My partner and I were assigned to interview a prospective client. The client was actually an actor from the school who had been given a script and instructed to respond to our questions.
During the interview, the woman explained that her son had been touched inappropriately at school.
Understandably, my partner and I approached the conversation with considerable sensitivity. We were compassionate, careful with our wording, and reluctant to press her for details about what had clearly been a very upsetting experience.
We thought we had handled the interview well.
We got an F.
The judges explained that we had failed to ask the single most important question:
“Tell us exactly what happened.”
We had been so concerned about making the client uncomfortable that we never obtained the information we actually needed to help her.
But without those details, how could we evaluate the situation? How could we determine what legal issues existed? How could we possibly provide meaningful advice?
That experience has stayed with me for years.
And the lesson is just as applicable to real estate transactions as it was to that fictional client interview.
When someone mentions a problem, don’t assume you understand it. Ask questions. Get the details. Find out exactly what happened.
You can be compassionate without being evasive. You can be respectful while still being thorough.
In fact, sometimes asking the difficult question is the most important thing you can do for your client.
Bringing It All Together
Looking back at Wednesday’s discussion about disputed inspection findings, I think
these three lessons fit together.
Give your clients all their options, even when you personally question whether the additional expense is worthwhile.
Encourage the use of qualified specialists when the circumstances warrant it, rather than expecting a general inspector to diagnose every potential problem.
And don’t be afraid to ask the questions necessary to understand what’s actually happening.
If we do these things at the beginning of a transaction, we’re much more likely to have the information we need before a disagreement develops.
The goal isn’t to make every transaction more expensive, complicated, or time-consuming. It’s to help our clients make informed decisions, identify problems early, and avoid surprises that could have been prevented.
After all, the cost of an additional inspection or consultation may be insignificant compared to the cost of a dispute after closing.
Don’t assume. Don’t decide for your client. Don’t be afraid to ask.
Give them the options, get the information, and do your job.
Navigating a transaction and unsure of your options? A Downing-Frye associate can guide you through the process, and Christian Ross of Ross Title, Inc. offers legal guidance on questions that come up along the way. Contact Downing-Frye Realty, Inc. to get started.
This article is for educational purposes only and is not intended to provide legal advice regarding any specific transaction.
