Do Sellers Have to Disclose Inspection Reports from Failed Contracts?

By
Real Estate Agent with Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com TREC #0492321
http://actvra.in/BRc

FAQ #1 - Do Sellers Have to Disclose Inspection Reports from Failed Contracts?
I have often heard this question asked by many sellers who have their home listed on the market. Do I really need to disclose that inspection report from the buyer, who backed out of buying my home since the transaction failed to close? Of course the best answer is to Disclose, Disclose, Disclose, but sellers don’t necessarily have to disclose an inspection report that they received from the buyers, who backed out of the contract.

However, to prevent any legal actions to the sellers, any known material defect MUST BE Disclosed. Sellers will not want to be in violation of any Texas Property Code or the Deceptive Trade Practice Act. Therefore, it may be in the seller’s best interest to provide a copy of those past inspection reports, where the transactions failed to close. But watch this video presentation for more guidance about this issue with disclosing inspection reports.

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Re-Bloggged 3 times:

Re-Blogged By Re-Blogged At
  1. Evelyn McCorkle 06/02/2012 11:02 AM
  2. Pam Sitterly 06/10/2012 07:49 AM
  3. Gabe Sanders 06/11/2012 04:11 AM
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Topic:
Home Selling
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disclosing material defects
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Comments 37 New Comment

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Jerry Newman
Texas REALTOR, San Antonio Military Relocation
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com

Hi Carol. Those sellers that do have the means of making any major repairs prior to putting their home on the Market, normally have a smoother time during the transaction, since most buyers are not concern with the smaller fix it items.

June 10, 2012 07:21 PM
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Jerry Newman
Texas REALTOR, San Antonio Military Relocation
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com

Hi Cindy. No one likes those Catch-22 situations. Understanding and identifying known material defects will save sellers and agents from any DTPA actions. I have had listing agents ask for a copy of that inspection report whenever my buyer has made a request for the seller to repair certain items. Then, other listing agents do not want the whole report, but only want to see those pages which identify the items being requested for repairs. 

June 10, 2012 07:29 PM
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Ed Silva
CDPE, GRI, ABR, Real Estate Agent
RE/MAX Professionals, CT 203-206-0754

Jerry, in our area the buyer has to give the inspectors a consent to send the inspection to their agent. The complete inspection never makes it to the seller, just the sections with issues. Then they do need to address. I have not had any instances where the deals failed because of the inspections, but I would presume that had it been the case the seller would redo the disclosures, especially as I would certainly let their agent know I would be monitoring the property

June 10, 2012 08:25 PM
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Jerry Newman
Texas REALTOR, San Antonio Military Relocation
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com

Hi Ed. I think that is remarkable that as a listing agent you haven't had any deals that failed because of inspections. I see this a lot with First Time Home Buyers. Most get scared off when that inspector finds more than they want to deal with, or even ask the sellers to repair.

June 10, 2012 08:45 PM
Rainmaker
782,132
Donna Foerster
Metro Denver Real Estate Agent
Cherry Creek Properties, LLC

Jerry~ Material defects MUST be disclosed.  I would likely counsel my clients to share the inspection report from the failed contract.

June 12, 2012 09:55 AM
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Jerry Newman

Texas REALTOR, San Antonio Military Relocation
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