If you are a home seller who has accepted a bid from a potential buyer for the purchase of your home, there is likely to be included in your agreement a contingency for a “home inspection” to be conducted by a person of the bidder/buyer’s choice.
A home inspection is conducted in accordance with a “standard of practice” published by a state licensing board or home inspection association that defines what is and what is not included as a part of the inspector’s observations and reports.
Presently, in an attempt to “upsell” and increase profits from their home inspections (or as a marketing incentive used to promote inspectors who need the business) some home inspectors are offering an add-on service for potential buyer’s that they call “Energy Efficiency Reports”.
Unlike the home inspection that is performed in accordance with a set standard of practice, energy efficiency reports are generally subjective, performed by inspectors with little or no training or certification and are calculated from basic calculators known to be broad and limited in scope. These reports are mere guesses as to how efficient the home might utilize energy in the future if the buyer decided to purchase it.
Inspectors usually provide this service through the use of simple generic calculators to publish “instant” energy efficiency reports based upon a few general observations. Unlike legitimate energy audits performed by trained and certified energy professionals, these efficiency reports provide unreliable results that are based upon inconsistent and extremely limited observations.
Home sellers who are opening their homes to home inspectors for the purpose of complying with their contractual agreement to allow inspections of the property for the buyer’s use in the real estate transaction are almost always unaware that the inspector can also be using his time in their home to provide potential buyers with an “energy efficiency report” that can potentially interfere with the sale and/or sales price of their home.
Whether they are real or not, reported conditions that would reflect poorly upon the home’s projected ability to perform in an energy efficient manner are not necessarily “defects” but can easily be perceived as such by hesitant home buyers. Likewise, home buyers relying upon this type of report are equally at risk if using the information it contains to determine affordability or projected energy costs.
Homes that are properly priced and presented for sale could be misrepresented as being worth less to prospective buyers due to such reports – reports provided without the input, knowledge or permission of the owner of the home.
Home sellers and the real estate salespeople who represent them should take extra measures to ensure that the inspector that they allow into their home is not performing any additional inspections or providing any additional information that is not included in the scope of the contractually agreed home inspection.
When the home inspector has stepped across the contractual boundaries … and the information that he reports outside of the scope of the contractually agreed home inspection has damaged the home seller’s attempt to sell his home … the seller should seek competent legal advice to see how these damages can be recovered from the inspector and from any real estate professional that referred or otherwise promoted the unauthorized inspection and report.
The unprofessional and objective views of an untrained person producing “energy efficiency reports” do not necessarily contain accurate information and should not be used to negotiate a real estate transaction. Home sellers should take the extra step to inform their real estate agents that their permission for a home inspection does NOT include permission for “energy efficiency reports”.