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Can an Austin Builder Restrict a Buyer to Using Certain Inspectors?

Austin Home Inspection

One of my buyers wrote an offer on a new home the other day. Not a completed “spec” home, but a “to be built”. While we can write an offer for a resale home in 15-30 minutes, signed, sealed and delivered (which sometimes isn’t fast enough in this Austin market), a new to be built home is a long, arduous sit-down in the builder’s onsite rep. We were there for over three hours. And this already knowing exactly what the buyer wanted except for just a few exterior items and colors. It just takes that long to write everything up, print it and go through it all.

Anyway, at some point going through the massive stack of builder contract paperwork with my buyer, a nasty little addendum emerged, the likes of which I’ve never personally seen. “Whoa, what’s this?”, I say.

It’s a document that imposes requirements on the private third party inspector that the buyer may hire to inspect a home. It requires that the inspector sign a document called a “Access Agreement for Home Inspection”. The access agreement requires that the inspector have:

Proof of General liability Insurance of at least $1,000,000
Proof of Auto Liability Insurance of at least $100,000
Proof of Worker’s Compensation Insurance equal to the “statutory minimum”.
Proof of Employer’s Liability Insurance of at least $1,000,000

So I dialed up my new home inspector while we sat there and asked about this. He said it’s total BS. A ploy by builders to limit inspections. He doesn’t meet the requirements, nor do most Texas Real Estate Inspectors (TREC requires $100K liability, so most carry the minimum), much less the Code Inspectors you want to be using on a new build.

Does this mean my buyer can’t use my over-credentialed, highly competent and trustworthy inspector? The builder was happy to offer a list of inspectors they have who do meet the requirements. No thanks. I want my buyer to have my inspector, not yours. So now what?

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Posted by Steve
3 years ago