As early as the 1930s, there are accounts of homes being inspected prior to the sale by friends and contractors. These hard-looks-by-a-friend inspections were sometimes called “Uncle Buck Inspections” and oftentimes were not integrated into the sale agreement. More often than not, the inspection was either the buyer kicking the tires or the real estate agent making wildly untrained opinions on the property. By the 1960s, a home inspection industry was starting to emerge as baby boomers were purchasing houses in greater quantities than before. The 1970s saw the emergence of trade organizations that established standards of practice and codes of ethics, forming the foundation of the modern standard: general, visual, noninvasive inspections. These standard inspections were faster, more easily scheduled, and reviewed the vast majority of the systems that Buyers were concerned about. They were informational, not diagnostic, and were not designed to replace engineering review, but in a fast-moving market, engineering review was a luxury. Nonetheless, real estate agents weren’t making substantial use of inspectors until the 1984 Easton v. Strassberger case found that the Seller had liability for disclosure of all material facts that a competent inspection could reveal about the property. States across the nation took the Easton outcome as a bridge too far and passed legislation that placed the limited obligation of disclosure on the Seller merely to disclose known defects that a buyer couldn’t otherwise find. These pieces of legislation largely found that buyers would need to inspect their own property to find the non-hidden defects.
In 1993, a buyer sued a broker for fraud through nondisclosure about foundation issues, but the broker was able to argue that they had a professional inspection done and were merely parroting the inspection’s information to the Buyers. The court found that as long as the inspection met the “reasonable diligence and competence” requirement expected of a reasonably prudent agent, the inspection would insulate a broker from liability. In other words, the agent is permitted to rely on the inspection report as proof. If the inspection is inaccurate, that’s something that the inspector takes on as a burden of risk, but the agent is not expected to second-guess a professional and can rely on their statements. This shifting of the risk for an inspection’s accuracy to the agent resulted in deep shifts in the inspection industry, as an inspector was sticking their neck out farther when making claims. Specialty inspections for irregular items or items that required different skillsets became more normal as a means of shifting the risk. Which leads us to today — where an inspector does general inspections, but a cadre of specialists is available to do additional searches and reviews when a specialized topic arises.