Guidelines for using the Professional Services Disclosure and Election form

QUESTION: In the “Service” column of the recently revised Professional Services Disclosure and Election (Standard Form 760), eight different types of inspections are listed under the heading “Inspections.” We have a buyer client who has decided not to order any inspections. Is it sufficient for that buyer to indicate his waiver of the inspections on the line labeled “Inspections?” Or should the buyer indicate his waiver on all eight inspection lines?

ANSWER: The Professional Services Disclosure and Election form was developed as a risk management tool to assist agents in framing conversations with their clients once a property is under contract. We strongly encourage all REALTORS®, but particularly those acting as buyer agents, to use the form in all of their transactions. In order for the form to serve its risk management purpose, however, it is crucial that it be used correctly. That starts with following the guidelines that have been developed and are set forth in Standard Form 760G. That form can be found on the NC REALTORS® website by logging in, and then clicking on the pen logo in the upper right-hand corner of the home page.

Perhaps the most important guideline when completing Form 760 is that agents and their clients (either buyers or sellers) should discuss each and every service listed in the form, and specifically discuss the potential importance of ordering that service. Only then can the client make an informed decision about whether to select or waive that service. Once a decision is made regarding a particular service, such as an inspection, that decision should be documented by having the client insert his or her initials on the appropriate line and in the appropriate column. If the client merely inserts initials on the line labeled “Inspections,” the agent will have no evidence that each specific inspection was ever discussed, or that the client made an informed decision regarding that service.

Form 760 includes a column labeled “Name(s) of Service Providers.” As pointed out in the Guidelines for that form, different firms have different policies on the extent to and manner in which the firm’s agents should provide the names of possible service providers. Agents are reminded that they should be guided by their firm’s policy in providing (or not providing) their clients with the names of possible service providers. The client should always make the final choice of service providers. Once that choice is made, the provider’s name should be inserted in the appropriate space.

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