Dear Monty: My daughter bought a home for $305,000 and moved in two weeks after closing. The home inspector said everything looked good, but after replacing a faucet, she discovered a leaking pipe, water damage under the kitchen sink and mold in the wall and bathrooms. The bathroom floor had been replaced recently. The inspector's insurer offered $590 if we waived all claims; we declined. We now have an $8,000 estimate for mold remediation. We wish someone had warned us. Could we have done anything differently and what can we do now?

Monty's Answer: You didn't necessarily do anything wrong. You encountered a common gap between what buyers assume and what the inspection industry actually provides. A standard home inspection is a visual, non-invasive snapshot valid only on the day it's performed. Inspection standards explicitly exclude identifying mold, moisture inside walls and concealed plumbing issues (InterNACHI Standard of Practice (SOP).

What Likely Happened

The EPA notes that mold can begin growing within 48 hours when moisture is present in enclosed areas. The recently replaced bathroom floor may indicate the seller was addressing symptoms, not causes, but that requires evidence before assuming nondisclosure.

The inspector's insurer offering money is meaningful; E&O carriers rarely offer even small settlements unless they see potential liability. Declining the release was wise.

Here are 4 possibilities:

No. 1: Press the Home Inspector's E&O Insurer

Pros:

— Inspectors carry insurance for missed conditions; strong documentation (photos, written contractor findings, moisture readings) strengthens your claim.

— A defect in an area the inspector labeled "no visible issues" is harder for the insurer to deny.

Cons:

— Insurers start with low offers and hope claimants accept quickly.

— Persistence, or an attorney letter, may be required.

No. 2: A Claim Against Your Agent's E&O Policy

Pros:

— Agents also carry E&O insurance. If you relied on their guidance and that guidance was zero, incomplete, or inaccurate, it can create liability.

— Some states recognize an agent's duty to explain inspection limitations. Check your state's statutes.

Cons:

— Harder to document without emails or texts.

— Brokerages will typically resist until shown written evidence.

Best when: You sought inspection advice and were told the general inspection was "enough."

No. 3: Consider Seller Nondisclosure Only If Evidence Supports It

Pros:

— If a contractor replaced the bathroom floor due to moisture, they may confirm prior problems.

— States generally require disclosure of known water intrusion.

Cons:

— Difficult to prove seller knowledge.

— Resolution is slow and often adversarial.

Best when: You find contractors, receipts or neighbors familiar with earlier moisture issues.

No. 4: Negotiate a Shared Contribution

Pros:

— Many hidden-defect cases resolve through combined contributions from the inspector's insurer, the agents' E&O carrier and sometimes the seller.

— This speeds remediation, which is important with children in the home.

Cons:

— Coordination takes time and each party will minimize responsibility.

Lessons for Future Buyers

The industry rarely explains its blind spots. In older properties, consider specialty inspections for moisture; mold/moisture testing with thermal imaging, sewer scopes and when possible, a pre-offer home inspection. Obtain three proposals (RFPs), as pricing and solutions may vary widely.

Final Guidance

Document everything, pursue both E&O policies, gather evidence about prior repairs and avoid signing any release prematurely. You didn't have bad luck — you stepped into an opaque system. Knowledge is your leverage.

Richard Montgomery is a syndicated columnist, published author, retired real estate executive, serial entrepreneur and the founder of DearMonty.com and PropBox, Inc. He provides consumers with options to real estate issues. Follow him on Twitter (X) @montgomRM or DearMonty.com.

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