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How close a relationship should a home inspector have with a Realtor?

A report from a local NBC news affiliate raises a few concerns for home inspectors and Realtors. The story in a nutshell is Realtor A is selling a home. Realtor B takes Buyer C to see the home. Buyer C likes the home, and hires an inspector to examine the home. The inspector happens to be a “termite inspector” as well, so he produces a WDI report too. It also happens that Realtor A and Realtor B work for the same brokerage. The inspector states that there are no termites in the home. Buyer C begins to remodel the home to find that a bedroom wall has extensive termite damage, and that there is an active infestation. This happens in the first month. The inspector denies any wrong doing, but the state board overseeing his Pest control license finds that he did not do his job properly, which by state rules gives him a warning on his file. In the mean time, several other recent home buyers file the same complaint. In one case, it appears that the same situation between a Realtor seller and buyer's agent from the exact same brokerage existed.

Why would this be a concern for a home inspector, when I am talking about a termite inspection? Well, the news report focuses on the termite inspection, but it does mention the home inspection aspect of the incident. The real problem develops in that the second inspector sent to check the home for a WDI report found obvious evidence of termites. One area he mentioned was opening an access panel to examine underneath a tub. As home inspectors in Texas should know, we are required to report if there is access to work on the valves for a shower and tub. The only way to be sure that a panel provides this access is to remove it. I have found in many of my inspections that these panels are placed on walls, but that there is no hole in the wall to look under the tub. This inspector did not perform an inspection that meets the minimum standards of practice by this fact alone. From the news article, the inspector appears to feel that he did nothing wrong.

Here is the thing; all inspectors make mistakes. We are human. The moment that you believe that you are perfect is the moment you are not doing your job right. I am always trying to find ways to improve how I do my job. I discover ways to include checks and balances to ensure that I catch any problems or issues in a home. On an inspection last week, the Realtor stated that he loves my reports when he represents the buyer, but he hates them when he represents the seller. He turned to the buyer and said “he is so meticulous”. I was not sure how to take that, but at least it validated that my methods were heading in the right direction

Yesterday I was chatting with another Realtor about various topics, and he mentioned an inspection report that he had seen. The inspector had a long paragraph explaining each finding, making for a very long report. He mentioned that it scared his client. That is part of the balancing act that inspectors must carry out when writing a report. We never know which item will be important, so everything needs to be given equal weight. I believe that one mistake that could be easy for us inspectors to make is to over emphasize one issue by longer explanations, while others are just mentioned. A question does arise here: did this inspector tailor his reports to make the Realtors happy? When my wife heard the news report, her comment was “remember when that Realtor wanted to dictate to you what you should put in the report?” It happened many years ago when I was green, but I had refused, so I did not work with that Realtor again. I bring this incident to the attention to the Realtors who will read this piece. You could be setting yourself up for a liability if the home inspector says that you were pressuring him/her on what should go into the report.

A final question is should a relationship between a home inspector and Realtor be so close that the Realtor recommends no other inspectors to their buyer? Some Realtors have told me that this is against Texas law. It is not. In fact I heard a lawyer from TREC (the Texas Real Estate Commission) state that it might be better for a Realtor to suggest only one inspector who they really trust. Most brokerages do have a rule though that states Realtors should have a few inspector names to give their clients. I think that the lesson from the news report should be is to discover if your inspector really is as good as you think he is. The inspector in the news report is well established in areas in the north of Houston.

Well here is the link to the report if you like to see it for your self: http://www.click2houston.com/news/21168973/detail.html What are your thoughts? Liked the post? Maybe visit me at http://yourhoustonhomeinspector.com .

Posted by Frank Schulte-Ladbeck on 10/03/2009 08:11 AM

Comments (23)

home inspections, realtorhome inspector relationships

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23 Comments on How close a relationship should a home inspector have with a Realtor?

OCT

I provide a list of several inspectors as well as offer a phone book (some still advertise). I think I know who the good ones are but that is my opinion that is not shared. If asked I will tell who I used to inspect my own purchase.

Good answer, Gary! -- Frank, I do hope that bad apples aren't going to encourage more rules like the HVCC.

I believe that a home inspection gone wrong is a Realtors fast track into court. There should be no personal relationship, only a business relationship between the home inspector and the Realtor. A list of home inspectors in the area may be provided for the customer to choose from.

Thanks for sharing. Best wishes for continued success.

Many of my home inspections are contacts that have found us from the internet. They can also go to the TREC website. I believe most realtors have a list of realtors from TREC and the consumer can choose for themself.

This is a tough one for all of us. The people we work with daily often become friends. But it should never preclude observing our fudiciary, professional, and legal requirements.

No, it't not again any law to only refer one inspector or one mortgage person, but our E&O couriers strongly discourage it. We (Realtors) can't be held liable for the buyers' decision annd when only given one choice, that's saying the Realtor made the decision not the client.

When in Dallas, I had an inspector who did about 80% of my inspections. I liked that even though he put everything on the report, he would say, "This is a $3 part at home depot" or "This would take you 30 minutes to fix on your own". He never freaked the buyers out.

Inspectors that put things on their report that have nothing to do with the functionality of the home like peeling wallpaper or lightbulb is burnt out, really annoy me.

Gary- I think no one shoulld be afraid of competition, so I am happy if someone chooses me after speaking to others. It is nice when the mainly suggest to a client to use me, but I am not upset when a Realtor gives other inspector names.

Maria- we already have a standards of practice in Texas that spell out the minimum for a report. I do not think this incident will lead to more rules, but it does seem that the brokerage and the inspector may be in for some hassle.

Captain Wayne- I believe that a professional line of communication shold exist between an inspector and a Realtor, even when they only work together once, so you have stated it well.

Hello Carl, my friend- this past week six people found me on their own (through the internet), four people came to me from specific Realtors, and two through financial analysts at a bank in conjunction with mortgages. If the Realtors suggested anyone else, I do not know, but they did express to their clients that they liked my work. All of the Realtors have seen me in action, but I do not mind them checking to see if I am doing my job well.

Trey- agreed. It is hard to site aside friendships which may develop. One of the Realtors who suggested me last week is one that I have worked with for three years. His wife works at the same hospital as my wife, and his daughter and my wife work in the same department. He and I run into each other socially, so it is hard to say that I cannot have more than strictly business relationship with him when I encounter him so often. We both have to separate our business lives from our social ones.

I hope that this story warns inspectors not to take it easy. We need to be vigilent to do our jobs correctly. For Realtors, it is a matter of not always relying on the standard inspector, because it may be an issue.

To all- thank you for commenting and your input. :)

Donna- I do not like putting values in my report. I do the same verbally with my clients. I feel all professionals should always attempt to strive to be the best, which does mean we should be happy that our clients look at the competition, and then choose us. :) Thank you for dropping in.

Giving a client a list of inspectors to choose from is much more about agents trying to 'cover their butt' - it's not about taking care of their clients. If an agent knows that one inspector / inspection company is better than the others, they should recommend them.

For any agents reading this, think about this: if you're helping a family member, such as your son / daughter / parent buy a house, would you give them a list of inspectors to choose from, or would you just tell them who the best inspector is?

You give better service when you stop trying to cover your own butt and you focus on your client's.

OCT

While the inspector might be one of the best in town the problem is the perceived conflict of interest when referring only one. The buyer might see it as something it is not and act accordingly right or wrong. Providing several contacts, in my opinion, limits the possibility of that accusation.

A list that the buyer gets from a real estate agent is always the best way. O' your family is not more likely to sue your a$$ off as a client would be. CYA is the name of the game as it always has been thus the reason for insurance!

"The story in a nutshell is Realtor A is selling a home." This is a much bigger deal because the seller is/was a real estate agent!

Howdy there Frank

There is a Inspector in my main area, which is where I live. That about 95% of the Agents, prefer for their Buyer clients to use. This Inspector, usual does not write up or will only write up one item as being a problem.

I know just how this Inspector, does Inspections, my Lady and I were looking at some homes some years ago. And was told by the Agent, that we only want to use this Inspector, I had not started my Inspection business up here as of yet.

And I had not told the Agent nor the Inspector about my background in the business. One of the main problems the home had, was it had a Oil Furnace and Wood Burning Stove vented into the same flue. Which could very will end up starting a fire, besides it being against local code. I ask him about it and was told, its not a problem, just don't use them at the same time. Not one item was written up, in his Inspection report of the home.

Baker Home, Commercial Properties Inspections and Consulting AR Signature

OCT

Reuben and Vince- as I mentioned, it is not illegal in Texas to suggest only one, and it was recommended. I do think that if this is the case then the Realtor better ensure that their inspector is doing a good job for the client (their mutual client). This may be hard to do though. I think that the news report shows Realtors that they should educate themselves, nad home inspectors that they need be thorough.

Ross- that was the big problem here. Both the seller and buyer's agant worked for the same brokerage, and one of the other incidents being investigated appears to be the same situation. I think that such a set up would make me much more cautious. As you said, you need to cover yourself, and I think that the best way to do that is by doing the best job possible.

Dale, my friend- you see, you did convince me to post here again. :) I wonder: do you think that it was a lack of training of this inspector, or is it that he is trying to keep the Realtor's happy? Either way he is failing his clients. Maybe we should send this news article around to some of those Realtors.

To all- thank you for dropping in and commenting; much appreciated.

Frank,

"Both the seller and buyer's agent worked for the same brokerage, ..."; not only this but like I said the seller is/was an agent with the same firm. So, what you have here is the seller, listing agent, and buyer's agent connected with the same firm. But it's a big name brokerage and everyone knows you just can't go wrong with the big name brokerages, because it is the brokerage and not the agent, said with great sarcasm.

Ross- personally, my best experiences with brokerages as a home buyer and as a home inspector have been with smaller brokerages. However, I did use a Realtor from a big name brokerage when buying my home, because he and I connected. If I sell, I would go with one of a few Realtors who work with samll brokerages who I have come to value. (My favorite Realtor being Erion Shehaj of Signature Real Estate here in Houston, no offense to the others :) As for the inspector, he is an "established" home inspector, who many have told me that they trust. I think it might be valuable to follow up this post with one detailing how to determine if an inspector is doing a good job- just to know if a Realtor should take someone off of their list. It would be nice to hear what suggestions Realtors and home inspectors would have for making such a determination.

Howdy there Frank

My friend, I sure was glad to see this new blog post by you. Your just to fine of a blogger, not to see your blog posts, here in the ActiveRain community.

I sure do wish, that I could say its because of lack of training. But he is 100% in bed with the most of the Realtors in the area. He's a local from the area, After the sale of a home, that he's done the Inspection of, the buyer's Agent take's him out to supper. Its because of that so called Inspector, why I decided to start doing Inspection again. I just could not stand by knowing folks were being done like that. Home Buyers area intitled, to an Inspector that will look out for them, as you will know.

As far as to sending your fine article to those Realtors, it would not do alot of good. Seen that the both of us were not born and raised in this area. They would just toss it into the trash. The other thing that the Home Buyers in Charlestown and Claremont, have to be weary of, the bigges part of Agents in the area, is they will give inside info about the buyers, to a listing Agent, thats not even out of the same Brokerage. Frank, Real Estate is a whole other world in these parts.

Baker Home, Commercial Properties Inspections and Consulting AR Signature

OCT

Howdy there Frank

Stoped back by to see you. I don't like to stop in to visit a post, with out living a comment. I forgot to bookmark your blog post before, but its done now. Want to keep up on the convereation going on here, at your blog post. Have a real good week, my friend!

Baker Home,Commercial Properties Inspections and Consulting AR Signature

Howdy there Frank

Came back by to let you know, about a post by Michael Boyett. Its his newes TREC SOP Commentary. He has it posted in Carl's Hill Country Inspector group. When you have time you sure are welcome to join us at Carl and Ceil's Water Cooler Hang Out blog post.

Baker Home,Commercial Properties Inspections and Consulting AR Signature

Frank seems this great blog of yours has come alive again. Really glad to see you back blogging on AR. How is the family? Bet that baby is getting big. We need some photo's.

OCT

Dale- I will go check that post out. Thanks.

Carl and Ceil- I keep meaning to post some to my Facebook page, but I only have a few there. Everyone is doing fine. The baby is ten months old now, and she is trying her best to communicate with us. My other daughter is in a pre-K class, and she is having great fun. My son has gone on his first inspection with me, and he is quite proud to have caught something that another inspector missed. I will get some pictures up soon. :)

OCT

We are always looking for feedback on the service providers like home inspectors, lenders, stagers etc. You really need to keep up with them all, as things change.

OCT

Hi Georgina- I think that is great. My impression is that this may not happen enough, or it may happen initially, then things become to comfortable. It is so simple to put a system in place to acquire this feedback.

I have a story to share that happened last week. Background: earlier this year I was witness to a slae where I knew the buyers and sellers very well. I did not do the inspection, because of these relationships, and my desire to maintain them. The buyers hired an inspector based upon their Realtor's suggestion. He spent thirty minutes at the home. That is it. The report was filled with mistakes, and it copied from a previous inspection report, without really reading what the first inspector said. Now move forward, due to some factors, the buyers have decided to buy a new home closer to their work. They contacted me to do the inspection. However, they decided to use their same Realtor (who they were mad at after this last sale), who told them to go to the same inspector (who they were furious at). I had actually walked the buyers through the home with this inspector's report in hand to show them how bad it was (basically this inspector walked by an object like the components of a water heater, and said that he did not see them). I showed them how "missing features" were in plain sight. Oh well, people are free to make mistakes. I talked to their Realtor (her told her clients that I had given her this inspector's name to explain to her the issues with the report. She became angered, and hung up on me. This is an example of an extreme that I thought that I would never see, but here it happened.

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