Should we require home buyers to have a license?

Spend some time reading home inspector blogs and you will see that a common theme is the question of conflict of interest between realtors and inspectors.  Some realtors pooh-pooh that claim, arguing that they also have the client's well-being at heart.  Like most inspectors, I do see the conflict of interest.  It clearly manifests itself in the way that realtors refer me.  Most of the business I get from realtors is related to property they or someone in their family are buying for themselves.  I also get referrals when a realtor has only his/her credibility (but no money) at stake.  For example, someone calls a realtor friend and says, "I think I may have some foundation problems.  Who can I get to look at it?"  I get those types of referrals, but I rarely get the referrals when a potential buyer asks, "Who should I hire to inspect this house you're trying to sell me?"  Realtors do not put me on their official "list of four recommended inspectors" that they present to those clients.

The conflict is real, but what do we do about it?  Some inspectors call for laws that forbid realtors from recommending any inspectors.  Others are trying to break the link between realtors and inspectors by promoting an organization where members pledge not to market to realtors.

http://www.independentinspectors.org/

I believe the problem is not with realtors or inspectors.  The problem is naïve buyers.  The vast majority of buyers have very little knowledge about the home buying process or the real estate market.  They are clueless about important legal issues such as disclosure and agency.  They have no idea what all those papers they are signing and initialing are all about.  Maybe it's time we require buyers to be licensed!

I think it would be reasonable to require potential buyers to attend a two to four hour class that covers the basic process in buying real estate.  (Savvy buyers, could skip this by passing a simple 20 question quiz demonstrating they understand the basic ideas and terms.)  After taking the class or passing the quiz, individuals would be given a one-year license to buy real property.

What do you think?

 

14 Comments on Should we require home buyers to have a license?

David,

I agree with your assessment.  The problem is that homebuyers do not know about the process of buying a home especially first-time homebuyers.  They are looking at the Realtor/Agent for advice.  Obviously a clean inspection report will not scare buyers but as we all know that even new homes can have some items that can come up in an inspection report.  Then the buyers sign all these disclosures but they don't seem to even want to read them unless it talks about their payments and interest rate.  As a Realtor I know it's my duty to explain all the disclosures and their rights.  I recommend different home inspectors and I ask them if they know of someone or would like to research on their own to make sure it's a license and bonded inspector.  The one company that I work well with has admitted to me to losing Realtor business because they were to thorough and scared certain buyers.  The buyers get emotional and it's our job to explain the items that come up and settle their emotions so that they can make a good decision rather than emotional one.  I like it when my inspection company is thorough because it gives me more peace of mind that when my buyers move in they are already aware of the items that need to be fixed if they hadn't already been fixed during escrow.  I get less complaints this way and I've never heard a client tell me that the inspection company missed something. 

08/15/2007 12:40 PM by Mario Villagran, MBA (Pacific Atlantic Real Estate)


Dave

you are probably right in your idea to have buyers attend a course and get a license. . More important is that parents get a license to have kids.

08/15/2007 12:56 PM by Mitchell Captain Home inspections in Broward, Dade, and Palm Beach (AllSpec Professional Property Inspections Inc)


Hi Mitchell,

I actually had that same thought when writing this blog.  We license many things where some level of competence is required (marriage, driving, etc.), but we don't license some things where competence is absolutely critical (like procreation).  I suppose child bearing and rearing is seen as a natural right, but it is sad to see the results of incompetent parenting. 

08/15/2007 02:04 PM by David Harkness (Home Analytical & Engineering, LLC)


Hi Mario,

You are right about first-time home buyers.  I was a first-time home buyer about twenty-five years ago, and I didn't have a clue.  And, even worse, I did not realize just how clueless I really was.  Fortunately, I had a good realtor and I was a good judge of construction quality.

When that realtor asked me what lawyer, title company, etc. I wanted to use, I had no idea.  (I didn't even know what a title company was.)  The realtor gave me some names, and I went with them.  Inspectors weren't commonly used back then.  Again, I had a very competent and ethical realtor, so everything turned out OK.

For most buyers, the realtor is the "go-to" person for all questions about real estate, and that puts the realtor in a very powerful position.  It would be better to educate potential buyers about the process and give them information about how they can find and evaluate service providers.

I certainly don't mean to bad-mouth realtors.  I am currently trying to sell my house, and I'm using a realtor.  I wouldn't dream of buying or selling real estate without a competent realtor on my side.  The problem is that it's hard for a buyer to know which side that handsome, smiling face is on.  The realtor gets paid when the sale is consumated, so their focus (quite naturally) is keeping the deal on track.  It is perfectly right and natural for a realtor to work toward that goal, but the buyer needs an inspector who has no allegiance to the realtors involved.

08/15/2007 02:58 PM by David Harkness (Home Analytical & Engineering, LLC)


Hi David, Your idea, while a good one, will never fly.  It may be better to educate the realtors who don't want thorough inspections.  I find that more old time realtors are that way than younger ones.  They started in the business when no one was doing inspections and would like it to stay that way.  I have had a few realtors actually say to my face that I am too thorough . . . and I am very calm in how I approach the client, no overstatement (and no understatement either).  I clearly tell what I see and give some options on how to fix it. 

08/16/2007 11:22 PM by David Helm, Bellingham,Wa. Home Inspector (Helm Home Inspections)


Hi David,

I'm always coming up with great ideas that don't work :)

 

08/17/2007 12:49 AM by David Harkness (Home Analytical & Engineering, LLC)


David,

 I do agree with you that first time home buyers should take some type of training/course to help them understand the home market a little better & not have to depend on a realtor to watch out for what's best for them.

The sad thing is that seller agents don't show a lot of concern for buyers in general, and a lot of the realtors look for inspectors that aren't going to point out all the defects because they just want to sell the home & forget it.

I have also had a hard time trying to get on with 2 local realty compaines recommendation list, they always say that there are to many inspectors now so we just picked a few that we wanted to use. What????

Unless these specific realtors get out of the picture it will always be the same way.

I am trying to work with our local Realtor Board to see if i can get them to make it mandatory that the home inspector & termite inspectors can only do the inspections & that they can't offer any type of service or treatment. This would take the realtors completely out of picking whom they wan't for inspections.

I feel that if everyone would do the samething in there area it might help make things better for all inspectors. 

08/17/2007 06:52 PM by jamie allen (Allen's Pest Inspections)


David:

I just had my Tuesday morning cancel. Her husband decided he had a friend that is an X builder and he is going to let him inspect the home. How many times have we said in our comments, don't let a friend or family member do the inspectin. If he is an X builder why is he still not building houses. They get what they pay for. In this case it's FREE.

08/17/2007 08:55 PM by Carl & Ceil Winters (Complete Inspection Service, New Braunfels, Texas 78133)


David

What if we licensed stupidity. I bet that would be the biggest license-holder group!

08/18/2007 03:45 PM by Mike Parks RBO, ESI, MHI (Residential Building Inspectors)


Howdy David

Very good post. Up here in NH there is a class offered to home buyers. The cost for it is $50.00 it's a good class. It gos over every thing. Even about the need for having a home inspection is talked about.

Have a good one

08/18/2007 05:43 PM by Dale Baker, Home Inspectior- in NH & VT (Baker Home Inspections and Consulting Service)


Well, you who know me know that this is an issue close to my ethical heart.  Admittedly, I get a bit emotional about it from time to time.  One thing is certain:  It is much easier to become successful as a home inspector if you are willing to "go with the flow."  Often, thoroughness is a handicap in our business, but smart realtors look at the competent, thorough home inspection as an extra bit of free insurance provided by the inspector.  I am not talking about the "nit-picker" who concerns himself with cosmetic issues.  Anybody can see that old, loose wallpaper and know what they need to do.  But when one gets negative feedback for recommending that metal drip edge be installed to protect wood fascia because "nobody does that", someone is doing a disservice to the buying client.  It is a proven fact that wood fascia AND sheathing at the eave and rakes AND roof coverings around the eaves and rakes of a home will last much, much longer if drip edge is installed properly.  My sister's home was built in 1966.  Forty-one years later, because they were wise enough to insist on installation of drip edge, the original wood fascia is still on the home, and in good condition.

I use drip edge as an example to drive home a point.  In the Southeast, except among the better builders, this simple measure to prevent moisture intrusion at a very important point is rarely taken.  Roofing manufacturers can, have, and will deny warranties because of its absence.  Most, if not all, include drip edge as part of their installation instructions, which are rarely read by roofers.  Most roofers do not include it in their subcontract bids because they are of the opinion that a 3/4" overhang of the roof covering will suffice to protect fascia and sheathing.  Many who do install it do it incorrectly, cutting underlayment too short to cover the drip edge, and failing to adhere the underlayment to the drip edge, leaving roof coverings susceptible to wind uplift.  Besides this, they tend to mount it flush with the fascia instead of leaving a 1/4" gap as is plainly illustrated in installation instructions.  Those instructions are most commonly found in the burn pile.

Now that we've covered that point, let us now move on to the inspector who has the unmitigated gall to call this out, since even local code authorities don't see the need.  It generally goes something like this:

Inspector recommends drip edge. Since its absence is the norm for a particular jurisdiction, it is recommended NOT as a defect, as it really should be, but as a maintenance/home improvement issue.  Doesn't even go to the summary portion of the report.

Client, for whom the competent inspector has explained the need for drip edge, mentions the item to agent.

Since the agent listens more closely to the builders and roofing contractors, and, of course, THEY say it's not needed, the agent tags competent inspector as an "alarmist."

Clearly, building science says that properly installed drip edge can, does, and will add YEARS to the life of wood fascia and eave sheathing.  Here's what the International Residential Code states, right off the bat in section R905, "Requirements For Roof Coverings."

R905.1  Roof covering application.  Roof coverings shall be applied in accordance with the applicable provisions of this section and the manufacturer's installation instructions.

The IRC does not provide for exceptions in this case. 

Now, we all know that any code is only as good as the oversight provided by local authorities, but here is the competent inspector's dilemma:  If, two to three years after a client moves into their brand new home, the wood fascia begins to show signs of dry rot because of moisture absorption, and it most certainly will, who will be liable for the necessary repairs?  IFyou are a smart realtor with the good sense to hire a thorough, competent inspector, certainly not you, and certainly not the inspector.  The builder and the roofing subcontractor will be liable, as they rightfully should be.  If you, as a realtor, think that such an inspector is being an alarmist, then you just might have to write a check.

Want your clients to be fully informed about potential latent defects?  Help them find a competent inspector who does his homework.

Want a little extra free insurance that will keep you on the job selling houses and out of the courthouse? Help your client find a competent inspector.

Want your clients to keep referring YOU 5 years down the road?  Help them find a competent inspector.

Then listen to that competent inspector.  He will be able to provide you with the facts on any issue.  You, the agent, and I, the inspector have a fiduciary responsibility to the client to provide them with the best guidance.

08/18/2007 09:56 PM by Jimmy Breazeale (Sherlock Home Inspections)


Hey Jimmy,

You have made so many good points & i agree with you 100%

Keep up the good reporting,

08/18/2007 11:58 PM by jamie allen (Allen's Pest Inspections)


Howdy David

Howdy Jimmy your on top of it like always. I am with you 100%

Have a good one

08/19/2007 11:03 AM by Dale Baker, Home Inspectior- in NH & VT (Baker Home Inspections and Consulting Service)


Hi David,

I too have agents that won't refer me to their clients because they consider me to be too thorough.  I get referrals sometimes from listing agents that have seen and had to deal with issues I've reported on their listings, but when they want a thorough inspection for their buying clients, they call me.  That's when you know are on the right track.  I work for the client and whether the agent likes what I find is irrelevant.   My inspections and style are what they are, I won't change for anybody.  Perhaps that has cost me business, but it is business that I didn't want any way.  

10/03/2007 07:27 AM by Bill Duncan (Home Status Inspection Company, LLC)


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Inspector: David Harkness (Home Analytical & Engineering, LLC)
David Harkness
Sherman, TX
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