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Should a Home Inspector "HOLD" the report until payment?

By Kelley Weimer

Real Estate Agent with Better Homes and Gardens Big Hill 2002018135

November 21, 2008 02:47 PM

This might be a controversial subject, but I'm willing to take the risk. Mind you, the Home Inspector in question here is my own family member, so I'm REALLY taking a risk.. But the question begs to be asked.

Here's how the scenario played out:

September 9 2008: I ordered a full home inspection/pest inspection for an out of town client, on a bank owned home in my own neighborhood. The inspection was completed, results given to myself and my clients, and the invoice given to me. I asked the home inspector how she would like to be paid and was told to "have it be paid at closing". Fair enough so far.

October 15 2008: This is supposed to be the close-by date. I had sent the invoice over to my Title company a couple weeks ago. Well, some sticky issues regarding financing are raised. So my clients file for an extension on the closing date, for November 1 to be safe. The bank says OK, and the home inspector also says "OK".

November 1 2008: This sucker ain't gonna close. Its an A-Frame house and there are NO COMPS.

November 5 2008: Yep, the deal is dead and I am now searching for a new home for my clients, with a couple of good possibilities. I go ahead and mail the home inspection invoice to my clients (across country) and tell the home inspector that I have done so, and to expect payment shortly.

November 8 2008: We've found a new house already and have a contract worked out. My clients would like to close ASAP and ask that a home inspection be done QUICKLY! I agree. It is another bank-owned and time is of the essence. So I call the same inspector at the request of my clients. The inspector says to me "Yes, I'll do the home inspection but I might hold the results until I get paid for the last inspection" Huh??

November 12 2008: Mind you, this is about 7 days since I mailed the inspection invoice. My clients HAVE received it, but just yesterday. It takes a little while for mail to get from Ohio to the West. So they now have the invoice and have written a check and are putting it in the mail TODAY. I know full and well they are good for it, based upon my knowledge of their situation.

November 13 2008: The inspection is done today and the home inspector/family member comes to my house afterwords. I ask "So how did it go?" And the answer? "Well, I'm not going to tell you until I get paid for my last job". Frankly, I didn't know what to say except.."The check IS in the mail, and honestly, I didn't get paid for MY last job at all, but that's the nature of this business".

November 16 2008: My clients are calling me, asking where the inspection is and how did it go? How embarrassing. I actually have to say to them that I cant tell them until the home inspector gets her hands on the check from the last job. I am FED UP. This is a bank owned property. There are only so many calendar days in which my clients have a legal right to argue something in the home inspection. And my inspector is holding up this process. So I call her and tell her I HAVE to have the inspection TODAY or I will have another inspector out there this afternoon to do the job, and she won't be paid for this one either.

Tell me...do you think I was in the wrong? Did the home inspector have the right to withhold the report? I feel that I was taken advantage of due to being "family" to this inspector. I cant imagine she would have tried this with any other agent in my office.

Just looking for opinions on this one. Thanks!

Kelley Weimer, a house "SOLD" name!

www.buypreblecounty.com

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Richard Dolbeare

Inactive - Wailuku, HI

Living the Hawaii Lifestyle

It's our custom that payment to the inspector is made from escrow. I suppose if I ran into a situation where I couldn't get my hands on a report such as you mentioned, I'd pay for it myself and get reimbursed later.

Nov 21, 2008 02:56 PM

Mick Michaud

Distinctly Texas Lifestyle Properties, LLC Office:682/498-3107 - Granbury, TX

Your Texas Lifestyle is Here!

Couple of questions. Who engaged the inspector's services? The selling bank, your clients, you? Whoever engaged the inspector's services is responsible. As such, the inspector may withhold the information pending payment if the same entity engaged the services. If not, I don't think it right to hold up the report to a different party.

However, as a service supplier, I certainly understand where they're coming from.

My 2c.

Nov 21, 2008 03:00 PM

Bob & Carolin Benjamin

Benjamin Realty LLC - Gold Canyon, AZ

East Phoenix Arizona Homes

Normally the inspectors here get paid before they do the inspection at all. Also most of the trades people will not work for anyone any more until they see money in advance -- be in landscapers, inspectors, repair people -- anyone. It is a sign of the times.

Nov 21, 2008 03:03 PM

Kathleen "Kate" Elim

Lake Anna, Virginia - Mineral, VA

RE/MAX Lake & Country

Hi Kelley...If I were in your position I would have paid for the first inspection and gotten the results of the second one. The check that the inspector will then receive (for the first one) from the sellers will be received in the mail as you state.

You can request a check from your buyers so that you do not have to wait until settlement or you can chose to wait until then hoping it will close.

Yes, I realize that we do not get paid until we close. That is one of many reasons that we get paid as much as we do. We take risks.

My experience has been that home inspectors expect to be paid when service is rendered. At least that is the way it is in my area. In fact most of our home inspectors have the buyers, when they are present, sign an agreement prior to the beginning of the inspection.

How do home inpector generally operate in your area?

Paying the inspector yourself is a small price to maintain a relationship that may provide you with preferable treatment when you need it. It's great to have people that are willing to help you out with short notice because we never know when we will need that.

Kate

Nov 21, 2008 03:04 PM

Kristal Perrone

Hunt Real Estate- Columbus Division - Rochester, NY

Associate Broker

Our inspectors get paid the day the work is done. It is understandable that your home inspector would like to see payment for the first inspection. She can't work for free, and to be fair, she probably doesn't know the clients. But considering it is family, I would hope that a family member would give me the report, especially if it's bank owned property.

Nov 21, 2008 03:04 PM

Loreena and Michael Yeo

3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX

Real Estate Agents

Here in the area, it is very typical for inspectors to hold reports until payment is made. Honestly, I think it's fair. Relative or not, I'm not quite sure about that. It's a personal decision.

Nov 21, 2008 03:06 PM

Loren Johnson

White Bear Lake, MN

CMPS

If they are looking for repeat business...they shouldn't! They don't realize that if you don't close- NO ONE gets paid. Granted, everyone needs to make a buck...but unless you force your clients to pay up-front...this kind of thing is a risk for happening. Good luck on working with your in-law!

Nov 21, 2008 03:10 PM

Steve Lightcap Jr.

HouseMaster Home Inspections - Clermont, FL

The easiest way to get paid as a home inspector, especially with an out of town buyer, is to get a credit card and a signed order agreement. Quick and easy with fax and/or email. I guess it depends if the inspector excepts that form of payment or has written agreements. But I could understand the frustration of the inspector after performing 2 inspections and not receiving payment from the first. We inspectors have to eat. =)

Nov 21, 2008 03:31 PM

Kris Wales

Keller Williams Realty - Lakeside Market Center - Macomb, MI

Real Estate Blog & Homes for Sale search site, Macomb County MI

The inspector should have been paid at the time of inspection. For her to state "at closing" was wrong in my opinion, very risky. To hold on to the other inspection before receiving payment is wise. I'd be a bit more concerned about using a family member for a home inspection. I'd hate for a buyer to later bring it up if they were unhappy with the home.

Nov 21, 2008 07:23 PM

Fred Pickard

Fred Pickard Innovations Realty Inc - Hershey, PA

Hershey, PA

In our market, the home inspector is almost always paid at the time of inspection.

Payment for a home inspection should never be contingent on a property closing, just like an appraisal. The home inspection should be based on the facts gathered, not on writing a "good" report that will entice the buyer to close.

I think most home inspectors on AR would agree.

Fred Pickard Broker Owner

Nov 21, 2008 09:26 PM

Chip Jefferson

Gibbs Realty and Auction Company - Columbia, SC

Nobody works for free. I am finding it more important now to have buyers pay these fees as the service is rendered. They pay it on the HUD anyhow so whats a little earlier?

Nov 21, 2008 10:20 PM

Scott Barr

Pacific Sotheby's international Realty - Newport Beach, CA

Realtor

I always have the buyer pay at the time of the inspection. It is a nominal fee relative to the entire transaction. A word to the wise, you don't want $200.00 holding up a $2,000 commission. Lead with revenue on this one.

Nov 22, 2008 12:44 AM

Kelley Weimer

Better Homes and Gardens Big Hill - Eaton, OH

Preble County Ohio Real Estate & beyond

Richard - Typically here in Ohio, at least this part, it is also typical fo most inspections to be paid at escrow. I did consider paying for the home inspection myself, but knowing that the check was indeed "in the mail" made me re-consider this. My experience with the clients assured me that they would be "good for it". I probably should have just swallowed my pride and paid for the darn thing just to save peace of mind for my clients and the deal.

Mike - I engaged the services of the inspector. Does this mean that anytime a Realtor orders up an inspection and the inspector gets stiffed, it is the responsibility of the Realtor to pay for services rendered? This could become pretty costly. I do see it from the other side however, like you said. Appreciate the input!

Bob and Carolin - Its been customary here in this area for years that the inspections are paid at closing. I agree though, whats' worked in the past is most likely NOT the way it should be working now.

Kate - Seems like the standard of practice here in Preble County OH might be a little behind the times, from what I'm reading. Normally, we are all paid at closing. Realtors, inspectors and the like. If the property never closes, the agent is usually left to the task of bill collector for services rendered. I DON'T think its fair when an inspector isn't paid for the hard work they do, but at the same time, I DO believe that a professional in this business who believes they will recieve payment for every job ever done is unrealistic. I think that based on the years of experiene I had working with this inspector, they should have taken me at my word regarding payment, instead of witholding information and upsetting clients for a mere $200.00

But I might be in the minority here :)

Kristal - I agree! She should have just been paid at the time the first inspection was done. Instead, she opted to have that service be paid at closing. So at that point, she is essentially telling me that waiting a while for the payment is OK. And given a good history with me and my past clients, I felt it was somewhat unprofessional to hold the results on the next one. How come it was alright to wait for 30 days or more to get paid on the first job, yet even on my word, couldn't give me the report on the second job until she made sure her check was in the mailbox?

Loreena - As you can read, its all done a bit differently here in rural USA! My frustration really lies in the fact that I have been sending this inspector business for years, and every job has been paid for. ONE TIME, and she couldn't give the benefit of the doubt?

Nov 22, 2008 02:08 AM

Kelley Weimer

Better Homes and Gardens Big Hill - Eaton, OH

Preble County Ohio Real Estate & beyond

Loren- That was my feeling exactly. We had a history together of a good, honest working relationship. It EMBARRASSED me to have to call my clients and tell them that the inspector that I recommended so highly would not give me any information because she didn't have payment from the first job, knowing full and well that my clients had A. Sent the check and B. Were very nervous about this new inspection and the time line with the seller.

Steve - I appreciate your input. I guess this is the rub for me....The inspector knew we were up against a big deadline. If she didn't want to do it because she was never paid for the first, OK. But no, she agreed to do the second one with the condition that she "might" hold it if her check didn't come in the mail. Well, I guess that was my bad for agreeing to that, but gee, I cant control the US Postal Service. She should have never agreed to do the second job. I told her her payment was mailed to her on Nov 12. On Nov 16, she's still holding the results, checking that mailbox everyday. Meanwhile, the clock is ticking on this transaction.

Frankly, I'm stumped. My clients LOVED the job she did on the first, and specifically requested her again. I chose to have her do the job and pray to God that first check would get across the country fast. Should I have told the clients "NO, even though I KNOW you mailed that first check, my inspector doesn't believe me/you, and we will have to use someone else?"

Kris - Well, I don't know how much business we will do in the future. I a very careful to disclose the material relationship, and give many options on inspectors and prices at the get-go. First rule of real estate - CYA.

Fred- Agreed. I think its part of the "small town" mentality around here that most people are "good for it" and inspections are always paid at closing. Myself, I dont believe I'll be doing it this way any longer, all things considered. Family or not, I have always tried to use this gal because she is a wonderful inspector; fair, unbiased, "just the facts ma'am" kind of person.

Laura- yeah..lesson learned for me, that's for sure. This led to undue stress for my clients, as well as stress between myself and my home inspector. Just not worth it.

Scott- "...you don't want $200.00 holding up a $2,000 commission." That's exactly why I was so frustrated with her! She developed a good rapport with my clients after the first inspection, talked to them personally on the phone several times about the first house, and suddenly she is telling me, and them in effect, that $200 is more important to her than future business, referrals and the clients satisfaction?

On the other hand, I should have paid it myself. I was also saying that the principle of $200 was more important than the happiness of my clients, and a closing.

Nov 22, 2008 02:39 AM

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