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RE agent recommending an inspector

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Home Inspector with "A" TEAM Home Inspection, Inc.

Recently, I asked the receptionist at a large Real Estate office if I could leave some flyer's about my inspection business. I was told that to be on the office "approved" vendor list or part of their "Connoisseurs" program it would cost $600. I was surprised and said no thanks. Imagine that this list of "approved"inspectors is not necessarily the best in the area but only the one's who were willing to make a financial investment in this office. Many inspectors and companies are willing to pay in order to play. As an inspector I report on the facts of the property to my buyer client and if my inspection and report happen "to kill the deal" so be it. Imagine what happens if 2 weeks later my client again declines another purchase because of my inspection. Will my name remain high on the "approved" list, lowered to the bottom or maybe removed. Will the office manager contact me "suggesting" I improve my reporting methods. If I have this financial investment in this office, I can not afford to kill many deals in-order to remain in good standing. Yes, I have many agents refer their client's because of the superior service and satisfaction guarantee we provide to our client's

The American Society of Home Inspectors (ASHI) Code of Ethics states, "Inspectors shall not directly or indirectly compensate realty agents, or other parties having a financial interest in closing or settlement of real estate transactions, for the referral of inspections or for inclusion on a list of recommended inspectors, preferred providers, or similar arrangements."

As I did some research on this topic I discovered a lawsuit in New Jersey some years ago when a buyer sued their inspector and his franchise. Problems in his home were not reported and/or glossed over. In court it was proven by his attorney that this franchise required their inspectors to maintain a "Double Standard" and to go easy for agent referred inspections. The inspection & franchise lost and were required to pay the homeowner with penalties added.

Comments(108)

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Mitchell Captain
AllSpec Professional Property Inspections Inc - Fort Lauderdale, FL
Home inspections in Broward, Dade, and Palm Beach

I'm sorry I thought it was prophylactic Bob because you protect your clients by informing them of their prospective dwelling.

I still see a lot of anticaptain input here. 



Mar 20, 2008 08:00 AM
Matthew Heavener
ERA Heavener Realty Co. - Jacksonville, FL

I saw that I was royally roasted on my comment. The "roof" portion was unrelated to Scotts post, and Scott, "economic life" is the verbage used in a purchase and sale agreement and anything else leaves the matter open to interpretation.  Thus hurting the buyer who may want to get his binder money back.  If you have not done so already you should familiarize yourself to the Purchase and Sale agreement used in your area so your inspections conform to the verbage to which the buyers are bound, as Chad pointed out they are your customer.  Our P&S says major systems must have at least "2 years economic life" or the buyer can get out of the contract.  Simply stating the roof needs to be replaced is not sufficient.  When does it need to be replaced? Is it currently leaking? What type of leak (plumbing vent, missing shingles, etc.)?

In response to Chad, Paul went into a real estate office and asked to leave his fliers at the front desk.  This is the same as asking for a recommendation.  I offerred what he would need to do to get my recommendation if he were here in Florida.

Now Chad says that by saying "my" (which for me meant "Recommended" not "purchased"), I am suddenly "what is wrong with my industry"?!?  And, because I ask you leave your emotions out of an analysis you are diluting or obscuring the results?!?  Chad is wrong.  Are you not a better inspector by doing each of the three recommendations?  I have not said that ASHI is irrelevant.  I have said inspectors should have additional certifications to set themselves apart and above their peers.  They should be objective.  They should use a checklist.

Now, the reason you go to REALTORS is because buyers purchase through us and ask us for our opinions on "inspectors".  "My" inspectors have a high opinion of me and would be happy that I call them "mine", and as such, have even used "my" services on "their" own sales and purchases.  As a result, they call me "their" REALTOR even when recommending "me" to "others".  Also, I can call them "my" inspector because I hired them for the last six houses "I" bought.  I have never charged them or profited in any way other than their reliable service for this recommendation.  They simply do a great job and have earned "my" respect. 

My criteria for recommending an inspector are objective.  Instead of looking at this and making an effort to understand this part of my job (how I add value to a client's transaction), there seems to be more of an interest in emotionally charged and irrelevant rhetoric.  I responded hoping that people looking at this blog would be able to see what is needed by a REALTOR to give a recommendation, not to be insulted or start a fight.  Chad and Mike your egos are going to at best limit you and at worse hurt you.  The reason to blog is a  hope that all of us are smarter than one of us.  You both seem resistant to understanding others points of view.  I hope you all figure the issue out, and that your businesses prosper.

 

Mar 20, 2008 08:10 AM
Bob Elliott
Elliott Home Inspection - Chicago, IL
Chicago Property Inspection

Matt , this subject is an emotionaly charged thread due to the fact there is no clear cut answer to the issue.

We will ....unless regulations are enacted, have very strong opinion on both sides.

Both Inspectors refered to are known as being very professional and thorough.

Chad has more knowledge of systems , than the contractors others recommend, from what I can tell of his past posts, here and on TIJ.

So I would never feel I can figure how a mans business is going , or going to go judging by thread replies on a Forum.

Mitch ...we are allways anti-captain.Every story needs a villan, and you know you love it.

Mar 20, 2008 09:34 AM
Chad Fabry
StructureSmart, Inc. - Rochester, NY

Fellas,  each of us has our own thoughts  and  beliefs. The best we can hope is that we can coax some contemplative consideration of 'our side"

 I'm not going to change the world by not marketing to realtors, but I might influence one or two other like minded folks to give it a shot.  

Bob, thanks for the kind words.  

Mar 20, 2008 10:20 AM
Wendy Baldwin
Baldwin Realty Group, LLC - Columbus, OH
Columbus OH Real Estate, 614-433-0008 Residential,

I know of  brokers that have "preferred" vendors and they say that if it wasn't for these vendors, their agent fees would be higher. I did not agree with that practise, so when I opened my own brokerage, I made a choice not to have "preferred" paid vendors.  I do give a list of referrals when asked by the client, but always prefaced with the statement to feel free to use who they want to.  I am only comfortable sharing names of vendors I have had first hand experience with.  In looking out for the best interest of the buyer, I don't want the buyer to end up with a house that will have problems later, so I would not pass off a problem house to a consumer so I could get a commission, just as I never look at the commission offered on a listing and steer consumers away from looking at that house. There is no referral fee exchanging hands, just a mutual respect for each other's ability to serve the consumer

And I never steer inspectors to come up with a favorable report.  I am not present during the inspections unless the buyers want me to, so I may not know the outcome until after the inspection report has been prepared. I do encourage the buyers to be present. 

There are times the client has chosen an inspector based upon price,or picked someone out of the phone book, and some of those inspectors cannot even find problems the appraiser points out.  I would prefer the inspector found the problems before the buyer purchased the home.  If it is not the home for my buyer, next.  I'll get paid when we find the right home for my buyer.

We are all in service oriented professions, and ultimately the public decides whether or not we stay in business. I believe they will see through those who puts money above providing them a valued service. 

Mar 20, 2008 11:51 AM
Mitchell Captain
AllSpec Professional Property Inspections Inc - Fort Lauderdale, FL
Home inspections in Broward, Dade, and Palm Beach

I guess if the RE community doesn't see this as a conflict (ethics)then I guess they will never see the inherent conflict between REA and HI

 

http://biz.yahoo.com/bizwk/080321/mar2008bw20080320053109.html?.v=1 

Mar 23, 2008 11:23 PM
Chad Fabry
StructureSmart, Inc. - Rochester, NY

"For every newscast that profiles a crappy inspector referred by a real estate agent, I can show you newsreels of crappy inspectors who were not referred by a real estate agent."

 

Please do that Mr. Humphries... find three.

 

To whom is Home Savvy marketed? 

Mar 24, 2008 11:05 AM
Bob Elliott
Elliott Home Inspection - Chicago, IL
Chicago Property Inspection

Thanks for the compliment.

In ever present irony, I had a Realtor referal last week , and a call for a building Inspection from another today.

I will add unsolicited.

Does not change my position on anything, but I sure would be dum to say no.

Mar 24, 2008 01:55 PM
Bob Elliott
Elliott Home Inspection - Chicago, IL
Chicago Property Inspection

Exactly, as I personaly feel paying to be on a list is where the line needs to be drawn.

Paying for a small square of add space at $2,000 a pop for a small square is the Broker taking advantage of a desperate Independent contractor.

The Broker is dis-honest for throwing the bait, and the Inspector is dis-honest if he thinks overpaying is a wink-wink.

I am not sure about other areas , but in Chicago we are born streetwise.

Mar 24, 2008 03:15 PM
Chad Fabry
StructureSmart, Inc. - Rochester, NY

Mr. Humphries,

 

I took a few minutes and read a portion of the links that you provided and  while I did see a few that mentioned agent referred inspectors I didn't see any that specified their inspector wasn't agent recommended. 

I'll certainly concede that independent inspectors have incompetent members  in their ranks. That being said, agent recommended inspectors also have incompetent members in their ranks but they also have the the lackies that sell their clients a false bill of goods to preserve the referral base. It happens all the time. It's an undeniable truth.

If you feel it's ethical and there is no nepotism involved in these pay to play schemes where a hundred dollars worth of advertising is sold for two thousand dollars and that the consumer benefits from these arrangements, then by all means, choose one of the players to inspect your next home.  

"If you don't want to pay $300, $600, $1,200, or $2,000 to be on a preferred vendor list so that your name is put in front of a pre-filtered, highly-targeted, channel market, THEN DON'T DO IT.  Your desire not to participate doesn't make the practice wrong".- Robert Humphries

I'm sorry but if you think that is what the pay to play is all about, then you're naive. The practice isn't advertising, it's  ass kissing, palm greasing- payola,  and it benefits only the agent and the inspector. The consumer becomes a likely victim; the inspector is referred only because they advertised not because the agent feels the inspector is the best choice. The system forces the agent to compromise their fiduciary obligation to their client. 

  I'm out for now,  I have to go do what I do to market to my target demographic. .. write an excellent  document that will inspire my current client to recommend me to my future client. I do it all the time. Imagine that, the virtue of competence rewarding me with monetary gain rather than me groveling around begging for handouts. 

 

Those vendors who can afford the higher fees are more likely to be generating revenue and are more likely to be reliable in the long-term. - Robert Humphries

Oh stop. Now you're just making things up. That's like saying businesses with the full page ad in the yellow pages are better than those who opt  to buy line ads.

Mar 25, 2008 01:05 AM
Mitchell Captain
AllSpec Professional Property Inspections Inc - Fort Lauderdale, FL
Home inspections in Broward, Dade, and Palm Beach

"PERSONAL RESPONSIBILITY.  Burn that into your brain. "

You are exactly correct that is why I will not solicit REA. I have a personal responsibility to do the best job I can for my client.  I can not have extemporaneous thoughts. I work for only and solicit only one client.

As I can tell you can work for two masters I can only work for one. Even though both say they have the same goals but the road traveled maybe different. 

If we all had personal responsibility this conversation would not be taken place. 

 

Mar 25, 2008 01:51 AM
Bob Elliott
Elliott Home Inspection - Chicago, IL
Chicago Property Inspection
I was going to say wrong thread buddy, but its yours.Ha Ha
Mar 25, 2008 05:57 PM
Kevin Corsa
H.I.S. Home Inspections (Summit, Stark Counties) - Canton, OH
H.I.S. Home Inspections, Stark & Summit County, OH Home Inspector

Wow, you guys have certainly wasted a lot of valuable time in here. Doesn't seem to be an end to this one. LOL

 

Mar 27, 2008 03:29 AM
Bob Elliott
Elliott Home Inspection - Chicago, IL
Chicago Property Inspection

Kevin...

Discussing this type of issue may be the most valuable use of time in this group.

It effects the money we bring home to our families, and how many other venues allow Inspectors to escape the Association wars to actualy put forth their thought on common issues such as this one.

Mar 27, 2008 03:36 AM
Mitchell Captain
AllSpec Professional Property Inspections Inc - Fort Lauderdale, FL
Home inspections in Broward, Dade, and Palm Beach
Bob Elliott
Elliott Home Inspection - Chicago, IL
Chicago Property Inspection

Barry hit it on the head.

Somebody talk him into joining this group.

Apr 01, 2008 10:01 AM
Sarah Nopp
South Sound, WA

That is great to know- I had never seen part of the ASHI code.

I am lucky to work in such an open market, where cooperation between agents is encouraged. Really, all professinal competitors are expected to be professionals, lenders, title reps, inspectors- everyone! I have at least 5 very qualified inspectors I can recommend to a client. And I am reassured in that they all know each other and trust each other.

Apr 29, 2008 03:09 PM
Mitchell Captain
AllSpec Professional Property Inspections Inc - Fort Lauderdale, FL
Home inspections in Broward, Dade, and Palm Beach

Sarah Nopp, REALTOR(R), CRS. RE/MAX Four Seasons, Olympia WA

 

That is what our profession is missing, more cooperation between inspector and Real estate agents. If inspectors cooperate anymore I think they deserve part of your commission. Professionally speaking.

Apr 29, 2008 11:34 PM
John LeBaron
Chimney Check Professionals - La Crescenta, CA

I'm a Chimney Inspector in SoCal and I have experienced this as well. Some offices will add you onto a list simply because they like you and other, larger offices, sometimes want to charge you.

Thus far I have not paid anyone although we chimney inspectors do not have such a standard as ASHI provides to Home Inspectors. I truly believe that I will get referrals based on the work that I do and the report that I deliver not on the dollars I donate to the office fund.

I have however brought in breakfast to an office meeting to get my foot in the door and deliver an educational presentation on the nature of our inspections and what an agent should look for to know when one is needed. What are your thoughts on that?

Apr 30, 2008 11:47 AM
Mitchell Captain
AllSpec Professional Property Inspections Inc - Fort Lauderdale, FL
Home inspections in Broward, Dade, and Palm Beach