The Real Estate Agent / Home Inspector Conspiracy

the elephant in the roomIs there actually a conspiracy or just a huge misunderstanding? Listening to agents we get one perspective, listening to inspectors we get another, and listening to clients we get yet another. It seems all parties to the transaction act as if there is some established “standard” that home inspectors should be following, and if they would only do that everything would flow smoothly to closing and everyone would be happy.

The old tired arguments of home inspectors being deal killers, or in some way preventing the sale from moving forward because of what they found, or the way they communicated what they found, somehow killed deals has likely run its course.

The reality is that all parties share the blame for how our various “professions” have turned out. Whether it was the “tone” of the inspector’s voice, or what he or she specifically said, that lead to the loss of “perspective,” it was still the inspector’s fault in the eyes of the agent and sometimes even the eyes of the consumer. This speaks to ineffective or inadequate research on the part of the consumer and ineffective or inadequate setting of expectations on the part of the agent and the inspector.

Here is one common phrase, “It has been that way for 100 years and nobody has died.” Another good one is an agent not wanting me to call a room a bedroom because there is no closet, when nothing in the building codes require a closet. This would warrant an informational comment, not a call for repairs. And, what about the agent that thinks some cosmetic issue should be included in the report while actual issues like emergency escape and rescue from old house windows should be “soft pedaled” –because of silly notions like “grandfathering?”

Grandfather is dead!

He would have wanted to have a home that was safe for his kids too.

How do we define “perspective?” It is thrown about as if it was “common knowledge” that can be simply glossed over to move on to the rest of the argument.

The reality is, I seriously doubt anyone involved in the transaction can readily define “perspective” beyond their own narrow view. When there is no established definition, and someone else has a different perspective, there is bound to be considerable angst and finger pointing when the transaction falls apart.

I by no means intend to let home inspectors off the hook on this either.

Many are under-trained, say stupid things about easy obvious conditions and even communicate as if the sky is falling over these “findings.”

But let’s back up a bit and look at what inspectors have historically been hired to do at a home inspection and why agents even tolerate them as part of the transaction at all.

How the heck did home inspectors even become a necessary evil?

Home inspections allow the agents to separate themselves from the liability of all the stuff they do not understand about houses. Things that could come back to haunt them later.

What a cool idea! Get an inspection, and then be able to relax a bit about that giant crack in the foundation they might have otherwise sold to their equally clueless client–a client that could end up p.o.’d enough about the crack to look for compensation.

Of course, there has always been this unjustified assumption that home inspectors know what they are doing. Some do, and some don’t. Just like agents, some do, and some don’t.

So how do we get home inspectors to a place of “knowing-what-they-are-doing?” We create a plethora of mediocre training programs that crank out “licensed, qualified and certified” home inspectors in 1 and 2-week courses. We even create state licensing laws that set minimum standards for the schools to follow to ensure that home inspectors starting out have some minimum level of competency. We have home inspector associations that fight in public about who is better when none of them are good enough. Is any of this adequate?

Certainly not.

This is the elephant in the room, it CANNOT BE DONE, and most inspectors starting out are expected to learn on the job. It results in huge numbers of inspectors failing before they even get started. Some sort of apprenticeship type program could fix this, something like what most “real professions” have. In all of this, the consumer is likely to suffer the most. Right from the get-go we are setting the stage for a great deal of difference in “perspective.”

The agents are not getting what they are expecting.

The consumer is not getting what they are expecting.

The inspector is not getting what they are expecting.

How each party defines what they “expect” will run the gamut from what they are told by each other as well as what they see on the internet or from friends. It will sometimes even be driven by how hungry they are.

The agent tends to see the home inspector as a facilitator of the real estate transaction and training and education of home inspectors is designed to support this. Home inspector standards of practice are even designed to support this notion. Unfortunately, this does not often bode well for the consumer.

The home inspector has a huge opportunity to be of service to their clients above and beyond the simple job of facilitating a real estate transaction.

In my opinion home inspectors should distance themselves from the very notion that they are in any way supposed to “facilitate a real estate transaction.”

This likely gets to the core of complaints I hear from agents about home inspectors not playing the game properly. These inspectors are only interested in their client and not so much in that closing off in the distance. These can never really be reconciled between agent and inspector but it sure can result in happy clients.

Given there is no apparent path to sort out any of this, leaves us with a guarantee for the dissatisfaction of all parties.

There are agents also that suffer from lack of training and may be so hungry they take the process in directions not benefiting the client. It is highly likely agents kill more deals because they are involved in far more aspects of the transaction.

Short contingency periods are perhaps the most common tool used to control the transaction and actually can result in many of the problems associated with poor inspections because the better inspectors will be too busy to meet the short contingency period. The result is the agent recommending inspectors that are new and perhaps less competent. There is this very misguided perception that all home inspectors are equal while at the same time many are being perceived as inadequate. Is either actually true?

Let’s take for example a 1910 house the agent has counseled their client to make an offer on. The client calls the inspector and sets up the inspection. They meet at the agreed upon time to do the inspection. One of the first thing the client says to the inspector is, “If you see anything that looks like lead paint or asbestos please let us know, as we really do not want to buy a house with either.” WHAT?

SAY WHAT?!!

How the heck did the process ever get as far as an inspection? Why did the client not have this conversation already with their agent? Does not every agent know that pretty much all houses built in 1910 are going to have some amount of lead or asbestos? Why is the agent even showing them houses from this time period?

The best agents obviously could care less about whether the deal proceeds. Wouldn’t that be nice? Inspectors should not care either, but which makes the agent happier? Which will likely result in more referrals from that agent? Is it any wonder inspectors are perceived as being in bed with agents—Sleeping with Agents?

BUT: when the deal falls apart and there is someone to blame you can bet the blaming will happen anyway. It seems “not caring” whether the deal moves forward has more to do with the assumption that everyone has performed in accordance with the agent’s expectations—with the agent’s perceptions. Somehow this perception seems sacrosanct because they are the one that is not getting paid. The home inspector obviously collects his peanuts.

Here is the bottom line. HOME INSPECTORS CANNOT AFFORD to care one hoot what the expectations or perceptions of the agent. Harsh I know. The idea the inspector must understand the needs and wants of the agent is absurd. How much do agents understand the requirements of the inspector? They are two very different jobs. The inspector is taking on the liability and responsibility for all that technical crap about houses that the agent chose to give up.

As near as I can tell they do not want it back.

I cannot remember the last time when an engineer had to be called in to sort out some structural engineer and they got blamed for ruining the deal. The reason for this is they are perceived as professionals and home inspectors are not. This obviously must change and there is no mechanism currently for home inspectors to cross that chasm. Agents have their own chasms to bridge as well.

Following this thought, the inspector cannot be involved in whether the homeowner can afford or not afford the house—including whether they can afford the cost to repair any issues that are found. The house and its issues are just the house and its issues. Period. Some future homeowners are “renters” and should probably stay renters–especially unhandy people buying at the low end of the market.

Some agents say home inspectors think buyers are entitled to a perfect house. This is of course preposterous, but the fallacy that everyone should own a home is equally preposterous.

We must tackle this question from multiple angles because of the fact way too many home inspectors, both new and old, are grossly incompetent to do what is asked of them. There is a tendency to fault the newer inspectors, but the reality is that newer inspectors have a much higher likelihood of being better trained than the older inspectors were when they started. They also started at a time when almost nothing was expected of them. More experienced inspectors have merely survived the self-teaching process and were lucky enough to not get anyone killed in the process.

Luck should not be part of the picture, but it unfortunately is.

Lack of training and experience should not be part of the picture either, but it unfortunately is.

I have heard agents argue some inspectors kill deals because they can then get another inspection from that same client. Lack of ethics is a problem in both “professions” and I suspect the market place weeds these sort of agents and inspectors out. None of this kind of argument brings the “perceptions” of any of the parties any closer to alignment—it is just one more separator and is counterproductive.

So far, we have not talked much about the consumer. Is that not strange? After all they are the reason agents and inspectors both have jobs to begin with. Business models, whether agent or inspector, should be about taking care of the client. If either is starving to death and “invested” in outcomes, whether it is getting a pay check, securing future referrals, meeting numbers goals–whatever—IT IS BAD FOR THE CONSUMER.

So, inspectors must figure out how to get work on their own and not rely on agents. This is obvious. This does not mean they cannot work together–they just cannot be “partners” in bed together to get things done.

It should be just as common for our clients to ask if we know any good agents as it is now common for clients to ask their agent if they know any good home inspectors.

As an inspector, I make it very clear I work for the client regardless of how grateful I might be for the agent’s referral. That referral can never have anything to do with my performance for my client.

I know there are home inspectors that are just arrogant donkeys (euphemism for something else), and that of course is just as unacceptable as a micromanaging agent that attempts to “explain” the defects found by the inspector in their own language–sometimes to soften what probably does not warrant softening.

Another huge issue that I have experienced with agents is how they take the recommendations of the inspector and “rewrite” those recommendations in their own words. They have no license or training to perform the duties of a home inspector and should never alter one word (or even a comma) of the recommendation. If they do, they then own that recommendation and may very well be in violation of licensing laws–even their own.

Agents talk about it not being an issue if the inspector finds things wrong, it is more about “how” the inspector talks about those issues that is the problem (the way, or tone of delivery of the information). I have never been able to get an agent to provide the definition of “how” or what that “delivery” is supposed to “look like.” It is sort of like, “I cannot define it or describe it, but I know it when I see it.” Is that not “convenient?” What can the inspector possibly learn from that? Nothing.

The inspector cannot afford to even be in a place where they are attempting to figure out what will keep an agent happy, and likely most clients appreciate this about their inspector.

Every home inspector has experienced how what worked one day did not work the next. The only difference in the “how” or the “delivery” was that the deal either went forward or did not.

All the home inspector should care about is that the client is happy with what the inspector has done. That right there is also what the agent should probably like as well. If the two can align, then that is also OK.

Solutions to all of this are difficult, but I do know that agents need more training, home inspectors need more training and consumers need to learn how to demand more of both.

By Charles Buell, Real Estate Inspections in Seattle

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Comments

  1. Charles,
    Very well put

  2. Brad Cyrier says:

    A simple question would be, how many Inspectors have re read their own reports from the beginning to the end. I have a couple thousand reports with my Inspection program and can honestly say, its been awhile. The report has a plethora of information that is canned. Which is pretty good. Clients are so much more sophisticated than in the not so long ago. Of course thrown in there are the folks that should always be renters.
    I myself have been fortunate to work with agents that I have trained over the years. Rarely do they question something found as generally I photos to back my findings up. They trust me. So when they show the prospective client, by rule the 3 inspector names with a point and a wink at mine, I thank them.
    In the WDO classes, I’ve seen a dramatic improvement in the questions and body language from the students. Don’t get me wrong, there are still the slow ones that I certainly think will get scrapped off.
    Great article Charles. Appreciate your contributions. Thank you.

  3. Thank you for putting together

  4. Very well written, Charlie. That inspectors should distance themselves from “facilitating” a sale is an understatement! Observe and report is simply that.

  5. Charles,
    Good perspective as always. I tell people that there are two kinds of agents: those who protect the client and those who protect the deal. The second group don’t like me much.
    I do find it really unusual the way those same agents are willing to give me such power over every deal. Like it is all up to me wether or not the deal closes. I guess it is easier to blame others for their incompetence.
    Keep it up buddy, education for everyone is the only way to battle the old ideas.

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