There are basically two different types of home inspection reports on the market today. The checklist report and the narrative report.
Checklist Report
The checklist report list inspected items and usually consist of some type of condition word following the item such as “fair ”, “good”, or “needs replacement”. This is usually the depth of the report. This type of report usually does not state the exact problem when one exists. They tend to be too brief in their “descriptions”. This type of report usually leaves the client asking alot of questions that this type of report is unable to answer, such as why is something labeled fair, good, or needs replacement?
Narrative Reports
The narrative type report consists of a variety of short paragraphs or statements on items inspected
The narrative report requires more words to communicate both good and bad parts of the property. The reason more words are needed is due to the need to use complete full sentences in order to make the reading material flow in a professional manner. (The whole sentence needs to be read to fully understand the condition.)
At times these reports read more like a novel and the reader quickly loses interest.
Reports Which Utilize Diagrammed Pictures
“Pictures can be worth a thousand words” is a saying we have all heard over the years. In the case of a home inspection report this is exactly the case. One must remember that most home buyers are in the dark about what certain items are in a home therefore to say that that there is a crack in the air handler in the burner means very little to most home buyers. They have no idea what an air handler in a burner is. But if they were to be shown a picture of the air handler with an arrow pointing to the crack that was found they would know exactly what a air handler is and exactly where, in this case, the crack is.
Home inspection reports should be both accurate and concise. The inspector's client should be fully informed of the condition of the property in an effective manner and be easily understood. This type of report can only be accomplished with numerous diagrammed pictures with short non-technical explanations of the items inspected. This type of report takes longer to prepare and that is why you should always ask any home inspection company you are thinking of using what type of report they generate. You should also request to see a sample of one of their reports.
If you cannot find a sample home inspection report that reflects diagrammed pictures accompanied by short non-technical statements you can visit http://www.longislandhomeinspection.org and click on “Free Sample Report” on the left hand column of the home page.
Wednesday, January 21, 2009
Wednesday, January 14, 2009
Eight Tips To Sell Your Home In A Tough Market
Eight Tips To Sell Your Home In A Tough Market
If you are currently considering selling your home then there are certain things that you can do to ensure that you get that all important sale. Certainly, with the way that the economy is currently selling your home has become more difficult and it is now a buyer’s market. Below are 8 tips for selling your home and which should hopefully help you to achieve the price you are after.
Tip 1 - Before you put your home on the market it is a good idea to do some research beforehand. The quickest and easiest way of doing this is through looking as a few property classifieds in your local newspapers or by going online. This way you can gather information regarding what prices houses similar to yours are selling for currently.
Tip 2 – Decide on who is going to sell your house including yourself. Don’t be afraid to ask friends, family members and work colleagues if they can recommend someone to you. The other choice is to sell it privately through the property classifieds, but if you do you need to be aware of the right procedures to follow first.
Tip 3 - Getting your house looking great inside is crucial but you need to make sure that the house looks great outside as well. Remember the first thing that is going to be making an impression on any prospective buyers of your home is the front area. So make sure that this area is kept clean and tidy at all times.
Tip 4 - You need to remove as much clutter as you can from your home and put it into storage until the sale has been completed. If there is too much in any room it can make them look much smaller than they really are.
Tip 5 - Although you don’t think your home needs it repainting the main rooms in your home in neutral fresh colors is a good idea. This way the prospective buyers will be able to see the rooms more clearly and get a feel for whether their own belongings will fit into them.
Tip 6 - It is important that before every viewing you make sure that your house is clean and tidy. This is especially important if you have pets as although you may not be able to smell the odors potential purchases will.
Tip 7 - Spend time on staging the rooms to show them off to their full potential. As you do this make sure that the focal point in each room stands out.
Tip 8 – Make sure you are aware of all the problems in the house that may come up when a potential buyer has an inspection done on your home. A great way to get this information is to purchase a pre-listing inspection by an independent home inspector who is not affiliated with any real estate agent or mortgage broker you may want to use. This inspection will provide you with the information on items that may need repair. You can then decide to either repair the item (s) or at least get estimates to have these items fixed if they come up on negotiations on the house.
If you are currently considering selling your home then there are certain things that you can do to ensure that you get that all important sale. Certainly, with the way that the economy is currently selling your home has become more difficult and it is now a buyer’s market. Below are 8 tips for selling your home and which should hopefully help you to achieve the price you are after.
Tip 1 - Before you put your home on the market it is a good idea to do some research beforehand. The quickest and easiest way of doing this is through looking as a few property classifieds in your local newspapers or by going online. This way you can gather information regarding what prices houses similar to yours are selling for currently.
Tip 2 – Decide on who is going to sell your house including yourself. Don’t be afraid to ask friends, family members and work colleagues if they can recommend someone to you. The other choice is to sell it privately through the property classifieds, but if you do you need to be aware of the right procedures to follow first.
Tip 3 - Getting your house looking great inside is crucial but you need to make sure that the house looks great outside as well. Remember the first thing that is going to be making an impression on any prospective buyers of your home is the front area. So make sure that this area is kept clean and tidy at all times.
Tip 4 - You need to remove as much clutter as you can from your home and put it into storage until the sale has been completed. If there is too much in any room it can make them look much smaller than they really are.
Tip 5 - Although you don’t think your home needs it repainting the main rooms in your home in neutral fresh colors is a good idea. This way the prospective buyers will be able to see the rooms more clearly and get a feel for whether their own belongings will fit into them.
Tip 6 - It is important that before every viewing you make sure that your house is clean and tidy. This is especially important if you have pets as although you may not be able to smell the odors potential purchases will.
Tip 7 - Spend time on staging the rooms to show them off to their full potential. As you do this make sure that the focal point in each room stands out.
Tip 8 – Make sure you are aware of all the problems in the house that may come up when a potential buyer has an inspection done on your home. A great way to get this information is to purchase a pre-listing inspection by an independent home inspector who is not affiliated with any real estate agent or mortgage broker you may want to use. This inspection will provide you with the information on items that may need repair. You can then decide to either repair the item (s) or at least get estimates to have these items fixed if they come up on negotiations on the house.
Friday, January 9, 2009
Home Inspectors Who Pay Real Estate Agents For Inspections
Home Inspectors Under Scrutiny For Payments To Realtors
CBS Homes Preferred Inspectors Being Investigated
OMAHA, Neb. -- Four home inspectors are under review for their financial relationships with an Omaha realtor. The American Society of Home Inspectors, or ASHI, is now investigating home inspectors on Omaha Realtor CBS Home Real Estate's preferred vendor list.
Some inspectors who talked to KETV News Watch 7 said the fees are just good business. Others said the payments are necessary to get on a realtor's "preferred" list, and get business from the realtor. Are home inspections ever compromised by the relationship?
A woman who only wanted to be identified as Kathy said that before she moved into her new home, she hired a home inspector to check it out. It took about two weeks for her to find out the inspector had missed something. A plumber pointed out yellow water stains in the basement. "They determined that there was damage behind the
wall that was leaking, a broken pipe or something," Kathy said. She sued her home inspector and won an $1,800 judgment. Kathy is convinced her inspector didn't
provide her with the full story on her new house. "I thought, 'OK, if they could have at least pointed this out to me.' I love the house, so I would have still purchased the home, but maybe I could have gone back to the previous owner and have them fix the damages," Kathy said. What raises further questions in Kathy's mind is how she found the inspector. "I was referred to the home inspector by my real estate agent," Kathy said.
The same real estate agency that sold her the house provided Kathy with a short list of inspectors. She was free to go to any inspector she could find, but with so many to choose from, she relied on her agent's help and chose one from the list.
It's not uncommon for real estate companies to provide lists of preferred vendors, including home inspectors. But how do vendors get on these lists?
Pat Casey's inspection company, Home Buyers Protection, is on CBS Homes' preferred vendor list. So is John Wanninger's company, Amerispec." They each pay CBS $2,500 a year to participate in the program. They see that fee as a cost of advertising.
"There is no guarantee of business as a result of that money," Wanninger said.
"What do you get for the fee?" Casey asked. "I get access to the real estate agents."
That access may include office presentations and realtor business meetings. Casey and Wanninger believe there's nothing wrong with their companies participating in this program.
ASHI is now investigating Casey's and Wanninger's companies, plus Quality Home Inspections and Cornerstone Home Inspection Service, all on CBS's preferred vendor list.
"Paying for referrals is not ethical," said ASHI's Miki Mertz. Mertz, of Midwest Inspector's Institute, trains new home inspectors for ASHI certification. She is investigating the complaint against the four inspectors. When it comes to referrals, Mertz said, the ASHI code of ethics is clear. "It's OK for real estate agents to refer business to home inspectors if it's truly based on merit. But if the realtor's giving that inspector the business only because they paid a sum of money to get on a list, then that's not ethical," Mertz said. The rule is that inspectors can't pay real estate companies for referrals. But what makes it more complicated is that the ASHI code of ethics does allow inspectors to pay for advertising, and that's a matter of interpretation.
"If I thought it was unethical, I wouldn't do it," Casey said. Casey believes he's paying CBS for advertising. The owner of Metro Property Inspections, Larry Crouch, sees it differently. He refuses to have anything to do with fee payments.
"I just think when you've paid to get on that list that real estate agents give them, to me, that's just not fair. It's unethical," Crouch said. Crouch said that because he refused to participate in CBS's preferred vendor program, his business
initially dropped about 10 percent. "I think the first year it started, I probably lost 40 to 50 inspections. There were maybe 15 or 20 agents who stopped using me," Crouch said. Crouch believes inspectors may be tempted to give a bad house a good inspection just to stay on the realtor's preferred list.
"The term that's used in our profession is 'soft soap the inspection,'" Casey said.
Casey and Wanninger said they would never "soft soap" an inspection for CBS.
"By softening an inspection, or not revealing potential issues in the home inspection business, would be financial suicide," Wanninger said. The president of CBS Home Real Estate, Larry Melichar, agreed. "I can't imagine a vendor that we work with doing that. We certainly wouldn't be involved in something like that," Melichar said.
Melichar said the only reason CBS puts out a preferred vendor list is to help the buyer. Melichar said the inspectors are simply paying for good advertising.
"It's not a matter of getting referrals. They don't get referrals," Melichar said. "What they really get is a chance to market their services to our organization and to our clients." Casey would like realtors to do away with preferred vending programs, but for now, he sees his $2,500 advertising fee as a cost of doing business.
Kathy said she'd advise homebuyers to check inspector's references carefully before you closing the deal. "Do their own homework," Kathy said.
How do you know if your home inspector is paying a real estate company to be on its preferred list? You have to ask. CBS said it does not disclose that information to its buyers. The American Society of Home Inspectors hopes to complete its investigation by early summer.
CBS Homes Preferred Inspectors Being Investigated
OMAHA, Neb. -- Four home inspectors are under review for their financial relationships with an Omaha realtor. The American Society of Home Inspectors, or ASHI, is now investigating home inspectors on Omaha Realtor CBS Home Real Estate's preferred vendor list.
Some inspectors who talked to KETV News Watch 7 said the fees are just good business. Others said the payments are necessary to get on a realtor's "preferred" list, and get business from the realtor. Are home inspections ever compromised by the relationship?
A woman who only wanted to be identified as Kathy said that before she moved into her new home, she hired a home inspector to check it out. It took about two weeks for her to find out the inspector had missed something. A plumber pointed out yellow water stains in the basement. "They determined that there was damage behind the
wall that was leaking, a broken pipe or something," Kathy said. She sued her home inspector and won an $1,800 judgment. Kathy is convinced her inspector didn't
provide her with the full story on her new house. "I thought, 'OK, if they could have at least pointed this out to me.' I love the house, so I would have still purchased the home, but maybe I could have gone back to the previous owner and have them fix the damages," Kathy said. What raises further questions in Kathy's mind is how she found the inspector. "I was referred to the home inspector by my real estate agent," Kathy said.
The same real estate agency that sold her the house provided Kathy with a short list of inspectors. She was free to go to any inspector she could find, but with so many to choose from, she relied on her agent's help and chose one from the list.
It's not uncommon for real estate companies to provide lists of preferred vendors, including home inspectors. But how do vendors get on these lists?
Pat Casey's inspection company, Home Buyers Protection, is on CBS Homes' preferred vendor list. So is John Wanninger's company, Amerispec." They each pay CBS $2,500 a year to participate in the program. They see that fee as a cost of advertising.
"There is no guarantee of business as a result of that money," Wanninger said.
"What do you get for the fee?" Casey asked. "I get access to the real estate agents."
That access may include office presentations and realtor business meetings. Casey and Wanninger believe there's nothing wrong with their companies participating in this program.
ASHI is now investigating Casey's and Wanninger's companies, plus Quality Home Inspections and Cornerstone Home Inspection Service, all on CBS's preferred vendor list.
"Paying for referrals is not ethical," said ASHI's Miki Mertz. Mertz, of Midwest Inspector's Institute, trains new home inspectors for ASHI certification. She is investigating the complaint against the four inspectors. When it comes to referrals, Mertz said, the ASHI code of ethics is clear. "It's OK for real estate agents to refer business to home inspectors if it's truly based on merit. But if the realtor's giving that inspector the business only because they paid a sum of money to get on a list, then that's not ethical," Mertz said. The rule is that inspectors can't pay real estate companies for referrals. But what makes it more complicated is that the ASHI code of ethics does allow inspectors to pay for advertising, and that's a matter of interpretation.
"If I thought it was unethical, I wouldn't do it," Casey said. Casey believes he's paying CBS for advertising. The owner of Metro Property Inspections, Larry Crouch, sees it differently. He refuses to have anything to do with fee payments.
"I just think when you've paid to get on that list that real estate agents give them, to me, that's just not fair. It's unethical," Crouch said. Crouch said that because he refused to participate in CBS's preferred vendor program, his business
initially dropped about 10 percent. "I think the first year it started, I probably lost 40 to 50 inspections. There were maybe 15 or 20 agents who stopped using me," Crouch said. Crouch believes inspectors may be tempted to give a bad house a good inspection just to stay on the realtor's preferred list.
"The term that's used in our profession is 'soft soap the inspection,'" Casey said.
Casey and Wanninger said they would never "soft soap" an inspection for CBS.
"By softening an inspection, or not revealing potential issues in the home inspection business, would be financial suicide," Wanninger said. The president of CBS Home Real Estate, Larry Melichar, agreed. "I can't imagine a vendor that we work with doing that. We certainly wouldn't be involved in something like that," Melichar said.
Melichar said the only reason CBS puts out a preferred vendor list is to help the buyer. Melichar said the inspectors are simply paying for good advertising.
"It's not a matter of getting referrals. They don't get referrals," Melichar said. "What they really get is a chance to market their services to our organization and to our clients." Casey would like realtors to do away with preferred vending programs, but for now, he sees his $2,500 advertising fee as a cost of doing business.
Kathy said she'd advise homebuyers to check inspector's references carefully before you closing the deal. "Do their own homework," Kathy said.
How do you know if your home inspector is paying a real estate company to be on its preferred list? You have to ask. CBS said it does not disclose that information to its buyers. The American Society of Home Inspectors hopes to complete its investigation by early summer.
Thursday, January 1, 2009
Home Inspectors Wary of Unscrupulous Real Estate Agents
Real Law Central
Issue Date: Nov. 10, 2008
http://www.reallawcentral.com
“If you kill this deal, I’ll make sure you never do business in this town again.” This not-so-subtle warning is not uncommon to hear from some real estate agents, according to one Missouri home inspector. Others say most real estate professionals are looking out for clients’ best interests. How prevalent is the problem and what do agents risk by asking for a good report?
As the housing market continues to look bleak, agents are looking for the best ways to close a sale. But are they taking the low road to get there?
As any real estate agent knows, there are myriad ways a home sale can fall apart. Most agents aren’t willing to risk violating their code of ethics to clinch a deal, but home inspectors are reporting that some agents are, and that they’re feeling pressure to give positive reports, or lose future referrals.
Agents can help their clients select a home inspector from various sources. Some refer to lists made available by their brokers, while others simply stick with inspectors they’ve worked with in the past, feeling satisfied with the results. Others make no recommendations or referrals at all, at the behest of brokers who insist on avoiding any potential conflict of interest.
A few home inspectors are reporting that they’ve encountered real estate agents who are feeling so pressured to close on a sale, they warn the inspector, “You’ll never get another inspection in this town.”
Applying subtle pressure
In most real estate transactions, pressure on a home inspector — either explicit or implied — is a rare occurrence. Regardless of the market, buyers only want to know what the major problems with a property are, and agents only want to ensure their clients are getting the information they need, according to Mark Nahrgang, professional building consultant for Kingdom Inspections in St. Louis.
Formerly a licensed real estate agent himself, Nahrgang now works from the home inspection side and believes that by and large, agents aren’t intentionally urging inspectors to give a thumbs-up on an inspection. He personally hasn’t been warned to give a positive report.
“I haven’t been threatened but I know people who have seen where the real estate agent says, ‘If you kill this deal I’ll never use you again,’ or ‘You’ll never work in this town again,’” Nahrgang said. Instead, he notices more subtle ways an agent may hinder an inspector’s work.
“Say he’s doing a home inspection and finds a defect, and as he’s talking to the client about it the agent is standing there and says, ‘Oh, we see that all the time, it’s not that big of a deal.’ You can’t really say much at the time when the agent contradicts you, you just go on. But in reality, what has happened is the issue you’ve reported maybe is not a big deal to fix, but it would be a big deal if you left it alone,” Nahrgang said. “That would be a thing I would see more often, (the agent) taking ownership of a problem saying it’s not really a problem.”
When Nahrgang first entered the real estate business as an agent, he said the brokerage where he worked had a list of inspectors and another salesperson would check off those who were recommended, and those who were not due to being too “nit-picky.” Now, as an inspector, Nahrgang teaches classes on home inspection basics to real estate agents, and advises them on how to make inspector recommendations. He suggests they select from a list of just a few, three or four, who are known to be thorough but fair.
Some agents, Nahrgang said, are barred by their brokers or attorneys from making home inspector referrals, but he said this doesn’t necessarily benefit their clients.
“I never did particularly agree with that. If you’re just picking out of a phone book, you don’t know what you’re getting. If you’re a real estate agent and sincerely trying to help your clients, you’re going to want to make a recommendation of someone who is going to do a good job for them. But, the agents have to do what their brokers say,” he said.
Motivated by desperation
Although the depressed housing market could be a factor in pressure on home inspectors, Nahrgang thinks it’s no more of an issue than any other time. But, he acknowledged, when business and the economy are bad, and people are desperate for work, he understands that a buyer walking away from a deal because of a poor inspection is certainly frustrating for the agent.
The risk for a home inspector facing pressure from an agent comes from both the business side and the legal side. There is the potential to be “blocked out” of future business if the inspector doesn’t give the kind of report the agent wants, or the possibility of litigation if a problem wasn’t noted in the report.
“I believe the legal norm is, if something goes south, it’s not just the person who is at fault who gets sued, lawyers sue everybody, and they let the court work it out,” said Nahrgang. “If one of these unethical agents were to do something, they’ll drag me into court, and I don’t want that either. I’d rather not have the referral than to compromise my ethics.”
Most home inspector associations, like the International Association of Certified Home Inspectors (InterNACHI), with whom Nahrgang is affiliated, have a code of ethics that outline how the inspector is expected to conduct business. InterNACHI’s code of ethics prohibits its inspectors from accepting or providing referral fees. This, Nahrgang said, helps weed out potential problems.
“Unethical people don’t stay in business too long. That’s where the ramifications are going to come in. If one of my fellow brethren at InterNACHI discovered that I did something (unethical), I would lose my membership,” he said.
As seldom as Nahrgang sees issues with pressure from agents on home inspectors, another Missouri-based home inspector believes the problem is rampant. James Braun, owner and certified master inspector with Braun’s Inspection Services in Jefferson City, said he encounters unscrupulous agents regularly. According to Braun, “good” agents know that a thorough inspection is key to avoiding potential litigation. Crooked agents see it as a hindrance to a sale.
“It happens quite often, because you are basically ruining their sale, the way they see it,” said Braun. “They don’t see it as you are saving them from a potential lawsuit.”
Tarnished reputation
Home inspectors who buckle to pressure for a good report risk harming their reputation, which he said could be even more costly than a lawsuit.
“As soon as you get marked as an ‘agent-owned’ inspector, it’s pretty hard to beat that. You’re pretty well tarnished,” Braun said. “You’re just not going to have respect from colleagues and from other agents. But there are some honest agents out there who do a great job.”
Furthermore, if an inspector has already established himself as reputable and thorough, there is no need to worry about warnings from a dishonest agent who is only looking to close on a deal, according to Braun. The main objective for any inspector should be to follow one’s code of ethics and treat all parties in the transaction the same way.
“I have buyers who want me to write down a lot of nit-picky stuff that doesn’t matter, just to get the price down. Well, you have to explain to them the reasons why you cannot do that. You have to think about the seller. If you lived in his place, how would you feel about this being written on the report when it’s really nothing to worry about? The way I feel I do a job right is, I want the buyer not to experience any financial loss. That’s the main thing. I don’t want him to move into the house and have to spend thousands of dollars he doesn’t have,” Braun said.
Real estate agents don’t deserve any more of a bum rap than home inspectors do, says Robert Jenson, a Realtor with The Jenson Group in Las Vegas. Regardless of the condition of the market, he said there are too many inspectors who attempt to justify their fees with a “laundry list” of items on a report.
“Sometimes (the reports) are 40 to 60 pages long, which is ridiculous. You’d get this inspection and there would be certain things that are noted that aren’t a concern, like random non-issues. It’s almost like they had to put all these things in a report to make it look like they did a good job,” Jenson said.
Rather than agents pressuring inspectors to give a report they want, Jenson said, they are probably urging inspectors to “come up with what’s really a problem” like plumbing and electrical issues.
For Jenson, the best way to ensure an inspection goes smoothly is to choose someone with whom the agent has worked with in the past and does an accurate job, and then be sure the buyer, agent and seller attend the inspection. Jenson said he prefers to appear at the end of the inspection, simply to hear what the inspector recommended so that there are no surprises later in the transaction.
Unethical actions will backfire
Even if real estate agents are suggesting to home inspectors that they must give a positive report, Jenson said it is not in the inspector’s best interest to do so, and it wouldn’t take long for it to come back and bite the inspector.
“There’s no doubt that if the home inspectors are not fully disclosing issues because of an agent’s concern, if there are major issues (with the property) they will show up pretty quickly,” he said. “I doubt there’s much of it going on. It is possible things can get missed, but in general, home inspectors are licensed and bonded and have a list of things they need to follow, so it all gets addressed.”
Nahrgang said he falls smack in the middle of a spectrum of inspectors — those who are too detailed and report minor issues like scratches on the walls, and those who are too vague and give “light” reports to endear themselves to real estate agents. Now he teaches other agents what they should expect from home inspectors.
“As a Realtor, I didn’t want either one of those guys. I wanted somebody who was going to do a great job for my customer, and actually do a thorough job, but on the other hand I didn’t want him intentionally scaring the buyer over stuff that wasn’t necessary to be scared of,” Nahrgang said. “I educate agents, teaching them what to expect in a home inspection. A thorough inspection protects everybody the best. I’ve had good results from that.”
Although there are agents who are the exceptions who are so desperate for a sale they are willing to risk their client’s best interests, Nahrgang said most are more concerned about the client than the deal dying.
Issue Date: Nov. 10, 2008
http://www.reallawcentral.com
“If you kill this deal, I’ll make sure you never do business in this town again.” This not-so-subtle warning is not uncommon to hear from some real estate agents, according to one Missouri home inspector. Others say most real estate professionals are looking out for clients’ best interests. How prevalent is the problem and what do agents risk by asking for a good report?
As the housing market continues to look bleak, agents are looking for the best ways to close a sale. But are they taking the low road to get there?
As any real estate agent knows, there are myriad ways a home sale can fall apart. Most agents aren’t willing to risk violating their code of ethics to clinch a deal, but home inspectors are reporting that some agents are, and that they’re feeling pressure to give positive reports, or lose future referrals.
Agents can help their clients select a home inspector from various sources. Some refer to lists made available by their brokers, while others simply stick with inspectors they’ve worked with in the past, feeling satisfied with the results. Others make no recommendations or referrals at all, at the behest of brokers who insist on avoiding any potential conflict of interest.
A few home inspectors are reporting that they’ve encountered real estate agents who are feeling so pressured to close on a sale, they warn the inspector, “You’ll never get another inspection in this town.”
Applying subtle pressure
In most real estate transactions, pressure on a home inspector — either explicit or implied — is a rare occurrence. Regardless of the market, buyers only want to know what the major problems with a property are, and agents only want to ensure their clients are getting the information they need, according to Mark Nahrgang, professional building consultant for Kingdom Inspections in St. Louis.
Formerly a licensed real estate agent himself, Nahrgang now works from the home inspection side and believes that by and large, agents aren’t intentionally urging inspectors to give a thumbs-up on an inspection. He personally hasn’t been warned to give a positive report.
“I haven’t been threatened but I know people who have seen where the real estate agent says, ‘If you kill this deal I’ll never use you again,’ or ‘You’ll never work in this town again,’” Nahrgang said. Instead, he notices more subtle ways an agent may hinder an inspector’s work.
“Say he’s doing a home inspection and finds a defect, and as he’s talking to the client about it the agent is standing there and says, ‘Oh, we see that all the time, it’s not that big of a deal.’ You can’t really say much at the time when the agent contradicts you, you just go on. But in reality, what has happened is the issue you’ve reported maybe is not a big deal to fix, but it would be a big deal if you left it alone,” Nahrgang said. “That would be a thing I would see more often, (the agent) taking ownership of a problem saying it’s not really a problem.”
When Nahrgang first entered the real estate business as an agent, he said the brokerage where he worked had a list of inspectors and another salesperson would check off those who were recommended, and those who were not due to being too “nit-picky.” Now, as an inspector, Nahrgang teaches classes on home inspection basics to real estate agents, and advises them on how to make inspector recommendations. He suggests they select from a list of just a few, three or four, who are known to be thorough but fair.
Some agents, Nahrgang said, are barred by their brokers or attorneys from making home inspector referrals, but he said this doesn’t necessarily benefit their clients.
“I never did particularly agree with that. If you’re just picking out of a phone book, you don’t know what you’re getting. If you’re a real estate agent and sincerely trying to help your clients, you’re going to want to make a recommendation of someone who is going to do a good job for them. But, the agents have to do what their brokers say,” he said.
Motivated by desperation
Although the depressed housing market could be a factor in pressure on home inspectors, Nahrgang thinks it’s no more of an issue than any other time. But, he acknowledged, when business and the economy are bad, and people are desperate for work, he understands that a buyer walking away from a deal because of a poor inspection is certainly frustrating for the agent.
The risk for a home inspector facing pressure from an agent comes from both the business side and the legal side. There is the potential to be “blocked out” of future business if the inspector doesn’t give the kind of report the agent wants, or the possibility of litigation if a problem wasn’t noted in the report.
“I believe the legal norm is, if something goes south, it’s not just the person who is at fault who gets sued, lawyers sue everybody, and they let the court work it out,” said Nahrgang. “If one of these unethical agents were to do something, they’ll drag me into court, and I don’t want that either. I’d rather not have the referral than to compromise my ethics.”
Most home inspector associations, like the International Association of Certified Home Inspectors (InterNACHI), with whom Nahrgang is affiliated, have a code of ethics that outline how the inspector is expected to conduct business. InterNACHI’s code of ethics prohibits its inspectors from accepting or providing referral fees. This, Nahrgang said, helps weed out potential problems.
“Unethical people don’t stay in business too long. That’s where the ramifications are going to come in. If one of my fellow brethren at InterNACHI discovered that I did something (unethical), I would lose my membership,” he said.
As seldom as Nahrgang sees issues with pressure from agents on home inspectors, another Missouri-based home inspector believes the problem is rampant. James Braun, owner and certified master inspector with Braun’s Inspection Services in Jefferson City, said he encounters unscrupulous agents regularly. According to Braun, “good” agents know that a thorough inspection is key to avoiding potential litigation. Crooked agents see it as a hindrance to a sale.
“It happens quite often, because you are basically ruining their sale, the way they see it,” said Braun. “They don’t see it as you are saving them from a potential lawsuit.”
Tarnished reputation
Home inspectors who buckle to pressure for a good report risk harming their reputation, which he said could be even more costly than a lawsuit.
“As soon as you get marked as an ‘agent-owned’ inspector, it’s pretty hard to beat that. You’re pretty well tarnished,” Braun said. “You’re just not going to have respect from colleagues and from other agents. But there are some honest agents out there who do a great job.”
Furthermore, if an inspector has already established himself as reputable and thorough, there is no need to worry about warnings from a dishonest agent who is only looking to close on a deal, according to Braun. The main objective for any inspector should be to follow one’s code of ethics and treat all parties in the transaction the same way.
“I have buyers who want me to write down a lot of nit-picky stuff that doesn’t matter, just to get the price down. Well, you have to explain to them the reasons why you cannot do that. You have to think about the seller. If you lived in his place, how would you feel about this being written on the report when it’s really nothing to worry about? The way I feel I do a job right is, I want the buyer not to experience any financial loss. That’s the main thing. I don’t want him to move into the house and have to spend thousands of dollars he doesn’t have,” Braun said.
Real estate agents don’t deserve any more of a bum rap than home inspectors do, says Robert Jenson, a Realtor with The Jenson Group in Las Vegas. Regardless of the condition of the market, he said there are too many inspectors who attempt to justify their fees with a “laundry list” of items on a report.
“Sometimes (the reports) are 40 to 60 pages long, which is ridiculous. You’d get this inspection and there would be certain things that are noted that aren’t a concern, like random non-issues. It’s almost like they had to put all these things in a report to make it look like they did a good job,” Jenson said.
Rather than agents pressuring inspectors to give a report they want, Jenson said, they are probably urging inspectors to “come up with what’s really a problem” like plumbing and electrical issues.
For Jenson, the best way to ensure an inspection goes smoothly is to choose someone with whom the agent has worked with in the past and does an accurate job, and then be sure the buyer, agent and seller attend the inspection. Jenson said he prefers to appear at the end of the inspection, simply to hear what the inspector recommended so that there are no surprises later in the transaction.
Unethical actions will backfire
Even if real estate agents are suggesting to home inspectors that they must give a positive report, Jenson said it is not in the inspector’s best interest to do so, and it wouldn’t take long for it to come back and bite the inspector.
“There’s no doubt that if the home inspectors are not fully disclosing issues because of an agent’s concern, if there are major issues (with the property) they will show up pretty quickly,” he said. “I doubt there’s much of it going on. It is possible things can get missed, but in general, home inspectors are licensed and bonded and have a list of things they need to follow, so it all gets addressed.”
Nahrgang said he falls smack in the middle of a spectrum of inspectors — those who are too detailed and report minor issues like scratches on the walls, and those who are too vague and give “light” reports to endear themselves to real estate agents. Now he teaches other agents what they should expect from home inspectors.
“As a Realtor, I didn’t want either one of those guys. I wanted somebody who was going to do a great job for my customer, and actually do a thorough job, but on the other hand I didn’t want him intentionally scaring the buyer over stuff that wasn’t necessary to be scared of,” Nahrgang said. “I educate agents, teaching them what to expect in a home inspection. A thorough inspection protects everybody the best. I’ve had good results from that.”
Although there are agents who are the exceptions who are so desperate for a sale they are willing to risk their client’s best interests, Nahrgang said most are more concerned about the client than the deal dying.
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