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Home Inspectors are tired of being "BLACKLISTED" T

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'Deal-killer' inspectors unite










Home inspectors organization bans referrals from real estate agents
Friday, January 03, 2003

Inman News Features




A Massachusetts home inspector wants to put an end to the common practice of real estate brokers and agents making referrals of home inspection services to home buyers.

The inspector is Dennis Robitaille, owner of Able Home Inspections, and he's made a start toward his goal with successful legislation in his home state.

The legislation signed into Massachusetts law in May 2001 requires state licensing of home inspectors and expressly prohibits real estate practitioners from directly recommending a specific home inspector or home inspection company to home buyers. Instead, brokers and agents must give buyers who request such a referral a state-produced list that includes all of the state's licensed home inspectors. The law doesn't apply to real estate brokers who work exclusively for the buyer as a buyer's broker, according to Robitaille.

Massachusetts is the only state that mandates any sort of barrier between home inspectors and real estate practitioners. But Robitaille wants to push similar legislation in other states and has founded an organization, Independent Home Inspectors of North America, to help promote his cause.

"I figured if it could work in Massachusetts, it could work elsewhere," he said.

The group's objectives are to increase home buyers' awareness of the relationships between home inspectors and real estate practitioners and the supposed conflict of interest that Robitaille believes inherently exists in such relationships. The organization also coordinates inspectors' efforts to educate state legislators about the Massachusetts law and encourage adoption of similar mandates elsewhere.

"We don't want to be labeled as anti-Realtors. We feel they're professional in what they do and we're professional in what we do—except we're working for two different people," said Robitaille.

He believes the broker or agent works for the seller and is focused on earning a commission when the sale closes, while the home inspector works for the buyer, who pays for and expects to receive a thorough unbiased report about the property's condition.

When brokers or agents mix with home inspectors—a practice that's common throughout the country—the result is a home inspector who lives in an agent's hip pocket, Robitaille believes. He said inspectors who give home buyers unbiased reports that potentially could derail a home sale are referred to as "deal killers" and are "blackballed" by some agents.

He particularly dislikes corporate-level agreements between brokerages and large home inspection franchise companies that pay the brokerage a fee to be on a "preferred vendor list." He cited such agreements as an example of alleged "blackballing" that is especially difficult to combat.

"Big (home inspector) franchises are keeping other inspectors out of the door because they can't afford to pay the (broker) agency the money to be on that preferred list....the way these big guys stay on the list is to do the kind of inspection the real estate agents want, which is quick and simple," said Robitaille.

Some real estate practitioners also allegedly steer buyers away from certain very picky inspectors by saying "that inspector takes too long," "we've had trouble with that inspector," "we don't allow that inspector to inspect any of our listed properties," "that inspector is too expensive" or other derogatory comments, according to the inspectors group's Web site. Brokers and agents also can blackball a home inspector by promoting his or her competitors' services, according to the group.


IHINA members must sign a pledge stating they won't engage in a referral type of business relationship with brokers or agents, said Robitaille. They also pay an annual $50 membership fee.

The group has only 100 members. Robitaille said he receives on average three inquires a day about membership, but most of those who inquire won't sign the pledge to severe their business referral ties with agents.

"For about every 30 inspectors who apply (to join IHINA), only one follows through because the other 29 are not willing to sign that pledge," he said.

Robitaille likens the organization's slow progress to an ice pick chopping away at an iceberg.

"What keeps me going is the good stories I hear (from) people who contact me and say they've been doing inspections for 15 or 20 years, they're getting blackballed and they're glad to find an organization that stands for the consumer," he said.
 

wyecoyote

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Jan 15, 2002
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Gvmt Agency, FNMA, HUD, VA etc.
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Washington
If one put in appraiser in some of those areas it would fit nicely especially with being blacklisted and a deal killer.
 
Joined
Jan 16, 2002
Professional Status
General Public
State
North Carolina
I have mixed emotions on this one.

I agree that the inspector needs to be retained by the buyer (or buyers agent) when an inspection is part of the buyers right to have a home inspected. However, if a real estate agent wants to hire an inspector as part of the sellers preparations for marketing, that should be allowed.

The problem that I have seen (in three sales in which I was the seller) was where the home inspector crossed the line regarding what his function was in conducting the inspection.

As I understand it, the function of the home inspector is to point out existing problems where a given item is not properly performing the function for which it was intended or where it fails to meet current applicable code.

In each of the three sales I was involved in, the home inspector's report adequately addressed these issues in a proper manner. The problem lay not with the written report, but in the ongoing discussions that occurred during the actual inspection. In these verbal discussions, the various home inspectors made comments like, " The basement floor drain system is working adequately, but is poorly designed and needs to fixed. The best solution is .... and the seller should fix it." or "The house sits on a slope and some of the surface water flows to the house. There is no apparent damage, and the corrective measures (the pipes and drains) appear adequate. However, this is a potential problem area and should be fixed. I would regrade the entire back yard." or "The electrical wiring in a portion of the house (almost 80 years old) is no longer current by code and should be replaced. The estimated cost to fix is $500. " or "There are some settlement cracks and althought the structural engineers report states that there is no evidence of recent settlement, I would have the seller fix these because it will hurt resale value down the road. " or " The home needs central HVAC installed to keep the value up, and you ought to replace the heating system when you do this, the cost would be $6,000 - $8,000.

These are real life examples from three home inspectors who I believe are diligent, know their profession, but are providing professional opinions beyond what the home inspector should be expressing casually, off the cuff, to the buyers. They should not be concerned with opinions of resale value, they should not be expressing opinions about future problems where there is no current problem, nor should they be contradicting other, more qualified, professionals.

I lost one deal because the home inspector literally scared the young couple out of buying the house. The report stated only minor problems (leak in water heater and given the age and condition of the water heater, it should be replaced, and several electrical outlets that were not grounded. ) but the informal verbal list of should be fixed items exceeded $25,000. This included the HVAC, the drainage and a host of other items. The couple, who are neighbors, recently came up to me and said that they regretted not buying the house and that they were literally scared off by the inspectors verbal comments. They went on to say that after having almost another 9 months of house shopping for older homes and reading his column in the local paper, they realized his nature was to overstate the merits of the issue at hand.

Of course, if the buyer wants the home inspector to point out all the problems that could potentially exist in a home, these kinds of comments should be provided, with proper disclaimers. However, I suspect that most home inspectors probably would need more training in design, architecture, all fields of engineering, etc in order to undertake such an assignement.

Regards

Tom Hildebrandt GAA
 

Jonathan Davey

Freshman Member
Joined
Jan 25, 2003
Interesting Points
Im from Massachussetts and have worked here the better part of my whole life. Couple things: Massachussetts is the land of sharks. There are more lawyers per capita in Massachussetts than anywhere else in the country, lawsuits in real estate deals are more or less a negotiating tactic(took me awhile to figure that one out). The home inspectors basically are used as a negotiating tactic as well. It is true that in Massachussetts the brokers were hand picking the inspectors for an easy sale. Now, the inpectors are expected to become the buyers negotiating tool and as such, act accordingly. They certainly provide an essential function for which they've become trained. The negotiating tool aspect: well, doesn't sound much different than what the appraisers do when "hitting the mark".
All in all though, i'd recomend to any purchasor to hire an inspector for saftey to spot real problems. Most purchasers can i'll afford to get screwed. That goes with the appraisers function as well, anyone who reads this and inflates an appraisal, just think about the kids of the family getting screwed by predatory lendors. Think about the ten year old girl living in a welfare motel! Asside from thinking about your paycheck and profesionalism, think about what your actions could mean to that little girl!
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
Bob-

I posted this story some weeks back likening it to similar problems which currently exist between the appraisal, real estate, and lending institutions. A letter from the President of ASHI (American Society of Home Inspectors) has since been printed in INMAN NEWS. In my opinion, the letter was written by a politician in an attempt to quite the growing rhetoric from both sides. The letter was written in a 'middle ground' style, insinuating that neither extremes viewpoint was the norm. In other words most home inspectors (ASHI Certified presumably), and real estate agents get along just fine without any problems!

My experience includes an extensive background in home construction, home inspection, commercial pest control consulting, appraising and real estate. I'm currently a certified appraiser and real estate agent, and will be testing for my Brokers License sometime later this year (if all goes as planned). I've allowed my licenses in Home & Pest Inspections to expire as I find maintaining the afore mentioned licenses time consuming, and that portion of my business far more lucrative. I feel my background in these industries provides me with a unique insight into the problems which exists between these industries. I feel these problems are much more common than the President of ASHI is willing to admit.

The liability appraisers face pales in comparison to the home inspection industry (at this time). I once attended a seminar in which the speaker asked all those in attendance to raise their hands if they'd ever been sued or were in the process of being sued--two-thirds of the hands went up! The speaker then asked how many home inspectors expected to be sued in the future by an overzeaous buyer--nearly all hands in attendance then went up.

In short, commission based individuals often attack those in the unenvious position of costing them a paycheck. Sometimes it isn't even done intentionally. That's to say some real estate agents and loan officers honestly believe (subconsciously) the appraiser, home inspector or pest inspector really doesn't know what they're doing. Why?--because they are not a dispassionate, unbiased observer--they have everthing to gain, and precious little to lose. Afterall, when it's not your license on the line it's very easy to accuse someone of being 'paranoid' or 'conservative' now isn't it?

This is why it is imperative to provide the appraisal, home inspection, and pest inspection industries with a reasonable degree of protection from overwhelming and incessant pressures from buyers, sellers, real estate agents, and lenders who've everything to gain and nothing to lose.

-Mike
 
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