1st Priority Home Inspections, LLC

Home Inspectors & Potential Conflicts Of Interest

What is wrong with using the inspector my agent recommends? The typical commission a real estate agent receives is approximately 5%. That means a house selling for $300,000 has a potential commission of $15,000. Sometimes an agent will recommend particular home inspector to a prospective buyer, sometimes a list of three or more is given out. How did these inspectors get on the list? Is the agent recommending a thorough non-biased inspector or is the agent recommending someone who will help protect the potential $15,000 commission? Obviously, just because an inspector is recommended by an agent it does not mean that you shouldn’t consider using them. You just need to your own research to independently verify the quality of the inspector.

Do you have the right to use an inspector of your own choosing? If your agent tells you that you cannot use an inspector of your choosing, or insists that you use one of their “recommended” or “approved” inspectors, you should find a new agent. A real estate agent who tries to get you to use an inspector of the agent’s choice is trying to control the home inspector selection process. Prospective home buyers must keep in mind that real estate agents who receive a commission from the property seller, are in many cases working in the best interest of the seller. As the prospective home buyer, you are a customer of the agent, not a client. As the prospective home buyer, the inspector you’re paying for should be working in your best interest.

What Is A “Deal Killer”? The derogatory phrase “deal killer” is a term used by real estate agents to label home inspectors who give buyers objective / non-biased information. Information that may lead the buyer to renegotiate or to look at other properties. Many real estate agents view these “deal killers” as obstacles to the sales commission and will use a number of tactics to control the inspector selection process to make sure that prospective buyers do not retain independent home inspectors.

What methods do Real Estate Agents use to Control the Inspector Selection Process? The agent could discourage a potential buyer from using a certain inspector by making comments like: “That inspector takes too long” or “we’ve had trouble with that inspector” or “we don’t allow that inspector to inspect any of our listed properties” or “that inspector is too expensive.”

The tactics used to encourage use of a particular inspector include: “We’ve had good luck with this inspector” or “this inspector has a low fee” or “we use this inspector all the time” or “this inspector only takes an hour and he gives you a report right on the spot.” Some agents may have a list of three inspectors who have been screened to be “agent friendly”. The list, however, will be long enough to protect the agent from referral liability should the buyer want to blame the agent for any inspection mistakes.

Why Don’t Home Inspectors Organize Too Change The Current Control Real Estate Agents Have Over The Inspector Selection Process? You would think inspectors would welcome the opportunity to allow prospective home buyers to freely choose a home inspector. Unfortunately, too many inspectors rely upon real estate agents to steer clients their way. In a free marketplace, companies that provide a poor service eventually go out of business. In the world of home inspection, there is an artificial marketplace controlled by real estate agents. This allows “agent friendly” inspectors to stay in business, regardless of their inspection abilities.

What Can Be Done To Prevent This Potential Conflict Of Interest?  Do not ask the real estate agent for the name of an inspector. Do not accept any short list or recommendations from the agent. If the state you’re buying in requires home inspectors to be licensed, obtain the list of licensed inspectors. Do a little research and choose your own inspector. The best referrals will come from people who do not have a vested interest in the sale. Remember, it’s your money and your potential future home. Choose your home inspector wisely!