"Paying at Closing"

Originally Posted By: jfunderburk
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I encouage clients to pay at the time of the inspection by charging an additional fee if they want it to go to closing. The surcharge is $35.00. However, about 1/2 don’t blink an eye and take it to closing.


I've got a client who just booked an inspection, wants to pay at closing...and closing is 4 months away.

It's made me want to consider putting a 60 day limit on when payment is due
Do any of you guys have an opinion or advice about this?

Thanks


Originally Posted By: aleleika
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Joe…This is a cash business, meaning, payment due upon services rendered. This is my opinion. When I am scheduling the inspection with the client I always inform them to bring a check for the amount of the inspection. I have never had a buyer batt an eye at this. The only time I have ever accepted payment at closing is from a lender who needed a “Cost to Cure” inspection, and those closings are ussually within a week of that inspection because they saw something on the appraisers report that they want a residential Home Inspector to look at. And also Draw inspections I have waited payment on.


Joe it is your decision if you want Receivables or no Receivables....that is a business decision you need to figure what works best for you. At the very least you may want to re- think the 60 days down to 30 or 15 days Net then 1.5% after.

And by having the client pay at time of the Inspection, I don't have to worry later about the uncomfortable phone calls trying to collect on a timely basis...I get to use that time for more marketing.

IMHO


--
A. Dan Leleika
www.a-teamhomeinspections.com

Originally Posted By: ecox1
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hey joe bad idea, I had one client in which I agreed for payment at closing, Two weeks after closing I contacted the client about payment and was told that they thought I got paid through the closing preceedings. But any way I got a check the same day from the client. Will never make this mistake again.


Originally Posted By: jwilliams4
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They want to pay at closing? O.K. I’ll give them the report the next day.


icon_wink.gif icon_wink.gif


Originally Posted By: away
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Joe,


I agree with the others, that is an awfully long time to wait for payment. I don’t know if I would blackmail them like Jae though. icon_biggrin.gif



Earl,
I haven't done a "pay at closing" yet (and probably won't unless it is either that or not get the job) but from what I have gathered from other posts, you have to submit a bill to the title company so they know to write the check to you.


--
Andrew Way
Keystone Residential Inspection Services PLLC
817.441.9598
www.keystoneinspections.com

Originally Posted By: jonofrey
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I avoid payments at closing like the plague.


Originally Posted By: dbush
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I take pmt at closing quite often; I usually put a 30 day rule on it, however, I have been known to go to 45 but I ALWAYS ensure the title company has the invoice and I am on the closing sheet.


Originally Posted By: dnice
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jwilliams4 wrote:
They want to pay at closing? O.K. I'll give them the report the next day.
![icon_wink.gif](upload://ssT9V5t45yjlgXqiFRXL04eXtqw.gif) ![icon_wink.gif](upload://ssT9V5t45yjlgXqiFRXL04eXtqw.gif)


Absolutely. The inspection service is not tied to a closing. One has to ask oneself, why would a client want to pay at closing? Are they unsure that the deal will close and feel they should somehow not be obliated to pay if there is a hitch? Are they trying to delay payment due to cashflow problems (a big red flag when buying a home)? What is the deal here?

Extending credit to the average homebuyer is not a good practice. Being a nice guy by extending credit is more likely going to bite you in the a$% than create goodwill that leads to more business.


Originally Posted By: mjones3
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What if the property never closes, and the client walks away? I always get payment when I deliver my report.


Originally Posted By: jfunderburk
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Quote:
The inspection service is not tied to a closing. One has to ask oneself, why would a client want to pay at closing?


They want to delay payment because it's money not direclty out of their pocket. Quite often, the seller pays closing costs, including the home inspection. Or, the bank rolls the inspection and all other closing costs into the amount of the loan. In both cases, the money doesn't come directly out of the client's pocket.

It is very common here in my part of the Carolinas for HIs to let it go to closing. If I refuse, many Realtors may find someone else. This is my first year, and I feel like I have to bend over backwards to gain new clients--offer service above what the other guy does. This is part of my service. I've done > 130 inspections this year and haven't been stiffed yet. In fact, I prefer to be paid at closing because it's an average of 10% more that I gain by waiting. But I think 4 months is a little excessive!

I like the idea of limiting it to 45 days. Who wouldn't wait 45 days for 10% more money?


Originally Posted By: jwilliams4
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If the client says he will pay later, he has breached the contract.

So if he ain't payin', I ain't reportin'.

After all, that's what he actually has contracted for--the inspection

report. Why should he receive it if he doesn't want to pay for it?


Originally Posted By: gbeaumont
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Hi to all,


I agree with most of the opinions expressed here, no check........ no report, I am in the inspection business not the lending business.

Regards

Gerry


Originally Posted By: mboyett
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This is about the umpteenth time this has been hashed about this year but let’s do it again anyway. I accept payment at closing but charge even more than Joe, I add 16% ($40 on a $250 inspection). I do like the idea of limiting the time frame to <45 days. I also really like Dave’s process of comfirming with the title company or wherever the closing is to take place that they have my invoice and I’m on the list to be paid. I’m going to implement that as well. I’ve done 4-5 payments at closing this year and no problems so far. I do realize there is a risk but I’m willing to take that risk to help the client if that’s what they need. One thing I’ve thought about doing that would lessen, but not eliminate, the risk is to hold a check from the client until I received the closing check then return or destroy the client’s check, whichever they wanted. That way, if closing didn’t take place, you would have a marginal better chance of collecting.


Originally Posted By: dspencer
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Something to think about…


For those with Insurance:

Until a Payment has been made a report is not valid for Insurance coverage. I explain this to my clients before I even go over the report I need a check.. Why they ask..it is my Insurance Co policy and when payment is made my policy goes in effect for that property and their/our protection before report is discussed....check is then in hand and/or appointment set ![icon_biggrin.gif](upload://iKNGSw3qcRIEmXySa8gItY6Gczg.gif)


Originally Posted By: jkormos
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no ticky no washy icon_biggrin.gif


Originally Posted By: rgallahorn
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Joe,


Must be a South Carolina thing icon_smile.gif I have changed my pricing around and it considerable reduced my “carried to closing”. I increased my prices $50 per inspection across the board and then offered a $50 discount if paid at time of inspection (cash, check, cc). People always are looking for a deal and get excited about paying at inspection. This practice has dropped my accounts receivables from 10-12k to about 2.5k. It would be a good idea to have the client sign an " obligation for payment" or take a credit card for reservation for payment.


Originally Posted By: mboyett
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rgallahorn wrote:
Must be a South Carolina thing ![icon_smile.gif](upload://b6iczyK1ETUUqRUc4PAkX83GF2O.gif) ......my accounts receivables from 10-12k to about 2.5k.
Based on the % of clients that want to pay at closing for me then I would have to be doing >800 inspections per year to have a number like that. I've got a ways to go.


Originally Posted By: msylvester
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I’m with Jae No Money no report.


I had a client tell me he left the money at home, "I'll mail it to you Mark".
My comment was "I will do the Inspection but will not release the report to anyone until I get paid". He was on his last day of the contract. Wow it's amazing how fast people will come up with the cash. He had it dropped off during the inspection by his Wife. I have never been stifed on an inspection and want to keep it that way.


Originally Posted By: bemelander
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Joe,


I agree it is a business decision to accept at closing.


I do accept payment for an additional charge. By doing this I get the some of the inspections that may have gone to another inspector.


I have them sign a payment agreement. In short it states they have 60 days to close or they must pay me direct. It also states the check must be in my office 3 days after or they pay a surcharge of 20%. Also they are responsible for all collection fees/attorney fees resulting in collections.


I send a copy of the invoice to the title company and their Realtor.


So far I have never been stiffed.


Bill


--
Anchor Home Inspections

bill@anchorinspections.com

Originally Posted By: away
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Jae,


I said that in jest.



Andrew Way


Keystone Residential Inspection Services PLLC


817.441.9598


www.keystoneinspections.com