NACHI Factoring: Instant cash when you do an inspection.

[Nick Gromicko]

With more and more inspectors using software to generate their reports which now often includes pictures, fewer buyers are feeling an absolute need to accompany the inspector during the inspection. Online report uploading and hosting (an existing free NACHI service available to members) is also increasing the number of absentee clients. Why attend the inspection when the detailed report with pictures is available online? Furthermore, many working couples find it diffictult to take off work to attend the inspection. And then there are the out-of-town buyers as well.

The result is more and more inspectors being unable to collect the inspection fee on-site... the client isn't on-site.

It is estimated that more than 1/4th of all inspections are not paid for on-site.

I am asking if NACHI members who carry receivables would like their money tomorrow? And if so, would it be worth 15% to you to have your receivables factored (have a finance company buy your invoice for 85 cents on the dollar and pay you now)?

Let us say you do an inspection for a client who doesn't show up for the inspection or for a REALTOR who wants to pay you at closing or for a RELO company that is slow pay. Would you be willing to trade 15% in return for getting your money instantly? No fuss, no muss. Fax us the invoice and the money goes into your bank account.

Is this of any interest to anyone?

I know that back when I was in the inspection business I would have jumped on it. I could have raised my prices 4% to cover the 15% factoring fee on the 25% of inspections that I didn't collect on-site and it would have used the cash flow to grow my business faster.

How about you? I'm interested in knowing that if I launch this service, will anyone use it?

[jmichalski]

No.

Paypal can get me paid instantly, and I only lose 3% in fees that way. It goes in instantly and I can draw it out instantly with my Paypal debit card.

Clients who I know cannot attend are sent an e-invoice which is paid prior to the inspection. I get paid, tehy get their report. Everything is smooth and no need for collections.

[Russell Spriggs]

Interesting concept, Nick.

I would imagine that we would not be required to do this all the time, just in cases of our choice, such as delayed (escrow) payments?

I can see where this would be of use to me as an inspector, to actually advertise that I would accept payment upon closing for 1031 exchanges, for example. In our area, we have seen a rise in CA to ID 1031's.

This all sounds plausible, in some instances.

Q:Would we have to be 1099'd from you / NACHI for those monies deposited into our accounts?

Let's explore this more deeply. . .

Russ

[Larry D. Kage]

How old can the receivables be?

[Jeffrey S. Campbell]

Since adding the Paypal option (and yes the fee) along with an electronic check paying option to my website, payment has not been a problem.

I currently have one account several years old that was UNDER paid. But all else have paid.

[rwand1]

Cash or cheque upon completion of inspection. Most of my clients attend inspection. If they cannot attend a narrative report is done, with or without pictures. If they cannot attend I also charge more.

Cash or cheque is the only legal tender in my opinion.

Raymond Wand
Alton, ON

[Mark R. Long]

Originally Posted by jmichalski

No.

Paypal can get me paid instantly, and I only lose 3% in fees that way. It goes in instantly and I can draw it out instantly with my Paypal debit card.

Clients who I know cannot attend are sent an e-invoice which is paid prior to the inspection. I get paid, tehy get their report. Everything is smooth and no need for collections.

Agreed, if I know that someone will not be there at the inspection, they are billed in advance via PayPal. In a few cases, the realtors have brought a check on behalf of the client. I don't allow receivables.

[lewens]

Ray
We are somewhat different up here as we want the client glued to our hip during the inspection. I feel it is so much easier to go through the report with the client if he/she has seen all that you have during the inspection. I have never had the problem of getting paid. They feel they have got there money's worth if they see how extensive a job you are doing for the money charged. I don't think I want to be in the position of having receivables on the books. If I have to resort to factoring I feel I have been stiffed. That is a whole other kettle of fish.
Larry

[Bruce A. King]

When they do not pay NACHI who goes after them? Do we want NACHI to become known as a "bill collection agency" this might harm the name.

[ekartal5]

No money - no report.

Erol K.

[jrivera]

You can always make the client "an offer they can't refuse"

[Bill C. Merrell, CMI]

Based upon stories from my graduates over the years, many Inspectors seem to have, even it is a small receivable list. Some have even tried to put a mechanics liens on the property. Our county has problems with this if the buyer is the one who hired the inspector (the client).

Common all the time, NO. Does it happen, YES. Would inspectors turn over receivables to get 85% of the pie rather than 0% of an aging receivable, YES.

Good idea. Case specific. Those who need will like it. Those that don't won't sign up. I have 2 inspectors that have approx. $ 4,000 in non paid aging receivables that would be happy to turn them over for a piece of the pie.

Good idea, and value added bonus for NACHI membership.

[William J. Decker]

My insurance (FREA) requires that I obtain payment BEFORE I start the inspection. Also, The Illinois HI law language has been interpreted to mean 'Paid Inspection' as paid at the time of the inspection.

Further, being paid at the time of the inspection helps to limit liability, both for me and for my client and the Realtor. In fact, the seller is also better protected.

Hope this helps.

[John M. Acaron]

Nick, this is an outstanding idea/service. We do run into that situation quite a bit. My company will be very much interested in that type of servive. 35% of our customers are out of town buyers and sometimes it will take several month to collect our fees after many invoices are sent out. Many times REALTORS take the liberty to schedule an inspection for their out of state client and they want the inspection done right away! However, the payment for the inspection does not happen right away. Your service will mitigate that issue and will result in less conflict with the REALTOR.

Great idea,
John
HOMEINSPECTORUSA, LLC

[Larry D. Kage]

Originally Posted by ekartal5

No money - no report.

Erol K.

For clients not attending the inspection:

No payment before - no inspection.