Home Inspectors as Deal Killers

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Home Inspectors as Deal Killers

by Barry Stone, Certified Building Inspector

Dear Barry: There’s a home inspection subject you’ve touched on from time to time but have never fully addressed: the problem of Realtors who won’t recommend the best home inspectors. I’ve inspected homes in the Midwest for over 15 years and have performed more than 7000 inspections. My reputation for thoroughness is widely known among local real estate agents, but this has not been good for my business. Instead of referring me to their clients, most agents have labeled me as a “deal killer.” The inspectors they prefer are not nearly as experienced or qualified and tend to miss many of the defects that I routinely include in my reports. The homebuyers and investors who read your column need to know about this unethical practice. So how about taking it on? John

Dear John: You raise the most controversial of all home inspection topics, the one that stirs ire among veteran inspectors and that draws defensive reactions from real estate professionals everywhere.

The very idea that agents are the primary source of home inspector referrals is a clear and obvious conflict of interest. Yet most homebuyers never seem to give this a thought. They simply hire the agent’s favorite inspector, without asking if this is the best one available.

The dilemma for agents and brokers is obvious: they make money when transactions are closed. Transactions close when buyers are satisfied with the condition of the property. The best home inspectors find more of the conditions that raise dissatisfaction. Less experienced inspectors don’t disclose as many of these conditions, posing less risk to the agent’s income. For many agents, the temptation to recommend a less thorough inspector is too great to resist. When temptation prevails, the lesser inspector becomes the agent’s choice, while the thorough inspector is written off as a “deal killer.”

But what exactly is a deal killer? The name itself suggests someone who routinely causes deals to fall through. That would be a fair description of an inspector who reports nonexistent problems or who describes defects in an alarmist fashion. But inspectors of that kind are rare. The deal killer epithet is more commonly applied to those with the greatest ability to discover problems in a home.

Once an inspector has been branded with the DK label, the disrepute spreads like cheap gossip through the grapevine of local agents. When new agents joins a real estate office, they are advised by the veteran agents not to use Inspector X, due to his deal killer status. Eventually, no one who does business with that real estate company has the benefit of the best inspectors available.

Some agents whitewash this exclusionary process with a clever slight-of-hand. Rather than recommend a particular inspector, they produce a list of local inspectors and advise buyers to make their own selection. If undisclosed problems are discovered after the sale, the agent can deny having chosen the inspector. By sheer coincidence, however, the agent’s preferred inspector is conveniently placed at the top of the list, hints are dropped as to which inspector is the best choice, and so called “deal killers,” in most cases, are absent from such lists or are added for good measure at the bottom.

Is this the common practice of all agents? Absolutely not. Is it the practice of many? Absolutely. So what is the solution? Essentially, there are two answers: one for agents and one for homebuyers.

Agents should realize that they are not in the business of selling property. If that were the case, their title would be “salesperson,” not “agent.” The proper job description of agents is “representing the best interest of clients.” The highest expression of true representation is to provide total, complete, and unabridged disclosure. When a buyer asks an agent to recommend a home inspector, the actual question, regardless of how it is stated, is “who is the best home inspector available?” Agents who recommend someone they do not regard as the best are not representing the client’s interests and are thereby guilty of misrepresentation. If the ethical commitment to a client is not sufficient motivation to recommend a quality inspector, agents should consider the matter of personal liability. Every defect that is overlooked by a marginal inspector is a potential lawsuit at some time in the future, and such suits are commonly filed against agents who compromise the interests of their clients.

Finally, when you buy a home, practice due diligence. Trust others for suggestions. Trust yourself for decisions and choices. Your agent may be one of the truly honest professionals who recommend only the most thorough home inspectors. But you don’t know that for sure. So compare the qualifications of inspectors. Ask who are the most thorough, most experienced, most qualified home inspectors in the area. You might even come straight out and say, “I want the one they call Deal Killer.”

I’ll be at a realtors convention today, with a sign at the booth that says “Attack the Deal-Killer with a Two-edged Sword.” I’m hoping it stirs up conversation, of course. I want to get realtors’ ideas about what constitutes a deal-killer. If there is such a thing at all, it’s the house itself that can be the deal-killer. A house that hasn’t been maintained, or worse, one where defects are intentionally hidden by the seller.

The two-edged sword refers to what we do with a house like that. I recommend honesty and presentation, but there may be other ways of attacking that will well, too. The seller, the realtor, and the inspector all need to be honest about the condition of the house - no hiding, no ignoring. And then the inspector needs to present the report in a way that doesn’t go to either extreme. Not the extreme of running away from the house screaming that the sky is falling, nor the extreme of pretending everything is ok, no problems. Instead, a balanced approach that describes the concerns, and then explains how they might be fixed. Most problems can be fixed, you know. And if the house really needs to be levelled, then the lot itself has value, no?

Another element of the “deal killer” philosophy is the part played by certain buyers or buyers AND sellers who kill their own deals. The inspector simply comments on the condition of the home. Often times it’s how the buyer and seller view the inspection report that kills the deal.

The sellers are like the RE agents, they want to make money on their sale. They don’t want to pour money for repairs into a place they are leaving AND pay the RE commission. Some buyers insist on a perfect house. The two butt heads and the deal dies. Somehow, this scenario has become the inspector’s fault. SOMEONE has to be blamed…

It could be that we need to shift our marketing to the sellers. Encourage disclosure of problems up front, fix what you can and list the property as is. People buy used cars etc. every day. If the seller tells the buyer that the tranny is on its way out, that’s ok. Then it’s up to the buyer to accept or decline and take on the responsibility for fixing the tranny. But if the seller tries to pass the car off as being in good condition and THEN the tranny goes out, that’s a different story. No one likes to feel victimized whether intended or not.

I purchased a house a couple of years ago with the intention of flipping it and had an inspection done. I used the inspection report to fix most of the things that were wrong with the house and tied all of it in with my remodeling efforts. Three months later I had a buyer and I gave him the inspection report from my inspector. He chose to have his own inspection performed and the deal went through without a ripple.

My other point, with this example, is that two different home inspectors found work from this. After all, most of the time the buyer and seller each have their own real estate agents, why can’t they each have an inspector if it will help to insure a successful transaction and mitigate the stigma of, “deal killer”. Just a thought.

I have found that I have a personal disdain for lawyers. I enjoy watching an ambulance slam on its brakes just to watch the lawyers who smack into the back of it, chipping their teeth and breaking their noses…yet…

When I want to win a case, I look for the “whore”…the hungriest and wiliest of them all to do for me what I want done. That is, to win.

So…a person who wants to sell their home for a profit…who knows that their home is not actually worth 75% more than what they paid for it in 1979, but still wants to cash in on the current buying mentality of today’s home buyer…is probably not anxiously seeking the most honest, objective, and ethical agent to get his price for him. Nor is he willing or anxious to disclose anything more than the law would require…but sometimes, less. The seller’s priority is such that it is usually the agent who convinces the seller that they can get his price…and quick…who gets the listing.

Along comes the buyer who must select from this field of “salespeople” an “agent” who will act upon his behalf to protect his interests in buying his home under these circumstances, if he is to find someone at all to represent him. Many don’t use a “buyer’s agent” and depend upon the integrity of the seller’s agent to properly guide them in their decision to buy.

It is a system built of conflicting interests and, IMO, the farther we (the home inspection industry) are from it the better off we are. Some deals simply deserve to die.

I feel the attitude also from realtors. (DealKiller) that sure sums it up.

With years of Construction experience and living in same county since 1972 we’ve seen builders come and go and have a knowledge of issues each builder had with their homes. The complaints and inferior workmanship as well as those who built quality products.

Now as a Home inspector and Pest Control Operator I’m hired to report on conditions of these homes. As a professional and since I have knowledge of a defect I feel greatly obligated to report on the issue even though it exceeds every SOP. (a doctor treating lung problems must report heart issues…or we hope) Sometimes being the best trained most experienced will hurt your business if marketing to realtors as you want to report everything and charge appropriate prices for this service. The realtors want only good things on report and cheap prices. Can you compete? Sometimes the answer is no. I can not leave an issue off the reports or inspections, my integrity won’t let me. The seller and realtor wants a minimal inspection the buyer wants everything inspected and guaranteed, a happy medium isn’t as easy as it sounds.

I’ve done inspections for realtors who are quite happy and refer you when you give them what they determine as clear reports. Send one in that costs a seller the sale and realtor their commission and you’ll never get another referral. I’ve seen sales lost over $200 item that seller refused to fix where the realtor could of paid for it out of his $21,000 commission. Instead he blamed me.

CONFLICT OF INTEREST? Realtors here in Florida represent the seller unless disclosed as buyer’s agent. So why does the realtors do all the hiring of Termite inspections, Home Inspections, and other orchestrated activities. They work on commission and won’t hire companies who can risk it.

In Florida it is against real estate law to give realtors money as referral fees etc. Yet it is the realtors who refer the most work. By softening the inspection report to fit realtors taste, protecting his commission by not disclosing defects, you are in effect buying his referrals at Home Buyers expense.

500 houses a month are sold here. Realtors involved in most of them. Can you exist without them? Yes! But you are working harder for less. I’ve boycotted working for realtors for years for the same (DEALKILLER) label. I didn’t want to be a part of the conflict. I’ve re-assessed that opinion and will
re-seduce the realtor bunch with my WDO and Home Inspections.

My New agreement will offer Standard inspection following only Standards of Practice nothing extra for one price. The customer signing that they are understand other issues could exist. This at a price competative for our area.

Then we offer the addition of other observations as addendum should someone want it. This is a compromise of what to report and what not to report as customer chooses. Why walk away from more than 400 jobs potentials each year. Yet it still is a compromised report.

Kind Regards,

Having done my share of work in the industry and as a contractor I can honestly say I have never killed a deal, yet. There have been more than a few times when a home has committed suicide as soon as I walked through the door but that is precisely what we are hired to do. If we cannot provide a fair and honest evaluation of the condition of a home it is time to hang it up. If you end up with a reputation as a deal killer by showing due diligence to your client so be it. Continue doing the best you can for your clients and let the chips fall where they may.
Larry

In some regards I can see why realtors do not like
some home inspectors. They see some who write up
everything in order to cover their a$$ets. The Realtor
knows it and it makes them angry.

Then there are those Realtors who are blinded with anger
because they cannot see the “big deal” of some of the
things sited on an inspection report. They think because
the house has been livable for 20 years… why would a
sag in the roof be a big deal… “It’s not going to cave in
is it?” Their ignorance and learned behavior cannot see
why an inspector should be causing panic over things
that have always been normal tweaks in most houses.

I have noted another trend…

In areas where people have been educated from constant
media and word of mouth (like Texas)… home inspections
are becoming the NORM.

In areas where there has been less discussion, laws, and
media attention given to home inspections… it is still
not as common to use a home inspector.

As more people shop for homes on the internet and become
educated to the inspection benefits in the process… more
and more people are bypassing the Realtor.

Like Nick once noted, in California, the awareness level has
converted many of the Realtors there to start doing pre-listing
inspections on a regular basis. In that area, they realize that
buyers are going to hire an inspector most of the time anyway.

The internet is educating buyers and thus taking some of
the Realtors “power over the ignorant” away from them.

90% of all home inspectors never make it. Those who
do make it by becoming whores, are living on ice. I have
come behind some of them, because people hired me to do
a re-inspection of their work. Their “ice” melted fast.
Some have been named in law suites.

Thus is the fate of sloppy work and easy money. Never
give up. Inspect it once and inspected right. :wink:

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I was doing an Inspection yesterday with an agent who has much knowledge ,
He says when I dead goes bad it is usually the agents fault ( got to love this guy )
Some agents do not give enough or the proper information to the client and when if goes south they blame the Inspector .
an example Thursday did an inspection on a 80 years old home .
Well looked after and was up to date in most respects.
$600,000:00 in my area that is in the top 1%
It is a husband wife real estate team ( now they should have some ideas on homes ) who have owned this home for many years .
The man agent sticks to me like glue I leave a room and off goes the light .

I come to the boiler great condition 2 years old , Oops all the rad feed pipes are covered with Asbestos .
I said gee it is to bad this was not removed .
He said nothing wrong with asbestos and it is a great insulator , I also pointed out to the purchaser and he has no trouble with it .
( he is trying to plant a seed in my head ) ( I am to stupid to bite ).
Now this is a great home and would is exactly what the purchaser wants , they could not be there living in Calgary 2 hours different time zone .
I call him at 9:00 pm our time 7:00 pm his time .
I read the report one page at a time as we go through he knows this house well he knows just about ever little thing I tell him .
When I come to the heating section and go over it and come to asbestos
HE ALMOST COMES THROUGH THE PHONE. He said I did not know about the asbestos and the seller did not tell me .
This is when I found out what he is , He said I am a doctor IN radiology and see what asbestos can do to people .
Many cancers we can help and Win but asbestos He had a name ( Not asbestos )
and he said our failure rate with this is 100%.
I am really concerned .I faxed him the full report.
He called the next morning 10:00 am my time 8:00 am his time and said Roy I loved your report and I want you to know how great a job you did and that I am not going to buy this home but will be needing you when I do find the home I want .
What I leading up too is if these agents was so damed smart.
Why did they not get the asbestos gone in the last 6 years .
No it is the stupid Home Inspector who killed the deal.
my writing ( Please note Much asbestos insulation on heating pipes recommendimmediate removal by qualified personal to remove asbestos ( It has red labels on it stating Asbestos ) )
Roy Cooke

Roy,This must be the day for me to challenge you. Please don’t take it personal. It certainly is not meant that way. We are all here to learn, I hope.

The following is from the EPA in the States (Highlights added)

What Should Be Done About Asbestos In The Home? If you think asbestos may be in your home, don’t panic! Usually the best thing is to LEAVE asbestos material that is in good condition ALONE.
Generally, material in good condition will not release asbestos fibers. THERE IS NO DANGER unless fibers are released and inhaled into the lungs.
Check material regularly if you suspect it may contain asbestos. Don’t touch it, but look for signs of wear or damage such as tears, abrasions, or water damage. Damaged material may release asbestos fibers. This is particularly true if you often disturb it by hitting, rubbing, or handling it, or if it is exposed to extreme vibration or air flow.
Sometimes, the best way to deal with slightly damaged material is to limit access to the area and not touch or disturb it. Discard damaged or worn asbestos gloves, stove-top pads, or ironing board covers. Check with local health, environmental, or other appropriate officials to find out proper handling and disposal procedures.
If asbestos material is more than slightly damaged, or if you are going to make changes in your home that might disturb it, repair or removal by a professional is needed. Before you have your house remodeled, find out whether asbestos materials are present.

more info here:

http://www.epa.gov/asbestos/pubs/ashome.html#4

Mike it is no challenge to me CMHC also says the same thing and I told the client what CMHC recommends just incapsul it .
I have put in Many miles on Duct tite when we had to do the tapers on the pipe by hand. I also go back to the time when I with my brother put asbestos on water tanks and covered the Jacket heater
( did you ever see a jacket Heater ). I have not seen one in 50 years.
Now tell me if you had some pipes with asbestos on them and you where going to sell your home would you leave it or remove it .
I my self would remove it and all traces as Like the example only so many people want a home of this type and if 50% do not want asbestos why would you even consider removing 1/2 of you possible sales .
It like you saying I will only do 1/2 of the inspections I am offered .
Thats my feeling .

Roy Cooke

Roy

That makes you a full fledged honorary “Deal Killer”…:smiley:

Be nice to have a badge which said something like that, you know?..:smiley:

Or a hat with a realtor lady holding a gun to her head insignia…:smiley:

Roy,

I would remove the asbestos only if was in poor condition or if it was preventing me from selling the home.
In the real world I suspect much asbestos has been removed by non-professionals and buried. You can thank the lawyers for the demise of asbestos. If it were as dangerous as we have been lead to believe we would all be dead from it by now! Do you know how much break dust you’ve inhaled in your lifetime?

We all know that if it isnt disturbed its ok but ASBESTOS is potentially dangerous and almost always the cause of mesothelioma. Yeah, lots of people are ( were) exposed to brake dust and all that, but some people have stronger constitutions. That doesnt mean that friable asbestos fibres are harmless. When was the last time you had a check up. NOBODY thinks that they are going to get sick. Then they do and then its too late, TOO LATE.

However, I do think it has to be treated more like lead dust. You know, make sure people know what the health hazards are, let them be educated, recomend a safe response to it and in the end let them decide.

BUT, dont call me a deal killer if i report the presence of it in a matter of fact way and also try to inform people of its potential hazards.

Why the heck should it be kept a secret?
What am i supposed to do , pretend its not there?

i really hate the term DEALKILLER

Maybe we should be using " used house salesman" to describe any realtor who is too eager to sell a “lemon” house.

What a great new marketing niche.

“HAMMER HOME INSPECTIONS”

When a deal has to be absolutely and positively killed overnight, call the experts in deal killing - “Hammer Home Inspection”.

The last time I checked, we are not normally qualified to identify asbestos. I usually mark it as asbestos-like material which should be evaluated by a qualified technician. From there, the clients or vendors can choose to do what they wish after it’s been tested and verified. It might sound like passing the buck but I feel that I’ve done my job and identified a concern which should be handled by a professional in that field.

Used house commissioned sales people will do and say anything right now to get a sale. Here in Kansas, all they have to do is get a “licensed” state home inspector, get him to check an outlet or two, a switch here and there, close one door, yep, there is a roof, open one window, turn on the furnace, yep, it heats. $149 and 45 minutes, done.

That really serves the consumer. And, if there is a problem later, the buyer calls the inspector.

The KAR bought and paid for these new laws. Now Kansas lawmakers, the attorney general, the former governor, all will have to answer to the consumer when the time comes. Yep, I can see Hammer time coming soon this fall, during elections.

I am a certified deal killer. I know of several that have fallen through due to my reports. Or should I say, due to the choice of the buyer. That, is the way it should be.

Hey i like the name Deal Killer i also have a new badge to wear I was Called the home violator . This guy said after i leave, the home feels violated .

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It is some of the agents that have the problems, and should be regulated, licensed, insured, and monitored. There should also be a committee or a regulatory agency that is advertised and given to the buyer of the home to voice complaints against these agents, and manned by home inspectors. I think that the NAR and state RE agencies should step up. :roll::shock::mrgreen:

Hi Michael,
Do you or should anyone really trust the EPA and their so called safe standards? I noticed that you have a picture of your favorite child or grandson? Would you trust the EPA guidelines with his or her health? Or would you deeply consider a doctors experience in treating patients with exposures to asbestos even in trace amounts, that the EPA considered safe? In my opinion the amount of money that it would take to clean up a home from such dangerous materials would far outweigh the cost of any health risk for my loved one or those of my clients. This is a really good read everyone!

This is a 13 year old thread.
What did I say that upset you?