View Full Version : Getting contract signed?

Steve Panting
05-06-2007, 09:30 AM
During recent inquiries of various errors and omission insurers I have discovered some require that the contract be signed before the inspection. I have had several insurers in the past and none have required such a stipulation. My normal procedure is to of course have the contract signed by the client during inspection. However, many of my clients are out-of-towners and consequently do not attend the inspection. I send them the contract with the paper copy of the report and ask them to return it signed. I've looked at the last hundred jobs I've done and discovered nine contracts missing. Two are authentic bad debts which I naturally have sent the collection wolves after them. Of the remaining seven, in at least three of them the deals of gone down and I am not sure about the remainder. In the last five years, I have only had one client not sign the contract when it was presented on site.
Being a sole proprietor, having the contract signed before the inspection will prove troublesome. I'm fairly certain if I decided not to perform some inspections because the contract wasn't signed, I will lose some jobs. The only way I can figure out a way around this is to get a second phone line installed in my home for this specific purpose. Some of my rural clients simply don't have access to a fax machine.
To what lengths do other home inspectors go to have the contract signed before the inspection? Does anybody know of any way to achieve a binding contract by the use of the Internet? Of course the document can be faxed and I understand that is legal. The signed contract also be scanned and sent via the Internet in this fashion. However, many people do not have access to a scanner. There's no way I'm going to ask the conflicted real estate agent to sign it. Does anybody have any ideas?

Rick Cantrell
05-06-2007, 09:59 AM
Go ahead and do the inspection, but do not release the written report until after you have been paid AND the contract is signed.
Once they have your report in their hands, you have nothing left to bargain with. If they are on a tight deadline or out of town you have more authority and control over the process.

If you do not take Visa/ MC you should start.

You have a business to operate, operate it like a business.

Schedule the appointment.
Get payment up front.
Inform them you will send them some papers to FILL OUT.
Do the inspection
If they ask for the report, say. I haven't received the agreement back from you. Can you send it now?
When you receive the agreement back, send the report.

John Arnold
05-06-2007, 10:00 AM
...Does anybody know of any way to achieve a binding contract...

Binding? Ha!
Sorry. My cynicism got the better of me.

I try to get the client to at least read the contract, by email or on the web, prior to the inspection, so they can't claim they signed it "under duress". If the client isn't going to attend the inspection, I definitely want a signed contract before starting. If they don't do fax, or email, etc., it can be a problem. The client's agent has often helped me with this.

Jim Robinson
05-06-2007, 10:31 AM
I email (99% of the time) or fax the contract to the client ahead of time, along with a cover letter about payment, access to stuff in the house, etc. I generally deal with the contract and the check at the end of the inspection. I know, but I haven't been stiffed yet. If the client is out of town, I tell them to mail payment and the signed agreement to me. I always bring two copies of the agreement form with me to each inspection. One copy for me, one for them. If someday, someone refused to sign the agreement, I would not release the report to them until I had the agreement signed. It seems to work pretty easily for me.

Jerry McCarthy
05-06-2007, 11:12 AM
FWIW my advice: if you have a web site put your contract on the web site (Pdf file) and then your clients can download and sign it and email it to you. You can also post their finished report on your web site and give them a pass-word to open it and download it, that is after you have a signed contract from them and been paid. Bottom line: no signed contract, no inspection. Remember, your contract is going to set the parameters (expectations) of your inspection and is the first weapon in you legal defense. This is from a fellow who makes an excellent living as an EW in home inspector litigation plus construction defect cases.

Dave Mortensen
05-06-2007, 11:32 AM
I get their email address's when they call and notify them of the contract that's going to be sent to them. If they haven't received the contract within a few hours they are to call and have me resend it. I have run in to a few people who could not download a word document so it's in PDF format as well. I have heard that some clients have sued because they felt "under duress" when signing the document at the inspection. Copies of the contract are always in my truck, since clients do forget to bring them sometimes, but they have been given the chance to read the document at least 24 hours prior to the inspection. David

Nick Ostrowski
05-06-2007, 02:56 PM
Steve, I e-mail a copy of the agreement to the client prior to the inspection for the same reasons John mentioned. Also, the last thing you would want as a consumer is to have a legal document dumped on you at the last minute to read, digest, and sign off on. If they don't have e-mail or a fax, they can drive to a local retail store (ie - Staples, Office Depot, etc) that offers faxing services for a small fee. If these options don't work, try the good old US Postal service.

The bottom line is that the inspection agreement is a necessary part of every inspection we perform and it needs to be followed through on in a consistent manner from start to finish every time. That piece of paper may save your butt ($$$) one day.

Every once in a while, you will get somebody who doesn't like a clause in the agreement or wants something changed. These are the things you want to get out in the open beforehand. Often times, you can explain that the verbiage is standard fare for inspection agreements and the client will accept your explanation. Other rare times, they may refuse to sign. Better to air these things out and lose one client every blue moon than to be saddled with a possible legal nightmare.

Tim Moreira
05-06-2007, 10:27 PM

A few things. As the others stated, no agreement, no inspection.

I have mailed out of town buyers with my agreement. I always enclosed a self addressed/stamped envelope for them to return to me in. Also, good phone contact during this time is needed to follow up.

Also in your post you stated:

Being a sole proprietor, having the contract signed before the inspection will prove troublesome.

Was being a sole proprietor statement a euphemism, or is that the legal entity you chose to operate your business under. I'm not an attorney here and can not offer legal advice, but, if you are operation under the *sole proprietor* business entity, you are open to all kinds of legal issues personally. If this is correct, I recommend you contact an attorney in your state and see if an INC. or LLC is more appropriate and protecting of your personal assets.

Tim Moreira
05-06-2007, 10:31 PM
Dave M,

I have run in to a few people who could not download a word document so it's in PDF format as well.

Word of caution on emailing Word documents to folks. Work documents can be altered unless you can sent it as a *read only* version. PDFs can not. You don't want your client changing your agreement to their liking.

Dave Mortensen
05-06-2007, 10:48 PM
Hey thanks for the tip! I hadn't even thought about a client changing the wording of the document. No more word documents.... Dave

Jack Feldmann
05-07-2007, 04:32 AM
I operate like most of the others here.

I mostly e-mail the contract, fax a bunch, and also have them sign it on site. Once in a blue moon I will over night it to someone that doesn't have e-mail or fax.

I take credit cards to keep payment probelem to a minimum.

If someone refuses to sign the contract? Easy....I'm back in my truck heading out. If someone doesn't like a part of the contract? Easy..we can talk about it and if I agree to their changes, we both initial the changes and move on. If I don't agree to their change? Get the truck keys out.

As far as someone not being able to change a PDF? It CAN be done....Easy.

Anytime I have had resistance about a contract, and it's usually from a Realtor trying to set up an inspection, I just tell them that I am required by my insurance company to have one, end of story. If it's the Realtor giving me a bad time, I ask them if they require an contract when they start doing business with their clients?

Joe Nernberg
05-07-2007, 08:20 AM
Great feedback/advice.

I will not release my inspection report until I have a signed agreement and payment. "It's not personal - just business" - I tell them. I have been remiss where I probably should have sent my agreement in advance. I do not print on site so there is no uncomfortable chatter about why I can't hand over a report that just printed. For those who forgot their checkbook, I gladly accept credit cards.

In the past, a few clients wanted to carefully review my agreement at their leisure and I would not discourage this. In fact, I recommend an attorney to review all transaction documentation. Further, I state that they owe me nothing for the inspection if they decide not to sign my agreement. In my mind - it is far better to walk away, then to deal with a picky/litigious client who will later complain that that the contract was signed under duress.

Dave Mortensen
05-07-2007, 03:33 PM
Do you have to pay a service to use credit card billing? If so, who do you recommend?

Jim Robinson
05-07-2007, 03:42 PM
I use a PayPayl account. It's only 3% for each transaction. I only do one or two credit card payments a year, so it's not a big deal to me. There are other, easier ways to do it, but they probably do have some additional fees involved.

Jack Feldmann
05-07-2007, 08:59 PM
Yes you have to pay to ue credit card services.

I use the ASHI preferred provider Moneris. There are many ways to take credit cards. You may want to check your local bank, or Sams or Costco, or many others out there.

A lot depends on how much transaction activity you think you will have. I actually have more transactions than I thought I would when I started taking CC's. I probably average 10 - 14 per month. I thought I might do one or two.

I KNOW I have landed some jobs BECAUSE I take cc's. There would be times when I had several thousand dolars outstanding because I couldn't collect at the inspection. Pretty much ZERO now.

Yes there is a cost involved. I just consider it a cost of doing business, and the price for not having to chase down payment for weeks or months at a time.

Dave Mortensen
05-08-2007, 10:58 AM
Thanks for the good info. In four years of doing business, I have yet to have a client's check bounce. No one has complained about the lack of cc availability either, but it seems to be what the big boys do (Maybe I should buy an infrared camera too?). This board provides invaluable help to me everytime I log on, thank you! David

Jon Randolph
05-09-2007, 04:28 PM

Does the client have to go into Pay Pal over the internet and set up the payment or can you have them sign the slip and punch the numbers in when you get back to the office? Do you get the payment in advance of the inspection?

I use Quicken service to accept cards. They charge $14.95 a month plus 3% per transaction. If I could get away from the monthly fee, that would be great.

Jim Luttrall
05-09-2007, 07:18 PM
I signed up with my local bank at no cost, pay 1 or 2 percent (I forget the exact terms right now) of the inspection and key it in over my cell phone. No need for card readers, etc. but I think you get a discount on the percentage if you use a reader. Lots of local banks here are battling for this business with no up front fees, free equipment, etc. I would shop around and see if your bank will deal with you on fees.
I have a separate merchants account that the CC transactions post to the same or next day, then I go on-line and periodically transfer the funds to my general account, again no fees. Banks are thick around here and have lots of promotions to get your business.
I only take Visa and Master card, not Discover or American Express since there is a extra monthly fee for those. That has never been a problem yet.

James Duffin
05-09-2007, 07:38 PM
PDF files can be edited just like a doc file....just not as easily.

Erby Crofutt
05-10-2007, 04:53 AM
In a nutshell.

1. Get the agreement to the client somehow (web, fax, mail) well before the inspection.

2. Have the signed agreement in hand before the inspection starts.
(Rural customer - no fax. Tell em to go to their bank. Banks have faxes. No agreement, I'm out the door like Jack. If you are afraid of losing jobs because of the agreement you are looking at the wrong thing to be afrad of. Be afraid of lawsuits for "contract signed under duress" or "not having a contract.)

3. Payment before report delivery.
(If you don't take credit cards, find a way to do so. It's a cost of doing business. I didn't think I'd do it more than once or twice a month as that's how often people asked so I didn't bother for about three years. Now I use First National Bank of Omaha thru HomeGauge. No set up. No monthly. Low 2. something per transaction. Jobs out the ying-yang because of credit card acceptance {about $4,000 CC just in April} Yeah about $85 bucks in fees but I eat it. {Bullshit, I just raised my rates to cover it})

You wanna run a business, run it like one.

You wanna play at running a business, have it your way.

Sole proprietor doesn't have any more liability than the LLC, UNLESS you have inspectors working for you.

LLC gets sued. Inspector gets sued personally. If you're both, you "get it in the end."

BUT (BIG BUTT), LLC does have a lot of tax advantages.