Thread: "Free" Home Inspection when you list with us

One of my friends showed me an article today from one of his areas local papers with a real estate company advertising a free home inspection when you list your home with them.

This seems pretty unethical to me. Reading between the lines, I can see the sellers "giving" potential home buyers the report so they dont have to buy one.
The real estate agents "favorite" home inspector getting lots of work and sugar coating the report.
And is it really "free", no way. Its tacked on into the sales price or some where else.


Maybe this is common in other parts of the country, but its the first one Ive seen in Houston.

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Originally Posted by imported_John Smith

And is it really "free", no way. Its tacked on into the sales price or some where else.

It probably really is "free".

If someone is going to sell their home for $249,000 they are not going to then make it $249,125.

Its like the adds you see for 1 years free gas when you buy a new car. Or a free trip for listening to someone pitch a timeshare. Right.......


I aint buying free. The cost of the inspection is included somewhere in the deal. We are all in business to make money.

quote=imported_John Smith;30864

This seems pretty unethical to me. Reading between the lines, I can see the sellers "giving" potential home buyers the report so they don't have to buy one.

It's unethical for the buyers Realtor to inform the buyer not to get a home inspection since the seller got one.

The real estate agents "favorite" home inspector getting lots of work and sugar coating the report.

I do pre-listing inspections for two Realtors. Indirectly are you suggesting that I sugar coat my reports?

And is it really "free", no way. Its tacked on into the sales price or some where else.

Lets see, as a Realtor I get a client, I find out if there is any major issues with the house before spending my time and money listing the house(around here, it's surprising how Realtor have to pay for every little thing). Then when it comes time for the buyers to make an offer, the process is likely to go smoother.

I would hope that this Realtor is looking at this service as a glass of water that is half full and not half empty. In other words, not trying to scam people but providing a service for her clients and herself.

Originally Posted by imported_John Smith

Its like the adds you see for 1 years free gas when you buy a new car. Or a free trip for listening to someone pitch a timeshare. Right.......


I aint buying free. The cost of the inspection is included somewhere in the deal.

If the price does not change to reflect what is 'given for free', then it is 'free'.

To suggest that it it 'included in the price for some cost' is to state you could deduct that cost, not get what was included, and 'save' that much money.

It's all part of the negotiation ... You make an offer on a house, and, in that offer you say you want window coverings included ... and you want the price reduced by $15,000 ... if the offer is accepted, the window coverings were 'free' (there was no additional cost for them).

We are all in business to make money.

Yes, but 'how much money' is the negotiable part - if you pay full price and get nothing other than what was listed for that price ... the seller of that whatever made money - if you negotiated a lower price and got all of what was listed for that price ... the seller of that whatever made money (just not as much money) - if you negotiated an even lower price, got all that was listed for that whatever, and got some other things included, the other things included were 'free' ... the seller still made money (made even less money).

The only times the seller of whatever does not make money is in distressed sales where they either have to sell it or lose it, in one case they lose some money, in the other case they will lose it all. So, while "we are all in the business to make money" - there is no guaranty that will happen, when it does not, well, that's called 'a business risk'.

Originally Posted by imported_John Smith

One of my friends showed me an article today from one of his areas local papers with a real estate company advertising a free home inspection when you list your home with them.

Maybe this is common in other parts of the country, but its the first one Ive seen in Houston.

Sure is a different world here in Florida where most Realtors are shunning new listings, go figure.

Just did a prelisting inspection today where I found the main electrical panel installed in the lower level bathroom with a shower. A disconnect box in the garage with knockouts missing and cardboard pieces that fell in the disconnect box. The roof sheathing (upper part of the quad level) was saturated due to poor ventilation (moisture meter pegged) with black moisture stains. Reverse polarity at all outlets in kitchen and bathrooms with one outlet in family room testing no ground. Overall it was a nice house but as you can read, there are things that could have slowed down if not kill a deal.

Even though the seller paid for this, I can see how this also benifited the Realtor.

As Jerry said, nothing is free. I have had two Realtors ask me if I would give them a reduced fee for these pre-listing inspections. The Realtor was paying for it, not the seller. But the Realtor wanted a reduced fee on the idea that they would use me for all furture pre-listing inspections. I am sure the Realtors can write this off as a marketing expense to get more listings.
I personally don't see anything wrong with this. I am still going to tell them like it is. The idea that I would sugar coat the report is ridiculous. This is my chance to prove I can find anything that may be of issue. In turn I would hope the sellers would rush to use me for the house they are buying. So I get that full fee. This also takes the heat off the Realtor to have to negotiate with buyers. All major concerns have been identified and either addressed or the price of the house adjusted.
As for the discount to the Realtor. To me that is no different than the discount I give to invesment clients who use me several times a year. I give them special rates because I know they will use me several times. I even give a small discount to repeat clients, where they passed on the first house for some reason. So I don't feel discounting is a bad thing. It's no different from anyother business.

I've always held the belief that something "free" has little or no value and I still think that's a popular thought shared be many folks.

[quote]

Originally Posted by Jerry Peck

If the price does not change to reflect what is 'given for free', then it is 'free'.

Peter Drougas: As Jerry said, nothing is free.

It sound like Jerry is saying some things are free.

I had a Realtor advertise that they would pay for your inspection. They contacted me for a bid and wanted low prices and I would be their inspector. I replied that my inspection fees follow the same criteria for everyone. I never heard back from them. They later stopped giving away free home inspections.

Jerome Cartier
Cartier Fine Home Inspections, LLC
Daphne, AL. 36526
Cartier Fine Home Inspections, LLC
251-490-3212

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I continue to defer to the ideology of "Who pays the bill defines my customer". How the Realtor markets the inspection is immaterial to me so long as they do not infer, state, imply that they are paying my fee or that I am working for them.
I would think it possible to define an inspection as free if the Realtor is contractually obligated to refund the purchase price of the inspection. That would be totally independent of anything I may do with the client and they would understand that they would be responsible for paying for the inspection.
Make sense?
hmmm..........more beer plez

I have been asked by an agent to do this sort of thing...

They (the agent) were going to pay for the inspection themselves and give it to the buyer.
I have not done it but I did not see anything wrong with it. I still would give the same report as if the buyer was paying for it.

There is a legal term for that. Its like blocking out a time slot for a realtor each week just for him. you give him that slot before any other.

Sorry but i can not think of the term.

It's unethical and illegal in my state Calif.

I think its in the B&P CODE.

I've always held the belief that something "free" has little or no value and I still think that's a popular thought shared be many folks.

LCJ:

Agreed. There's no free lunch.

Ass-kissers:

And, no matter who you are or what you are doing in conjunction with a real estate broker or salesperson, it is unethical. Period. Don't waste my time trying to convince me otherwise. Your justification may suffice to ease your squirmy little mind, but the collusion is so obvious to us with properly-tuned BS meters that it's evident from afar . . .

Aaron

I think Aaron just said........."Talk to the hand".

Originally Posted by M. Waller

I have been asked by an agent to do this sort of thing...

They (the agent) were going to pay for the inspection themselves

Allow me to ask my fellow high and mighty inspectors this question:

None of you has ever inspected a home for a real estate agent?

Seems that many of us brag about 'yeah, I never get any real estate referrals ... until they or a family member is buying a house, *then* they call me' ...

So, he does the inspection for the agent, the agent *IS* The Client. *The Client* gives permission for the information to go to a third party (we all deal with that every day, the report is for The Client, the client gives the information to The Seller (who is not the client) so they can negotiate the price down.

It happens EVERYDAY, MANY TIMES per day.

And that is somehow *different* than ...

and give it to the buyer.

Please explain how that is different than what you guys do everyday, and many of you do it 2-3 times a day.

I have not done it but I did not see anything wrong with it.

There isn't anything wrong with it ... as long as you do what you are saying next ...

I still would give the same report as if the buyer was paying for it.

This bears repeating:

"I still would give the same report as if the buyer was paying for it."

Presuming that you do THE SAME inspection for the agent as you do for your client, that is no different than *any home inspector* doing any inspection for any agent or their family, PROVIDED (again) that "I still would give the same report as if the buyer was paying for it."

There will likely be some flamers who will respond negatively to what I've just said, but those will be the same people who have done inspections for agents or agents family members who want a good inspection and call them, when they would otherwise never get a real estate agent referral.

Provided you keep you standards high, the same, and "I still would give the same report as if the buyer was paying for it.". you should be okay.

Provided you keep you standards high, the same . . . you should be okay

In a perfect world, with only ethical people, I would agree. Living in G.W. Bush's mangled and perverted version of the "American Dream", you should be so lucky.

Aaron

Originally Posted by Aaron Miller

In a perfect world, with only ethical people, I would agree. Living in G.W. Bush's mangled and perverted version of the "American Dream", you should be so lucky.

Aaron

But ... Aaron ... if 'you' were to inspect a house for a real estate agent, *you* would not 'go easy on them', would you?

So why "assume" that another inspector would under the same circumstances?

So why "assume" that another inspector would under the same circumstances?

ECJ:

I am not assuming a thing. I have witnessed this on so many occasions that I can no longer keep count. Even if you have never seen such a thing as unscrupulous behavior between agents and inspectors or cannot somehow conceive of the possibility (yeah, right), we are ethical whenever we avoid even the appearance of a conflict of interests. We are skanks when we do not.

There is a very plainly etched line there and it is not difficult to see it, unless of course, one's eyes are diverted in the direction of payday.

If the only way one can make money is by working in tandem with agents, one should GTF out of this profession and start selling used cars where one's "talents" might be appreciated by one's peers.

Aaron

I will not inspect a home that a agent ownes. that is one fast way to loose an agent. Works everytime.

Before I retired a large percentage of my inspections where of the presale variety of which again a good amount was paid for by the listing agent. There are two types of agents; “Jerry, please go easy as I need this sale.” And “Jerry, tell it like it is and we will deal with it.” My protocol never varied between the two and the “go-easy” agents always stopped using me, but the “tell it like it is” group never batted an eye.

Everybody has to, or should, set their standards, which should be of the highest standards of our industry. There will always be professional inspections performed by competent people as there will always be the “inspection light” (IL) type. Our legal system has a way of eventually culling out the “IL” types, and besides, most IL’s are of the short lived variety because they eventually discover that losing a little each job and making up for it in volume is a sure receipt for failure.

Originally Posted by Ron Bibler

I will not inspect a home that a agent ownes. that is one fast way to loose an agent. Works everytime.

I love inspecting homes that agents own. It's almost as much fun as inspecting a builder's own home . . . but, just almost.

Aaron

Our legal system has a way of eventually culling out the “IL” types, and besides, most IL’s are of the short lived variety because they eventually discover that losing a little each job and making up for it in volume is a sure receipt for failure

LCJ:

You are a true optimist and have a much higher opinion of our legal system and the effect that a free market can have in the way of culling the bad apples.

"Eventually" maybe. Like the old Japanese proverb that if you sit by the river for long enough you will see the body of your enemy float by. I prefer to be the one to push them in the damned water and save the sitting by the river for something more pleasant.

Aaron

OK, Ok, some us don't agree on this idea about doing business with agents.

And, that's perfectly alright.

However, if you are one who prefers to do business this way you might want to add one of these (or several) to your tool box . . .

Aaron

Originally Posted by Jerry Peck

There isn't anything wrong with it ... as long as you do what you are saying next ...



This bears repeating:

"I still would give the same report as if the buyer was paying for it."

Presuming that you do THE SAME inspection for the agent as you do for your client, that is no different than *any home inspector* doing any inspection for any agent or their family, PROVIDED (again) that "I still would give the same report as if the buyer was paying for it."

There will likely be some flamers who will respond negatively to what I've just said, but those will be the same people who have done inspections for agents or agents family members who want a good inspection and call them, when they would otherwise never get a real estate agent referral.

Provided you keep you standards high, the same, and "I still would give the same report as if the buyer was paying for it.". you should be okay.

I have never sugar coated a report for anyone BECAUSE it is my understanding that if there is a lawsuit from the transaction and it has anything to do with my part or lack there of, then it is MY arse that will be left out to dry. I would not think that any agent would come in to help me if such a time were to happen so.. I do my best to not leave any door open.
Agents are like kids, and if you give them an inch then they will always expect atleast that and then some.

Although they never set up any inspections "free to the buyer" I am sure they would have the buyer present during the inspection so I could go over the report for them.

I just believe the agent saw it as a marketing tool.. " Hey pick me and you get a free inspection on the house".

I just believe the agent saw it as a marketing tool.. " Hey pick me and you get a free inspection on the house".

If it looks like a phuque, acts like a phuque and walks like a phuque, chances are it is a phuque.

Aaron

I have not only seen it, but have participated in it. It is a marketing tool for the agents. How can we, as home inspectors, advertise it to home sellers as a marketing tool and expect realtors not to do the same. This type of inspection is intended to do one thing and one thing only - notify the seller of any issues that may delay the sale of their home.

Explanations -

1. Regardless of who pays for a pre-listing inspection, it is intended to serve the seller of the home. The seller of the home is my client, no one else. The inspection is intended to notify the seller of issues that exist so that they can either have the conditions corrected or get contractor estimates to help remove the items from the negotiating table. (hard to negotiate selling price for a damaged floor joist that was already disclosed along with repair estimates)

2. The inspection report is the sole property of the client (see number one). No person, other than the client, has any entitlement based on the home inspection.

3. Though I know that it does and can happen, my inspection report can not be used by the buyer as they are not my client (see number one). The buyer should get their own inspection.

4. A pre-listing inspection better be performed at the same level that a buyers' inspection is performed. You don't want to give a soft report (as some have alleged). If you do give a soft report, you better hope that the inspector that the buyer hires is less competent than you are. You are still liable to the seller as they were your client for your inspection. (see number one)

5. Why not leave the report out on the kitchen counter when the home is shown? Whether the inspection is used by the seller to make repairs or the home is in relatively good condition and no major repairs are needed, it is a selling tool for the home. If the home is in good shape, why shouldn't they be able to "brag" that it is in good shape. After all the report does belong to the seller (see number one).