i will be doing my first inspection and the buyer says it will bill to escrow , i am wondering what i need to do, does anyone have any advise for me ... thanks

Terry,

I get this request periodically. I try to find out who the closing company will be and send the invoice along with a cover letter explaining the clients request to pay at closing. If you let the client get the invoice to the closing company, chances are it won't happen.

You should also remind the client that if he does not purchase the home for any reason, they will be obligated to pay the bill.

Mike Tracy

Terry
Whenever I was asked to bill escrow I explained there was a $______ charge for such a service. After hearing the amount most found their check books. If they did agree I got all the necessary information; Title Company, address, phone number, title officer’s name and escrow account number and emailed our invoice the same day the report went out.

My secretary, a resolute as they come, also sent a hard mail copy of my invoice then after about 4 or 5 days called the title officer to confirm our invoice was in their property’s escrow file. She kept up the calls until escrow closed and we had our check. Only once in 15 years did a title company ever try to stiff me and as soon as they received my small claims court demand their check arrived in our mail.

Bottom line, you have to stay on top of this type of billing because it’s very easy for your demand to fall in the cracks and once the account is settled and closed it’s very difficult to get paid. Most of my brother inspectors would not bill escrow, but I felt the extra ____ fee charged help take the aggravation out of it.

BTW, never bill escrow for inspection done for the seller. (pre-listing type inspection) because in those cases you may be waiting anywhere from 6 months to never to see your check.

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Jerry McCarthy
Construction Consultant
www.expertbuildingconsultants.com

There is a good chance of a "bill to escrow" working like this, you do the inspection & report your findings, the seller can't afford the repairs, the buyer can't afford the repairs & nothing ever gets to escrow.

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Clarksville Home Inspection
JW Goad
TN License #307 | KY License #2402

Terry,

Do all you can to get the check "today" or at the close of your inspection data gathering.

As Jerry M. indicated an extra fee for billing to escrow is in order ... not just $25.00 either!

If you do proceed with the escrow payment, as noted above, you will have to keep on top of it to ensure you get the check. That takes time and time is money.

I try to avoid them as best as possible, but some do go to closing for payment, but I also get my 'handling' fee.

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Cheers - Nolan E. Kienitz, HCRI, PMP
Dallas Home Inspector
www.NolansInspections.com

I have only gotten a handful requests to make payment for the home inspection at escrow and I batted them right back at the client. They way I see it, I provide a professional service with prompt delivery of the report the next day so I should be paid promptly. I personally don't care if the house ever goes to settlement and I don't want to have to worry about how I will be paid if the deal falls through (many of my inspections do result in no sale).

I guess some areas of the country are different when it comes to this type of payment.

I try to avoid "pay at escrow" which basically means they want to pay at closing at the title company.

Most clients want to do this most of the time because their company is picking up the cost of their move. That is always the case with the ones I have worked with.

How I handle it is I still ask the client to pay me with their own personal check which I will agree to hold for 30 days with an handling fee of 75. extra dollars added to the check.

I will then bill the title company for the inspection along with an extra fee of 150.00 which not one client has ever complained of because they know their company is picking up the charges.

I have an agreement that the client signs stating that if I don't receive payment from the title company within 30 days of the inspection, I have the right to cash or deposit the check they gave me at the original inspection.

If I do receive the check from the title company, I then tear the personal check in half and mail it back to the address on the check.

As someone else mentioned if you just wait for the title company to send you a check alone, you'll lose money eventually as the client will back out of the deal due to your report or possible because their financing of the home fell through.

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Rick Hurst_Home Works Inspection Co_Rockwall TX
In the words of Mike Tyson.... "Everyone has a plan until they get hit inda mouf"

I charge a $50 fee for payment at closing. I also require a CC number as a deposit in case it does not close within 30, if it does not I charge the card. I have never had a problem doing it this way.

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Scott Patterson
Spring Hill, TN
http://www.traceinspections.com

NO!

In case that wasn't clear - NO! I DO NOT TAKE PAYMENT AT CLOSING!

Way too many seemed to loose the paperwork, even though I followed up with hard copies, phone calls etc.
Way too many didn't buy the house and there just wasn't an escrow.

The straw that broke the camels back was one where the closing company screwed up the closing and I didn't get paid. I then had to go to my client and try to collect. It took over 6 months of getting small payments ever 6 weeks or so to get paid. Trying to get blood out a turnip.

So when someone asks, the answer is NO!
JF

Jack,

Pls ... don't hold back.

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Cheers - Nolan E. Kienitz, HCRI, PMP
Dallas Home Inspector
www.NolansInspections.com

Didn't know we could quote pricing? I charged $100.00 for escrow billing and as you guessed that did not often happen, but when it did, oh well! My secretary/book keeper always managed to pocket the escrow fee, but I couldn't complain or she would stop making my meals, cleaning house and doing my laundry. Now a days everybody around here takes credit cards when they hear those fateful words "I don't have my check book with me."

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Jerry McCarthy
Construction Consultant
www.expertbuildingconsultants.com

No. I have buyers who have said the closing costs are being paid by the seller and they want to include this in the closing costs.

Fine. Here is a reciept that indicates you paid for my services. Submit the reciept to the closing attorney and get reimbursed. I do not delay payment until closing.

I had a customer who submitted my RECIEPT marked PAID IN FULL and the closing attorney sent ME a check. I contacted my customer and said I would be happy to get paid twice for the job but offered to deposit the check made out to my company and send him a check. He mentioned I did a great job but not worth double the fee. Oh well. The customer has already referred me to his ex-wife and a co-worker who both booked inspections.

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Bruce Ramsey
Advocate Inspections
www.NCAdvocate.com

I did bill the title company and stopped. I have gotten burned too many times. It was common practice in my small town and I never had much trouble... but then I moved to the big city. I still have several hundred dollars tied up in escrow from a deal that went south in 2006.
NO MORE!
Too much trouble. I'll take cash, check or credit card before they get the report.
Bill to escrow? NO!

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Jim Luttrall
Mr. Inspector.net, Inc.
Allen, Texas 75002

We do it once or twice a year.... As with the others, it's a charge. We started taking visa/mc a few years back it has cut down a great deal on the requests. The cc merchant fee's sting a bit but it's worth it to get your money now... We also do a lot business for people moving in from other areas so the cc thing works great.

As for the nuts and bolts of the billing... just make sure to get the escrow officer's name and give him/her a call and introduce yourself. That way, they'll already know you if/when they mess up. Overall, the billing end of it is easy. This is the stuff the title companies do everyday. The only problems come about when a deal doesn't close.

Tell the buyer ... no problem, that's when my report gets issued ... when I get the escrow check.

Since this is your first inspection, if you loose it after doing it, use it as a 'training experience', including learning how to avoid 'billing to escrow'.

Preferably, though, you will want to get paid, and what if the deal does not make it to escrow? You don't get paid.

Thus, either check now and report now, or report at escrow when check is given at escrow ... of course, though, that does mean you will not be able to benefit from my report as your inspection time period will have passed ...

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Jerry Peck, Construction / Litigation Consultant
Construction Litigation Consultants, LLC ( www.ConstructionLitigationConsultants.com )

75% of my inspections get paid at closing. There has never been a time I did not get paid. I do not charge extra for this service. I guess it depends on how quick (or bad) you need the money. I have about $6000 owed to me at the moment.

James, that is the position I was in until relocating. Good luck with it, I would no doubt still be billing to escrow if not for moving to the big city.

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Jim Luttrall
Mr. Inspector.net, Inc.
Allen, Texas 75002

James,

That's a different problem than billing to closing and not related at all.

During my last 4 years or so in the business I seldom got paid at the time of the inspection and after I completed the report and gave it to my client they would mail be a check.

I typically had about $20,000 per month 'in accounts receivable' waiting on those checks. When I retired, it worked out good as I received the last couple of month's checks over the next few months following retiring ... it was nice getting $10,000 per month ... to bad it could not have lasted longer.

Anytime you 'bill for the fee' there is a risk of not getting paid, however, when you bill to escrow you are adding in the risk that it may not get to escrow - the deal may fall apart.

I'm glad you have been successful on those collections, but it does not always work out that way - so the advise to a new inspection should include those warnings.

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Jerry Peck, Construction / Litigation Consultant
Construction Litigation Consultants, LLC ( www.ConstructionLitigationConsultants.com )

I get paid at closing about half of the time. I must admit that I have not had a bad experience. I don't charge extra either.

All I do is keep a simple Excel sheet with the address, buyer's name, and realtor's name and number. If I don't get paid when I am told, I call the realtor. It has not been a big deal for me. Actually, my realtors like it because their client does not have to come up with my fee up front. It makes them happy, so they call me more often. Seems like a win-win to me.

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Brian Cooper, Located in the Columbia, South Carolina area.

www.CooperHomeInspection.com

As long as their happy, I guess that is all that matters.