Is your inspector working for you or the real estate agent?
October 28, 2013 10:31 PM
By Tim Grant / Pittsburgh Post-Gazette
Home inspectors and real estate agents work together, but not always for the best interest of the homebuyer, says Bruce McClure, a Toronto, Canada-based licensed home inspector and author of "Buy or Run: I'm a Real Home Inspector Not a TV Celebrity!"
Too many home inspectors turn a blind eye to serious issues with a house in order to help close the deal, said Mr. McClure. That leads to unsuspecting homebuyers who have paid good money for a home inspection only to end up with a house of horrors.
"Home inspectors are small business people and the majority of us will market our services to Realtors," Mr. McClure said. "They know if they go out and blow the sale for the Realtor, the Realtor will not refer them in the future.
"People like myself gain a reputation for being deal killers because I work for my client -- the homebuyer. I want to protect their best interest, which means pointing out issues and telling them what's wrong with the house and things that may end up costing them money."
A home inspection can make or break a real estate transaction. Buyers often have the right to back out of a contract to buy a house or ask for a lower purchase price if the results of the inspection reveal significant structural problems.
In the U.S., only 35 states -- including Pennsylvania -- have licensing requirements for home inspectors.
The American Society of Home Inspectors estimates there are between 25,000 and 40,000 home inspectors in the U.S. There is no official number of home inspectors due to some states having no licensing requirements and the fact that there are multiple volunteer associations that set standards for the industry.
"There is no standard inspection format," Mr. McClure said. "Many jurisdictions stipulate that the inspector must follow the American Society of Home Inspectors or the Canadian Association of Home and Property Inspectors standards of practice, but do not require the inspector to be a member of either association.
"As a result, there's no one making sure these inspectors follow the standards or rules."
At one time, the property appraisal industry faced similar criticism for doing a poor job of estimating the value of real estate prior to the housing bust, largely because appraisers were influenced by Realtors and financial institutions that needed homes to have a certain value to complete a sale. Now property appraisers are guided by different rules meant to avoid any conflicts of interest.
Walter Molony, a spokesman for the National Association of Realtors in Washington, D.C., said real estate agents do refer buyers to home inspectors and vice versa. He said real estate agents look for someone with no conflict of interest. The home inspector should provide a written report and welcome the buyers to go along on the inspection to take notes.
Mr. Molony also said the home inspector should be a member of a professional industry organization.
Stephen Gladstone, owner of Stonehollow Fine Home Inspection in Stamford, Conn., and 2004 president of the American Society of Home Inspectors, said he has been in the business for 30 years and he agrees with many of the points raised by Mr. McClure.
"Like any business, as you get better you see things," he said. "The more experienced inspectors out there will see the items that are important. They will see that house for what it is and that may scare a Realtor."
Home inspectors could be liable for failing to point out serious problems in a house, which is why they are required to have errors-and-omissions insurance. Mr. McClure said lawsuits against home inspectors are far more common than many people realize. Some of the lawsuits are trivial, others major.
"We somehow need to separate the home inspection from the real estate contract and the influence of the Realtor," he said. "Until we do this, government licensing, rules and regulations won't mean anything because at the end of the day, Realtors are in charge."
Tim Grant: firstname.lastname@example.org or 412-263-1591.
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