I have learned of a monumental hypocrisy in this industry, and I want to share some of my experiences regarding this. The hypocrisy is this: Home Inspectors work for the Home Buyer who hires them to conduct a thorough and impartial inspection of their prospective new home. Is this what actually happens in reality? Most of the time that answer is a resounding NO! I will be explaining this in greater detail in subsequent posts. For today, I just want to describe an event that happened to me about 2 weeks ago which highlights this problem:
Many real estate firms have something they call a "preferred vendor program". In short, these "preferred vendor programs" provide a structure wherein area real estate firms and their realtors are agreeable to actively promote the home inspection services of only those inspectors who have paid to them some 'participation fees'. Ostensibly these fees are portrayed as a means to help defray the costs they incur to promote home inspectors. Hence, consumers are advised by such materials that brokerage firms and Realtors can offer comprehensive services, including home inspection services, by referring them to some known & "approved" home inspectors. No methodology exists for assessment of a home inspector’s abilities, other than their payment of the 'participation fees'. What this means to you as a consumer is that some realtors may be attempting to steer you towards using a specific home inspection company based upon that inspector's financial contributions towards their office, rather than on an inspectors ability. To an unknowing consumer who views this as a realtor looking out for his/her best interests... in reality, this takes the control of the home inspection process out of the consumer's hands where it rightfully belongs, and encourages "preferred" inspectors to write "soft" reports to ensure that the inspector continues to get future inspection referrals from real estate agents. I view this as a very serious conflict of interest and a breach of ethics.
As an example: at 10:31a.m. on Wedesday, 15 August 2007, I received a phone call from a person who identified themselves as a representative of Cent**y 21. Her opening line was: "Would you like to start getting inspection referrals from Cent**y 21 realtors? I'm not stupid... I said "Of course, that is a silly question". She replied that they have over 400 agents in the Treasure Valley. (There are actually more than 5,000 agents from all agencies in total... so they are roughly 10% of the overall). She said they would gladly place me on their "preferred" list if I would only pay their fees to "participate". I quickly replied that this was a very serious breach of ethics and I would never participate, and asked her to never call me back again. At a single stroke, I took my business out of contention for roughly 10% of the market share of inspections. Cent**y 21 agents will likely never refer me to a client, because I did not pay their "fee" to become listed. What this all means, is that when a Cent**y 21 agent refers an inspector, they are doing so because that inspector paid them to be on their "list". Now, is that inspector working for the homebuyer, or is he really working for the agent? Are the Cent**y 21 agents really referring the very best inspector to their client? No! My dog could get on their list if he only pays their "fee". An inspector with absolutely no training and no experience can easily get on their "preferred" list, if he only pays them for it. How disgusting!
OxBow Home Inspections does not participate in, or promote preferred vendor lists in any way, and encourages you as a consumer to exercise your right to hire the home inspection company of your choice. As long as you are the one paying for the home inspection services, the decision as to which home inspection company inspects your home belongs to you. The vast majority of home inspectors in America receive the bulk of their business in the form of referrals from real estate salespeople. Keeping these salespeople happy has become the primary concern of most (not all) inspectors. Often times this is done at the expense of an unsuspecting home buyer who frequently ends up with a "soft" inspection report, done to avoid angering the inspector's "Gravy Train" (referrals from agents). I have actually been "blacklisted" by several real estate offices, because my reports are so complete, in depth, unbiased, and thorough. The very, very few agents who do refer clients to me, do so because they really and truly care about their clients more than they care about some commission, and they want their client to receive the most comprehensive and honest inspection available. And since 15 August 2007, I am obviously "blacklisted" from Cent**y 21 as well, and that's okay. Common sense and human nature dictate that an inspector who pays his bills, feeds his family, and puts his kids through college based upon the business he generates from marketing to realtors, would be naturally inclined to do what is necessary to continue getting that 'bread & butter'.
Yes, it is true. Most home inspectors spend huge sums of time and money courting Real Estate Agents. Go to any agency office, and you will see numerous flyers, brochures, etc... from Home Inspectors. They take candies and doughnuts and other things to agents, in the hopes of future referrals. Now, when they get a referral from said agent, do you think that they will write a harsh, unbiased, and critical report of the home for the BUYER, when such a report might change the buyers mind, and cost that agent a $15,000 commission fee? Unlikely! Human nature intervenes, and most often the inspector writes "soft".
Mind you... this is not ALL Agents; nor is it ALL Inspectors. But I would estimate it to encompass 90% in each category. Log into any of the nationwide inspector trade organizations (ASHI, NACHI, NAHI, IAMI, etc.) and look at their message boards.... you will find this to be true. There are only 3 inspectors in all of Idaho who have signed a sworn statement that they refuse to market to agents, so they they can give a fair, honest, and impartial report to their client (the home buyer). I am one of those 3.
This is explained a bit more in detail on my web site. Go to http://www.oxbowinspections.com/, and click on the sentence about: "what makes my services different?"
Wednesday, September 5, 2007
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