My Round House

My Round House
Believe it or not, it's round!

Tuesday, August 10, 2010

A word about Inspections and reports.....

Ever had a house inspected?  It's highly recommended so you know exactly what you are getting and can purchase with the full awareness of what you're getting.  It's money well spent....sort of.

Inspectors are an odd lot.  Their profession is fraught with problems, not the least of which is tip-toeing around one HUGE conflict of interest.

On one hand, YOU are the client.  YOU are the person who pays for their service.  YOU are their bread and butter so they should be committed 100% to YOU by giving YOU a wholly unbiased warts and all inspection in order that YOU can make an informed decision on a pretty major life time purchase.

They usually tout themselves as just the guy you are looking for and that they will tell you EXACTLY what you are buying so that you can indeed make the informed decision you so desperately seek to do.....and, if what the tell you somehow improves your negotiating position and strength, so much the better.

On the other hand, the inspector community is nearly 100% reliant on the real estate agent community to continually refer paying clients to them.  Therein lies their inherent conflict of interest.

If, as claimed, they give you a wholly unbiased warts and all inspection report so that you can make an informed decision....and your informed decision is to NOT buy the property (which usually happens when buyers don't like what they hear), that costs both the seller and buyers Realtor lost revenue in the form of wasted time, energy, and commissions that just went down the crapper because the inspector issued a bad (oops!) wholly unbiased warts and all inspection report which caused the buyer to walk.  It's not rocket science to figure out that those Realtors are seriously going to reconsider referring business to that inspector in the future.

Soooo....the inspector suddenly comes face to face with reality, a major moral dilemma; If he's too honest and his honesty causes lost sales, while he might be doing you a good service, he's doing himself a greater disservice by becoming what is called a Deal Killer within the real estate community.  Realtors understandably don't like Deal Killers taking commissions and thus food from their mouths.  Realtors will simply stop referring customers to a Deal Killer.

No referrals, no customers.  No customers, no business.  No business, no money.  No money, no food, cars, or friends.  Carry that to it's logical and predictable conclusion;  No more wholly unbiased warts and all inspection reports.  It's a vicious circle with you the buyer usually on the losing end.

I encountered the same problem with my inspector.  I wanted a wholly unbiased warts and all inspection report because I wanted a good deal.  What I got was a pretty vanilla report filled with careful, deliberately worded vagueness guaranteed not to offend, not to compromise the bread line.   It didn't tell me anything new, anything I didn't already know and more importantly, it did tell anyone else anything either.  I had to go back to the inspector and insist he rework his report to clearly and explicitly outline some of the concerns he and I both observed AND DISCUSSED.

In my case, I have some experienced at renovating and was well aware of various problems with the house as seen with my own eyes.  What I wanted in this inspection was a second opinion confirming what I already knew to be problematic.  I wanted a second set of eyes to raise issues that perhaps I might have missed.  While I got most of that, I have to acknowledge my disappointment in his lack of integrity towards me, his paying customer. I can't honestly say that I would ever refer another buyer to him.


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