FAQ: Should I use the inspector who was recommended by my agent?

Thanks for your question. It's a tough one. Who do you trust - someone you found on the internet, or the person that you've hired to guide you through the process? I'm not going to be able to give you a definitive answer, but let me offer a few points to consider:

• Who is best positioned to know who the good inspectors are? The obvious answer to that question is real estate agents. They are the professionals who are present at multiple inspections observing multiple inspectors. Not only do they observe inspections, but they also work with inspectors in follow up situations. They know who the professionals are. They know the market. They have established relationships with inspectors. The question is; what do they consider to be the qualifications of a good inspector?


• Real estate agents have a number of potential conflicts of interest with respect to the recommendation of specific inspectors.


• The most obvious conflict of interest is related to the agent’s concern that the inspector might find something wrong or deliver information in a way that might influence the buyer toward a decision not to go through with the purchase. Because the agent’s commission is directly related to the sale, an agent might be inclined to recommend an inspector who is less likely to point out the big problems or to be completely candid with the information or its relevance.


• This particular concern is balanced though, by the agent’s competing concern – that something might go wrong after settlement. In most cases, real estate professionals are dependent on repeat business and referrals for their incomes. They nurture past clients for years in hopes that they will get the listing and the sale when a given client moves. They farm small communities - often communities in which they themselves live. Word does get around. The most successful agents I know, are over sixty years old, with over thirty years of experience, who do most of their work within a couple of miles of home and spend almost nothing on marketing. They can’t afford for the word to get out that they recommend fly-by-night inspectors who candy-coat their findings.


• There’s the quid-pro-quo (this for that). Some of the larger firms and franchises have discovered that the best investment of their marketing dollar is advertising through brokerage channels – brochures, magazines, sales meetings and websites. In some cases, they pay money for these opportunities. In some cases they enter into preferred provider relationships – sometimes exclusive provider relationships. In these cases, a recommendation from a real estate agent is, in effect, a paid ad. The federal RESPA law addresses this. It is my understanding that, as long as the fee paid is directly related to advertising actually provided at market price; this practice is allowed under the statute. The state certification law and the ASHI Code of Ethics however, take different positions.

• So what are your alternatives?


• You could ask friends, coworkers, colleagues, neighbors, and family members who recently bought houses if they were happy with their inspectors. This sounds good, until you consider the knowledge base of your sources. In each case, you’re talking to a particular person who had a particular experience. Her frame of reference is one inspector at one inspection – not a very diverse sample.


• You could ask the agent for the criteria used to evaluate the recommended inspector:


• What do you like about this inspector?


• How long have you known him?


• How frequently do you use him?


• Is he an ASHI member?


• Is he state certified?


• Do you have another inspector that you recommend sometimes?


• Why do you recommend this one sometimes and the other one at other times?


• Did you buy a house yourself recently? What inspector did you use?


• Did you sell a house to an immediate family member (mother, father, brother, sister, son or daughter) recently? What inspector did you use?


• You could interview the inspector yourself?


• Background – What did you do before you got into inspections? Critical responses might be:


• Used car dealer


• Retired builder


• How long have you been in the inspection business?


• How many inspections have you performed in your career?


• Divide total number of inspections by number of years in business (inspections per year).


• Fewer than 200 is part-time.


• More than 600 is extraordinary. The important question here is, did he accomplish this feat by being extraordinarily organized or are his inspections less than thorough. I can think of examples of both.


• Credentials - Home inspection, as a profession, has only existed for about forty years.


• In 1976, a forward thinking group of inspectors joined together (in large measure to address this very question) to create the American Society of Home Inspectors (ASHI). Due to the practicality (focus on protecting the interest of both the inspector and the client) of its Standard of Practice and its Code of Ethics, ASHI membership has gradually become the accepted credential for home inspectors nationwide.


• The National Association of Home Inspectors (NAHI) emerged in 1987 with a similar mission. NAHI membership is easier to attain than is ASHI membership. The NAHI CRI (Certified Residential Inspector) credential is almost similar to ASHI membership. They both require testing (proctored exam) and have minimum experience requirements.


• There are a number of local inspector organizations serving different pockets of the country. Many of these are very good – FABI in Florida, CREIA in California (for example).


• With the advent of the internet, some pseudo-organizations have emerged. These are, in large measure, well optimized websites that masquerade as professional organizations capitalizing on the goodwill established by ASHI and NAHI. When evaluating claims made on the internet, I suggest a careful reading of the actual language and independent corroboration of any claims made. There are some very good looking high profile logos available in exchange for an annual fee (dues). The appearance of testing is accomplished by the administration of an online quiz (not proctored).


• When evaluating the organization to which an inspector belongs, I recommend asking a few direct questions:


• Did you actually take the test yourself? Are you confident that every member of your organization actually did?


• What is the corporate structure of your organization? Is it governed by its membership, or is it a for profit business owned by its executive director?


• How long has it existed?


• How many members does it actually have? How confident are you that this is an accurate number of individual professional inspectors?


• In the state of Virginia, there are three levels of regulation.


• Registration – Owning a car is an example. There are no legally required competency standards. Anyone can own one, but he must register it with the DMV.


• Certification – A voluntary state issued credential. It does have minimum competency requirements, but is not mandatory. I can’t think of a motor vehicle analogy.


• Licensing – Going back to our DMV analogy, this would be the driver’s license. In order to operate a car legally in the commonwealth, a person is required by law to meet certain minimum competency standards demonstrated by testing.


• Effective July 1, 2003 the state has made available a voluntary credential in the form of Home Inspector Certification. Those inspectors, who have chosen to become certified, are legally bound to a standard of practice and a code of ethics. There is a regulatory body that has the authority to impose consequences on inspectors who fail to comply with these regulations. You will find very few (if any) inspectors who are both certified and participate in proffered provider programs. Both the state certification code of ethics and the ASHI Code of Ethics disallow this practice.


• Training – There is reason to believe that the best background for a home inspector would be construction. A person with specific experience in a particular trade might be very good at evaluating a particular system, but his experience is likely to be limited to his specific specialization. Inspectors are generalists. They inspect all the systems and therefore, must be familiar with all the systems. One might expect then, that a general contractor might make a better inspector than might a plumber or an electrician. He deals with all the different components. Every builder I know subcontracts most of the work and is therefore, dependent on other’s specific knowledge. The argument proceeds – But he has to supervise all that work. Once again, my experience (and I’ve had this conversation with my students many times) is that builders depend on the county inspectors for quality control.
  
  In order to become competent home inspectors, all individuals require training. There are many training opportunities available. The good ones are not cheap. There is therefore, a market for inexpensive pseudo-training available marketed over the internet and on matchbook covers. There are some very good schools. More experienced inspectors may list all of their training experiences on their websites. These lists are often many pages long including every seminar an inspector ever attended.


• Peer review – An inspector who has been elected by his peers to represent them in some capacity has been granted some kind of meaningful endorsement by those in the second best position to evaluate his ability (the agent is still in the best position to observe).

In my assessment, the bottom line is; the inspector that your agent has chosen may well be the best inspector in town. There are indeed conscientious agents who do care for their clients. I know many of them. If you don't trust the agent you're working with, you may be well advised to find another agent.

Hollis Brown