Editor’s note: The author is not an attorney and this article is not intended as legal advice or a legal opinion about whether your real estate agent should recommend your home inspector. It is based on the authors own research and conversations with inspectors and real estate professionals. If you disagree with the author’s opinion, please share your thoughts in the comments below. If you have a legal concern about a real estate agent, or inspector you’ve worked with in the past, please consult an attorney.
Q. Should You Trust Your Real Estate Agent To Recommend A Home Inspector?
A. Yes, No, Maybe.
The key to answering this question lies in understanding what is meant by the word “recommend”.
To get to an answer we need to understand that there are three issues to consider:
- Conflict of interest
The main concern here is the following:
Real estate agents profit from successful sales. Home inspectors have the ability to jeopardize sales. Therefore, if a real estate agent recommends an inspector, there might be a conflict of interest. The inspector may be inclined to let the sale proceed by overlooking issues in order to get future referrals from the agent.
When The Answer Is No.
So, if by “recommend” we mean a real estate agent directly recommending one specific inspector, or inspector’s company, the answer to the question is “No”.
Here it is helpful to note that a number of States have regulations prohibiting real estate agents from recommending a specific inspector. Most, if not all, professional organizations further prohibit inspectors from receiving commission, or paying commission to real estate professionals.
In addition to the conflict of interest, agents also expose themselves to unnecessary liability when recommending a specific inspector. If the recommended inspector overlooks a significant issue, either intentionally or accidentally, the buyers may attempt to initiate legal action against both the inspector and the agent that recommended the inspector. It is therefore in nobody’s best interest for a real estate professional to directly recommend a specific inspector.
Are there exceptions? Perhaps.
I know of areas, believe it or not, where there is only one home inspector serving an entire town (or island). This can put buyers, sellers and real estate agents in a difficult position.
The Common Practice Approach
There is another way of “recommending” an inspector which is common practice in many areas. Real estate agents will provide sellers with a curated list of inspectors they typically work with. This gives the seller the opportunity to do their own research and make their own selection. This practice is generally not prohibited by State regulations or professional organizations.
There are two benefits associated with this practice. Firstly, it helps buyers to quickly and easily contact potential inspectors. Considering that most inspectors have some online presence these days, and that most buyers can access the internet, this practice may be a remnant from the 1990’s when finding an inspector in the yellow pages could have been challenging for some in the midst of open houses, escrow conversations and general house hunting.
The second benefit of this practice, and probably the real reason for this practice, is that it allows an agent to provide buyers with a selection of ‘vetted’ inspectors. Competent inspectors with a track record of balanced and informed inspections and a history of satisfied clients. These are inspectors who would not ‘blow a deal’ over paint chips and dirty carpets, but who would be willing, if needed, to be the bearer of bad news, even if it ends the deal.
Unfortunately, this approach is not without risks, since any curated list can be manipulated. My agent provides me a list for:
- Joe Toolbelt’s Inspectional Services (No website and he never answers the phone)
- Milly “Minor Defect” House Inspections (Average 1.5 start rating)
- James & Sons Professional Property Inspections (Responsive, 4.8 star rating, Killer website)
Is it a coincidence if J&SPPI shows up at 99% of my agent’s inspections?
Just because manipulation can happen, doesn’t mean it does, but just because it doesn’t happen doesn’t mean it can’t.
What to do then?
One way to get past the pitfalls of the “curated list” approach is to provide a list of recommendations that is in proportion to the number of inspectors in your area. In a town with only 5-10 inspectors, a list of 3 will suffice. In larger metropolitan areas where you can easily find 20 – 30 inspectors without trying, a list of 5 – 8 inspectors is more appropriate. A list representing 10-20% of available inspectors in your area is a good start.
Always, don’t forget about telling buyers about the various Home Inspector Associations that offer their own directories which may be helpful should they decide to find their own inspectors. (Also remember HomeInspectionDaily’s slowly growing independent directory). This would also be a good time to tell buyers how to select a home inspector, and local licensing and registration requirements they need to be aware of.
Since “Recommend” in this case means providing a curated list of inspectors, with sufficient information for the buyer to find their own inspector, the answer is “yes” you can trust your real estate agent to recommend a home inspector.
Take away for home buyers
If you are a buyer, working with an agent, you should be able to trust your agent’s recommendations on all aspects of your transaction. However, given the risks associated with the buying or selling of a home you have to do your own due diligence and critically review all recommendations made by your agent. This includes recommendations regarding financing, legal advice, closing costs, escrow, making an offer, attending an open house, yes even finding an inspector.
Your agent’s goals might be aligned with yours, but it is not identical. What is deeply personal to you is most likely business for him, and there is nothing wrong with it. It is his job to assist you, but it is still his job. The same goes for the inspector.
At the end of the day, irrespective of how you’ve found your inspector, you are responsible for making a final decision based on the information you receive. If you attended the inspection, read the report, understood what was included and what was not, and still had questions the inspector was unable or unwilling to answer; if you are not satisfied with knowing what you’re getting into and feel like you’ve reached a dead end, find yourself another inspector. Yes it will take time, yes it will cost money, but the only person at the end of the transaction that will be left holding the bag will be you, so make sure you get the help you need.
Please take a minute to share your thoughts and experiences by leaving a comment below. HomeInspectionDaily.com want to provide helpful information to buyers, sellers, agents and inspectors, and since we don’t know everything, we need your help to do it.