The Rogue Home Inspector

By
Commercial Real Estate Agent with RE/MAX West Realty Inc., Brokerage (Toronto)

The Rogue Home Inspector

  
By Brian Madigan LL.B.

Most Home Inspectors are quite legitimate. They are professionals who take their business seriously and conduct their business affairs in accordance with sound ethical practices.

Then, there are the rogue inspectors! Who are they? These people are "hired guns", they are "rogues" in the sense that there reports are "for sale". They act for purchasers and it is their role to find something wrong with the property. Anything! It doesn't really matter all that much. But, they will total up the potential repair bills and provide ammunition to a purchaser.

Let me first deal with the gold standard. Here you will find Carson Dunlop and others like them. They are truly professionals and provide independent opinions to vendors and purchasers alike. Their reports are fair and reasonable and meet all the appropriate standards of care.

Vendors will secure a report from Carson Dunlop when they believe that they might receive multiple offers for their home. A Carson Dunlop report will be provided to all the prospective purchasers, and then none need to include a home inspection condition in their bids.

But, what about the rogue inspector? These people are usually part-timers. They don't maintain offices. They operate out of their cars and have a laptop computer. They seem to do a lot of work for the same real estate agents.

So, here's how it works. The purchaser secures the property at a negotiated price subject to a home inspection condition. The inspector is always unavailable until the day before the condition is due to expire. Then, the inspector hurries through the home and prepares a report which is again at the very last moment. Whatever the price, and whatever the negotiated terms may be, a predetermined estimate of the potential reduction in the purchase price is made. And, that's just what the report will say!

Naturally, if it's too much, then it completely lacks credibility, so this report is a "measured response". How much less do you think that the vendors will accept, now that their property has been sold, and effectively off the market for a week, $5,000, $10,000, $15,000? Well, that's the precise amount you are going to find in the rogue inspector's report.

Now, armed with this information, the purchaser's agent will seek to re-negotiate the purchase price.

Rogue inspectors don't last long in the business. Their reputation precedes them. Vendors' agents will refuse to permit them to do inspections. They will have to move and order new business cards. Unfortunately, in a large metropolitan area, they don't have to move too far.

Presently, the home inspection business is not a regulated industry. There are voluntary associations, but that's not entirely satisfactory to the consumer.

So, my advice: go to a reputable, qualified, professional, ethical inspector who will provide sound advice whether you are buying or selling. By the way, if you have to go to Court, their reports will be the gold standard.

Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through Royal LePage Innovators Realty, Brokerage 905-796-8888
www.OntarioRealEstateSource.com

 

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Rainmaker
1,184,477
Steven L. Smith
King of the House Home Inspection, Inc - Bellingham, WA
Bellingham WA Home Inspector

Interesting report. In this state we have licensing so all inspectors have to test and meet a basic minimum level. Personally, I only know one inspector in the state, I am sure there are others but I know many, who give repair estimates. Most of us cite problems, hopefully prior to the last day of the contingency offer, and let clients take the costs from there.

Feb 08, 2011 02:20 PM #1
Rainmaker
895,509
Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker

Steven,

A few of thse people give the industry a bad name. So, it's very important to work with someone trustworthy.

Brian

Feb 08, 2011 02:30 PM #2
Rainmaker
372,017
Robin Dampier REALTORĀ®
Coldwell Banker King - Hendersonville, NC
Hendersonville & Western NC Real Estate Source

Wow, we've encountered a few that can create unnecessary angst and/or kill a deal but nothing like what you are describing, thank goodness.  In NC all Home Inspectors are licensed and as in any business there are always a few bad apples but generally speaking I would have to say our Inspectors are of the Gold Standard.

It will be interesting to see others comments.

Sue of Robin and Sue

Feb 08, 2011 02:30 PM #3
Rainmaker
895,509
Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker

Sue,

There is no licensing in Ontario. That wouild be helpful to the vast number of excellent home inspectors.

Brian

Feb 08, 2011 03:24 PM #4
Ambassador
1,103,598
Charles Buell
Charles Buell Inspections Inc. - Seattle, WA
Seattle Home Inspector

I have never heard of anything like you are describing.  As far as using a sellers inspection report to forgo the buyer getting one is a really bad idea on the part of the buyer.  Used as "part" of the total inspection process I think they are great, but should never be seen as an end in themselves.

I am constantly up against short contingency periods---I think 10 to 15 days should be a minimum, but I find that most sellers agents set the terms contingency---and seem to want it to be as short as possible.  5 days is common and that is not long enough to get me most of the time---and if it is it seems like it is on the last day.  What is a buyer supposed to do with that?

Feb 08, 2011 04:14 PM #5
Rainmaker
895,509
Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker

Charles,

I was quite surprised about this too. However, I think it's fairly limited. I really only know of 2 people like this.

And, the same agents use them over and over.

Brian

 

Feb 08, 2011 04:33 PM #6
Rainmaker
95,077
Jim Bushart
Licensed Public Insurance Adjuster - Springfield, MO
Missouri Licensed Public Adjuster

As the definition of "rogue" being one who is "Operating outside normal or desirable controls" I am a proud rogue inspector.

Inspectors should be totally independent from the "control" of the real estate salesman who is attempting to sell a building and an inspector that a salesman feels that he can "control" should never be hired by a potential buyer.

Feb 09, 2011 10:10 AM #7
Rainmaker
895,509
Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker

Jim,

Good point. I used the term "rogue" in the sense that thgere were some who didn't follow a professional code of ethics etc.

Independence is key.

Brian

 

Feb 09, 2011 10:33 AM #8
Rainmaker
95,077
Jim Bushart
Licensed Public Insurance Adjuster - Springfield, MO
Missouri Licensed Public Adjuster

Just for clarification, Brian...your entire post is about two individuals and your prescribed remedy is to help others to avoid the possibility of engaging these two people?

In the United States in 2010, scores of real estate salesmen were arrested and prosecuted for crimes ranging from fraud to rape to child molestation.

How appropriate do you think it would be to start a thread warning parents of small children to protect them from sexually deviant real estate salesmen?

Are you just angry because a couple of guys killed your deal, Brian, and you needed to take it out on an entire industry?

Feb 09, 2011 02:29 PM #9
Rainer
13,282
Joseph Hagarty
Main Line Inspections, Inc. - Parkesburg, PA

If by "Rogue" Inspector you mean to suggest
Someone that offers a Valid Opinion contrary to Your Own.....
Good Luck....

Maybe works for your business model in Canada,,,,,
Will never work in the USA...

Ironic that you did not suggest that alternative reports indicated erroneous findings...
only findings EXCLUDED from your report.......

 

Feb 09, 2011 02:49 PM #10
Rainmaker
895,509
Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker

Jim,

I am involved as an expert witness in two cases involving two different inspectors. I know that the problem is larger than that, but I don't have pesrsonal knowledge, just second hand information.

The case involves the ethics of the agent not the inspector. There are no regulations for inspectors in Ontario.

Brian

 

 

Feb 09, 2011 03:51 PM #11
Rainmaker
95,077
Jim Bushart
Licensed Public Insurance Adjuster - Springfield, MO
Missouri Licensed Public Adjuster

It is even more interesting that you are serving as an expert witness regarding alleged unethical activities of two real estate salesmen...and...instead of a thread about two unscrupulous real estate salesmen you decided to target the home inspectors that these two allegedly unethical real estate salesmen chose to recommend.

Perhaps a more appropriate warning, Brian, would be to advise the public that they are better served to find another source for a home inspector than from someone who stands to financially gain from the sale of the house....such as a real estate salesman who very well could be, like the two you are being paid to witness against, less than honest.

 

Feb 09, 2011 04:15 PM #12
Anonymous
WIll Decker

Brian, a few comments are needed.

1) In my state, Illinois, home inspectors became licensed starting in 2002.  A national association (ASHI) pushed for licensing and, I believe, that they did so in order to "lock out" people who were not ASHI affiliated.  This didn't happen, thankfully, and NACHI is now as well known and professionally viewed as ASHI.  In some cases, even more so.

2) As part of this national drive for licensing, ASHI started its "branding" campaign.  During this campaign, they attempted to "brand" in the minds of the public, but more importantly, in the Real Esate community's mind, that to be an ASHI member was the same thing as being licensed, professional and the only inspectors worthy of the name.  Please don't get me wrong, I have nothing against ASHI inspectors and know quite a few very good ones.  I am merely explaining the motivation of the association's leadership at the time.

3) Many state NAR chapters joined in this branding, as well as in the licensing push.  As a result, our state wound up with Realtors on the state board that oversees home inspectors.

4) Whyin the world would the real estate community, and the NAR in general, think that they have any business being involved in the regulation and/or licensing of home inspectors?  These are two totally different professions with different expertise and qualifications.  Thankfully, within a few years the state licensing authority realized this (mainly, because of the lobbying efforts of our local NACHI chapter) and removed realtors from any involvment or input into home inspector regulation.  This is how it should be.

5) Many inspectors, sadly, still see Realtors as their main referral source.  This is a disservice to both industries.  I have many agents and brokers who refer me, and some who refer me exclusively.  But I have never asked them to do so, marketed myself to them (other than just doing a good inspection for the client) and would never do so.  I work with them because of mutual respect and professional recognition that we both serve the same client, but do so in very different ways.

6) I have had many clients talk me up to find as many things wrong with the house as I can because they want to negotiate for a lower price.  I have also had many agents request the same thing.  These clients, I don't do business with.  These agents, I report to the state licensing ethics board.  I have even gotten a few broker licenses pulled for the really bad ones.  I do the same inspection, professional, thorough, unbiased and fair, for ALL my clients.  If the client doesn't like that, they they, not I, have a problem.  If the agent (either buyer's or seller's) doesn't like that, well that is just too bad.

7) As to your poimnt of the "vendor's agent refusing to allow them to do the inspection", that is unethical and illegal in the U.S.  A contract of sale has an inspection clause and the client (the buyer) is contracturally free to hire anyone they want to do the inspection.

8) Around here, all RE transactions are handled by lawyers.  I know that this is not the case everywhere, but it is here.  I find that to be a very good idea because lawyers, generally, have a much more mature and experienced understanding of ethics and are obligated to represent their client's best interest while many (not all, but many) agents and brokers around here are not.

My 2 1/2 cents.

 

Will Decker - Decker Home Services.

Feb 09, 2011 05:46 PM #13
Rainmaker
95,077
Jim Bushart
Licensed Public Insurance Adjuster - Springfield, MO
Missouri Licensed Public Adjuster

I would like to add a thousand exclamation points to Mr. Decker's very accurate analysis.

 

Feb 09, 2011 06:20 PM #14
Rainmaker
895,509
Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker

Will,

Thanks for your comments which certainly add some light to the industry, particularly as it stands in Illinois.

I have over 2,000 articles posted, most deal with unethical conduct on the part of real estate agents rather than home inspectors.

Myself, I use several home inspection companies. In my view they all maintain high ethical standards.

And, yes, I'm shocked to find that in some cases the contents and opinions in a report may be "for sale" for a price. It was in that sense that I used the term "rogue" as representing someone "ungovernable" and "unethical".

Independent, ethical inspectors are easily found in the GTA. There isn't a real push for regualtion. There was a desire about 5 years ago, but that seems to have gone by.

Brian

Feb 09, 2011 10:02 PM #15
Anonymous
WIll Decker

Brian;

I would posit that the best solution to these clowns (yes, we have them here as well, in a license state.  Government licensing does not stop this.) is to have professional associations comprised of professional inspectors police themselves.

- Professionals are the people who most object to the clowns.  The clowns reflect on all inspectors, to the detriment of the entire industry.

- Professional associations are not limited to the restraints of legal due process that government agencies are.  If they find one of their membership to be unethical or "for sale", they can kick the guy out and black ball him without him being able to appeal for his "rights".

- Professional associations, especially ones who have high standards on continuing education and qualifications, create a high bar for membership, as well as peer pressure during the training that helps to raise the quality of the members

- Professional associations can more easily educate the public about their profession, and instruct the public on what to look for in a professional inspector.  Avoid the low cost inspectors who only do a quick check list type report.

- Professional associations also work to reach across the gap between the HI profession and the Realtor profession.  This fosters better understanding and less tension between these two groups.  It also helps to draw a clear, plain line between where one professions expertise and authority ends and the other's begins.

If these steps are followed, both professions flourish and become more professional and ethical, and the public is better served.

Hope this helps;

Will Decker

DeckerHomeServices.com

Feb 10, 2011 08:37 AM #16
Rainmaker
895,509
Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker

Will,

I sincerely appreciate your very valuable contribution to this topic.

I teach a several continuing education credit courses for real estate agents, and several are sponsored by home inspection companies. So, in that regard, I have an affinity for the industry.

Brian

Feb 10, 2011 10:13 AM #17
Rainmaker
575,351
Chris Smith
Re/Max Chay Realty Inc., Brokerage - New Tecumseth, ON
South Simcoe, Caledon, King, Orangeville Real Esta

Brian, I have not use Carson Dunlop in a while, but I do agree with you they are among the elite.  My two cents would also add Pillar to Post in that group.

Feb 13, 2011 08:36 AM #18
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