Tips for Navigating the Home Inspection Process
An agent’s responsibility toward their client — whether buyer or seller — often includes guiding through the home inspection. This is an extremely important part of the process, especially when a report is issued that recommends repairs. In almost all circumstances, remind your client an inspection is warranted.
For first-time buyers, the whole process is also an education. After all, there are many moving parts. But what is the agent’s responsibility when it comes to the inspection process? Does he or she have a duty to assist in this matter? A real estate agent does have a duty to be fair and reasonable in the home transaction process. Many believe that the home inspection is an extension of the sale.
Who Pays for the Inspection
This is actually the first step in the negotiation process. Before the home inspection is conducted, one party must pay for the inspection and the subsequent report that is followed. Usually the buyer is the responsible party. This makes sense as the buyer probably would want to hire their own inspector.
But this doesn’t mean as an agent that one should accept these terms. In a buyer’s market, why not suggest to the seller’s agent that the seller purchase the inspection report? An agent can negotiate on behalf of their buyer that the seller purchase the report, and many do! Many times this can come back as a credit on the buyer’s side during closing.
Should The Agent Recommend an Inspector?
It’s common for a client to ask their agent to suggest an inspector. The agent can provide a list of qualified inspectors for their client. Your state probably has a website of qualified inspectors. The agent should direct their client to the appropriate website.
However, it’s not ethical and it may be illegal to recommend an inspector who gives referral fee to the agent. The one caveat here would be to not only make the client aware of a relationship that exists like this, but also have him or her sign off that they are aware that this reimbursement system exists.
A problem could certainly arise if the inspection prepared was found to be negligent. This would surely have ramifications for both the inspector and the real estate agent. The client could file a lawsuit against both parties, and file a complaint against the agent with the appropriate real estate commission.
Should the Agent Attend the Inspection?
This is entirely a matter of preference. But if you are an agent yourself, it might behoove you to do so. The education provided by attending an inspection is probably reason enough. But if the report makes several notations regarding potential repairs, the agent can better negotiate on behalf of their client, since they attended the inspection. Most clients have no idea what occurs during an inspection. Most don’t even realize that they should absolutely attend the process so they can ask the inspector questions.
Don’t Offer Opinions During the Inspection
But you should also know that agents have been sued for interrupting home inspections and offering opinions. The agent should understand that they don’t have the knowledge and certifications of an inspector and should respect the process. They should simply stand back and observe, period. This is the one way to avoid confrontation between the inspector and buyer/seller. After the process is completed and the inspector has left, then the real estate professional can converse with their client.
Repairs to Negotiate on Behalf of Your Client
Buyers and sellers may not know that they can ask the other party to make the suggested repairs. Again, this will fall upon the agent. This is another reason why it’s so important to attend the inspection. Remember that there are types of repairs that shouldn’t fall upon the seller. An agent has the duty to relay this information to their client.
Seasoned agents seeking to have the seller pay for repairs should ask for an alternative payout. Rather than ask the seller to pay upfront for the repair, credit should be given to the buyer upon closing.
If the seller pays for the repairs out of pocket, it still may not satisfy the buyer. That is why the credit system works well.
Remember, even though the agent’s commission is on the line, the duty is to the client. Walking away from the purchase might be the best scenario. If terms cannot be met between which party should be responsible for the repairs, it’s better to find another home without the conflict.
Here is a recap of what the agent should and shouldn’t do in the inspection process:
- Remind the buyer, you are not a home inspector. You may not have the knowledge to answer their questions.
- Suggest to the buyer they find a qualified inspector that is licensed in the state.
- Agents should attend inspections when possible. Be sure to keep quiet during the process.
- Do not converse with the inspector about their duties. A simple hello or goodbye is warranted.
- Do not keep a copy of the report in a personal file.
- Do not provide the report to anyone but the person who paid for the inspection.
- Do not recommend a personal friend or someone who offers you a kickback for each referral.
- Many times the buyer will ask their agent about details in the inspection report. An agent shouldn’t provide an answer, if he/she isn’t knowledgeable.
There you have it. When it comes to the inspection process, an agent certainly has a duty to their clients in the process.
Rentkidz.com and has been assisting clients in the real estate industry for over 10 years in Texas. He helps answer common questions that buyers and sellers come across in common transactions.