August, 2013
Ethics
Inspection News and Views from the American Society of Home Inspectors



Keeping the Agent in the Loop without Losing Sight of Who Is the Client

P. NATHAN THORNBERRY

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There’s a disconnect amongst inspectors throughout the U.S. between what they believe their job is and what their job actually is — and it tarnishes the views agents and the public have of us as an industry despite our best intentions. As home inspectors, we rightfully believe our job is to inspect homes. That is our primary job function — identify defects and put them into a concise report format free of any conflict of interest (i.e., having no interest in the repairs to be made afterwards or a direct interest in the sale of the home). We all do this, of course. I haven’t met an inspector who doesn’t, and I’ve only personally met around 5,000 of them. Home inspectors are the most ethical, thorough, technically minded people in any profession, and they all put the client first . . . or at least try their best to.

The reality is that most inspection clients are homebuyers involved in a real estate transaction. In nearly all transactions an inspection response will be made, citing the inspection.

Why is it then that so many inspectors don’t deliver reports to the real estate agent responsible for creating that inspection response? Here’s the most common answers I’ve come across in my 14+ years in the business and hundreds of presentations to thousands of inspectors:

• “I have a duty to my client, not the agent.”
• “It’s not legal for me to give a copy to anyone but the client.”
• “It’s the obligation of the client to pass on the report.”
• “Liability.”
• “The agent will give the report to someone else if the transaction doesn’t go through.”

It’s indisputable that the report in the hands of the agent representing the client is more convenient for all, and it’s absolutely necessary in most situations in order to fulfill the inspection response portion of the purchase agreement — the very reason we are all in business! All the same, in order to get to a place where we are more friendly to the transaction without losing sight of who the client is or changing our inspection, we have to address the reasons why inspectors don’t want to share the report.

Objection #1:
“I have a duty to my client, not the agent.”
Yes, you do have a duty to your client, who is being represented by the agent in the transaction that will be formulating an inspection response on the client’s behalf. A part of your duty to the client should absolutely be getting a report into the agent’s hands. Think about it — you find a defect. What happens from there? Often the client will ask the seller to fix it. If there is an opportunity for that and it doesn’t happen quickly within the time allotted, then you finding that defect was a useless exercise. Any money spent on your inspection services was wasted. The primary function of the inspection report is to be used as collateral in backing up the contractually allowable inspection response — a function only the agent or attorney involved in the transaction is permitted to advise the client on. In other words, you may think you’re simply shunning the agent, but you’re actually shunning an extension of your client and standing in the way of any of the actual benefits of your job function for your client.


Objection #2:
“It’s not legal for me to give a copy to anyone but the client.”
In some areas, this may be true . . . if you don’t get permission from the client! Bottom line is this, if your inspection agreement reads that a copy of the inspection will be delivered to the client’s agent and they sign it, it is legal everywhere to give a copy to the agent. If the client takes issue with a copy being delivered to the agent, then cross out the line and initial it and let the client know that they can pass it on to the agent when they feel comfortable. I would also consider making a phone call to the agent to explain what happened.

Objection #3:
“It’s the obligation of the client to pass on the report.”
If this is how you feel, you’re probably not cut out for running a business. The next time you show up to an inspection, you might consider handing the client the outlet tester as well and putting them to work. Home Inspection is a service industry, and we’re here to serve. Outside of the three hours on site, you’ll be taking phone calls with questions, emailing documents, arranging access to listings and all sorts of things that you need to do for your business. Don’t get sucked into a mentality of “that’s not my job” or it will take a toll on your income.

Objection #4:
 “Liability.”
There’s liability in flushing a toilet. We still do it to test the toilet. So far as liability associated with delivering a report to an agent with the written consent of the client because it was built into the inspection agreement — there hasn’t ever been any. Do a search for court cases, talk to an attorney, or if you have E & O insurance, call your agent. You’ll discover this supposed liability is really only in our imagination.


Objection #5:
“The agent will give the report to someone else if the transaction doesn’t go through.”
That could happen. The adverse consequences of it are the proverbial needle in a haystack and the benefits are substantial. I can’t imagine anything better than the work product of my inspection company — the inspection report — being in the hands of a buyer in the market and being seen by all the agents associated with a property. Many, if not most, inspectors have some variation of the verbiage contained in the inspection agreement in the report itself to protect from third-party liability.

Whatever other objection you can come up with is really just an excuse for not wanting to work with agents. Maybe you’ve had a personal bad experience with one, and that’s fine, but you’re taking it out on your clients. Doing an inspection and then making it difficult in any way to utilize in the inspection response is a lot like building a house for someone and then never handing them a key. You can build the best house ever, but it’s really of little use to someone if they can’t open the door! 

P. Nathan Thornberry is the president of the Inspector Services Group, marketers of 90-Day Warranties, RecallChek and administrators of the Alarm Leads Program for more than 3,800 professional home inspectors throughout the U.S. and Canada including countless ASHI members and every major home inspection franchise. You can contact him directly at Nathan@NathanThornberry.com or see him
live at InspectionWorld Nashville January 12th thru the 15th.