The Gulf Between Real Estate Agents and Building Inspectors 8

Tuesday, August 4th, 2015
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It’s no secret that real estate agents and building Inspectors do not always see eye to eye.

Understandably, the agent needs to make a sale and the inspector needs to protect the property purchaser. Without both parties respecting each other’s intentions and outcomes, it can be a recipe for disaster with a potential conflict of interest.

Real estate agents need to comprehend the role of the pre-purchase inspector, which is to ensure that any potential defects in a home are reported and either rectified or negotiated in reducing the price of the dwelling. Not only is this morally the right thing to do, it also helps to guard the agent’s reputation.

Too often, agents become involved in conversations between the purchaser and the pre-purchase inspector because finding fault with the property could jeopardise the sale. When a property has defects, fix them. That way you will sell your home with a clear conscience.

Naturally, the vendor has a vested interest in a favourable report so it doesn’t prevent the sale or reduce the price. If the vendor organises their own inspection and the report comes with defects, there’s no requirement for them to improve their property based on report results. Therefore it is critical that anyone purchasing a property engages their own building inspector to inspect the property independently, and I would guard against relying on any reports that come with the property. In recent news the median house price in Sydney and Melbourne has reached around $1 million mark, making it even more critical to get the home inspected thoroughly for peace of mind.

There are times when agents prefer to ignore certain defects or faults in a home, i.e. when mould, asbestos and/or termites are discovered on a property for sale. The right thing to do is to remove the property from the listing out of respect for the next unsuspecting buyer. After all, it may delay a sale but it can also help keep the agent’s goodwill and reputation.

Often real estate agents disconnect themselves from property inspectors who do the right thing by the purchaser by reporting appropriately, and this does not serve anybody. In reality, the vendor also needs to be aware of defaults in their property so there are no nasty surprises when it comes to selling.

One word of advice for pre-purchase inspectors I give is to not become an advocate for agents simply because they may provide you with work. You are better off to build your business based on your integrity and professionalism and the work will come to you. Likewise for real estate agents, when recommending a building inspector to a client, make sure the inspector has a good track record, at least five years’ experience, and is insured. Failing to do this could find agent coming under scrutiny from buyers who may suspect the agent does not have their best interest at heart.

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  1. Sam

    All of which makes a complete farce of the system in the ACT that MANDATES that the Seller has to procure the report which is loaded with so many qualifications as to be all but useless to anyone (at a cost of around $1,000)!

    • Howard Ryan

      Yes it does, however in the ACT the vendor being the seller should also be prudent in who they have inspect their home. Advocates are not welcome here

  2. Branko Mladichek

    As pre purchase property inspector with thousands of inspections I fully endorse Howard's comments. Issues that stand out are:
    1 Real estate agent is not your friend but vendor's agent with aim to maximise sale price.
    2 Ethics can quickly evaporate when sale of the property comes into question
    3 I have been contacted numerous times with agents offering referrals for a kickback or offering to build some kind of relationship.
    I always say no then never hear from them again.
    4 Inspector must never loose sight of the responsibility to the purchaser. That's why I have no friends in what I do.
    5 I have been contacted at least twice by agents who never refer to me but want inspection because now they are buying their own investment.
    6 Got a call few days ago from angry customer who just settled and found termites wanting to know why I had not picked it up. It ruined my day. Office checking revealed he booked inspection 6 weeks ago then cancelled going with inspector agent recommended. When I called back and confronted him all he could say was: 00ps, err, sorry, called the wrong inspector. I think he knew and that I was insured and was just hoping I was not on the ball.

  3. Mark Whitby

    Good article Howard. And it seems that Sam has a good point too.

    One of my top references was a real estate agent who never got me to look at any of his 'for sale' houses, but got me to inspect his house, his mother's house and his sisters house!

    • Howard Ryan

      Its funny how the Agents know what to do for their own purchases but don't give a rats for their actual customers.

  4. Branko Mladichek

    When we first started property inspections a decade ago we always used to give our business cards to agents or send them in the mail to their offices, no more. We found it a waste of time because many agents prefer "soft inspectors" or the ones giving kickbacks for referrals. Even if agents were to give our card in most cases they would not be trusted by purchasers (for very good reasons RE agents credibility is low)and we would miss out anyway.
    We now rely on internet and cold calling and we get our share.
    Just a few days ago at pre purchase inspection agent said to me "look after me". When I told him "No chance" that my main and only obligation is to the purchaser he was visibly shocked.
    Lucky for him there were no significant reportable defects on the day.

    • Howard Ryan

      Well done, I myself get this from time to time and they too are shocked.