How Real Estate Agents Work with Home Inspectors

Posted On: November 21, 2024
How Real Estate Agents Work With Home Inspectors

A home inspection can make or break a sale. Buyers can discover their dream house needs thousands of dollars in repairs, while sellers might face unexpected negotiations or even lose a potential sale if significant issues are uncovered.

It can be a rough wake-up call for everyone involved.

As a real estate agent, you can help your clients navigate the inspection itself and the subsequent negotiations. Below, we’ll talk about the role of a home inspector in a real estate transaction and tips for working with home inspectors as a real estate agent.

Is A Home Inspection the Same as a Home Appraisal?

Home inspections and appraisals are different processes completed by different professionals.

Appraisals focus on evaluating the current market value of the home.  Flaws are a part of that valuation, but finding problems isn't their primary job.  Mortgage lenders typically require appraisals to make sure the property is worth what a buyer is paying.

Inspections focus on the condition of the property and its systems exclusively. The role of a home inspector in real estate transactions is to look for health and safety issues, as well as minor repairs.  They aren't required (by law or by lenders), though the FHA strongly encourages it.

What Qualifications Should the Home Inspector Have?

As an industry professional, your clients will ask for recommendations on an inspector. As a new agent, you can ask your brokerage who they prefer. 

As you become more experienced, pay attention to the work of the inspectors you meet and curate your own list.

Here are a few of the things you should consider before recommending an inspector:

  • Licensing. Most states require licensing for home inspectors, but there are 15 states that don't.  You should know your state's requirements, and always double-check the status of inspectors – especially if you’ve never worked with them before.
  • Certification. Even if your state doesn't have licensing, you can check inspectors' certifications.  The American Society of Home Inspectors (ASHI) is the most common and sets standards for the industry.  The International Association of Certified Home Inspectors (InterNACHI) is another.
  • Thoroughness. There is no standard inspection format, but your state may provide requirements on what needs to be evaluated, and ASHI may publicly post its standards of practice. You can use these as guidelines to recognize how thoroughly an inspector does their job.
  • Accuracy & Context. Every home is going to have issues on inspection. A good home inspector should be able to say when the problem is minor and when it needs to be looked at by a professional. They should be able to advise clients on the relative seriousness of the problem. Their written report should be consistent with what they communicated in person.  You don't want them to downplay major problems, but you don't want them to blow issues out of proportion, either.

What Happens If the Inspection Finds a Problem?

The important part of the real estate agent and home inspector collaboration to master is the level of response that different problems warrant.

There are a few ways the sale can go after an inspection:

  • The buyer walks away. They're within their rights to do so under certain circumstances.  Your clients should reserve this option for extreme problems: major structural issues, termite infestations, severe water damage, and so on.
  • The seller brings in experts. If the inspector's findings seem to exaggerate a problem, sellers can bring in experts to re-evaluate the problem.  You should proceed down this road carefully and with reputable professionals to avoid alienating the buyer.
  • The buyer asks to renegotiate. For medium-sized issues, the seller should expect buyers to ask for either repairs or a lower purchase price to cover the cost.
  • The buyer accepts things as-is. If the only problems are minor or cosmetic, the buyers might not bother renegotiating.

Realistically, the condition of the housing market also impacts this process.  If it's a strong buyer's market, then buyers can demand more concessions.  If it's a hot seller's market, sellers can more easily negotiate an as-is sale.

How Long Does a Home Inspection Take?

An average-sized house will take a few hours.  The inspector will walk through the house's exterior, interior, and the surrounding area.  They'll note down any defects or hazards and their severity.

The written report should take three or four days to complete.

When Does a Home Inspection Happen?

There are two kinds of inspections in residential sales.

A buyer's inspection happens after an offer but before closing.  Nearly all home sales (80% of resales) will go through the buyer's inspection process.  They cost less than $1,000 and act as an important safeguard for the buyer.

A seller's inspection happens before the home is listed if it happens at all.  They give sellers an opportunity to get ahead of problems, but there are downsides.

Should Seller's Agents Encourage a Seller's Inspection?

The answer depends on your seller and their house.

A pre-listing or seller's inspection can allow your clients to handle issues before a buyer ever sees them.  It can also help smooth the way during closing and relieve some of the stress during the final stages of a sale.  Your sellers won't have to worry that the buyer's inspection will reveal a major problem they're unaware of (theoretically).  For all these reasons, seller's inspections are becoming more common.

On the other hand, sellers are legally required to disclose their inspection report to buyers, so it's a bell that they can't un-ring.  And different inspectors find different things, so there's no guarantee you'll eliminate all surprises.

If your sellers are particularly high-strung or their house is on the older side, a seller's inspection is probably valuable.  If the house is relatively new and they've been diligent with maintenance and repairs, not so much.

Should Agents Attend the Home Inspection?

This is a personal call every agent has to make for themselves. Clients are more likely to expect attendance from buyer’s agents than seller’s agents – the exception being when you’re undergoing a seller’s inspection.

In the "pro" column, attending means you'll know what was said if and when your client gets nervous.  You'll also have a chance to evaluate the inspector for future work. In the "con" column, you could make yourself a nuisance or expose yourself to liability.

As a new agent, you should probably attend at least a few so you can make an informed decision about whether you find it valuable to your clients. But when you attend, remember that you aren’t a home inspector. You'd hate it if they tried to do your job, so you shouldn’t try to do theirs. 

Tips for Working Well with Home Inspectors

What is the secret recipe for a real estate agent/home inspector collaboration? Here are a few things to keep in mind.

Set Your Clients’ Expectations Appropriately

Before the home inspection, make sure your clients understand what is included in the inspection and what is excluded. If it’s a visual inspection only, explain those limitations.

But don’t put the responsibility entirely on your shoulders. Encourage your clients to read the inspection agreement before authorizing it. This is a fairly short document that lays out the limitations and exclusions.

Learn to Communicate Effectively with Inspectors

Communication between real estate agents and home inspectors is the key to ensuring that the inspection and the subsequent steps go as smoothly as possible. It’s particularly important to clarify and confirm information in two areas.

One is scheduling. You want to be sure you’re on the same page for not only the scheduled inspection time but also the delivery of the report. This way, you both look professional and prepared for the clients.

The other critical area for mutual understanding is the severity of any problems that are found upon inspection.

One thing to keep in mind is that home inspection is a task that comes with substantial liability, and 60-70% of inspectors are self-employed.  That can make some practitioners skittish and lead them to red flag every issue, especially in writing.

Avoid Liability for Acting Outside Your Role

While it is your job to advocate for your client, stepping outside your role during the inspection process can open you up to liability.

Essentially, by criticizing the home inspector or pointing out problems the home inspector “missed,” you’re positioning yourself – accidentally or not – as a higher authority. This means when something goes wrong, it won’t just be your inspector’s name on the lawsuit, it’ll be yours as well.

As we’ve mentioned, this kind of behavior will strain your relationships with home inspectors and create liability.

Build Mutually Beneficial Long-Term Relationships

A good real estate agent-home inspector relationship can be beneficial to both of you in terms of business. Not only can it lead to mutual referrals, but it can also help you work more smoothly together. 

For example, if you end up in a tight spot where you need a quick turnaround on a home inspection, are you more likely to get it from someone you know and work well together or a total stranger?

Avoid Influencing Clients’ Choice of Inspector

While it’s good practice to network with home inspectors and cultivate relationships, you need to be careful not to take it too far.

Pushing your client to use a certain inspection vendor can lead to lawsuits for undue influence. You should disclose any conflicts of interest and avoid working exclusively with one home inspector or with any professional who participates in preferred vendor schemes.

It’s smart to provide a list of three or four recommendations at a time without indicating a preference. Most importantly, remember that clients have the right to choose their own inspector. You should advise them if you think they’re making a bad choice, but it’s ultimately their decision.

The Bottom Line

Home inspections can be a nerve-wracking part of the home buying or selling process for your clients. Your experience and expertise are invaluable in helping clients sail through. That’s why it’s important to invest wisely in your pre-license education and CE courses.

We offer a state-approved curriculum that’s online and self-paced for your convenience. You can work through courses at your own pace and explore important topics with the consideration you deserve. The more you know, the better an advocate you can be.

Enroll today!

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