The Hungry Home Inspector by P Nathan Thornberry :: Why Some Inspectors are Always Hungry for More While Others Just Go Hungry

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The Hungry Home Inspector

Why Some Inspectors Are Always Hungry For More
While Others Just Go Hungry


Chapter 4

Inconvenient Truths

Darth Vader was Luke Skywalker's Father.  
That means he kissed his sister inapproprietly. Ewe.


It’s inconvenient that most people need a mortgage. It’s built into our system now, no turning back.


Oh, wait! It’s a great thing that the home mortgage exists! If we didn’t have mortgages, where would we be? A lot smaller houses, that’s for sure…and probably far fewer of them.

Even with mortgages that had huge down payments and were done locally and had five-year balloon payments, the world was very different. Take 20% of the mortgage ability off the top and we’re back to the days when grandma lived in the den and the kids stayed home until they married.

It’s an inconvenient truth that mortgages exist because of the regulations that come with them. Appraisals are a nightmare today. Approvals can be yanked at the last moment and our bank-owned real estate inventory is truly problematic for our country.

They’re also inconvenient for real estate agents.

Mortgage guidelines, federal regulations, and the Real Estate Settlement Procedures Act make the agent’s job very defined, frustratingly so.

They represent their client, whether it be a buyer or a seller. It’s a tough situation to deal with when you have a buyer who’s made an offer on the property, it was accepted, and then the appraisal comes in low. What happens now?  They have to try to argue with the appraiser, make their case for the value to someone who thinks they know a lot more than the agent does. Or they have to convince the buyer to come up with more cash, or they have to convince the seller to accept a lower price, or a combination of the two.

But that’s the sandbox they have to play in. No real estate agent or company or organization thinks that they invented the process. They can add their nuances, maybe some USP’s, but they’ve learned to adapt the process to the mortgages that nearly every transaction is tied to.

For as much criticism of real estate agents from home inspectors, the inconvenient truth this chapter is focused on is that many home inspectors have a bigger sense of entitlement than agents do.

It’s true.

How many times have you heard a group of inspectors talking about the home inspection process and how it relates to the purchase agreement (or “purchase contract”)?

Never.

Successful home inspectors realize that the real estate transaction, the agents, and the purchase agreement are their best friends, even if they’re a necessary evil. I’ve actually always liked the agents I deal with,  but I can certainly see why inspectors might not take the same view at all times.  Think of it this way: the real estate transaction is a small island, and while it’s in progress the inhabitants are you, the agents, the sellers, and the buyers. Tropical Storm “Mortgage Approval” is heading west towards your position and it’s picking up speed as it’s hitting warm water full of objections, appraisal issues, and inspection problems...luckily we have this Hurricane Shelter called the Purchase Agreement, cool heads, cooperation, and...uh oh. The inspector just lit the Hurricane Shelter on fire.

Many inspectors will not appreciate the severity of my analogy. They’ll say that they’re not a part of the real estate transaction. This is coincidentally exactly what most agents in their market probably say about them as well. We found common ground!

There are many inspectors who believe that their job is completely separate from the real estate transaction. I’m convinced that some of them may even believe they invented the inspection process.

What they fail to realize is that the inspection is defined in the purchase agreement. No ifs, ands, or buts about it.

Do yourself a huge favor and get a blank purchase agreement from your local real estate board. If they won’t help you, talk to an agent. Somehow, get your hands on one. I don’t care if you have to make an offer on a house, do it. (I would suggest a low ball offer that will not get accepted unless you actually are in need of a house at the moment.)  Find the section regarding the inspection response. Read it.

What did it say?

Did it say anything about the buyer being able to ask the seller to replace something that is perfectly operational simply because it is old?

No!

Let’s think about this one for a second. In an earlier chapter, I mentioned an inspector who was “Real Estate Agent Kryptonite.” I told you he had some foundational issues in his business, and the way he was  reporting some things were creating problems. He said agents didn’t like him, which didn’t surprise me at all.

You see, he had either no knowledge or no respect for the real estate transaction. Forget the agents for the moment; let’s talk about the client, the one we’re all obligated to.

The client signed a contract to purchase the property-and within that contract, very clearly defined, was the timing for and subject matter that could be contained within an inspection response. It also had a completely, totally separate section that discussed operational but older appliances and components. It was the section about home warranties.

Thirty years ago, inspectors were largely defining the home inspection industry as it was still in its infancy. The standards varied enormously from company to company, and a large contingency of home inspectors became accustomed to making statements about older equipment suggesting that they were “defunct” or in need of replacement or “beyond their useful life expectancy.  Even twenty years ago, there was certainly a place for this tactic when it came to furnaces, air conditioners, and water heaters, but not today.  Old water heaters are addressed in the purchase agreement and don’t require any predictive statements from the home inspector.

It’s not a point that’s up for debate; it’s a fact that is in writing in a legal document in every real estate transaction throughout the U.S. and Canada.

This rule does NOT apply to roof coverings, as an example. A roof that is gone is gone, whether it’s leaking or not. Call it. The rule only applies to mechanical items that fall under extended warranties available to home buyers.

But who are you to say when a water heater needs to be replaced? If it’s old, find an issue with it. Run it a little extra, see if you can get it to go lukewarm or cold. Call any actual defect on it you can, but don’t try to define the home inspection as something distinct and separate from the defined process outlined in the purchase agreement. If you try to do so, you will succeed, and you won’t be a part of the real estate transaction.

If you had presented these facts to as many inspectors as I have, you would know that there will be a guy who stands up and makes a statement that goes something like this:

“I’m not going to do a walk-through inspection for cheap so that I can get business from agents. If they want someone to gloss over defects they can hire someone else!”

It makes me want to ask if they have a hearing problem, or just simply don’t understand English.

Who said gloss over defects? Who said walk-through inspection? Who said cheap?

Nobody did.

When an inspector has defined his position as being against real estate agents he has also defined his business as being non-conducive to the real estate transaction, and that is why he does fewer inspections
than he should. That’s why he doesn’t make as much money as he should.

It’s much easier to be thorough when you’re prepared to be hated for being so. Being thorough and respected for it is much more difficult, and some inspectors just aren’t up to the task, it’s scary to them. It takes finesse and a little bit of salesmanship.