The REAL Truth About Home Inspectors Referred By Real Estate Agents

What's The Potential Problem With A Real Estate Agent Recommending A Specific NJ Home Inspector To Their Buyer?
On average, most real estate agencies get paid on commission of about 5% paid by the property's seller. A house selling for $400,000 can have a commission of $20,000. Occasionally, a selling agent will recommend one particular home inspector to a buyer; sometimes a list with the names of two or three inspectors may be provided. The question is who are these recommended home inspectors? What did they do to "qualify" in order to get on this "approved" list for this agent? Is this real estate agent recommending a thorough, non-biased inspector, or is this agent suggesting someone who will work to help protect a possible $20,000 commission? Unfortunately for the prospective homebuyer, some real estate agents see a thorough and non-biased New Jersey home inspection as a genuine threat to their income.

Is it the rights of prospective homebuyers to choose an inspector of their own?
If a real estate agent tells you that you are not allowed to choose your own home inspector, or insist that you must use one of their "recommended", "suggested", Or "approved" home inspectors, contact your attorney. A real estate agent who tries to force you to use a home inspector on the agent's list is trying to gain control the over the home inspector selection process.

Homebuyers must bear in mind that a real estate agent earns a commission from the seller of a property and, therefore, has as a priority the best interest of their client, the seller. As the potential homebuyer, you are a customer of the agent, not a client. Shouldn't the home inspector you're paying be working with your best interests in mind?

What Is A "Deal Killer"?
Real estate agents, to describe home inspectors who are independent and give buyers unbiased, objective information in the inspection report that may cause the buyer to decide to renegotiate or to view other properties, often use the derogatory term "deal killer". Some real estate agents see independent inspectors as a threat to their ability to generate a lucrative income. These "deal killers" are viewed as foes, and an unscrupulous agent will use a number of methods to control the selection process of the inspector to ensure that an independent home inspector is not retained by the potential buyer.

How Can The Inspector Selection Process Be Controlled By A Real Estate Agent?
There are a variety of tactics used, some are subtle, some not-so-subtle. A real estate agent may attempt to dissuade the buyer from hiring a certain home inspector by making comments such as: "That inspector is really a deal-killer", or "That inspector is too slow" or "We have had a lot of trouble with that inspector" or "Our agency does not allow him/her to inspect our listed properties" or "You'll find that inspector far too expensive."Another tactic employed by agents is to advise potential buyers that they should expect a home inspection to cost around $250 or $300. By allowing homebuyers to expect such unrealistically low fees, agents effectively steer buyers toward their own preferred inspectors since they may now choose to limit the search to the "arbitrary" price range as described by the real estate agent.

Common tactics used to guide a prospective buyer toward an agent's preferred home inspector include:"We've had a good deal of luck with this particular inspector" or "This inspector has a really low price" or "We have used this inspector for years" or "This home inspector is finished in an hour and he provides you a complete report right there on the spot." At the beginning of the discussion about having a home inspection performed, the real estate agent might suggest to the buyer a "great" home inspector with whom they've worked for a long time. Some agents, careful to protect themselves from any referral liability in the event the buyer should want to blame the agent for any inspection oversights, may provide a short list of several home inspectors who have been determined not to be deal-killers. The short list, however, will be just long enough to effectively protect the agent. The agent now has the desired combination of A) No actual liability for the home inspector referral; B) The buyer "chooses" a home inspector of the agent's preference; and C) Unbeknownst to the buyer, his/her "choice" is limited only to inspectors who will not harm or kill the sale.

Shouldn't Inspectors Organize And Reduce The Control That Real Estate Agents Have In The Selection Process Of A Home Inspector?
You might think that home inspectors would welcome the opportunity to allow prospective homebuyers freely choose a home inspector. Unfortunately, many home inspectors actually rely upon these real estate agents to steer business their way. This is particularly true for large multi-inspector firms. Less than 1% of all nationwide inspectors can claim they do not seek client leads from real estate agents. Companies operating within a free marketplace that provide inferior service or offer a poor or ineffective product will, in time, fail. Not so in the world of home inspection where there exists an artificial marketplace that is manipulated by real estate agents. This situation allows "agent friendly" inspectors, regardless of their abilities, to stay in business.

Even if an inspector claims to not have any affiliations with any real estate agents, it should be noted that it does not necessarily mean they will not seek client leads from real estate agents. The best way to make this determination is to directly question the inspector about whether he or she practices the solicitation of real estate agents for business leads. If you find the inspection company's brochures or business cards in real estate offices, or if you find that the inspector or inspection company is on the agent's list of recommended inspectors given to prospective buyers, this should alert you.

Do you want a home inspector who will "help" the real estate agent earn a larger commission, or would you rather have a home inspector who is going to fully disclose the condition of the house?
As a completely independent home inspector in New Jersey, I don't rely on referrals from real estate agents. My business is built one satisfied client at a time. My ONLY focus is on you, my client. When you hire LookSmart you hire a NJ home inspector who is dedicated to providing an unbiased complete assessment of the home. When something is wrong I tell you its wrong verbally and in writing. You will not find me on any realtor referral lists and I work hard to keep it that way.