Emmanuel Nov/ 22/ 2014 | 0

Is your Real Estate Agent actually looking out for your best interests when referring a specific Home Inspector(s) to you?  There are two schools of thought on the subject and you should think heavily on this if you are being referred to specific Inspector(s) by your Agent.[tab: Who’s Looking Out For You?]

You’re getting ready to spend a HUGE amount of money out of your pocket for the process of buying your home.  Part of that most always is a very long term bank loan to finance that home.  Selecting the proper professionals to help you along the way is crucial to making sure you don’t buy into a BIG problem later!  Your Real Estate Agent (Agent from here forward) will even advise you, or should be advising you, to perform your due diligence with care.  Part of that due diligence is making sure you have selected a Home Inspector that is working to protect your interests and not the sale and/or Agents’ commission(s).  So why would you not thoroughly review even the Home Inspectors your Agent recommends to you?

There is a great deal of debate as to whether your Agent’s “Preferred” Home Inspector(s) are actually looking out for your best interests or if they are actually looking out for the Agent’s best interests and their sales commission.  The three basic lines of thinking can be described as follows.

As an Agent I only want the best Home Inspector for my clients.  After all a satisfied buyer means more referrals from them to others for my services!

There are many good Agents out there that truly believe and try to live this line of thinking.  Unfortunately for consumers there are many Agents who might speak this but only for your benefit.  What is interesting to note about this line of thinking is that it is basically shared by the licensed Agents/Brokers, their various associations they belong to, and again unfortunately many Home Inspectors, as well as other vendors, who market heavily to Agents/Brokers for inspection referral leads.  Beyond these groups of people there are not a lot of defenders of this line of thinking.

You should never use your Agent’s recommended Home Inspector as they are only there to help the Agent close the deal and earn their commission!

This line of thinking generally stems from consumers like yourself that have been seriously wronged during their home purchase.  Consumers will many times rely heavily and trust their Agents and do not always perform due diligence which also includes checking out the Home Inspector(s) their Agent is referring.  However this line of thinking is not limited to just consumers.  There are many Home Inspectors, lawyers, as well as others who feel that there is an inherent conflict of interest when Agents refer their “Preferred” Home Inspector as the Agent has everything to lose and not much at all to gain if the Home Inspector actually does a proper job that results in you the buyer from walking away from that home purchase.

One of these Lawyers is a Montana lawyer who has chosen to enter the Real Estate litigation arena and specialize on this very problem of consumers being wronged not only by Agents but also Home Inspectors.  He has written a very interesting Blog you can read HERE. In the Blog he basically states that you need to be very, very careful about using your Agent’s “Preferred” Home Inspector without thoroughly checking them out!  This Blog post is well worth reading and this Lawyer also provides links to a national Realty publication written for RE Agents that basically also is telling you not to use the “Preferred” Home Inspector.

So what is the third line of thinking with regards to this subject?  Well, my line of thinking of course!

The Real Estate industry is not unlike any others with both honest and not so honest Agents, Home Inspectors, other vendors (Mortgage Lenders, Appraisers, etc.).  For these other, not so honest Agents, they are highly dependent on each and every commission.  A recent newsletter by The Texas Association of Realtors® (TAR) made a quick blurp whose title indicated that there is one Realtor® for every 293 Texans.  This only accounts for the approximately 90,000 licensed Agents and brokers that are also Realtors®.  The last time I ran the statistics as of September of 2014 there are a total of   141,332 individually licensed Agents (Salespeople) and Brokers in the State of Texas.  You can see these statistics on the Texas Real Estate Commission (TREC) WEB site monthly report page HERE. That actually will reduce that 1 in 293 to lower than 293.

Now lets add one set of statistics to this which is provided by The Texas A&M University Real Estate Center located HERE.  According to this chart so far in 2014 only 290,825 homes have been sold State wide.  We know that not all of the 141,332 licensed Agents and Brokers are selling homes with many either inactive, working in other Real Estate aspects requiring a license, or other situations.  What we must then expect is that the 90,000+  Realtors® are actively selling homes since it does cost to maintain the Realtor® designation.  So 90,000 divided into 290,825 equals 3.23 homes sold per licensed Agent/Broker if the sales were divided equally which we already know they are not.  Also according to that TAMU chart the average sales price was $239,200 which equates to $7,126 per Agent, per commission.  That leaves the Agent with an average annual salary of 3.23 X $7,126 or $23,178.00.  A large part of that commission is paid to the Brokers, in the expenses the Agent incurs during the year, as well as income and other taxes.  That expense range can eaily equate to 50% or more leaving them with less than $16,500 a year.

Those are amazing statistics when you think about it!  You also have to realize that not all Agents are selling 3.23 homes a year while other Agents are selling much more which can further reduce the Agent’s commission intake.  I would fully expect that there are many outright “Dog and cat fights” to make sure the sales go through!  As the saying goes “Money Talks” and when people don’t have the money and are faced with financial problems even the most honest can be tempted to move to “The Dark Side” and do whatever it takes to make that commission!

So my line of thinking on this is that it does not matter where you get your Home Inspector reference you need to fully check them out!  I’ve seen WAY TO MUCH dishonesty among all participating groups in the Real Estate industry not only as a Home Inspector but also as a consumer using the services of these Real Estate professionals (??).  Only you have the real ability to protect yourself from being taken advantage of.  I always try to convey from a consumer stand point that you should never give more than 90% of your trust to anyone trying to sell you something or their services!  Always keep that 10% withheld since that 10% is what makes you think twice when something sounds wrong or to good to be true!


PS Inspection & Property Services LLC is a full service home inspection and light commercial inspection company servicing the entire Dallas and Fort Worth, Texas metroplex as well as all areas around them.  If you are located outside of these areas we can still help service your needs so call us to see how we can help.  We strive to for the satisfaction of our customers in everything we do.  Our services offerings include:

Buyer home inspections
New Home Warranty Inspections
New Home Draw Inspections
Home Maintenance Inspections
Home Remodeling Inspections
Investor Inspections
Rental And Renter Inspections
Infrared Thermal Imaging Inspections
Whole Inspections Or Inspections Customized To Your Needs

If you have an inspection need we can customize an inspection for it.  Please visit our main site at PS Inspection & Property Service LLC.