The Peril of Broker Paid Home Inspections

When it comes to buying a home, buyers need to be aware of the risks of homeownership.  Any property, even new homes,  have warts and wrinkles that need to be addressed or understood by anyone wanting to own the property.  Thus, during the purchase process, we give buyers ample time to discover all the things they want to know about a property.  This process usually includes a home inspection by a professional, radon tests, zoning verification, and other fact finding.  

Here is a checklist that Realtors give clients to help shepherd them through the process of doing due diligence.  

Utah Buyer's Due Diligence Checklist

As you can see, the checklist is pretty thorough.

However, recently I was made aware of a brokerage that offers to "help" buyers in their due diligence process.  They promise to provide a home inspection at no cost to the buyers.  While this may sound appealing, this situation actually causes more problems than it solves.

I met a young couple who recently purchased their first home in my neighborhood.  The home had recently been renovated by an investor who wanted to flip the property.  The home was listed for sale by Agent Andrew at SuperDooper Realty (not their real names, obviously).  The buyers were represented by Agent Sally who worked for SuperDooper Realty as well.  Agent Sally showed the buyers the home and placed an offer.  As part of the deal, SuperDooper Realty hired and paid for a home inspection.  The deal closed and the buyers move in.

So what was the result of this scenario?  Well, the buyers found all kinds of electrical problems and bad wiring that was easy for a home inspector to find but was not disclosed in the home inspection they received.  They felt like they had been hoodwinked.  But, someone might say, isn't the home inspection supposed to report these things?  The answer is, maybe.  In this case, the home inspector wasn't working for the buyers, he was working for the brokerage or the agents who paid for his services.  The agents and brokerage have a strong financial incentive to see the transaction completed.  And, the home inspector has a strong financial incentive to keep his client happy.  So, if things get missed or overlooked in the report being given to the brokerage (which is then relayed to the buyers) that is unfortunate but a cost of doing business this way.  (NOTE: Home inspectors are not regulated by state law in Utah but this is a conversation for another day...)

The best way to prevent this deceptive chicanery is for buyers pay for their own inspections so the inspector is accountable to the buyers as his clients.  If you are being represented by a brokerage that is offering to pay for your home inspection, politely refuse, and insist on paying for your own inspection.  It is worth the money.

If you are looking for a home inspector you can trust, I highly recommend Mark Ward at WIN Home Inspections.  He has been my tried and trued inspector for years.  His reports are thorough and readable and his experience as a home builder has been invaluable to my clients' understanding of the homes they are purchasing.  Feel free to reach out to Mark at 801-444-9464.

If you are looking for a home that is right for you, CONTACT ME, and let's explore the market for homes that are a perfect fit.