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'Recommended' home inspectors -- who do they serve?

You're buying a house, and a real estate agent gives you a list of three home inspectors. You hire one of them. Who is the inspector more eager to please? You? Or the real estate agent?

Some home inspectors say a conflict of interest exists when a real estate agent hands a list of recommended inspectors to a buyer.

The agent doesn't make money unless the sale goes through, so inspectors who frequently point out major problems find themselves excluded from agents' referral lists.

"It's patently manipulative to have an agent recommend an inspector," says Kenneth Bates, a home inspector in Boston. "He's basically going to recommend someone who won't make trouble. What does that mean? Saying less, doing less."

Dennis Robitaille, an inspector in nearby Saugus, Mass., agrees. "There is an inherent conflict there," Robitaille says. "There's only so many agents out there who are going to put up with losing deals."

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Independent inspections
Robitaille feels so strongly about the issue that he started the Independent Home Inspectors of North America, an association of inspectors who pledge to refrain from soliciting real estate agents for client leads.

The pledge reads, in part: "I understand that active solicitation includes giving 'sales' presentations to real estate agents about my inspection service, dropping off brochures at real estate offices and/or rewarding or compensating agents for referring clients to me. I understand that handing out a business card to a real estate agent at an inspection site is not considered active solicitation."

Robitaille estimates that there are about 10,000 inspectors in the United States. His organization has about 90 members in the United States and Canada. The Web site lists them by state and province. Robitaille says the list merely names inspectors who have signed the no-marketing pledge; it doesn't vouch for their competence or experience.

The plain-spoken Robitaille believes that he is one of the most perceptive home inspectors around, and that he's not popular among real estate agents -- a status that suits him just fine. If an agent in his area were to hand a home buyer a list of five recommended inspectors, "I can guarantee you that I would not be on that list, and most of the good inspectors in the area would not be on that list," he says.

A seller's agent in Massachusetts isn't allowed to provide such a list. Under a law that went into effect in May 2001, an agent representing the seller can't give a buyer a list of recommended inspectors. Instead, agents hand over a brochure (required by the state) that explains the inspection process and contains the URL for the Massachusetts Board of Home Inspectors. The site lets users search for licensed inspectors.

Robitaille campaigned for the law that put these requirements into effect, and already the real estate lobby is trying to amend it so agents can give buyers a list of three or five inspectors.

Bates, who doesn't belong to Robitaille's organization, says the law benefits consumers and thorough inspectors. "It's taking away business from the favorites of the brokers," he says, adding that "our phones have been ringing more" since the law was enacted because it's harder for agents to blackball him.

Still, he finds that agents use subtle means to steer business away from him. They set aside 90 minutes for him to inspect a house, when they know it takes him three to four hours. Or they're unavailable when Bates has an opening on his calendar.

"They'll say to the buyer, 'Do you want this house or not? I can find an inspector who can fit in that time,' " Bates says. "The goal is to get more inspections by easier inspectors."

Fending off the foxes
Bates and Robitaille are both members of the American Society of Home Inspectors, the largest such group in the country. ASHI's executive director says they raise a valid concern when they worry about agents steering work to more lenient inspectors.

"However, if a real estate professional is truly a professional, they're likely going to provide the buyer with Web site information -- typically, it'll be our Web site -- or a listing of inspectors in the area," ASHI Executive Director Rob Paterkiewicz says. "Typically, you'll see a listing from the ASHI directory in the area, and that's fine. We don't have a problem with that."

On the other hand, he says, "If the agent tells you, 'Go see John Smith to do your home inspection,' that should raise a red flag. There could be undue influence on that home inspector to come up with a report that's squeaky clean."

ASHI grants membership to inspectors after they have passed a rigorous test, and they must agree to abide by a code of ethics and standards of business practice. "It's clearly stated that there cannot be undue influence on an inspection," Paterkiewicz says. "And our members take that seriously."

About 70 percent of inspections result from referrals by real estate agents, which Paterkiewicz calls a high number. "Are we going to say to our inspectors, 'Don't take a referral from a real estate agent'? No," he says.

But ASHI would like its members to rely less on referrals.

"We're trying to tell the consumers to go to the ASHI Web site and look at the inspectors in your area," he says.

-- Updated: June 6, 2003
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See Also
What an inspector will -- and won't -- check
When a basic inspection isn't enough
More mortgage stories

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