Home inspectors have a responsibility to provide an unbiased opinion about the homes they inspect
Hiring a home inspector is a vital part of the homebuying process. That may sound easy, but a home inspector’s job is substantial and very detailed. Here’s what you should know about what a home inspector does and doesn’t do and how to avoid the potential for conflict of interest.
From the windows to the walls, home inspectors will ensure the home you’re buying is in great condition (or that you are at least aware of issues before buying). And when you hire a home inspector, you’re counting on them to provide an unbiased opinion on the state of the home. This is why you have to think about the potential for conflict of interest (which we will get into more later).
Home inspectors visually inspect the home for problems, including the following:
Plumbing fixtures
Ventilation systems
Insulation
Gutters
Chimneys
Roofs
Decks
HVAC
Windows
Doors
Electrical outlets
Foundation
Yard slope
Walls
Keep in mind that a home inspector doesn’t use their hands to tinker around with things they think could be problematic. Their job is purely visual.
Generally, buyers hire home inspectors to—you guessed it—inspect a home they’re under contract to purchase. However, sometimes sellers will hire inspectors to do pre-listing inspections so they can get an idea of what needs fixing on the property before they start engaging buyers.
Home inspection reports are a great investment since they outline everything potentially wrong with the property, from water to electrical, and give buyers a clear view of what they’ll need to spend money on to repair.
Buyers can use any problems found by a home inspector as negotiation tools to possibly get a price reduction, require the seller to fix things before the sale, or negotiate closing costs. When going through these negotiations, each side should source estimates from third parties who are not in any way tied to the home inspector to avoid a conflict of interest.
Home inspectors are paid by their clients to do the inspection, which is usually the buyer unless they are hired to do a pre-listing inspection. They are not allowed to “double dip,” or accept compensation from both the buyer and seller.
They are also not permitted to accept financial compensation or other benefits like free equipment or supplies for promoting a specific product or service to avoid a conflict of interest.
While it may seem convenient to have a home inspector in your family, it’s a big no-no to hire that person to do your home inspection. Because inspections are supposed to be unbiased, it’s important that a home inspector has no stake in the transaction.
Inspectors also have a responsibility to disclose any potential conflict of interest or reasons why they might not be able to be objective in their analysis.
If a home inspector offers to provide estimates, that’s a huge red flag. According to the American Society of Home Inspectors (ASHI), inspectors are forbidden to engage in any activities that appear to compromise the inspector’s integrity, which includes not working on any inspected property for one year after the inspection date.
The International Association of Certified Home Inspectors (InterNACHI) has something similar in place, which states that inspectors cannot accept a fee for repairing components covered in a home inspection for one year. The National Association of Home Inspectors and the American Society of Home Inspectors’ websites also contain similar verbiage.
The reasoning behind these rules is pretty straightforward: If an inspector is going to be hired to fix problems, they might look harder for problems they know how to fix. Having these rules and guidelines in place protects everyone involved from a conflict of interest.
On the other side of the coin, don’t ask your inspector for estimates for repair work. This puts them in an uncomfortable and potentially unethical position. It’s better to ask your real estate agent for contractor recommendations after you’ve received your inspection report.
They can—but they really shouldn’t. Some states, like Massachusetts, even have laws in place prohibiting real estate agents from recommending an inspector. Instead, agents are required to provide their clients with a complete list of licensed inspectors provided by the Board of Home Inspectors.
Your real estate agent also should not provide you with a shortlist of inspectors they recommend. This is because some inspectors might be persuaded to protect the agent’s commission, or might be eager to close the transaction and could be working with inspectors who will let things slide.
The bottom line is that the responsibility is on you to protect your own interests. You need an unbiased report that outlines any problems that a home might have. Do your research and make sure the local home inspector you hire has appropriate certifications and belongs to at least one accredited organization. Also, get referrals from friends, relatives, neighbors, or anyone who doesn’t have a stake in the transaction to help avoid a conflict of interest.
