An Odd Request

Last weekend brought in an odd request. A potential client, who was purchasing a "new build" home wanted us to do what's known as a "third party" or independent inspection. That's not new. We get those requests all the time. What was new about this one was that the builder wanted us to sign a contract with them before we could inspect the house.

That's a new one. The buyer sent me a copy of the contract the builder wanted us to sign. It was several pages long and more one-sided than an insurance contract. It's been a while since I took that contract law course, but I still remember a few things. Plus I've always scored pretty high in reading comprehension. Lots of problems signing that thing.

1. The builder wanted us to have a certificate of insurance issued naming them. I could understand this request if we were doing subcontract work for them but this contract was only good for a specific buyer and property. I thought that showing them proof of insurance should be sufficient without specifically naming them.
2. They had a requirement that the site superintendent must approve and be present at the inspection. I took that to mean that the site superintendent was intended to supervise the inspection. Mark is a licensed professional inspector. He also has academic credentials that include an advanced degree. In Texas, builders are not subject to licensing requirements, nor are academic credentials required. So in essence, they wanted us to agree to be supervised by someone who is not qualified to supervise. Additionally, there was no provision for remuneration if the site superintendent was late or failed to keep the appointment.
3. The contract stated that the inspection must be conducted during "normal business hours" without defining what those are. It also stated that the inspection must be performed prior to the "New Home Orientation", without defining what that is or when it takes place. For all we know, we might have a 30 minute window to perform the inspection. It takes Mark a minimum of 2 1/2 to 3 hours. Period.
4. The terms of the contract prohibit the inspector from being on the roof. This doesn't really bother us because we have equipment that allows us to do a very thorough inspection from a ladder and the ground. But not all inspectors have this equipment. The disservice is to the buyer.
5. The contract prohibited the inspector from communicating with any workers other than the site superintendent. Seriously, if the property is ready for inspection, there should not be any other workers present to communicate with. We certainly do not want to set up our equipment when there are tradesmen wandering about because it is clear that the builder is not willing to accept any responsibility for damage to our equipment that might be caused by a workman.
6. Under the terms of this contract, we assumed responsibility for damage to our own equipment as well as any damage to the property. For the sake of argument, let's assume that the site superintendent does not stay for the entire inspection. And since our inspections typically take a minimum of three hours, that seems like a reasonable possibility. But we could be held responsible for damage caused by someone who came in after we left.
7. Under the terms of this contract, we must deliver a copy of the inspection to the builder. It is our practice to deliver the report to the person who paid for it. What they do with it is up to them. We feel it is the buyer's responsibility to deliver the report, not ours.

Most contracts are mutually beneficial to the parties. This contract had no benefit to us at all.

The bottom line - we declined. I don't really understand what this particular builder is up to. But we won't be signing a one-sided contract with them.

I'm sure there are some inspectors who will agree to be supervised and will willingly sign their contract. I hope it goes well for them. But when I'm told the contract is "non-negotiable" I take them at their word. I don't negotiate. I also don't sign.

Your Opinion Please!

We are seriously considering turning down requests to inspect "new build" houses. You might wonder why because with no furniture in them and everything being in "new" condition, it would seem to be an easy job. If only!

Here are the problems:

1. The client typically calls to schedule the appointment weeks in advance. The appointment goes into the calendar and the builder representative is called and informed that the client has requested we do a third party inspection. The builder is asked to notify us as soon as possible if the home is not going to be ready.
   • Often the builder's representative's voice mail box is full making it impossible to leave a message, which means I have to keep calling back until I get someone or until they clean out their voice mail.
2. A day or perhaps an hour before the scheduled time, the client or the builder will call to say that the house isn't quite ready. The appointment is rescheduled (sometimes more than once). In the meantime, I have turned down other business that could have been scheduled for this time. If I'm given 24 hours, I have a chance of filling the time. It's pretty rare to fill it with an hour's notice.
3. The other scenario is that no one calls and Mark goes to the property and finds that:
   • It is locked up and no one is at the model.
   • It is not ready. There are no appliances and/or the gas and water are not turned on.
   • The place is buzzing with tradesmen. Three or four different crews are doing their best to complete the house. - Which presents two problems. 1. The house is technically not ready and 2. It's not practical to try to set up high-tech equipment when it's going to be in someone's way and you can't hold them responsible for breaking it. But we're still back to the place where other work has been declined because there was already an inspection on the schedule.

So, what can be done? We've tried to explain this situation to buyers who agree in principle that if the inspector has to make more than one trip there will be a charge for it. But in practice they either refuse to pay it or whine that it wasn't their fault. We agree, it wasn't their fault. It was the builder's fault, but we can't make the builder pay for it.

We take a great deal of pride in the level of service we provide. We want our customers to feel that they got the best possible value for the money they spent. We want them to give us a stellar rating without any reservation or hesitation. And lost opportunity costs aside, there are expenses every time Mark leaves the driveway, so multiple trips to do the job seriously eat away at the profit margin. (That's right! This business is run "for profit"!)

I'm not convinced that turning away business is sensible. But I'm not sure what to do. I'm very interested in hearing how other inspectors have addressed this problem. I'm also interested to hear how potential clients feel about it. As a home buyer, what are your expectations? And if any of you are builders - what is your excuse?

I Can Get You on the Front Page of Google!

Tell me again why being on the front page of Google is something I should care about? I get these calls all the time. They interrupt my day and distract me from whatever it is I'm doing at the moment. They don't take "no" easily and I don't like to be rude. But the fact is, I don't CARE if I'm on the front page of Google. I care that someone actually picks up the phone and calls to schedule an appointment. And search engine optimization companies can't promise me that.

We typically get sucked into trying one at least once per year. It happens when business is a bit slow and we're on the verge of dancing around a fire with a mask in order to make the phone ring. Someone calls and they're just a wee bit different from the last one. So ever hopeful, we agree to try it and pay the "small" set-up fee only to find that if it generates any calls at all, they are from people who are either outside our service area or who want to know why we're charging a hundred dollars more than the other guy they called.

Some of these search engine optimization (SEO) companies want to replace our grammatically correct text with stuff that makes me cringe. (I certainly don't want to be grammatically incorrect on the front page of Google!) Some of them have added misleading key words, the worst of which was "cheap". That's just not a word we want to own. We want the client who is concerned with quality and value, not "cheap". One of these SEO companies opened a Google AdWords campaign for us and we were hit with charges from the SEO company AND from Google. Now that was an expensive surprise!! And the effort it took to get that cancelled! Have you ever tried to talk to someone at Google? It's like trying to talk to someone at Microsoft. It can't be done. The only thing you can do is appeal to your credit card company. In the end, we had to cancel the card and have a new card issued to keep Google from charging us for the campaign that we had not authorized in the first place.

Anyway, bottom line - I don't care if I'm on the front page of Google. We CAN be found on Google. One of our clients from yesterday told me she'd found us on Google (even though it probably wasn't the first page). Everybody knows that the first page is filled with people who paid to be there. If I'm searching for something, I typically skip right over the "sponsored" results and I don't think I'm the only person who does that. So now, when they call me to tell me that they can get me on the front page of Google, I simply say "I don't care about that." It pretty well ends the discussion. "I don't care" isn't one of the objections they're trained to overcome.

Broken Trust

A lack of trust is what causes most relationships to fail. No different for buyers and sellers of real estate. Mark saw it happen on Saturday. The inspection required that he turn on a faucet that had been shut off. When he turned it on both the faucet and the shut-off valve started to leak. Since the house was vacant he asked the buyer's agent to phone the listing agent and let her know about the problem.

Within the hour the seller and one of his friends arrived at the house and started talking arguing about how to fix the problem. The two of them discussed whether they needed to call a plumber now, or wait until Monday when the plumber wouldn't have to be paid the weekend rate. They discussed getting a handyman instead of a certified plumber. In the end, they called the plumber but the damage was already done.

I'm not talking about damage to the house. I'm talking about damage to the relationship with the buyer. You see, the buyer no longer trusted the seller to repair all the things that were wrong with the house. The buyer feared that the seller would cut corners and not have the work done properly and decided to walk away from that house and look for another one.

It happens all the time. Sometimes it's because the inspection turns up something that wasn't on the seller's disclosure but the buyer feels certain the seller had to know about it. Either way, the buyer no longer trusts the seller and the whole sale ends up in the toilet.

I don't understand why sellers are reluctant to disclose the defects. If you disclose them, the buyer has to assume that you took the defects into account when you priced the house. Taking a chance that the inspector won't find them is very risky and can cost the sale.

Taking a Knife to a Gun Fight

Yesterday was Mark's first day back on the job this year. He's fully booked for today and tomorrow and we've already booked two for next week, so it's a really great start to the year!

Yesterday afternoon's client initially had her brother call to get information and I sent him an email with a sample report, a document that outlines what we inspect, video links to actual inspections, and our standard pricing. I guess she wanted to make sure the Angie's List deal was really a deal (it is!) and not just our standard pricing masquerading as a "deal".

As I was taking down her details, I asked if she was working with an an agent. She said no and gave me the details for the listing agent. People who've decided to go it alone without an agent are in the minority, but they're out there. I don't question them.

When Mark got home I asked him (as I almost always do) "How was it?"

"It was awful. It was terrible. The sewer was shot. The roof was shot. Of course, I didn't use that language with the client because it can all be fixed and it's not my job to frighten them. But she hasn't got an agent. The house has been done up on the inside and the listing agent is also the seller. She really needs someone to negotiate for her. There's a bunch of stuff called out in the report, but not having a skilled negotiator who knows what the property is worth and what it will cost to put it all right is like taking a knife to a gun fight."

It is. At least she'd done her research on Angie's List and got a thorough inspection. The inspection report is a powerful weapon in the hands of a skilled negotiator. At best the buyer will be able to get a combination of repairs and price adjustments. The worst that can happen is the buyer is prevented from buying the money pit because the seller wants to hold out and wait for the uninformed buyer who won't bother with an inspection.

Mark did explain to her that commissions are typically paid by the seller and that having an agent would save her money in the long run. He even gave her the name of an agent who specializes in the area and knows what it takes (and who it takes) to get repairs done on the type of home she was looking at. I do hope she makes that call.