Uncovering Real Estate Inspection Ethics: Protecting Your Home-Buying Journey

Real estate transactions hinge on the quality of home inspections, as illustrated by a recent emergency case where critical issues were uncovered just in time. Agents must prioritize ethical recommendations and transparent communication to safeguard their clients’ interests and ensure long-term success in their careers.

• Highlighting the urgency of thorough home inspections 
• Story of a frantic client facing hidden issues 
• The impact of poor recommendations on client trust 
• The necessity of comprehensive and clear inspection reports 
• Ethical responsibility tied to referrals and client care 
• Associations between agent practices and reputation building 
• Emphasizing the fundamental role of home inspectors in client advocacy

Transcript

Speaker 1 0:02

Welcome to the Standing Out in Ohio podcast, where we discuss topics, upcoming events, news and predictions with real estate professionals and entrepreneurs. Listen and learn what makes their companies and themselves stand out and gain advantages over the competition and gain market share. Subscribe for the latest news and discussion on what it takes to stand out from the crowd. Now here's your host, jim.

Speaker 2 0:31

Hey everybody, Welcome to the Standing Out and how podcast. This is Jim Troth and of course I have Laura Troth, the office goddess, here.

Speaker 3 0:39

Hello everyone.

Speaker 2 0:40

So all right, it is. What is this? January 5th?

Speaker 3 0:44

Is it the 5th already? Is the 5th?

Speaker 2 0:46

wow, we're doing this. Um, as you know, not all companies are the same in quality experience. Give a shitness right seriously you're right yeah and then, and nor are all agents, but it's something you need to be aware of, because who you recommend is a huge reflection on who you are. And so we have a story today where somebody called in emergency inspection because today's our last day.

Speaker 4 1:22

Okay, but first let's listen to this Habitation investigation is the way to go for a home inspection in Ohio. Trusted licensed home inspectors for your needs. From radon to mold to warranties For a great home inspection, you really can't go wrong.

Speaker 2 1:46

Visit home inspections in ohiocom all right, laura so I get a call, yeah yeah, go go to the store and go ahead so I get a call today.

Speaker 3 2:01

Gentleman is panicking because he has been asking questions and asking questions and asking questions and has been blown off apparently for two weeks because his inspection period was two weeks.

Speaker 2 2:17

So when did he have his first inspection done?

Speaker 3 2:19

The first inspection was done December 27th, according to the report that I'm looking at from the first company.

Speaker 3 2:25

Okay, which we will not give their name, which we will not give their name. So what ended up happening is he had specific questions about specific items. His agent had contacted a roofing company, writing that he needed specific things looked at, that he was concerned about the ventilation in the attic being blocked off, and so on and so forth. So, needless to say, one of our inspectors said you know what I've got a few minutes before my inspection today. If I can hit it on the way out, I'll stop, I'll do the mold testing and I'll look at those couple of things he wanted.

Speaker 2 3:06

Because the client, the buyer, is concerned about moisture issues in the attic space right and mold.

Speaker 3 3:14

And mold.

Speaker 2 3:15

And then, after we got all scheduled, he goes hey, can they take a look in the crawl space also? Because X, y, z and Drew awesome as he is, he's like yeah. Yeah, he'll do that he's squeezing in. He got things done. Luckily there's nobody currently there in the way.

Speaker 3 3:31

So he got things done. He was able to.

Speaker 2 3:32

But wait, so there's, a.

Speaker 3 3:35

Go ahead.

Speaker 2 3:36

What did Drew find in that brief amount of time he was there?

Speaker 3 3:39

So in the brief amount of time we were there, drew found. So let brief amount of time we were there, drew found. So let me backtrack. So this agent had a home inspection company come out, a separate termite company come out and a roofing company come out that he had to take care of. So he had the report for the termite in the home inspection, didn't get a report for the roofing company oh, okay, but nothing arrived but at this point was told that everything looked great, there were no problems.

Speaker 3 4:13

Drew goes out, he gets into the attic. He finds two leaks. He finds ice. He finds that the bathroom is venting directly into the attic space and he found areas of mold because he did a swab in the attic. He gets into the crawl space and he finds termite tubes. He finds that the dryer was vented into the crawl space.

Speaker 3 4:42

That's a huge no-no which is a huge no-no vented into the crawl space. That's a huge no-no, which is a huge no-no, and apparently the client's parents had had that done to their house and it totally damaged their foundation, which you know.

Speaker 4 4:54

It would ravage the floor, joists.

Speaker 3 4:55

The floor, joists. So that's just a quick brief. What all Drew found in the half hour he was looking in there and you talked to the client. Brief what all Drew found in the half hour.

Speaker 2 5:04

He was looking in there and you talked to the client he was not happy. I can't think of how the questions came about. What order? But the client was not given three inspection companies to shoot from. No, he was not the agent just scheduled. I'll schedule an inspection company. I'll just schedule an inspection company with one from. No, he was not the agent just scheduled here.

Speaker 2 5:25

I'll schedule an inspection company, I'll just schedule it all with one that I know, one that I work with or I like working with you, do that. He's got a roofer, he's got a termite. So, first of all, that's you're not supposed to do that, and here it gets even better.

Speaker 3 5:42

So the client is not sure that he paid for the roof inspection. He doesn't know that he did, which means literally that the agent had a roofing company come out and go oh hey, everything's fine. When we go in, and we're not even on the roof, we're just in the attic, and we find two leaks, and you know what I mean. So, and when the agent called me to see if, you know, we were like contractors and could get in, like he made it seem as if this client had waited, just you know, lollygagging about for two weeks until now, when he was like, oh I, I need all this stuff done, not, you know, not realizing that the client had already told us listen, I've been trying to get answers for two weeks yeah, well, the special only like a week or so ago well, a week and a half, so maybe who knows.

Speaker 2 6:41

But anyway, it's very suspicious when the agent doesn't give him a choice to who to pick.

Speaker 3 6:47

Right.

Speaker 2 6:52

And there's no good quality customer service because they're not getting their questions answered.

Speaker 3 6:58

No, the inspection company didn't get back company didn't get back. The um roofing company didn't look at what he wanted and he had it in writing that he wanted specific things looked at and actually those were a problem, those. There was something that wasn't big enough, there was stuff that was blocked, so he had a justifiable concern with those vents in the attic yeah, some of them were not open as much as they should so but we looked at the well the client our client now sent us the report because he had moisture concerns.

Speaker 2 7:35

We I think, instead of a report, we'll look at the location, an idea of where to do the mold testing yeah, and see what the moisture issues are, but man, I can't there weren't any in it that report. I'm not going to tell you the name of the company, but, man, it was not an easy report to read. There's lots of pictures.

Speaker 3 7:54

That was all.

Speaker 2 7:54

There wasn't any explanations? Yeah, there's no explanation for the pictures, they're just like here's 15 pictures of this area, but nothing telling you what this picture is showing.

Speaker 3 8:06

Did you see the part where your exterior is in good working order?

Speaker 2 8:11

I, yeah, I did, I did, I did okay that that's interesting.

Speaker 3 8:17

I'm just kind of funny, that's kind of I gotta get the.

Speaker 2 8:20

The siding isn't the shape, but there's things that just don't make.

Speaker 3 8:23

There was another one I forgot because drew saw sunlight through the chimney and saw issues with the chimney. Oh, the chimney flashing. I don't know if it was the flashing or the chimney itself, but this guy had no problems with the chimney, said it was in good shape and continued to monitor. And please understand, repairs may be required in the future. Well duh, it's a chimney. Of course there's going to be repairs in the future. You always need to upkeep stuff.

Speaker 2 8:51

Yeah, it's just not a good. I mean, if what you're used to maybe and we're very used to our report, but our report At least you explain stuff. Our report has hyperlinks, so if you want to jump down to the attic, you click a button that takes you down to the attic section. This thing has no easily recognizable organization that I can see. There's no at the top. I don't think there's even a list of here's the sections.

Speaker 3 9:15

Yeah, there was.

Speaker 2 9:16

There was a table of contents. Okay, but no links, but no links.

Speaker 3 9:19

Like you, literally just have to scroll through this whole report.

Speaker 2 9:22

Yeah, not great. But an issue is the agent is now Didn't give him a choice. Yeah, did not give the buyer choice and so the client is not Happy. Yeah, I'm sure he's not happy with that agent. That agent will never get referrals from this client, which is why some agents never get busier. As the years go on, they don't get busier. You know, as the years go on they don't get busier because their referral sources aren't there. There's no big chance to work like that.

Speaker 3 9:56

I mean you'll occasionally get somebody just because you've got somebody that's in a hurry and they don't read reviews or they don't see things, and so you'll occasionally get somebody just just by virtue of the fact that there's a crap ton of people in the area. But you're not going to grow. And at this point this client has every right to file an ethics violation with that agent.

Speaker 2 10:19

Oh, yeah, yep.

Speaker 3 10:20

Like every right to do that and every like all three reports that this guy got in a half an hour. We found contradictory evidence on all of them.

Speaker 2 10:35

Correct yes, yes.

Speaker 3 10:40

Because the termites Drew wasn't looking for termites. No, he didn't and found them.

Speaker 2 10:42

He's looking for moisture and he goes oh, there's the tubes, here we go, go.

Speaker 3 10:46

So I mean it's not about whether an inspection company does a thorough job or not, because they all should. There's a minimum standard that the state requires, but that's not the point. The point is that your clients this is the largest purchase of their lives.

Speaker 3 11:10

Let's be realistic at least up until this point and in all probability, unless they buy another house, this is going to be it. But when you do that and you don't give them all the information that they're sitting here begging for, begging for this because something doesn't feel right to them, and like there's been comments about things that, oh well, you know we work with this agent all the time and don't worry, you're good and and you know just we, we work with this agent, you're fine. You know this guy doesn't feel fine, he's concerned, and that threw red flags up to him.

Speaker 2 11:48

He's concerned and that threw red flags up to him. Well, it's a sad fact that agents only get paid if the house sells. Yeah, and we have seen social media posts where somebody's like some agent's like, hey, where can I get a quick sale or I can't make my rent this month.

Speaker 3 12:07

My closing just got canceled. How can I get into another closing really quick to make my rent?

Speaker 2 12:12

You just saw that like four days ago.

Speaker 3 12:15

Yeah.

Speaker 2 12:16

And then, before that, somebody needed a sale in order to make their mortgage payment.

Speaker 3 12:20

Yep.

Speaker 2 12:21

It's been a rough year for a lot of real estate agents. It's been a hard year for home inspectors as well. But a home inspector here's a big difference. A home inspector here's a big difference. A home inspector their best interest is to protect the client.

Speaker 3 12:34

And to give the client enough information to make an informed choice.

Speaker 2 12:38

Correct, Because a home inspector will get paid whether or not the home sells. So the way a home inspector stands out, trouble is to do a good job.

Speaker 2 12:49

do a good job, not miss things not over exaggerate don't misrepresent things, do not minimize things. It is what it is. Things are not like this. But for a real estate agent, say there's an inspection, they minimize issues found during the inspection. They can minimize that and then they get paid. And then and I had this happen one time I wrote something about a chimney Leaks around the chimney. It even had a tarp around it. Okay, the tarp a little bit, but there's issues around here. You need to get that looked at. The disclosure said no leaks coming into the roof or the ceiling. That's what the client told me later on. Because they move in, it rains, there's water coming in.

Speaker 3 13:45

Okay.

Speaker 2 13:46

They call the agent and go we have an issue here. And the agent goes oh well, your home inspector should have caught that. Of course I'm like yeah and I you did. Yes, here it is. But the agent does not want to take responsibility over anything, even though they know that was hidden on the disclosure. Obviously it was, and here's pictures. But a real estate agent, they can minimize issues and still get paid where they. If somebody decides not to buy a house because of the issues, the agent doesn't get paid.

Speaker 2 14:20

So there's a motivation for agents to let people buy things that may not be in their best interest. That's definitely not every agent, no, and it isn't. We're not saying that.

Speaker 3 14:30

But that's like any industry, any job, any whatever, you're always going to have that small percentage that aren't looking out for a client's best interest, and those are the ones that just should no longer be agents, because you shouldn't be.

Speaker 2 14:47

I like to think it's. Three to 5% of the population is just Well, did I tell you?

Speaker 3 14:51

about the article I read the other day, I don't know. I saw it on LinkedIn. A gentleman who was a broker wrote it and the title was I hate real estate agents. And then you go in and he's like not really, but here's what's going on. So he's saying that statistically, there's like between 1 million and 2 million real estate agents in the United States. 75% of all transactions are performed by 375,000 agents across the country.

Speaker 2 15:25

Like 15 to 20% is what this article said it's that parade of 80-20. Right.

Speaker 3 15:31

So what he's saying is that all these brokerages are going out and they're courting that 375,000 agent group.

Speaker 3 15:41

So, then you've got these other groups, like you've got new agents coming in and this and that, and so brokers are complaining that agents aren't going into training, they're not doing this, they're not doing that and so on and so forth, and that they're starting to try to crack down on people in their offices and if you're not doing stuff, then they're going to just get rid of their license for that agent. But you know, we've also seen where you've got people coming in straight from Hondros or straight from wherever, and they're not given any direction at all.

Speaker 2 16:15

Oh no.

Speaker 3 16:15

They have no clue what to do. They have no clue that this is a business, and that was one of the things that this article talked about. You know, like they think they could just pop up whenever and go do work, that they're not approaching it as a business. Well, I don't think that when they get into it that they're told you're now a small business owner, you need to know your numbers and and have that brokerage set them up and teach them those skills.

Speaker 2 16:39

I do remember that article.

Speaker 3 16:41

Yeah.

Speaker 2 16:41

You read it to me. The broker was complaining that a lot of the new agents expect the broker to do everything for them to get them the leads to do everything. It's like, no, this is your stuff. I'm just here to kind of supervise you.

Speaker 3 16:55

But that should be part of their training. Coming in Like there shouldn't be any, shouldn't be the agent thinking anything. There should be an interview process prior to you taking somebody on at your brokerage. These are the expectations. You're going to be attending X number of trainings. You're going to be making X number of cold calls. You're going to be doing X number of mailers and you're going to keep track of your numbers. These are the numbers that you're going to be doing X number of mailers and you're going to keep track of your numbers.

Speaker 2 17:20

These are the numbers that you need to keep track of. That sounds good.

Speaker 3 17:23

Well, as they're all independent contractors, you can't make Right, but you can guide them and you can say this is my expectation for my brokerage that you do this as part of this. And if they come in and they choose to do that, that's their choice. They should be doing those things.

Speaker 2 17:42

There should be some minimum standards.

Speaker 3 17:44

There should be minimum standards. Let everybody see who floats. Right, or just to take somebody's money, because that's part of the problem with the industry. I think that you've got so many new people coming in that don't look at this as a business, that don't understand that this is your reputation and the industry's reputation, because this guy is evidence of that. I mean, he'd never heard of us, which really offended me, because he's like well, are you guys going to be able to get in?

Speaker 2 18:10

I'm like I don't want that agent.

Speaker 3 18:12

We've been in business for 22 years.

Speaker 2 18:15

Who trained this guy? How long has he been in business? That agent? I don't know. We can look that up for that. How long has he been an agent? Or does the person who trained him train him to try and find a sheet inspector?

Speaker 3 18:26

Right.

Speaker 2 18:27

That way it won't blow your deals. Right, which instead is going to blow all your referrals down the road. This agent assuming that's all he does is just give you recommendations. He'll be out of business in a couple of years.

Speaker 3 18:43

Nobody's going to recommend him, because what's going to happen is something like this is going to happen again and he's going to have a crappy inspector come out. They're going to miss something, like they did this time, and he's going to get sued and he's going to end up having to go out of business because he's lost his shirt. Yep, and you can't even protect them because at this point, you didn't give the three people you just gave one.

Speaker 2 19:07

It's obvious to me, as we do this for years and years and years, that some agents see homeless vectors as an impedance to their sale going through, when in reality, we are keeping your ass from getting sued and we're helping the buyer make an informed decision.

Speaker 3 19:24

Well, do you remember when we first started like 20 some years ago? It wasn't real estate agents against home inspectors, it was a team Well, not so much a team but it was part of a team approach.

Speaker 2 19:38

Yeah, but I never.

Speaker 3 19:41

There was always some agents like oh your, inspector's a ruin of a deal, but for the most part, though, those are the piece of the shit.

Speaker 2 19:46

Agents that really want to go out of business.

Speaker 3 19:48

But for the most part, though, the attitudes were different from the real estate industry and home inspectors were looked at. You know, we had the same clients, we had the same protection of the client's interests at heart, and that's changed somewhere down the road, where real estate agents don't think that home inspectors have their best interests at heart the clients or that they don't want it because they're going to blow the deal. And if that's the case and you're just doing crappy houses like that, you need to prep your clients better, or you need to have better understanding of what they need.

Speaker 2 20:29

We have a good agent that referred us for years.

Speaker 3 20:31

Yes.

Speaker 2 20:32

And they even tell us their whole process where they tell the client hey, you're going to get the report, there's lots of stuff on that. Look it over, we'll go over it together. Where they set the expectations, what the report's gonna look like, what's gonna be on it what kind of dollar things? That they're gonna look at. It may be scary, but everything's repairable. We'll sit down, we'll talk, talk right, and those agents close almost all those inspections that we do. Yeah, because there's no all right.

Speaker 2 21:00

When you are you doing sales or something some, if you get a client too many choices, they get confused, right, and they don't make a decision right you need to guide your client so they know what's going to happen and you don't want them to be confused like, if you like, this guy, this client today who hired us. He had questions, he was confused about the report because all his concerns were not addressed, nor were they being addressed when nobody was helping him, so he probably would have backed out of the sale anyway oh, I'm sure if it had pushed come to shove, he would have backed so we, we were there.

Speaker 2 21:42

Actually, they could make sure no, because he wasn't he needed he needed to make a decision well, he and his wife there was a couple. So yeah, confused people don't these people don't buy homes they don't buy homes, they don't make decisions well, if at all no, because they they need the information.

Speaker 3 22:03

That is what a home inspection does. It gives that client information, it gives them peace of mind, it gives them the ability to know that they can walk into that house and that whatever's going on, they can either handle or they know somebody that can help them handle it will be interesting the next day or we'll get the mold test back see if there's any mold spores elevated amounts in that house.

Speaker 2 22:25

There could be, because there's definitely some mold issues in there.

Speaker 4 22:31

So we'll see.

Speaker 2 22:32

Yeah, we will find out, but I don't think that real estate agent is going to get any recommendations.

Speaker 3 22:40

Oh, I'm sure he's not at this point.

Speaker 2 22:41

Because too many issues.

Speaker 3 22:46

Too many red flags, yeah.

Speaker 2 22:48

So, Eric, I think that's it for this one, who you recommend has a huge impact on your future business, like us Habitation Investigation. What did we win this year?

Speaker 3 23:00

We won Consumer's Choice Award this year.

Speaker 2 23:03

We did yeah didn't even yep, didn't even thought about it, it wasn't even on our radar.

Speaker 3 23:07

We got contacted and hey, guess what?

Speaker 2 23:10

Y'all just won this. You guys won this. Oh, that's cool. So we got that going for us and we also a couple years we best in midwest for home inspections. We also do commercial inspections with heartland commercial property inspections well, there's a difference in commercial and that would be another podcast and that can be another podcast that gets separated out. Yep, so I think, if, for this, make certain you give your client three choices, if you give them any, like you know, at all, or you know, tell them to make sure they're good companies.

Speaker 3 23:45

Yeah yeah, I mean, it is your name, it is your reputation on the line and if you're recommending somebody, for example, like this company, what do you think would have happened down the road if the clients had purchased this house and then found rot, found termites, found this.

Speaker 2 24:09

Like who's the client going to go after? I guarantee the agent will go. Oh, you should go after the dispatchers. They missed it Like dude you-.

Speaker 3 24:16

You were the one that said you were the one that fired them. You gave them no choice. This one that said you were the one that fired them.

Speaker 2 24:20

You gave them no choice. Yeah, so and yeah, insurance company will go after both.

Speaker 3 24:26

Yep.

Speaker 2 24:27

And home inspectors legally in the state of Ohio. We are reliable up to the cost of the home inspection.

Speaker 3 24:33

Yes.

Speaker 2 24:35

Which means if there's say there's a we'll say $10,000 worth of damage, they got missed, we'll say, Wow, All right, here's your $550 for the home inspection. The rest is we're going to have to go after the agent.

Speaker 3 24:48

We're going to go after the agent.

Speaker 2 24:49

Because the agent scheduled this. I don't feel bad If it's a bad agent. If it's a good agent, I would feel bad. But that's the E&O insurance, yeah. So I think that's it for this one. But oh, choose your home inspection companies, your termite companies, anybody you recommend choose your associates wisely choose them wisely, because it is a huge reflection on your professionalism and ethics.

Speaker 3 25:16

And you're yeah.

Speaker 2 25:17

Yep. Thank you everybody.

Speaker 3 25:18

Bye, bye, bye and your.

Speaker 1 25:24

Yeah, yep, thank you everybody. Bye, bye. You've been listening to the standing out in ohio podcast. Be sure to subscribe on spotify or google podcast to get new, fresh episodes. For more, please follow us on instagram, twitter and facebook, or visit the website of the best Best Ohio Home Inspection Company at homeinspectionsinohiocom or jimtroffcom. That's J-I-M-T-R-O-T-H and click on podcast. Until next time, learn and go do stuff.