Opinion?

[A-Pro]

I'd like to hear what you guys think of this.

The Realtor in question is offering a free pre-sale inspection performed by an "independent certified home inspector," yet the owner's brother (stated as a partner in the business) is clearly IDed in the article as a licensed home inspector himself. This would lead one to believe that he's probably the one performing the inspection, no?

From: www2.townonline.com/allston/atGlance/view.bg?articleid=202916

Family Crest Realty, formerly McDermott Realty, 545 Washington St. in Oak Square, is now providing the seller with a free presale home inspection.

Principal broker Jerry McDermott, along with his brothers Jim and Joe, have instituted a program called Hassle Free Home Sales.

When listing a home with Family Crest, an independent certified home inspector is hired at no cost to the homeowner to conduct a comprehensive home inspection prior to showing a home to any potential buyers.

A certified home inspection can cost $500 or more. Family Crest believes that pre-inspected listings benefit all parties involved in the home selling process.

"Your home will sell quicker and for the best price if a buyer knows the home is in good condition early on in the process. Also the seller will have the opportunity to correct problems and eliminate last-minute repair hassles that could delay the closing, or worse, cause the sale to fall through. Not a bad strategy when you think about it," said partner Jim McDermott, who is also a licensed builder and home inspector.

Jerry McDermott said his experience has shown that once an offer is accepted, many sellers develop a belief that their property is sold, only to realize that they have to renegotiate the entire sale when the buyer's home inspection is completed, causing unwanted stress for both the buyer and the seller.

He also stated that buying a home is the biggest purchase most people will ever make. A buyer should come away from the sale with the peace of mind that they won't be subjected to any unexpected surprises.

For more information, call 617-787-5851 or visit www.familycrestrealty.com.

[Brian G]

First, I don't see any way to avoid the appearance of a direct conflict of interest, since there is one. The inspector has a direct financial interest in the brokerage who is listing these properties, and the brokerage will make no money until the properties sell.

Second, if (and when) one of the buyers who relies on the inspection to make his / her decision has problems after the deal is closed, any sharp attorney should have a field day with this inbred arrangement in court.

Bad, bad, bad idea.

Brian G.

"Let Our Fox Guard Your Hen House"

[Darren]

Dennis should have a field day with this one.

Darren

www.Aboutthehouseinspections.com

[Steven Hockstein]

I think that this is OK as long as the buyer hires an inspector for him/herself.

If the pre-sale inspection discloses defects and the seller repairs them for the buyer it will help to smooth out the sale.

The problem that I see is if the inspection discloses problems and the seller does half-ass repairs or worse, hides the problems.

[Bill Kibbel]

The way I read it, it sounds like a scam against the seller.

Jerry lists the house, brother Jim (inspector AND contractor) finds stuff to be repaired by Jim. Jerry sells the house, convincing naive buyers that the house is perfect because it was inspected by an "independent certified" inspector and repaired by a licensed builder.

I can only hope the first time they try to pull this off, the buyers are smart enough to bring in a real inspector to find the real problems and the seller shoots the McDermott brothers.

[Scottpat]

I bet that this is also against the MA Home Inspector license law. I bet that the inspection fee is also contingent on the sale of the home !

Bad idea.

[Steven Hockstein]

Maybe I am missing something here.

Lets say that I am hired by a seller to inspect the house before they put it on the market. I tell them that I can help them through the sale by finding things that would likely come up during the home inspection performed by the buyer's inspector. The seller has the opportunity to make repairs and represent that the home was inspected and show that the repairs have been made. Additionally, if the seller choses not to perform the repairs and discloses the problems to a buyer and tells the buyer that the problems are excluded from any future negotiations it will likely help to smooth out the sale.

To take it a step further, if I do it for the seller and the agent pays me for this service, as long as I do a proper inspection why is this bad? Is there something improper about this?

A smart buyer will still likely have their own inspection. The goal is to help find the problems and eliminate them as issues during the sale.

I actually think it is a smart marketing program for the agent.

[hausdok]

Hi Steve,

I agree. When I was with the franchise outfit we did buyers inspections and had a nice little framed certificate that we provided along with the report. That inspection report and certificate were displayed in the homes along with the flyers and information packets.

The way we explained it to sellers was that they always have the option to fix things, but why bother? Just make sure it is all in the report and is disclosed. The buyer will probably not rely on it and will get his/her own inspector. After the inspection, if the buyer comes back to negotiate, simply state something like, "I'm sorry, but everything you are asking for is in my own inspector's report and was disclosed to you. That's why we set the price on the home where it is. We aren't coming down any more."

It makes sense. As long as you do a good job, the seller is happy because the inspection knocks the wind out of a buyer's negotiating leverage. I don't see why it would be illegal or against a code of ethics. After all, you are inspecting for the person who hires you and pays you.

ONE TEAM - ONE FIGHT!!!

Mike

[kurt]

As long as everyone involved w/ the process is highly competent, completely ethical, performs their professional tasks w/rigorous attention, & treats all the other parties as they would treat themselves, I think it could work out peachy.

Of course, I don't think I've ever been party to any transaction where these things occurred. Caveat Emptor. Just put the house on the market, let informed buyers make their decisions, & if there is any renegotiation, deal w/it. It wouldn't be complicated if realtors didn't continually make it that way.

[Bill Kibbel]

Guys,

There's nothing wrong with an agent advising a seller's inspection. I get my share of them, like when agents list old buildings with lots of obvious issues.

The problem here is that the article states that the principle broker and the home inspector/builder are partners. On top of the conflict of interest issue, as Joe and Scott pointed out, this could be against the intent of the MA law.

[Brian G]

Originally posted by inspecthistoric

The problem here is that the article states that the principle broker and the home inspector/builder are partners.

Exactly. The "HI" has a direct financial interest in seeing the listed house sell. That's a very different thing from Joe Schmo hiring a disinterested HI to perform a pre-listing inspection. To me it smacks of an attempt at a premptive strike, if and when the buyers don't know better. "Look, it's already been inspected and everything was fine."

I also notice they state that the inspection is at no cost to the homeowner. So who pays for it? You can bet it isn't the buyer, since he never asked for it and didn't choose the inspector. If the brokerage is paying out of it's end, I can't help wondering whether the HI partner gets paid for the inspection if the property doesn't sell. If he only gets paid if and when a sale is made, that's extremely odious.

Imagine that one flipped around. I agree to do a pre-listing inspection on every property for a local realtor, but I only get paid if and when they sell. No conflict? My state's SOP says it is, no matter how honorably I may act in the deals.

Brian G.

[Jack Ahern]

This applies to all 50 states and other places where inspections are done for the buyer. An educated informed buyer should bring his own "team" to investigate the real estate transaction. They should work only for the buyer-not have any questionable connections.It would be awsome to have 100% confidence that the professionals in the transaction are competant, truthful and ethical. Just think of it----no courts---no judges---no need for insurance. Things are picking up in Mass. Home of the World Champions [:-banghea

Jack Ahern Needham on the Charles