A civilized discussion on Agent relationships

[hausdok]

Here's how it works,

A new inspector getting into this business typically asks an old timer how to market or he/she is told in one of the shake-n-bake inspector schools how to market.

Most old timers and schools are going to tell a newcomer that the only viable approach is to try to market directly to real estate folks; because there really is no other marketing model for this business. Sure, there are plenty of other methods that work, but it takes a lot longer to see results and most new folks coming into this business are doing it out of necessity, don't have a lot of extra cash to tide them over for very long and they can't afford to use the slow approach.

So, initially inspectors market directly to real estate folks using a lot of tried and true tactics - most of them designed to convince the agent that the inspector is going to be the agent's best friend in the home inspection business. Stats from the franchise I used to be with were that you had to market constantly and consistently and that an agent had to see you numerous times over at least a 3 month period before they'd finally take a chance on referring a client to you. I think the franchises stats were that roughly one out of 30 agents you meet will take a chance on you and refer you to one customer.

The first inspection referred to you by a real estate agent is an audition; depending on the type of agent that referred you, an honest inspector might or might not get referred again. Some agents will instantly try and determine how malleable the inspector is and whether the inspector will listen to "the code" - little body English signals or specific turns of a phrase that will indicate that the agent is not happy with what the inspector has just said, is getting impatient because time is running short, wants the inspector to talk up some gee whiz aspect of the house, warns the inspector that the agent's regular inspectors don't say that as a means of saying, "Shut up, you're putting my commission in jeopardy," that sort of thing. Other agents, the honest ones, will be looking to see whether you are working for their client or them. They'll use the same tricks because they've been taught the same tricks by the less ethical in their offices and it's an easy way of screening out suckup inspectors. Of course, the inspector - not knowing the agent personally - really won't know what type of audition it is unless the agent has the stones to tell him/her afterward what the agent didn't like about the inspectors inspection.

Most folks' experience is that the great majority of the time the agent will say, "Great job," and they will not be referred again if they truly went all out for their client instead of the real estate agent. So, it's a question of time and numbers; you have to get in the face of as many agents as you can and try and get on their "list" before you run out of money and end up camping out under an underpass. That means meeting and greeting them over and over and over and over when you are new, trying to cajole your way into their offices in order to give them a "presentation" or something similar. The more you meet, the more likely you are to garner referrals.

Know this, most agents who've been in the business for a year or more have already met dozens, maybe hundreds, of inspectors before they meet you and they will have already put together a list of inspectors they refer to their clients. Even though you might be the best inspector on the planet, they will really have no interest in referring work to you because the auditioning process is just as stressful on them as it is on inspectors and they'll be comfortable with their list. An ethical agent will have a very short list and will remain very loyal to the inspectors on that list for years; an unethical agent will have a longer list and will be somewhat loyal to those on that list; as long as they continue to kowtow and play the game properly. An unethical agent won't even consider referring you until it looks like one of the inspectors on the list is getting ready to go rogue. If you just happen to meet that agent at that point, you've got a chance. So, the bottom line is that it's a crap shoot and continued business depends on whether the inspector's ethical center and the agents ethical center are in sync at that first inspection.

The experience of most ethical inspectors is that when they first get into the business the great majority of their referrals comes from agents and a very small percentage comes from friends, relatives, co-workers and satisfied former clients and the friends, relatives and co-workers of those clients. If an ethical inspector manages to survive long enough, those referral numbers will reverse themselves and they'll gradually see the number of referrals from agents drop off to a trickle compared to those from non-agents and they'll find that it's no longer necessary to constantly market to keep themselves barely afloat.

On the other hand, the guy/gal that feeds at the real estate through will need to constantly market, market, market, market. All of that marketing means they can't afford to spend a lot of time inspecting and writing reports; so, even if they want to change their way of doing things and wean themselves off of the real estate teat, it's very difficult to do and still be able to pay the bills. These folks have no alternative but to market in order to keep adding new agents to their referral base because customers aren't stupid; they can sense when an inspector isn't working for them and is more interested in the real estate person's future referrals to the inspector instead of their well being. These clients will not tell their friends, co-workers, relatives about that inspector - unless it's to tell them how ripped-off they feel after paying that inspector - so referral numbers from satisfied former clients vs. agents tend to reverse themselves at a much slower pace with this type of inspector. That's where it's dicey; the real estate community is small - screw up one time when you're a suckup artist and word is liable to get around that you're damaged goods and the other realtorzoids (agents who prefer nearsighted suckup inspectors over ethical inspectors - zoids for short) will avoid you like the plague. When that happens, and the client is screaming about the thing you missed 'cuz you were too busy getting the job done quickly and without making any waves, and is threatening to sue everyone in sight, the agent will put it all on your shoulders. On the other hand, if you're an ethical inspector and screw up, and you admit your mistake, do the right thing and make right by the client, the ethical agents will probably continue to refer work your way.

Some folks who begin in suckup mode manage to survive and come over from the dark side; many don't. Some don't care; they jump into the business, suckup to the max, make as much money as they can in the shortest time possible and then they get out while the goings good, leaving a trail of unhappy customers behind them. Some stay though and continue the model; some of these are so successful that they blossom into multi-inspector firms or they open up schools and start to teach new inspectors how to suck up, thus perpetuating this flawed model. Some get sued into poverty or declare bankruptcy, pick up and move to another town and open a new company under another name.

ONE TEAM - ONE FIGHT!!!

Mike

[Darren]

OK, I'll bite.

I'm a one man show. I have been in business since 1997. In my first 2-3 years I marketed to realtors but found it a waste of time and money. As been said here more than once, realtors are looking for an easy sale, easy money.

Here's one example. In the first year of business, I pointed out the fact a boiler was improperly installed in a garage. The realtor pulled me aside and asked if I could leave that out of the report. To be honest, I thought about it for a minute, but quickly came to my senses.

Several years ago on a new townhouse development near Rt 23, I found missing 'kick-out' flashing on an EFIS install. Realtor said it passed code inspections, so it must be OK. I wrote it in the report, and got tons of BS from everyone. The buyer called me later and said the entire development was being repaired. I actually went back and took pictures of the repairs in progress to show other 'dis-believing' people.

It took me a year to find out my belief didn't match up with the industry. I want to do the best I can while other want me to 'glaze' over the house and 'pass' it.

There is a very busy home inspector in Morris County (who shall remain nameless but Neal knows who he is). He does tons of inspections but misses many problems. I know for a fact he missed a large structural defect but had a friend of mine fix the 'mistake'; he paid over 10K out of his pocket because he couldn't afford to put it on his E & O (what does that tell you?).

He is on the TOP of the realtor's list of 'good' inspectors. Is he? Hell no, he's does 90 minute inspections, but he's busy as can be.

In 2004 I grossed over 200K. I did over 325 inspections along with 'other' work. It's been downhill ever since.

I have about 10 top notch realtors who refer me to their clients. These realtors know my business plan. I tell it like it is and have the chips fall where they may. My other business comes from past clients and my web site.

There may come a time real soon when I won't be in business; but all I can say is I tried the best I could and when I lay my head down at night, I can fall asleep knowing that.

[Gibsonguy]

Wow,

Both excellent insights. I cannot say how much this post is relevant to me, a young, "green" inspector fresh out of a 250 hour course and starting my own business on the little amount I can't really afford.

I was approached by my professor to come and work for him, but decided to got it alone, citing the reason this career enticed me in the first place; being my own boss... that and a $5000 cost to join his "team"

Today up in Montreal we had a bit of a snowstorm (6cm and blowing gusting winds) and are predicting -33 degrees C with the wind chill factor tonight, and I have just returned this evening from going to an empty real estate office to hand out some business cards...

[Brad Manor]

Originally posted by Gibsonguy

that and a $5000 cost to join his "team"

hmmm..... pay someone $5 to be his employee - sounds like a heck of an instructor.

-Brad

[Gibsonguy]

Well that amount would let you buy into being a part owner/inspector of his company, allow for profit sharing and stuff mailboxes with his flyers or... give him $2000 to be just an employee and stuff mailboxes with his flyers.

I said to myself: "Self... you could do your own start-up for that"

[sepefrio]

When I came on the scene a stomping and a storming, I did what I was told, market to the agents. I spent numerous weekends going open house to open house. Probably a few thousand miles later and countless hours plus brochures, cards, candy bla bla bla I was not making any headway, at least not enough to make it worthwhile. I did hook up with two agents, who I still get work from, but that was through friends and not really the marketing effort I was doing.

That is when I changed to a networking based approach. My first and to be honest most valuable and effective move was joining my local BNI group. I know some haven't had a good experience with BNI's but I have. I did visit like 4 differant chapters before I picked one to join, and we have a blast every week. So the First part of BNI, or any networking group is the people. If they are all selfish pigs, no matter the name, it won't work.

Now, I maybe received 8-10 inspections directly from BNI in the year I've been in it. Not a whole lot you can say for spending 52 Tuesday mornings at $10 a pop for a gross breakfast. (Not to mention the joining cost of $400+). But that only applies if you do direct math. The intangibles I received though are priceless. First I did get a few 2nd hand inspections but the most important part is I learned how to network. Several of the folks in my group are MAJOR net workers and they helped me out big time. I go to numerous meetings every week, usually in the 5-9pm range. From local Chamber of Commerce, to young entrepreneurs, to other local groups. I've met more agents, lawyers, appraisers, car dealers, health care specialists, loan officer, closing agents etc etc etc than I could possibly count. I must have close to 1000 different business cards that I have on file now (OK maybe not 1000 but I aint counting). Not only have I gotten inspections from them, but I have also found ways to get better deals for me or improve my business. I bought my company shirts from a guy I met there, my business cards, attending free coaching etc. I have no way to add up the "income" I have received from things like this but it is vastly more than what I spent and more effective than my previous approach.

This year I intend to double/triple my networking efforts. First because most of the events are fun. You sit back with 30-40 people at a time, enjoy a good beer or some wine and just talk and be normal. I have gotten to the point that every event I walk into at least a third know me and my business by name. Every event I go to, I also meet new people. But again, I think the thing it did most for me is teach me how to talk to people and how to sell myself.

So to sum up, I'm not pushing BNI on anyone. I am suggesting you try networking though.

[Brad Manor]

I'm a member of one of the local chapters - it has worked very, very well for me.

-Brad

[Tim H]

Originally posted by sepefrio

So to sum up, I'm not pushing BNI on anyone. I am suggesting you try networking though.

That's good information John. Are you a member of a local chapter to one of the big national/international groups, a local/regional group, or both?

Tim

[sepefrio]

BNI (Business Networking International) is a international group and well established. But like I said, you could go to 4 different groups and get 4 different feelings for them. So before you join any group, search out several. IMHO it really is the people in the group that make it, not the name.

Also of note, I can almost promise you in every group you will find an agent. If you join that group, you will find in private talks with them, they will be a lot more open and talk to you more freely about everything Mike said above.

[sirch]

Hey Tim, I have been to a few here in Montgomery and one in P'ville. I was invited to all but never felt comfy at any of them.

[Gibsonguy]

I too was invited to a BNI meeting. I liked it, but the group seemed completely starved for a new network. My wife mused that BNI stood for: "Breakfast Not Included". I still laugh at that one...