What's In a Home Inspector Recommendation?

Home inspectors trade group criticizes use of paid "preferred" lists

By Scott Friedman
|  Friday, Apr 27, 2012  |  Updated 1:59 AM CDT
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What's In a Home Inspector Recommendation?

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Good home inspectors can sniff out hidden problems that can cause home buyers money. But how good is the advice from an inspector recommended by a buyer's real estate agent?

Most people hire an inspector from a list of names provided by their real estate agent. Dana Fox, who just bought her first, hired an inspector before she signed the papers to purchase her one-story ranch in Richardson.

"I didn't know a whole lot, so my Realtor gave me a list of about three or four different home inspectors," she said.

Some real estate companies go further, handing out published lists of "preferred providers."

For example, in North Texas, Century 21 Judge Fite publishes a preferred list it calls its "Connections Network." The list includes home inspectors listed as "diamond level" and "gold level" inspectors.

"The consumer naturally assumes these are the inspectors I should choose from," said Nick Gromicko, who heads the International Association of Certified Home Inspectors, a Colorado-based trade group.

Gromicko said preferred lists are misleading because consumers don't realize inspectors are actually paying to be on those lists, and the people at the top of the list simply pay more for that spot.

"You could be the greatest inspector on Earth, and you can't get on that list unless you write the real estate office a big, fat check, and that's wrong," he said.

But the home inspectors and real estate agents who use paid preferred lists to reach clients defend those lists, arguing that they are more than just advertising.

"Any inspector group who has a problem with something like this really should dig into the individual case," said Jim Fite who heads the Century 21-Judge Fite Company.

Fite said inspectors pay to be on his company's preferred list, but he said his company also constantly monitors inspectors on the list to make sure they provide outstanding customer service.

"We police it," he said. "We have actually asked people or kicked them out of the program."

Bill E. Smith, a certified home inspector with Pillar to Post, a company that pays to advertise nationally on preferred lists including Texas-based Keller Williams Realty, said that the lists can be a good way to find a qualified inspector.

Still, he cautions customers to not rely on any list as the only source of information.

"Call any of the inspectors, talk to them," he said. "How long have they been in business? How many inspections have they done? What kind of accreditation do they have?"

Gromicko's group argues that states should step in and put a stop to the paid lists.

But the Texas Real Estate Commission has no plans to crack down, unless the agency gets more complaints directly from customers.

"Is it potentially misleading? Yeah. But we don't get many complaints," said Douglas Oldmixon, administrator for TREC. "If consumers are mislead by this, I encourage them to call us and file a complaint."

The real estate agents and inspectors who use the paid lists argue that they are already policing themselves.

"We want to hear any complaints or problems, because we want to have good quality vendors out there for our clients," Fite said.

The Texas Real Estate Commission has a rule on the books that states inspectors shall not pay for inclusion on a list of inspectors or preferred providers.

But in practice, the state enforces that rule differently. The TREC administrator said payments are only prohibited if there's a limit to the number of people who can be on the list and it's not a case of advertising that's open to anyone.

Fox she chose an inspector from a short list of inspectors her real estate agent had personal experience with on other transactions. She said finding a qualified inspector has given her peace of mind about her purchase.

"It's worked out pretty well so far," she said.

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