Conflict of interest among agents & inspectors

Q: I am a newly certified home inspector and have a question that involves professional ethics. When I attended home inspection school, my instructor told the class we should not be "deal breakers." Otherwise, we were told, real estate agents would not refer us to their clients. I thought the purpose of a home inspection was to disclose property defects to homebuyers. How can we perform this function in a competent and ethical manner without losing the support and recommendations of agents?

A: Relationships with real estate professionals is a primary concern among home inspectors everywhere. Here is the problem: Home inspectors are hired by homebuyers to be consumer advocates - to represent the buyers' financial interests in the purchase of a home. This is complicated by the fact that home inspectors obtain most of their business from referrals by real estate agents. The problem with this arrangement is that agents do not get paid for their time and efforts if the transaction does not close, and the findings of the home inspector can impact whether that closing actually takes place. Hence, there is an obvious conflict of interest.

Real estate agents, in a limited sense, can also be viewed as consumer advocates for their clients. That is why they are called "agents" rather than "salespeople." Fortunately, there are agents who understand this ethical role and perform it to the best of their abilities. These agents recommend only the most qualified, thorough home inspectors to their clients.

Unfortunately, there are some agents who operate in a manner consistent with the proverbial label of "used car salesman." Their primary motivation is to close the deal, regardless of consequences to the buyers or others. One way of doing this is to steer their clients, as much as possible, away from the most thorough home inspectors: the ones they typically call "deal breakers" or "deal killers."

In every profession, there are diverse levels of ethical performance. The best agents are those who truly represent the interests of their clients and who demonstrate this by recommending the most qualified home inspectors available.

Those who are commencing new careers as home inspectors will gradually learn where the local agents stand on the ethical scale of business practices. Home inspectors who do top quality work for homebuyers will be recommended by the ethical agents but not by others. That's how it is in the real estate business. Many agents dread the most thorough and experienced home inspectors. Fortunately, the respectable agents provide a sufficient flow of business to the best home inspectors and thereby represent the best interests of their clients.

Hopefully, your home inspection instructor does not advocate pandering to the pressures of unethical agents. It is one thing to warn fledgling inspectors about the pitfalls in the business, but inspection schools should not encourage their students to compromise the honesty and thoroughness of total disclosure for their clients.

• Email Barry Stone at barry@housedetective.com.

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