Should You Be Using Your Realtor’s Home Inspector?

Should you be using your Realtor’s home inspector? If you believe what people say on social media, the answer would be no. However, those people don’t know you or your real estate agent. If your real estate agent is a Realtor®, he or she is bound by the National Association of Realtors® Code of Ethics. I know there are a few bad apples in every profession, but I also know that there really are many Realtors who are ethical and always work in the best interest of their clients. If you’re questioning your Realtor’s motives, I think there’s a bigger dilemma than whether or not you should be using that Realtor’s home inspector.

Common Misconceptions

  • Realtors Get Kickbacks for Inspector Referrals

    South Carolina license law prohibits home inspectors from paying a referral or finder’s fee in connection with a home inspection. Furthermore, InterNACHI’s Code of Ethics states:

    6.  The InterNACHI member shall not:

    […]

    c. offer or provide any disclosed or undisclosed financial compensation directly or indirectly to any real estate agent, real estate broker, or real estate company for referrals or for inclusion on lists of preferred and/or affiliated inspectors or inspection companies.

    ASHI’s Code of Ethics states:

    Inspectors shall not directly or indirectly compensate realty agents, or other parties having a financial interest in closing or settlement of real estate transactions, for the referral of inspections or for inclusion on a list of recommended inspectors, preferred providers, or similar arrangements.

  • Inspectors Have an Interest in Making Sure the Deal Goes Through

    Even when a buyer uses the Realtor’s home inspector, the buyer is the inspector’s client. The home inspector does NOT work for the real estate agent! Furthermore, ASHI’s Code of Ethics states:

    Inspectors shall not inspect properties under contingent arrangements whereby any compensation or future referrals are dependent on reported findings or on the sale of a property.

  • Realtors Choose Inspectors Who Make the Report Look Good

    The theory is that a real estate agent will choose a home inspector that will make the property look good. As a result, the transaction will go through, and the Realtor will be paid. It seems logical, but there are a couple of issues with this.

    • It goes against NAR’s Code of Ethics, which requires to Realtors® to put the clients’ interests ahead of their own.
    • Additionally, this practice would be bad for business. Sure, the agent makes a commission on that transaction, but at what cost? I don’t know any agent who would want to risk their future reputation for a single commission. Most Realtors® depend on referrals from past clients, so it wouldn’t make sense for an agent to intentionally choose a poor inspector just to make sure one transaction closes.

As I said before, I know there are bad apples in every profession. There are unethical real estate agents, as well as unethical home inspectors. However, the vast majority of individuals in both professions value their careers too much to risk everything by behaving unethically. That being said, your Realtor® should always provide the names of more than one home inspector. Even when you’re using your Realtor’s home inspector, you should have a few options. Just remember, your agent cannot require you to use a certain provider for any service!

It’s important to verify a home inspector’s qualifications, whether using your Realtor’s home inspector or finding your own. The state of South Carolina requires that home inspectors renew their licenses every other year, while some states don’t require licenses at all. Additionally, you should look for a home inspector who is a member of ASHI or InterNACHI (or both)! It’s also wise to check online reviews or ask for references.

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