Inspector / Vendor Conflicts of Interest & Biases

The Problem

Many vendors will perform inspections and also provide repairs for those services. For example, CenTex is a well-known and established foundation company in Austin who provides “free foundation checks”. Their primary business is repairing foundations. They are inherently biased.

The Solution

• Sellers: We will not accept or review an inspection report prepared by a vendor who also provides repairs for the system they are inspecting.
• Buyers: We recommend against “free checks” and to instead pay (usually a few hundred dollars) to have an unbiased inspection by a vendor who does not also provide repair services.

Additional Problem for Sellers: Disclosure

It’s important to understand that you must disclose any inspection you have reviewed. If you get a bad inspection from a biased vendor, you must disclose that inspection to buyers. You can certainly have a better, unbiased inspection performed after the fact and disclose + emphasize the better inspection, but you will still have this bad inspection potentially cause problems for you.

Solution to Disclosure Problem (Policy):

Any time a buyer’s agent tells you they are scheduling additional inspections, make sure and ask who is inspecting. If they are scheduling an inspection by a vendor who provides repairs for that problem, tell them they are more than welcome to do so, but you will not accept, review, or negotiate based on a report from this vendor. (This is your policy and your company’s policy.)

Vendors Categories Where "Free Checks" Exist but You Should Pay for an Unbiased Inspection

• Foundation Repair: This is a massively biased field. In my own experience (Eric), I will never accept a foundation inspection from a foundation company, without first reviewing an unbiased inspection (paid for). This is an incredibly important system and a potentially huge expense. Why would anyone get the free bid when an unbiased inspection from a structural engineer or Foundation Guru is generally a few hundred dollars.
• Mold: This is a massively biased field. Mold is everywhere. There is mold in your shower, mold in the air, and mold in your car. There are only a few species of “bad” mold. It’s critical that you find an unbiased inspector to give an accurate, unbiased opinion.

Gray Areas (Vendor Categories)

There are some categories in which unbiased vendors do not exist. There is no such thing as a “Residential HVAC Inspector”, for example. You have licensed HVAC techs who perform inspections. Some are honest and some are dishonest.

• HVAC: There are many honest HVAC techs and many dishonest HVAC techs. Generally, the larger companies will advise unnecessary repairs. The larger companies pay their techs commissions (yes, seriously!) when they “sell” new equipment. Not all small companies are honest, but many are. Make suer you know an honest tech.
• Plumbers: This is a similar situation to HVAC techs, but we have found far fewer plumbers who recommend unnecessary repairs.
• Plumbers (Sewer Lines): When you need a sewer line checked (castiron, etc) every plumber will charge you to inspect the line (and many can’t inspect the line because they don’t own a camera). We’ve found that these inspections are reliable and unbiased. Make sure and get a referral if you’ve never experienced this before.
• Electricians: Licensed electricians also inspect electrical work. Electrical repairs are often complicated and can be subjective. It’s generally okay to see a report or repair bid from any electrician, but it’s often smart to get a second opinion.
• Roofers: There is no licensing requirement for roofers in Texas, so you will get a wide variation in quality and honesty among vendors. Similar to electricians, it’s generally okay to see a report/bid from one roofer, but expect to get a second opinion from your own vendor (and it’s important to develop a relationship with a great roofer). Many good home inspectors will give detailed roofing reports.