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Chairman's Message — I’m Mad as Hell and Am Not Going To Take It Anymore

Every month, it is the responsibility of the CREIA Chairman of the Board to send a message to CREIA members. It is a privilege and a responsibility that I take very seriously. This month, I choose to recount a personal story that may seem familiar to most members.

Mark Your Calendars! Click here to             register NOW!Last week, I set up inspections for two single family resale properties. In both cases, the buyer’s agents were the contact who initially gave me the information needed and arranged the time and date for the inspection. The very last question that both agents asked was “what will be the charge for the inspection?” I was pretty impressed that that question was not the first. When I quoted the fee (same price, same size houses), both agents reacted like they had been shot. “I can’t believe that you charge that much for that size house. I quoted my buyer clients a not-to-exceed estimate of $400.” I responded with “how can you quote my fee before finding out what I charge?” Both agents stated: “no inspector should charge that much for an inspection. I can get my buyer client the same inspection for $300 less than what you charge.” I let both agents know that they may be able to get an inspection for their respective clients for $400, but they would not be getting the same quality inspection for $400. Both agents hung up with a flourish (slammed the phone down). After five minutes, both clients called to cancel the inspections. Both clients recounted that “my agent says that you charge too much.” Nothing that I said, at that point, had any effect on changing the client’s mind. Needles to say, I did not perform either inspection.

Now, let me say that, over the years, cancellations are a part of the business. Let me also say that I am not crying poor or whining about losing two inspection fees. What I am upset about is that other real estate professionals (agents) feel that they have the right to limit what I earn in my profession. The time, effort, continuing education and studying to achieve my current professional level, as well as my history in the construction field before becoming an inspector all go into determining my pricing. Two questions come to mind. First: How can anyone who does not know about all my qualifications and experience set my fees? Second: Does the real estate agent have their client’s best interest in mind when referring an inspector based on price and not qualifications?

Allen Insurance

If inspectors had access to buyers before the real estate agents influenced their opinions, buyers would be better informed about inspector qualifications, the positive influence professional associations such as CREIA have on the industry and the need to “get what you pay for.” That mantra of “get what you pay for” was old before homes were being professionally inspected but never more important as right now.

With the current market of most homes sold being REO properties, there is no seller to disclose previously known conditions of a property. There is also no seller to negotiate with for identified material defects. It should follow that the more detailed an inspection is, the better chance of providing full disclosure to potential buyers. That disclosure both reduces the chance of litigation against a real estate agent and gives the buyer the needed information to make an informed buying decision.

Common sense would dictate that agents should be scrambling to refer those inspectors whose reports provide that disclosure, regardless of the price. Common sense would also dictate that, since the agent is not paying for the inspection, that the agent refers the best quality report available to their client, regardless of price.

Let me also be clear that I am not talking price fixing in our profession or commenting on different pricing amongst CREIA members in any given area. I am well aware that my prices are higher than some CREIA members in my area. I also remember when I first started performing inspections, that I was the low price leader. At that time, I could not honestly set my prices to what the established inspectors had theirs set at. I was a newbie and my lack of experience and knowledge set my price for me. Once I gained in both experience and knowledge, then I started raising my prices.

It would probably be too radical to suggest to a buyer that they explore discount real estate brokerages as a way to save money during a transaction. That way the client can save literally thousands on real estate commission fees rather than the few dollars on shopping for the inspection fee. After all, the discount broker completes real estate transactions the same way as a full commission agent does. That way the client can then say” I can get the same real estate transaction for thousand less than what you charge.” Hmm, I might be onto something.

As always, if you as CREIA members have any comments on how to improve our Association, please contact your Chapter President, Regional Director or simply e-mail the Board of Directors through the CREIA website.

Michael Foschaar, MCI
Chairman of the Board 2008/2009

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This Issue ...

Exhibitors for the CREIA/AZ ASHI 2009 Conference in Scottsdale, AZ

A Ethics Question

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Upcoming CREIA Events
May 2009

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Q: Is this against the CREIA Code of Ethics to give out coupons for say $100 off a home inspection? …and can an inspector offer a raffle and give away the free inspection for the agent who wins the raffle (to enter the raffle you must have booked an inspection with the inspection company in the past four months)?

A: From an ethics perspective, I do not see a problem with giving out “dollars off” coupons for inspections. However, the requirement for an agent to have used you in the past XX months prior to being included in a raffle could be considered an inducement. If one wanted to have a raffle, have it open to the entire office. Thank you for your membership and desire to conduct your business reflecting the high ethical standards of CREIA.

Submitted byDavid Pace, Ethics Chair, CREIA MCI

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