Who Can You Trust When Buying a House?

It occurred to me while listening to the talking heads at a town meeting recently, that just about everything runs on nepotism. The process depends on apathy from the folks who count on the system to protect them. If the system works at a minimally proficient level and folks are adequately apathetic, then no one ever questions the methods or results.

Government corruption and personal gain under the guise of public service isn’t ground breaking news. Only the most naïve of the innocents believes that all the decisions are made for the public good. You take it for granted that someone somewhere benefited personally while making decisions that affect you as an individual. You’re used to it and you expect it. At least in the case of government you’re prepared.

What you don’t expect is to be blindsided by people that you hire to protect your best interest. You might think it’s a stretch to go from elected officials to home inspectors and their clients, but the fact is, the analogy is dead on.

Most people hire someone to help them buy a house. We know the official name for folks that help people buy houses but humor me and let me call them buyer’s advocates because that’s what they’re supposed to be. The buyer’s advocate is fighting an uphill moral battle from the get-go. They don’t get paid until the buyer actually buys something and when they do get paid, they get a percentage of sale price. So, the buyer’s advocate makes more per hour if the sale goes fast and for a high price. In contrast, in the buyer’s best interest, the advocate must help bargain the price down and show the buyer a number of properties so that the buyer can feel she has been exposed to a sampling of what’s available in the market. The nature of the system plays tug of war with the advocate’s responsibility to his client and with his desire for a new Volvo with a personalized plate that says ‘eyesell’ because he didn’t think of it first. Logically, it’s very difficult to end up with a win-win situation. It’s much easier to end up with a situation where one wins and the client thinks she wins.

The news doesn’t get better from here.

Most buyer’s advocates have a stable of inspectors that they suggest the buyer use. The advocates usually call these inspectors ‘my inspector’. The phrase ‘my inspector’ really isn’t that subtle. Think about it.

Most inspectors depend on the buyer’s advocate for referrals and therefore for their livelihood. For those inspectors, the buyer’s advocate , not the client, is the most important person in every deal. The inspector really, really wants the buyer’s advocate to like him and use him again. I’m pretty sure you get the picture.

The advocate benefits when the house sells for a lot of money and it sells fast. The inspector is beholden to the advocate for his living and might paint a rosy picture of the house to preserve the deal and his referral base. You paid both of these people to be trustworthy but it’s like you had the used car you’re buying checked over by the used car salesman’s mechanic. Maybe, the car salesman and the car salesman’s mechanic are dead honest and really want to give you the best deal possible. Maybe.

There’s no great way to pick a home inspector but researching it on your own and picking an inspector that’s independent of the “good ole boy” club is worthwhile. At least it reduces the possibility of the nudge, nudge, wink, wink relationships eroding your position.

Here’s the last of the bad news. Even if you find an honest inspector, that’s just step #1. Step #2 is harder. Does the inspector know anything at all about houses?