First, what is a “soft” home inspection report – and how can it do harm?
Many home inspectors that inspect homes for real estate transactions will build their businesses upon the hope of referrals from real estate salesmen to stay in business. Since real estate salesmen make no money until a home actually sells, some inspectors feel compelled to assist them in selling the house they inspect with the hope of gaining future referrals. To do this, they ensure that their inspection reports do not “alarm” the prospective home buyer or possibly interfere with the sale of the home – with the expectation of gaining favor with the sales agent.
The result is a “soft” report that is of no value to the home buyer, and potentially harmful. A “soft” report could result in a buyer being deprived of important information that could affect a decision to buy a house that can lead to a serious financial loss.
The following are a few common methods used by some home inspectors to “soften” their home inspection reports:
“Balancing” the Report
The most common method used to “soften” a home inspection report is to add “positive” things about the home that would be attractive to the buyer. Some inspectors have told me that they strive to include one positive feature of the home for every material defect that they find in order to “balance” the information.
Most experienced and professional home inspectors, however, already take into account the fact that their client has found features of the home that attract them, or they would not have agreed to purchase it. Professional inspectors know that they are hired to describe the home’s true condition and report material defects that could affect the health or safety of its occupants as well as the sustainability of the structure.
They will perform this service by providing a home inspection report that is complete, accurate, and unbiased.
Sandwiching information about hazardous or defective conditions between flowery comments is not the proper way to write a home inspection report.
“It Wasn’t in the Code Book, Back Then“
Another common technique used to minimize a material defect in the mind of a potential buyer is for the inspector or real estate salesperson to point out a serious material defect in the home but then infer or suggest that it is somehow more acceptable since the correct installation was not required by the code or building standards at the time the home was built.
Any defect that could result in physical harm to the structure or its occupants is serious – no matter when it became part of the house – and should be addressed. A home inspector’s job is to bring to his clients’ attention every such issue he observes and to recommend that it be corrected. It is not his job to make excuses for its presence.
Understanding that building codes are simply basic minimum standards of which anything less is illegal … the fact that something harmful may or may not have met code at the time it was built has no relevance to the owner, today.
Another way that an inspector can take the “sting” out of a material defect to “soften” a report is to include an estimate of repair to help the prospective buyer apply what is called “context” to the defect. This is not common to most home inspection reports, but it happens in some cases.
It is dangerous for the inspector as well as the homebuyer to make purchasing decisions based upon an inspector’s estimates. Many state laws and all standards of practice discourage inspectors from providing repair or replacement estimates.
Estimates can only be accurately provided by a person or business who is currently doing the work and aware of the present costs of materials and labor associated with the project and will often find undiscovered issues that affect the cost of the project once work has begun. Many contracting companies employ professional estimators who are trained and current in the practice of providing them.
“I am not an Alarmist.”
Watch for these code words that home inspectors use to alert interested real estate salesmen that they will write a “soft” home inspection report in exchange for future referrals … something that one court referred to in one recent lawsuit as “consumer fraud”.
Among some home inspectors and the real estate agents they work with is an “understanding” that first-time home buyers are sometimes easy to frighten or “alarm” when they learn of imperfections with a house they intend to buy. Some home inspectors address this as they solicit referrals from real estate agents by advertising themselves as friendly to first-time home buyers and provide an assurance that they do not “alarm” them in the manner that they describe defects in their reports.
Learn more about the bad results that come from this act of “consumer fraud” … from this lawsuit (click here) … that resulted from a soft home inspection report given to a first-time homebuyer who got burned.
“Free” Warranties and ” Guaranteed Buy Back” Offers
It makes sense for a real estate salesman to want to take some of the worries out of taking a chance on a new home. Many will encourage or enhance the sale by providing “home warranty services” that may or may not cover items that stop working when the new homeowner takes over the property. Some will offer to buy the house if they can’t sell it … or “buy the house back” if you don’t like it, with (of course) a long list of certain disqualifying conditions.
While most home inspectors are careful to inform their clients that they are not providing or implying a guarantee or warranty through their inspection reports, many will want to impress real estate salesmen with the appearance of assisting them in providing an incentive to buy. Accordingly, they will purchase “90 Day Home Warranties” or provide “Guarantees” that are supposed to cover selected systems within the home against defects for a very low cost ($5 to $15) and will provide them to their clients with paid home inspections.
These low-cost service contracts promising high-end payouts are a common source of complaints with state-level consumer advocacy offices (attorney general, BBB, etc.) and should be carefully scrutinized. Even when they appear to be provided “free of charge”, reliance upon them when deciding to buy a home can be extremely costly.
In addition to the exclusion-laden free “warranty” is the recent promotion where some home inspectors offer to “buy back your house” if they miss a defect in their report. If you really … really … believe that your home inspector can afford to “buy back” every house that he inspects charging his $300-ish inspection fee, then go ahead and take comfort in his offer when deciding to buy a home. If, however, you are suspicious as to why he will NOT promise to pay to replace the broken water heater he failed to detect for $500 but is willing to “guarantee” to buy back the house for $300,000.00, instead … look carefully at the hundreds of exclusions that assure that no such transaction can ever take place.
When the home inspector, hired to report things that might be wrong with the house, begins providing “free” incentives to help the potential buyer decide to purchase the home (by addressing future recalls of appliances or “free warranties” should things break), this could indicate that someone other than the home buyers’ interests is being considered.
The use of these so-called “warranties” along with other gimmicks (such as ongoing updates on the recall status of appliances, alarm system evaluations, etc.) assist home inspectors who wish to solicit additional referrals from real estate salespeople to help the sales agent advance a presumption that the prospective buyer will decide to buy the house. They also create an illusion that future breakdowns will be covered at someone else’s expense. Carefully read these “warranties” and “guarantees” to see that they actually provide the intended coverage. Many don’t.
While these gimmicks have little to do with reporting the present condition of the home … they can go a long way in helping a sales agent create a mindset of “ownership” that advances the sale of the home. This is why some inspectors, according to their conversations in private sections of professional forums, promote their use as “marketing tools” to solicit more real estate agent referrals. “Agents love them” is a mantra for those who promote them. One vendor who sells the “We will buy back your house if we miss something” goes as far as to promise participating home inspectors that “every” real estate agent he solicits will provide him with “every” client they serve as a referral. Some home inspectors believe this and are willing to take a shot.
Homebuyers should ensure that the company that is representing these service contracts is properly registered with their state and should not hesitate to hold the inspector that provided it to them responsible for the provider’s failure to perform under the contract – since it is being provided as a part of the home inspection service that they paid for. Here is a lawsuit where the home buying victims of a “soft” home inspection report with a 90-day warranty did exactly that … (click here). A “We will buy your house back” guarantee would also exclude the conditions described by the duped homeowners in this suit.
What Should You Do (and NOT Do)?
Do your best to seek an experienced, full time and certified inspector, but be aware that even highly experienced and “credentialed” home inspectors can still be found to participate in writing soft reports or using gimmicks in return for future referrals.
While I personally know some excellent home inspectors who have scaled down their businesses for various reasons and continue to do quality inspections on a part-time basis … I know many others who have yet to reach a level of skill and expertise upon which they are able to confidently rely upon or fully commit themselves to be a home inspector on a full-time basis — yet these inspectors somehow expect others to place confidence in that level of skill and expertise to such a degree as to rely upon them to make the largest single purchase that many are likely to ever make in their entire life.
Use the internet to do your research and if you prefer to have someone refer an inspector to you, seek advice from friends or family who have had personal experiences with professional home inspectors.
Be skeptical of referrals for home inspectors from real estate agents or anyone else who has a financial interest or stands to gain from the sale of the home. Often, home inspector referrals come in the form of lists that will contain the names of inspectors known to the list provider to write soft reports or will be simply a list of inspectors who were willing to pay the real estate broker or agent a fee to appear on their referral list. If one chooses to rely upon the recommendation of a real estate salesman for a home inspector and they provide a list of inspectors that they prefer to have a home buyer work with, it is not a good idea to go through the list simply searching for the inspector with the lowest fee.
Instead, homebuyers should seek information about the inspector’s qualifications, length of experience, certifications, and whether or not the inspector is committed to business on a full-time basis since some only perform inspections sporadically “on the side” from their other full-time job. When a home inspector adds a “free” gimmick to an inspection report such as a 90-day “warranty”, he should be asked how he has come to the conclusion that the buyer has decided to go forward with the purchase prior to having read his inspection report.
He should also be asked why he would be involved in matters, regarding future performance or recalls of appliances in a home, that he alleges his report to be exempt from. Using these selection criteria, the best inspectors will stand out quite readily. Still, one should remember the “code words” when reviewing his advertising and his reports.
(Revised on 6/9/14)
Copyright 2012 James H. Bushart
Great article and glad to see the all too common ‘soft inspection report’ addressed by a Real Estate Licensee. Of course a soft inspector would is required for such a report. Other simple considerations regarding a home inspector are:
1. Does the home inspector have a construction background?
*NOTE* Home inspectors DO NOT require a prerequisite construction background to qualify for basic training in order to be certified &/or licensed.
2. Does the inspector qualify with a trade, degree, builder, remodelling or restoration experience?
*NOTE* The inspector may only have basic certification and licensing training & NO construction background or technical knowledge.
3. Does the inspector provide an onsite checklist report devoid of photographs?
*NOTE* A generic report is a one for all homes checklist, without photos that will likely provide minimal accountability by stating a further evaluation is required with minimal specific & more general details.
4. Is the report from a highly developed software application that provides an abundance of disclaimers and liability waivers?
*NOTE* Report writing software advertises that “Nothing (from the Standards of Inspection) is missed” thereby walking the basic trained & inexperienced through the filling in of the report.
Learn how to get the: Best information at the best time!
Rob – You offer an interesting perspective. Thanks. Your third point appears to condemn the written checklist and your fourth point appears critical of the computer generated report. Do you have an alternative?
Having a background in “construction” or the trades in my opinion does not determine one’s abilities as a home inspector. Lord knows there are plenty of “construction” workers, contractors, and tradesman out there building and working on houses that probably shouldn’t be! As inspectors we often see the end product of what some in the construction industry produce. It certainly always isn’t perfect, and occassionally is downright scary. (or at least good for a laugh)
I for one have no prior background in construction, and have been inspecting homes for about 9 years. I have acquired all of my skills through experience and being proactive about seeking quality education. Loads of it! Soaking up as much as I can along the way. The inspector that has no drive to acquire new knowlege is a sore spot in our industry.
If it wasn’t for many of the inept and unqualified contractors out there many of us inspectors would not really be needed! LOL. Honestly, this is not a shot at all inspectors who are former tradesman. The background is certainly a benefit assuming they are good at their craft. Just saying it should not in my opinion be a “requirement” for one to be a good inspector.
John, do you think the people that used for inspections 8 or 9 years ago got completely screwed, since your 9 years of inspecting had made you what you are today…
John — How is this relevant to the topic? I am not aware as to how an inspector’s background in the trades (or not) would have anything to do with providing soft reports or other incentives for his client to buy the house.
@ Rob – In a nutshell yes! I think those of us who inspect homes can agree that as time passes we gain more insight and knowledge making us better inspectors. Certainly we learn as well from our mistakes.
@ Jim – My comments on background in construction and trades were referring to Rob Hakesley’s first comment on your article where he suggests considerations for qualified home inspectors. His comments were:
“Other simple considerations regarding a home inspector are:
1. Does the home inspector have a construction background?
*NOTE* Home inspectors DO NOT require a prerequisite construction background to qualify for basic training in order to be certified &/or licensed.
2. Does the inspector qualify with a trade, degree, builder, remodelling or restoration experience?
*NOTE* The inspector may only have basic certification and licensing training & NO construction background or technical knowledge.”
I was simply expressing my opinion that this background was not necessarily required and that it has nothing to do with writing soft reports. So yes Jim I agree with you…why is background relevant Rob Hakesley?
Rob, would you rather inspection software not make sure that all inspectors at least cover the minimum standards of inspection? Most inspectors will go way above and beyond. Software that ensures an inspector covers everything is an asset, not a negative.
As a Realtor, I use the inspector other Realtors do not. He is very picky. I explain this to the buyer and that they should not expect these things to be repaired by the seller. This is a list of the things they will want to address over time after the home is purchased. If the problems are beyond what they want to handle then we will find a better house and the money spent is smart insurance. It is not about the house so much as the relationship with the buyer and future referrals.
Thanks, Gail, for sharing an excellent point. Honest professionals, such as yourself, could be equally harmed.
Gail I liked your response its good to know someone appreciates picky inspectors after all it is about the consumer
Thanks, Dom. Many of the professional and experienced inspectors that I know will provide much more information than what is suggested by an inspection reporting program, as you pointed out.
Hi Dominic, I think the reply is in my response below but if you require further clarrification just ask. @|8^>
@Jim First off; The following is provided on behalf of the Public interest: All professional reports should be computer generated and slick report writing software can be a great tool! My concern is that the software is so good (I’ve been impressed) that even someone with no construction background, training, or experience and ONLY basic home inspector training can give the illusion that they know what they’re talking about. Q: Should our profession be allowed to be watered down with inspectors having only the basic training? A: Q: Is there any other professional expected to be qualified to offer an opinion in many disciplines without expertise in at least one discipline of their own? A: NO!
THE DEVIL’S IN THE DETAILS: IMHO & In a nutshell; The generic, one fits all, boiler plate checklist, filled in onsite reports are unprofessional. Q: What other professional (worth his/her salt) who is a supposed expert in their field, would stoop to such a mickey mouse format? A: NONE!
A checklist report typically contains as many details as possible in order to make the report adaptable to almost any home. Many of the options are not applicable on every home and yet there is no way to delete the unnecessary details. How does a professional observe all items in the Standards of Inspection and beyond, fill in the report, and discuss with Clients without cutting corners? Onsite inspecting times is another major issue that could be another discussion.
Inspectors and professionals are accustomed to looking for check marked little boxes withg small hand scribbled notes beside boiler plate details, but this is NOT the best format to give the best information at the best time. Clients should not be made to navigate through details that DO NOT apply to their home. Information is judged according to it’s usefulness to the Client not by knowing how to fill in a report that limits the inspectors liability. IMHO the checklist report was designed and developed more for the inspector than the Public we serve.
In conclusion: I’m welcome open discussion of the preceding points & am sure I’ll be proven wrong just as soon as other professionals adapt the generic, one fits all, boiler plate checklist, filled in onsite report format.
Rob – I don’t disagree with you on the point that a report produced on-site in a matter of minutes could be less than accurate and comprehensive. It takes me a couple of hours to prepare a report and I have them ready for my client within 24-hours after the inspection. Frankly, I have not (in my nine years in business) ever had an instance where a client required a written report “on the spot”. I am also in discussion with other inspectors who agree with you … and we are intrigued … regarding the ease that someone with no skill or expertise could simply operate a computer software program and produce something that might appear, to the untrained eye, as an actual home inspection report.
What we agreed to be the remedy is for consumers to carefully select their home inspector. Where Gail is an honest professional who takes care to find the quality inspector, she also shared how she recommends inspectors that other sales professionals might not, at the risk of losing their sale.
I think that it rests upon consumers doing their homework and having access to professionals such as yourself and Gail to educate them. Would you agree?
I have given the responses a ‘thumbs up’ rating in this thread and definitely agree that the Public should do their own due diligence when hiring a home inspector.
Thanks Gail for your response!!
There are many home inspectors that exemplify all that the Public expects or have been lead to believe our profession will provide but there are far too many home inspectors that simply fill in a “soft report”.
I like to ask questions while the Public are doing their due diligence in order to raise these concerns in the court of public opinion. The Public can then indicate with their pocket book what kind of inspector and report they prefer.
I loved the article and agree with everything written – right up until the final sentence. A part time inspector is less committed to a client than a full time inspector? either way, a “time slot” is alotted for the inspection and report to be written. As a part timer, I can only complete one inspection per week day and 2 on weekends or holidays. I turn down inspections every week because i cant fit them in my schedule. My divorce decree says I must maintain insurance = or better to what I had when my ex and I split. I cant afford a $2000.00 monthly premium with $2000.00 deductible and 35%/ yr out of pocket or I would be a full time inspector. Who could? and yes I have checked around. I am currently an estimator for a large construction company m-f 7-330. Many inspectors dont even get out of bed that early. I eat my dinner at my computer writing reports about every night.- now That is dedication ?
I know many realtors with ethics like Gails. unfiortunately there seems to be about 4 that would sell their soul for a sale for every one like her. Its truly a pleasure to work with good people and it makes it all worth it helping good people.
Thank you for adding your perspective. I have read your posts on other message boards and know you to be a skilled and committed home inspector. Soft reports are not limited to part-time inspectors and I didn’t mean to give that impression.
Excellent blog!! I could not agree more!! Rest assured this will be shared and plastered all over the internet to help inform potential home buyers of the realities of this industry! Good Job!!
Reblogged this on MC2 Home Inspections Indianapolis Home Inspectors in Indianapolis Indiana.
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The only way to eliminate soft reports is to eliminate the connection between inspector and realtor. State home inspection laws should prohibit any referrals, recommendations, winks & nods, and HI’s marketing to agents. Let agents bundle other services but not the home inspection. If the buyer has to do their own research and get their own home inspector they will search for the toughest, most thorough inspector they can find. Sounds harsh. Maybe it is. But as long as home inspectors get their business from agents there will be soft reports.
Sellers and their agents can still attempt to “soften” a report by paying a contractor to come in and provide a differing opinion concerning a defective condition pointed out by the inspector.
While home inspectors are human and can make mistakes like contractors can, home buyers should be wary of contradictions to home inspection reports that are being provided by contractors who are being paid by anyone who is trying to sell them the house.
Thats all throgh, hope it helps clients.
Thanks for the insightful article on ‘easy inspectors’ and ‘soft reports’. If I may I’d like to pick a couple of small bones. First, you might be wise to drop the term ‘salesmen’ whether or not you believe in the Equal Rights Amendment. If I were a female real estate pro I would be at least slightly put off by the use of that term. Secondly, there is a real estate company that does not follow the model of ‘no sale, no pay’ and they are a joy for us to work with. The company is RedFin and their agents are paid through a system based on client (buyers or sellers) reviews. The lack of tension during a RedFin transaction is palpable. They don’t argue with us, they don’t try to minimize our findings, and they don’t follow us around the home trying to distract us or defray the buyer’s attention from our work. Just a little food for thought. Thanks again for your post.
Thanks, Dan, but sometimes it is not the real estate agency … but the inspector … who makes the decision on his own to go “soft” with his reporting or to offer incentives to encourage the buyer to purchase the home in an attempt to solicit future referrals from agents.
For example, there is a so-called “marketing” principle being promoted in a home inspector association that actually insists that home inspectors adopt the position that it is the real estate salesman who is their client and NOT the home buyer that they refer. This “marketing” principle encourages home inspectors to adapt to the idea that they need to provide “extras” that will attract real estate salesmen to provide future referrals by offering things that “agents will love”. One promoter of this “marketing” principle is a real estate salesman (no surprise, there, right?).
Most of these promotional dialogues and sales presentations are conducted in message board forums that are outside of public access although, occasionally, they sometimes leak into the public forums.
There are inspectors who may wish to market to real estate salesmen. I understand that. But I do not agree that the salesman is the “client” in such cases. Good home inspectors, in my opinion, focus totally upon the needs and welfare of the recipient of their report — the real client who will be relying upon the information in it when they decide (or not) to go forward with the purchase of a home. Not the salesman who might have referred them to the inspector. The perception that the inspector must somehow please his “client” … the salesman, in hope of future referrals … instead of the home buyer can cause some serious damage.
It’s not always the salesman’s fault when inspectors choose on their own to use soft reports, gimmicks or sales incentives to attract real estate salesmen and their future referrals, IMO.
The only way to remove soft reports is to remove the connection between examiner and agent. State house examination regulations should prevent any suggestions, suggestions, winks & nods, and HI’s marketing to providers. Let providers package other services but not the property examination.
Rusty, you are 100% correct … and as long as it is the real estate sales lobby that is controlling the legislative efforts regarding home inspectors at the state level, you will never see a bill that interferes with this relationship.
In my opinion, the best solution lies in the hands of the consumer who should carefully review any list of home inspectors provided to him by his real estate salesman … and disregard all of them, seeking an inspector who is NOT dependent upon that (or any) salesman for future referrals.
I don’t have a problem with working with or getting referrals from Real Estate agents. There, let that sink in and await the storm. Now here’s why. Any agent that has worked with me knows what I do and how I do it, they also know or will quickly note that the only thing I expect and except from them is integrity. That means we both have it and there are NO issues. The ones who don’t won’t be seeing me again. I report what I see.
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Jim, when it comes to reading articles like this one wonders ohoh what am I doing wrong. But I must say it is a good article and made me reflect on my reports and realize that they are far from being soft. Business might be slow but the business is better for it
Thanks, Paul. Good inspectors who provide complete, accurate and unbiased home inspection reports – such as yourself – will always have a market as more and more clients learn that you exist. Keep up the good work and thanks for sharing.
Pretty good observations, and as most often is the case, not everything is Black and White as might be drawn from some of this narrative. Regarding “Balancing the report” I, for one, offer items in the report that might be a positive so as to inform a client of a product they might not be aware of. It certainly shouldn’t be the goal to match item per item of bad vs. good. There are many products that the “public” might not be familiar with and I consider that part of my SOP also.
Second, “It wasn’t in the code book”, well, I used this type of communication often when “Recommending” items to be considered for future improvements to inform clients that they have been changes i.e. AFCI’s or GFCI’s when these “weren’t required” but should be considered as the most common reason for code changes are
“building system fail and/or people die”.
Its like getting your car repaired….You can shop price alone or go for the mechanic with great qualifications and experience and pay more but get much more quality work. I prefer to be the qualified mechanic and I market my Home Inspection Business that way….Soft Reports will get you ran out of the Inspection Business……I got 7 years of Inspecting under my belt…Greatly credit Nachi and all the great home inspectors including Mr. Bushart that educated me away from Soft report’s.
I appreciate the article Jim. A lot of good information. I especially appreciate the fact that you don’t encourage clients to throw out the list from their agent, but instead to research it and other inspectors. I have found over the last nine years that I attract like minded business relationships just by the way I choose to do business. I have no concern over losing(or never getting) the referrals from any one particular agent who may not appreciate my style of inspecting and reporting because there literally are hundreds more and thousands more clients. I know I am on several agent’s lists and it frustrates me to know some clients simply discard the lists with my name and number thinking it guarantees they will find a professional, objective inspector. If a home buyer distrusts their agent to the point they feel they should discard any references that agent provides, that is a clear indication they have already chosen the wrong agent. Beyond correcting that choice there is nothing, nothing, which accomplishes the goal of getting an honest and unbiased inspection more effectively than researching your inspector.
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Thanks James for sharing the info. Keep up the good work about Home Inspection topic. I studied all your information and it is really good.I want say thanks to Rob Hakesley, I like your question and answer on soft inspection report.