Reputation at Stake Why Agents Should Advocate Inspections

Ever wonder if skipping that home inspection is worth the risk in today’s fast-paced real estate market? Join us on Standing Out in Ohio as we share the latest updates on our house build, with the drywall up and countertops arriving earlier than expected. We also clear up any misconceptions about our retirement plans and share exciting news about our expansion into southeast Ohio. Our discussion dives deep into the risks of waiving home inspections, featuring insights from a real estate attorney on the surge in lawsuits against agents who advise against them. 

In this episode, we emphasize why home inspections are crucial, discussing the limitations on liability for home inspectors in Ohio and how real estate agents face greater risks. We reveal how negative experiences can sabotage an agent’s reputation, stressing the importance of always recommending inspections to clients. Additionally, we hint at an ongoing roofing insurance controversy in Ohio, pointing to practices affecting homeowners. Tune in for a comprehensive look at these pressing issues and stay informed about the ever-evolving real estate landscape. Don’t forget to follow us on social media and subscribe on Spotify or Google Podcasts for the latest episodes!

Transcript

Speaker 1 0:02

Welcome to the Standing Out in Ohio podcast, where we discuss topics, upcoming events, news and predictions with real estate professionals and entrepreneurs. Listen and learn what makes their companies and themselves stand out and gain advantages over the competition and gain market share. Subscribe for the latest news and discussion on what it takes to stand out from the crowd. Now here's your host, jim.

Speaker 2 0:31

Hey everybody, Welcome to the Standing Out and Out podcast. This is Jim, and with me, of course, is Laura, the office. Goddess, Hi everyone. So all right. Update on our house Builds, come along. Drywall is up. It was getting taped and mudded this past week.

Speaker 3 0:49

Probably finished mudding and sanding this week.

Speaker 2 0:53

Yeah, so they might start painting next week, at least the primer coat. Get all that done, and then we have to pick out paints and bring them in to them.

Speaker 3 1:02

And the tile for the bathroom, for the shower.

Speaker 2 1:05

Pick up the tile we ordered. Here's the story. You always hear about stories about the bill taking longer than it should have. There's weather, people get sick, they can't show up, things happen. Poundertops for the kitchen and bathrooms four to six weeks out Was what we were told. That's what they said. Four weeks. So Laura ordered them. Was it Saturday? Saturday, okay, today's Monday Got notification that they've been mailed out.

Speaker 2 1:38

In full, in full, every single item. So sometimes it happens the other way. The shit is quick, sometimes it's fast. It must have been like not, it's not custom made. The quartz is for the countertop, the quartz is oh, so they did the quartz also.

Speaker 3 1:58

It said your order has been fulfilled in total, so my thought would be yes.

Speaker 2 2:04

Was that all in one order?

Speaker 3 2:07

There were two separate orders. So maybe I don't know which order it was.

Speaker 2 2:13

Sometimes things go quicker and better than you thought they might. But we'll talk about that, and I also want to talk about bad things that can happen, even if just perceived. But first let's listen to this.

Speaker 4 2:28

Habitation investigation is the way to go for a home inspection in Ohio. Trusted licensed home inspectors for your needs. From radon to mold to warranties For a great home inspection, you really can't go wrong. Visit HomeInspectionsInOhiocom.

Speaker 2 2:54

All right, laura. So our order for our cabinets that stuff's coming in faster. That's awesome because we're looking to move into the house. I know some people are probably wondering is Jim and Laura retiring and stopping doing home inspections? No, we are going to continue doing home inspections, running the company. We're not retiring.

Speaker 3 3:16

From our forest and we're doing inspections down in southeast Ohio now.

Speaker 2 3:20

Yeah, so actually we kind of spread out of the territory, because now where we're at now, inspectors can cover that and our inspectors are good. They are good, thorough inspectors, every single one of them, because if they weren't they would not be here, at least they wouldn't have lasted long, right, but they've all been here getting great reviews, so they're all good. But what we're doing is we moved down to that area near Hawking County, actually Benton County that is now well within our range to easily get to and inspect. So actually we're expanding our territory Right, athens, logan which we've always been available to do but it's been harder to get.

Speaker 2 4:07

They were, but worked into the schedule a little bit more delicately now athens I'm 30 minutes away yeah or at least I will be in, uh say, two months so anyway we got that, got that going, and I want to talk about the. Sometimes you're planning on doing something. Well, what's the worst that can happen? All right, real estate market's crazy right now. Yes 9,000 agents low inventory. It's the same thing. The last two, three years Low inventory, people waiving inspections. You know they are.

Speaker 3 4:49

Yep.

Speaker 2 4:50

I don't think people are announcing as much, because one of the worst things that can happen if you are a buyer you waive the inspection. The worst thing that can happen is and this is various levels, but there's issues pop up that you did not know existed until you moved in the house or lived there for a month or so or maybe almost six months a year, and hopefully nothing's major. But that's the worst thing that can happen to the home buyer is issues popping up. Hopefully they're tiny issues that's no big deal Cosmetic stuff's not part of the inspection anyway but large issues you don't want that popping up. A terrible thing that can happen to a real estate agent is they let their client, and I know that the client makes the decision. But if you somehow encourage them or something, no, that's okay, let their, and I know that the client makes the decision but.

Speaker 2 5:45

If you somehow encourage them or say no, that's okay, the house is just redone, it'll be good and they waive the inspection and then stuff pops up. Who do you think the homebuyer is going to blame for that? Who let them make a mistake? Well, they're going to blame the agent, because that's the only person to blame.

Speaker 3 6:04

It is the only going to blame for that who, who let them make a make a mistake? Well, they're going to blame the agent, because that's the only person to blame it is the only person that blames didn't. So you had a conversation within the past year I can't remember how long ago it was with a I think he was a real estate attorney from somewhere out east and you asked him about this current trend with people blowing off home inspections.

Speaker 2 6:31

Oh, yes, this guy was cited in some national newspaper publication.

Speaker 3 6:37

He just talked to you.

Speaker 2 6:38

And I found him, talked to him. He was like yeah.

Speaker 3 6:42

So he said that nationally, lawsuits against real estate agents were up 11% and that part of what people were saying wasn't that. You know, yeah, my agent told me blah blah, no, what they're saying was they didn't understand what they were giving up and what that meant to them, said that the what's it called the award that they that that clients, consumers were getting from the court was up 20 000.

Speaker 2 7:21

Oh, and I came here with that? No, I don't know if it was 20 000 or was it more?

Speaker 3 7:27

it was one, it was one year 40, I think that. I think an average was like 40 000 oh, that's what it was the average, but it was higher. It was, but it was higher, so the average was $40,000.

Speaker 2 7:36

It was higher than in the past, but lawsuits were up. But well, if you're an agent and you're working with a buyer, you are the real estate expert, Right? You are there to give them guidance.

Speaker 3 7:48

Right.

Home Inspections and Real Estate Risks

Speaker 2 7:48

And it's easy. It would depend on the client. Some people are more Handy. Well, some are handy. Some people are, I guess, more fragile. If there's an issue that pops up and they don't want to handle it, they can't deal with it. They get too emotional about it.

Speaker 3 8:04

Well, what do you think is going to happen if that couple doesn't get a home inspection? And then they walk in and they find this major issue. Maybe there's a sewer line issue, or there's a foundation issue, or the roof leaks, or whatever the case may be at this point.

Speaker 2 8:19

Yeah Well, here's another thing. Okay, home inspectors here in the state of Ohio, the limit we can be sued by a state law is the price of the home inspection. In case you didn't know that that was when they did licensing. That's the most we can be sued is the limit of the home inspection fee, unless, of course, we did fraud. Then that changes that Right.

Speaker 3 8:44

Or we did something blatantly outside of the standards.

Speaker 2 8:48

Yeah, very negligent, it's got to be really negligent of the standards. There's no limit. That I've ever heard for real estate agents how much they can be sued.

Speaker 3 8:58

Nope, and I will hear people go well, they have E&O insurance.

Speaker 2 9:03

Yeah, most people don't understand how E&O even operates. Like well, you got E&O insurance, I'll take care of it. Like no, not really, I still have a deductible E&O insurance, see, and I no, not really, I still have a deductible, you know, see, I don't know why we even have even have, you know, we, while we have it, because somebody did something really negligent like a blatantly the state at this point tells us that we have to have, you know, insurance but the you know, I think the deductible is like twenty five hundred dollars for us.

Speaker 2 9:32

I think it's what we have it set at, but that's kind of typical $2,500,. If the fee that we're legally responsible to, according to the state, is to the inspection fee, we will never get touched. Right Because everything is well below the deductible.

Speaker 3 9:52

State standard.

Speaker 2 9:53

The deductible. So all of our inspection fees are well below that deductible. It's like you just paid out of pocket. Right, if that was ever an issue, if that was ever a thing.

Speaker 3 10:00

But Real estate agents don't have that luxury.

Speaker 2 10:03

Nope, nope, no, they don't so here's another thought when you you've had to study, you read the study. When somebody has a bad experience, how many people do they tell? What was that? 14, they tell 14 16 it was 16. They tell like 16 people have good experience. It's like what they might tell like four people, eight people, yeah, yeah no more than eight so if they have a bad experience with a home inspection company or a real estate agent, they're telling a shitload of people.

Speaker 3 10:36

Everybody they know.

Speaker 2 10:38

Yes, and if they waive the inspection and things pop up, the only person they can blame would be themselves. Maybe I should have done that, but they're going to go, man my agent told me that was a bad thing to do.

Speaker 3 10:52

Or did the listing agent know and help hide this?

Speaker 2 10:55

Oh, that's a thought too, because some people will be like the listing agent and the buyer agent are especially in the same offer. They work together to conceal stuff because they want to get that sale.

Speaker 3 11:09

That's why they put no inspections in the MLS, or that's why they said this, or that's why we were encouraged to do that.

Speaker 2 11:16

Or we were allowed to do that. Yeah, it suggested that we did it, but then they made us sign the papers telling us they told us to do it.

Speaker 2 11:25

No, in that journey that I talked to you said, that doesn't work, they can just go. I didn't know. Like you said, I didn't know I was giving away my right to a home inspection and I just wasn't aware of what was going on. I was under duress. The agent even said my odds of my getting the house my offer accepted would be going to be pretty low if I did not waive the inspection.

Speaker 4 11:46

That's all it takes.

Speaker 1 11:47

That's all it takes.

Speaker 3 11:50

They feel like they have no choice.

Speaker 2 11:52

So more or less always get the inspection done, never suggest that they don't do it. And here's what I would do I would never tell anybody. No, you don't need to have that done.

Speaker 3 12:04

That will come back to bite you in the butt, yeah. Maybe not now, maybe not a few months from now, but it eventually will catch up.

Speaker 2 12:11

Well, the worst thing is like no. They have a walkout basement, you don't need to do a radon test. That is not true. That is from the uneducated person making that statement. Because that is not true? Right, because radon can be anywhere. We have found it. We've even found it in a third floor condo unit Downtown Columbus. It's like an apartment building almost, but it's a third floor condo unit Downtown.

Speaker 3 12:34

Columbus Like an apartment building.

Speaker 2 12:35

Almost it was a condo, found it up there. It can go crazy places, but you do not want to kind of be hung out the dry because that buyer had a bad experience. They're going to tell them I have 16 people. If you're an agent and you're wanting to grow your business, that's not good. Let's just say each person was a referral and you lost 16 referrals. Well, no, I'll be not that manny, because you're realistic, not everybody's going to buy. But even let's say, one in seven, 14%, you lost growth a year percent.

Speaker 3 13:19

Yeah, yeah, you lost that growth a year. Not only that, but you lost their referrals and their referrals and their referrals down the road, just because yeah.

Speaker 2 13:26

So let's say do you know the rule of 72?

Speaker 3 13:31

oh, I've heard All right.

Speaker 2 13:33

So you take this investment term but you take the number 72, just the way it works out. Take 72 and divide it by a percentage of growth, okay, of return.

Speaker 3 13:44

Okay, so let's use that 14%.

Speaker 2 13:45

Let's say 14%. You say one person, we'll say 14%. They tell you. I won't say 14%. They tell you. So if you're getting 14% of your referrals, you know told you're that equals 5.1. So if you're getting 14% referrals from your clients, your business doubles every five years. So I mean you're really shooting yourself in the foot if you get bad or you miss out on the future referrals.

Speaker 3 14:23

And as that number increases because you will have more people referring you as you do more business, that number will become even larger. That you're missing out on that was every five years.

Speaker 2 14:36

If you say you do, I don't say you do a million dollars of sales this year, five years. You're doing two million, then you're doing four million. You're doing four million dollars a year in 10 years just based on referrals because you treated people well and didn't let them go the wrong direction. So always have an inspection. That's basically the rule.

Speaker 3 15:02

And especially for even new builds, like we hear a lot. Well, it's a new build, we don't need the inspection because they're going up so fast and builders are victims of their subcontractors. We are seeing way more areas of concern in a lot of new builds than we have in the past few years. So you really want to make sure that you fight for your client's right to have an inspection for a new build for all three phases, because it is really becoming important for that yep, and we got something else I want to talk about, but we're going to try and get a insurance company to join us because insurance companies are.

Speaker 2 15:44

They're struggling and of course everybody else is going to pay as a result, which I get it. You have to stay open, you have to adjust your fees and all that, but if you know anything was going on, florida trust. A lot of insurance companies have best bailed on doing any kind of coverage in florida because the claims are so high down there.

Speaker 3 16:06

Or gone out of business because they had claims and had to fold.

Roofing Insurance Controversy in Ohio

Speaker 2 16:10

Yes. So that's the top we're going to have coming along, because there's some insurance things. I want to say insurance monkey shines going on up here in Ohio in regards to roofs.

Speaker 3 16:22

Yes.

Speaker 2 16:22

And we're going to talk about that on the next podcast.

Speaker 3 16:26

And I think we might have a roofing company on with us too with what they've seen.

Speaker 2 16:31

Okay, so Well, I think that's it for this one. We've got some stuff coming up. Definitely keep tuned. Thank you and good night.

Speaker 1 16:41

You've been listening to the standing out in Ohio podcast. Be sure to subscribe on Spotify or Google Podcasts to get new, fresh episodes. For more, please follow us on Instagram, twitter and Facebook, or visit the website of the best Ohio home inspection company at homeinspectionsinohiocom or jimtroffcom. That's J-I-M-T-R-O-T-H and click on podcast until next time. Learn and go do stuff.