Offer an inspection report with no repair estimates and a repair sheet as a GC. Don’t mix the two and charge for the extra. Give a SWAG…
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Building and Repairing, Buying and selling
Why home inspectors don’t give estimates.
[E-mail](javascript:void(0))|Link|Comments () Posted by Rona Fischman December 15, 2009 02:18 PM
One of the things that frustrate my clients about home inspections is when the inspector tells them that he can’t give an estimate for the repairs. The reason he (or she) can’t is that the licensing laws in relation to inspectors forbids giving estimates. Here’s the line from the law:
266CMR 6.06: (6) [prohibited from] Determining the cost of repairs of any item noted in their Report and/or inspected by them and/or their firm.
Why is that rule there? Does it make sense to have it?
There’s an inspector in British Columbia who wishes Canada didn’t allow estimates. He was fined $192,000 for grossly underestimating a problem.
Another thing that frustrates my clients is when an inspector says that they need to get another inspection, be it a termite inspection or an engineering report or a chimney evaluation. That Canadian inspector was also held liable because he failed to recommend that an engineer be called in.
When the inspector in Canada showed a signed contract limiting the liability to the cost of the inspection, the judge threw out the contract on the grounds that the clients did not have sufficient time to read the contract and the contract did not properly highlight the clause limiting the inspector’s liability.
That is something that I think inspectors should change. A few send the contract the day before for review, but the vast majority pull it out right at the beginning of the inspection, then expect it signed at the end with the check. I do prefer that my clients get a chance to look at it before signing it.
What do you think about the rule of not giving estimates?
Did you inspector properly refer you to engineers, or did you feel like he/she passed the buck by recommending further inspection?
When did you see your contract? Did you think that you had time to review it and understood your recourse in the event of a problem later?
Mike, the agent wants to be able to negotiate with the owner to either get their client a better price or to be able to get some money in escrow, to fix the problem. If you have an idea what it costs put it down, with the caveat that they should get an estimate from a licensed professional, and say it could be more extensive than you can see. If you don’t know, don’t guess. There is nothing I know of that gives a one size fits all answer on price. I beleive in trying to work with all parties in the transaction, and also recommend guys that i know will do the job professionally and without overcharging.
Thanks Sean you advice is appreciated.
I’ll answer that with another question: What do you think about it when an agent tells your client how much (they think) you charge for a home inspection?
Mike,
we have clients and realtor ask us about estimates and we explain to them that our estimates are guestimates…they are not from a licensed contractor in any of the specific areas. if they want estimates, we are happy to provide them with the necessary names & numbers of contractors that we have working relationships with.
I don’t want to open myself or my company up to a suit where we say the estimated repair cost may be $2500 and it ends up being $5000 or more.
I like my business too much to risk it.
Thanks to all for all the different views.
Mike,
It is really not up to an inspector to give estimates for a repair job. I do not do that personally. I am asked frequently what things may cost to repair, but do not get involved with that part.
I perform many 203ks as a HUD Consultant that actually have cost estimates in the report I writeup, which is required by HUD and is far different than a normal HI.
Granted, most of us know that it can be determined by looking at or measuring it or what have not, but it really comes down to telling/explaining to the client the defects and to refer them to a licenced contractor for whatever the defects are on that particular system to evaluate and make necessary corrections.
This is really where the fine line is drawn for the inspector and the contractor comes in to play.
Time will only tell if what it is that you are asking will be the way of the future or the demise of all of this.
Inspectors here in S. Fl. have been giving estimates since before I started in 88. And, the key word is “estimates”.
Estimate and Cost are two different words with two different meanings.
Just curious…but why would anyone want to stop a competitor from doing something that could get him sued out of business?
Ethical issues need to be addressed, of course, for violators reflect poorly on all who are in the profession. But the willingness to risk your entire business, home and the future of your family for a single inspection fee…simply to please a salesmen who is likely to be out of business, themselves, within one to three years or who will be leading the pack to call for your head if the client wants to sue him for an underestimation that causes him financial harm…is probably something that one would actually encourage his competitors to do. Right?
Why argue with anyone (who doesn’t work for you) and who is willing to take this potentially harmful and unnecessary risk? Encourage them and let Darwin do his work.
Yup, Tampa too to some extant. 
The problem is that both the clients and realtors are too lazy to call in contractors and too cheap to pay the costs associated with the bids. It is illegal under Florida law to render a bid on any contracting work that you are not able and willing to perform. Inspectors have skirted this issue in the past by providing a range of cost estimate. There remains a tremendous liability in this if the estimation is still low. This is a worthless endeavor for the inspector & the client but not the realtor. The realtor takes the estimate and trys to negotiate with it. Generally to the benefit of the seller. Giving cost guesstimates is a disservice to the client and should be prohibited.
I disagree. Many times I am faced with 1st time buyers, single women buyers and elderly buyers who are attempting to purchase low-cost homes. In many cases these people are on a limited budget and are being shown substandard homes which in most cases “look good”. I provide guesstimates to help my clients realize the the true cost involved in purchasing a home with major defects.
I believe it is a disservice to our profession when we fail to help our clients understand the magnitude of the defects we report. The easiest way I know of getting someone’s attention is to talk in terms of repair/replacement costs. My mission is to accurately report the current condition of a structure to the extent that my client is comfortable in using this information to make financial decisions.
OK you are entitled to the disagreement and I partially agree with your arguement. You do realize that the licencing law for HI’s does prohibit estimations by us as it currently stands though. Personally I think that is another way we are getting screwwed. Just for the record I do understand your position and when asked by the client I will verbally tell them what I think the costs might be, but I really don’t ever put it in writing. I tell them to get a real bid.
What makes an HI qualified to give estimates?
Absolutely Nothing.
I can only speak for myself, 18 years as a licensed contractor and being a licensed Florida Adjuster helps. Sorry, I don’t do repair work.
I do not believe the law prohibits them I believe it states they are not required. It should prohibit them because “most” are not qualified to give them.
I disagree with pretty much everything you have said above.
(1) In todays market, there is rarely the time to get estimates. There is barely enough time to schedule the inspections. It has nothing to do with laziness.
(2) There is a huge difference between providing an approximate estimate and a bid. As most home inspectors are not licensed to perform work, they couldn’t give a “bid” if they wanted to.
(3) There is no more liability incurred by providing estimates. What if your estimates are too high? Who is going to sue you?
(4) Negotiating what is specified in the Real Estate contract is part of the Realtors job. Benefiting the Seller? Reducing the selling cost by the estimated amount would seem to be harder on the Seller, not beneficial in any way.
(5) When you take your car to get repaired, do you just say “fix it, I don’t care what the cost” or do you want an estimate first? Or several estimates?
- Who carved that closing date in stone? 2). It won’t be exact. 3). The buyer if the seller walks, the seller if he buys it and it’s too low. 4). I contend that the negotiation always ends with the buyer somehow splitting the difference on cost to repair deficiencies and therefore only the low end of the guestimate ends up getting on the table. 5). The mechanic who is doing the work is giving a quote for it. he knows the problem, what the cost of the replacement parts will be and approx. how long it takes. He is giving a bid. I know you guys in So. Fl. are stuck giving these on your reports and feel for you. Don’t wish this on the rest of us.