Hey everyone, especially those of you who are new or looking for extra jobs,
Would you accept side jobs doing prelisting inspections for a home buying website?
Some of you may be familiar with some of the several companies who are creating online marketplaces where buyers can purchase homes without paying commission to an agent. They do everything online, but they can tour the house in person, etc. if they choose.
I am talking with someone from one of these companies about brokering prelisting inspections for them. The idea is that when you go to their website to buy a house, the online report will be available for buyers to look at (like move-in certified or preinspected.com). The appraisal and virtual tour will also be available. Buyers can then make an offer on the home with one click (yes, this is really a thing).
We want to have inspectors in each of the areas we service who are available to inspect the homes for us. This would be commission-based. We would provide the software, etc. Our inspectors would still own their own companies and perform their own inspections.
What do you think? Is this something you would sign up for? What makes it appealing or unappealing? And what changes might make it better?
I want to hear from you. Feel free to reach out via email or phone as well (before 9 PM MST please).
Thank you for the feedback. This kind of pushback is exactly what I’m looking for. No use wasting my time or money on an idea unless I have reason to believe it will work.
The inspection fee would actually not be dependent on the sale. It would be a normal prelisting inspection. Fee paid in full before or at the time of the inspection. The pay to the inspectors would be commission-based in the sense that they would be paid per job, not salaried. Whether or not the home sells will not effect the fee.
I’m operating out of Utah. The website I’m working with right now is fairly new, and they only operate Utah markets (for the time being). I have not spoken to TREC yet. Right now I’m just trying to figure out if there are even inspectors who would want to do this. Otherwise, it’s not worth moving forward.
I’m still in the discovery phase of this business model, so I haven’t nailed the commission structure yet. For cash flow reasons, it would probably be easiest for us to pay it monthly, assuming inspectors are taking multiple jobs with us a month.
I will have to negotiate with the websites to see how much they will pay per inspection. I imagine I will be paying the Inspector somewhere around half of that, plus reimbursing travel. That is a super rough guess.
Once you are able to quote the paid fee per inspection you may receive more responses. Otherwise you would be wasting your time chasing possible participants once they hear the fee might not be what they would accept.
This is quite similar to what Nick has been doing. The difference is the websites I would be working with. They are selling homes almost exclusively online and without commissioned agents. So the idea is that I will set up a contract with them to do a inspections for all their new listings. They seem pretty interested because it helps them sell faster.
It sounds like you would be a broker, not an inspector. You won’t be working with websites, you will be working with one or more discount brokerages who use websites to make representations to induce people to buy houses with the click of a button. Would your personal or company name appear anywhere on the inspection report? Would these inspectors be considered employees, subcontractors or working entirely independent of you? State and Federal agencies may have their own ideas about this. Are you making any representations or simply lining up schlubs to perform these inspections and assume 100% of the liability for 50% of what the client is willing to pay for the inspection? If you will be the one paying these inspectors, you will be creating quite an interesting scenario as to who is the inspector’s client (you? your client? the homebuyer?). The state that you operate in might have a very different answer regarding who is accountable to the consumer than you might hope for. What caliber of inspector do you believe you will attract with 50% or so of the fee that super/ultra/discount broker is willing to pay for a liability shield? Who is your client (the click and buy-it used-house salesman) going to point the finger at when a homebuyer’s attorney claims that the inspection for their client’s problem home was substandard?
What actual value do you consider that you would be adding to the process? My guess is to be the liability magnet.
Unfortunately for them there will be plenty of ignorant Inspectors willing to work for little and assume the liability when the proverbial poop hits the fan. They will be required to use the provider’s software, run the provider’s procedures for the inspection, and make the provider’s required turn around times. In simple terms they will have no control over the process except whether or not to participate.
It’s a good plan for everyone except the Inspector.
Thanks for the push-back. You bring up some good concerns, some of which I had not thought about. My whole purpose in creating this discussion is to get feedback like this, so thank you.
I want to add a little context about the website I want to work with. They are a company that is trying to disrupt the real estate industry by getting rid of real estate agents and commissions and making transactions more straight-forward. When you buy, you browse through the homes yourself while a team handles the paperwork. They make tours, etc. available by getting you in contact with the seller directly. Buying homes with them is free, and if they receive commissions from the seller at closing that are greater than the transaction fees, they refund you the difference. If you sell with them, they charge you a flat rate (I think something like $1500), and they have their sales team (which does not receive commission) take care of the listing, etc.
I and most other (non-realtor) people in the area like them. Realtors are terrified of them–I hear about it all the time when I visit brokerages. But no one has been able to fault them legally, and they are becoming a bigger and bigger phenomenon around here. I am skeptical about their free buying process and refunds, which sounds too good to be true, and they are very new and keep changing their business model. But the people I’ve met are solid and straight-forward. They like the idea of pre-listing inspections because it increases transparency. That, to me, is encouraging. They have a very different attitude towards sales than people I meet at brokerages. Check them out here: Buy Real Estate, Homes for Sale - Homie.
The value add is the same as any other pre-listing inspection: I’m helping them set a realistic price and build buyer confidence. Not unlike moveincertified.com or preinspected.com in that way. They (Homie) would be the client. Buyers would still be encouraged to get their own inspection (just like any normal pre-listing inspection arrangement). Because they sell so many homes at once, and because these homes do not have individual selling agents, its easier for them to have one company who does all of their pre-listing inspections. That is the service I want to provide.
I want to contract out to inspectors who are doing their own work most of the time but who want some side jobs. I know that for me as a new inspector, side jobs have been very important. Working for less is not great, but it is great side work when business is slow. These inspections with Homie would normally not be on the market, so I would not be taking work away from these or other inspectors.
My first hurdle is seeing if this is a sell-able business model (see if the company I’m talking with really wants it, see if there are inspectors who would take the side work, etc.). Liability will be my next hurdle to see if this project can become a viable business. My guess is I would need to assume liability for the inspectors, pay the insurance, etc… You are right in identifying that as a major weakness. I will have to see if the costs of liability is balanced out by revenue.
If you are going get paid a regular rate for the regular amount of work for a third party inspection, I am not seeing a problem with that. Probably won’t amount to much work. I am for any work that I donot have to deal with Realtors.