I’ve had a few realtors ask me about repair assessments. I had one realtor tell me that all home inspectors do repair estimates. She told me that a home inspection report is required to have repair estimates. I have always felt that a home inspector is there to provide information on the condition of the home, and cannot possible provide the cost to repair, dozens or sometimes hundreds of defects.
On the other hand I have found some services like repairpricer.com which offer this as a service. You upload the inspection report and they will generate a repair cost estimate.
My questions are these:
Does any one have experience providing repair estimates?
How do you price the cost of repairs if you don’t personally do the work?
Do you provide repair estimates for all defects or only certain ones?
I would suggest you talk to your insurance provider. They might not cover you providing repair estimates, even through repairpricer.com. I usually just tell the client that it would be terribly irresponsible for me to even attempt to provide repair estimates, as I do not provide those services.
IMO it’s never a good idea to provide repair or replacement estimates, because I’m not doing the repair or replacement.
I get asked all the time for estimates and I tell my clients 1. Only the contractor doing the work can give you an accurate estimate, and 2. if you call 3 different contractors, you’ll get 3 different prices and I could be way high or way low and I prefer not to give any of my clients potentially misleading information.
Repair Pricer is a good service. Charge a few bucks extra for it and go for it.
There is no liability if you have it spelled out in your agreement. Repair Pricer takes on that liability… and they even state that in their terms.
Just know that RP will provide a price for EVERYTHING in your report… so it is worth the effort to
Explain it to the client
Spend a few minutes going through the report yourself unchecking some of the tricky tack stuff you may have called out, so the estimate is not so large.
Do you know actual construction costs? Are you a skilled construction estimator? I’m a retired construction GC, now an inspector, and I NEVER give estimates with an inspection. From my past construction experience, computer estimating software is always way off. Forget the estimating software. I tell my clients that I’m not up to date with current prices and by giving even a wild guess, I’m doing them a disservice. Your realtors know inspectors will give repair prices that are always way too low. They are putting the blame on you for inaccurate estimates and assuring their sale and commission, at the expense of your reputation!
When a home inspector writes a repair estimate, he is speaking for someone other than himself and is accepting legal liability and accountability to his client for something he cannot control.
In the insurance industry where I work, estimates are considered little more than guesses written by people who are not doing the work. They are based upon an estimator’s best guess of the past costs of materials, labor, overhead, and profit and are considered a starting point but not an actual cost. Estimating software used by most insurance adjusters comes with the instruction that the guesses it produces are not definitive and are not intended to replace the bids of contractors who will be performing the work.
Written estimates from contractors who are immediately familiar with the costs of materials and labor will still provide a caveat that their estimations are subject to change upon a variety of factors and will place a time limit on their validity.
If a home inspector does not think his exposure and vulnerability to lawsuits is great enough already, adding the liability associated with providing an estimate for a repair that is potentially less than the actual cost to his client could bring him right up to that desired level of risky behavior. Prudent home inspectors, however, will continue to recommend further evaluations and estimates from qualified individuals, when necessary.
I have provided estimates a few times, but I really stay away from it. The few times I have provided an estimate - maybe 3 times in 19 years, I made sure they understood I was not a contractor, and I do not follow current material prices and availability, which can fluctuate and will affect the final price. Then any estimate I give is a very wide range. They usually then thank me for the extra effort and then contact an actual contractor for better pricing.
So many reasons I don’t, including those reasons given above. The other reason is that I do almost all of my own work on my property. I bet a lot of us inspectors do. So how would I have a clue how much repairing that wall will be? Your clients will also be constantly asking you for a reference for a handyman/plumber/electrician/deck repair, etc etc for their small projects. How would I know? I tell them (nicely) to ask someone like them who doesn’t do their own repairs - or ask a flipper if they just want to pay fewer dollars.
I wanted to thank you all for your replies. I still have the same dilemma. Here in the Richmond Virginia area, many realtors are expecting Repair Estimates or Cost to Cure. I’ve inspected homes all over Virginia, and these guys are the only ones that expect that.
I suspect the reason is that, home prices are rising because people from the Washington DC area are buying homes down here for the lower cost of living. This pushes up home prices and realtors use the cost to cure to beat up sellers on the price.
If I do not use repair estimates, this leaves me uncompetitive in the market. What would you suggest I do?
I suggest you take the jobs in the Richmond area that you get and not worry about the rest of them. Let the other Inspectors place themselves in the line of fire if their clients find out later their repair costs are a lot more than what was quoted. Keep in mind anybody can come after you for any reason regardless of any “disclaimers” on any document. You will still have to defend it and if that means using up your E&O then you lose again!
BTW before you offer any estimate type function do speak with your E&O provider to determine what their take is on it. It may not be supported and might even be a reason for them to refuse coverage for a legitimate error when it gets tangled in a fight on a “repair cost” fight in the same inspection.
One more thing you are not here to service Real Estate Salespeople unless they are your client signing the contract. What they say or do should not affect how you operate your business and serve your clients.
We have a multi group firm here that provides estimates. To their credit, they have 4 categories.
Under $1,000
$1,001-$5,000
$5,001-$15,000
$15,001 +
They are just throwing darts. But agents use this information to their advantage.
It all seems pretty useless IMO.
That is a better route to take but still a hazard no matter what types of disclosures are given. As an example, that I have encountered, was damaged/deteriorated roof trim and wood type siding on an older home. I did not estimate this but the client had a siding person estimate. Good for the siding guy who had, in strong wording, that hidden damage could not be accounted for. Once the actual repair work started they found under the damaged siding/trim was rotting sheathing that never had a moisture barrier installed, significant WDI damage (attracted by the wet woods) to include framing, and other issues. There were no visible signs of these underlying damage.
Luckily for my client they made repairs as a condition of the purchase and the owner had no real idea what was going on behind the visible damage. The deal fell through when the extent of the damage and delay to closing needed to correct it was announced. Can you imagine what might have happened if I provided any estimate, whether mine or one of these estimation services just for siding and trim, and the client went through with the purchase?
About the only time I give an estimate is for a simple part and that is to demonstrate how the cost of repairs can add up VERY QUICKLY even on small things. For example I may mention (not written) to a client that to replace one GFCI outlet costs about $25.00 for the outlet and $100.00 - $200.00 for the licensed Electricians time. That’s just to demonstrate how even little things can add up very quickly!
Why do I feel i need to compete with anyone else? The Richmond market is highly competitive. There are too home buying transactions and too many inspectors. When I first started, i had to do 25 ride along inspections with experienced inspectors, every single one of them told me not to get into this industry, because of market saturation.
In Richmond, if you’re not doing cost to cure, you don’t get clients or referrals.
