In one of our previous articles, we talked about the close connections between real estate agents and loan officers and tried to examine can one person successfully perform both these tasks. Even more important, we did our best to see if this sort of real estate multitasking was even beneficial for people trying to buy or sell the property.
Well, this puzzle is far from being the only problem you will need to face when you start looking for your new home. We are living in a very harsh, competitive economy, and people working several jobs at once have become more of a norm rather than the exception.
Even brokers who traditionally earn more than regular agents have this problem.
So, it is entirely feasible that your realtor will try to offer you some additional service and streamline the acquisition process as much as possible.
This time we are going to examine can a real estate agent also be a home inspector and, if so, how wise it is to hire the same person to tackle both these responsible tasks. Fasten your seatbelts, we’re taking off.
What Are The Responsibilities Of A Real Estate Agent?
But, before we see how real estate agents and home inspectors work together and are their duties in a potential conflict of interest, let us first break down these two professions for all of you that don’t have too much experience in the real estate market.
We will start with real estate agents.
So, in the simplest possible of terms, real estate agents are the professionals that help people buy or sell properties. They coordinate, negotiate, advocate, and advise their clients throughout the entire transaction.
When they are representing the homebuyers, the tasks of real estate agents are as follows:
- Assisting with getting preapproval
- Following the buyers on showings
- Wring up offers
- Attending the inspections (this will become very important in the following discussion)
- Negotiation inspection repairs
- Monitoring the necessary paperwork
- Mediating between the other parties in the transaction
In the case of sellers, the duties are somewhat different but follow a similar pattern:
- Assessing the appropriate home price
- Marketing the property
- Negotiating any offers
- Staying on the top of the paperwork
- Attending the appraisals
- Tying up loose ends at the closing
- Mediating between the other parties in the transaction
The Benefits Of Hiring A Real Estate Agent
- Although the usefulness of real estate agents can be easily observed even from the shortlisting above, we want to underline just how critical these professionals can be when you engage in any kind of real estate transaction.
- Real estate agents have access to tools and platforms that track the latest offers on the market. If we take a look at the recent research, we can see that an average homebuyer needs 30-45 days to find the ideal property. In that time, a lot of things can change. Having access to the vast databases of available properties, real estate agents can cut this search to the shortest possible time.
- Real estate agents can help you negotiate a better price. Negotiation is an art that needs a lot of time to develop. Also, you need to be experienced and know where the wind blows on the real estate market to understand how low or high you can go. Professional realtors have both these requirements in check.
- Real estate agents are motivated to get the best deal. The numbers here can vary from state to state or even from company to company, but, on average, the experienced real estate agents will take 5-6% commission on the transaction (e.g., $15,000-$16,000 if the price of the home is $300,000). These sweet numbers make them more than inclined to work hard in your best interest.
What Are The Responsibilities Of A Home Inspector?
On paper, home inspectors are sharing very little common ground with the real estate agents. Their job is to perform a visual inspection of the property and assess the condition of the components like roofing, chimneys, gutters, and flashing as well as critical systems like electrical network and HVAC (heating, ventilation and air conditioning).
Scope Of The Inspections
- On average, these inspections tend to take up to 3-4 hours and cost $315, which is a perfectly fair price for the job performed. Usually, the inspectors will be so thorough they will even test the property for radon, lead, mold, termites, and asbestos. Purchasing these tests and performing them on your own will probably cost you more than that.
What Home Inspectors Don’t Do?
- Home inspectors are not fraud inspectors. Also, they have only a couple of hours on disposal to check all the critical systems and components. So, if some issues are intentionally covered up, chances are they won’t make the final report.
- Also, home inspectors are not negotiators. They will check the properties and write down all the issues they see concerning, but ultimately, the job of negotiating the final price will be in the hands of your real estate agent (another important thing to note).
The Benefits Of Hiring A Home Inspector
- We think that all the things we have covered above gave you a pretty good idea about the value of experienced home inspectors. But, much like in the case of real estate agents, we will provide you with a couple of tangible benefits that should clear up the things for you.
- Alleviating home-buying risk. The average home prices in the USA sit firmly between $360,000 and $400,000 – too much money to throw it away on the property that looks nice but feels rotten under the surface. Home inspectors are cutting this risk to a bare minimum.
- Helping you understand ROI – When they finish their duty, the home inspectors will present you with a complete list of necessary repairs and their overall cost. That will help you reach a much better understanding of the value of the property. Very useful if you want to flip the house.
- Helping you make a confident purchase. The current real estate market is very volatile and competitive. If you find the right property, you have to act, and you have to act fast. Home inspectors are helping you to make that confident purchase without wasting any of the time.
How Do Real Estate Agents Work With Home Inspectors?
As we can see from the previous sections, the duties of real estate agents and home inspectors don’t exactly overlap. The main thing that binds them together is the professional ethic and the task of keeping the client’s best interests as their priority.
Also, it is highly advisable that they work together during the home inspection.
First and foremost, the sellers have every right to choose who will get access to their homes. Some of them may not agree to let the home inspector crawl all over their property if the buyer’s agent is not present.
Furthermore, the real estate agents may provide valuable feedback about the history of the property and some issues that are not visible at first glance.
On the other hand, some real estate agents may be hesitant to attend the home inspection from the fear of liability. Namely, if they try to point out some flaws themselves, they can end up sued by the inspectors. But, as long as all parties stick to their area of expertise, the problems should be avoided.
What Does The Law Say?
When it comes to the legal side of the story, we can only conclude that, to our knowledge, neither of the federal or state laws prevents the same person from holding the real estate agent and home inspector license at the same time.
But, that’s not all – these regulations even extend to the cases when the same person represents the same client in the same real estate transaction.
The similar regulations extend to national organizations of realtors and home inspectors (NAR, NAHI). Their internal codes of ethics do not prohibit the members from representing their clients as agents and inspectors.
What About Real-life Ethics?
What do we mean by real-life ethics? Well, imagine a real estate agent trying to sell you his own property.
This is the area where things start to be a bit muddled. At first glance, hiring your real estate agent to represent you as a home inspector as well sounds good. The legal obstacles are all but non-existent, there’s no fear of professional interference, the commissions are probably far lower, and the purchase process gets drastically streamlined.
But, what happens when the property doesn’t really need an inspection, but your agent insists on giving it a closer look for some added price? The situations where the seller’s agent represents the buyer are far less likely, but they can theoretically occur.
With no legal input to regulate these instances, the outcome largely depends on the agent’s/inspector’s personal code of ethics and the client’s better judgment.
So, hiring the same professional to represent you as a realtor and home inspector works only as long as you hire an honest professional with your best interests in mind. Therefore, be patient when choosing your representatives. Do quick online research. Ask your friends and family for referrals. Do anything you can to make sure your hard-earned money is not wasted.
We have finally come to the very end. What is the answer to the all-important question: can a real estate agent also be a home inspector? Well, yes. And not only that, they can represent the same client in both roles at the same time. Whether you are going to use this opportunity and take this shortcut depends on you and the person you are going to hire. As long as you are working with honest, experienced, and reputable professionals, there are very little things to go wrong.