There is a great strategic business question that I’ve come to love: “What are your customers doing 5 minutes before they engage with you, and what are they doing 5 minutes after they engage with you?”….this post takes that question to the home inspection industry.
In today’s world of home inspections (due to standards of practice), most clients are left hanging after the home inspection. They are delivered a report with a bunch of findings but none of it is actionable.
Agents and Home Sellers that receive HomeBinder from their inspector can leverage the site to help sell the home. Specifically, HomeBinder Seller Reports, see example here, can set homes apart and add value to the listings in several ways:
Despite significant effort, home inspectors struggle to educate new homeowners on the property they are interested in buying. Undeniably, homeowners have difficulty paying attention to the valuable information offered to them when they are overwhelmed with the many other responsibilities associated with their purchase.
Being so engrossed in the transaction, buyers often forget or don’t listen to what the home inspectors are trying to communicate. Even if you’ve put in honest effort in providing your clients with accurate and comprehensive information, much of it can go overlooked. In Dennis Robitaille’s experience, 95% of client issues were actually addressed in the inspection report, they just didn’t know what they were reading.
The relevant information found in your inspection report won’t do the client much good sitting on a shelf collecting dust, and will be of little consolation when the owners have already had to deal with that avoidable maintenance issue. The client’s negative feelings regarding this sort of miscommunication can lead to a drain of your time and hit your reputation as well.
This can lead to some issues for your practice down the road if homeowners encounter issues with their new purchase that they weren’t previously aware of. Any experienced inspector can tell you, to work in this field is almost inviting lawsuits at some point or another. As the saying goes, “it’s not if you get sued, but when you get sued”.
Expert’s Advice on Limiting Your Liability
The internet is littered with stories of homeowners filing against their inspectors and articles authored by small claims lawyers urging owners to file these sorts of lawsuits. Although it has become the norm for inspectors to carry errors and omissions insurance for their practice, the stress of this predatory environment drives many to be compulsive in keeping track of their work and meticulous in how they conduct business.
Have clients sign a pre-inspection agreement or contract with a limitation of liability clause
Have them sign this agreements ahead of time, before you arrive for the inspection
Communicate the scope and limitations of your service clearly both verbally and in writing
Stay up-to-date with the latest technologies and practices regarding mold testing, assessment, and remediation, as these standards and regulations are constantly changing
Approach every inspection knowing that third parties, such as agents and sellers, may also seek litigation
Purchase insurance with incidental coverage for cases where the unexpected happens
To that point, know your insurance policy inside and out. Understand what you’re paying for when shopping for insurance
The Golden Rule for avoiding liability – write what you see, say what you write, and don’t sugarcoat anything
Prevent Claims by Ensuring a Positive Experience for Clients
Explore other parts of the web, and you’ll find that most inspectors have established their own practices with limiting liability in mind (this includes even recording audio of all their inspections and transcribing phone conversations with clients, in case they need to be brought up in court). In their four-part series Resolving Complaints, Carson Dunlop stresses that every inspector handles complaints in fundamentally different ways, but every inspector should take steps to ensure their clients have positive experiences before they complain. If you increase the likelihood of your client being satisfied with their inspection, you decrease the likelihood that they file a claim later on.
We’ve summarized the majority of the advice below:
Use the inspection booking process as an opportunity to ask questions about work the client needs performed, and be clear about issues that fall outside of your scope of business. Give suggestions of where they can find the answers or service providers they need, and communicate with them that a particular issues aren’t addressed by standard home inspections. For example, if a client would like their septic tank inspected kindly inform them that as a home inspector you do not work with septic tanks, and point them in the right direction to find a specialist.
Invite your clients to the inspection. Use it as an opportunity to establish reasonable expectations for the work being performed, as well as to establish yourself as a professional and hardworking individual. Clients who do not attend inspections are more likely to be dissatisfied, largely because it limits the amount inspectors can communicate with their clients. Having those hours available to communicate verbally with a client is superior to written reports, since it allows you to make sure the buyer understands what you’re saying. Clarify or stress points that need more attention, or break complicated issues down to make the inspection report easier to interpret.
Define the scope of your inspection in your contracts, and don’t contradict that scope through your words or actions. If you go outside of your contract’s scope of limitations, a court may find that you should have addressed other issues outside of what was previously agreed upon. A contract should set the expectations of the work you plan to perform, and can feature various clauses to limit your vulnerability (such as the previously mentioned limitation of liability clause). Have an attorney write or review your contracts to ensure proper wording.
During the inspection there are several dos and don’ts to follow, some more common sense than others. Be consistent between your verbal and written observations: don’t downplay the significance of an issue in person just to harp on it in the report, this frustrates clients and can lead to the dismissal of the inspection report in court. If you find an issue you’re not an expert in, do proper research before making assumptions and get back to your client with reliable information. Speak in a non-technical manner so that you can be understood clearly, you will be appreciated if you are able to help your client understand their home better.
Have clients fill out a pre-possession checklist to complete before buying the property, taking inventory of different visible defects and issues they find before moving in. In the event that a client complains about a stain, crack, bulge, or something of the sort which appeared after your transaction, the absence of said issue on the checklist shows that it must not have been visible during the inspection.
Be sure not to oversell yourself through promotional materials. There’s a difference between claiming quality service and promising “complete peace of mind” or “a total solution”. Stay on the right side of that fine line, as those adverts may come back to haunt you in the courtroom.
The majority of these methods have one goal in mind: be clear about the work that you intend to perform the work you have performed. So often inspectors’ legal trouble derives from miscommunication between two parties and discrepancy in the expectations of the service provided. The number one way to reduce your liability as an inspector is to use every channel of communication you have access to to be as clear as possible.
The importance of keeping complaints low goes beyond just financial or legal concerns. According to Carson Dunlop, only 1% of dissatisfied customers will file a complaint with their inspector, but a dissatisfied customer will tell ten others about their negative experience while a satisfied customer will only tell two. The effect of an unhappy client who doesn’t complain can potentially be much graver than the effect a client who does complain. Especially with the internet as a resource to home buyers something as simple as a poor review on Yelp (justified or not) can drive these potential clients away from your service.
Inspections In The Age Of The Millennial Homeowner
According to the NAR 2014 Profile of Buyers and Sellers, 24% of homeowners today are between the ages of 19 and 39, and 60% of them are planning on owning a home in the future. Additionally, 33% of buyers are purchasing their very first homes. These individuals know less about owning property than any demographic before them, and they’re married to the idea that a quick and easy solution to their problem is available on the internet. If you want to best educate and help new homeowners, then you need to find ways to connect with them through the digital platforms they now use for all areas of their life.
Coupling the new wave of buyers is a market of older homes. Currently 84% of homes being purchased are not new, meaning that the vast majority of buyers are purchasing properties where maintenance will be a bigger issue than in a recently built property. Proper guidance will be of paramount value to this inexperienced generation of owners in dealing with problems that are sure to arise. These individuals need you to be clear and concise when talking about their home.
But as we’ve established that style contradicts the detailed method in which home inspections should be performed. A thorough home inspection isn’t necessarily accessible to clients, but a more user-friendly report likely leaves out details that should have been included. It’s a dilemma many inspectors are forced to deal with after it’s too late.
To make things more difficult, inspectors receive pressure from real estate agents to help drive purchases through their funnel. Some contractors in more compromising situations facilitate agents’ transactions by downplaying the importance of conditions that warrant explicit disclosure. Even minor issues that should be communicated to the client can be seen as a derailment of a sale to an agent. There have been cases where agents seek litigation against inspectors because they made note of defects that delayed a purchase decision or ultimately drove potential buyers away. In interacting with multiple stakeholders, home inspectors find themselves engaged in a balancing act of sorts. Inspection reports can’t be too technical or overwhelming, yet they need to be detailed and thorough enough to be useful. Inspectors have an obligation to be explicit in all of their communications, yet some agents expect to downplay certain incriminating observations.
HomeBinder: A Tool to Nail the Balancing Act
Fortunately there are services available to aid in these efforts. Setting up a HomeBinder account for the properties you inspect addresses these issues from multiple fronts, taking a large report and breaking it down into timely, relevant communications that spread out over years instead of days.
HomeBinder simplifies your client’s experience by communicating with them when maintenance is required on their property. A homeowner that failed to heed your warning to pump their septic tank by the end of this coming fall will avoid disaster when they receive an automated HomeBinder email reminding of this maintenance requirement. This reminder email can be branded with your and/or your referring agents’ logo and signature to ensure you remain a positive image in your clients’ minds.
HomeBinder also serves as a repository to store any paperwork associated with a property. By setting up and populating an account with inspection reports, checklists, insect radon reports, and more, you can easily provide your clients with a secure and accessible database for reference whenever they need. Superior to email and hard copies, investing five minutes in a Binder on the behalf of a client will guarantee they always have access to your reports whenever necessary.
This simplification of delivery aids in pushing individuals through agent’s purchase funnel, while helping the client avoid issues they may not otherwise deal with properly. Knowing a property comes packaged with its own care assistance program puts prospective buyers minds at ease, since they’re better equipped to take care of issues that will arise.
Providing convenience, reliability, and safety checks through HomeBinder improves the service you offer and helps maintain positive relationships with both your customers and local agents, minimizing liability on your end by making home buying and owning easier. To sign up for HomeBinder’s free trial, navigate to our Inspectors page and click the “Request Free Trial” button. All that is required is an email address and your name, no credit card, no hassle.
Many established home inspectors have proudly built a business that fills their calendars with inspections every day of the week, but this work consistency can be both a blessing and a curse. On one hand there’s stability associated with having such a high volume of sales – if a client backs out, it won’t be difficult to fill in that spot with an alternative. On the other, operating at maximum capacity can establish a salary cap year to year, unless you can figure out how to make more money on your scheduled inspections.
These are good business problems to have though. They mean you’ve been successful at increasing your number of customers and clients through methods like improving referral rates, increasing retention rates, and enhancing sales techniques. While this is by far the most time consuming method of growing your business, it continues to be the most sought-after solution for inspectors who are trying to grow their business. However, after a certain point, customer acquisition won’t help a business that cannot accept any more.
Improve Your Process To Save Time
For established home inspectors, time is the most limiting factor when looking for ways to influence your bottom line. You can’t work eight days a week, you can’t be in two places at once, and you may not be in a position to contract inspectors to work under you. Some estimate that inspectors can make an additional $8000 per year by employing efficient business practices to reduce their average inspection time by just 15 minutes.
They recommend that having clients sign contracts ahead of time instead of on site can not only save time but also reduces liability and opens the door to early payment. Leaving unnecessary details, like the weather, out of written reports getting to the meat of the inspection quickly to spend less time on each individual report. Similarly, quality home inspector software like report builders or HomeBinder can help inspectors provide a better service in less of the time.
It’s not about cutting corners, it’s about trimming the fat in your inspection process.
Increase the Price of Inspections
The ASHI Reporter recommends including ancillary services such as testing for lead paint, radon, carbon monoxide or asbestos. Homeowners also really appreciate the value in offering additional property reports from BuildFax, EDR or HouseFax. Experts explain that offering these services to homeowners can help set you apart from your competition; however, they note that these standard upsells often require extra time and expertise from the inspector.
The ASHI Reporter cites raising inspection prices as the preferred method of expansion, saying that “if you’re different than your competition, then price yourself differently.” They engage in a dialogue about different pricing strategies for inspectors to consider.
You know though that price changes can be met with skepticism, and inspectors worry that charging more may end up hurting their business more than it helps. While most jobs offer employees at least 3% in wage increases yearly to offset for changes in the cost of living, inspectors often feel that they can’t move prices that have been consistent for an extended period of time in fear of how the market will react, which may explain why home appraisers don’t earn much more on each home than they did 20 years ago.
The problem home inspectors encounter is justifying the raise in their service rates to homeowners or agents. Even if you feel that you’ve earned that raise, crowded markets and a lack of product differentiation can be challenging if you raise prices higher than the local competitors without proper reason. The ASHI Reporter mentions that inspectors should “focus on value by providing more benefits to your clients and partners instead of lowering your price.”
To inspectors price signifies personal worth. A low price tends to send a negative message to clients, and can lead to inspectors being pigeonholed as a cheaper or less experienced service provider. Charging more than your market’s average can communicate that you are providing a superior service than your competitors. But assuming that potential clients will find that a higher price suggests quality is a bit risky, especially considering how little homeowners generally know about the service they’re paying for.
Demonstrate Value to Your Clients
Expertise, reliability, and thoroughness seldom ring true as justifications for anything more than humble jumps in inspection pricing, so in the midst of high price elasticity and ample competition what is an inspector to do? To effectively increase prices above the market average, you must find other ways to create a higher perceived value for your work.
Guiding apprehensive clients to understanding why you’re worth the extra expense can allow you to combat pushback on premium pricing. To identify and capitalize on a “hot button” topic for a client is a very effective method to quickly turn a conversation around. For example, if a real estate agent finds that it’s important for inspectors to be “even-keeled” and keep details in perspective, then use appropriate opportunities to communicate that you exhibit that quality in your work. Offering proof of your value through researched statistics and personal testimonials will further address clients’ concerns.
Give Homeowners What They Want
Fortunately most buyers share a specific point of view on what they’re looking for in an inspection report, and positioning your work around these preferences can make selling your value much easier.
According to a homeowner survey, customers called for a simplification of home inspection reports so they would be more accessible and user friendly. The majority of responses from their past customers found that inclusion of an executive summaries (96%), simplified formatting (81%), less details (80%), topic headers (98%), highlights of important details (99%), photos (87%), and prioritization maintenance of issues (98%) would have made their inspection reports more valuable. As Carson-Dunlop notes, buyers want “short and sweet,” “concise and specific information.” Are your current reports what customers are looking for?
The fact of the matter though is, home inspection reports that get stored on a bookshelf simply won’t be used by the tech generation who now find finance, fitness and dating answers in online applications. A third of all buyers are first time homeowners and a quarter are between the ages of 19 and 39. These individuals know less about owning property than any demographic before them and they’re dependent on digital solutions. If you want to best educate and help new homeowners, then you need to find ways to connect with them through the digital platforms they now use for all areas of their life.
Offer HomeBinder to Earn More Money
Enter HomeBinder, the online tool that has led to home inspectors successfully increasing their inspection prices by over 10% on average. HomeBinder is a complete online home management system that is being adopted as an expectation of many homeowners regionally. With features that provide utility to homeowners and the inspectors, including maintenance reminders and online record keeping, both groups are embracing the ease and functionality it adds to the buying process.
Through HomeBinder maintenance reminders you can provide exactly the sort of simplification homeowners want without sacrificing the thoroughness of a traditional inspection report. HomeBinder can also make available to your clients contact information for local service providers, decrease clutter associated with cumbersome inspection reports, and otherwise aid in their home care experience. HomeBinder will allow inspectors to provide more accessible reports to their clients, in addition to providing them with built-in drip-marketing campaigns and opportunities to partner with and win more referrals from real estate agents.
Binders are simple and fast to set up and provide many of the services that inspectors pay for already for a fraction of the cost. Digital file storage and recall notifications are all included in a package that for most inspectors will work out to less than $2 per inspection! Binders are quick to set up at the end of any inspection, taking just minutes to complete alongside a traditional report.
Despite the low cost investment of just $49 per month for unlimited Binders, inspectors find that opening Binders on the behalf of their clients either indiscriminately or à la carte style allows them to raise inspection prices $20 to $80 with no pushback from clients.
HomeBinder offers a free trial to inspectors, so you can see how simple and effective this tool really is. Navigate to the Inspectors’ page and hit the Request Free Trial button to get started, no credit card required – just your name and an email address. Any inquiries can be directed to firstname.lastname@example.org.