Many real estate agents and industry bodies believe it’s too easy to become a real estate agent, and stricter tests are needed. That might be true, but at least real estate agents have some regulation and are accountable to their industry and the government via legislation.
But did you know that in NSW, property inspectors (building & pest inspectors and strata records inspectors) can start business without qualifications or any licenses?
Depending on who you speak to, you may find that potentially half of all property inspectors do not carry any insurance either, even though it is easy to get for most inspectors.
Of course, there are many good inspectors. But their role is an important part of a property transaction, and even good inspectors might be working in a vacuum. By that, I mean they usually operate as lone contractors and don’t have the checks and balances expected in most businesses. Arguably, many tradies are also one-man bands, but they are subject to licensing, years of training and severe sanctions if they get things wrong.
Property inspectors are a little bit different.
Over the last 10 years, the cost of inspections has fallen in nominal terms and tumbled in real terms. But inspections themselves haven’t become any quicker or easier, so inspectors have needed to find ways to maintain their income. Many inspectors are trying to complete more inspections in the same amount of time. It’s not hard to see how this can adversely affect quality and increase risk. And because many inspectors can’t compete on quality or service, they can only drop their price to get business. That is a large reason for the price falls seen in the industry.
At EYEON Property Inspections, we’ve taken a much different approach to most inspection businesses.
We have introduced innovative products that have changed the pricing structure for buyers, while also engaging property sellers and agents in the inspection process. In addition, we have introduced our own regulation and assurance systems around inspectors and report quality. These things are essential for delivering our low risk, high quality solution for all parties.
For selling agents who recognise the benefits of having property inspection reports available for their listings, the trade off between price and risk should be top of mind.
Particularly because property inspections are already the lowest cost item associated with marketing and selling a property. Our research of the cost of selling a house reveals that sellers pay $5,500 – $12,000 in legal and marketing costs to sell their home. This does not include selling agent fees (1.5 – 2.5% of sale price) or styling costs ($1,000 – $6,000 where necessary). When those costs are included, the total cost to the seller is likely to be over $30,000.
When you consider that our inspection services cost the seller, on average, no more than $500 for a house and $250 for an apartment, it amazes me that agents would consider using a higher risk service to save a very small amount of money.
Perhaps, those agents don’t realise they are taking more risk, because they think all inspection reports are the same. For those agents, we recommend they think about two things:
- The report is only part of the service
- It’s what in the report (or missing from the report) that’s more important than the format of the report
Another important issue is that higher risks expose your clients too. One reason we hear from selling agents for using cheaper providers is that it’s hard to get sellers to pay for inspection reports. Perhaps, if you talk to clients about risk rather than cost, you will find them more willing to invest a bit extra in this important service.
You can read more about inspection reports and risk here.
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MD EYEON Property Inspections
At EYEON Property Inspections, we help you buy and sell with more confidence.