There has been a lot of recent media articles suggesting a loss of confidence in the apartment sector of the property market. Why? Defects leading from poor building standards and deficient Government regulation are a big part of it. Recent research indicates that a lack of reliable information about building defects is a critical factor.
In fact, this article makes many interesting points, but one issue that struck a chord with us is the concept of “information asymmetry”. This arises when buyers are unable to distinguish the difference between good products and bad products. This happens because they don’t have the necessary information to know how to tell the difference. When this happens, buyers tend to gravitate towards the cheapest products, which are also usually the lowest quality. As a result, the higher quality products can become unsustainable and the market is left with “lemons”.
Do you think all inspection reports are the same?
Many agents say – “it’s just a report, right?” – and go with the cheapest option without thinking about the report or service quality. They just want some information to be available and aren’t concerned about its quality or reliability. Unless it might undermine the sale. At the same time, they criticise cheaper property selling models as providing inferior service and outcomes.
These agents save their sellers a few dollars and, in some cases, might even prefer poor-quality products that smooth over some issues. They don’t see much risk in this because most buyers and sellers typically know nothing about property inspections. But make no mistake, using poor quality property inspection services creates significant risks for agents and their clients.
You risk damage to your reputation, you risk future referrals and return business. But you might also jeopardise the agent model altogether. Be more trustworthy or your industry might die.
Stop talking and start acting.
Throughout the years, we have spoken to many agents who’ve told us they are looking to provide the best service to their buying and selling clients. Some agents even acknowledge their current inspector is not doing a good job and clients are complaining. But guess what? The inspector provides reports cheaply so agents just continue using their reports, which diminishes their own service levels.
We have also been approached by agents who want to control what is included in the report to make the property look better. We refuse to work with these agents, but there is always someone who will. These behaviours double-cross the efforts in the industry to make real estate agents a profession. Remember, a professional needs to act professionally all the time, not most of the time.
And while a property inspection is only one part of a larger sales process, it is often the most important step for a buyer who is making a massive decision.
We know that selling budget are tight, but if you frame your discussion with vendors around risks and outcomes instead of costs, you might get better outcomes too. If your current inspector provides mediocre or inconsistent service, why trust them with your clients and your reputation? Poor quality inspection services are not doing anyone a favour, even if they cost close to nothing. Do you want your service associated with a lemon?
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The EYEON Property Inspections Team
At EYEON Property Inspections, we help you buy and sell with more confidence.