As you probably know, or will learn soon after earning your certification, there’s a lot more to being a home inspector than just performing inspections. Some keys to good business take a little extra effort on your part, but are well worth it in the long run. Such is the case with a pre-inspection agreement.
This agreement spells out for the customer what you will inspect. It helps avoid confusion, and it can also help you save money. Here’s how:
#1: Save Customers from Confusion
You inspect real estate all the time. Your customers probably never have. More than that, your experience with homes is much broader. Most customers will never move to even a fraction of the number of houses you inspect in a year. In short, you have inside knowledge that they don’t, and it’s important that they get it.
A pre-inspection agreement helps fix expectations. It shows the customer what an inspection does and doesn’t cover. Tailoring your own agreement to ASHI or other Standards of Practice means your customer has something tangible to refer to. If you say that you can’t inspect anything that’s not accessible, the customer can see for him or herself that your guidelines are based on what’s normal for the industry.
#2: Protect Yourself Against Frivolous Claims
Most of your customers are great. But all that it takes is one bad apple to spoil a business that you’ve worked hard to build. With a pre-inspection agreement, everyone knows what you intend to inspect. That means a customer can’t come back later and claim that you promised something that wasn’t delivered.
This is important in case there’s ever a lawsuit. In court, you’d be hard pressed to defend against a claim that you promised to inspect something that was never actually discussed. With an agreement, any judge would clearly see whether that item was promised.
#3: Qualify for an E & O Insurance Discount
Errors and omissions insurance is part of every responsible home inspector’s life. It protects you in case your work somehow causes the customer any harm. For example, if you overlooked a defect or reported something as being in good condition when it wasn’t, the customer could look to you for compensation. E & O insurance pays those claims when they’re valid, and so they like it when inspectors take extra steps toward preventing them.
A pre-inspection agreement reduces the likelihood of a claim, and it also helps the carrier defend you in court. So some carriers offer a discount on premiums for inspectors who take that step. Attorney Brian L. Trotier explains in the Fall 2015 issue of NAHI’s Forum Magazine that discounts are sometimes available for other measures, too, such as association membership and which Standards you follow.
#4: Keep Your E & O Insurance Active
As with discounts, a signed pre-inspection agreement can also help you keep your insurance in force. While most E & O insurance carriers don’t currently require an agreement, stating that you use one in order to claim a discount can result in a canceled policy if a claim pops up and there wasn’t an agreement after all.
That’s basic, responsible work, and most inspectors would never claim a discount that they hadn’t earned. However, it also means getting the agreement signed every time. If you forget, or if there is an occasion when a customer can’t or won’t sign the agreement, you should let your insurance company know.
You can likely find a pre-inspection agreement template online, but it’s a good idea to go over it with a fine-tooth comb before using it for your own business. Compare it to the way that you do business, and to the Standards that you follow. Then you can mold it into something that’s yours.
A better idea is to build your own from scratch using your own words. You can use a template as a formatting guide, but creating the agreement means that you drive its intent, and nothing is implied that shouldn’t be. Whichever route you choose, a pre-inspection agreement is always a good idea. It helps preserve goodwill between you and the customer, and it helps keep you in the good graces of your E & O insurance carrier.
If you haven’t yet earned your certification, there’s no better time to begin. Enroll now, and start working toward a new career in home inspecting tomorrow.