Home Inspection Scams
When I was a senior manager, one of my duties was to oversee risk control. I was good at it, since I paid attention to how it was accomplished after the fact, so I could spot signs of scams happening in the future. After having written about a real estate scam involving craigslist, I was asked about scams involving inspectors. I was stumped for a bit. I do not have the makings of a good criminal mind, and I have never been asked to investigate a scam, so I had to think hard for a moment about how a home inspector could be involved in a fraud. I came up with the following, but I have to state that I personally have never seen either of these done, but I am sure that one of them does happen on a regular basis.
The con job that I think occurs with some frequency would be the “I can repair that for you” scam. I would avoid any inspector who is advertising his repair service in conjunction with his inspection service. In Texas, we cannot work on the home for one year after inspecting it, so most Texans have nothing to fear. This would work much like what happens with mechanics who take advantage of people not knowing about their car. The inspector could point out an issue that needs to be repaired quickly for safety or efficiency, but it may not have to be fixed at all. How many people know the workings of their HVAC or what is acceptable in the breaker box? To prevent this scam, take a basic precaution when dealing with the inspector. Tell him that you will be asking for three bids on repair items. If he knows that another contractor will be looking into his statements, then he will not want to make a false one, in fear of being exposed.
This second idea may be far fetched, but it is the only other fraud that I could think may happen, and it may not involve the inspector at all. Currently, many buyers are becoming vocal on wanting homes repaired before they move in. What if to force the seller to make certain repairs, the inspector places them on his report with emphasis that this needs to be repaired. The idea being that the inspector and buyer work together to place the seller into a position that repairs have to be made. In this case though, the buyer does not really need the inspector involved. The buyer is not required to share the report, so they could state that the report demands the repair. The inspector would be compensated by an additional fee if it worked. To prevent this sellers would have to stand their ground. They could have a pre-inspection done on their own, or have a contractor come out to inform them of the significance of the inspectors findings. They need their own report to counter this scam.
I am not sure how else an inspector could develop a scam. Certainly, there could be other means for perpetrating a fraud on the buyer or seller, but I think that it would be a variation of the above. Maybe the inspector does not make the repair, but a firm that gives him a referral fee does (in Texas, the inspector has to inform his client, that this would be the case). I guess that I should contemplate a life in crime to determine how other schemes might occur, but I am not interested in that, so maybe you know of something that has happened along these lines?
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