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Should I Give Full Or Partial Refunds?

Should I Give Full Or Partial Refunds?

canstockphoto19423192Most Home Inspection Claims Aren’t Valid… So Be Very Selective About Offering A Refund?

Many home buyers today have totally unrealistic expectations about the scope of a home inspection. Sadly, they do not take time to read the pre-inspection agreement even though by signing it they have acknowledged that they have read the agreement in full and understand all the terms and conditions.

Many people think a home inspection is a home warranty and if any thing goes wrong anytime in the future the home inspector should stand behind their work and pay for whatever needs to be repaired. I know that’s totally crazy but that attitude seems to be prevalent more and more each and every year.

To try to combat this, we actually wrote this on the summary page of our report… “Please talk to your real estate agent about purchasing a home warranty on this property because the systems and components of a home can and will fail at the most inopportune times.” Even though we had this right on the summary page we still got callbacks saying that some system or component had failed and that we should’ve caught it and brought it to their attention, even if we inspected their home eight or 10 months earlier.

Here’s what you need to do in the event of a call back…

1. Listen to what the home buyer saying and probe for further clarification so that you can truly understand what the issue is all about.

2. Let the home buyer know that you are going to pull the inspection report and get back with them quickly after you’ve had a chance to review it.

3. Evaluate the inspection report to see if you reported on the issue the customer has identified or if the issue the customer has identified is outside the scope of the home inspection.

4. Next, you can either call or email the home buyer to let them know your findings. In many cases, we prefer email so that we can avoid the he said, she said scenario. We like everything to be in writing in case the situation escalates.

If you’re not at fault in this situation then you have no obligation to provide the home buyer a refund, full or partial. Be prepared for the home buyer to argue with you and threaten you either with an attorney or to do damage to your firm on social media if you don’t pay up.

Joe Ferry, The Home Inspector Lawyer

“If you are prone to offer refunds at the first sign of dissatisfaction, you should ask yourself this question: Is this client dissatisfied with me or is she dissatisfied with the result? If the result has nothing to do with the quality of your inspection, you need to keep your hands in your pockets and explain that, although you sympathize with their position, you are not responsible for it. You should remember this piece of home inspector training.”

With that said, on rare occasion there may be a good “business reason” for you to offer a full or partial refund.

Many of you receive referrals from real estate agents, mortgage brokers and other professionals in the real estate industry. As you can imagine, they want to keep their clients happy. There may be a rare case when a client is so dissatisfied with your work that they will vigorously complain to the referral source that you didn’t do your job and they want a refund if they are ever going to refer the real estate referral source again. In that case, that real estate professional may come to you and ask if a refund, either full or partial is possible to make this situation go away, even though they acknowledge you did nothing wrong.

Over the years we have had this discussion with a number of real estate professionals. We always evaluate how important the referral source is to our firm. If the referral source is a top producer and gives us lots of business each month, I’m a lot more amenable to the request for a refund. However, if the agent asking for the refund isn’t the top producer and has only used our firm a couple of times in the last three years, I’m way less interested in offering a refund where we made no mistake.

Note: At The Savvy Inspector we teach you how to set up an effective dispute resolution process and we also provide you forms to use to make the whole thing much easier and less painful.

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