Should you use an agent's recommended home inspector?

Should You Use an Agent's Recommended Home Inspector?
By Elizabeth Weintraub, About.com Guide

Whether buyers should hire the agent's home inspector depends on the agent.

Question: Should You Use an Agent's Recommended Home Inspector?
A reader asks: "We are first-time home buyers. After we got our offer accepted on a bank-owned home, our agent sent us a list of home inspectors to call. We think the agent might have a reason to refer people who won't tell us if something is wrong. After all, she doesn't get paid if we don't buy the home. Should we use our agent's home inspector or should we find our own inspector? Help! We're stuck."
Answer: Are you suggesting that your agent is less than honest with you and you don't trust your agent? I ask because it happens. Also, in an industry where 10% of the agents sell about 90% of the homes, the remaining agents may not have enough first-hand experience to know which home inspectors are thorough and qualified.
I've never met an agent who didn't want his or her buyers to have full disclosure, but that's not to say every agent puts the buyer's interests first. However, I can assure you it would be extreme for an agent to pressure a home inspector to provide a faulty report. It's simply not standard practice.

You imply that a home inspector and a real estate agent may be in collusion with each other, and that's such a rarity. You'll find dishonest people in every business, but the numbers are much smaller than you may imagine.

No reputable real estate agent will withhold information from a buyer or induce a third-party vendor to withhold information.

If you choose your buyer's agent wisely, the home inspectors your agent recommends are most likely of the same caliber as the agent.

Do Agents Shun Home Inspectors Who are Deal Killers?

Yes, they do. Surprised? But my definition of a deal killer is probably different from yours. A deal killer is not a home inspector who discloses. A deal killer is a home inspector who makes mountains out of molehills and doesn't know how to properly communicate with a buyer.

Here is how a good home inspector would disclose, say, a problem with the HVAC system:

The differential readings are low. This could mean the unit is low on refrigerant or it could be something more serious, such as a cracked heat exchanger.
I suggest you hire a licensed HVAC contractor to inspect the furnace and A/C.
The HVAC system is near its economic end of life, and you may want to gather bids to replace the system.
A deal killer home inspector, on the other hand, may approach the same situations like this:

I'm worried that the furnace is going to explode at any minute. Stand back.
This will cost $20,000 to replace.
Man, I would not buy this deathtrap of a house.
See the difference?

What Kind of Home Inspectors do Agents Recommend?

Honest and ethical real estate agents recommend only the most qualified home inspectors. An agent with many years in the business most likely maintains a list of home inspectors who are reputable.

Word gets around about bad home inspectors, and agents don't recommend those inspectors. Your home inspection should be exhaustive and complete, consisting of 20 pages or more.

Agents want buyers to be fully informed because those who aren't will come back to haunt their agents after closing.
Agents who stay in the business and are successful year after year do so because their clients refer more business to them. Duped clients don't refer.
Agents can negotiate repairs or cash credits, or advise the buyer to walk away if the home inspection reflects too many problems.
Agents work with many of the same home inspectors over and over and witness first-hand the effectiveness and thoroughness of an inspector.
Agents don't want a finger pointed at them if the home inspector misses a serious defect, which is why a qualified home inspector is important to an agent's business.
If you don't trust your agent to refer a competent home inspector, then you may want to consider hiring a different buyer's agent whom you do trust. That's better than plucking a home inspector out of the phone book or online directory and hoping the inspector is competent.