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inspection fee paid through escrow


frosty23
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  • 2 weeks later...

1) Don't do it.

2) Illegal in some states.

3) What if you do such a good job the buyer backs out & there is no closing.

4) A client who cannot afford to pay you is not a good client.

5) This is also an issue with ethics. You now have a vested interest in the sale of the property because of #3 above.

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I do it, but only for a few of my loyal RE friends who I know will see to it that I'm not left out. One specializes in a low income type of loan where the client often won't have the money for appraisal, inspection, etc., but she wants them to have the same protections as the higher-end clients. I'm with her on that.

As far as the deal dying, I don't worry about it. I make it clear they will still owe me if the thing falls though and I have a signed contract that says so too (hence no contingency). I haven't lost on one yet (knock wood), but I'm wouldn't want to let it become a bigger part of my business.

Brian G.

The Poor Need to Know Too

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I was supposed to get paid at closing a number of years ago. The deal got to closing, all the papers were signed, but the buyer (a real estate agent) refused to fund the deal. Obviously without funding, the deal fell apart.

When I asked the title company where my check was, I was told there wasn't enough earnest money to go around and I was at the bottom of the pecking order. I never got paid.

Today my policy is cash or check at the time of inspection. No exceptions. No payment, no report. I may not get paid for an inspection, but no one is getting a report either.

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Like Brain G, I have a special PIA that I get signed. Payment from the closing, or the buyer if no closing. Only break it out for those 'special' Realtors who have yet to do me any harm...

Have had only only one "can I get a reduced rate" request from a Realtor who was paying for the inspection herself. Client's didn't quite qualify for the home I had inspected, I got the second inspection as well. It did pay at closing.

Been about three months since I've even had a 'pay at closing' request... thankfully...

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This is a slight thread drift, and it even harkens back to a topic from a couple of weeks ago. My situation most closely approximates Brian's, but there are the inevitable, "I forgot my checkbook" clients one has to contend with. My business relies on about 40/60 realtor/client referrals, and so I'm reluctant to be a hard a*s about payment. But . . . I typically have eight or ten K out in receivables that I loathe keeping track of and chasing down. I would much prefer Paul's approach, but people can be exceedingly sensitive and I'm reluctant to leave on what could be a moment of disharmony. I realize the counter position is that I'm allowed to be sensitive, too, and explain that a client can deliver a check in exchange for the report the following day. But I wouldn't want it to have an adverse effect on my bidness. Most folks have good intentions, and all but one or two a year wind up sticking a check in the mail, ultimately. So . . . it's a tough call to make, at times.

Back on topic, I get left off at escrow about half the times I'm supposed to be on, but the realtors who ask for this favor shoulder the responsibility of making certain the client pays. To date, I haven't had any problems.

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Originally posted by Bain

. . . My business relies on about 40/60 realtor/client referrals, and so I'm reluctant to be a hard a*s about payment. But . . . I typically have eight or ten K out in receivables that I loathe keeping track of and chasing down. I would much prefer Paul's approach, but people can be exceedingly sensitive and I'm reluctant to leave on what could be a moment of disharmony. I realize the counter position is that I'm allowed to be sensitive, too, and explain that a client can deliver a check in exchange for the report the following day. But I wouldn't want it to have an adverse effect on my bidness. . .

In my opinion you're actually hurting your business and your future referral volume by enabling deadbeats.

Here's why. When someone owes you money, they feel guilty, especially when they think or talk about you. Therefore, they avoid you and they avoid mentioning you. That means that they're less likely to refer you in the future.

I suggest you start accepting credit cards. Your deadbeat file will shrink very fast.

- Jim Katen, Oregon

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I have been burned in the past like most of you. I still agree to be paid out of the closing but only if the client gives me a valid credit card as a back up. If a check is not issued out of the closing I process the credit card. If they have no money and no credit card than I do not want there business

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Nah,

No escrow. Not anymore. I allowed it a few times and had to jump through hoops to get paid. One guy said that it had been an error and said he'd pay me out of his own pocket when the escrow folks didn't send me a check. It took 4 months to get paid and then the only reason I got paid was because I showed up at his doorstep on a weekday evening, stuck my foot in the door and wouldn't budge until he'd paid me.

I've been at inspections where the realtor pulls the client aside and has them sign papers and then fork over a check for thousands of dollars. As far as I'm concerned, if they've got the wherewithal to buy a house they can afford to pay me right away.

ONE TEAM - ONE FIGHT!!!

Mike

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One short story about a future home buyer who wanted to pay at closing and wouldn't take my first "No" as an answer. I told him I was sure I could get him a "Free Inspection". I told him I would call one of our local HI schools and could probably get a student to do it free, so they could get the experience. He didn't care for that answer either. He broke out the checkbook.

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I avoid it like the plague. Once in a while I agree when it's an agent I really trust and I tell him that it's his responsibility to see that I get paid at closing or he/she compensates me.

I don't even like taking credit cards, but I do.

Cash, check or money order is my mantra and the few times I've receieved a bad check I simply say, "You do understand that writing a bad check for over $100.00 is a felony dont you?" Miraculously, everyone has immediately made the check good somehow.

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My suggestion is if you do it, charge for the convenience, I got up to $11,000.00 in accounts recievable one time in Ca. and when I saw that, I decided to start charging, and had an extra form, along with the contract, for the client to sign discussing if the deals fails to complete, payment is due within 10 days. I'm glad it is not the way of doing business here in NY, so I don't do it anymore.

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