In the last two years, one of the biggest headaches for Betta owners has been home buyers that have asked Betta owners to take them on a “home walk.” Typically, these homeowners are referred to Betta Inspect It staff members who accompany their buyer on the tour of the property and inspect it from a distance. Many home buyers don’t like this because they feel as if they’re being pressured into buying a home that is below their true expectations. What many owners don’t realize, however, is that this is also a very common practice among banks.
According to Betta’s general manager, Matt Mason, these banks are routinely contacted by interested home buyers that have either had pre-approved home inspection reports, received a single tick box inspection report, have declined a bank offer, or have just received a balky one-line report that they are dissatisfied with. Betta’s managing partner, Paul D’Emilio, explains how banks do all of this in a blog post entitled, “Is Home Inspecting Really As Painful As It Sounds?” He explains that banks have several different reasons for making inspections as painful as they are. The first reason, according to D’Emilio, is because they want to make sure their borrowers are indeed purchasing a home they can afford.
Secondly, it makes financial sense for banks to conduct a home inspection on borrowers as quickly as possible. For one thing, when a home buyer declines a bank offer, a bank will often have to pass the price back to the client for another offer. By inspecting the property, they can see whether there is any way to decrease the cost of the home. And when a home owner is unsatisfied with a loan or their house, they tend to default on the payments and/or take the home back in an attempt to correct the situation.
When a borrower doesn’t receive a home inspection on time, they become anxious and may decide to close on the house, at which point they begin a buyer’s cycle all over again. This cycle often ends up being a losing battle for both the bank and the borrower because the lender ends up with a bad deal and the borrower ends up defaulting on the loan. D’Emilio goes on to explain why the practice of home inspection should not be viewed as a negative.
In order to alleviate the tension caused by the exam process, however, D’Emilio says Betta offers homeowners the option to purchase a pre-approval service from them. called a “buddy” which acts as a sort of third party between the buyer and the bank during the entire loan process. Buddy services are often offered at no additional charge to homeowners and allow them to complete the process in one day. This is a more affordable option than having to go through the same ordeal over again.
There are other reasons why the bank doesn’t like to get the bad credit borrower to perform a home inspection. D’Emilio explains, “Banks do not want to pay someone’s salary just so you can go into a bank and look at their home.” In addition to the fact that a bank might not find out about a borrower’s bad credit, he explains that lenders are often less likely to lend money to these borrowers since they feel more comfortable doing business with someone who has good credit. If a homeowner is able to find a friend in the bank that offers to act as their personal banker, then the bank’s attitude towards these people could change significantly. When banks are willing to consider lending to someone who is happy with his or her personal banker, it suggests that the borrower has good credit.