Debbie,

Hi, I have not personally heard of the cost of inspection being paid at the closing. Did he say where he was from?  Hope you get it sorted out.

The inspection can be paid at the close, as well as the appraisal. Problem is, the vendor has to agree with that. If your company has a home services department, check with them to see if there is a vendor that will accept payment from HUD. All they have to do is invoice the title company, and the title company will make sure it is paid so they can insure clear title, and not have to worry about a mechanics lien in the next 60 days. The vendor may agree to have payment at close as long as they have an established relationship with you, or the company, and someone guarantees payment. I would tell my buyer that I will do everything in my power to find a vendor that will accept that. Don't make it sound like it is you saying it has to be paid at time of inspection, but explain that the inspector may not go for that.

A few years ago all the inspections I had done were paid at the close. Even repairs were included. The vendors agreed because they wanted to keep you using them. As times got great they were less agreeable to this. Now they all ask for money up front. Some roofers will still agree to accept payment at closing. I think a lot of inspectors got burned when closing fell apart and finally had enough.

Yes, it can happen at closing.  Most of our inspectors want payment at the time of the inspection; however, I know of 2 in my area who will invoice the closing office in special cases.  

The vendor I use will send an invoice to the Title Company as long as they get a credit card# from the buyer in case the deal does not go through. Maybe, your vendor will agree to billing the inspection fee if they have secured a credit card.

It is possible to arrange to have everything paid at closing.  The catch is that the people providing the service have to agree to wait.  Some will and some won't.

It is pretty common in our area that inspectors and appraisers are paid out of escrow but usually there is an additional charge to do so (about $50).  Of course most inspectors and appraisers want to be paid at time of service but the majority here will let the client bill through escrow.

I do it all the time at closing. My lenders try to get all the earnest money back for the buyer and they have it paid for out of that or in some cases, we have even had the seller pay for it.

A whole house inspection is expected to be paid by the buyer at the time of the inspection.  I educate the buyers ahead of time of out of pocket expenses that they will encounter, one being a whole house inspection.  Some do not want to spend the money to have a whole house inspection done, and I usually will provide them with a specific waiver stating that it was recommended and they chose not to have it done.

As for termite, gas line, well, septic.... these inspections, the inspectors usually just know that they'll be paid out of the closing, usually by the seller if it was agreed upon in the contract.  If the contract doesn't close, these expenses become buyer expenses.  We've had buyers stick us with the bills after a deal fell through, so I like the idea of the inspector getting a credit card number.

We have discussed just making it our policy that the buyers have to pay for all of it upfront.  Even if the sellers agreed to pay for it.  Then, at closing the buyers can get a credit - and if it doesn't close, we don't have to chase down buyers to come up with money for the home their not buying.

Tracie

I have an inspector that gets 1/2 up front and the other half at closing.  Everything's negotiable!  It's up to the inspector.

Nearly every inspector I have used is fine with being paid at closing and that's how I like to work it.  They will send the invoice over to the Title company at it gets taken care of at closing.  This way, it's also one less check the buyer's have to write out and if the seller is helping to pay all or some of the closing costs and the pre-paids, then the buyers don't have to worry about getting reimbursed for it.

If the deal falls apart, then the Title Company will deduct that bill from the escrow deposit before releasing the funds back to the buyer (if the buyer is due the escrow deposit back).

Some Home Inspectors take credit cards.

I've never had a home inspector wait until closing to get paid.  The home inspector works for the Buyer and owes his/her allegiance only to the Buyer.  The Buyer pays for this on the date of the inspection.  Until the Buyer pays for it, the written report will not be given to him.  What happens is financing falls through or something else prevents the deal from happening?  Same with septic.  You don't get the passing certificate until the inspector is paid and attorneys won't even schedule a closing without a passing certificate.

Here in Tulsa, most inpectors agree to be paid at closing.

We usually bill inspections to closing.  Appraisals are usually paid at the time they are done.  The reason for this in my case is that a large percentage of my clients are buying their home on either first time home buyer bond money or via concessions from the seller so they are getting into the house for their earnest money deposit and usually nothing else.  Rather than have them get reimbursed at closing (if their lender allows it, most do) I just bill it out to closing.  I haven't had an inspector get burned yet (fingers crossed) and I am very loyal to the vendors so I use so I have a good relationship with them and they know I will work with them to help make sure they get paid if the deal busts out.  Now, if the client is paying their own closing costs and/or putting a down payment on the property at closing, then I encourage them to go ahead and pay for inspections at the time they are performed.  Usually, they will get a discount for doing this.  

Debbie, it looks like you got alot of good advise here, I might add, that as agents/realtors we are always first to think that to hold the deal together will take us giving up something. I have been trying to work on NOT thinking that.

Yes we all want the deal to go through, but you will notice that no one else in the loop ever says their price can be compromised. We hold deals together by working through each crisis as it comes along, and they do come along. Hold your price, it was already negotiated. Deals will still happen.

Why is the buyer upset? I bet he is the same type to try and re-negoitate the sales price based on the inspection report. Tell him to pay the $400.

The home inspector I uses gets paid at time of the inspection.  He has a website where they can go and pay with a credit card.  He does that because he's been stiffed so many times or has to wait for the escrow company to pay him out of the deposit.