Inspecting the Inspector
Saves Time and Money
Jan. 22, 2002 -- As a public-relations manager for a commercial real-estate company, Tom Womack knew the importance of hiring a professional home inspector when he purchased his Dallas-area condo in September. After his realtor supplied him with a list of 12 to 15 licensed inspectors, (Texas is one of 25 states that require home inspectors to be licensed) he narrowed his choice by asking the opinions of his experienced-real estate colleagues, making phone calls and comparing prices.
"Although I'm fairly handy at repairs, the inspector pointed out a lot of smaller items, such as improperly-grounded electrical outlets, a problem with the water heater and stair balusters that exceeded the state-code distance for child safety -- things that I never would have noticed. The inspector also found some issues that were the responsibility of the condo association to fix, including missing gutters and loose roof tiles," explains Mr. Womack.
Overall, the inspector found no major concerns and Mr. Womack was very satisfied with the level of service provided, including a detailed, printed report about the home's condition and even a few pointers on how to remedy some of the problems that were uncovered.
Now in the process of closing, Mr. Womack confirms that his experience with the home-inspection process was pleasant. In this, he isn't alone. A spring 2001 survey of 1,000 home buyers by the American Society of Home Inspectors (ASHI), in conjunction with the National Association of Realtors (NAR), found that 77% of home buyers who had purchased a home during the previous 18 months had obtained a home inspection prior to purchase. Ninety-seven percent reported that it was a good value for the price they paid -- the average inspection costing around $250 nationwide.
While a 3% dissatisfaction rate might be considered low by most survey standards, experiences with disreputable, uninsured or unqualified inspectors can leave homeowners with little recourse and a money pit they can't afford to fix.
"Once you've signed on the dotted line, it can be quite discomforting to find out that you've bought a 'two-story' house. You get the first 'story' before you buy and the second 'story' after you move in," says Kathleen Kuhn, chief executive officer of HouseMaster, one of North America's leading home-inspection companies based in Bound Brook, N.J.
Scott Black is all too familiar with this scenario. When he and his wife were considering purchasing a home in Carrollton, Texas, in 1996, they looked to a state-licensed and realtor-recommended home inspector to help increase their confidence in the choice they were about to make.
"We received a favorable report from the inspector, so I called my Allstate agent to begin the process of insuring the home," says Mr. Black. The agent asked if the inspector had looked closely at the roof, since other homeowners in the Carrollton area had filed a variety of hail-damage claims during the previous year.
"After phoning my real-estate agent, I learned that the inspector hadn't looked at the roof from a ladder, giving it a passing mark after looking at it only from ground level," admits Mr. Black.
The seller agreed to a second independent-roof inspection, which found a new roof to be necessary. (ASHI does not require inspectors to walk on roofs and in about 30% of inspections, part or all of the roof isn't accessible due to safety concerns. In these cases, the inspector is expected to use a ladder to get as close to the inaccessible area as possible and supplement this view with binoculars, say experts.)
"I was disappointed that our original inspector didn't even climb a ladder to view the roof, particularly since the roof was easily accessible and the home is located in an area that has many hail storms. To my knowledge, he wasn't even aware of the hail issue," says Mr. Black.
After the seller's insurance company paid to replace the roof, Mr. Black and his wife examined the home from top to bottom and went ahead with the purchase. They plan to be more cautious when inspecting future homes. They'll also be present during future inspection processes to ensure that the inspector thoroughly examines everything, particularly major components.
Attending what usually amounts to a two-hour home inspection is key to keeping your inspector on his or her toes, say real-estate experts.
"A reputable inspection firm will encourage the purchaser to accompany the inspector," says Ms. Kuhn, "since the point of the inspection is for the buyer to see, first-hand, any problems that may exist. This enables them to make their own decision about whether to move ahead with the transaction."
In the case of Mr. Black, the inspector didn't encourage buyer attendance.
How else can you ensure your home inspector is reliable?
Insurance.
Errors & Omissions (E&O) Insurance is a major priority. Like a doctor's malpractice insurance, this protects the inspector against post-inspection legal problems, such as not noticing a serious defect that must be remedied.
"This insurance assures that the inspector won't go bankrupt in the event that the missed condition is costly and must be paid for," says John Hendricks, director of the National Institute of Building Inspectors (NIBI), a residential inspection-training facility that requires its certified inspectors to carry E&O insurance and other coverage.
Written report and guarantee.
An inspector should stand behind his or her findings, so requiring a written report as evidence of the inspection is essential. "You'll need a printed, official record of the home's condition if you're to have any protection against future problems that result from aspects that were overlooked," says Ms. Kuhn.
A thorough report lists approximately 40 items inspected, including such major components as electrical systems, roofing, heating and cooling, plumbing, fireplaces and insulation as well as exterior elements like siding, chimneys, doors, etc. If subcategory items such as stove knobs, outlets and door locks are included, a report can exceed more than 400 items. A report also may indicate conditions that need immediate attention or that can be addressed in the future, helping the buyer to budget repairs or negotiate the sale price.
Avoid a conflict of interest.
Make sure home inspection is the only business your inspector is in. "The inspector is supposed to offer a credible, third-party assessment of the home," says Mr. Hendricks. "This person shouldn't offer to fix the problems found or recommend someone who can."
While home buyers should take advantage of the inspector's expertise, home-maintenance tips and quick courses on how to operate some of the home's major systems, they shouldn't be asked to hire the inspector or any colleagues or relatives to remedy existing problems.
Trusted recommendations.
Realtors refer many buyers to inspectors and may be a good first source. However, the realtor is typically an agent for the seller. Be sure to seek other referrals from more trusted resources. Ask friends or relatives about inspectors they've used and if they were happy with the outcome.
Training and credentials.
"Regardless of where you get a recommendation, check the inspector's credentials before you hire him," says Ms. Kuhn.
Twenty-five states have set up regulatory statutes or licensing laws for home inspectors, but these regulations can be limited in scope. "In many cases, anyone with minimal home expertise can hang up a shingle and become an inspector," warns Mr. Hendricks. "Make sure to look for an inspector with experience, as well as one with a professional association with a group that provides ongoing support, training and annual re-testing."
Contact your local Better Business Bureau and ask if any complaints have been filed against the inspector or the firm he or she represents.
Mr. Black didn't "inspect" his inspector beforehand, and it ultimately could have cost him thousand of dollars in roof-replacement fees. "We most certainly will next time," says Mr. Black. "I learned my lesson."
-- Ms. O'Mahoney is a free-lance writer in Bedford Corners, N.Y.
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