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Employees
General
Formal,
structured home inspections began to occur in the United States in the 1960's,
probably due to a growing consumer consciousness and self protective instinct.
Industry growth has been fueled by numerous court rulings in recent years, that
have given more protection to property buyers. In the old days, sellers
were not required to disclose defects or problems with the property and the
buyer had little recourse after the transaction was closed. The buyer was in a
position of "buyer beware". Nowadays however, buyers are more
sophisticated, and those that order home inspections are in a position of
"buyer be aware", allowing them to know the condition of the
property prior to consummating the sale.
Purpose and Scope of Home Inspections
A standard home inspection is a cursory, visual
inspection of the property components to determine the inspector's opinion of
general condition and operability. Only the visible and readily accessible
components are inspected and reported on. Inspectors typically do not
disassemble components, move furniture to gain access to components, or perform
demolition to gain visible access to components. Deactivated systems are
generally not activated by the inspector. Inspections are not intended to
determine compliance with building codes, zoning laws, etc. Unless
specifically contracted for separately, a standard home inspection does not
usually include environmental testing, pest inspection, measurements, cost
estimates for repairs, or inspection of ancillary items such as window
coverings, phone wiring, security systems, landscaping, sprinkler systems, wells
and septic systems, swimming pools, detached buildings, etc.
The home inspection is performed by the inspector exclusively
for the client, typically a buyer with a contract on the property.
Frequently the inspection report is used by the client as a negotiation tool in
the sales transaction process. Most inspectors have their client(s) read
and sign an agreement form describing the "purpose, scope, limitations and
conditions" of the inspection, prior to beginning the inspection.
Common Misconceptions about Home Inspections
Many homebuyers have misconceptions about what constitutes the "purpose and scope" of a standard home inspection. The following are common misconceptions that people may have about home inspections:
"Warranty" - Some clients will feel that an "acceptable rating" of a component constitutes a guaranty that the component will not fail in the near future. However, the home inspection and report do not constitute a warranty on the property or its components. In fact, the report constitutes the inspector's opinion of the condition of the component at the time of inspection, based upon the evidence encountered and the limitations of the cursory inspection techniques employed.
"Compliance with building codes" - The inspection is not intended to certify compliance with building codes, zoning regulations, protective covenants, etc. Building codes are constantly being updated, and vary from area to area. It would be impossible to know all the codes that were in effect in a given area at the time of construction and/or remodeling. The inspection is to determine the operability and condition of the components, not whether or not they meet codes of yesterday or today.
"Appraisal" - The inspection does not determine market value of the property. An "appraiser" inspects the home to determine its market value. An "inspector" inspects for condition. Appraisers take into consideration the general condition of the home in determining value, but their inspection is much more limited in scope than a home inspection.
"Seller 'must do' list" - Some "buyer" clients think that the inspection report constitutes a list of repairs that the seller must legally perform in order to sell the house. In fact however, what the seller "must do" is determined by the "contract for sale", by and between the buyer and seller. In most cases, any items discovered in the inspection can become a matter of negotiation, at the buyer's option. The buyer may be allowed, by the terms of the contract, to cancel the purchase agreement should the inspection report be unsatisfactory to him/her, or if negotiation based upon the report are unsuccessful.
Types of Home Inspections
The type of inspection performed for a client depends upon the "degree of certainty" or "confidence level" desired by the client, relative to the assessed condition of the property. In many cases the assessed condition may actually be different than the true condition. The accuracy of the assessment depends upon the inspection techniques utilized, the evidence available to the inspector, the experience of the inspector, and to some extent the actual condition of the property components.
Technically Exhaustive Inspection - This is the only type of inspection that can result in a near "absolute degree of certainty" as to the true condition of the property components. This type of inspection is very rare in the United States (but common in parts of Europe) because it is very time consuming (typically requiring 2 weeks or more), very expensive (minimum of $3,000), and it requires destructive measures to expose concealed components. Normally included in the inspection is soil sampling and testing, materials sampling and testing, etc.
Standard, Cursory Inspection - For most clients, a technically exhaustive inspection is not practical or economically feasible. Yet it is desirable to have at least a "reasonable degree of certainty" as to the condition of the property components, especially before purchasing the property. Hence the most popular inspection performed in the US is the standard, cursory inspection, which it is normally referred to as a standard home inspection, or simply a home inspection. The standard home inspection is primarily a visual inspection, with no exposing of concealed components, no sampling and testing of soils and/or materials, and no detailed analysis or remedial design. Mechanical, electrical, plumbing, moving parts, etc. are checked for operability and readily apparent defects, using visual techniques and simple testing instruments only. Standard cursory inspections typically take from 2.5 to 4 hours for an average home, and typically cost from $300 and up for a quality inspection.
Cursory-Plus Inspection - This level of inspection involves more technical testing and analysis than the standard home inspection. While it is still cursory in nature, the structural, mechanical, and electrical systems receive a higher level of attention. The structural portion of the inspection would include measurements and calculations to quantify deflections or other movement, including checking of adequacy of the structural members. The mechanical portion of the inspection would include measurement of electrical current, air flow, and temperature differential, as well as determining the adequacy of the heating and cooling plants for the property. The electrical portion of the inspection would include load calculations to determine the adequacy of the service, electrical panel, etc., as well as performing load calculations on individual circuits. Cursory plus inspections take from 6 to 8 hours depending upon the size and condition of the property, and typically cost from $800 and up. This type of inspection, however, is rarely requested as the standard, cursory inspection is predominant in the industry. Unfortunately, many people make their decision based solely on price, assuming that all inspectors are the same. We frequently find major problems in houses that were previously inspected by "others" and wrongly given a "clean bill of health". Good inspectors keep things in perspective and focus on the major problems found in a house, thus saving the client from making big mistakes.
Types of Home Inspection Clients
Property Buyers - Most home inspections are
performed for prospective buyers of homes. The buyer will frequently order
the inspection prior to consummating the purchase agreement. This is
typically referred to as a "pre-purchase" inspection.
Property Owners - Occasionally the owner of a property
may order an inspection. The owner may simply want to know the condition
of the property and what repairs may be needed to maintain the property.
Sometimes the owner wants to know this information because he/she is thinking of
selling the property and realizes that the future buyer will probably also order
an inspection. The seller then is pre-informed as to what may need repair
or replacement, and he/she can then either address the items beforehand, or
accommodate them in the pricing of the home. There will also be occasions
when the owner will order an inspection to get a second opinion on issues raised
by another inspector, or by an insurance agent.
Others - Occasionally a lender may order an inspection
on a property that has questionable integrity as discovered by an appraiser.
We have also performed numerous inspections for real estate agents that wanted
to know the condition of a property prior to spending time and money marketing
the property. Property managers will occasionally order an inspection to
stay on top of maintenance.
Types of Home Inspectors
There are two basic types of home inspectors: qualified,
and non-qualified.
Non-Qualified Inspectors - There are non-qualified
people in all areas of business and the home inspection industry is no exception.
Since most states do not license or regulate home inspectors at this time, there
is a proliferation of non-qualified inspectors in the marketplace.
Qualified Inspectors - It takes years of experience to gain
familiarity with the multitude of construction techniques and materials used
over the past 100 years. A good inspector will have that kind of practical
experience, along with some engineering, architectural, or construction
experience.
Types of Home Inspection Reports
Verbal Report - As the name implies, there is no
document provided by the inspector for this type of inspection. Frequently
the client follows the inspector and takes notes of pertinent issues.
Unfortunately, there is no official record of the findings for substantiation of
claims with this type of report. In my opinion this type of inspection
should be avoided.
Checklist Report - This type of report is convenient and easy for the inspector to fill out, but fails to give adequate explanation to the deficiencies found. Only if there are very few problems discovered is this type of report adequate.
Checklist with Commentary Report - This type of report solves the problems associated with the "checklist only" report, allowing the inspector to describe the deficiencies and make recommendations for repairs. This type of report is also preferred by most clients and agents over narrative reports, as it is typically prepared on-site, thus saving the client valuable time waiting for the report to arrive in the mail. Since the content of the report is essentially the same as for a narrative report, and since the client gets his/her information immediately, this is the type of reporting system that we prefer to use.
Narrative Report - This type of report is generated by
typewriter or word processor, and is a very professional looking document.
Many home inspectors insist on this type of reporting system. However, the
time involved in producing the report is a drawback to the "buyer client
" who is commonly under a tight schedule for responding to the seller.
Real Estate Agents and the Home Inspection Process
In most real estate transactions, the Real Estate
Professional is the "pivot person" around which the entire process
revolves. In today's complex market, the Real Estate Professional is a
vast referral resource that homebuyers heavily depend upon. Most Real
Estate Professionals have information on lenders, inspectors, engineers,
contractors, designers, handypersons, etc. that a homebuyer does not have time
to compile. When it comes time for the Home Inspection, naturally the
buyer asks for recommendations from his/her Real Estate Agent.
Because of the "Inspection Provision" in most Real
Estate Contracts, Real Estate Professionals generally recommend that the
property be inspected by a third party professional. Reputable agents only
refer qualified, established inspectors. There are a growing number
of agents that only refer Professional Engineers to perform home inspections,
since Professional Engineers are licensed and registered by the State(s), while
Home Inspectors are not licensed in most states.
Choosing a Home Inspector
To paraphrase a popular real estate idiom, the three most
important parameters to use in choosing a home inspector are experience, experience,
and experience. Unfortunately, many people make their decision
based solely on price, assuming that all inspectors are the same. We
frequently find major problems in houses that were previously inspected by
"others" and wrongly given a "clean bill of health".
Good inspectors keep things in perspective and focus on the major problems found
in a house, thus saving the client from making big mistakes.
When interviewing inspectors the following items should be determined:
-
The inspector's background - education, training, construction experience. Ask for a resume.
- The number of years the
inspector has been performing home inspections. Ask for references from
other clients.
- The number of home inspections
performed to date.
- The professional status of the
inspector - i.e. Professional Engineer, Registered Architect, Contractor,
Certified Inspector, etc., and what societies/associations the inspector belongs
to.
- The average length of time the
inspector spends performing an inspection.
- Find out if the client is
allowed to attend and participate in the inspection.
- The type of report system used
and how soon it will be delivered.
- The types of insurance carried.
- The fees charged for inspection
services.
Home Inspection Societies and Associations
PEHIA - Professional Engineer Home Inspectors of America. PEHIA was founded in Denver, Colorado in 1993. PEHIA provides training to Professional Engineers nationwide who are interested in providing home inspection services. Membership in PEHIA is restricted to Professional Engineers.
NABIE - The "National Academy of Building Inspection Engineers". NABIE was founded in 1989, and is a charter affinity group of NSPE (National Society of Professional Engineers). Membership is restricted to professional engineers who are members of NSPE (and architects who meet certain requirements).
ASHI - The "American Society of Home Inspectors". ASHI was formed in 1976 as a not-for-profit professional society, by a group of home inspectors that desired to establish a "Standards of Practice and Code of Ethics" for the industry.
SPREI - The "Society of Professional Real Estate Inspectors". Founded in 1990, and similar to ASHI in terms of "code of ethics" and "minimum inspection standards".
NAHI - The "National Association of Home Inspectors".