Imagine that you just purchased a house, having paid a home inspector several hundred dollars to perform an inspection of the premises in advance of closing.
Now you find you have a problem with your well - and the inspector says it isn't his problem. You also have a serious problem with the electrical wiring, which the inspector said was in good shape, and are looking at an expensive repair - but your contract with the inspector limits any damages from a bad inspection to the fee you paid.
Your real estate agent told you that this inspector was great. So how did things go so wrong?
In recent decades, home inspection has grown to become a very profitable business.
A good home inspection will examine a property for defects from the top of the roof to the bottom of the foundation, including the plumbing and electrical systems, heating, cooling, and ventilation systems, windows, doors, siding and trim, visible insulation, and the physical integrity of the visible structure.
A good home inspection will reveal those areas of a home in need of maintenance or upkeep, as well as those which may require more costly repair (such as a new roof or furnace), and the associated cost.
Even with the purchase of a new home, an inspection can be very valuable. Even the best builder can make a mistake, and the home inspector's report may allow for its prompt correction before closing or during the warranty period.
The biggest potential problem areas with home inspections are ensuring that the inspector is qualified and will be sufficiently diligent, and in making sure that all relevant aspects of the property are inspected.
If the person who is recommending your home inspection has a financial interest in the outcome of the inspection, they may refer you to an inspector who they know will overlook any problem that is so significant that it will cause you to cancel your purchase contract. You should get independent referrals to a home inspector, rather than relying upon the recommendations of those who might profit from the sale of a property, such as the property owner, or a real estate agent or broker involved in the sale.
You need to understand the scope of your home inspection, and what will be included and excluded from your inspection. If you will need to repair or replace a septic system, dig a new well, engage in a costly environmental clean-up project, or bring in an exterminator and repair insect damage, you will obviously benefit from knowing what will be required and its cost before you purchase a property.
For example, if you are purchasing a home with a septic field, you need to either hire an inspector who can inspect the septic system and perform a perk test or utilize a second inspector to verify the condition of the field.
The same applies to properties which may have environmental problems, such as a lot that has been used for illegal dumping, properties containing or which have ever contained above-ground or underground storage fuel storage tanks, and properties dependent on well water, or that may have an insect or termite infestation, or may have an issue with radon levels.
Inspectors are called upon to inspect homes that are often furnished, and usually have floor coverings. Many homes up for sale are also freshly painted.
While a good home inspector may at times be able to detect a problem hidden behind a fresh coat of paint or a carpet, many significant problems cannot reasonably be detected without looking behind a wall or under the floor covering - and it is an exceptionally rare homeowner who will permit that type of intrusion.
Also, if some of the utilities are off (e.g., gas, water, electrical), it won't be possible to perform a complete inspection.
Although you can expect to pay an additional fee, you may opt to have your inspector accompany you on a final walk-through in advance of closing, after the seller's property has been removed from the premises. You may identify problems at that time that were previously concealed by furniture or other objects.
When you hire a home inspector, you can take some simple steps to reduce the likelihood of future problems.
Understand the Scope of the Inspection
It is not unusual for a home inspector to exclude certain activities from the inspection service. For example, the inspector's contract may state that the inspector will not inspect wells, septic fields, or gas storage tanks.
If the property you are purchasing has ever had a gas storage tank, you should consider utilizing an inspector who knows about those tanks and the environmental problems they can create. There are also specialized inspectors who will supplement your primary inspector's work, for example by testing a well for its quality and rate of flow, or testing a basement for radon.
Be Careful With Recommendations
You may really like and trust your real estate agent, but recall that you are a client and the real estate agent will earn a hefty commission when the deal closes.
There are cases in which real estate inspectors have been discovered to have promised the real estate agents they work with that they will never cost the agent a sale - no matter how severe the problems are with a property. Additionally, even without such an agreement, inspectors know that if they cost a real estate agent a sale they risk not receiving additional referrals from that agent.
It is best to seek your referral to an inspector from a neutral person, and to hire an inspector who is not afraid of alienating the real estate agents who will profit from the sale.
Check the Inspector's Credentials
Don't hesitate to ask about the inspector's background, qualifications and experience:
- How is the inspector qualified to perform house inspections?
- Is the inspector certified by any organizations?
- How many years has the inspector worked in the field?
- How many home inspections has the inspector performed?
- How many inspections has the home inspector made of similar properties?
- Is the inspector insured?
- What type of report will the inspector provide - and is an example available?
- What is excluded from the inspection?
- What will be the total cost of the inspection?
- What guarantee does the inspector offer if a significant problem is later detected?
That last question is a bit of a trick question. Odds are the only promise is that if the home inspector fails to properly conduct an inspection, you can get a refund of the amount you paid for the inspection.
Read the Contract
When you sign a contract with a home inspector, make sure you read and understand any limitations on the work the inspector will perform, and any guaranties or warranties relating to the inspector's work.
Avoid Conflicts of Interest
In addition to the conflicts previously described in which the person recommending an inspector may have an interest in the outcome of the inspection, you should also be wary of an inspector who intends to profit from any problem discovered.
For example, if you utilize an exterminator to inspect for the presence of termites, the inspector has an incentive to find evidence of infestation and to sell you the extermination services.
While some inspectors will be honest despite a conflict of interest, you should play it safe by utilizing a home inspection service that does not also provide remediation services.