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The Problems With Home Inspections

Dear Monty: You have written numerous articles over time about different problems with home inspections. We are near our savings goal and preparing to buy a home. What is your current opinion of home inspections?

Monty’s Answer: Home inspection laws came into existence because home sellers were either unaware of or hid the defects of the home, or they made inadequate repairs to get the best home price. Homebuyers called for regulation to protect themselves from buying homes with such defects.

My state of Wisconsin defines a “defect” as: “a condition of any component of an improvement that a home inspector determines, on the basis of the home inspector’s judgment on the day of an inspection, would significantly impair the health or safety of occupants of a property or that, if not repaired, removed, or replaced, would significantly shorten or adversely affect the expected normal life of the component of the improvement.”

Are Home Inspections a Good Idea?

The concept of a home inspection is an excellent idea. A proper home inspection by an individual trained in inspecting a home has several advantages over other options. In my opinion, a good inspector is one who consistently observes defects and material adverse facts, regardless of which party ordered the appraisal.

The Weaknesses in the Industry

Some weaknesses or flaws can be difficult for a home buyer to discover when choosing a home inspector. Like many service providers in the real estate industry, home inspectors are not all created equal. For more information, read my column “How Do We Go About Hiring a Home Inspector?” on my website, Dear Monty.

Over the past 30 years, as the inspection industry has evolved, I believe some home inspectors have unwittingly muted the value of a good home inspection to gain a competitive edge. Here are some examples:

No. 1: Some are so afraid of litigation they constantly suggest consulting a technician with particular expertise. Suppose the inspector is calling to consult a roofer, a plumber, an electrician, and a heating, ventilating, and air conditioning contractor. They can certainly reduce their potential liability and lessen the inspection’s value.

No. 2: Some dilute the value of the inspection by turning a nine-page inspection into a 30-page maintenance service manual. So instead of a report that specifically calls out the unsafe components or the material adverse facts, they go way beyond with potential maintenance items that may not appear for years. While many homebuyers like this information, in my experience, this type of inspection creates unnecessary confusion and concern to make the inspector look good and the house look bad. Most buyers know homes wear out. They only want assurance that there are no hidden surprises. My home state recently updated the law to make it mandatory for an inspector to use the word “defect” when calling out a defect.

No. 3: The inspector population is aging. Hearing, sense of smell, and eyesight tend to diminish as we age. Physically climbing around in the attic or going up on the roof can create an urge to take shortcuts. Aging is a factor because inspections are in-person visual observations only. It is no wonder drones are becoming popular in the home inspection industry.

The current practice of delaying the inspection until securing a buyer is a weakness. A minor shift in the practice would allow the seller to disclose, replace, or repair defects upfront. It would also benefit the buyer, as they would know about defects upfront and how they were dealt with. They could make a fully informed offer.

Richard Montgomery is the author of “House Money: An Insider’s Secrets to Saving Thousands When You Buy or Sell a Home.” He advocates industry reform and offers readers unbiased real estate advice. Follow him on Twitter at @dearmonty or at DearMonty.com. Email him at monty@dearmonty.com. Copyright 2021 Creators.com

Richard Montgomery

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