Why is Every Experience I Have with Inspectors is Bad?
As a home seller, I despise the entire home inspection business. A potential buyer is interested in your house, you execute a contract, they engage a home inspector. The inspector comes out and the buyer receives a copy of the inspection and the resulting negotiations to complete repairs and reduce the price would have you believe the house should be condemned. Nowhere is there any obligation to share the report with the seller. Nowhere is there room to object to any of the findings. Nowhere is there room to correct errors. I’m amazed any houses ever get sold.
How did we get to this point? In Texas, home inspectors are licensed and regulated by TREC, the Texas Real Estate Commission. There are 3 levels of inspector, Apprentice, Real Estate Inspector, and Professional Real Estate Inspector.
An Apprentice is entry level and is required to train under a Professional Real Estate Inspector. After gaining experience and certain educational requirements, the Apprentice can sit for the Real Estate Inspector exam. To be a Professional Real Estate Inspector you must be a Real Estate Inspector first and meet additional experience and educational requirements and pass the exam.
Appraisers are required to follow a Standards of Practice “which provides the minimum standards an inspector must follow when inspecting a house”. The Standards of Practice lists the minimum requirements for real estate inspections. Per the Standards, “For the purposes of these standards, an inspection is a limited visual survey and basic performance evaluation of the systems and components of a building using normal controls that provides information regarding the general condition of a residence at the time of inspection. It is not intended to be comprehensive. It does not require the use of specialized equipment including thermal imaging equipment, moisture meters, elevation determination devices”.
The Standards go on to say, “These standards do not prohibit an inspector from providing a ‘higher level’ of inspection performance than required by these standards of practice or from inspecting components and systems in addition to those listed under the standards of practice”.
Therein lies the problem. Home inspectors compete for buyers, so they boast about how rigorous their inspections are. Identifying the most deficiencies and problems on their report makes them look more thorough and diligent than their competition. They reach for anything that might be or might have been.
1) It is not uncommon for an inspector to flag a house for having low water pressure. (City water pressure varies hourly depending on the height of water in water towers).
2) I was recently flagged for having a 40 year shingle roof that he recommended be replaced even though 3 roofing companies told me otherwise and the insurance company said there is no damage, there is no leaking, and it was unnecessary to replace at this time.
3) If there is any distortion to a wood floor, you will get flagged for possible underground water leak.
4) If your HVAC is older than 8 years, they will recommend replacing the HVAC system.
5) Oh, and the big one. If you have aluminum wiring that is properly pigtailed, you may get flagged to replace all the aluminum wiring in your house and have it replaced with copper because you run a substantial risk of dying when your house burns down.
(The International Association of Certified Home Inspectors actually quotes in their Facts and Figures, “On April 28, 1974, two people were killed in a house fire in Hampton Bays, NY. Fire officials determined the fire was caused by a faulty aluminum wire connection at an outlet)
Those are just the big things. At this point, the buyer is led to believe they will have an immediate repair bill of $30,000-$40,000 the day they close. Unsurprisingly, they are probably down the street looking at the next house.
Yes, these are big items. Yes, they ultimately need to be replaced when they break or no longer function. But no one in their right minds replaces big ticket items before they cease functioning. The fear inspectors instill in buyers needs to be controlled.
How can this be changed?
1) Sellers need to be allowed to provide feedback on the report to the inspector before a final report goes to the buyer;
2) Sellers need to be allowed a copy of the final report;
3) Delete Section 7 of the TREC Seller’s Disclosure Notice;
4) STANDARDIZE the methodology for all appraisers.