As a home inspector in Columbus, Ohio I'd like to share a few observations regarding bank owned property.  It seems that almost half the homes I inspect these days are foreclosures.  Most of these properties have been shut down with the gas, water and sometimes even electricity off.  When buyers understand the limitations of inspecting the mechanical systems without the utilities on they generally would like to have them restored.  Often it can take weeks to coordinate getting these turned on.

The buyers generally must have the utilities put in their names for a day or two. The call is made to the gas or water company and it is assumed that everything is a go for the day of the inspection.  In my experience more times than not there are problems getting things turned on.  The gas company is notorious for spending about two seconds trying to open the lock box.  If it is not right in front of them and easily opened they are gone.  It could take several days to get them back out to try again.  By that time the water is probably scheduled to be turned off.  Sometimes the inspector must come back at his own expense to reinspect just to make things work.  No one wants to come out to the house on the scheduled time for the inspection spending time driving to the the property only to have the buyer cancel because the gas isn't on.

The fact that these properties are discounted from their pre slowdown prices attracts buyers.  Unfortunately you often get what you pay for.  People who are in foreclosure do not generally invest in maintaining their homes and many times substantial deferred maintenance is present.  Closing down a home for a substantial period of time can cause problems with mold and moisture.  Most of the banks have extensive disclaimers regarding mold and market the properties in as is conditions.  The irony is that they have created the very conditions that has allowed the mold to become a problem.  The cost of mold remediation done according to accepted standards is cost prohibitive to most buyers.

Many buyers come to realize that the discounted price may not represent such a good deal when the problems with deferred maintenance are taken into account.  Unfortunately bank owned foreclosure property will be part of the available inventory for at least couple of years.

David Tamny

Professional Property Inspection

www.worryfreeinspections.com

Home inspector licensing is in front of the Ohio legislature again this session.  A group of home inspectors calling themselves the Joint Legislative Commission has authored HB 257 with Representative Michelle Schneider of Cincinnati as the sponsor.

Currently there are 32 states with licensing laws for home inspectors with Florida being the latest after West Virginia to join the ranks.  This is not the first attempt to get something through the legislature with previous attempts in 1999 and 2006.  Neither of the previous bills got beyond the House Commerce and Labor Committee and it remains to be seen if this bill will make it through either.

Ohio lawmakers are somewhat reluctant to enact more government regulation when there is little demonstrated need in the marketplace.  Few consumers have really been harmed in a significant way by minimally qualified inspectors.  The amount of complaints with the Ohio Attorney General is minimal and so are lawsuits in the civil courts.  The one stakeholder group which has wanted to see home inspectors licensed for a long time is the Realtors.  They are concerned that home inspectors can continue to disrupt their transactions with no disciplinary measures other than the courts.  One person told me "we just want a way to discipline home inspectors who write bad reports".  I guess that begs the question what is a bad report?  Hopefully the requirement is not whether a deal has gone south.

A recent study was performed by the Ohio Division of Real Estate through Belmont Technical College.  The study surveyed home inspectors, Realtors and Consumers in both licensed and unlicensed states.  Their conclusion was that the level of home inspection quality was not improved by licensing laws.  HB 257 requires 8 hours education about the law, the passage of the National Home Inspector Exam (NHIE) and General Liability Insurance in the amount of 100,000.  Thirty hours of continuing education are required over a two year period.  It also requires 10 parallel inspections under a licensed inspector.

It should be no surprise that home inspectors are divided over this legislation.  Many experienced inspectors feel that the requirements are too low.  Those that want to see high professional standards feel that a law like this will decrease the quality of an inspection as consumers will believe that all licensed inspectors are competent to inspect.  Other inspectors feel that high requirements are too restrictive and create a restriction of trade forming unreasonable barriers to entry and any law no matter what the requirements is better than no law.  All in all this should make for interesting debate this fall when hearings begin in the Ohio House.  A copy of HB 257 as well as an analysis of key problems with the bill is available at www.ohioinspectorlicensing.com.

David Tamny

Professional Property Inspection

www.worryfreeinspections.com