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King For a Day Series – Home Inspectors

If I were king for a day what changes would I make to the home inspection industry to better protect the public?

This is the 2^nd in a series of blog posts I am writing about how to better protect the public and improve the real estate industry. After selling many homes and being intimately involved in the process of working with the public in buying and selling residential real estate I have formed some very strong opinions about changes I would love to see in our industry.

As will be a common theme in these articles I would insert more accountability into the process.

For a start I would require that each and every home inspector must be licensed in any state they do business and require a minimum set of standards that each state. Hopefully they will go even tighter. In Hawaii home inspectors are not required to be licensed, have insurance and any experience. For the price of $19.95 to buy some cheap business cards, you too can be a home inspector in Hawaii. If they mess you up, they can just get on a plane and go to another state with the same lack of standards and start all over. Or they can just stay here and keep doing it.

A few more things I would add to the list:

Require errors and omissions insurance.
Have a state agency oversee the licensing and complaints. (No license in Hawaii required)
Require minimum standards to get a license. (Experience, school)
A license exam to prove they have the required knowledge. (Do they know the building or fire code for example?)
Add continuing education requirements to renew a license.
Nationally recognized designations, letting the public and others in the industry know if that inspector has professional development.
Not allow home inspectors to sell homes, mortgages or home owners insurance.

I would also have a standard industry report form for doing residential inspections and list of items that should be required for a proper inspection.

I know there are association groups within the home inspection industry. I would like to see them be more recognized and more active with the states to better assist in the creation of licensing laws and industry standards.

A gentleman came in my office one day a year or so back and gave me his business card. It was a new home inspection business. He looked real familiar. He used to be the on the local evening news.

He has no inspection of construction experience. He took a training class in another state that sold him a franchise of some type and gave him some software for creating reports. Now I am sure that the teacher in Nevada or wherever he took the two or three day class has no clue about our building or fire codes in Honolulu County. He probably never crawled under a house, stepped on a roof, checked plumbing or electrical and may or may not have insurance. It is not required here.

Can you see why the public needs more protection?

Other King For a Day Posts:

Posted by Randy L. Prothero - Hawaii REALTOR® on 10/29/2007 04:53 PM

Comments (15)

real estate etchics, real estate, hawaii, century 21, home inspectors, home inspections

Originally posted at: Hawaii Randy's Real Estate Opinions: King For a Day Series – Home Inspectors

This post has been included in Hawaii Information

15 Comments on King For a Day Series – Home Inspectors

OCT

2007

"In Hawaii home inspectors are not required to be licensed, have insurance and any experience. For the price of $19.95 to buy some cheap business cards, you too can be a home inspector in Hawaii."

Wooooo-HOOOOO!

Gonna get RICH, MAMA!

Mike - Isn't that scary? That is on of the many reasons why we as real estate agents really earn our money.

We have something called mrhandyman.com but I do not think they are advertising home inspections and for that price. I agree all entities of a Real Estate transaction should have some sort of licensing and education.

Who's snagging my "WooHoo?"

I'm with you all....EVERYONE associated with our industry and transactions needs to be licensed/insured/CE/the works!

How come the mortgage topic got so much attention? Can you imagine working on the other side of some of those guys? I CAN'T!

Neal - I do not see any other logical way to protect the public without licensing.

Sally - All I can say is they prove my point about the need for more public protection.

Randy I do not know about Hawaii, but here in Connecticut Realtors have a HUGE say on who a Buyer will use for their home inspection. The reason why is that most Buyers do not have a clue as to who to use for their home inspection and they will almost always go with who the Realtor suggests, at least that is the case with the Realtors that I have worked with. So here is an area of the Industry that Realtors here in Connecticut could play a major role in cleaning up,

My biggest problem these days with home inspections is that many times the Buyer does not want to have the house appraised until the home inspection has been done. This presents a problem for me because my company requires me to order the appraisal when I turn in the loan. If the home inspection is not going to be done for a week I lose that time in being able to get Commitment on the loan.

What I end up having to do some times in these situations is turn in the loan, and order the appraisal, but I tell the Appraisal to tentatively schedule the appraisal for after the home inspection, but not to do it unless he gets the go ahead from me. I don't like doing that because it leaves to much up in the air and open to miscommunication.

George - Most of my clients go with my recommendation for a home inspector. But what about those buyers not using a real estate agent? They are on their own. What if they mess up and miss something really major? Do they have proper insurance. They do not have a license so you can not go after them through the same channels as their real estate agent or contractor. It is a problem, that we as professionals no how to deal with, but what about the public?

The home inspection vs. appraisal is a standard situation for me. The buyers do not want to pay for the appraisal if they decide to pull out of the deal after the home inspection. The home inspection can be a renegotiation point in the sale. Once that is behind us we are hopefully in the home stretch. When I write a purchase contract I am sure to allow enough time for the inspections and the lender. Good communication between us makes it all go smoothly.

Randy, to your first point, that is the reason why when I Pre-Qualify a Borrower who is not working with a Realtor that I HIGHLY recomend that they get one and I offer to refer them to Realtors that I have a lot of confidence in. I warn them of pit falls that they can fall into if they are not working with someone who will look out for them during the transaction. But some do not take my advice, some how they think they are saving money. It is hard for me to feel sorry for them when things then don't go as expected. I am not disagreeing about the licensing and the standards that you are suggesting, but I do think that the industry has more control over home inspectors then it has over Loan Officers.

To your second point, I am happy to here that you allow time for that, I wish Realtors over here would do the same. I find myself all to often have to get my Appraiser and Underwriter to rush a loan because the Realtor did not take this into account.

George - The good agents know how long it takes for a transaction to be completed and always give the appropriate amount of time. If the time is to be shortened for any reason, I always discuss it with the loan officer.

OCT

2007

Yeah..... Just can't seem to get as excited about these guys, although I imagine that it's maddening to have Jethro Bodine show up with a look of murderous intent at the sellers... Donna Harris wrote a pretty funny blog Why Do Inspectors Have To Freak Out Buyer, in which she told this nightmare story. The brief excerpt below"

"inspector completely freaked my buyer out with the Pool. The inspector told my buyer that there had to be some type of plumbing issue within the walls of the spa and that the pipes were filled with air and they were leaking within the pool"

I commented that the Italian language has a word which means "Pipes filled with air, leaking into the pool" The word is: J-A-C-U-Z-Z-I

That is a good one.

You should pick on appraisers too! I had an experience where the appraiser that saw one of my properties WAS NOT LICENSED (I didn't know anyone else on the Big Island - I do now!). She was an apprentice. So the lender wouldn't accept it and we had to send her licensed boss out to the property to appraise again at his cost!

OCT

2007

Pete - That is ridiculous. The licensed appraiser should have refunded the money and had his license removed for sending a non-licensed person to do the appraiser.

I agree. I should have pushed the issue after it closed, but they were one of my offices contacts on that island and I didn't want to rock the boat. Although my boss at the time knew full well of the situation. They should have done something.

Pete - At a minimum I wouldn't use them again.

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