Home Inspections: more important now than ever
Guest blog by Harvey S. Jacobs, from the Washington Post
These two Latin words - which mean "let the buyer beware" - are taking on added significance in today's residential real estate market.
Recent changes to Washington area real estate forms have turned house sales into "as-is" propositions. Meaning the seller makes virtually no representations as to property condition. Thus, as a savvy home buyer, it is incumbent upon you to insist that your real estate agent include a well-thought-out inspection contingency strategy in your purchase offer and to have your prospective home professionally inspected.
There are several ways of contracting for an inspection. You can insert a clause that permits you to void the contract if you don't like anything in the inspection report in your sole and absolute discretion. You can insert a clause that permits you to void the contract only if your inspection report reveals a defective condition or building code violation. A third situation is that you may conduct an inspection for informational purposes only. In the last situation, you are required to go to settlement even if your inspection reveals problems.
But whichever clause you use, you are relying on a qualified home inspector to provide you with accurate data regarding your purchase. According to the American Society of Home Inspectors (ASHI), a home inspection is "a documented, professional opinion of a home based on a visual evaluation and operational testing of the home's systems and components to determine their current condition." A home inspection should cover at least the following: foundation, walls, roof, insulation, windows, doors, kitchen, bathroom, laundry, water heater, furnace, ventilation, air conditioning, electrical systems, plumbing and outdoor areas.
Hiring a qualified home inspector often starts by getting referrals from real estate agents, loan officers or real estate attorneys. As with all things in life, there are some very good inspectors and some not-so-good inspectors. Prospective home buyers should also check to see whether the inspector is certified, licensed and insured.
At least two national trade organizations accredit home inspectors: the ASHI and theNational Association of Home Inspectors (NAHI). To be accredited by these organizations at the highest level, the home inspector must pass training classes and the National Home Inspection Exam, complete 250 or more fee-paid home inspections and adhere to industry practice and ethical standards. Each association also provides for continuing educational requirements.
Virginia and Maryland home inspectors can be licensed. The District has no regulations or licensing requirements for home inspectors. To conduct a home inspection in Maryland, the inspector must have successfully taken at least 72 hours of classroom training from an approved trainer. The inspector must pass the National Home Inspector Examination and must maintain at least $150,000 general liability insurance coverage.
Maryland's licensing is regulated by its Department of Labor, Licensing and Regulation's Commission of Real Estate Appraisers and Home Inspectors. In Virginia, the licensing system is voluntary, but before inspectors can use the term "certified home inspector," they must have a high school diploma or equivalent, must have successfully taken 70 hours of classroom training from an approved provider, must have passed the National Home Inspector Exam and carry at least $250,000 in general liability insurance coverage. Additional information can be obtained from the Virginia Department of Occupational and Professional Regulation.
Home inspections can usually be scheduled within a week to 10 days of your request. Depending on the size of the home, they can take three to four hours. Costs vary, but expect to pay between $350 and $500. For that, you will get a complete on-site inspection and a detailed written report. Reports will vary from a 15-page handwritten form to an upscale 25-page full-color report, complete with digital photographs of each area inspected.
You should definitely accompany your inspector. Plan to wear clothes that can get dirty, as you may be crawling around dusty attics, damp basements or dirty garages. There are several reasons to accompany your inspector. First, if he locates defects, you will want to see their extent and nature. Often the inspector can advise you on the best means of fixing defects and perhaps even on the estimated time and cost required to repair or replace the defective system. With that knowledge, you can intelligently notify your seller what needs to be fixed or what dollar amount you will accept in the form of a repair credit. Your seller will then, by contract clause, have three days to respond.
Another good reason to accompany your inspector is to learn how to inspect and maintain your home in the future. Good inspectors will take the time to show you what to look for in areas such as the clothes dryer vent, furnace filters and humidifiers or dehumidifiers that require regular cleaning and maintenance.
Home inspections are not designed to cover certain conditions and elements that may require specialized skill, instruments or access. Thus, often home inspectors will recommend that additional inspection and testing be done by qualified inspectors for such issues and environmental hazards as: radon or other air-quality issues; energy consumption; termites and other invasive pests or vermin; the chimney, flue and liner; well-water potability; septic tank efficiency; asbestos encapsulation; lead paint; and mold.
All home inspection reports also contain disclaimers and limitations of liability. The disclaimers will notify you that the report is based on visual inspections and that no attempt at gaining access to any hidden areas was made. Concealed or latent defects are also excluded from the inspection. Virtually all inspection reports limit the inspector's liability to the return of his inspection fee.
Harvey S. Jacobs is a real estate lawyer in the Rockville office of Joseph, Greenwald & Laake. He is an active real estate investor, developer, landlord and conducts residential and commercial real estate settlements. This column is not legal advice and should not be acted upon without obtaining your own legal counsel.