Tuesday, August 18, 2009

Criteria for Choosing A Qualified Home Inspector

I just saw a local news station video coverage on a homebuyer's horror story.

The home buyer encountered many home condition surprises and incurred about $11,000 in unplanned repairs. She cites the home inspection and inspector as missing these issues. She was very disappointed.

Without knowing the details, it’s hard to speak to this case. However, there are some very distinct considerations anyone hiring a home inspector should consider.

By comparing the following criteria and shopping for a qualified inspector an educated consumer should reduce the risk of disappointment or worse and should improve the likelihood of being very satisfied with your home purchase decision.

Realtors and Consumers should consider the following criteria at a minimum:


  • Do they carry general liability and errors & omission (E&O) insurance?

This protects the inspector, the referring Realtor, buyer and seller should physical damage occur or major devastating errors from the inspection.

None of the other criteria should be considered if the inspector does not carry proper and complete insurance.


  • What, if any, standard of practice do they base their inspections (e.g., American Society of Home Inspectors (ASHI))?

  • If another, how does it compare to the nationally recognized ASHI standard in terms of proven and broad state-level acceptance?


  • What source & level of training, experience & education do they have?

  • Are they CERTIFIED with a reputable organization such as ASHI (e.g., qualified with proctored exam, peer reviewed reports, 250 inspections min. level of experience) or simply an online internet test?

  • Do they maintain continuing education?

  • How many Home Inspections have they performed? Not counting years in related services, such as remodeling or construction trades.


  • How much time do they typically spend on an inspection?

  • What additional inspection techniques and tools do they use?


  • Are they impartial (e.g., independent of anyone with a financial interest in the results except the client)?


  • How are their reports presented, organized & written? How much detail?

  • Is it prepared on site? Do they include pictures, diagrams, etc.?

  • How well does the inspector communicate with all involved parties?


  • How do they present results? Are clients encouraged to attend the inspection?

  • What do their clients say? Do they guarantee client satisfaction?

  • How much is the fee and what is it based on? Is it competitive for the services and qualifications provided?


  • How important is this service to the client’s home buying/selling investment?

  • How do their qualifications compare to the price? - Client must decide.

This criteria with a comparative worksheet is available at http://www.id-inspections.com/, near the bottom of the home page.

Don't make an all too often mistake on a major purchase. Shop and compare when looking for a professional home inspector.

-Jon Rudolph
I.D. Property Inspections, inc.

Wednesday, August 12, 2009

Realtor Liability: What do you do to protect yourself and your clients?

How well have you really considered the liability you're exposed to in your business?

Do you know someone that's been sued, settled out of court or compensated someone else to avoid legal action, lawyer expenses and negative publicity? Have you encountered a situation that made you think, "That could've been me" or "that situation could have gone really bad?"

How often have these situations involved hidden surprises in the condition of a home, inaccurate or misunderstood disclosure or even a client's false expectations in their purchase?

Adding to the potential risk of liability is the fact that the State of Colorado and Federal Government does not regulate or control home inspectors or home inspections. In Colorado there is no governing set standard of practice. There are no governmental requirements for basic skills, training or proof of competency. No insurance requirements. There are no background checks on individuals that are literally given the keys to people's homes.

So, how closely have you looked into the liability risks of Home Inspections? What does this mean for a Realtor? What about liability to a home buyer or a home seller, your clients? Do home inspections potentially increase or decrease their liability in the transaction? Are there practical ways to minimize you and your clients' risk?

Although professional home inspection training emphasizes reporting techniques and language designed to minimize liability, significant liability risks still exist. This is where errors and omission (E&O) insurance can help offset the risk to all parties involved, not just the inspector.

E&O insurance not only protect the consumer from human and gross errors in an inspection, most policies carry a rider to indemnify the referring Realtor.
So why wouldn't a Realtor only refer professional home inspectors and insist that the inspectors also have E&O insurance? As a Realtor, do you? How many Realtors do you know that at a minimum only refer professional home inspectors carrying E&O insurance?

There can't be too many, as it has been informally estimated that only around 10% of the national home inspectors carry E&O insurance. This percentage is consistent with what I'm aware of among home inspectors operating in Northern Colorado.

Working with a professional home inspector that carries E&O insurance seems like an easy, responsible and prudent practice to protect yourself and your clients.

- Jon Rudolph
I.D. Property Inspections, Inc.