Home Inspections

The Home Inspection is done primarily for people who intend to purchase a particular home. Federal, state or local governments do not mandate this inspection. Do not confuse this with your State mandating that Home Inspectors be licensed. Years ago the lending institutions used to do the inspections themselves or cover the cost of the inspection. The borrower would not even receive a report on it.

Over the years the lending institutions transferred some of the cost to the borrower. An example of this is the home inspection. Since the borrower is now paying for the inspection it is widely believed that the inspection is done for them. The borrower expects that the inspection is there to advise them if they should purchase the home, things they should consider after they buy the home and assist them with the obtaining of the mortgage. The lending companies and the home inspectors perpetuated this belief. This was not the primary purpose of the home inspection.

This does not mean that the home inspection could not do what was mentioned above for the borrower. What it does mean is the purpose of the home inspection was used as part of the lending companies process in determining risks to them and not to the borrower. Since at this time there were no laws governing the home inspection, they could be done by anyone. Also people involved in this industry understood what the underwriter wanted. So when the home inspection cost was transferred to the purchaser of the property, the inspection report remained the same, along with its purpose. After the home is purchased the new homeowners review the home inspection report. To their dismay, they soon realize that this report has very little value to them at this point. What they see in these reports are roof is good, walls are good, etc.

If they were to read roof is bad or unacceptable, they would not be reading this report because they would not have gotten a mortgage for the home, unless the roof was repaired.. If the report would have said roof is acceptable, however, you should sister two by tens to the existing two by six rafters to strengthen the roof structure. In this case the lending companies would consider it risks to them and not approve the mortgage. This led to problems for lending companies, so transferring the cost of the home inspection to the borrower was supposed to not only reduce the lending companies cost but also give the purchaser of the property information so they can make the decision either to have the seller repair the defect, accept the defect and repair it themselves or not purchase the property. Unfortunately this did not happen. This was because the inspection report did not change.

Today with the passage of the "Home Inspection Professional Licensing Act" in many States, the report has shifted somewhat towards the purchaser of property. The Law varies from State to State, but they all seem to have the same elements in them. This includes what and how elements of the property should be inspected and reported. What the home inspector must and must not do. Furthermore, the home inspector must not only report the defect but must also report its implications. Though energy efficiency has impacted the cost of living in our homes today, it is not considered a material function. Thus it is not reported as such in a home inspection report. The passage of such laws are there to protect the purchaser of property and making them aware of conditions with the property.

Though this apparent shift towards the purchaser, there are limitations to the home inspection report because it is a cursory inspection. What this means is that no home inspector can evaluate each component of the property as professionals in that particular industry. For example, a home inspector may identify a defect in a heating system. In the report the inspector will state so but will recommend further evaluation by a heating professional to determine the appropriate course of action. The same is true with roofing, masonry, plumbing, electrical, wood destroying insect and other structural aspects of the property.

If the home inspector did inspect the elements of the property to that of a professional in each category, it would take several days to complete the inspection and cost considerably more than a $1,000. The home inspection report is still used today by lending companies to determine their risks but the decision to take appropriate action is determined by the purchaser. For example, the attorney for the purchaser after reviewing the report see that the roof is in need of immediate repair. The attorney tells the purchaser that the seller will be informed that the repair must be made before the purchase will go through. The attorney does not say to the client that if the mortgage application was submitted with this report, that the mortgage would not be approved. When it comes to energy conservation the home inspector is aware of making such comments on the report and they avoid doing so. What most home inspectors do is give general energy conservation tips and not anything too specific.

Let's say the report says the heating system is in very good condition, however, because of the age of the unit you should consider installing a high-energy efficient system that would save you money on your fuel bills. Though this is common knowledge, when entered into a report that is used to determine risks to a lending company, it will have a negative effect on that process. Some home inspection companies provide the borrower with some helpful hints to owning a home. This is usually very general, is given to all their clients and the Mortgage Company does not consider it as part of the inspection.

If you are considering purchasing a home in Northern and Central New Jersey and you want me to do the home inspection, you can contact me at (732)489-7454.

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