An Ugly Side of Home Inspection

True story.

While conducting a home inspection on a particularly large property in Kalamazoo County, a local real estate agent decided to engage in some small talk. About home inspectors. It turns out that this particular real estate agent lives in the same neighborhood as a local home inspector. His opening comment was that this particular home inspector living nearby "likes to engage in politics."

"Politics?" I asked. Yes, politics, apparently. Or at the least, unethical business practices.

As the story was related, the neighborhood home inspector had a friend--who happened to be another home inspector--who wanted to purchase a house. The house was apparently too costly, so the home inspectors entered into an unwritten agreement that the neighborhood home inspector would inspect the house for the other inspector, documenting problems and deficiencies that did not exist, and exaggerating the problems that actually did exist. Thus the home inspector wanting to buy the house in question would be able to ask for reductions in the sale price. It was not revealed whether or not the property actually sold.

The truthfulness of this story could not be verified, but it would seem that this particular real estate agent had little or nothing to gain by relating this story to me. This story is not shared to point fingers at anyone. It is shared to illustrate yet another reason that home inspectors should be licensed in Michigan.

It is unknown whether the inspectors involved are members of any home inspection association, or whether any association they may subscribe to has any code of ethics, nor whether this particular real estate agent reported the inspectors involved to any association. Some might suggest that the real estate agent may have been sharing this story out of frustration that nothing could be done about the home inspectors in question, and that might be a valid point. Historically, home inspector associations have not made disciplinary records available to the public, so it is difficult to ascertain what associations do take action on complaints.

Though it is likely too late for the Michigan House to act, House Bill 4014 (2011) would license home inspectors in Michigan. Introduced by Democrat Richard LeBlanc, HB 4014 has been held captive by the House Regulatory Reform Committee (Hugh Crawford, Chair). A recent conversation with Representative Crawford's office will shed some light on some possible reasons why the committee chairman has neglected to bring this very important legislation to the committee's attention.

Slate Roofing

A caller several weeks ago inquired about inspecting a home with a slate roof.  The caller had been told by previous home inspectors that she had contacted that a separate inspection was necessary, and that it needed to be performed by a specialist in slate roofing.  She evidently had bought this suggestion hook, line, and sinker.

The truth is, any competent home inspector should be able to inspect a slate roof.  In this particular circumstance, the roof appeared to be an artificial, or manufactured, slate roof.  The roof shingles likely contained asbestos, based on the age and appearance of the shingles, and the rear of the house had been re-roofed using laminated asphalt shingles.

Slate roofs are not difficult to inspect if the home inspector is competent and knowledgeable regarding slate and manufactured slate roofs.  The inspection process itself is very similar to the inspection of any other type of roof; investigating for signs of damage or leaks, looking for missing or loose shingles, investigating for signs of improper installation or alteration, and so forth.

If a home inspector is properly trained, there should be no need for an additional roof inspection during the home inspection process.  The roof should be inspected as part of any competent home inspection.  Substantive training in home inspection will include slate roofing, so a good home inspector will be able to inspect and report on the condition of a typical slate roof.

Renegotiation A Problem?

In a recent Market Watch article (The Wall Street Journal), writer AnnaMaria Andriotis discusses the real estate recovery.  According to the article, which quotes the National Association of Realtors (NAR), 36% of real estate agents report "some kind of problem" between the buy-sell agreement and closing.  One item mentioned is "renegotiations of the sale terms."

Renegotiations typically result from new information revealed during the appraisal or home inspection.  The article specifically states "appraisals have been derailing home sales in cases when the appraised value of the home comes in lower than the purchase price the buyer and seller had agreed to."  What Andriotis fails to mention is that this often occurs when the appraiser is actually doing their job, and refusing to inflate the value of a property as was often done in the past, and was a primary cause of the real estate collapse.  The same may be true in the case of home inspections, where the home inspector properly and honestly reports the true condition of the property.

What Andriotis fails to address is the real issue, that the majority of properties on the market at present are in far worse condition than sellers or real estate agents are willing to admit, and when the actual value or condition is revealed to the buyer, buyers are now more willing to insist on renegotiating the buy-sell agreement or walk away.  As is said in negotiations, no deal is better than a bad deal.  Buyers are waking up to that reality.  The twist of the article seems to be that this is a bad thing.

The truth of the matter is that it is a good thing when a buyer attends to the details, which include researching proper permits for work done on the property, having an appraisal done by an honest appraiser, and having a thorough home inspection performed by a competent and professional home inspector who answers only to the buyer.  This is a reminder that, even in this day of high technology and open information, the warning "buyer beware" still holds true.  Honestly, it is more true today than it was in the past.

If you are purchasing a home, pay attention to the details.  It may save you more money than you could imagine.  Surround yourself with professionals with integrity who will focus on your interests only.  And still, beware.

Michigan Supreme Court Ruling

The Detroit News reported on 17 August 2012 that installers of appliances have no legal duty to warn homeowners about observed safety hazards.  The case involved installers of an electric dryer.  While installing said dryer in the home of a Clinton Township (Michigan) resident, the installers observed an uncapped natural gas line.  Some time later, the home owner opened a gas valve supplying the uncapped line.  An explosion resulted, severely injuring the homeowner and her children.

In a 4 to 3 ruling, the Michigan Supreme Court ruled that the appliance installers had no legal duty to warn the homeowner about the danger.  The court apparently did not comment on the installer's moral or ethical duty to warn the homeowner.  Nonetheless, the appliance installer could have avoided a lawsuit, and done the morally correct thing, by putting in place a policy that any uncapped natural gas lines be capped when installing an appliance.