Las Vegas Homes and Real Estate News

Sudden rise in home inspections presents quality problem

Some home buyers turn to inspecting prospective purchase personally
By JAMES M. WOODARD COPLEY NEWS SERVICE

Mar. 05, 2006

A home inspection is increasingly becoming an integral part of home sale transactions. As many as 85 percent of total home sales in some areas include an inspection, according to the National Association of Home Inspectors, up from 5 percent in the 1980s.

Are those inspections really needed? Does the contracted service justify its cost? Are there viable alternatives?

Before addressing those questions, let's make it clear that a comprehensive inspection of a residential property before finalizing a purchase agreement is vitally important. That home probably represents the largest investment most people will ever make. Making sure there are no unexpected surprises is vitally important.

Most new buyers recognize those considerations and are signing inspection contracts in record numbers. Home inspections have grown to a $1.2 billion-per-year industry in a surprisingly short time period. That creates one of several problems within the business.

The rapid growth of this industry naturally attracts many new practitioners, individuals who want a piece of that moneymaking pie. Some of those "inspectors" have minimal or no background for performing professional inspections. Others, of course, are highly qualified.

As for costs, an inspection fee typically ranges from $150 to $600, depending on the prevailing rate in local areas and the size of the house. Some inspectors calculate their fee on the time they expect to devote to each inspection, generally figuring about $100 per hour. Other inspectors base their fee more specifically on the size of the house, typically $8 to $12 per 100 square feet. An overall average fee is probably about $400, plus additional fees for extras such as pools.

Is that cost justified? If a truly qualified inspector is selected, it probably is. There is, however, an alternative.

Some prospective home buyers are inspecting the property themselves, following guidelines established by seasoned professionals. Web sites are available with information to help guide consumers who want to inspect a property themselves.

For example, Freddie Mac offers a "Consumer Home Inspection Kit" on its Web site. The site recommends that a consumer inspection be followed by a professional inspection before the purchase contract is finalized.

Many sellers are undoubtedly satisfied with consumer self-inspection alone. Another Web site, this one from America's Doorstep, offers a "do it yourself" home inspection kit for $19.95. "Why spend $400 for a home inspection you may not need?" the company asks on its site.

Other similar sites can be found via an online search engine.

Before choosing a professional inspector, ask for recommendations. After selecting two or three good possibilities, check their qualifications and references carefully.

The key to an effective inspection is a genuinely well-qualified inspector. Belonging to an inspector association is fine, but that's not enough to ensure a quality inspector.

Builders soar on bird's comeback

I recently received a news release from the National Association of Home Builders, headed "NAHB Lauds Resurgence of Bald Eagle." My first thought: What do bald eagles have to do with home building?

The release focused on the announcement of the proposed removal of the eagle from the list of animals and birds protected under the Endangered Species Act. David Pressly, association president, explained his association's stand:

"The bald eagle is one of a few clear success stories from the Endangered Species Act, but it's a very important one. While pesticide use, particularly DDT, was responsible for the eagle's dwindling numbers, home builders have worked to help preserve their habitats when designing communities. Through the years, our members have worked with wildlife officials to protect this magnificent bird. It's been our national symbol, and NAHB's symbol for 60 years," Pressly said.

"With voluntary guidelines, home builders and landowners can continue their conservation efforts without the expensive and often protracted permitting process that often adds months and thousands of dollars to the cost of housing."

Builders expect revival of rental market

Q. Why aren't more rental apartments being built?

A. There will be more as the year progresses. Home builders are particularly optimistic about the multifamily rental market this year. There's currently a strong consumer demand for rental units, creating a growing potential for builders, according to the National Association of Home Builders.

"A balanced and stable multifamily market offers a range of options for people who want to rent an apartment home, and for those who want to buy," said Leonard Wood, chairman of the Multifamily Leadership Board of the home builders trade group. "The reports of rising demand for rental apartments and increased apartment starts indicate that this sector of the housing market is moving toward better balance."

All classes of apartments are exhibiting greater demand. The biggest increase is reported for top-tier Class A apartments, but demand is also high for both mid-range rentals and lower-rent apartments.

"Our survey of builders indicates such positive trends should continue over the next six months," said Dave Seiders, chief economist for the home builders trade group. "For the first time since the beginning of last year, builder expectations are rising substantially for every class of apartment building."

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