Upon Closer Inspection . . .
With the Right Person to Spot A Home's Flaws, You May Avert a Disastrous Deal

By Allan Lengel
Washington Post Staff Writer
Saturday, June 16, 2007

Phillip Carls, a home inspector, shimmies up the aluminum ladder and scales the roof, checking gutters and shingles and craftsmanship. Beads of perspiration roll down his forehead, and his exposed legs are full of fresh scrapes.

In no time, he's inside the empty, newly built house in Bowie, flipping light switches, opening and shutting doors, peeking underneath a sunken tub with a mirror, examining the electrical wiring in the dishwasher, climbing into a 98-degree attic.

After four hours, the flaw-hunter-for-hire comes up with four legal-size pages of problems, some minor -- construction debris in gutters -- and some pretty major: no support beneath the tub, inadequate attic insulation, roof problems that could cause a leak.

"I am shocked, I really am," says buyer Sheila Hopes, a lawyer, as she surveys the list during the final inspection a week before she's scheduled to sign for her $900,000 house. "If those things had gone unnoticed, it would have far exceeded $20,000" to repair.

Simply put: Picking the inspector can make or break you.

To that end, industry experts say, a Maryland law -- the first in the Washington region -- will benefit consumers by requiring that all home inspectors be licensed by Jan. 1.

The District requires no license. In Virginia, inspectors can opt for voluntary certification. In Maryland, out-of-state inspectors will need a Maryland license to work in the state.

"It will have an impact on the state of Maryland and the contiguous states," said Elwood A. Mosley, executive director of the Maryland Commission of Real Estate Appraisers and Home Inspectors. "It will protect the consumers by having minimum standards of practice."

Still, some industry experts fear that consumers may pick inspectors simply because they have licenses and overlook other key considerations.

"The license is the minimum set of standards, and people figure we're all licensed, we must be the same," said Frank Lesh, president of the American Society of Home Inspectors, which has about 6,000 members. "What happens is consumers get a false sense of security."

So what is it, then, that consumers should look for?

According to inspectors and real estate agents, inspectors should, ideally, belong to a nationally recognized association that calls for testing and a code of stringent standards and ethics, have a background in the building industry, have experience as an inspector, meet any licensing requirements, and come highly recommended by a friend or real estate agent.

That said, many agents, inspectors and associations recommend that home buyers pick their inspectors rather than have real estate agents do it for them.

"I would go and find my own," said Mallory Anderson, executive director of the National Association of Home Inspectors, which has about 2,000 members. "Sometimes [agents] just need to make that sale, so they'll pick an inspector who may or may not find things. They just want the sale to go through."

Agent Becky Plesset of Long & Foster Real Estate in North Bethesda said she gives home buyers the names of at least three inspectors. "I think you have to give them a choice and let them make a decision. If I give them one name and they don't like the person, they're going to feel I'm not serving them right."

Agent Maxine Schwartzman of Long & Foster in Bethesda sees it differently. She said she has confidence in certain inspectors -- Carls being one of them -- and has no hesitation about recommending one of them to a client. Carls has worked as an inspector for 25 years; before that, he was a project manager and supervisor for a builder.

"You really have to protect your buyer," Schwartzman said. "I do know you're supposed to give three names on a piece of paper, but that doesn't protect the buyer at all. I really feel it's my duty to recommend ones that are good."

She said some listing agents have expressed concern about using Carls for fear that he may find too many flaws and ruin a deal.

Still, she said, "when they buy a house, who do you think they call? They call Phil."

Joe Sagona of Trademaster Home Inspection Service in Olney, a former president of the mid-Atlantic chapter of the American Society of Home Inspectors, recommends that home buyers call different inspectors and ask what they plan to do. He also recommends asking many questions at the inspection itself.

"You want to be comfortable speaking with this person," he said.

In deciding which inspector is best for the job, "I think the key is experience," Sagona said. Even with experience, "no one can go into a house for several hours and come out with everything. It's impossible."

The Maryland licensing law was passed in 2001, but the state failed to fund its enforcement until last October. "From our perspective, we were very anxious" for the law to take effect, said Mosley of the state commission of appraisers and inspectors.

The law provides for a mechanism to investigate consumer complaints and requires a $400 license fee, at least 48 hours of a state-approved training course, a high school diploma and a minimum of $50,000 in general liability insurance. Some inspectors will be grandfathered in because of their years of experience.

Sagona echoes the sentiments of many other inspectors.

"It's the best thing that could happen to this industry," he said. "It's a means to determine some level of competency to give the public value. It will weed out" bad inspectors, he said.

But Lesh, president of the American Society of Home Inspectors, is more skeptical. He points to publicity in the past over new licensing programs in some other states that ended up attracting inspectors with little experience.

"Educational providers see this as an opportunity, and they start advertising" for inspection courses, said Lesh, a home inspector in Indian Head Park, Ill.

The new licensing requirement in Maryland comes at a time when many Washington area inspectors say they have seen a spike in work in the past six to eight months.

That contrasts with recent years when the home-sales market was hot and many prospective buyers passed up inspections to remain competitive in multiple-bid situations.

"I think every buyer wanted an inspection, but they couldn't compete if they put one in" the contract, said Jane Fairweather, a real state agent with Coldwell Banker in Bethesda. "As soon as contracts stopped being full price and multiple, home inspections were back, and I would say with a vengeance."

If a purchase of an existing home is contingent on an inspection, that inspection is usually done within a few days of the contract being accepted. Inspections are also done before drywall is put up on a new house or immediately before closing, like the inspection Carls performed in Bowie. People also hire inspectors before they bid on a house, or after living in one for several years, to take inventory of problems and wear and tear.

Sheila Leifer, an agent with Long & Foster in Northwest Washington, said that sometimes buyers use a critical inspection report to get out of a contract after deciding they no longer want the house.

"If someone really wants to get out of a contract, generally it's better to let them out," she said.

Prospective buyers who want to move ahead with the purchase despite flaws in the house normally present the inspector's list of problems to the sellers. The two sides then negotiate about repairs or price reductions.

Richard Fritts, a lawyer at Paragon Title & Escrow in Bethesda, said inspectors aren't perfect and can't catch everything. But a competent one should spot the obvious things in key categories such as electrical, mechanical, structural and plumbing.

He said most inspectors sign contracts that make them liable for negligence up to about $1,000 or the price of the inspection, usually $300 to $500.

"Proving negligence is a different matter, and it can be hard," he said.

Most inspectors have liability insurance in case they damage the home during the inspection. Lesh said about half of inspectors have errors-and-omissions insurance to cover costly oversights that could lead to problems like structural damage.

On occasion, a dispute can land in court, he said. But in most instances, the inspector who admits negligence might pay out of pocket for something such as repair of a tile floor or ruined possessions caused by a water leak, he said.

The problem with limited liability in the contract, Fritts said, "is that a court may or may not choose to enforce it, and it could be very expensive to go to court to find that answer. An inspector may decide it's less costly to have it fixed themselves."

Some real estate agents are adamant about getting inspections. "I wouldn't buy a house without an inspection," agent Schwartzman said. "I wouldn't do it even in a hot market. If they can't have an inspection, I don't want to know about the house."

Contrary to what home buyers might think, she added, "New-house inspections are more important. You can find very little, and you can find a boatload of things wrong."

On his inspection of that 6,000-square-foot house in Bowie on a recent Thursday afternoon, Carls was finding more than a little wrong.

Only 45 minutes into the inspection, he already had a long list of problems.

Carls stepped into the master bedroom, opened the cupboard beneath the sink, unscrewed a panel inside, and then used a long stick with a round mirror to peer under the whirlpool tub.

"This tub is not properly supported," he said. "There's nothing underneath."

"Not good," owner-to-be Sheila Hopes said.

As the list grew, Carls said: "The builder will have no problem with all these things. He doesn't want water floating in the basement."

The next day, Hopes had her final walk-through with the builder. He found eight problems on his own. Afterward, she handed him the four-page list of problems from the inspection.

"He said, 'Whoa,' " she recalled.

But she said he agreed to fix everything "without a blink of the eye."

Despite the scary list, she said, "I came out pretty good."