When Rick and Karen Hartford, a young Connecticut couple, first saw the 1924 colonial-style home they later bought, they knew it would need extensive rehabilitation. Before they committed themselves to the purchase, they hired a home inspector to give them an independent, third-party report on the condition of the structure and the mechanical systems.

The inspector, a retired contractor, assured them that the house was structurally sound but noted that there was a bit of wood rot caused by water damage. The electrical wiring, he reported, was of sufficient caliber that it would be easy and inexpensive to add capacity for their heavy-duty appliances such as the electric stove.

By the first week in their new home, the Hartfords were paying for the inspector's mistakes. The electrical service, it turned out, was only 30-amp adn the $75 electrical job they had been told to expect blossomed into a $550 rewiring. Within months, the roof that the inspector had assured the Hartfords was good for two years was leaking and had to be replaced, a job that cost $1,000 in materials and the uncalculated cost of their own labor. The garage roof, they soon learned, was "totally destroyed by carpenter ants" and also required immediate replacement. "If he had known what he was doing, he would have seen the piles of sawdust," said Karen Hartford.

The Hartford's experience is not unique. Home inspectors, who typically are hired by prospective buyers to examine a property and whose satisfactory report is often a condition of a sale, are entirely unregulated. Even those in the field concede that there are many unqualified and incompetent persons among the estimated 3,000 to 5,000 home inspectors operating nationally.

"Anyone who is out of work who has repaired a stove or who has built a house can be a home inspector. They just hang out a shingle," said Claxton Walker, a Potomac, Md., inspector.

To combat what one inspector called "charlatans and carpetbaggers," a handful of inspectors five years ago founded the American Society of Home Inspectors, a small trade group that they hoped would set a professional tone for the young industry. The society today is still a fledgling, with only about 250 members who come mostly from engineering or the building trades. The society's leadership is intent upon using its standards and ethical code to elevate industry practices.

Under society standards, a home inspection should, at the very least, include an examination of the central heating and air conditioning systems, electrical system, plumbing, roof, ceilings, floors, windows, doors, foundation and basement. In most instances the inspector should activate and operate mechanical systems, said John W.Paardecamp, a Springfield, N.J., inspector and the society's legislative chairman. A thorough inspection of a single family house should take about two hours, he added, and the client should always demand a written report. The society's ethical code includes provisions that a member may not serve two interested parties in the same transaction and that any report issued is confidential.

Questions of liability have arisen in many cases where something goes wrong after a satisfactory inspection report. Indeed, one impetus for forming the society was to help inspectors obtain what amounts to malpractice insurance, said Walker. Some inspectors offer warranties, usually for about $200 in addition to their fee, which typically ranges from about $100 to $250. Fees are generally determined by the size of the house, its value or by the hour.

Home inspection is a relatatively young business. Eight years ago, when Walker went into business for himself, there weren't enough home inspection services to rate a separate listing the Washington Yellow Pages, Walker recalled. Today, there are about 50 firms employing approximately 150 inspectors in the Washington area, he said. Before the growth of home inspection, only the most astute buyers would employ a builder or contractor to examine a home in much the same way the buyer of a used car would get a mechanic to look at the engine. Today, Paardecamp estimates about 7 percent of all resale of all resale homes are inspected and a growing number of sales are contingent upon a satisfactory report.

Its practitioners view development of the home inspection industry as an outgrowth of consumerism. "We came into being to combat the one-wayedness of deals with the lendor, broker, real estate agent on one side, and the poor little purchaser on the other side with on one to represent him at all," Walker said.

In the Washington area, with its frenetic real estate activity, about one-third of all resales have inspections, estimated Walker, whose onw firm conducts about 1,600 inspections a year. About 80 percent of his clients are prospective buyers, said Walker, but his firm is also called to make inspections for sellers who want their houses examined before they are put on the market and by condominium associations who want an independent examination before their building is turned over to them by the condominium builder or convertor.

Condominium conversions are a major part of business during the current sales slump, said Walker, and he noted that many conversions "may say new bathrooms but they don't mention the plumbing."

It is their potential for quashing deals that places home inspectors in what they see as a sometimes adversarial relationship with real estate brokers. Walker said that 88 percent of his clients buy the properties that his firm inspects, but added that, as an agent of the buyer, he can be a "thorn in the side" of the broker who represents the seller. Thomas Sprewer, director of community programs for the National Association of Realtors, said that his group has had little formal dealing with the home inspection industry, but considers that inspections generally are advantageous to both buyer and seller.

Nevertheless, some home inspectors are concerned aobut potential conflicts of interest arising when real estate brokers refer their clients to home inspectors. Home buyers, especially those moving from other areas, often are referred by brokers to lawyers, banks and other services. Such referrals are "the state of the art right now," said society founder Ronald J. Passaro, a Weston, Conn., inspector who added that "brokers who deal with home inspectors frequently have an idea of who's good."

Although many progressive brokers encourage home inspections, many agents, said Walker, "know where they can find a termite inspector who is not going to find termites and where to find a home inspector who may or may not make a thorough inspection."

Some clients of home inspectors even express reservations about the value of services performed by firms with an established reputation. One Arlington man whose future home was inspected by Walker said Walker supplied him with information he "pretty much could have figured out for myself." The homeowner admits the house he bought "was basically in good condition," but feels Walker could have pointed out "a couple of things" that later caused small problems.

Paardecamp said he is especially concerned because the current building slowdown may be causing an influx to the field of unqualified inspectors who are desperate for work. "The guy with the hammer and saw in the trunk of his car (who) can't get a job in a bad market, so as not to; lose his source of business, gives a good report in every case," he said. Referrals also can be legally risky for brokers who could be held liable if something in the inspection report later turned out to be incorrect, said Sprewer. "If I were a broker, I wouldn't want to be put in that position," he said.

The problems of finding a trustworthy, independent home inspection would be minimized if inspectors were licensed, some observers believe: New Jersey Assemblyman James W. Bornheimer, a Democrat form Middlesex County, for the third time has introduced legislation calling for licensure of the estimated 150 home inspectors in that state. The bill is pending in committee.

"There are people becoming home inspectors who have no qualifications at all," said Bornheimer. "Licensing will require certin standards and there will be an approved list published by the state of New Jersey." The bill is supported by the 17,000-member New Jersey Association of Realtors, although Executive Vice President Robert F. Ferguson said it is not a legislative priority. Nevertheless, he said, "If there are going to be home inspectors, it may well be in the public's best interest to have them regulated . . . . If I were in the home inspection business, I would welcome responsible regulation."

The New Jerseu bill has been a call to arms for the home inspectors society, which vehemently opposes many of provisions contained in the proposed legislation and contends it would overregulate the industry and make doing business impossible.

Society members are divided on state licensure. Although the society has taken no official position, it has drafted model legislation "out of self-defense" against the New Jersey bill, according to Paardecamp. Twenty-eight states currently are considering some sort of regulation of the home inspection industry, he said.

Membership in the society, its proponents said, assures the consumer that the home inspector is well qualified. Of more than 300 applicants for admission last year, only 27 were accepted, said Walker. Although the society has only three chapters -- one each in the Washington-Baltimore-Philadelphia, metropolitan New York and New England areas -- there are members in 26 states. For a roster of society members, write: American Society of Home Inspectors Inc., Suite 520, 1629 K St. NW, Washington 20006.