Q DEAR BARRY: As an insurance agent, I've watched with interest the rapid growth of the home inspection business. Fifteen years ago, I didn't know what home inspections were. Today they seem to be center stage in every home purchase. Could you comment on some of the trends involved with this change? Why has the demand for home inspections increased so strongly among home buyers? Why has the number of liability claims against home inspectors also increased? And what role, if any, do mortgage lenders play in selecting home inspectors? -- Mark

A DEAR MARK: The influence of home inspections on residential real estate sales has grown markedly. Inspections were available in the 1970s and 1980s but were not common. By the 1990s, however, inspections had become a significant part of most transactions. There are two major reasons:

* Home prices have increased dramatically, raising the level of financial commitment that buyers make. Buyers typically seek the most expensive homes they can afford, leaving little or no reserves for repairs after the purchase. By disclosing unseen defects, home inspections provide a way to avoid unexpected costs.

* The litigious nature of today's business culture has made everyone involved in a sale more cautious. Agents and brokers have been particularly affected, which has made many of them advocates for defect disclosure in general and home inspections in particular. Today's agents routinely encourage home buyers to hire home inspectors. The old-fashioned "buyer beware" agents have resisted this trend, but the general movement toward inspection has been accepted by practical members of the real estate profession.

Accompanying the growth of home inspection services has been a parallel increase in liability claims against inspectors. Two circumstances stand out:

* Some claims are clearly because of inspector negligence. The rapid growth of the industry is one reason, because there has been an influx of inexperienced and unqualified inspectors. The result has been incomplete or incorrect reporting of property conditions. That leads to claims.

* Many claims, however, are frivolous. While unqualified inspectors are subject to claims due to incompetence, sometimes the best inspectors may be targeted even if they are not at fault. For example, a home inspector might be named in a lawsuit against a negligent termite inspector. In such cases, it might be cheaper for the home inspector to settle the claim than to fight it in court. Many home inspectors carry errors and omissions insurance to avoid such costs, but the deep pockets of an insurance company can be the magnet that attracts frivolous claims.

Finally, you asked about the role lenders play in picking inspectors. Surprisingly, most lenders show very little interest in home inspection findings. Whereas banks typically require a termite report, they seldom ask for a home inspection. This means that lenders regard termite damage as more significant than foundation settlement, roof leaks or the safety of electrical wiring. This is likely to change, but so far, change has been slow.

Barry Stone is a professional home inspector. If you have questions or comments, contact him through his Web site, www.housedetective.com, or send mail to 1776 Jami Lee Ct., Suite 218, San Luis Obispo, Calif. 93401.

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