What is a Home Inspection?

A paraphrasing of the definitions of home inspection by the various home inspection trade associations identifies a home inspection as:

…a non-invasive, visual examination of the accessible areas of a residential property, performed for a fee, designed to identify observed material defects, and that results in a written report. 

The requirements of a home inspection vary somewhat with the jurisdictional standards of practice (SOPs)– if any – with which an inspector must comply.

 What is a Home Inspection Report?

A property inspection report is a written record of the inspection company’s findings during an inspection. It is a collection of the inspection company’s opinions as opposed to a statement of fact, and that should be made clear to a client in your Agreement or/or report introduction.

How is report content determined?

Report content can vary according to various factors:

  • Jurisdictional requirements; typically, state regulations in states that regulate home inspection (some do, some don‘t);
  • Professional Standards of Practice (SOP). Many inspectors belong to professional organizations that have SOPs that serve as minimum guidelines that can typically be exceeded. Some states prohibit or regulate inspection of certain systems or components.
  • Business decisions. Inspection companies typically have a choice in what to include in the report. Decisions are often based on finding a balance between being competitive in the market and wanting to limit liability.
  • Climate zone/building practices. Content will vary with the types of systems and components encountered by inspectors, which will vary with climate zone and building practices.

What information is included in an inspection report?

Although the extent to which the information in an inspection report is standardized varies with jurisdiction and inspector preference, reports typically provide:

  1. An introduction including disclaimers and information designed to limit or guide client/report reader expectations;
  2. A written record of what was inspected;
  3. The inspection company’s opinions on relevant conditions observed;
  4. A summary of findings

Reports may include estimates for repair or correction and/or the results of ancillary inspections such as well/septic, sewer scope, radon measurement, etc.

What Purpose does a Property Inspection Report Serve?

Property inspection is consumer protection, but in addition to a buyer (who may also be – or become – the occupant) a report serves as a written record of the inspection, helping to help avoid misunderstandings or biased interpretations based on verbal description of the property condition.

In addition to a buyer, other participants or potential participants connected to the transaction may find the report helpful:

BUYER CLIENTS

 The report helps buyer clients in four ways:

  1. It helps protect make them aware of conditions or material defects at the property that may need to be repaired, corrected, replaced, updated, etc., sometimes at significant cost.
  2. It helps make them aware of safety issues and potential safety issues that may need to be mitigated.
  3. It may provide buyers with leverage in negotiating the cost, or a reduction of the property price, related to any needed work. And
  4. It helps buyers to make an informed purchase decision.

SELLER CLIENTS

  1. It makes sellers aware of conditions they might want to address before listing a home for sale to avoid problems identified by the buyer’s inspector.
  2. A clean report can serve as a sales tool.

REAL ESTATE AGENTS

Reports provide detailed information that help agents to:

  • Better understand property conditions and features to effectively market the property;
  • Better advise their client on setting a price and what repairs to be made before listing the property, and
  • Better understand what stance to take in the negotiation process.

CONTRACTORS

The report can give contractors a better idea about needed work than a phone conversation with a customer. This may allow the contractor to arrive at the property with the proper tools or components for repair, correction, replacement, etc.

OFFICERS OF THE COURT (arbitrators, attorneys, judges, etc.)

Having a report provides officers of the court with information supplied by a neutral third party inspector instead of claims made by those with varying levels of building system expertise that may have conflicting motives and perspectives related to the transaction.

MATERIAL DEFECT DEFINITION

Inspection industry SOPs typically require inspection reports to comment on material defects. The definition of a material defect in relation to home inspection various among Inspection organizations and government agencies but they’re similar. To paraphrase, it is:

…an observed condition that is a safety hazard, or a system or major component that fails to perform as designed.

This leaves plenty of grey areas! For example, many conditions that have been considered safe in the past are now considered potentially hazardous. This is the reason for changes in building codes over the years. Building codes which, of course, are concerned with safety.

Most of us also include in the report systems and major components that are functional and safe at the time of the inspection, but that may soon fail or become unsafe.

The result is that those who found home inspection businesses must decide what to include, how to express their opinions, and how they might best defend their decision if required to do so in court. Most of us use the opinions of experts in making those decisions, allowing us to support our opinions with those of credible sources.