How To Protect Yourself from a Home Inspection Scam

And that’s just the scams that were reported. Your best bet is to arm yourself with knowledge to make sure nobody can take advantage. This article will focus on one specific scam – the home inspection scam – but you should also learn how to avoid other real estate scams. In this case, we should start by explaining what a home inspection is.

What Is a Home Inspection?

A home inspection is an inspection of the current material condition of a property. A home inspector will inspect the fire and safety conditions, the HVAC system, electrical work, plumbing, water, sewage, and look for any issues that could affect the value of a property, and make a report on the findings.

It should be noted that a home inspection is not the same as a home appraisal. A home appraisal is used to determine the fair market value of a property, accounting for factors like the location, the square footage, the current situation in the real estate market, etc.

A home inspection, on the other hand, is specifically done to determine the current condition of a property and does not account for the other factors. In short, a home appraisal assesses the value of a house, while a home inspection finds out what needs to be repaired. That is, when it is done properly – and that’s how we get to home inspection scams.

How Home Inspection Scams Work

This scam usually targets buyers, but sellers aren’t exempt. A buyer or seller home inspection scam is a home inspection that is performed poorly, either intentionally or due to negligence, often with unnecessary costs added on. Here are the three most common methods:

Home Inspection Scam Method 1: Intentionally Performing a Bad Inspection

This type of home inspection scam is the most malicious one (but fortunately not very common). In this case, your real estate agent has very close ties with a home inspector. They recommend them and the inspector intentionally overlooks problems with a house when they are hired. Now, why would they do this?

Because the agent won’t make his commission unless the sale goes through. So they recommend a home inspector that ignores problems in order to make the sale go smoothly. The best-case scenario here is that you sniff out that something is wrong and hire another home inspector (but even that entails paying a new fee).

The worse option is that you buy the house only to find out that there are many more issues than was presented, so now you need to pay thousands more in repairs than you anticipated. So, how can you protect yourself?

Get an independent home inspector unless you are 100% sure that your agent has your best interest in mind.

Home Inspection Scam Method 2: Lack of Training/Intent to Do a Proper Inspection

Some home inspectors may not scam you out of malice, but due to a lack of training or intent to do a proper inspection. However, the end result for a homebuyer is the same, regardless of the motives – you get an unprofessional inspection done that doesn’t uncover the problems of a home.

One of the issues is that many states have no formal state-issued licensing for home inspections. Many for-profit and non-profit organizations provide certifications for home inspectors, but there are no unified legal requirements to become one. Further, some states do not even require a home inspector to have a license of any kind.

For instance, a home inspector in California is not required to acquire a license. There is no legislation that regulates home inspector licenses or requires licenses to be state-issued. The California Trade Practice Act of 1996 (7195 – 7199), alongside some other non-specific legislation and case law, regulates the ethical standards that need to be followed during a home inspection, but there are still no prerequisites on who can perform the inspection.

Even in those states where training is required to get a home inspector license, the training is often minimal. In practice, this lack of regulation and training can lead to your home inspector being ill-equipped to do a proper inspection.

A home inspector may only do a visual inspection, without delving deeper to uncover the true problems. In accordance with many state laws, that is often the only thing required of them. They may only inspect your roof from the ground, without climbing on a ladder to do a proper inspection (and fixing a bad roof can cost you thousands of dollars).

They may even lack experience with new homes. In-depth inspections are often performed on older homes, so some home inspectors may assume that new homes have no issues. There is no reason to believe this is always the case, so an inspection should still be done.

Further, they may not know the local building codes. Because no legislation stipulates that home inspectors must have current knowledge on building codes, their knowledge may be outdated. So, what can you do to make sure you get a proper home inspection?

• Hire an inspector that is certified by high-authority bodies or comes with excellent recommendations (even the states that do not have state-issued licenses have some types of organizations that license home inspectors; e.g. the two largest ones in California are the American Society of Home Inspectors and the California Real Estate Inspection Association).
• Get it in writing that a full home inspection will be performed.
• Get it in writing that the inspection performed will be accurate.
• Hire an inspector that has errors and omissions insurance (even the best home inspectors can make mistakes so E&O insurance lets them pay for repairs if they miss something).

Home Inspection Scam Method 3: Additional Costs

The final home inspection scam method involves hidden costs and this one is rather straightforward. A home inspector will give a low rate when offering their services. But that rate suddenly increases when they come to do the inspections.

One example would be that their offer only included a visual inspection. So when they come to your house and you want a full inspection done, the rate dramatically increases. The new costs may be double that of what you originally expected.

To protect yourself, make sure you know exactly what the home inspector will do before you agree to an offer.

Additional Issues

The trouble you could have with home inspectors doesn’t end there. A proper home inspection entails that your inspector takes a hands-on approach and checks your home in detail. During the inspection, they may actually cause damage to your house.

Under normal circumstances, home inspectors are not liable for the damage they cause. And there is no point in getting a home inspection if you’re going to end up paying hundreds or thousands of dollars for new repairs.

Get it in writing that your home inspector will pay for any damage they cause.

You Can Be a Target of Real Estate Scams Even if You’re Not Buying or Selling

A home inspection scam usually targets buyers or sellers, but you could be targeted even if you have no intention of buying or selling property. Two home inspection scams have recently become popular:

Home Inspection Robocalls Scam

You might get numerous calls that you need to get a home inspection done but that it will be free. Often, the reasons they give for the inspection is something along the lines of – they know your home is damaged/you live in a natural risk area and your city requires a home inspection.

Home inspections are not free. A home appraisal might be and this is where they want you to get confused and ignore the warning signs. The scammers’ intention is to get access to your home to take inventory or even steal items.

Home Inspection Fire Scams

There are many reports that home inspection fire scams have also been on the rise lately. In short, scammers come into a building without a prior appointment, present themselves as fire inspectors, pretend to do a safety inspection, get your signature that the inspection was done, and send you a bill in the mail.

The scammers will often have fake uniforms and badges, so spotting them may be tricky. To protect yourself, don’t let anyone into your home until they give you the proper identification and you check with the appropriate authority. Reputable companies will rarely go door-to-door offering fire inspections services.

Can You Sue a Home Inspector?

Yes, you can sue a home inspector for negligence or for not honoring their contract. However, to prove negligence, you will often need to prove that the inspector did something that they should not have done and that it directly caused you damage.

You cannot win a lawsuit against your home inspector if they performed a professional inspection and acted with due diligence, and the inspection made the buyer no longer interested in buying your home. They are not liable for a deal falling through in such cases.

The Simplest Way to Avoid Home Inspection Scams When Selling a House

If you are selling your house and worried about a home inspection scam, contact SleeveUp Homes. We will buy your house as-is for cash, so you don’t need to worry about a home inspection.

Additionally, because you are selling the home directly to us, you won’t be paying any agent fees, on top of not worrying about a home inspection. SleeveUp Homes offers top dollar and there are no hidden costs. But don’t take us at our word – request a free cash offer and see how much you can get for your property.