The following was presented to various chapters across North America by John Bowman, past Executive Director of NACHI. It is reprinted here for your use if desired.
How often have we heard that the Home Inspection Profession/Industry is new to the real estate world?
To this day, the home inspection profession is still considered a relatively young profession, but in reality, people have been seeking the services and advice of others about home purchases since — well, since forever. However, prior to the late 1960’s, early 70’s, that expert was usually a grandfather, father, cousin, uncle, or some other friend or relative who had some background or experience in real estate or construction. True that experience was limited. Normally these consultants or advisers had either already gone through the process of buying a home or remember helping their “Cousin Charlie: build a barn or an addition to the house. In addition people trusted or were dependent on the word of the realtors and their assessment of the home.
But those were simpler times. Beginning in the late 40’s, shortly after World War II, a huge nationwide demographic shift began and the “baby boomer” generation began. People began trading the farm life for the suburbs, which was closer to their factory jobs that offered stability and benefits. These “Blue Collar” workers began sending their children to college and from that came the next generation of upwardly mobile professionals. Professionals that were raised on the principle that “Knowledge is Power” and, if you get an education you can go beyond this factory life, etc. Which leads us to today’s generation, who are privileged to vast amounts of media and research by the creation of the internet.
In the early 70s home buyers began utilizing the services of general building contractors to perform pre-purchase inspections. The phrase “Contractors Inspection” was coined and many contractors began offering there opinions on the structural soundness of the home. But that was not enough for the buying public. Rising costs of construction and materials mandated that they also know about other systems of the house before they purchased it. It soon became apparent that a general knowledge of all the systems of the home was necessary to fulfill the demands of the consuming public. Gradually, the term, “Contractors Inspection” evolved into the term, “Home inspection”, a term that adequately described the evaluation of the entire home and all of its systems by an unbiased expert. The term “Home Inspector” aptly describes an industry expert/professional with the ability to examine all the systems of a house.
Some History Changing Events
1975 – A small group of concerned home inspectors formed a study group to troubleshoot inspection techniques and enhance their knowledge and professionalism. Up to this point, inspections had been performed on a very casual basis by a very limited number of individuals. This group later morphed into the California Real Estate Inspection Association (CREIA).
1977 (Some say 1976) – The American Society of Home inspectors (ASHI) was formed. In cooperation with CREIA the first Code of Ethics and Standards of Practice for Home Inspectors was developed.
1984 – In California the famous “Easton vs. Strassberger” court decision held that the duties of a real estate broker include “the affirmative duty to conduct a reasonably competent and diligent inspection of the residential property listed for sale and to disclose to prospective purchasers all facts materially effecting the value of the property that such investigation would reveal.”
This decision seemed unreasonable to ask, therefore, the real estate industry pushed, California Senate Bill 1406, which legislated to mandate disclosure in California. The disclosure laws required seller’s to tell homebuyers everything that they ‘know’ about the property being sold. This ranged from listing all items in the home that were found to be defective, to identifying items not functioning, or additions built without permits. The law also required that real estate agents perform their own “diligent visual inspection” and disclose any defect that they might find.
To circumvent this new law, and shield them from litigation, the California Association of Realtors altered their contract forms to include a provision for the homebuyer to hire their own professional inspector. Hence the home inspection business emerged on the west coast as an industry/profession. Since then, one state after another have adopted their own versions of California’s disclosure laws leading to the emergence and expansion of the Home Inspection Industry.
1985 – The State of Texas enacted the first “Professional Practice Act” regulating the home inspection profession.
1987 – The State of Texas began the requirement for the registration of Home Inspectors.
The National Association of Home Inspectors (NAHI) was formed.
The Ontario Association of Home Inspectors (OAHI) is formed as a Chapter of the American Society of Home Inspectors (ASHI), until 1994 when they became a self-regulating professional body under the Ontario Association of Home Inspectors Act. To this day OAHI is identified by ASHI as a Chapter.
1990 – The National Association of Certified Home Inspectors (NACHI) was formed. In 2007 they assumed the name T he Inter-National Association of Certified Home Inspectors (i-NACHI).
1991 – The State of Texas was first to enact a full licensing law for home inspectors.
2002 – More than 14,000 home inspectors had entered the profession nationwide. The Home Inspection Industry continues to grow and a professional, independent home inspection had now become widely recommended by real estate authors and columnists.
2007 – Recent estimates indicate that there are approximately 50,000 home inspectors in North America. (Some have even gone as high as 75,000).
The Present – Where are we now?
To begin we must take a look at some statistics:
One sixth of all Americans, an estimated 43 million people, move each year. (U.S. Census Bureau)
Approximately 17% of the total U.S. population moves each year, which is more than any other country. Australia ranks second in annual citizen moves with 10.4% followed closely by Canada. (U.S. Census Bureau)
The average American moves 12 times in a lifetime. (U.S. Census Bureau)
Almost half of all moves, an estimated 21.5 million people, occur between the beginning of May until Labor Day in September. (American Moving and Storage Association).
Moving is the third most stressful event in life following death and divorce. (Employee Relocation Council)
The typical moving customer is a married couple between the ages of 24 and 44, with one or two children between the ages of 2 and 11. (Mayflower)
These staggering statistics show that the need for professional home inspections is needed and warranted. We (meaning the home inspection profession) must take a stance to ensure the safety and well being of our fellow citizens, neighbors, children, elderly, etc. Educating the public should become our creed.
Public awareness begins with us. We must teach them that “What you don’t know can harm you”. Take the following and use it to your advantage to inform your future clients.
Houses degrade from the moment they are completed. And with human nature the way that it is, many people won’t fix their home unless they are forced to. Until the home inspection service evolved, houses were typically purchased in “as is” condition. This process continues from buyer to buyer or until eventually the house falls apart or a disaster occurs.
Occasionally, houses are fixed up before they are sold, but these are the exceptions and not the rule. Owners who decide to market a house rarely want to invest extreme amounts of time and money in it because they usually feel that they won’t get their money back from the sale. When they do decide that the problem must be addressed or fixed, they often times do it themselves (even though they may not quire understand the problem or how to fix it) or hire a not quite qualified unprofessional to do the repairs, which may create additional problems. This process is not new. The old Roman Latin saying caveat emptor or “let the buyer beware” is just as appropriate now as it was then.