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HOME INSPECTION SERVICES By Elizabeth H. Cottrell, IAHBE Staff Writer "Home is where the heart is." With home ownership being a priority for millions of families and individuals, a home is often the largest single investment most of us make in our lifetime. While home cost averages vary greatly throughout the world, even throughout the United States, the national average U.S. home price in 2002 was $291,097 according to Coldwell Banker's 2002 annual Home Price Comparison Index (HPCI). This was a 7% increase from the year before. When so much money is on the line, it's no wonder that home buyers want to make sure that they are not buying—and lenders want to make sure they're not financing—any kind of problem in the way of deficiencies, infestations, water damage, structural damage, contaminated water, septic challenges, or any number of other problems. More and more, home buyers, realtors, and lenders are turning to the services of a Home Inspector for help in evaluating a home. The business of Home Inspection began in the 1970s in the U.S. and has taken off as real estate prices have escalated astronomically. Numbers are still growing, but the American Society of Home Inspectors (ASHI) estimates that 77% of the homes sold in the United States and Canada today are inspected prior to purchase. The career seems to still have plenty of room for growth. If you have a background or interest in anything related to construction or similar fields, Home Inspection may be something you should consider. The basic work is done on site, so the business of Home Inspection can easily be run from a home-based office. For the more entrepreneurial home inspectors, there is additional opportunity to expand your home inspection business services to include commercial inspections and expert witness testimony. Radon, carbon dioxide, asbestos, mold, lead-based paint, septic systems and indoor air testing—even pool and spa testing—are some of the services that home inspectors can provide for additional fees. According to ASHI, "the financial investment and overhead needed to run a home inspection business are small compared to other businesses, making this a lucrative small business opportunity." What It Involves… According to the American Association of Home Inspectors, "A home inspection is a documented professional opinion of a home based on a visual evaluation and operational testing of the home systems and components to determine their present condition." A home seller might hire a Home Inspector to provide information that will help him determine a realistic price for the home. A home buyer might hire a Home Inspector to ensure that there are no hidden problems. Real estate agents will often be in the best position to recommend a Home Inspector to either a buyer or a seller. Banks or other lending institutions may require an inspection before they are willing to finance a mortgage. As described in the Allied School's Home Inspection course description, "The home inspector must be able to recognize any condition that could cause problems for the potential home owner. Home inspectors need extensive knowledge in many areas of residential construction such as: soils and foundations, wood and construction, roofing, plumbing, electricity, heating and ventilation, air conditioning and heat pumps, appliances, swimming pools and spas, termites and wood-destroying insects and environmental considerations." The typical day for a home inspector involves lining up work with potential home buyers, sellers, and real estate agents, making home inspections, and writing reports. The ASHI Website offers some excellent details about the career: http://www.ashi.org/. Advantages to the Home Inspection profession include excellent income potential, physical activity, variety of clients and facilities, and much outdoor work. Disadvantages would include the dependence of your income on the real estate market in your area, the emotions of buyers and sellers, the possibility that real estate agents might feel threatened by what you might find, and the potential liability if you should make a mistake or miss something. Requirements/Licensing Credibility is a major key to success in the Home Inspection business. You must have the knowledge in the areas mentioned above to make an effective inspection, but your customer has no way to know you have that knowledge unless you have gotten some sort of certified training. See the next section for places to find this. A college degree is not at all required, but you must have sufficient writing and communication skills to write clear reports on your inspection findings and explain them effectively to your clients. Affiliation with a professional Home Inspection organization will help to establish your credibility until you have customers who will give you good references. You should also be licensed in states that require it (many states require little more than paying a fee) and bonded. Check your local government office for information on requirements in your area. Errors and Omissions insurance will give your clients peace of mind in knowing that if you miss something in your inspection, they have some recourse for grievances. You will probably have to pass the ASHI test before you can obtain this insurance. It is available through that organization (See Professional Organizations below.). Part of the work of a Home Inspector is problem solving: looking for the causes of stains, leaks, and cracks. You must be able, and willing, to climb up on roofs and crawl into basements or spaces beneath homes. Education/Certifications Go to your favorite search engine (I like Google.com) and type in "career: home inspection." The result will amaze you; you'll find sites that not only provide more information, but also sites that offer training and franchise information. A few states and even some local municipalities require you to pass a separate exam for licensing purposes. Typically these government adopted exams are inferior to the Online Inspector Examination offered by the National Association of Certified Home Inspectors (NACHI - see below). The American Society of Home Inspectors provides links to many educational resources on its Products and Services page: http://www.ashi.org/resources/category.asp?cat=prod. The National Association of Certified Home Inspectors (NACHI) has an excellent resource on their Website called the NACHI Inspector University: http://www.nachi.org/education.htm. It offers links to online courses, quizzes, and resources for current or aspiring home inspectors. This includes a preparatory course for those who plan to take a state home inspection licensing exam. Professional certification is offered by the Home Inspection Institute of America (http://www.inspecthomes.com/). They claim to offer "unbiased, independent certification" with recognition by the National Association of Home Inspectors. Allied Schools offer a Home Inspection Course for $620 to $720 (depending on the payment plan chosen). It may be taken online or through correspondence. It consists of 13 separate units. Go to http://www.homeinspectioncourse.com/aboutTheCourse.html for a course description, demo link, and link for more free information. The American Home Inspectors Training Institute also offers training courses: http://www.ahit.com/. When choosing a training course for Home Inspection, check the references and look for training that is recognized by one or more of the national professional organizations. Start Up Cost Estimates (in US dollars): Franchise or Solo? Your start-up costs for becoming a Home Inspector will depend on whether you decide to buy a franchise or start from scratch. The estimates below assume that you already have a vehicle you can use. If not, you must add that to your start-up costs. While it may seem to cost more to buy a franchise, the support and "hand-holding" may be well worth it, especially if you are inexperienced in running your own business. Let's examine the franchise route first. The ASHI Website offers a list of ASHI endorsed franchises at http://www.ashi.org/resources/link.asp?cat=prod&id=92. The franchise package offered by National Property Inspections, Inc., for instance, costs just under $22,000. It claims to include: Exclusive Territory (up to 200,000 population). Comprehensive Training (two weeks at headquarters, optional third in field). Handheld computer, loaded with NPI's proprietary inspection software. Portable printer. Digital camera. Rewritable CD player. Paid first-year E&O liability insurance, up to $2,000 $300 toward first year ASHI membership or other professional organization. Home inspection tools and supplies (gas sniffer, voltage meter, etc.) Home maintenance guides, reference manuals, and computer software. Initial supply of business cards and stationery. Initial supply of marketing materials. Free
Website. Multi-function printer/fax/scanner/copier for your office $250-$750 Business licenses $100-$250 Additional testing tools $500-$5,000 Cell phone $75-$200 Additional equipment (hand tools, ladder, flashlights, etc.) $250-$1,000 Office furniture $400-$1,500 Business stationery - business cards, letterhead, envelopes $200 TOTAL
START-UP (including franchise package): $23,775-$30,900 Training/Certification $600-$2,000 Handheld computer $1,000-$2,000 Specialized software $400-$3,000 Portable printer $400 Digital camera $300 Cell phone $75-$200 E&O liability insurance $700-$2,000 Professional membership and start-up marketing (ASHI offers brochures and promotional materials $1,000-$2,500 Home inspection tools and supplies (e.g., hand tools, ladder(s), flashlights, gas sniffer, voltage meter, moisture meter, circuit tester, electrical tracer) $500-$5,000 Multi-function printer/fax/scanner/copier for your office $250-$750 Business licenses $100-$250 Office furniture $400-$1,500 Business stationery - business cards, letterhead, envelopes $200 TOTAL
START-UP: $5,925-$20,100 Professional Organizations Affiliation with at least one of these professional organizations will not only lend credibility to you as a Home Inspector, but it will also provide benefits and resources, including continuing education and networking with other professionals, that you might not find locally. Membership typically gives you permission to use the organization's logo and Code of Ethics in your own marketing material and on your Website, but individual guidelines may apply. Membership also may give you national listing in a home inspection service directory, making it easier for customers to find you when they're looking for someone in your area. Another advantage of membership in a professional organization in the earliest stages of your business is for the assistance in choosing appropriate tools - fellow members can share their experience with various brands to help you choose wisely for this initial investment. American Society of Home Inspectors (ASHI): This organization appears to be the most prestigious of the Home Inspection professional organizations. It requires a home inspection candidate to pass a written test, and regular members must maintain continuing education requirements. The ASHI Website (http://www.ashi.org/) offers a wealth of information about the profession of Home Inspection: what is involved, what it takes, and what to expect. They offer a Training Manual for Home Inspection at a significant discount. The
National Association of Certified Home Inspectors (NACHI) The
National Association of Home Inspectors, Inc. (NAHI) Income Potential The typical home inspection lasts for two to three hours. Depending on your local economy, the fee is usually between $250 and $500—$300 is common in many areas. An average of two to three inspections a day can yield between 200 to 400 inspections a year, remembering that some areas will be slower in the winter. The income potential, therefore, can get up between $60,000 and $120,000, but most experts say it will take at least three years of hard work to get up to $50,000. Expect to pay at least 25% in overhead, depending on your vehicle expenses. Start-Up Tips Ron Passaro, founder of the ASHI, suggests that if you think you want to become a Home Inspector, you should start by reading "The Complete Book of Home Inspection" by Norman Becker. Next, you should spend a day or more with a home inspector to see what it's like. Remember that a local inspector might consider you a threat, so you might have to go to a different area to find someone to let you tag along. Further experience can be gained by becoming an apprentice or employee for an established home inspector. Even if you buy a franchise, you should do some inspections with the supervision of an experienced inspector before going out on your own. You might have to pay someone to help you with this. By joining a local chapter of a home inspection professional organization, you can meet people and learn more about the field by attending meetings and seminars. RESOURCES Becker, Norman. "The Complete Book of Home Inspection." McGraw-Hill, 1993. Edwards, Paul and Sarah, and FunCareers.com. "Home Inspector." Career Profile available for $4.95 from www.funcareers.com. Irwin, Robert. "The Home Inspection Troubleshooter." Dearborn Publishing, 1995. Directories
of Home Inspection Training Schools: Inspection Training Associates: classroom and home study courses. 1016 S. Tremont Street, Oceanside, CA 92054. 800-323-9235 or 619-967-4184. Mangiaracina, Greg, and R. E. Payne. "How to Operate a Home Inspection Business." P.O. Box 604902, Kenner, LA 70064, 1997. National
Property Inspections, Inc. - a franchiser as well as a home inspection
service business. You can order a free information kit from their Website. Traister, John E.. Home Inspection Handbook. Craftsman House, 1997. Wickell,
Janet. "Do You Really Need a Home Inspection?" About.com Website.
July 8, 2004. http://homebuying.about.com/cs/homeinspections/ World
Inspection Network CANADA RESOURCES: The
Canadian Office of Home and Property Inspectors Coursework in Canada: Carson Dunlap and Associates, 120 Carlton Street, Suite 407, Toronto, Ontario M5A 4K@, Canada. 800-268-7070 or 416-964-9415. Websites for the professional organizations listed above have other links for more information and assistance in the field of Home Inspection. Elizabeth H. Cottrell is a home-based entrepreneur, freelance technical writer, and owner of Riverwood Technologies, a desktop publishing company in Maurertown, Virginia. She is currently a staff writer and editor for IAHBE.
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