LIVEVALUATION , May 2010 Issue. Submitted by Michael Connolly, CI Smart Move Inspections, Inc.
In a prior life, I spent ten years working for a prominent Midwest appraisal firm. Between this experience and running my own home inspection business for the last 16 years, I have found that inspectors and appraisers share some common issues. I have acquired a special appreciation for the similarities and differences between them. Mostly, our professions are related through the real estate process (perhaps cousins, twice removed)—we both visit the house and ascertain the general condition of the property.
I read Steve Papin’s article in the April edition of LiveValuation, entitled “Joe Appraiser”, and chuckled at his descriptions of inspecting the property and avoiding “Fido’s droppings”. Inspections and appraisals share the pitfalls of evaluating a property. For example, after setting off an alarm in a home, I once spent 30 minutes in the back of a police cruiser until the police were able to confirm that I had permission to enter the home.
Most people believe that a home inspector just evaluates the home and report its condition to our clients—but not many people realize the true purpose the inspection serves in the real estate process. It provides affirmation. Yes, affirmation. Hypothetically, if a buyer has contractually agreed to purchase a home, they are most likely in love with it and the surrounding neighborhood. They want the house! They hire a home inspector to uncover any issues, but hope there are none. The client wants to be prudent and protect their personal interest, thus they are happiest when their inspector tells them the home is in good condition with limited deficiencies. Ultimately, they want the inspector to shake their hand and congratulate them on their purchase: affirmation. Of course, in order to satisfy our client, we, as inspectors, must be diligent in our evaluation of the home. We must use all resources available to provide a thorough analysis of the property.
Home inspectors fill out a variety of inspection forms to report their findings. Unlike the appraisal industry, there are no national standard inspection forms. It may be interesting to see how an inspector addresses sections of the appraisal form URAR 1004. In this article, I will use the URAR as a general outline of points in order to demonstrate some of the tricks and techniques used by a home inspector during the inspection process.
Section 1: SUBJECT
I often “Google” the address of the subject property to see what shows up. I once found that the subject property I was searching had suffered a fire in the previous year. (Many fire departments now publish fire reports and any emergency runs to a specific address.) Of course, there was no mention of this in the property disclosure form that, by state regulation, the home owners had to fill out. Internet searches may also reveal listings of the property, both active and prior, that have valuable information concerning the age of major systems such as roofs and furnaces.
Assessor’s Parcel Number:
In my market, it is easy to look up a property tax record and description from the county auditor. Besides the usual information on square footage, there can be some valuable information gleaned from the records. For instance, a tax card might list a family room addition to the rear of the property, which was built in 2001. From this I can assume the addition was completed with the benefit of a municipal inspection and therefore probably met the local building codes at the time of construction. At the property, if I notice the roof on this addition is in the same shape (condition, color, style) as the roof on the main house, I could conclude the age of the roofs are 9 years old. Knowing an asphalt shingled roof in my area lasts approximately 20 years, this roof probably has 11 remaining years of service life. If the main house roof does not match and appears to be older, then it may have a lower remaining service life. But, if I arrive at the home only to find there is an addition which was not listed on the tax card, then I can assume it was built without a permit and inspections from code officials. I would then closely evaluate this addition and disclose to the client that it may have been built without a permit.