It's risky to combine appraisals and home inspections

Q, I'm thinking about adding home inspection services to my real estate appraisal business. According to articles I've read, a home inspection can be done concurrently with an appraisal and only adds about an extra hour of time at the property. My main concern, however, is liability. Before making this change to my business, I'd like to know as much as possible about combining home inspection with appraisal. Do these two services seem compatible, or is this a risky idea?

A. Home inspection and real estate appraisal are sometimes viewed as related professions, but there are major differences that involve serious levels of liability.

Appraisal, simply put, is the process of estimating the dollar value of real property, based upon size, quality, location and the current state of the market. This process does not include an analysis of construction quality or compliance with innumerable building requirements (with a few exceptions, such as smoke alarms). This is why most appraisers have professional backgrounds in business and economics, rather than construction.

Home inspectors have no interest in real estate values. Their job is to identify property defects related to quality of construction, general maintenance, functionality and safety. Their primary focus is to address the concerns of buyers, with regard to observable defects, to report those defects clearly and accurately, to recommend the most appropriate ways of addressing those conditions, and to avoid making mistakes, as much as possible.

The time needed to perform a thorough home inspection would add far more than a mere hour to a real estate appraisal. Besides walking and measuring, as you would normally do during an appraisal, you would have to crawl under the building and through the attic. You would also have to walk on the roof, open the electrical panels, test electrical outlets and fixtures, open and test heating and cooling fixtures, test the plumbing and built-in appliances, and so on, and so on.

To become skilled and proficient at this process requires years of on-the-job experience as an inspector. Novice inspectors should enter the profession as a solitary occupation, after thorough preparation and training, not as a sideline or an add-on to another profession. To do otherwise increases the likelihood of liability claims for unreported defects.

Liability is a primary consideration among professional home inspectors. An adage in the profession is that there are two kinds of home inspectors: those who have been sued and those who will be. That is why training, prior to becoming a home inspector, is essential. It is also the reason why home inspection should be the singular concern of anyone undertaking the profession. The more you focus on the process of home inspection, the less likely you are to overlook or misreport a significant property defect. If you're looking to provide a service that is related to real estate appraisal, home inspection is probably not the answer.

• To write to Barry Stone, visit him on the web at www.housedetective.com, or write AMG, 1776 Jami Lee Court, Suite 218, San Luis Obispo, CA 94301.

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