History of Home Inspections
The History of Home Inspections
Courtesy of CREIA (California Real Estate Inspection Association)
The early 1970s saw the creation of a new industry when buyers began hiring general building contractors to perform pre-purchase inspections on homes they wanted to buy. As the home inspection industry grew it soon became apparent that the depth of knowledge required to properly evaluate a home’s systems and components was beyond the capability of most general contractors. Slowly the term “Contractor’s Inspection” was dropped in favor of “Home Inspector” as they were now looked upon as industry experts in performing inspections to confirm the current condition a home’s overall health. By the 1990s mostly due to California real estate law and increasing consumer awareness, pre-purchase home inspections became “de-facto” and the majority of homes sold in today’s market are inspected. Locating and scheduling home inspectors was generally in the realm of the agent representing the buyer but as associations like CREIA grew, more home buyers have begun seeking qualified home inspectors on their own and the internet has become a major player in this approach. It’s now common for inspectors to be retained through CREIA’s web site (www.creia.com) or their own personal web sites. In fact many of CREIA’s chapters have their own web sites where all the local members are listed along with their company name, phone number and email address. Also, a growing number of home inspectors deliver the inspection report to their clients via the internet.
Many real estate brokers and their agents at first felt threatened by the home inspection industry, but eventually came to understand that it was far superior to the “Uncle Buck” inspections where the buyers brought along some relative or friend who claimed to have a construction background for a “preview.” Good old Uncle Buck would push on the balcony railings, open and close a couple of windows, jump up and down on the floor, and perhaps even peek into the foundation crawl space, but only from the access openings. He would then sum up his appraisal by declaring to all who would listen that the house was either a fantastic buy or an overpriced dump.
It didn’t take long before the more experienced agents recognized the idea that a professionally performed property inspection not only could be employed as a marketing tool, but may help shield them from potential litigation after the close of escrow. The famous Easton vs. Strassberger law suit changed this idea from a theory to a fact.
This landmark case occurred in 1984 when the court 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 affecting the value of the property that such investigation would reveal.” Real estate brokers and their agents immediately recognized that it would be prudent to refer independent experts to provide a far more complete and thorough inspection than they were capable of furnishing. Their legal departments also recognized the opportunity to pass on potential disclosure liability by introducing another player into the sales transaction.
This had the effect of a major increase in homes being checked by professional inspectors before the close of escrow and according to a 2009 NAR statistics close to 80% of all homes nationwide are now inspected. In some parts of the country the percentage of homes inspected are even higher. In 2006, close to eight million home inspections were performed, and home inspection have become widely recommended by real estate authors and columnists.