Thursday, April 7, 2005

Local home inspectors are grappling with a decline in business sparked by a fiercely competitive Washington housing market.

With sellers receiving multiple offers, home buyers who want to win a contract have been waiving the home inspection as part of the purchase agreement.

Some inspectors have started investing money in new marketing techniques as a way to cushion the blow.

Hollis Brown, owner of ThoroSpec LLC in Bethesda, said business has dropped in the past several years. Prior to starting his own home-inspection business, he was doing about 500 inspections a year. When he opened ThoroSpec in 2003, that number sunk to 200.

He said he expected business to perk up in 2004, but it didn’t. And this year, business is down from a year ago, which he said is caused by a lack of inspections.

Stephan Baker, owner of the HomeBiz Inspection Team in the District, has seen a similar trend. In the past six months, he has performed about 100 inspections, down from 200 at the same time last year.

Both home inspectors said they are revamping their marketing efforts to focus on other services.

Mr. Brown said he has invested more money into Internet marketing for insurance claims, expert testimony and home evaluations.

“That’s helped me to weather the slow times,” he said.

Mr. Brown said his business is starting to focus more on environmental testing.

“In terms of marketing and advertising, we’ve started to push those more,” he said.

Other home inspectors also have found that the number of buyers in the area waiving the inspection as a contingency of a home purchase is rising, but say their businesses haven’t seen a drop in the number of inspections they are doing.

“I’m kind of surprised [buyers] are doing the home inspections at all, and I’m encouraged they still want to do it,” said Bill Patterson, owner of Action Building Services Inc. in Bowie.

Mr. Patterson said 40 percent of his clients waive the contingency on home inspections in their offers, but they have not stopped getting inspections.

He said he performed about 400 home inspections in 2004, compared with the 250 he did the previous year.

Although Brian Koepf, owner of Brian Koepf & Associates, has experienced about a 20 percent decline in requests for home inspections in the past 2 years, his business has posted about a 300 percent increase in the number of post-settlement inspections.

The home-inspection trend is not nationwide, said Rob Paterkiewicz, executive director of the American Society of Home Inspectors.

Buyers who waive the home inspection as a contract contingency essentially throw away the legal clout they would have if they discover a defect after settlement.

“Generally, a home buyer does not have the right to sue if they waive inspection,” said Traci Hughes, public affairs officer for the D.C. Office of Attorney General. “That, of course, is dependent upon the purchase agreement. There may be language that allows you to sue, but it’s on a case-by-case basis.”

The National Association of Realtors urges its members to encourage their clients to have a home inspection to rid them of any legal responsibility, spokesman Lucien Salvant said.

However, real-estate agents realize that Washington’s market has become so competitive that waiving a home inspection is sometimes necessary.

“While no one really wants to recommend that buyers waive a home inspection, this sometimes needs to be done in order to compete with other buyers,” Corey Savelson, an agent with Re/Max 2000 in Rockville, told The Washington Times in January.

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