I want you to picture a scenario for a second.
You're standing in a living room. It's a Saturday
afternoon. The sunlight is streaming through
these massive floor -to -ceiling windows. The
floors are this warm, honey -colored oak. It
just gleams. There is a smell of fresh cookies.
Because, of course, the real estate agent baked
them 20 minutes ago. You are looking at the crown
molding. You're mentally placing your sofa against
the far wall, and you are thinking, this is it.
This is the one. That is the honeymoon phase
of the transaction. And honestly, it is probably
the most dangerous moment in your entire financial
life. It really is. Because while I'm looking
at the way the light hits the floor, I'm not
looking at the water stain on the ceiling that's
been painted over three times. Right. I'm not
thinking about the fact that the furnace in the
basement is literally rusting from the inside
out. I am operating entirely on vibes. Which
is a terrifying paradox when you think about
it. We live in the information age. If you were
going to buy a new laptop, a purchase of maybe,
what, $1 ,000? Yeah, maybe $1 ,500 if you're
getting a good one. You would spend weeks researching.
You'd watch unboxing videos. You'd read the technical
specs. You'd compare processor speeds. You would
know everything about that machine before you
swiped your card. Oh, absolutely. I'll read 300
reviews for a toaster. A $50 toaster. Exactly.
But when it comes to the single most expensive
purchase of a lifetime, buying a home, signing
away 30 years of future earnings, most people
rely on a visual walkthrough that lasts maybe
20 minutes. If that. They rely on the aesthetic
appeal. And that gap between aesthetic appeal
and structural reality is where financial ruin
hides. And the only thing standing between you
and that potential money pit is this one kind
of administrative sounding document, the home
inspection. Yeah. Now, looking at the stack of
research you sent over for today's deep dive,
I have to admit, I always thought of home inspection
as a bit of a formality, like getting your car
inspected for emissions. It's just a sticker
you need to get the keys. That's what most people
think. But the more I read, the more I realized
this isn't just a checklist. It is a full blown
forensic investigation. That is the perfect way
to frame it. It is building forensics. It is
a crime scene investigation. But the victim is
your future bank account. Oh. That's a good way
to put it. And the mission of today's deep dive
is to shatter that checklist mentality. We are
going to tear this industry apart. We aren't
just talking about checking if the toilets flush
or the lights turn on. We are diving into the
legal landscape, which is shocking. It's a mess
in places. We're going to talk about the massive
difference between condition and value and how
this industry is a regulatory wild west in some
places and a bureaucratic maze in others. And
we're going to travel the globe, too, because
how we inspect a home changes entirely depending
on where you are. We'll look at the wooden frames
of California, the damp brick of the UK and the
concrete high rises of Mumbai. And perhaps most
surprisingly, we're going to talk about the things
an inspector is legally forbidden from telling
you. That part blew my mind. Yeah, the liability
aspect is huge. So let's unpack this. We are
working from a comprehensive overview of inspection
standards across North America, the UK, and India.
Let's start with the core identity. What actually
is a home inspection? Because I think a lot of
us have a misconception here. The best place
to start is the definition itself, which usually
appears in the standards of practice for any
major association. A home inspection is defined
as a limited non -invasive examination of the
condition of a home. Limited and non -invasive.
That already sounds like legal speak for I'm
not breaking anything. Precisely. And this is
the first point of friction for many buyers.
They watch home renovation shows where the contractor
takes a sledgehammer to a wall and says, oh,
look, dry rot. Right. Let's just open this up
and see what's behind here. A home inspector
cannot do that. They cannot tear down drywall
to check the wiring behind it. They cannot peel
up the carpet to check the subfloor. They cannot
dig up the foundation to check the footings.
So they are handcuffed. In a way, they have to
assess the health of the patient without doing
surgery. That's a great analogy. It's a physical
exam, not an autopsy. It's about what is visible
and accessible on the day of the inspection.
Okay, accessible is a key word there. A huge
one. If the seller has stacked boxes wall -to
-wall in the basement, blocking a foundation
wall, the inspector can't see that wall. They'll
note in the report, view obstructed. And that's
it. So there's a giant crack behind those boxes.
That's on you, the buyer, if you don't ask the
seller to move them. It's on you. And there is
another key nuance here that listeners need to
really internalize. It is a snapshot. The inspector
is describing the condition of the home at the
specific time of the inspection. So let's play
that out. If the inspector comes on a Tuesday.
And the furnace is working fine. He turns it
on. It heats up. It shuts off. Everything's good.
Yep. He'll write in the report, furnace was functional
at time of inspection. Then I buy the house on
Friday. And on Saturday, the furnace blows up.
Is that the inspector's fault? Almost certainly
not. And that is a hard pill for buyers to swallow.
But inspectors do not guarantee future efficiency.
And they certainly don't guarantee life expectancy.
They're not giving you a warranty. They're reporting
on what is visible right now. They aren't profits.
They are observers. A component can be working
perfectly on Tuesday and suffer a catastrophic
mechanical failure on Saturday. The circuit board
on that furnace could have been on its last legs,
but it worked for the 10 minutes he tested it.
It's about managing expectations. You aren't
buying a warranty. You're buying a report on
the current state of affairs. Correct. And this
brings us to what I call the triangulation of
professionals, which is where I see the most
confusion. You have a team of people involved
in a house sale. You've got the real estate agent,
the appraiser, and the inspector. In the movies,
they all seem to walk through the house together
having a chat. Right. But in reality, they have
completely different motivations. Right. And
different clients, really. Totally different
clients. And different jobs. Let's break that
down. I feel like people confuse the appraiser
and the inspector the most. I've definitely heard
friends say, oh, the bank is sending their appraiser
out, so they'll tell me if the roof is bad. That
is a dangerous, dangerous assumption. Let's distinguish
them. An appraiser determines value. Their client
is usually the bank, the lender. So they work
for the money people. Yes. Their job is to answer
one question for the lender. Is this pile of
bricks and wood worth the $500 ,000 you are about
to lend on it? So the appraiser is there to protect.
the bank's investment. They want to make sure
they aren't lending half a million dollars on
a shack that's worth 10 bucks. Exactly. They
are looking at comparables. What did the neighbor's
house sell for? They're looking at square footage,
lot size, bedroom count. It's an economic analysis.
What if the roof is bad? Well, if the roof is
caved in, will they notice? Yes, of course, because
that affects the market value today. Right. But
if the roof has a slow leak into the attic insulation
that isn't visible from the driveway. If it has
maybe five years of life left instead of 20,
the appraiser likely won't see it. And honestly,
they might not care as long as the market value
holds up against the comps. OK, so the appraiser
is the economist. They are looking at the numbers,
the spreadsheets. Right. The inspector, on the
other hand, determines condition. They are the
diagnostician. Their client is you, the buyer.
They are there to tell you what is broken, what
is unsafe and what is nearing the end of its
life. An appraiser says this house is worth five
hundred thousand dollars. An inspector says,
this house needs $50 ,000 of work because the
plumbing is shot and the electrical panel is
a fire hazard. A huge difference. One is about
the market. The other is about the mechanics.
Exactly. And then there's a third category that
confuses people, particularly in the United States,
the building inspector. Yes. This one always
trips me up. I'm waiting on the building inspector.
That sounds official. It sounds like the most
important one. It is official, but it's a different
lane entirely. If you hear building inspector,
that usually refers to a government or municipal
employee. Their job is code compliance. Code
compliance. So that's the person who comes by
when you're building a deck to make sure you
aren't violating city laws. Yes. They are checking
against a very specific book, the building code
for your town, for that year. Did you use the
right number of nails? Is the railing 42 inches
high? Is the staircase too narrow? So does a
private home inspector check for code? Generally,
no. And this is a critical distinction. A private
home inspection is not a code compliance check.
Why not? If something is against code, isn't
it by definition a problem? It is a problem,
but codes change constantly. A house built in
1950 was built to the 1950 code. It would fail
a thousand points of the 2024 code. Oh, OK. An
inspector isn't there to tell you everything
that's not up to modern standards. They're there
to tell you if it's functional and safe. But
wait, if my stairs are unsafe, won't they tell
me? They will tell you it's a safety hazard.
They might say these stairs are steep and the
tread is shallow, which is a fall risk. But they
won't cite you for violating municipal code section
12B. They aren't the police. They are consultants.
So we have the economist, the appraiser. We have
the police, the municipal inspector. And then
we have the consultant or the private investigator,
which is the home inspector. That helps clear
the board. It does. And the consultant's goal,
the private inspector, is building diagnostics.
I love that term. It's about identifying problems.
But here's the catch. They identify the problem,
but they don't always identify the solution.
Walk me through that. If they find a problem,
shouldn't they tell me how to fix it and how
much it'll cost? That's what every buyer wants,
right? A neat little list of problems with a
price tag next to each one. Yes. But they can't.
In fact, they're often discouraged from doing
so because they aren't specialists in every trade
and they aren't contractors. And Spectre might
say, there is elevated moisture reading in the
basement wall. That is the diagnosis. Okay. But
is that moisture coming from a crack in the foundation?
Is it coming from a high water table? Is it coming
from a broken gutter outside that's dumping water
right next to the house? And the fix for each
of those is totally different. Wildly different.
And does it require a $200 patch or a $20 ,000
French drain system? The inspector often stops
at the, what, there is moisture? They then refer
you to a specialist for the how and how much.
a foundation specialist, a plumber, a landscaper.
So the inspector is the general practitioner.
They listen to your chest and say, your heart
sounds weird, but they don't perform the surgery.
They send you to the cardiologist. That is a
perfect analogy. The inspector is the GP. They
know a little bit about everything. Plumbing,
electrical, structural, roofing, HVAC. But they
aren't the master electrician or the structural
engineer. Their job is to triage the house and
tell you which specialists you need to call.
Which makes sense. You can't be an expert in
everything. Okay. But that leads to the question,
who are these people? If they have to know a
little bit about everything, they must have some
serious training, right? This can't just be a
job you decide to do one day. You would hope
so. You would absolutely hope so. That tone suggests
otherwise. Well, let's talk about the regulatory
landscape in North America. This section of the
research was fascinating because I think most
people assume, That to be a home inspector, you
need a license. You need a badge. You need to
pass a board exam. Right. My hairstylist needs
a license. My driver needs a license. Surely
the person telling me if my house is going to
collapse needs a license. In the U .S. and Canada,
it is a bit of a regulatory patchwork. We often
call it the licensing wild west. How wild are
we talking? Are we talking like tumbleweeds and
shootouts at high noon? Pretty close. So currently
more than 30 U .S. states regulate the industry.
That's the good news. Okay. That means in those
states, places like Texas, New York, Illinois,
you need to pass exams, take strictly regulated
training courses, carry insurance, and do continuing
education every year to keep your license. Okay.
That sounds reasonable. That covers a lot of
the population. But that leaves... Almost 20
states. It leaves a significant number of states
where the profession is completely unregulated.
States like California, Colorado, Georgia. Big
states. Wait, California has no state license
for home inspectors. The place with earthquakes
and wildfires. No statewide license. Now, there
are professional associations that inspectors
can join which have their own standards. But
the state government does not license them. Define
completely unregulated for me in one of those
states. I mean that in those states, you could
literally wake up tomorrow, decide you are tired
of podcasting, go to a print shop, print a business
card that says host speaker, home inspector,
buy a flashlight at the hardware store and go
inspect someone's half million dollar asset.
Without any training, without proving I know
the difference between a neutral wire and a hot
wire. Theoretically, yes. In unregulated states,
there is no state board checking your credentials.
Now, the market might filter you out eventually
if you're terrible or you might get sued into
oblivion. Right. Eventually. But there is no
government barrier to entry. That is absolutely
terrifying. It's like having a driver's license
requirement in one state, but crossing the border
and being allowed to drive a semi truck with
zero training just because you own a truck. It
puts a massive burden on the consumer. If you
are buying a home in an unregulated state, you
cannot just assume the inspector is qualified
because they have a website and a clipboard.
So what do you do? How do you vet them? You have
to ask. Are you a member of a national association?
Are you certified by ASHI or Internatia? Those
are the two big ones in the U .S. You ask to
see a sample report. You ask how long they've
been doing it. you have to become the regulator
yourself in a way. It really emphasizes that
caveat emptor, buyer beware. But even if you
have a qualified inspector, the whole process
is high stress. The inspection is usually contingency,
right? Can you explain what that means? Yes,
the valid contract contingency. In most real
estate contracts, the deal isn't firm until the
inspection contingency is waived or satisfied.
So the inspector is basically the gatekeeper.
The deal can't close until they say it's OK,
or rather until the buyer reads the report and
says it's OK. Exactly. The buyer typically has
a window, say, 7 to 10 days to conduct the inspection.
After they get the report, they can do one of
three things. One, they can accept the house
as is and waive the contingency. Two, they can
try to negotiate with the seller for repairs
or a price reduction based on the findings. Or
three. Or three, if the problems are too big
or the seller won't negotiate, they can walk
away from the deal and get their deposit back.
The contingency is their escape hatch. And that
power, the power to kill the deal creates a massive
amount of tension. A huge amount. Think about
the players again. The seller wants to move.
The buyer wants the house. And the real estate
agent, well, they want the commission. And they
don't get paid if the deal falls apart. Correct.
So imagine you are a real estate agent. You have
a client buying a house. You need an inspector.
Are you going to recommend the inspector who
is known as the deal killer? No. The guy who
spends five hours at the house, finds every single
loose screw, and writes a 100 -page report that
scares the first -time buyer away from a perfectly
good house with minor issues. Probably not. You
want the inspector who is... reasonable, who
doesn't make a big fuss, who can manage the client's
expectations. Yeah, precisely. And that creates
a massive conflict of interest. If inspectors
rely on agents for referrals, they have a financial
incentive to go easy on the house, to minimize
the problem so the deal closes and the agent
keeps sending them work. It's the fox guarding
the hen house. Or rather, the fox inviting his
friend, the wolf, to come check on the chickens.
And this isn't just a theoretical worry. It became
such a problem that it actually shaped legislation.
We have to talk about the Massachusetts case
study. Yes. May 2001. I remember reading this
in the notes. This is a huge deal. Massachusetts
becomes the first state to basically say enough
is enough. They recognize that the referral loop
was anti -consumer. They saw that agents, specifically
listing agents who represent the seller, had
a vested interest in a favorable report. They
amended their real estate licensing law. Listing
agents in Massachusetts are now prohibited by
law from directly referring a specific home inspector
to a buyer. So even if I beg my agent, please
just tell me who to hire. I don't know anyone.
They can't give me a name. They cannot say, call
Bob. Bob is great. They cannot even give you
a short list of their top three favorites. Wow.
So what do they do? How does a buyer find anyone?
They have to hand you the complete list of all
licensed inspectors in the state. Or they have
to direct you to the state's official website
where that registry is published. Yeah, that
is hardcore. It's basically, here is the phone
book. Good luck. It feels like it puts the buyer
in a tough spot, but I see the logic. It forces
the buyer to do their own due diligence, to make
their own calls, read their own reviews. It breaks
the link between the agent's commission and the
inspector's paycheck. I can see how that would
be annoying for an agent who legitimately knows
a great thorough inspector, but I also see how
it protects the buyer from a soft inspection.
It's a blunt instrument, but effective. But regulation
isn't just about consumer protection in a financial
sense. Sometimes it's about life and death. You
mentioned a California law earlier, Senate Bill
721. Yes, the balcony bill. This feels like a
shift from transactional inspection to maintenance
inspection. That is the perfect distinction.
Most inspections happen when a house is sold.
It's a one -time event tied to a transaction.
But SB 721, passed in September 2018, targets
something specific. Exterior elevated elements.
Exterior elevated elements. That sounds fancy.
We're talking about decks and balconies. Decks,
balconies, walkways, stairways. Anything wood
-framed that is sticking out of a multifamily
building and is more than six feet off the ground.
And there's a tragic context to this, right?
Yeah. I seem to remember a balcony collapse in
Berkeley. Exactly. The 2015 Berkeley balcony
collapse. Six students died. Several more were
horribly injured. It was horrific. And the cause
was dry rot. So the wood just failed. The wood
had rotted from the inside out because of poor
waterproofing during construction, but it looked
fine from the outside until the moment it snapped.
God, that is a nightmare. You're just at a party
and the floor disappears. So SB 721 mandates
that buildings with these structures must undergo
inspections by licensed professionals? often
structural engineers, every nine years for condos.
And a similar law, AB 721, requires it every
six years for apartment buildings. And this isn't
about selling the building. This is just an ongoing
SASE check. Correct. It acknowledges that buildings
are organic in a way. Wood rots, fasteners rust.
You can't just build it and forget it. You have
to maintain it. And if the owners don't comply,
they face penalties. It shifts the mindset from
market value. to structural integrity as an ongoing
responsibility. It does. It's a huge step. Let's
look north now, because if the U .S. is a patchwork
of strict laws like Massachusetts and unregulated
wild zones like California, Canada sounds like,
well, a bit of a polite brawl. Polite brawl is
a very diplomatic way to put it. Canada historically
followed the U .S. model unregulated in many
places, with voluntary associations trying to
set standards. But they made a significant deviation
in 2016. What happened in 2016? The development
of the CSAA 770 -16 standard. That is a very
catchy name. It rolls right off the tongue, doesn't
it? But it's important. It was a unifying standard
developed by the Canadian Standards Association.
The goal was to bring everyone onto the same
page, a single rigorous standard for what a home
inspection should be across the entire country.
And was that successful? Is everyone singing
Kumbaya now? Not exactly. The standard is there,
but adoption and regulation are provincial matters.
And implementation is where it gets messy, especially
in Ontario. Ontario is the biggest market. By
far. Estimated 1 ,500 inspectors back in 2013,
probably more now. And the situation there is
complicated. Source material mentioned a battle
of the associations. Yes, I saw that. It really
is. You have the OAHI, the Ontario Association
of Home Inspectors, and then you have the Ontario
ACHI, the Ontario Association of Certified Home
Inspectors. Okay, those names are way too similar.
That is designed to be confusing for the consumer.
It's like the People's Front of Judea versus
the Judean People's Front. And they both claim
to be the largest or the most authoritative.
But the real fight is over a title, RHI or Registered
Home Inspector. It sounds fancy. Who gets to
use it? Well, this is where it gets legally weird.
Under a private act from 1994, the OAHI has the
legal right to award that designation in Ontario.
It's protected by law. So OAHI owns the term
in Ontario. Yes. But here is the twist. The Canadian
Association, CAHPI, owns the federal copyright
to the term. So one group has the provincial
law and the other group has the federal copyright.
How does that even work? Essentially, it's a
mess. And amid all this infighting over acronyms
and logos, the consumer is left scratching their
head wondering, who is actually qualified to
check my roof? Is there a solution on the horizon?
Or are they just going to fight forever? There
is legislation in the works. The Home Inspection
Act 2017 has received royal assent in Ontario.
This would license inspectors directly through
the government and dissolve that old 1994 act.
It would theoretically end the association wars.
But I sense a but. But as with many things in
government, it is awaiting specific regulations
to actually become law. It's been in this state
of limbo for years. So for now, it is still a
bit of a maze. It seems like no matter where
you go. Figuring out who is qualified to inspect
your house is half the battle. It is. And if
we hop across the pond to the United Kingdom,
we see a totally different approach. We see what
happens when the government tries to intervene
too aggressively and, frankly, gets it wrong.
This is the Home Information Pact story, right?
The HIP. The HIP. This was a massive government
initiative introduced in the mid -2000s. The
idea was actually... quite noble. They wanted
to speed up the home buying process, which in
the UK can be painfully slow. Okay, so what was
the plan? They mandated that sellers had to provide
a home condition report up front as part of this
pack before the house even went on the market.
That actually makes sense to me. Why wait for
a buyer to find the problems? Put all the cards
on the table from day one. In theory, yes. The
government anticipated they would need 7 ,500
to 8 ,000 inspectors to churn out 2 million of
these packs a year. It was pitched as a new industry,
a massive jobs program. Become a home inspector.
Secure your future. Exactly. Thousands of people
paid for training. They went to courses. They
got certified. They were ready to go. But there
were two massive problems. What were they? One,
the global financial market crashed in 2008 and
the UK housing market went with it. Suddenly,
no one was moving. Bad timing. And two, the public
hated the HIPs. They were seen as expensive,
bureaucratic red tape that the seller had to
pay for whether their house sold or not. So what
happened? The political winds shifted. The coalition
government came into power and canceled the HIPs
in 2010, suspended them with immediate effect.
Ouch. So what happened to all those thousands
of newly trained inspectors? The role of home
inspector, as defined by that program, became
redundant overnight. Thousands of people who
had retrained for this career, who had invested
time and money, were left with a qualification
that was... essentially worthless. That is brutal.
A government created industry wiped out by the
same government. So who inspects homes in the
UK now? Did they just stop inspecting? No, it
went back to the established experts. In the
UK, inspections or surveys, as they're called,
are done by chartered surveyors. These are members
of the RICS, the Royal Institution of Chartered
Surveyors. That sounds much more posh than home
inspector. It is more formalized. To become a
chartered surveyor requires a degree and significant
professional experience and a rigorous exam process.
And the source notes that a full building survey
from a chartered surveyor is generally more detailed
than what we see in North America. They go deep.
So they went from a failed bureaucratic experiment
back to a highly professionalized, rigorous standard.
It highlights that you cannot just manufacture
an industry overnight. It needs deep roots. Speaking
of deep roots or maybe the lack of them, let's
talk about India. The source describes the home
inspection industry there as being in its infancy.
This is the most fascinating part of the global
comparison for me, because when I think of India,
specifically cities like Mumbai or Bangalore,
I think of massive construction, high rises going
up overnight, entire townships being built. You
would think inspection would be huge there. The
scale of construction is staggering, but the
consumer protection infrastructure is still catching
up. In India, the concept of a third party inspection
is very, very new. Why is that? Is it just that
people don't know it exists? Awareness is a big
part of it, but there is also a massive cultural
and power barrier. We have to look at the relationship
between the buyer and the builder. Okay. What's
that dynamic like? In the U .S. or Canada, the
buyer is usually king. There are lots of houses
to choose from. In a hot Indian market, especially
for new construction, the builder holds all the
cards. Imagine you are buying an apartment in
a high rise. You have put down your life savings.
You are one of a thousand people trying to get
a unit. Right. It's a seller's market on steroids.
Exactly. So if you demand an inspection, if you
antagonize the builder by pointing out that the
walls are crooked or the finish is poor, there
is a genuine fear that the builder might just
cancel your allocation. Seriously, they can just
do that. They might say, you are being difficult.
I have 10 other people with cash who won't ask
questions. Here's your deposit back. Next. That
is wild. So people are skipping the inspection
out of fear of losing the deal, even on the biggest
purchase of their lives. In many cases, yes.
They accept the unit as is because they are desperate
to secure the asset. But that is starting to
change. A new law called URIRA. the real estate
regulatory authority, has come into effect in
recent years. Okay, ERE, what does it do? It
is a landmark piece of legislation in India intended
to clean up the real estate sector. It holds
builders accountable for delays and for the quality
of construction they promise. So it gives the
consumer some power back. It gives the consumer
teeth. It has given more potency to inspection
companies. Now, a buyer can point to RERA laws
and say, I have a right to quality. It is empowering
the consumer to ask for that inspection. And
the buildings themselves are different, right?
We aren't talking about checking for wood rot
in a Mumbai high -rise. Correct. Indian homes
are predominantly kiln -baked brick or reinforced
concrete. You don't have the same issues with
termites eating the structural frame like you
do in California. But you have different beasts.
Like what? What are they looking for? Concrete
curing issues. If concrete isn't cured properly,
if it's not kept wet while it hardens, it can
develop microcracks that compromise its strength
over time. You have issues with the quality of
plastering, with waterproofing in a tropical
monsoon climate. So the methodology changes completely.
Completely. They use primarily non -destructive
testing things like rebound hammers that measure
surface hardness or ultrasonic pulse velocity
tests to find voids in the concrete. Although
the source mentions that in some cases, based
on customer requirements, they will perform core
cutting. Core cutting. That sounds intense. What
is that? It is. It involves drilling a literal
cylinder, a core of concrete, out of a column
or a slab to test its compressive strength in
a lab. Wow. This is very, very different from
a U .S. inspector walking around with a flashlight
and a screwdriver. Yeah, if a U .S. inspector
started drilling holes in the wall of a suburban
house, the seller would call the police. Exactly.
It just shows how the local construction methods
dictate the inspection protocols. So we've covered
the who and the where. Let's look at the what.
Because I looked at the types of inspections
section of the NOS, and it's like a menu at a
restaurant. There isn't just one burger. There
are 10 different kinds of burgers, depending
on what you're hungry for. That is a good analogy.
The standard burger is your transactional homebuyer's
inspection. That is what 90 % of our listeners
are familiar with. You make an offer, you inspect
the house, you negotiate repairs. Simple. But
then you have the pre -listing inspection. That's
for the seller, right? Yes. Honestly, this is
a strategic move that more sellers should consider
using. The seller hires the inspector before
putting the house on the market. Why spend the
money, though? Why not just wait for the buyer
to find the problems? Because surprise is the
enemy of a deal. Imagine you're selling. The
buyer's inspection finds a major issue, like
a bad roof, in the middle of negotiations. The
buyer panics. They panic. They will ask for a
massive price reduction, way more than the roof
actually costs, or they'll walk away. If the
seller finds it first, they can fix it on their
own terms with a roofer they choose. Or they
can price the house accordingly and disclose
it up front. The house is priced to reflect the
need for a new roof. Exactly. It removes the
leverage from the buyer. It controls the narrative.
Smart. Very smart. Yeah. Then there's the pre
-delivery inspection. This is specific to new
builds. Yes, or the PDI. Now, this is one where
I think people get complacent. They think it's
a brand new house. No one has ever lived in it.
Everything must be perfect. That is the new car
smell fallacy. Do not assume that because a house
is new, it is perfect. In fact, new builds often
have what we call teething issues. Like what?
What kind of mistakes are we talking about? Oh,
all sorts. I've seen new builds where the vents
for the bathroom fans were never connected to
the roof. They were just venting moist air directly
into the brand new attic, which is a recipe for
mold. I've seen insulation missing in entire
sections of the wall. I've seen plumbing that
leaked the first time the water was turned on.
I've seen windows installed backwards. Backwards?
Yep. The weep holes that are supposed to let
water out were on the inside. Oh, my God. So
the pre -delivery inspection is your chance to...
to catch the builder's mistakes before you sign
off and give them that final check. Yes. And
typically, the builder is obligated to fix them
under warranty. But you have to find them first
and create a formal punch list. Then we get into
the really heavy stuff. The source mentions disaster
inspection. This isn't about buying. This is
about survival. This is a grim but necessary
part of the industry. This is post -event. Tornadoes,
floods, hurricanes, wildfires. Inspectors go
into homes, often working for FEMA or insurance
companies, to assess damage. I can't imagine
what that job is like, walking into a house that's
been flooded with three feet of mud. It's not
about checking if the outlets are grounded. It's
about, is the structure compromised? Is it safe
to enter? What is the dollar value of the loss?
It is high stress, emotional work, assessing
habitability. And then there's Section 8 inspection.
This is specific to the U .S., right? Yes. Section
8 is a housing subsidy program. The government
pays a portion of the rent for low -income families
directly to the landlord. But before they pay,
they need to ensure the property is fit for habitation.
So they are checking against a specific standard.
Yes. HUD's Housing Quality Standards, or HQS,
they are looking for the basics of human decency
and safety. Is there heat? Is there hot and cold
running water? Are there rodent infestations?
Is there peeling lead paint? Are the windows
broken? So it's less about is this a good investment
and more about is this safe for a human to live
in? Exactly. It establishes a baseline floor
for housing quality for subsidized housing. Now
here's one I had never heard of. Immigration
reports in the UK. Why on earth does a visa applicant
need a home inspection? This fascinated me, too.
It connects back to public health laws from decades
ago. If you are living in the UK and you want
to bring a spouse or dependent over on a visa,
the UK Visa and Immigration Authority, the UKVI,
needs to verify your living situation. They want
to make sure you aren't stuffing 10 people into
a one -bedroom flat. Precisely. They require
a property instruction report to ensure the home
will not become legally overcrowded under the
Housing Act of 1985. They calculate room sizes
and the number of permitted occupants. So the
inspector is basically certifying, yes, there
is enough room for this new person to live here
safely and legally. Yes. It's fascinating how
home inspection intersects with immigration policy.
It shows that inspection is about more than real
estate. It is about standards of living and public
health. Okay, let's talk about the specialized
inspections, the add -ons, the ones that go deeper
than the standard visual check. I keep hearing
about four -point inspections. What are the four
points? This is a term you will hear constantly
if you are buying an older home. especially in
Florida or other coastal states. Insurance companies
drive this. They want to know about the four
big liability risks. Which are? One, the roof.
Two, the HVAC, system heating and air conditioning.
Three, the electrical system. And four, the plumbing.
Why just those four? Why don't they care about
the foundation, for instance? Because those are
the four things that generate claims. A leaky
roof causes massive water damage. Old plumbing
bursts and floods the house. Bad wiring causes
fires. An old HVAC system can leak and cause
damage. So it's all about risk for the insurer.
All about their risk. Insurance companies don't
care if the foundation has a crack that might
cause the house to settle in 20 years. They care
if the house is going to burn down tomorrow.
And what are they looking for specifically in
those areas? For the roof, they want to know
the age and condition. For plumbing, they're
checking for old galvanized pipes or active leaks.
And for electrical, they are looking for specific
things like knob and tube wiring or aluminum
wiring. These are old school wiring methods.
Yes, technologies from the past that are known
fire hazards. If a four -point inspection finds
those, the insurance company might say, we won't
insure you until you rewire the house. Which
is a massive, unexpected expense. Good to know.
Now, let's talk about structural inspection.
This brings us back to that legal distinction
we touched on earlier regarding who can say what.
This is a crucial boundary line. A general home
inspector can look at a wooden beam in the basement
and say, that beam is sagging. It has a crack
running horizontally along the grain. That is
an observation of condition. Right. I see a crack.
It is this big and it is here. Correct. But in
many places, like New York, for example, a general
inspector cannot legally give a professional
opinion on structural sufficiency. So they can't
say that beam is sagging and the house is going
to collapse. Exactly. They cannot calculate the
load. They cannot say this beam is overloaded
and structurally unsound. Only a licensed professional
engineer. A PE or a registered architect can
render that opinion. They are the ones with the
license and the insurance to do the math. So
if your inspector sees a scary crack, what do
they do? They put it in the report, often in
big, bold letters. Structural movement and deflection
observed in main support beam. Recommend further
evaluation by a licensed structural engineer
prior to closing. They pass the baton. They stay
in their lane to avoid liability and, frankly,
practicing engineering without a license. And
you, the buyer. have to be the one to hire that
engineer and pay them to come out. Yes. And honestly,
you want them to stay in their lane. You don't
want someone guessing about gravity. That leads
us perfectly into the final section. The fine
print. The limitations and exclusions. Because
for all this talk of forensics, there are huge
blind spots in a standard inspection. And this
is where I feel like buyers get the most upset
later. Why didn't you find this? Huge blind spots.
And the general rule is... If it exceeds the
standards of practice, it is excluded. Let's
run through the big exclusions. Trees, that big,
beautiful oak tree in the front yard. Not included.
An inspector is not an arborist. They aren't
trained to look at that massive oak tree overhanging
the roof and tell you if it's rotting from the
inside and ready to fall on your house in the
next storm. So if you're worried about the trees,
hire a certified arborist. Goals and spas. Usually
excluded from the general inspection unless you
pay extra for a specific pool inspection. A pool
is a complex mechanical system. Pumps, filters,
heaters, chemical balance, plus the structural
shell. Some inspectors have extra certification
for it, but don't assume it's included. Though
the notes mention that the Canadian standard,
the CSA A770 -16, is unique because it actually
mandates swimming pool safety inspections. It
does, which is a progressive step. It focuses
on safety features like fences and gates. But
in the U .S., standard contracts usually exclude
the pool system unless you specifically add it
on. Now, here's the one that I think is the most
controversial. Thermal imaging. Ah, the infrared
debate. I mean, the technology exists. You could
buy a thermal camera that clips onto your phone.
It can see heat loss. It can see cold spots from
moisture behind a wall that looks perfectly dry
to the naked eye. Why isn't every inspector using
this on every inspection? Many are starting to
offer it as an ancillary service, but it is considered
exceeding the standard scope. And here's the
debate. Liability. How does seeing more create
liability? Shouldn't it reduce liability? You'd
think so. But imagine you are an inspector. You
use a thermal camera on the living room and find
nothing. Great. But you forget to scan the small
closet under the stairs. Six months later, a
pipe... bursts in that closet wall right the
buyer sues you saying you had the camera you
were looking for leaks why didn't you find it
the argument becomes that by using the advanced
tool you set a higher standard for yourself ah
if you use it you better be perfect with it exactly
once you start looking inside the walls you open
a pandora's box of expectations Many inspectors
argue that unless they are charging for a full
thermal audit and doing it methodically room
by room, it's safer for them to stick to the
visual standard. I can't see behind walls, so
don't blame me for what's behind walls. Precisely.
And that brings us to the hidden stuff. The biggest
nightmare for buyers. The underground sewer line.
Oh, God. I have a friend who bought a house.
Charming 1920s bungalow. Yeah. Week one, they
flush the toilet and sewage backs up into the
bathtub. The classic horror story. It turned
out that tree roots had grown completely through
the old clay pipes in the front yard. It cost
them $10 ,000 to dig up the yard and replace
the line. They were furious at the inspector.
Why didn't you check the sewer? And the inspector's
defense was likely valid and written right in
his contract. I inspected the plumbing inside
the house. The fixtures drained when I tested
them. The sewer line is buried six feet underground.
I cannot see through dirt. So how do you avoid
that? How do you check for that? You hire a specialist
to do a sewer scope. They run a camera snake
down the line all the way to the street. It costs
maybe $200, $300 extra. And they can see the
cracks, the roots, the blockages. They give you
a video of the whole trip. If you're buying an
old house with mature trees in the yard, it is
the best money you will ever spend. But a standard
home inspector does not do it as part of the
base package. It's an ancillary inspection. That
is a pro tip right there. Always get the sewer
scope on an old house. Always. And finally, we
have to address the no guarantee. The disclaimer
at the bottom of the report, usually in all caps,
this report is not a warranty. It is the harshest
reality. The inspector is not an insurer. If
they missed something that was visible and that
they should have seen, you might have a claim
against their errors and omissions insurance.
But those policies often limit the payout to
just the cost of the inspection itself. Often,
yes. And if something simply breaks the day after
you move in, the water heater that worked perfectly
on inspection day just gives up the ghost. That
is the joy of homeownership. You own the house
and you own its problems. Man. We have covered
a lot of ground. We traveled from the specific
anti -corruption laws of Massachusetts to the
concrete high -rises of Mumbai. We looked at
the bureaucratic mess of Ontario licensing and
the very practical reason why insurance companies
hate knob -and -tube wiring. It is a massive
landscape, and it's a lot more complex than just
kicking the tires. If I have to summarize this
for the listener who is maybe driving to an open
house right now, what's the big takeaway? The
key takeaway is that a home inspection is a tool
for informed decision making, not a crystal ball
and not a warranty. It is a visual snapshot in
time. It reduces risk significantly, but it does
not eliminate it. And it's not a cast fail exam,
right? I think people wait for the inspector
to say the house passed. Exactly. The house doesn't
pass or fail. The house just is. The inspection
tells you the condition. You decide if it passes
or fails based on your budget, your skills, and
your risk tolerance. Right. A house with a bad
roof might be a fail for a first -time buyer
with no savings, but it might be a pass for a
contractor who knows he can replace it himself
and wants to fix it. Jim, becoming cheaper. Everyone
has a smartphone. We talked about AI. How long
until the definition of non -invasive changes?
That is the big question, isn't it? As technology
evolves, will the legal standard of care shift?
If an inspector could have seen the leak with
a $200 attachment on their phone, will the courts
eventually say they should have? Will non -invasive
come to mean anything short of a sledgehammer?
And in markets like India, where the builder
has held the power for so long, will the consumer,
armed with more information and more legal rights,
eventually force a fundamental shift in transparency?
I believe so. Information is power. The more
buyers know, the less they will fear and the
more they will demand. The days of buying a multi
-million rupee flat on vibes alone are numbered.
Well, next time you walk into an open house,
maybe don't just look at the granite countertops
and the backsplash. Look at the corners of the
ceiling. Look at the grating outside. And remember,
what you see is only half the story. Indeed.
Look closer. That's it for this Deep Dive. Thanks
for listening.