Home Inspectors as Independent Business Operators
by Kenton Shepard
Members of InterNACHI Australia are independent business operators and make their own business decisions. The mission of InterNACHI Australia is to provide Standards of Practice and a Code of Ethics for its members, training and support for its members in both inspection and operating a business, and education for the public about the inspection industry. Members bear all responsible for establishing and running their own businesses.
Standards of Practice
The Standards of Practice are a set of minimum guidelines that define what an inspector is and isn’t required to do when performing an inspection. This helps build confidence among home buyers and those with financial connections to the inspection industry, including home sellers, real estate agents, lending institutions and insurance companies. When an inspector adheres to a Standards of Practice, those who depend on the report know that it will contain basic, crucial information. The inspection reports of most inspectors exceed the Standards of Practice.
Code of Ethics
InterNACHI Australia is serious about enforcement of its Code of Ethics. Inspectors are not allowed to offer to repair any condition they find for a period of one year after the date of the inspection.
Another common concern is that inspectors will make secret agreements with real estate agents that include ignoring defective or safety conditions in return for work referrals. InterNACHI handles ethics complaints through a review committee that makes a determination after hearing from both the inspector and the person filing the ethics charge, and examining all available evidence.
A major part of InterNACHI’s mission is providing online inspection training. InterNACHI’s online training includes a full spectrum of inspection courses with text and photos, video courses, and video segments that cover various aspects of inspection.
Providing training online has a number of advantages:
- Members can learn from anywhere as long as they have an Internet connection.
- Members can take all courses from a single location.
- Members don’t have to pay for travel and accommodations in addition to the cost of the class.
- Because no classrooms or instructors are required, we can offer quality training at a much lower price.
- Online photos and videos allow us to take the inspector places that would be difficult to take a class, such as onto a roof or into a roof space, and other areas that might not normally allow public access, such as a stone quarry or cement plant. They also allow us to cover single subjects with major components that are distant from each other.
Operating a Business
InterNACHI Australia and its members are separate business entities, so InterNACHI bears no responsibility for business decisions made by its members. Our interests are in promoting the inspection industry and in training and supporting our members.
Although we provide a number of free marketing services, courses and advice to our members, aside from requiring compliance with our Standards and Code of Ethics, InterNACHI makes no effort to control how members operate.
In order to help support our members in developing their inspection businesses, our online materials include:
- legal advice on what business form to use;
- advice on developing leads;
- free logo and brochure design;
- low-cost, SEO-optimized, easy-to-edit websites with multiple add-on functions;
- expert advice on website content, including what works best, where to get it, and how to organize it;
- a library of inspection- and consumer-related articles for use by our members on their websites and newsletters;
- access to specialized inspection software and reporting forms;
- an extensive online graphics library for use by members; and
- inspection contract templates.
Setting Inspection Fees
Each individual inspector sets his or her own inspection fees according to the method that each thinks is best. The fee for inspecting a home is usually based on the amount of time the inspector estimates it will take to complete the General Home Inspection. A common fee for a 280-square-meter home might be $350, and the inspector might expect to spend up to three hours on the inspection and up to two hours on the report.
The following criteria are usually factored into the fee:
- Home size is usually the primary basis for determining inspection fees.
- If a home is exceptionally old, it may require more time or special skills to inspect.
- The quality of the home is often taken into account. Poor-quality homes may contain more defects.
- Very expensive homes carry higher liability. If a solid gold doorknob is inoperable and needs replacement and you miss that, you may be asked to pay for replacement. So, you would take plenty of time with this type of home and would charge accordingly. These homes are out there! For some extremely high-end homes, inspectors charge 0.01% of the sales price.
- The complexity of the home systems can affect the time it takes to inspect.
- Homes in exceptionally poor condition often take longer to inspect and fees need to reflect this. Foreclosures are often in poor condition.
- In addition to the General Home Inspection, other types of inspections may be requested. Some common types of ancillary inspections for which inspectors might charge extra include private water well/bore equipment, yield and water quality, septic systems, wood-destroying insects, security systems, etc. Home inspectors with the proper qualifications can perform some of these. Inspectors who are not qualified will sometimes charge a fee for arranging for the services of a qualified contractor.
Payment is due at the inspection before the report is supplied. Clients who are unhappy with what the report has to say about the home may refuse to pay. “No payment at the inspection, no report supplied” is the universal practice.