February 20, 2019
To all my Maine friends and associates:
The Maine legislators are proposing to license home inspectors. As most of you are aware I’ve spent over two decades involved in this industry and I am opposed to this as a Community leader as well as a Consumer. I have been involved in this process before in the state of Maine as well as in New Hampshire. The results have always been the same, a reduction in Competition and an increase in price to the consumer.
The legislators who passed licensing do it with the noblest of intentions of improving quality for the consumer and reducing the rate of consumer complaints. However these lofty goals never materialize. There is no reduction in consumer complaints in the States after licensing. The best way to protect yourself from a bad inspection, whether your inspector is licensed or not, is to always obtain proof of insurance. There are processes already in place in the insurance industry as well as the court systems in the state to resolve issues. Believe it or not whether your inspector is or is not licensed the conflict resolution is the same process. So what does licensing actually do? It makes it harder for Competition to enter the industry as well as cuts out a portion of the existing inspectors. This drives up demand for the remaining inspectors and in return drives up the cost to do an inspection due to availability and new regulations.
I have experienced this 1st hand in the state of New Hampshire where, before there was licensing, we would get $300 for a general home inspection. In less than 2 and a 1/2 years after the passing of licensing requirements home inspectors were getting $450. The quality of the inspections have not gone up nor have the rate of consumer complaints come down. This is due to the fact that almost all inspectors already follow The American Society of Home Inspectors (ASHI) and the International Association of Certified Home Inspectors (InterNACHI) standards.
I have been involved in many 3rd party reviews of my competitors inspections and about 95 to 99% of the time when there’s a conflict between a consumer and inspector it’s usually because the consumer doesn’t understand the limitations of the inspection standards. But that the inspector made the right call and reported it correctly.
There are roughly 143 inspectors in the State of Maine but only 18 have passed the national exam. What a massive reduction this could be. 4 of these inspectors actually work for me. I could almost overnight control 22.2% of the market. We have always had a very strong training program at Focused Property Inspections hence the reason why we have so many highly trained professionals working for us.
To prevent this from happening the legislators like legislators in other States that have passed licensing will have a grandfathering clause for those who exist in the industry. To which I say if the industry is so bad than it needs to be regulated why are you grandfathering those that ran it into the ground?
So let’s look at some facts. There were 17,633 properties that transferred ownership last year in the State of Maine. The national average for inspections is 80% which means 14,102 of the transferred properties got a home inspection. Out of those 14,102 properties the Attorney General’s office is telling the news that they only received a handful of complaints each year. Does this really sound like an industry that needs regulation that drives up cost for the consumer? Think about this a 100 to a 125000 in tax payers revenue to run a program to oversee an industry that only has a handful of complaints. In return this is going to drive the cost to the consumer up as much as 50% . If you are a first time home buyer this could be catastrophic to your ability to buy a home using the proper inspection techniques. You see there is no law requiring you to have a home inspection so people will opt not to do the inspection due to cost especially those who need to have it done the most. High end buyers will be able to pay the price and gobble up the available inspection periods leaving the houses in the lower end of the market uninspected and those consumers vulnerable.
I just don’t think that the low incident rate of this industry warrants the expenditure of public funds at an increased cost to the consumer both in taxes as well as service prices.
Now I’m going to tell you why some, especially the less experienced inspectors including myself 20 years ago, supported the licensing of Home Inspectors when this issue came up before:
1. Reduces my competition
2. Increases my prices.
3. Protects my market share
4. Makes it harder for newcomers to get into the market.
You see all the reasons why we would support licensing are purely selfish. The reason why we have such a robust training program is because we have robust competition, which drives down prices and increases quality. We at Focused Property Inspections have always trained to the highest level of industry expectations. We have always trained for the day when licensing would be mandatory and have positioned ourselves in the market to be ready for this so we do not fear licensing. We fear what licensing can do to the industry and the consumer. Making it more expensive for home buyers to get into their homes is not good for Maine. We should be looking at ways to make it easier for people to want to stay and live in the great State of Maine.
I could go on and on about this. But I just don’t think it’s right to license and industry with such a very low incident rate. Raising taxes on the backs of Mainers and raising prices for the consumer only to end up with the same rate of incidents that we have today is not a win win. Again 95 to 99% of the conflicts between consumer and inspector are usually due to the consumer not understanding the limitations of the inspection standards. No amount of regulations and/or oversight on the inspector is going to elevate the education level of the consumer when it comes to inspection standards. This is why the incident rate in licenses states does not drop. It’s not the inspectors. It’s the consumer not understanding the limitations that is usually the root of conflicts. The inspectors insurance industry mandates that we use pre-inspection agreements to notify the clients which standards we are following. They signed these contracts but yet still don’t do their research into the standards which identify the limitations of the inspection. A home inspection cannot protect the client from every issue it’s impossible due to the fact that it is a limited visual non invasive review of the readily available areas and systems. The inspector can’t punch holes in walls or rip shingles up to see if there is proper underlayment.
Well there will be more of this to come. Please let me know your thoughts in a constructive professional manner.
God-bless and good luck