September, 2010
Washington Watch
Inspection News and Views from the American Society of Home Inspectors



Consumers Benefit from Major Home Inspection Legislation

RANDALL PENCE

The Wall Street Reform and Consumer Protection Act adds home inspection to the U.S. Housing and Urban Development (HUD) agency’s housing counseling program in a big way.
 HUD will do the following:
  • Actively advise homebuyers across the country to obtain home inspections as a key element of buying a house.

  • Tell buyers that obtaining a home inspection is a decision they need to make and should make.

  • Tell buyers what professional characteristics to look for in a home inspector and where and how to find one.

  • Ensure that homebuyers reached by the HUD counseling programs consider obtaining a home inspection as early as possible in the process — when home inspections have the greatest utility to homebuyers.

  • Develop new documents and training materials both for training HUD counselors and for distribution to the buyers they counsel.

  • Make all of these messages available to all homebuyers regardless of whether they finance using government-backed programs or private-sector lending.

This national de facto marketing effort will occur at no cost to ASHI members, and will be conducted under the authority, funding and staffing resources of HUD.

With completion of this legislative phase of the project, ASHI will shift to the next phase — administrative implementation. We fully anticipate ASHI will have input into the implementation phase. In fact, ASHI has already helped HUD draft some of the key documents that will be used – the “For Your Protection, Get a Home Inspection” document and the “Ten Questions to Ask Your Home Inspector” document that prompts homebuyers to consider the quality, professionalism, ethics and experience issues that strongly favor ASHI home inspectors.

Purpose of the legislation

Previous research conducted by the Government Accountability Office (GAO) (also requested by ASHI) demonstrated conclusively there are numerous reasons why homebuyers do not obtain home inspections, many of which are unrelated to cost. The reasons include confusion, lack of adequate information about the benefits of a home inspection, poor timing, simple lack of awareness and failure to attend to details, not knowing when a home inspection should be obtained and more.

It is reasonable to assume this confusion costs ASHI members prospective client opportunities and considerable revenue. Yet, most ASHI members do not have the resources to, on their own, fund or staff a coordinated effort to redress this revenue-sapping confusion and misinformation.

However, the federal government does have the resources to address this problem.

ASHI developed a compelling, comprehensive argument that it is in the national interest and consumer’s interest for the federal government to help. ASHI associated home inspection with consumer protection, a winning strategy in the current environment.

Further, ASHI devised an acceptable mechanism to implement such a national program by modifying existing programs.

Further, ASHI crafted a new legislative proposal to provide the legislative authority for HUD to apply resources specifically to home inspection counseling on a nationwide basis.

ASHI was successful in convincing key members of Congress at the heart of housing legislation that the legislation was substantive and would help homebuyers make better homebuying decisions.

The effort culminated with passage of the ASHI language within the larger financial reform bill.

The turnaround: History of ASHI legislative activity

1. Ten years ago, HUD was spending millions of tax dollars, with congressional approval, to tell homebuyers that they did not need a home inspection, only a good appraisal.

Today, ASHI has turned Congress and HUD 180 degrees. Congress is passing ASHI legislation, and HUD will soon use its funding and staff to deliver precisely the opposite message, a package of messages delivered by government and designed to drive homebuyers to hire home inspectors.

2. Within the home inspection community, only ASHI has this capability. ASHI has demonstrated that it can effectively represent the interests of its members before the federal government. ASHI is the voice of the home inspection profession in Washington, D.C.

ASHI has invoked enhanced political support with highly-targeted use of the modest, but valuable InspectPAC, the political action committee for ASHI, at minor cost to the association and its members.

Your successes in advocacy in Washington, D.C., are not limited to home inspection counseling. We will open doors for other opportunities that could drive new markets, new revenues and more to ASHI members.