Experts suggest all buyers get a home inspection.

Home buyers who get FHA-backed loans might think they can rely on a government-approved appraiser to tell them if the home has structural problems, but the only way to know that is to hire a home inspector.


St. Petersburg Times, published November 4, 2000

A lot of people who get FHA-backed loans think that the federal government would never let them buy a house with structural problems.

And some recent television commercials, touting FHA's Homebuyer Protection Plan, promise that the the Department of Housing and Urban Development will help protect them from buying a dud of a house.

"HUD and FHA are on your side," the announcer in the commercial says. "If any problems are found, you'll know about them before you close."

It's enough to make some home buyers decide they don't need to spend $200 or $300 extra to hire a private home inspector in addition to the government-approved appraiser, say critics, including a U.S. senator.

That could be a big mistake. An appraisal, even the more stringent one required for an FHA loan, is no substitute for a home inspection, appraisers and inspectors say.

The job of appraisers is to determine how much a house is worth, while home inspectors are hired to look in every nook and cranny of a home to determine structural problems. FHA appraisers are required to go a few steps further than a typical appraiser. They make sure that the home meets "minimum property standards." But it's a far cry from a full home inspection.

FHA borrowers are told several times on paper in disclosures that appraisals aren't the same as inspections. Still, borrowers are bypassing the step, and sometimes they are sorry later.

Linda Kemp, a mortgage officer for Market Street Mortgage in Clearwater, constantly counsels her clients that they need a home inspection.

"I tell them, "It's the best $200 you can spend in this whole transaction. Unless you are a builder and you know what you are looking for, I would get a home inspection,' " she said. "I still have people who don't pay the money to have a home inspection done and they have a problem."

First-time home buyers, sometimes cash-strapped to begin with, often are the most likely to ignore the warnings.

Some blame the HUD advertisements and say that the disclosures get lost in a pile of paperwork that home buyers are asked to sign.

"There are a lot of people who get their information from television," said Francois "Frank" Gregoire in Pinellas County. "When you are buying a house, you know what it's like, you have more papers sent your way and more often than not you just end up signing your name without reading them."

Gregoire says the ads are deceptive. They show terrible things happening to homes: a flood caused by a broken water pipe, a ceiling collapsing after a champagne cork hits a chandelier. Then the prospective home buyer awakens from the nightmare to hear his wife telling him not to worry, the appraiser is coming.

"On the one hand, they are nice (commercials) because they do portray the appraiser in a positive light," Gregoire said. "But the bad thing about it is that I am really concerned that they portray the appraiser as being responsible for things that they are not responsible for."

The ads have had an effect, private property appraiser Phil Cousineau said. There are times when he feels like an impostor when he goes to appraise a home.

Cousineau's job is to figure out what a house is worth, but it is clear to him that many of his clients, especially those buying houses with FHA loans, think he's supposed to let them know whether they are buying a house with structural problems.

"It's scary, but consumers misunderstand what we are doing," Cousineau said. "Folks really believe that we are the home inspector when we are there."

Republican Sen. Susan Collins of Maine, chairwoman of the Senate's Permanent Subcommittee on Investigations, was upset enough about the ads to send a letter to HUD Secretary Andrew M. Cuomo.

"The advertisement implies that the home buyer can blindly trust HUD to protect his or her interest, and that the appraisal process will disclose any and all problems with the house," she wrote. "Given that FHA deals overwhelmingly with persons who have no previous experience purchasing a home, I would hope that this inaccurate message troubles you as much as it troubles me."

The ads are not running now because their contracts ran out, yet HUD has defended them, saying they were not deceptive and pointing out the various disclosures that are required that strongly suggest borrowers hire a home inspector.

"I think it's pretty hard for a borrower to walk away from the table not knowing that HUD is highly in favor and highly recommends home inspections," HUD spokesman Andrew Lluberes said.

The commercials don't bother FHA-approved home appraiser Bob VanderLaan of Affiliated Appraisers in Palm Harbor, either. He does not think they are misleading. On the other hand, he's quick to recommend that home buyers hire a good home inspector as well as an appraiser.

"If I were buying a home myself I would get an inspection, and I've been doing this for 22 years," VanderLaan said.

But consumers should be cautious about who they hire to inspect their house. Unlike appraisers, home inspectors are not licensed. There are, however, trade groups that set standards for members to meet including the oldest, the American Society of Home Inspectors.

"I have come behind many home inspectors who have not done their job right," VanderLaan said.

Copyright 2000 St. Petersburg Times. All rights reserved.  

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