A Home Inspector’s Weblog by Frank Schulte-Ladbeck

exploring homes and the lives in them around Houston

Foreclosure Inspectors

There is a growing field at the moment in the real estate industry, and it is the foreclosure inspector. Growing not because of the amount of business has dramatically increased, but because of the number of people signing up to enter this profession.

Professional real estate inspectors, like myself, are regulated in many states, and we are required to follow standards when inspecting a home for sale or purchase. These standards do not apply when inspecting a home that has been foreclosed for a lender. Lenders want to know about the condition of the surfaces and the yard, which is not exactly what I do. A lender will ask if the walls need a new paint job, where I would be looking at the structure of those walls. For this reason, there are some firms selling the idea to people that they can become foreclosure inspectors. They do not need the training that I have acquired; in a sense, it is put forward as a simple job, and it is when only considering this basic description.

Lenders like the idea of dealing with one company that can cover their entire area of operations. They also like companies that they know. These facts lead me to believe that companies offering to bring you into this filed quickly may be earning money from you paying them fees, than from having lenders pay for their service. It is true that a lender will want to know the simple condition of the coverings, and you will not be regulated by the state, but lenders will want to sell these homes. To sell the home quickly they would have to be prepared for an investigation from a real estate inspector. Someone who has not trained in my profession would not be able to go into all of the details that I do. The companies that have a traditional relationship with banks hire contractors who have been in my business. These firms take on individuals like me, because they know that the lender will desire my type of evaluation on top of the details of the visual state of the home. I would be leary of any firm that makes promises of getting you quick work in this field. Check the details of what will be asked of you to see if you accept them.

I imagine that the idea of big money will crop up in a few schemes in the coming months as news of foreclosures stay in the public’s view. The only way for you not to be caught in such a flim-flam is to use your judgement. As a last word, if it is suggested that you should become a property inspector, realize that trade involves evicting people from their homes. Not a pleasant thought in my mind.

Your Houston home inspector,

Frank Schulte-Ladbeck

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17 Comments»

  John wrote @

Frank,

Where is a good place to start in pursuing a career as a real estate inspector? And why are the standards different for lenders who have foreclosed? Is it profitable to “stream line” ones expertease and just do foreclosures? I used a professional home inspector when I purchased my house but I’m curious why the lenders get a different standard. Is there a certification for foreclosure properties?

Respectfully,

John

  frankschulteladbeck wrote @

John,

I sent you an e-mail to better answer you. What I did not answer in the e-mail is the different standard for lenders. Lenders are really looking at cosmetic issues (does the house need paint; or does a wall need to be repaired). Since an inspection can cause problems with the sale, lenders also want to know about the normal home inspection findings too, but this has only been recently that lenders wanted to know about the property inspection. However, each lender is different. I have found foreclosed homes that were repaired before being placed on market, and others that are sold as is. The latter group of lenders do not want an inspector to come in, because they just want to get rid of the home with no more expense. As the number of foreclosed homes increases, this attitude might change. How many home buyers will want to repair a home themselves? It is easier to move into a house that is ready for the move-in.

Frank

  bruce carver wrote @

hey i would like to have you send me more information on how and where to go to get in to this line of work pls send to my email as soon as you can
thank you Bruce C

  frankschulteladbeck wrote @

I sent two emails. My daughter climbed into my lap and hit a button, so that is why there are two. If they do not go through, leave a message for me to send it again.

  Bobi wrote @

Hello, I am currently a residential appraiser trainee with very little work and I am interested in finding out how to get into property inspection for insurance and/or foreclosures companies. Thanks in advance for your time and help.

Bobi

  frankschulteladbeck wrote @

This post seems to cause the most interest, so let me go over the steps for this type of work.

1. Each state has its own requirements from residential inspections, so I would look on my Info on Inspectors page to find out the basics of what you need to be an inspector: such as a license. For example, in Texas you need over four hundred hours of education credits, and then you need to pass an exam. Texas happens to be among the more difficult states to meet the requirements, and they are making it harder here. In some states you just need a contractor’s license. In other states, you just need to call yourself an inspector.

2. Most lenders like using firms that have an established working relationship with them. Many of these firms are national, but there are some local. I would go to your bank and ask to speak with either the mortgage officer or someone in charge of the REOs (this means real estate owned property, or in other words properties that the bank owns). Find out from them which firm they use, and if they would use an independent contractor. Many of the national firms were advertising for inspectors for foreclosures late last year.

3. Insurance company work is far better than foreclosure inspector, so thank you Bobi for bringing it up. Insurance companies need inspectors to evaluate homes for insurance applications, and although the require inspectors with the proper certifications for the state you are in, they do not require that you do a full inspection. Typically, it is a quick exam of the property and taking some pictures of the roof and home. The companies will hire inspectors on a contract basis. It is always better to have an entry, so speak to your insurance agent if he will put in a word for you. Otherwise, contact the main office in your area to find out about the process for being accepted as a contract inspector.

4. As a warning, many inspectors around the country have complained about a slow down in work. Most inspectors, including myself, look at other ways to generate income, so plan on inspections being a part of your income. You can make very good money, but you can also struggle. There are inspector associations, NAHI and ASHI on a national level, that can help you generate work through marketing tips and contacts, so you may want to join such a group.

Well, that is the first steps in a nutshell. Once you have explored those, let me know if you need further information.

  tom Boddye wrote @

Hi,
I’ve had my own home inspection business for over 8 years and due to the economy business is slow. I thought I would try to get into the foreclosure inspection business but I’m having trouble coming up with a list of companies that sub out the work. Can you help me?
Tom

  frankschulteladbeck wrote @

Tom,
I wish that I had a good list. I built up a group of real estate investors through networking, and that is why I inspect quite a few foreclosures. Through my networking efforts, I made a connection with some loan officers, so I get some work from them. First American hires inspectors for this type of work (or they were). They are my best suggestion if you are looking to associate with a firm.

  Debbie wrote @

I plan to look into taking classes, for a home inspector (insurance and foreclosure); I am taking a small course now and I have a question: Once your home inspection report is generated, does it become public information.
Thank you.
Debbie

  frankschulteladbeck wrote @

Debbie,
the report that you produce belongs to the person who paid for it, so it would be their choice to make it public. You would have to hold onto to a copy of the report for a time though. Laws vary from state to state, but around six years is standard.

Good Luck with your classes.

  Jeff wrote @

Frank,
Thanks for your blog postings. They have been helpful. I have been in construction for almost 30 years and have been a licensed home inspector (part time) for about three. Are there any resources aside from ASHI and NACHI through which one can research legitimate insurance / foreclosure inspection companies to contact for employment opportunities in their area?
Jeff

  frankschulteladbeck wrote @

Jeff, I sent you an e-mail; good luck!

  Sergio wrote @

Hello Frank,
thanks for all your valuable info on this blog. its filled with great info and i commend you trying to help people. I have been a real estate broker and mortgage broker for the last 8 years. Due to the horrible economy i need to supplement my income. I would like to obtain information on possibly doing some foreclosure and insurance (windstorm mitigation) inspections here in florida. Can you email any suggestions? Are there legitament companies i should contact?

thank you
sergio

  Montray wrote @

Hey everyone can some tell me how to get foreclosurer inspcetion work I’m located in north fl.

  frankschulteladbeck wrote @

Sergio- I sent off an e-mail. I hope it helps.
Montray- basically let me put down what I wrote in the e-mail to Sergio: Florida does not have laws regarding home inspectors status (such as licensure) so you will have to prove to the firms that you have an appropriate background for such work. Clearcapital.com is one place to register to see if you can do quick inspection work. Otherwise, it is a matter of contacting the REO specialist at a local bank to see which firms are specifically operating in your area, or contacting insurance companies.

  Anna wrote @

Nice forum. I have had one experience with pre-disaster inspections and one with post-disaster inspections. There seems to be a mentality of ‘makin a quick buck’ attitude out there regarding inspections. Yes most of us get into the inspections business for income, however, too many think they can skate by without attention to detail or just not reveal all that should be revealed. This is not the business to get into if you are not consciencious. Even with two years experience I make a better inspector than some who have 20 years, but because I am consciencious. It seems to be the missing ingredient for some of the independent inspectors. So, in my opinion, if you can’t focus and find the details that most people miss, this is not the business to get into. I have discovered that inspections is like detective work. To be a good one, you need to be able to see through the obvious and have analytical clarity. It is my hope and belief that my attitide to get things right, will get me very far in this business. I really like this line of work.

  frankschulteladbeck wrote @

There does seem to be an attitude that home inspection is an easy business to get into, and that quick money is to be made, but like any business it takes work.


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