HMS says next inspection is free if sale falls through

November 13, 1994|By Adriane B. Miller | Adriane B. Miller,Special to The Sun

For years, buyers have cried foul when they pay $175 or so for a pre-purchase home inspection, only to have the seller back out of the deal or have their funding denied.

HMS of the Mid-Atlantic States, a home warranty company that recently started offering inspections, says that if it inspects a home at the buyer's expense and the sale later falls through for any reason, that HMS will inspect the buyer's next potential purchase for free.

VTC HMS, based in Fairfax, Va., said it is the first company in the region to offer such an inspection policy.

William Lamb, a buyers' broker with Buyers 1st Realty in Annapolis, applauds the program.

Mr. Lamb says buyers unfairly pay for home inspections even when the deal falls through because of defects uncovered by the inspection.

"It's probably not going to come into play very often, but it's of value to anybody who is thinking about buying a house, especially the first-time homebuyer where money is an issue," Mr. Lamb said. "I'm surprised nobody else has come up with it."

But some inspection firms think the policy only helps HMS.

"This is a marketing ploy," said Harvey "Sonny" Mosier, a home inspector with R. J. Moore and Associates in Annapolis and 1994 president of the Baltimore Chapter of the American Society of Home Inspectors. "HMS has a warranty service, and what they really want to sell you is the warranty service.

"The tendency is going to be for the inspector to be lenient in the reporting, for fear of killing the deal," he said. "No one in business is going to want to invest three hours of work today, just to turn around and do it all again next week free of charge."

HMS is nationally known for home warranty products it offers buyers, and errors and omissions insurance it provides real estate agents. The parent company and its affiliate, HMS Mid-Atlantic, have operated for about 10 years.

Brian Carr, HMS Mid-Atlantic vice president of operations, said HMS began offering inspections in May in Maryland, Virginia, West Virginia and Delaware. He said the company got into the home inspection business after real estate agents complained that bad inspection reports were ruining deals.

"We're not there to kick the contract out," Mr. Carr said. "Our inspectors are encouraged to give an unbiased assessment of the purchase and to be sensitive to the delicate Realtor/buyer/seller relationship."

He said every house has good and bad points, and HMS inspectors try to highlight all of them. "We rate a house against its peers, not the Taj Mahal," Mr. Carr said.

The company's slogan -- "No Close, No Pay" -- is slightly misleading; buyers do pay for the inspection upfront, even if they don't buy the house. But HMS will perform a second inspection at the buyer's request if the second intended purchase is within 100 miles of the first. The policy does not apply to inspections ordered by home sellers.

A staff of about 40 inspectors, each with at least five years' experience and membership in ASHI, conducts HMS inspections. The company charges between $175 for houses priced under $175,000, and up to $295 for houses valued above $300,000 -- about average. Inspections take about 2 1/2 hours.

Homebuyers don't have to buy pre-purchase inspections unless the lender requires them. Most real estate agents recommend them because they point out minor deficiencies that may need attention in the future, as well as major problems that may be reason enough to cancel the contract.

In its five full months of operation, HMS has made "quite a few" free inspections for buyers, Mr. Carr said, for reasons ranging from lack of financing to buyer's remorse.

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