Originally Posted By: rfarruggia
This post was automatically imported from our archived forum.
On two separate occasions, in a public forum, I listened to an influential inspector ( for the sake of continuity, lets call him 'name deleted' or ND for short) expound about why he thinks that there are enough inspectors in NJ. His reasoning so blindsided me that I am glad I heard it a second time. I wish I could give a verbatim, but this is my recollection:
After reciting the same numbers from NJAR, he also concluded that there was barely enough work for 500 inspectors. It was his opinion that if there were, say, 1500 licensed, qualified, and insured inspectors, the consumer would be harmed.
If there were 140,000 sales, of which 75% got inspections from one of the 1500 inspectors, each inspector would perform 70 inspections per year ( or 1.4 inspections a week). To make a living wage, ND reasoned, these inspectors would have to charge $2000 or more per inspection. Thus, many consumers would opt out of inspections, and be left unprotected; and there would be fewer inspections for the 1500, the average price would have to rise again (to provide a living wage) and on and on.
Since ND repeated this twice (at least), he obviously believes this. Unfortunately, even if his numbers were anything close to accurate, the basis of his reasoning is refuted by the one of the core theories of economics, namely supply and demand. The way this works in the real world (i.e. capitalist societies since about 1650) is "greater supply = lower price". more compitition for inspections, thus a lower price for consumers.
Now for the numbers
instead of taking the traditionally slow 1st quarter numbers from NJAR, lets look at the most recent figures from Q2, a seasonally adjusted 163,100 single family sales per year. Add in about 15% for FSBOs (according to NAR as quoted in NYimes R.E. section April 18, 2004) and, just to be conservative, another 20% via sales by agents who are not members of NJAR. So far we are up to 225,000 sales per year. This does not include condos and townhouses, which make up about 25% of the housing stock in N.J. ( again see NAR), commercial and multifamily buildings, (a lot), we are up to well over 300,000 real estate transactions per year in N.J.
For arguments sake, lets say inspections are performed on 75% of these. And just for fun, let us presume that every house that is inspected sell the first time, and never gets re-inspected. And that the entire concept of a listing inspection did not exist, one warrantee inspections, or partial (HUD) inspections or anything else.
With our current 500 inspectors, this afford them each the opportunity to do about 600 inspections per year.
That is if there really are 500 inspectors. The most recent information released by the NJHIAC shows about 285 licenses issued, over 15% of them are out-of-staters. I also know many of those that have license do not practice as H.I.s as a primary occupation.
when NJHIAC started, it sent out the licensing info out to 1500 people that they identified as Home Inspectors throughout NJ. One senior staff member of the board recently said that he was disappointed with the current number of licenses issued and applied for, as a percentage of that 1500. ND insists that 500 is not only enough, but exactly the number of inspectors that he predicted 3 or 4 years ago would receive a license.
Another professional organization lobbied NJAR, through their consul, that thier members should only recommend licensed inspectors (this was back in May of this year, just after the extension bills were passed). Why would they do this, even to the detriment of most of thier own members?
It seems on the face, and everywhere the deeper I look, that some influential inspectors are using the licensing regulations not a consumer protection device, but as an avenue to line their pockets. This is not only my opinion, but also that of the vast majority of the N.J. Senate and Assembly.
500 is not enough. And the gatekeepers to licensing (through mentoring/employment) are mostly those who do not want additional competition. There are a few exceptions, I know most of the guys that are offering themselves as mentors on the njhihobs site. These guys are good, noble , responsible, and are working for the betterment of the industry by sharing tier knowledge and experience, as intended by the regulations. Unfortunately, these 9 inspectors are but a tiny fraction of those who are capable of mentoring. And as far as I know, none of these 9 are seeking to employ those they mentor (save one, who reports 'architects/engineers preferred)'.
Mike and Phil, both of you know that I can rant on about inconsistencies and slights, both actual and implied, gross and petty, regarding these issues for hours. But I have work to do, so enough for now.
The system here in N.J. is flawed. This has been recognized, and hopefully is on the path to be righted. We'll see what the future brings.