Are we heading into a new set of operating rules in real estate? Could this mean there is a chance for evolution in the home inspection industry? If home inspectors want to stay ahead of the curve, they may wish to be looking at other business opportunities.
I have been noticing mixed signals when it comes to the real estate market. On the one hand, we do not recover from a housing crisis in a few short years. I expect that fact, and I try to make my business model stronger to meet this leaner period. Yet what I am seeing is an industry that does not comprehend its predicament. That may not be an entirely accurate statement, so let me explain. We have real estate professionals arguing that stimulus packages are a bad idea, while pushing the idea that we need stimulus packages to help the industry (the mortgage interest tax credit being an example). We were told to vote for people who want to see Fannie Mae and Freddie Mac to immediate end, yet these entities are what is keeping the real estate industry going at the moment. The truly interesting shift is that we may see more individuals forgo the goal of homeownership to become renters. What will they be renting?
As we had testimony before the US Congress recently pushing for policies that would benefit the trend towards homeownership, we also had economists pushing the idea that this recovery will be achieved without housing. The housing industry has been a major economic player. Thinking about all of the materials that go into a home, all of the services that are connected with the home, and the financial industry connected to the home, we can see how important a driver this industry has become, but this may no longer be the case. Obviously, the aspects of buying and selling homes is not going away, so home inspectors do not have to entirely give up their business model, but we are not going to see the same frenzy that we had seen in years past. What does this future hold for us?
Through this blog, I receive calls asking for bids on repair work or remodels. I refer people to others. However, this may be an opportunity that I should not pass by. There are home inspectors who use their business to promote their pest control firm or the remodeling contractors. This has been a questionable practice for me. In Texas, we cannot work on the home that we inspect for at least a year until after the inspection. Furthermore, is there much opportunity in this home repair industry? Where I do see a chance is that the home inspector skill set is perfect for checking on the quality of work by a contractor. Quality of work inspections may be an area where we home inspectors can begin to push our services. Basically, we change our focus from the buyer or the seller to the homeowner.
Another way for us to begin looking at the homeowner is the home evaluation. Do you realize that there is more competition now for home energy audits? This has not become a standard yet for the average homeowner, but more professionals are moving into this field. How about changing the ground rules? Do not offer the energy audit alone, but look at the home as a complete system. As home inspectors, we should know that different systems work together to make the home function properly. We could use this skill set to offer a home check-up, where we report on more than the state of energy usage, we need to report on the state of the home in its entirety (energy, water, structure, and systems). Or service could be quite comprehensive.
Taking advantage of the rental market seems easy enough, go after real estate investors. Well, that is not so easy. Investors are looking to reduce their costs as well, so the home inspector may be loosing out in that market. Not that you should not try; there will always be investors who need are expertise. However, I began to think of the renters. Many renters are acting like they are buying a home, so maybe they should begin looking at ways to acquire the same information that a home buyer does: the home inspection report. If more people are going to stay in the renter category, they may need a home inspector to help them make a wise decision on a home. Landlords may need us to evaluate a home after a renter leaves. This could be a growing market.
I am leaning towards the idea of home inspector as building consultant, like a LEED AP. We do have the knowledge. In this case, I am suggesting that instead of checking on the quality of work after it has been performed that we advise the client on how the work should be done before the job is even undertaken. If more homeowners are staying put in their homes, they are more likely to undertake remodels. The house of the future is not a new house of some science fiction design, but the current home with its interior changed. The new technology battleground is happening inside the home, and our homes will be changed to meet it. This is a chance for home inspectors to learn about the “intelligent” home, so we can be the advisers on this trend.
Our clients may see us as the guys that they call when they are buying or selling a home. Maybe we need to be the professionals that people call when the need the best information about a building. This means that the industry needs to go through an education growth, but the future always requires that from us.