Part 1: The Market from the Eyes of a Home Inspector

In an effort to provide a broader perspective than just my own, I have interviewed other respected professionals working in the Chicago real estate market. Part 1 of this series is reflecting the market from the eyes of a professional building inspector, Robb Packer.

A leader in ASHI (American Society of Home Inspectors) as a former board member and vice president, Robb Packer has been a respected home and building inspector for nearly 22 years. Actively pursuing excellence in his field, Robb has maintained memberships with the National Environmental Health Association and the American Association of Radon Scientists and Technologists and the Nations Radon Safety Board. He has been measuring and testing radon for 19 years. Robb has worked with many of my clients as well.

Q: Depending on who you talk to, the Chicago real estate market is in a state of flux or a total standstill. Where is most of your business coming from now? New construction, re-sale or pre-listing (before a property goes on the market?)

A. As you know, we are experiencing the toughest Real Estate Market since 1990-1991, the last recession; our business has contracted approx. 40% since the real recession started in 2006. But we are situated at the nexus of what is the current Market. Because we take the metropolitan Chicago area as our territory, we always have something going on, albeit on a smaller scale than usual.

Our business is very diversified, coming from Realtors, Attorneys, Mortgage Brokers, Previous Clients, The Web, and Professional organization referrals.

Currently, most of our business on single family homes are foreclosures. Next, we are still doing most of our business in Condos. As far as the type of business before the bottom fell out, we did primarily pre-contract inspections, with a high % coming from 'New Construction", to a lesser extent, we were developing a sizable business in the pre-listing market, due primarily in the aging of the Boomer parents there home coming on the market.

Q: Often homes in that are in a short sale situation or foreclosure have not been maintained well or perhaps not occupied for a long period of time. Since banks do not allow inspections until after a sale is negotiated, what should a buyer beware of when considering buying a distressed property?

A: In most situations where the distressed property is owned by the bank, the utilities are usually turned off. Because the utilities are turned off, you won’t know the true condition of the utilities and equipment in the property i.e. heating, air conditioning, plumbing which effects habitability. Keep in mind that you may need to be replacing that equipment immediately after closing, or soon thereafter. Buyers should factor in a minimum of $10,000 added cost beyond other relevant issues that would be revealed during an inspection.


Q: What are the toughest challenges today? Have you seen any positive changes as a result of this market correction?

A: The greatest challenges are just getting "normal" people to feel confident enough in their future to either buy their 1st property or take advantage of the amazingly good values to trade up and not worry about selling their current home or if they will still have a career. We are having a "crisis of confidence" that I have never seen in my 22 years as a Professional Building Inspector. The last 2 weeks have seen a spark in our business, but not enough to see a good pattern. We will just have to see if the disconnect in Washington D.C. and the rest of the country heals and see if this Recovery Plan works its way thru the system. Until people see things loosen up (people with great credit seem to have a problem getting loans), and money starts moving thru the Markets, we will have a long, brutal year.

Q: I advise all my clients to get a home inspection whatever they buy. Do you believe a buyer should get a home inspection when they are buying new construction? What is the scope of your home inspections? How is the cost determined?

A: Yes, Yes, and Yes! In New Construction, it is critical to have a good comprehensive inspection. There are a myriad of problems more constant in New Construction than in existing homes. Quality and Structural integrity are huge issues. As in existing home inspections, we take pains to check every possible issue. From windows to outlets, to water flow to seepage. Cost used to be determined by the size and age of the property. This is really a tougher question than you can imagine. Some days it is hard to determine what the value / cost of an inspection is. Mostly though, we keep to our usual pricing and work with some of our more difficult clients.

Q: With new construction what hurdles are you encountering? Are you seeing much change for builders in the way of Mayor Daley's 'Green City' Initiatives? What kinds of 'green' choices are builders making, and on what scale? Do you feel the cost for these outweighs the benefits?

A: As far as LEED or GREEN construction, most of the builders are using Energy Star products to Green Up their projects. Some are using Geo-Thermal, but for the most part it is the equipment not the materials we have encountered in the past few years. As far as Metrospect Ltd is concerned, we have been taking courses and seminars in Green construction and are very supportive of this in the Community. As ,more products and equipment come on line, the choices builders have and the more they are supported by the consumer will determine how far we go. And yes, even at slightly higher costs, the benefits outweigh the costs.

Q: Real estate is local. Which neighborhoods are you working in more and less? Are inspecting more single family homes, condos or investment buildings?

A: Yes, our real estate business is local, but every time there is an economic down turn, the business goes as follows:
a. The less expensive zip codes, 60622, 60607 etc. is where the people and money go.
b. Condos, either 1st timers or new in-towners.
c. Foreclosures, foreclosures, foreclosures! (single family homes).
d. Very little investment properties, this is a major surprise.


Q: Aside from home inspections, what other kinds of inspections do you do? Should everyone do a radon test? Mold test?

A: I do Radon Measurements and Testing, new construction consulting, and expert testimony, and yes, every home should be tested for Radon gas. Radon is the 2nd leading cause of non-smoking lung cancer. Mold should only be tested for after a building inspection has determined the possibility of it.

Q: Robb, Do you think our market will come around?

A: I hope these answers are of help to you and that they illuminate the current condition. I am still a firm believer and have faith in the Chicago Real Estate Market, and in its eventual return to a healthier condition.

For more information on Robb, to read his blog or to hire him to inspect your home, visit his website Metrospect Ltd. or call him directly at 847-808-8488.