I have included this story, to stress the importance of having a home inspection done by a contractor of your choice. The problems you may avoid, more than make up for the cost of the inspection. Read the story below, and then call for an inspection before you buy any home.

"Excerpt from the Detroit Free Press October 20, 2000"

Couple say ad misled them into buying unsafe home 

Termites, tub sewage among code violations


After 10 years of marriage, Mike and Kim Powers bought their first home, an $86,000 bungalow in Inkster on an acre of land their four children could roam. But instead of heaven on Earth, the Powers family says it got the house from hell and blames the federal government. Last month, the Powers clan left the home after an inspector they hired found 181 building code violations -- including sewage backing up into a bathtub, termites, dangling electrical wires and an exposed foundation.

"I was scared to go to the bathroom," 5-year-old Justin Powers said. He refused to take a shower for several days, his parents said. Three months after they moved in, the private inspector said it wasn't safe to live there.

A Federal Housing Administration appraisal and several city inspections done before the purchase had uncovered only minor problems. The seller of the property on Tromley Street also provided a statement claiming the house, built in the 1940s, was in good shape. The seller, who moved to Livonia, declined comment Wednesday.

The Inkster couple purchased the house in May, deciding not to get a private inspection after seeing a commercial on the Learning Channel. It touted the effectiveness of an FHA appraisal in finding defects in a house.

Mike Powers said he took a 10-minute walk through the 1,036-square-foot house after it passed an FHA check with flying colors. He said many of the defects at the Inkster site were hidden behind dropped ceilings and paneling. "I figured the FHA appraiser would be a nitpicker ," Powers, 31, said this week. The commercial Powers saw is considered misleading by a U.S. Senate investigative agency. The Permanent Subcommittee on Investigations says the Department of Housing and Urban Development, the parent agency of the FHA, has deceived home buyers, especially first-time and inexperienced buyers, into thinking they don't need an inspection.

In a Sept. 19 letter to HUD Secretary Andrew Cuomo, U.S. Sen. Susan Collins, R-Maine, requested that the commercials, which aired on CNN, ESPN and some non-cable TV stations, be withdrawn. Collins is chairwoman of the subcommittee investigating the impact of the commercials. The advertisements imply that the home buyer can trust HUD and that the appraisal process will reveal all problems with the house, Collins wrote.

In one commercial, the buyer is assured, "If any problems are found, you'll know about them before you close." But appraisals and inspections are not the same.

Appraisers work for the lenders. They compare house prices in the area to make sure the property is marketable and worth the money the mortgage company is paying in order to protect the lender's investment. They look for obvious flaws but are not required to do an in-depth inspection.

Inspectors work for the buyer or seller. They spend hours checking the property including the roof, the basement or foundation and heating and electrical systems, and they provide a comprehensive written report. Although an inspection is not legally required, HUD documents that are signed by buyers recommend a check of the house by an independent inspector. Matthew Franklin, FHA spokesman, said FHA will finance the cost of the inspection, up to $300, as part of the mortgage.

The purpose of the FHA commercials, which stopped airing in September after a scheduled 6-month run, was to highlight consumer protections in HUD's year-old Homebuyer Protection Plan, Franklin said this week. The plan requires mandatory appraiser testing and a four-page form listing physical deficiencies noted by the appraiser. FHA appraisers are expected to check the "readily observable condition" of the house, Franklin said. "They are not expected to crawl in the ceiling or attic and make a full assessment," he said. No structural or other kinds of problems were noted in the appraisal of the Powers' house. Franklin said the FHA is investigating the appraisal.

Appraisers who fail to meet FHA standards can be fined, suspended or banned from participating in federal programs, Franklin said.

A home seller who knowingly signs a disclosure statement with false information can be liable.

There are no statistics on how many home buyers say they have been confused by the commercials. Of the more than 6 million homes purchased each year nationwide, about 1.3 million families buy with mortgages insured by the FHA. About eight of 10 are first-time buyers. Home inspectors in Michigan have started a letter-writing campaign to federal and state officials criticizing HUD for giving home buyers a false sense of security, said Rick Bowling of Plymouth, owner of an inspection company. Bowling said many home buyers do not understand the differences between appraisals and inspections -- and HUD has added to the confusion. HUD statistics show only about half of all home buyers hire a private inspector.

The Powers family is caught in the middle. The couple admit they were given an opportunity to seek an independent inspection, but didn't think they needed one after paying $300 for the FHA appraisal performed by a company in Southgate. The Powers family is temporarily living at his father's residence. They are saddled with a $768 monthly payment on a 30-year mortgage for a house they say they will have to demolish. Builders estimate it would cost more than $50,000 to repair the 16 pages of code violations.

Before the sale, Inkster city inspectors checked the house for major plumbing, electrical, mechanical and structural defects, said Richard Wooten, the city's director of planning. But "those are just visual inspections," he said. Meanwhile, the Powers family wonders where it will live. "We basically bought a piece of property with utilities," Powers said. "We're stuck. My family needs to be together.

"We want a safe house -- it's what we're entitled to."