Are We Over-Protecting Home Buyers?

Have you been to any kind of a doctor or dentist lately? It’s remarkable to see how technology and research have changed medical care.

But now arises a medical question which — as we shall soon see — relates to real estate: Has medical testing reached the point where it has spawned an industry dedicated to more tests — even if healthcare is not improved?

Writing in The Washington Post, Dr. H. Gilbert Welch — a professor of medicine with the Department of Veterans Affairs and Dartmouth Medical School — says “the harder we look, the more we find. CAT scans of the chest lead more people to be told they have lung cancer, and there are even more abnormalities to find in the abdomen. As one radiologist who has read thousands of these scans put it, ‘with this level of information, I have yet to see a normal patient.'”

Welch, the author of “Should I Be Tested for Cancer? Maybe Not and Here’s Why” also says:

“Millions of healthy Americans are being told that they are sick (or ‘at risk’). More are undergoing invasive evaluations with needles, flexible scopes and catheters. And more are taking drugs for early forms of diabetes, heart disease, osteoporosis, hepatitis, vascular disease and cancer.

“We need to start asking hard questions about whose interests are served by the relentless pursuit of disease in people who are well. Clearly it’s good business — for test manufacturers, hospitals, pharmaceutical companies. And it’s good for some doctors.”

See: Dangers in Early Detection, July 1, 2004

We have a parallel dilemma in real estate. We have lots of tests, few people who say homes are imperfect — or that testing is a business.

I have very much favored home inspections because I though they were good for sellers (to head off future claims of concealed damage) and buyers (to better understand a property and its condition). I also think checks for wood-boring inspects should be made, in part because they’re quick and cheap.

But there’s no doubt that more tests will discover more “problems” — and things which would have been perfectly acceptable 10 years ago are suddenly matters of great concern.

Visit any historic home used as a residence and you will inevitably find lead paint and mold. And yet, magically, people occupy such properties, sometimes generations within the same family, and — usually — without producing tree-dwelling, 12-toed mutant off-spring.

The argument here is three-fold:

First, we need to weigh costs and benefits. Think of radon. Is radon a problem if you’re not a chain-smoking, basement dweller who has a day job in a uranium mine? How will you know? One study by the EPA found that 49.9 percent all positive tests were false. (See: “Technical Support Document for the 1992 Citizen’s Guide to Radon,” EPA, Page 3-11)

The EPA’s own Scientific Advisory Board said in a letter to the government that radon testing would produce 4.1 million “unnecessary mitigations” because the process was so uncertain. (May 22, 1992)

Question: How much will 4.1 million unnecessary radon repairs cost the public? Can you say billions of dollars? (For a remarkable discussion of radon, see Leonard Cole’s book, Element of Risk, The Politics of Radon.)

Second, all homes are imperfect simply because homes are complex. Buyers must understand that they should be legitimately concerned with major problems — but that they are buying homes in substantially the condition that existed as of the day of purchase.

Third, a home inspection should not be seen as a club designed to force concessions from sellers, it is not a tool to re-open negotiations. It is, or should be, simply a way to better understand a property and its faults — and there will be faults.

Professional home inspections should be routine — and most other tests should be required only on a case-by-case basis. The public must be told in writing of the accuracy of all tests offered and the fact that such tests can be wrong. Those who test should be forbidden from also making repairs because such dual roles represent at least the appearance of a conflict-of-interest. Instead, there should be those who offer tests and separate, unaffiliated firms that make repairs. Referral fees between the two groups should be banned, of course.

Like the chest surgeon above who can never find a “normal” patient, more testing will simply produce more anxiety and more repairs — many of which are simply unnecessary. It’s time to put testing in perspective.

Published originally by Realty Times on July 6, 2004 and posted with permission.

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