Department of Labor and Revenue

Title - South Dakota Real Estate Commission

Consumer Information About Home Inspections

The state of South Dakota regulates persons who engage in the business of conducting home inspections.

Defining a Home Inspection

A home inspection is a visual inspection and written evaluation of several components of a residential building, including the heating system, cooling system, plumbing system, electrical system, structural components, foundation, roof, and interior and exterior components. Prospective home sellers or buyers frequently order inspections. The purpose of the inspection is to evaluate the condition of the property and its components, and to inform the client of all observable defects.

Regulation of Home Inspectors

Home inspectors are licensed and regulated by the South Dakota Real Estate Commission, which also regulates real estate brokers and salespersons, property managers, time-share agents and real estate auctioneers. The purpose of the regulation is to establish standards for qualification of inspectors as well as for inspections and reporting.

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Types of Home Inspection Licensure

Home inspectors are issued in one of two categories of license, depending on the qualifications of the individual. A person entering the business will be required to complete 40 clock hours of prescribed education and pass an examination prior to filing an application with the Real Estate Commission. Education may be provided by a proprietary school, a technical school, or a college or university. To qualify to be a registered home inspector, an applicant must also be of good moral character, and have completed high school or high school equivalency.

Persons who have performed home inspections for a minimum of one year and have completed 100 home inspections may qualify for a license upon successful completion of an examination and the filing of an application. Persons engaged in the business of home inspections prior to implementation of the requirements for a license who provide proof of one year experience and complete the examination may be issued a license upon approval of an application filed with the commission. The application requires an experience log to be completed by the applicant.

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Extent of Home Inspection

Home inspectors do not perform invasive procedures, but may probe structural components if deterioration is suspected or observed, provided such probing will not damage the component. Such probing will be made in accessible areas, and will not be required on finished surfaces. Evaluation of structural components are not structural engineering evaluations, but rather inspections looking for evidence of a need for possible further evaluation by an engineer or other specialist. Depending on the size and type of structure, a home inspection will vary in cost.

Home Inspection vs. Appraisal

Although sometimes referred to as an inspection, an appraisal is not a home inspection. An appraisal is an estimate of value, determined by an appraiser through various approaches, including a comparison of the property being valued with others that have recently sold. The appraiser's function is to estimate the value of the real estate being secured by a mortgage, or sometimes for insurance, estate settlement or other purposes. An appraiser may conduct a brief inspection of the interior and exterior of the property to determine the number of rooms and overall quality and condition of the property. Appraisers may also note, as part of their report, certain repairs that need to be made, such as painting; but an appraiser does not inspect the systems to determine they are working properly. An appraisal report also should not be relied upon as a substitute for such procedures as a termite inspection or a survey.

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Availability of Home Inspectors

There are an estimated 60 home inspectors doing business throughout South Dakota. As an increasing number of consumers rely on home inspections when contemplating the purchase of a residence, the demand for home inspectors may increase. Many home inspectors conduct their home inspection business in conjunction with another occupation, while others are engaged full-time. A home inspector may also be a professional engineer, a licensed electrician or someone engaged in one or more of many related occupations.

A home inspector may also be a member of a professional home inspector organization. Professional organizations provide a variety of services to their members, including education and standard forms, and require their members to subscribe to a code of ethics.

Most real estate offices keep a list of home inspectors available for consumers. The business section of a telephone book may also include the names of home inspection businesses. In addition, a roster of registered and licensed home inspectors can be found on this website.

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SD Real Estate Commission
221 W. Capitol Ave., Suite 101
Pierre, SD 57501
Phone: 605.773.3600
Fax: 605.773.4356