National Education Conference
CLEARWATER BEACH, FLORIDA COMING, JANUARY 2016
MAKING BETTER HOME INSPECTORS EVERYDAY!
CO N TENTS F A L L
2015 NAHI BOARD OF DIRECTORS
2015 President | Troy M. Bloxom, CRI Home Inspection Plus, LLC 17640 Lacey Drive | Eagle River, AK 99577 P: (907) 694-7587 email@example.com Vice President | Sean McKenzie, CRI Burlington Home Inspection Service 137 Mansfield Ave. | Burlington, VT 05401 P: (802) 238-6558 firstname.lastname@example.org
ARTICLES Get Your Pre-inspection Report Agreement Signed | 7 Take the Home Maintenance Quiz | 9
Secretary/Treasurer | Charles Kleindienst, CRI Open Sky Inspections 10800 Canaan Valley Ct. | Glen Allen, VA 23060 P: (804) 399-2329 email@example.com Past President | Forrest A. Lines, CRI, NIT NAHI Training Institute
Healthy Tech, Healthy Business | 14
4426 5th St West, Bradenton, FL 34207
When to Report a Claim or Incident | 24
P: (614) 569-1640 firstname.lastname@example.org Director | Curtis S. Niles, CRI, NIT Armored Home Inspections, LLC 1451 N. Hanover St | Pottstown, PA 19464 P: (610) 352-2212 email@example.com
National Education Conference Page 13
Commentary | 5
Director | Steven Burnett, CRI Journey Property Inspections, LLC 403 Burt St. | Tecumseh, MI 49286 P: (517) 920-2888 firstname.lastname@example.org
New Members | 17 It’s Your Business | 19 So You Want to Provide Ancillary Services
It Could Happen To You... | 21 Build Your Own Business (BYOB)... | 25 Now I’ve Seen Everything...| 26
NAHI® is a non-profit association dedicated to promoting and developing the home inspection industry. NAHI®’s objectives are to further the professionalism of the home inspection industry by promulgating standards of practice to provide a consistent method of performance of home inspections; to promote educational opportunities to benefit its members, the home inspection industry, and consumers of home inspection services; to inform the public of the importance of a reputable home inspection as an integral part of the residential real estate transaction; and to protect consumers from fraudulent, misleading, or deceptive practices. The NAHI® Forum is available free of charge to members of the National Association of Home Inspectors and those interested in the promotion and development of the home inspection industry. Statements of fact and opinion in this publication are the responsibility of the authors alone and do not imply an opinion on the part of the members, directors or staff of NAHI®. Material may not be reproduced without written permission.
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Director | Charles Allen, CRI National Property Inspections 713 Augusta Drive | North Aurora, IL 60542 P: (630) 879-5715 email@example.com
Director | Michael Holmes CRI Holmes Inspections, LLC 5891 Picarn Rd. | Jackson, MI 49201 P: (517) 740-7035 firstname.lastname@example.org Director | Peter Rossetti, CRI Pete’s Friendly Home Inspection, LLC 1227 N Peachtree Pkwy | Peachtree City, GA 30269 P: (678) 329-7198 email@example.com
Executive Director | Claude McGavic (800) 448-3942 | firstname.lastname@example.org National Association of Home Inspectors, Inc. 4426 5th Street West | Bradenton, Florida 34207 (800) 448-3942 | Fax: (941) 896-3187 email@example.com www.nahi.org
Fall 2015 | 3
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COMMENTARY By Troy Bloxom, CRI
By Claude McGavic, CRI,
Home Inspection Plus, LLC
National Association of Home Inspectors, Inc.
FROM THE NAHI
FROM THE NAHI
PRESIDENT’S DESK Fall is in the air here in Alaska, and the giant vegetables are in the record books. For some in the home inspection business, the winter is their busiest time, and for others it is a time to reflect. Growing a business does not stop when the seasons change, it continues quietly, sometimes hidden under the leaves or snow, ready to burst forward with the spring of a new year.
Photo credit: depositphotos.com/jtiloligo
The business of NAHI is changing as well. The first home inspector training classes were held in September. Our training instructors are the best in the business and the education is exemplary. A recent graduate of the NAHI Training Institute (NTI) had this to say. “After having been in construction for many years, I thought I knew a lot. What I learned at NTI was that there was so much more to know. The hands-on in the lab and at the properties we visited was invaluable and was the main reason I chose this program. By the end of the class I was exhausted, but I also had far more knowledge about a home and its components than when I started. The support I have received since completing the class has been tremendous”. …Chad B, Columbus, OH. Additional classes have been scheduled through
January, 2016. If you know someone who is interested in taking the course, you could receive free 2016 membership dues. See page 22 for details. NAHI is also now offering three hour home inspector workshops in various U.S. locations to solicit for new inspectors and provide them with the information needed to start and grow a successful home inspection career.
Our annual education conference is scheduled for January in Florida. Start thinking about your schedule and make time to attend. It’s a positive experience to visit with your peers, and to walk away with some great education. I look forward to seeing you all there as well as having the opportunity to speak with all of you. Your board always has NAHI’s best interest in mind when any decision is made on your behalf, but we will always have an open ear to all the members. Should you have questions or concerns do not hesitate to contact any one of us or the friendly NAHI staff at our national office. We are here to serve you.
EXECUTIVE DIRECTOR Ever wonder what you would be doing if you were not a home inspector? You might better think about it - seriously. Hardly a week goes by that I don’t get a complaint from a consumer about a bad experience with a home inspector. They generally want a pound of flesh – and some get it. Let’s face it. You don’t stand a chance when you have to go up against an attorney like one in my area who has a 9 word TV commercial: “Dog Bite? Call Morgan and Morgan, For the People”. If attorneys will go after a single mom with three kids because her toy poodle nipped at someone, what chance do you believe you have when a young family goes into debt to buy a house on the basis of a report you prepared and gets stuck with expensive repairs? We can’t make you bullet proof and would not want to if you did a bad report, but we could help you avoid some pitfalls and traps when wrongly accused. This very topic will be addressed at our January, 2016 conference in Florida. Let’s face it; a tax free trip to Florida in January when snow is halfway up to the eaves of your house can help overcome a lot of cabin fever, especially if it shows you how to keep from having to go back to the job you had before becoming a home inspector. But, that’s not all. If you are one of those inspectors who has copied someone else’s pre-inspection agreement, or worse yet, written one yourself, getting out of that mess will likely yield the same results as trying to baptize a cat. We will have a highly successful and respected home inspection attorney at the conference who will answer your questions and put you on good legal ground with your pre-inspection agreement. These are just two of a dozen reasons you should attend the 2016 NAHI Conference. Registration opening soon. Claude McGavic Executive Director
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Fall 2015 | 5
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Remember to Put the Glass Down Steven Burnett-BSME, MBA, CRI
As home inspectors, particularly those of us in the northern states, we make the best use we can of the summer months. For many of us, that is when the bulk of home sales and our inspection income takes place. The old adage “Make hay while the sun shines” comes to mind. (That’s a well known phrase among farmers and rural folks, you city boys may have never heard it) Anyway, during these months when we are really busy, many of us work 12-16 hour days doing two or three inspections per day. Our mind is on making money and putting reserves into savings for the lean winter months that we know will come. Unfortunately, our families can get left in the dust. We may forget to do some marketing, you know, getting our business cards and flyers into that new office that just opened last week. There’s always CEU’s that we need to take, and attending our NAHI Chapter meetings lose their priority. Our wives may sit alone in the evenings while we are in our office writing reports, and the kids probably hear “maybe tomorrow, daddy is really busy”. We can get tired and sometimes cranky with those around us. We can get caught up in other tasks and handling the stress of building our businesses to support our families. Recently, my wife brought home an article from work. (She works for a counseling office.) The author is unknown, but it really struck home for me.
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“A psychologist walked around a room while teaching stress management to an audience. As she raised a glass of water, everyone expected they’d be asked the “half empty or half full” question. Instead, with a smile on her face, she inquired: How heavy is this glass of water?” Answers called out ranged from 8 oz to 20 oz. She replied, the absolute weight doesn’t matter, it depends on how long I hold it. If I hold it for a minute, it’s not a problem. If I hold it for an hour, I’ll have an ache in my arm. If I hold it for a day, my arm will feel numb and paralyzed. In each case, the weight of the glass doesn’t change, but the longer I hold it, the heavier it becomes. She continued, “the stresses and worries in life are like that glass of water. Think about them for a while and nothing happens. Think about them a bit longer and they begin to hurt. If you think about them all day long, you feel paralyzed - incapable of doing anything” The moral here is to: “REMEMBER TO PUT THE GLASS DOWN”. I found that this is good advice. Once in a while, I need to schedule myself a day off, or weekend off, so I can catch up to myself and my family. For me, this means turning my computer off, letting my answering service take care of my calls, and locking the door on my office with me on the outside. How about you? Do you feel a need to take some time for your family and yourself after the summer rush? If so, maybe you too should “remember to put the glass down.”
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Warning to all home inspectors:
Get your pre-inspection report agreement signed O
ver the past few years, more and more E&O insurance carriers offering coverage to home inspectors are asking a question about preinspection agreement use on an application for new/renewal coverage. The question reads slightly differently from carrier to carrier, but the essence of the question is whether you obtain a signed pre-inspection agreement from all of your customers. The carrier wants to know this because the lack of a pre-inspection agreement can make it more difficult, if not close to impossible, to defend you against any claim, but especially a frivolous one. You may wonder why this matters and the simplest explanation is that when you face a claim and do not have a signed pre-inspection agreement, it gives the claimant pretty much full control over arguing what the inspection was supposed to cover. For example, if you are an inspector in California where there is no licensing and/or state standards, you probably use a pre-inspection agreement that incorporates inspection standards from one of several independent sources (CREIA, NAHI, InterNACHI, or ASHI) and then you follow that set of standards when conducting the inspection and writing the report. However, if you do not get the pre-inspection agreement signed, the claimant is free to argue that an entirely different set of standards should apply and the standards the claimant chooses will almost always reinforce the claim rather than protecting you. Obviously, this can make it very difficult for your insurance carrier to defeat or minimize the cost of the claim. In addition, some insurance carriers give premium discounts based on what state you live in, what license you have, what standards you use, and what association(s) you belong to. When you fail to get a pre-inspection agreement signed that could protect you based on the
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standards you said you use then any claim becomes more difficult and costly to defend. Plus, the carrier that gave you a premium discount for having a signed agreement using those standards is now covering a risk they did not get paid to cover. Recently, one insurance carrier declined coverage for a claim because the inspector checked a box on the E&O insurance application stating he/she always got a signed pre-inspection agreement from every customer. The problem was that in this case, the pre-inspection agreement never got signed and now the inspector has to deal with this potentially costly claim personally. At this point, many of you are probably thinking that it isnâ€™t always possible to get the agreement signed before the inspection happens. However, there is nothing that says you cannot get the pre-inspection agreement signed later. Just be sure the agreement is made effective as of or before the date of the inspection, no matter when it actually gets signed. Perhaps the best way to accomplish this is to hold the report until the agreement gets signed. There is no requirement that you hand over your work product (the inspection report) before the agreement is signed. So, please remember to get your pre-inspection agreements signedâ€Śor you may find yourself up that creek without the proverbial paddle. Author: Brian L. Trotier, JD, is the Executive Vice President and Chief Operating Officer of FREA and a former practicing attorney with more than 30 years experience in real estate and risk management.
Fall 2015 | 7
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8 | Fall 2015
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z i u q e c n a n e t n i a m e m Take the ho As a home inspector, you know that your home is probably the biggest investment one can make. Taking good care of it with regular maintenance is necessary to maintain its value and ensure it will provide a comfortable, safe shelter for you and your family for a long time. Why not test your maintenance knowledge? While this quiz does not address every home maintenance project, it does provide helpful tips and reminders for chores you may have overlooked.
1. How often do forced-air furnace filters need to be changed? A: At least every three months during the heating season.
2. What part of the faucet usually needs to be replaced when you have a water leak?
11. Where should your firewood be stored?
A: Outside, away from your house and not directly on the ground.
12. What helps keep unpainted concrete floors easy to keep clean? A: Concrete sealer.
A: The washer.
3. Should you run hot or cold water through your garbage disposal? A: Cold water.
4. How often should the moving parts of garage doors be oiled? A: Every three months.
5. What tools can you use to unclog your drains?
13. What should you use to clean unpainted concrete floors? A: A solution of 4 to 6 tablespoons of washing soda in a gallon of hot water. Mix scouring powder to the solution for tough jobs.
14. When can you clean hardwood floors with water? A: When the floors have a polyurethane finish.
15. Do hardwood floors need to be waxed?
A: A plunger and a plumber’s snake.
A: Hardwood floors that do not have a polyurethane finish probably will need to be waxed periodically. Use liquid or paste “spirit” wax.
6. What tool can be used to unclog a toilet?
16. What is the best polish for vinyl floors?
A: Coil spring-steel auger.
A: Water emulsion wax.
7. What faucet part needs to be cleaned every three to four months? A: Aerator — the screen inside the end of the faucet.
8. What can you use for traction on icy sidewalks, steps and driveways? A: Cat litter or sand — never use salt because it damages the pavement.
9. Where should the fire in your fireplace be built? A: On the andirons or grate, never on the fireplace floor.
10. What will prevent soot and add color to the fire in your fireplace?
17. When is basement condensation at its maximum? A: In new homes because gallons of water went into the concrete of basement walls.
18. Why should noisy water pipes be fixed promptly? A: The condition that causes noisy pipes may be accompanied by vibration that can cause fittings to loosen and leak.
19. Why should frozen pipes be thawed slowly? A: Frozen pipes should be thawed slowly to prevent the formation of steam, which could cause the pipe to burst.
20. How often should your roof be inspected? A: A qualified roofer should inspect your roof every three years.
A: Throw in a handful of salt.
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Fall 2015 | 9
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21. What should be regularly checked on your security system? A: The alarms and circuit breakers should be checked to make sure they are in working order and the sensors should be inspected one by one.
22. To ensure your safety, what household equipment uses batteries that must be checked regularly to make sure they are operable? A: Smoke and carbon monoxide detectors.
23. What do you use to fill nail holes and cracks in plaster walls and gypsum wallboard? Spackling.
24. What is the white powdery substance that develops on masonry walls? A: Efflorescence sometimes appears on masonry walls. It is crystallized soluble salts that can be removed by scrubbing with water and a stiff brush.
25. At what temperature should your water heater be set?
Enter with Caution
A: 120 degrees Fahrenheit
26. How often do skylights need to be inspected? A: Skylights should be inspected each time your roof is inspected so leaks don’t develop from cracks and interruptions around its seals, caulking and flashings.
27. What is a simple solution you can use to wash extremely dirty exterior windows? A: A solution of equal parts vinegar and water or 3 tablespoons of denatured alcohol per quart of warm water. Use a piece of crumpled newspaper to wash the glass to avoid lint left behind by paper towels.
28. What can you use to help a window slide easily? A: Rub the channel with a piece of paraffin.
29. What should you look for when you inspect your siding yearly? A: Determine if wood-sided homes need to be repainted; check to see if the caulking around the windows and doors has split and cracked, and replace the caulk; clean the mildew; trim shrubbery away so it does not touch the siding. Reprinted with permission. National Association of Home Builders (NAHB) Washington, DC 20005
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ome inspection Standards of Practice require that a home’s electrical system be checked for defects. And few elements of a home inspection receive as much deliberate attention as an exposed electrical panel or a scorched electrical outlet. A good place to begin an electrical inspection is at the service entrance. It’s like the head of a snake. It’s just a good idea to know what is happening at the business end. The inspector should look at the service entrance from the pole to the mast head for signs of obstructions, entanglements, abrasions, safety clearances, rusted mast head caps, bent or leaning mast, loose or missing strain relief, and poorly configured drip loops. And if the service is underground, look for signs of rusted or loose service conduit. While here, look at ground rods, conductor clamps, and grounding at metal plumbing lines, as well as trip hazards at ground rods and conductors. The next part is where you get up really close and personal with this beast. A good inspection requires you to take the dead front cover off the panel. But before doing so, look around. If the area around the panel is wet, crowded, dark, or difficult to access, don’t be a hero. Never let your client or anyone else help you hold the panel cover while you take it off. No sense in having two people die or get burned if the thing shorts out. If the panel has reasonably safe access, first, knock on the outside cover with the back of your hand. If you are still standing, open the panel door and remove the dead front cover. Note if breakers, fuses, or bushings are missing. At this point, you should not let anyone come within reach of you or the panel. Look carefully at the breakers, conductors, and buss bars for signs of solid aluminum conductors, melted conductor insulation, scorching, and other signs of overheating. Look for indications that wire size does not match disconnect size; that each conductor is independently attached to a buss bar or disconnect device (no double lugs); and, that there are no unconventional conductors (extension cord or low voltage wiring) or devices (doorbell transformers) inside the panel. Finally, if wiring in the panel looks like a plate of spaghetti, note the presence of poor quality workmanship and a potential fire or personal safety hazard.
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PROGRAM HIGHLIGHTS 16 HOURS OF NAHI CE, EXHIBITORS, PRIZES, GIVEAWAYS AND SUNNY SESSIONS.
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their day in the sun. Fall 2015 | 13
of compressed air, then hire a professional. The can costs less than $10, while professional help will set you back between $50 and $100 per hour.
Healthy Tech, Healthy Business
Aside from keeping mechanical parts of your computer clean, you should also pay attention to software clutter. Delete programs and applications you don’t use. Cohen suggests using the “add and remove software” feature to cull old files and programs. “Always keep the hard drive at least 20 percent empty,” he adds. “If you have too much stuff, it’s time to upgrade your hard drive, with technical help, or remove unneeded files.”
Follow these steps to extend your computer’s lifespan. Until it slows to a crawl, idles, or crashes, you likely take for granted that your laptop or desktop computer will do what you expect it to. But it’s risky to overlook regular computer maintenance and even worse to be in the dark about whether your backup system is functioning. The fact is your computer will give out on you one day; you just don’t know when. The average useful life expectancy of today’s computers is anywhere from two to five years, says Matthew Cohen, chief technologist for Clareity Consulting, a real estate technology firm based in Scottsdale, Ariz. But you’ll likely be able to increase the longevity of your devices—and eke out perhaps seven or eight good years—by following these tips. In short, a fast, fit, and troublefree computer requires regular updates, cleanups, and backups.
Keeping It Clean Your computer is probably covered with tiny dust particles, which can severely shorten its life span. “Dust is a killer,” says Burton Kelso, owner and chief technology helper of Integral Computer Consultants, a Kansas City, Mo., computer repair company. “When dust collects inside your technology, it can cause your devices to overheat, which will cause them to fail.” To beat back interior dust bunnies, Kelso recommends his clients—15 percent of whom are real estate agents—clean the inside of their computers once a year. If you’re not comfortable with unscrewing the housing and zapping the inside with a can
Don’t install another program just to find out which programs to clean up. Cohen says practitioners should avoid utility apps that promise to optimize or clean your computer. “They cause more harm than good,” he says. Older computers used to benefit from defragmenting, which basically compacted information on your hard drive, speeding up your system. Cohen says most Windows defragmentation utilities are set to run automatically. “However, sometimes, one needs to analyze and defragment the discs,” he adds. To do this, go to the Start menu, type “defragmenter,” and locate the “disc defragmenter” utility. Mac users “generally don’t have to defrag,” Cohen notes. “It does it on its own.” Finally, check your preferences and examine which programs launch automatically upon startup and which ones are constantly running in the background. You can almost always change the settings so that they use up less of your computer’s operating power.
Continued on page 27
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A“lightsaver” for every home inspector The majority of our members will be up for membership renewal effective January 1, 2016. Well, the good news is that the 2016 dues will NOT be increased. YaY! More good news! NAHI is now offering an additional payment method in addition to paying in full, or the four (4) installment method. Members will be able to select a bi-annual credit card payment. Members who are currently using the (4) installment payment will save $7.50 by utilizing the biannual method. For members expiring at the end of this year, you will be receiving an invoice in the mail during the first week of November along with a self-addressed return envelope. You can quickly renew online, or we’d love to hear from you directly. at 800-448-3942. Questions? Email email@example.com.
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*Not available in all areas. Referrals not guaranteed. The franchise sales information in this communication does not constitute an offer to sell a franchise. The offer of a franchise can only be made through the delivery of a Franchise Disclosure Document. Certain states require that we register the franchise disclosure document in those states before offering and selling a franchise in that jurisdiction. NY NOTE: This advertisement is not an offering. An offering can only be made by a prospectus filed first with the Department of Law of the State of New York. Such filing does not constitute approval by the Department of Law. Moreover, we will not offer or sell franchises in those states until we have registered the franchise (or obtained an applicable exemption from registration) and delivered the franchise disclosure document to the prospective franchisee in compliance with law. Financing is available through ServiceMaster Acceptance Company, a subsidiary of The ServiceMaster Co. LLC, to credit qualified individuals. AmeriSpec L.L.C. Minnesota File No. F7441. Amerispec LLC, 3839 Forest Hill-Irene Rd, Memphis, TN 38125, US ©AmeriSpec L.L.C. All rights reserved.
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• National accounts with potential for recurring revenue* • State-of-the-art proprietary software • Expert business, marketing, and technical support • A world-class training center with full-time instructors • Dedicated marketing support
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J U N E 16, 2015 - S E P T E M B E R 15, 2015
NEW MEMBERS ALASKA
Gregory Hyatt, Kenai
Ron Sabotka, Marysville David Wressell, Rochester
UTAH Ryan Taylor, Salt Lake City
Paul Rusk, Phoenix
Jacob Schwegel, Olive Branch
Robert Harrell, Locust Grove Miachel Lathrop, Virginia Beach Joaquin Martinez, Henrico Kevin May, Monroe Marcos Pina, Chesapeake Nicholas Quillen, Broadway Mark Vaughn, Woodbridge
Charles Cook, Sedalia
Nathan Littlefield, Oshkosh
Philip Pearce, Centre Carl Simms, Tuscumbia Stephen Snider, Elmore
MINNESOTA Jim Weidner, Minneapolis
Doug Allen, Running Springs Bernardo Amparan, Highland Mike Bippert, Hanford Gerardo (Jerry) Duarte, Anaheim Douglas Kornblatt, Granada Hills James McBride, Santa Barbara James Murtagh, Rancho Cucamonga Rick Ramirez, Riverside Matt Smith, Canyon Country
Joshua Garner, Jackson
NORTH CAROLINA Jason Ross, Wendell
Frank Hendron, New Castle
Chad Bruner, Etna Jason Corrigan, Lewis Center Eric Fabian, Leavittsburg James Gaither, Cincinnati Tony Lipps, Cincinnati Christopher Lonsberry, Milford William Loomis, Bryan Sherman Sutherland, Lancaster
Jonathan Cox, Northglenn Todd Gold, Golden Jeff Hayden, Wheat Ridge Todd Vowels, Woodland Park
Justin Beach, Vero Beach Rodney Chang, Plantation Corey McClendon, Lakeland Jim Montgomery, Ponte Verda Beach Sean Stanton, Palm Harbor
The steps to update your membership are simple.
1. 2. 3.
Bill Lott, Suwanee Peter Varljen, Marietta
Randal Cook, Honolulu Geno Perozzi, Honolulu
Dennis Kranz, Rapid City
TENNESSEE IOWA Michael Peterson, Bellevue
Nathan Parker, Franklin Brian Tankersley, Johnson City Allen Tetleton, Germantown
INDIANA Mike Mosley, Alexandria Dave Rumschlag, Decatur
MARYLAND Arnold Gozora, Clear Spring Wayne Johnson Jr., Bowle Glen Odor, Ocean City
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We encourage you to update your membership profile regularly. This allows NAHI to deliver information to you in a timely manner, and enable you to maintain the continuity of your membership benefits, such as delivery of this magazine.
John Anderson, Tulsa
Anthony Carrozza III, Quarryville Michael Galob, Glenside John Ramsey, Milford Michael Redden, Orrtanna Gregg Wesolowski, Lansdale Michael Yoder, Coraoplis
Robert Greene, Centennial, CO Gregg Wesolowski, Lansdale, PA
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TEXAS Chad Arnold, Palestine Perry Grimmett, Kempner Brandon Huckabee, Stephenville Michael Luttrell, Quinlan James McNeal, Purdon James Mitchell, Fort Worth Daniel Riley, Del Rio John Vaden, Kilgore Ronnie Wexler, Midlothian
4. 5. 6.
Sign in to your NAHI membership On the right-hand side, select “Manage profile”. Scroll down and click on the “Edit Bio” icon under “Information & Settings”. Fill out appropriate information to update your membership information. Click on “SAVE CHANGES” at bottom of the page. Your membership profile will be updated.
A note about “Privacy Levels” Members can control what the public can view on the national inspector search site. Use the “lock buttons” on the left in your profile to set. DO NOT REMOVE YOUR ADDRESS, BUSINESS OR PERSONAL from your profile, but use the “lock buttons”.
Fall 2015 | 17
A Bright Idea. The Benefits of Belonging Mutual of Omaha Insurance Company and its affiliates and National Association of Home Inspectors have teamed up to offer you an exciting benefit. As an association member, you’re eligible to apply for insurance coverage at lower premiums or with no-cost benefit enhancements that aren’t available to the general public.
We want to shed some light on how Mutual of Omaha can help you: • Continue your income if you can't work • Send your children to college • Have choices if you get sick
• Save for retirement • Accumulate wealth • Protect your business
To learn more, please email me at email@example.com or give me a call at 800-624-5554. Or check out www.mutualofomaha.com/am/nahi/. Let’s get together to discuss your needs and goals. There’s no obligation, of course, and you’ll have a clearer picture of some alternatives available to help you protect what matters most.
Mutual of Omaha Insurance Company 800-624-5554 firstname.lastname@example.org
Insurance products and services are offered by Mutual of Omaha Insurance Company or one of its afﬁliates. Mutual of Omaha Insurance Company, Mutual of Omaha Plaza, Omaha, NE 68175 is licensed nationwide. Afﬁliate United of Omaha Life Insurance Company, Mutual of Omaha Plaza, Omaha, NE 68175 is licensed nationwide except New York. Each underwriting company is solely responsible for its own contractual and ﬁnancial obligations. The insurance provided will be individual coverage, not group coverage. This is a solicitation of insurance and a licensed insurance agent/producer may contact you by telephone. MC34490_1112
18 | Fall 2015
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r u o Y s It’
SO YOU WANT TO PROVIDE ANCILLARY SERVICES – WHAT TO CONSIDER WHEN OFFERING SERVICES IN ADDITION TO A HOME INSPECTION
L A G LE
Photo credit: depositphotos.com/@ ikopylove
By: Joseph W. Denneler, Esquire email@example.com
Whenever an inspector asks me about ancillary services to a home inspection, the conversation always starts with a discussion of the additional risks that may arise in providing that service. While many thirdparty vendors sell their programs and services as being low risk, high reward propositions, home inspectors should always analyze the risks associated with any new service to determine whether that service is the right fit for the inspector’s existing business model.
The very first thing any inspector should consider when deciding whether to offer the services provided by a third-party vendor to his or her clients is the contract between the vendor and the inspector. Home inspectors are often shocked and dismayed that their clients do not read and fully consider the provisions of his or her pre-inspection agreement, yet many inspectors never read the fine print in the contracts they are asked to sign by vendors. Does the contract contain any provisions that may affect the inspector’s ability to discontinue the vendor’s services in exchange for going with another vendor? What is the term of the contract? How does the acceptance of the vendor’s contract affect the inspector’s ability to provide top notch services to his or her clients? These are all pertinent queries that must be made before accepting the services of any vendor to the home inspection industry. The second prudent consideration is whether the inspector is capable of providing the ancillary service. Is there additional training needed to be competent to provide the service? Is there additional equipment or devices needed? Which equipment provides the best “bang for the buck”? All of these inquiries must be made before plowing ahead in providing something new to your clients. The third important consideration before deciding to provide any ancillary service is what standard of practice to follow in providing the service. Some ancillary services have multiple, competing standards of practice just like what is found in the home inspection profession. Picking the right standards is more than just throwing a dart at the board and hoping it hits the target. Any inspector seeking to provide ancillary services or products to his or her clients should take the time to research the standards applicable to the proposed ancillary service and determine which is appropriate for your business model and your client. As a corollary to deciding which standards to use in providing the ancillary service, an inspector should research whether his or her home state has adopted regulations for that service. Are there additional licenses required? Are there minimum insurance requirements? Most recognized ancillary services are not (yet) regulated on a state or federal basis. An inspector should always take the time to examine the laws pertaining to any ancillary service before leaping headfirst into something that may require adherence to laws or regulations. In a similar vein, many states that regulate home inspections have laws regarding which ancillary services may be provided as an addon to a standard home inspection. Any inspector in a regulated state knows too well that they are precluded from providing additional contracting services to repair a defect found during the home inspection. But what about advising the client to allow for additional testing by the inspector regarding a condition detected during the inspection, like possible mold, environmental contamination and the like? Does your state or association
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based standards of practice prohibit suggesting this service be provided to the client by the inspector who detected the condition? Again, in order to consider whether to offer this service, an inspector should always do the needed research, or consultation with an attorney to determine whether the proposed ancillary service is the right fit for the inspector. One emerging ancillary service being adopted by many home inspectors is infrared thermography. Putting aside the “wow factor” of being able to provide a client with an infrared scan of the interior of wall cavities or the hidden defects in a roof, there is much more to being able to provide this service than buying an infrared camera and popping it out at a home inspection. Becoming an appropriately qualified infrared thermographer takes an investment of time for training and money to purchase the right equipment. The science behind the service is fascinating and intricate. Knowledge of roofing materials and how moisture can be trapped in those materials is a must. Moreover, in most situations, a thermographer must scan a building after the sun has gone down but before possible moisture trapped in building materials has an opportunity to cool so it can be detected. This is not a spur of the moment upsell during a home inspection. Providing the service requires planning, knowledge of the science behind the camera, and the ability to perform the services at times when many inspectors are finishing their work day. Similar education and “hands-on” training may be required before offering mold sampling, indoor air quality testing, stucco evaluations, sewer inspections, and so on. Any attempt to blindly offer these types of services without the necessary training and experience can lead to disaster. Many of these ancillary services, if negligently provided, can result in bodily injury and sometimes death to inhabitants of a home. Allowing one’s desire to increase income derived from a home inspection at the expense of a client’s well-being surely puts the inspector squarely within the cross hairs of litigation, which we all know can be the ruin of even the most established home inspection business. Finally, an inspector should always consider whether there is insurance coverage available to protect the inspector when providing any ancillary service. Many errors and omissions polices offered to home inspectors contain restrictions on the nature of the services provided by the inspector that are covered by the policy. Often having coverage for these ancillary services requires an endorsement to an existing policy to cover the inspector in the case of an actual error or omission, as well as frivolous claims arising from the provision of these services. A prudent inspector should always consult with his or her insurance provider before offering ancillary services to his or her clients to determine whether insurance is provided under an existing policy, or if an endorsement is needed to provide coverage. Most insurers have endorsements available to cover an inspector when providing these services, but you certainly never want to find out you have no coverage after a claim is made. There are always avenues to increase one’s business and income. Knowing the potential pitfalls before landing in hot water is the best defense against an unexpected claim from a client. Consider all of the risks and rewards before offering ancillary services to stay ahead of the curve, and far away from a potential claim.
Fall 2015 | 19
20 | Fall 2014
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Knowing that as home inspectors, the image we project elicits real expectations from clients, I am careful about my personal appearance, demeanor, and actions. I dress just a little above my clients (out of respect). I smile a smile of happy contentment, not a surly, ’I’m gonna’ get even for the last time”, kind of smile. And I exude the confidence of a battle tested United States Marine that I am well trained, properly equipped, and I know what I am doing. So, when the home owner asked the real estate agent what that thingie was that I was carrying through her living room, the agent replied that, “ Oh, that’s a telescoping ladder he will use to get into your attic. It’s the coolest thing. I watched a different inspector knock a lamp off a table and then leave marks on a wall by using one of those old extension ladder thingies, but this guy has the coolest stuff”. She was saying, “Why he even has a …”, when I entered the hall and turned the corner to face the attic scuttle. Beaming with personal pride that I had these ladies where I wanted them and wondering what I could do to impress them
next, I extended the current source of amazement and wonder toward the ceiling. Then, when within reach of the ceiling, and with both hands above me to lift the hatch cover, I had this overwhelming feeling of weightlessness that a skydiver must experience upon leaving an airplane. Truth is, I was only about four feet above the floor when the ladder, which I had placed on a throw rug, zipped down the hall floor and crashed into a door casing. (Who knew a throw rug with a ladder on it would actually move; and with NASCAR speed?) At the same instant, I came down, arms flailing, dragging nick-knacks and pictures off the walls. I had forgotten an old Sunday School lesson, “Pride goeth before a fall . . . ”, to which I can now add this post script, “ . . . and takes all credibility with it”. It could happen to you. Claude McGavic NAHI
It Could Happen To You Episode I
Got a “It Could Happen To You” story? Send it to firstname.lastname@example.org. Not a writer? Send us the facts and we’ll ‘polish’ it and then publish it.
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Fall 2015 | 21
Sponsor a new student for the NAHI Training Institute to receive your FREE membership dues at renewal time.
YOUR NAHI DUES
You must know someone who needs training to become a home inspector in one of the following states: AL, AK, CA, CO, GA, HI, ID, KS, ME, MI, MN, MO, MT, NE, NM, ND, OH, PA, RI, UT, VT, VA, WI, WY, and in DC.
OFFER EXPIRES, November 26th, 2015 (Thanksgiving Day).
1) Find a student and get them to take the 80- hour course in Columbus, OH. 2) Agree to mentor the student for 6 weeks or 6 inspections (whichever comes first) after the student successfully completes the course. Mentoring may include advice on how to find customers, inspection report reviews, ride-along inspections, phone or text consultations, or similar home inspection related activities. 3) Notify NAHI in writing prior to the beginning of the course that you are the sponsor. (No prior written notice â€“ no free dues)
22 | Fall 2015
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Fall 2015 | 23
When to Report a Claim or Incident By David Brauner, OREP Senior Broker For many home inspectors, the anxiety ratchets up a few notches when facing an unhappy and complaining client, but not always for the reasons you might expect. Many home inspectors are confident in their reports, so that typically is not the worry. For these inspectors, the heartburn is not that they made a mistake in the report but whether to report the complaint to their insurance agent, just “take care of it” themselves, or simply to ignore it. Most inspectors have walked in these moccasins at least once. If you do report it, the worry is that the insurance company will simply “roll over” and pay off a complaining client to save itself money and then raise your rates next year- whether the complaint had any merit or not. To a careful and competent inspector, that prospect is enough to make your blood boil. And to add insult to injury, the “settlement” is usually just under the deductible cost and comes out of your pocket! If you’re with me so far, here a few things you ought to know. 1. Most insurance policies contain language requiring the insured to report the claim or incident when it happens. A claim can usually be defined as a demand for money or simply a “demand.” Admittedly, this can be murky territory. It doesn’t hurt to take a look at your policy language. With the OREP home inspector policy, a Claim means a written demand or suit you receive. And suit means a civil proceeding for monetary, nonmonetary or injunctive relief, which is commenced by service of a complaint or similar pleading. While a verbal demand or complaint technically does not meet the definition of a “claim,” it can still trigger the reporting provision in your policy for reporting any incident that reasonably could give rise to a claim in the future. Most inspectors ignore verbal complaints but take written ones seriously, especially if they are delivered on a law firm’s letterhead and arrive via Certified Mail. However, many insurance policies do not make any distinction, in the policy language itself, between a verbal and a written complaint. You usually have a duty to report both. The good news is that, contrary to what you might think, reporting is in your own best interests.
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2. Home inspectors do make mistakes, sometimes serious ones that wind up costing tens of thousands or even hundreds of thousands of dollars to defend and settle. If you have insurance and you find yourself embroiled in a complaint, pat yourself on the back for avoiding the potential catastrophe of having to come out of pocket to defend yourself. No one likes insurance until they need it. If you don’t have insurance, get sound legal advice as soon as possible.
Why Report First, as stated above, most policies have language requiring you to report a claim or incident. Why is it so important for the insurance company to know about the claim or potential claim when it happens? Because experience shows that when an insured (you) attempts to handle a claim on their own, they are more likely to hurt their own defense rather than help it. The best advice is to let the experts handle the response- even the initial one. Too many times a polite apology or impulsive admission of responsibility is hard to undo. Secondly, if you do not report an incident when it happens, and some time goes by and the incident resurfaces as a full-blown claim, the insurance company has the right to refuse coverage if they feel the delay in reporting has complicated the defense. That’s what most policy language says. It’s rare but it can happen. Additionally, if you have completed a renewal application in the meantime and checked the box “no claims or incidences,” they are going to want to know why. If they believe you willfully concealed facts, they can refuse coverage. They may defend the claim, but decline to renew your policy. When you go to find a new carrier, one of the questions might be whether you’ve ever been denied coverage and why. You get the picture. It can get ugly.
Claims Made Most every inspector has a “Claims Made” policy. This means the claim has to be reported during the policy period. If you let your policy lapse (don’t renew), the policy period ends. If you did not report the incident when the policy was in force (or during any applicable extended reporting period), there is no coverage for that incident. Moving your policy to another company at renewal is perfectly fine, as long as the new company offers prior acts coverage and there is no lapse in coverage. But imagine this scenario: a homeowner complains about an item or two in your report a few months after moving in. You rebut it verbally and then hear nothing more. You did nothing wrong so you assume it’s resolved. In the meantime, you’ve let your policy expire because business is slow, or you hate insurance or you went on vacation and forgot to renew it in time. Today, six months later, you receive a certified letter from the homeowner’s cousin Joey who has just opened up his own legal practice and now wants to practice on you. If you reported the incident when it happened, even if you did let your Claims Made policy lapse, it should be covered because it was reported when the policy was in force. If you didn’t report the claim/incident when the policy was in force and it has expired, there will be no coverage. So by reporting you are protecting yourself.
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WHAT IS THAT?
Mythbusters Finally, most of the large established insurance programs for inspectors, especially those backed by long-standing insurance carriers that have been in business for many years, like OREP’s, have a staff of adjusters whose job it is it to evaluate the merit of these claims. If the claim is frivolous, the adjusters will respond accordingly. Typically, if the issue goes away at this “first defense” point, there is no cost to the insured’s deductible and no premium increase next year. A happy ending.
This bulb offers more than just light. The Sengled Snap LED lightbulb features a wireless video camera built inside for security monitoring. The 25,000-hour LED bulb can be controlled via a mobile app. Place the bulb outside and the camera uses facial recognition to sort the difference between a family member and an intruder. The bulb boasts a 1080p camera, speaker, and microphone, as well as infrared night vision. The app can be set to alert you when it detects motion across a certain path. You can also turn the light off completely and still have the camera on. Price: $199
So, to summarize, at most insurance programs like the one at OREP, there is no downside to reporting incidents or complaints when they happen, and in fact, reporting can offer you the kind of protection you purchase insurance for in the first place. Food for thought. About the Author David Brauner is Publisher of Working RE and Senior Insurance Broker at OREP.
Build Your Own Business (BYOB) Q&A Session with Scott Lunsford, owner of Pillar To Post Home Inspectors of Denver.
3. What advice do you have for any would-be home inspectors considering getting into franchising? Go for it, but be prepared to work harder than you ever have. In time, you’ll feel reap the rewards for your hard work.
1. How long have you been with Pillar To Post? We opened our doors in 1999. We were the second Pillar To Post franchisee in the state at the time. 2. What about being a home inspector is appealing to you? The ability to keep families safe and to help ensure the homeowners’ investment is protected is something I think about every day. Radon testing, in particular, is a big part of my business given its prevalence throughout Colorado. There’s also an educational aspect to being an inspector that I enjoy, both in terms of educating homeowners about how to keep their home is top condition and mentoring fellow inspectors as well. About 4 years ago I opened up the two territories I owned and have allowed additional Pillar To Post owners to start a business in the area. This added several inspectors to the Denver area which coincided with the upsurge in real estate that the Denver area has experienced in the last few years. I’ve helped train these inspectors and field questions from them on a daily basis and I see them not as competitors, but as friends.
It’s also important to have someone to collaborate with, and someone to share the accomplishments and the occasional setbacks with. My wife has been an active partner in our business since the beginning. We work well together and having her involvement has been instrumental to our success. Surround yourself with people that encourage you and support your dreams. Rely on other franchise owners in the area for ideas on how they do their marketing, how they handle conflicts and ideas on time management. 4. Where do you want to take your business from here? For six years, we’ve been the corporate sponsor for the Brain Injury Alliance of Colorado, supporting its annual golf tournament that raises money to send survivors of brain injuries to recreation programs in the Front Range. Owning a business that allows me give back to the community was always something I desired, so being able to run such a company is very rewarding. I’d like to continue my outreach efforts in both the work I perform and charitable endeavors. Over the next 5 years I would like to continue to cut back on the actual number of inspections I perform each week, building my Pillar To Post business, such that it can run itself a little bit more, providing a steady work pattern for my employees.
Pillar To Post Home Inspectors, the largest home inspection company in North America, with headquarter offices both in Tampa and Toronto, announced today that so far this year they have welcomed 52 new franchisees, and expect at least another 20 to come aboard in the last quarter of 2015. ...Digital Journal-September 23, 2015
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Fall 2015 | 25
Now I’ve Seen Everything A
Yes. It’s inside the house!
C Portable heater + vanity sink = electrocution
The water heater plays “hide and seek”
(A) Steven Burnett, MI (B,C,D,E) Troy Bloxom, AK
You just can’t be too sure
26 | Fall 2015
Time for a new plumber.
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Differentiate from your Competition! Improve the Quality of your Service! Increase your Sales & Profitability! Monroe Infrared Technology, Inc. (800) 221-0163 monroeinfrared.com 29 years dedicated to Infrared NAHI partner for Thermography Training and Infrared Camera Selection
Healthy Business - Continued from page 14
Staying Secure Kelso says malware is the cause of many computer issues, so Windows and Mac users need to take protective steps. Always download antivirus software directly from the vendor site, and don’t share your account information with others. Part of keeping your computer secure is limiting access to it. Marc Catuogno, director of information technology for Better Homes and Gardens Rand Realty in New City, N.Y., oversees 200 computers for 800 active agents and 23 offices. To keep data safe on corporate computers, Catuogno suggests centralizing important information and making it inaccessible to the general sales population. “We keep our data in the main home office,” Catuogno says. “Anything really important we keep on our extranet, [which] is passwordprotected and limits the harm that agents can do to each other’s data.” Keeping information stored this way can actually help agents’ computers run more efficiently, because the hard drive doesn’t have to store data locally. “There is very little information actually on the computers; everything is Internet-based,” Catuogno says. “We encourage the agents to keep their own portable thumbnail drives if they need to access things.” And it’s not just other users you need to be careful about; be choosy about the web applications you use as well. Read their user agreements and research past security breaches before signing up. If you’re looking for a free e-mail solution, choose Gmail, Kelso says, over the less-secure Yahoo or AOL.
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Keeping Up-to-Date Sometimes computers are slow because you’ve been ignoring that box that pops up telling you it’s time to update programs, or even to get the latest operating system. If you’re really far behind, that can mean your software and hardware don’t have the patches they need to interact smoothly and safely. However, don’t get too update-happy. Sometimes it’s best to wait a few days on major updates to make sure they work properly. United Real Estate Scottsdale broker Byron Short, who oversees information technology for 42 agents, warns practitioners against updating immediately. “There’s no reason to be on the bleeding edge,” Short says. “Let somebody else take the damage. Then come in when it’s proven and it works.”
Having an End Game Everyone needs to prepare for the worst-case scenario: losing your data in a crash. Store critical business data on secure servers or using cloud-based systems like Carbonite or Dropbox. Even when your computer suffers a catastrophic failure, this doesn’t mean your business has to experience it as well. Kelley Skar, a real estate practitioner with CIR Realty in Calgary, Alberta, says the last time his laptop crashed in 2012, he lost 30 percent of his data. Fortunately, he’d backed the remainder up using online storage systems. Since then he’s spent about $300 to add a two-terabyte external hard drive that uses Apple’s Time Capsule program to back
up his data locally once a month. No matter how well you manage your computers, you’ll need to replace them eventually. Catuogno’s company uses Windows and Acer machines, but it doesn’t change out its inventory wholesale. Instead, he replaces the oldest machines with new PCs every 12 to 18 months. The company does keep older models that still have life in them available for agents who prefer to stick with what they know. Michelle Hofmann is a Los Angeles-based freelance reporter who loves all things real estate. Reprinted from REALTOR Magazine Online (http://realtormag.realtor.org), September, 2015, with permission of the National Association of REALTORS. Copyright 2015. All rights reserved.
NEW PRODUCT - Leak Detector Catch water leaks before it’s too late. WallyHome offers the ability to detect those leaks before they get too serious and costly. Attach its wireless sensors around water-prone areas such as sinks and toilets. If a drop of water falls, an alert will immediately be sent to your smartphone. The device also can alert you to important changes in humidity and temperature in the home. Price: $300 Fall 2015 | 27
Good to GREAT!
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28 | Fall 2015
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Key to icons Education
Arts & Leisure
These places score high on many of the qualities that families look for in a hometown. The icons below show where each city on the list stands out.
Source: Money.com (September, 2015) Onboard Informatics. US. Bureau of Labor Statistics.
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Melrose, MA Worthington, OH Centennial, CO Plano, TX Novi, MI San Antonio, TX Crestwood, MO Austin, TX Fargo, ND Carlsbard, CA
How much house one can buy depends in large part on how much money one makes. These places have the most “home” relative to earings. On average, housing prices in the U.S. are 3.22 times median household income. 1. 2. 3. 4. 5.
Maryland Heights, MO Hewitt, TX Mason, OH Papillion, NE Tolland, CT
2.01 2.06 2.09 2.12 2.12
x income x x x x
Sources: Money.com (September, 2015) Onboard infomatics. National Association of REALTORS.
Source: Combined Hotness Index for January-June 2015.
Small towns not your thing? These five urban gems offer an abundance of amenities, and at very livable prices.
E I T I C
on d t h ey
PENNSYLVANIA Population: 305,000 Median home price: $115,000 Average property tax: $2,000 Unemployment rate: 5.6%
Population: 433,000 Median home price: $116,300 Average property tax: $2,700 Unemployment rate: 2.9%
Population: 352,000 Median home price: $121,200 Average property tax: $1,800 Unemployment rate: 5.6%
Population: 661,000 Median home price: $288,800 Average property tax: $1,600 Unemployment rate: 4.1%
Source: Money.com (September, 2015)
Apex, NC, pop. 42,150 Papillion, NE, 20,166 Sharon, MA, 18,178 Louisville, CO, 20,075 Snoqualmie, WA, 11,268 Sherwood, OR, 17,813 Chanhassen, MN, 24,671 Coppell, TX, 40681 Simsbury, CN, 23,676 Solon, OH, 24,472 Acton, MA, 23,197 Rosemount, MN, 22,787 Erie, CO, 20,970 Westborough, MA, 18.898 Edina, MN, 49,789 Johnson, IA, 20,126 Mason, OH, 32,273 Draper, UT, 45,356 Woodbury, NY, 10,765 Hewitt, TX, 13,932 Bedford, NH, 21,783 Twinsburg, OH, 18.932 North Laurel, MD, 21,570 West Goshen, PA, 22,541 Wylie, TX, 43,170 Doctor Phillips, FL, 11,147 Nether Providence, PA, 13,875 Berkley, MI, 15.011 Sahuarita, AZ, 26,378 Hillsborough, NJ, 39.192 Damascus, MD, 15,723 Menomonee Falls, WI, 36,641 Maryland Heights, MO, 28,542 Tolland, CN, 15,030 Urbana, MD, 11,154 McCandless, PA, 29,108 Germantown, WI, 19,645 West Linn, OR, 26,250 McCandless, PA, 29.108 Colchester, VT, 17.638 Harrisburg, NC, 13,189 Walkee, IA, 16,696 La Palma, CA, 15,789 Heber, UT, 13,034 Cheshire, CN, 29,633 Stallings, NC, 13,795 Mukilteo, WA, 21,211 Vienna, VA, 16,269 Walnut, CA, 30,054 Woodstock GA, 26,059
1. 02176 2. 43085 3. 80122 4. 75023 5. 48375 6. 78247 7. 63126 8. 78729 9. 58103 10.92012
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50.
According to an exclusive analysis by the realtor.com economic data team, the results for the top 10 hottest ZIPs are in. Each city on this list is emblematic of the key trends driving housing this year, namely economics, job opportunities, and affordability. Did your zip make the list?
Five great places for
Do you Live in a “Hot” Zip Code?
Population: 461,000 Median home price: $172,500 Average property tax: $1,200 Unemployment rate: 4.5%
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