Working RE Home Inspector - Issue 20

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Home Inspector Working RE

Fall 2022,Volume 20

INSPECTING IN A SLOWING MARKET Infrared Camera and Home Inspections Notes on the Limitation of Liability Mysterious Leaks

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From the Editor

Readers Respond

6

Inspecting in a Slowing Market

by Isaac Peck, Editor

10 12 16 22

Infrared Camera and Home Inspections

by Bill Fabian, Monroe Infrared Technology

Notes on the Limitation of Liability

by Kendra Budd, Associate Editor

Mysterious Leaks into Home and Basement

by Tom Feiza, Mr. Fix-It

Managing Client Expectations

by Kendra Budd, Associate Editor

26

Lead Testing and the Correlation of Decreased Violence

by Kendra Budd, Associate Editor

30

Exploring “Pay at Close” Inspections

by Aaron Fuhriman, Guardian Payments

32 36

Animals, Skeletons, and Creepy Home Inspection Stuff

by Reuben Saltzman, CEO of Structure Tech

How to Deal with Cancellations as an Inspector

by Ian Robertson, InspectorToolbelt.com

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Professional Marketplace Mission

Working RE Home Inspector magazine is published tri-annually to help home inspectors build their businesses, reduce their risk of liability and stay informed on important technology and industry issues.

Editor

Isaac Peck: isaac@orep.org

Senior Graphic Designer

Ariane Herwig: ariane@orep.org

Associate Editor Published by OREP Working RE is published by OREP, a leading provider of home inspector insurance nationwide. OREP has a low cost, broad coverage E&O and General Liability policy. Coverages available include radon, infrared, termite, pest/rodent, lead paint, mold, septic, and more. See inside front cover for more information or visit us online at OREP.org to get a quote today!

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Working RE 6353 El Cajon Blvd Suite 124- 605 Sa n Diego, CA 92115 (888) 347–5273 Fa x: (619) 70 4–0567 www.workingre.com

Kendra Budd: kendra@orep.org

Graphic Design Associate Maria Cornelia: mj@orep.org Working RE Home Inspector is published tri-annually and mailed to home inspectors nationwide. The ads and specific mentions of any proprietar y products contained within are a service to readers and do not imply endorsement by Working RE. No claims, representations or guarantees are made or implied by their publication. The contents of this publication may not be reproduced either whole or in part without written consent.

From the Editor

The Struggle

by Isaac Peck, Editor

It’s clear that the market has shifted.

As a leading provider of home inspector liability insurance, OREP is in touch with thousands of home inspectors every year—hearing their stories, keeping a pulse on their businesses, and defending them from (mostly) frivolous complaints.

Recently, I have been personally calling home inspectors who are current or past clients of OREP to check in on their business and see how OREP can improve on the services we provide. What I’ve found is that many newer home inspectors are pulling out of the business and “hanging it up” because of the slowdown in work.

Faced with the already difficult proposition of starting a new business, finding those first clients, and networking with real estate agents—the task becomes even more difficult in the face of a substantial decrease in purchase transactions across the United States (See Inspecting in a Slowing Market, pg. 6).

Even experienced home inspectors are feeling the pressure. Of course it is not just home inspectors who are being affected.

Businesses everywhere are bracing themselves for what the “experts” say is coming—beseiged by headlines that predict doom and gloom, recessions, and crashes.

In the face of this, I’m reminded that challenges are also opportunities. Across all industries, as some businesses retract, pull back, or close down, the ones who stick it out—who push harder—are the ones who not only survive, but thrive. There is a cyclical nature to business and the economy, and real estate especially.

During these difficult times—during this struggle—the decisions we make will have far-reaching effects on our businesses and on our futures. We can’t control the economy, but we can control how we respond.

And so from one business owner to another, I encourage you to double down on your business and make the most out of the challenges facing us today. Where there are challenges, there is opportunity. Here’s to your success! WRE 4

Working RE Inspector Fall 2022

Readers Respond Should the Buyer’s Agent Attend the Home Inspection As I am sitting down the block, waiting for my home to be inspected before the sale, I am concerned that the inspector is in my house with no one watching my property. I feel that the known Realtor of the buyers, who has the code for the key, should be in there and responsible. She gave a totally unknown stranger access to my home. —Steve In reply to Steve: You need to realize inspectors are licensed and insured just as we agents are—and ones with experience and a good reputation deserve our trust and respect.

They do inspections ever y day. I hope this helps change your perspective on the matter. They get the key code in the same fashion we do—by setting an appointment with the showing company and having homeowners like yourself approve the appointment. Worry about other things. —Damon

Home Inspections and Codes In Kentucky, it is a violation of State law for a licensed home inspector to report any code compliance issue either in their report, or verbally to clients. Such violation could result in disciplinar y action by the Board of Home Inspectors up to and including license revocation. More states need to build this wall between home inspectors and codes. It is amazing how many eggheads tr y to say that what we do comes from codes and continues to be based on codes. After nearly 40 years in this business, I assure you codes had nothing to do with it! —David Michael Green WRE

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Inspecting in a Slowing Market

by Isaac Peck, Editor

700,000

650,000

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250,000 Jan

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Figure 1: Existing Home Sales in 2022, Compared to 2020 and 2021

It’s no secret that the real estate market has slowed down.

Rapidly rising interest rates, uncertainty in the economy, and the looming threat of a recession have taken their toll.

The latest data from the National Association of Realtors (NAR) shows that existing home sales in July declined by 20 percent. Existing home sales in August 2021 were 576,000.

But in August 2022, only 451,000 homes were sold—a decline of 125,000 home sales.

If we assume an average home inspection fee of $400, a decline of 125,000 home sales represents $50 million in lost revenue for home inspectors nationwide just in the month of August this year. (*125,000 Homes X $400 Inspection Fee =

Isaac Peck is the Editor of Working RE magazine and the Senior Broker and President of OREP.org, a leading provider of E&O insurance for savvy professionals in 50 states. Over 10,000 professionals trust OREP for their E&O. Isaac received his master’s degree in accounting at San Diego State University. Reach Isaac at isaac@ orep.org or (888) 347-5273. CA License #4116465.

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Working RE Inspector Fall 2022

$50,000,000—Assuming all homes would’ve been inspected.)

If you take into account additional services inspectors provide, such as sewer scoping, radon testing, and mold testing, the impact is likely even worse.

This is no small decline in business in just a single month.

In fact, these are the lowest sales numbers for the month of August that we’ve seen in the last decade—making it the slowest August since the year 2011. But compared to 2020 and 2021, an even sharper contrast is notable. Figure 1 shows the Existing Home Sales in 2022 compared to the last two years.

Of course, one bright side for home inspectors is that the slowing of the market has done away with the risky practice of waiving the home inspection that became so popularized during the height of the “craze” in 2020 and 2021.

Nevertheless, home inspectors are feeling the slowdown. In the face of declining real estate transactions and declining revenue—what is a home inspector to do? page 8 8

Working RE Inspector Fall 2022

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7page 6 Slowing Ian Robertson, a veteran home inspector in New York and co-founder of Inspector Toolbelt, a fast-growing inspector reporting and scheduling soft ware, says that while his inspection firm is not doing bad, they are still feeling the sting of the slowdown. “We are seeing a fair number of our competitors go out of business because of the slowing market. I’m not talking about an official ‘Hey everybody, I’m out of business,’ but we’re seeing home inspectors shut-down their websites, pull down their Facebook page, and go out and do contracting work full-time until the market turns around,” says Robertson.

This is a unique time for home inspectors, according to Robertson, because the market is still transitioning between a seller’s market to a buyer’s market. “The transition period is generally the worst for home inspectors because not a lot of transactions are taking place. It takes time for sellers to adjust to the new market reality. I see a lot of home inspectors hurting but not talking about it. I try to be super transparent about my business on my Inspector Toolbelt podcast and I’ve been upfront that this year (2022) is the first year since the great recession that my firm has seen a downward turn in our numbers. I expect that by late spring next year (2023), we should see some things pick up. As the spring season goes along, more and more listings are going to come to market and we should see a full-blown buyer’s market take hold,” reports Robertson.

In the meantime, Robertson encourages inspectors who are struggling not to give up. “We are seeing inspectors giving up because the market is getting hard. It’s been a really easy market for the last six or seven years. If you started as a home inspector in the last few years, the market was booming and it was easy for new inspectors to find business and thrive. In contrast, now is the time when you have to stick with it. The guys who hang on and ramp up their marketing now are going to get paid later,” Robertson argues.

Of course, the bright side of some home inspectors shutting down their businesses is that once the market picks back up there will be much less competition in the market. “Once the market turns we’ll have a lot less competition,” Robertson says.

Stepping Up Marketing Of course, surviving a slowdown involves more than just hanging on and waiting for conditions to change. Now is the time to step up your marketing, argues Robertson. “When the market is transitioning like this, now is the perfect time for inspectors to go back to grassroots marketing. With a slow market, if our real estate agent base is having 500 agents who refer their clients to us for the home inspection, we’re now going to need 800 agents to refer us—just to maintain the same level of business,” Robertson reports.

With transactions slowing down, both home inspectors and real estate agents have more time. This gives inspectors an

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Working RE Inspector Fall 2022

opportunity to focus on building relationships with agents.

“This is the time where visiting real estate offices, giving presentations to agents, and taking agents out to lunch is much more effective. The best part is that marketing to real estate agents is practically free. You don’t need to buy extravagant lunches or drop off fancy candy and flowers to their offices.

It costs you gas and your time to drive around and visit real estate offices and invite the broker out to lunch. It can be time consuming, but it’s not expensive,” says Robertson.

In terms of low-cost, grassroots marketing, Robertson encourages inspectors not to default to the “easy” tasks. “Many inspectors want to sit at home in their pajamas and post on Facebook or send out mass email blasts or mass text messages.

The problem is that everyone is doing that. It is easy to send email blasts and mass text messages, post on Facebook, and follow agents on TikTok. But for those home inspectors who are willing to do the real hard work, those are the ones who are going to do a lot better. Our firm doesn’t rely on agent referrals as the primary source of business, but given the extra time that we have, we are now ver y focused on developing our agent relationships during this down time,” Robertson advises.

Buyer’s Market?

While the market has clearly turned in favor of buyers, Robertson says that it will take some further adjustments for it to fully transition into a healthy buyer’s market. “When you have a transition from a seller’s market to a buyer’s market, it’s a weird time for transactions and for home inspectors generally. If you look at Google trends, search volumes for the number of home inspections is way down. There are some areas in the country where the volume of searches is so low there’s basically no data! These are some of the lowest search volumes I’ve seen in the entire year,” Robertson reports.

Nevertheless, Robertson says if you can still afford your online marketing, don’t stop. “If you are hurting for work, why take away one of the few channels you have to get business. I’ve even talked to home inspectors who have taken down their websites, saying they’ll put them back up next year when business picks up. What agent is going to refer you if you don’t have a website? If you’re not on social media, you don’t exist. If you pull back now, you’re not going to be able to recover quickly when the market comes back,” says Robertson.

While now is the time to step up on building relationships with agents, home inspectors should also be prepared to ramp up their direct-to-buyer marketing in 2023. “Once we transition to a full-on buyer’s market in late spring of next year, buyers will be looking for home inspectors directly. In a buyer’s market, the buyers call around to find the most qualified home inspector. They will call and interview you. Once that starts, that’s when direct-to-buyer marketing becomes super important and inspectors will want to ramp up that part of their business,” Robertson says.

No Waived Inspections Dave Klima, co-founder of InspectedHouses.com and President of Aardvark Home Inspectors Inc., says that the upside to all this is that buyers are no longer waiving home inspections.

“We’re seeing prices go down, the number of days a house is on the market go up, and the total number of homes on the market generally is going up. The number of inspections we’re doing hasn’t really dropped dramatically though and the reason is because the market is turning into a buyer’s market. Buyers used to be skipping home inspections and our industry really took a hit because so many people were skipping inspections. That’s not happening now. Even though the number of inspections has gone down, the number of homes getting inspected has not declined too much in my market,” reports Klima.

Pre-Listing Inspections As a longtime advocate for pre-listing inspections, Klima sees the coming buyer’s market as creating the perfect opportunity for home inspectors to increase their business with pre-listing inspections. This is because during a buyer’s market, buyers typically have control of the negotiations and are much more likely to scrutinize the home. “Buyers will get a home inspection and then demand that X, Y, or Z be fixed or they’re not buying the house. Sellers are often forced to make those repairs, usually on very short notice, because they don’t want the house to go back on the market and sit for another three or four months,” reports Klima.

Pre-listing inspections give sellers a lot more control over the sale of their home, make the sale more certain, reduce surprises, and make the transaction more profitable, according to Klima. This is because it gives sellers advance notice of any issues a buyer’s inspector might find and gives them the opportunity to address it before the home goes on the market. “Often if a seller gets a pre-listing inspection, they can make many of the repairs themselves—put in a GFCI outlet, and so on. Whereas if the house is already in escrow, these contractors charge rush, premium pricing. Buyers and their agents typically demand that the work be done by a licensed electrician or a licensed contractor and trying to make those repairs on short notice doesn’t give the seller much time to shop around. So it saves money for sellers on both fronts: they have the opportunity to fix some things themselves and they can shop around and get better repair pricing and higher quality work,” Klima says.

Whereas only five percent of Aardvark’s (Klima’s firm) revenue comes from pre-listing inspections currently, Klima is hopeful he can increase that figure up to 20 percent of his revenue as the buyer’s market picks up. He is actively visiting Realtors’ offices and giving presentations to agents on the topic where he explains to real estate agents the many benefits of pre-listing inspections.

If pre-listing inspections are positioned correctly, they can also translate into a LOT more revenue for both the home inspector and the Realtor. Klima built InspectedHouses.com,

which is a platform that home inspectors and Realtors can use to showcase homes that come with pre-listing inspections.

Part of Klima’s approach is to put a sign in the front yard of a listing promoting that the home has been pre-inspected.

Potential buyers then visit the website (or just scan the QR code on the sign) and can view (or purchase) the pre-listing inspection depending on the seller’s preference. This gives both the Realtor and the home inspector a list of potential buyer leads they can follow up with and try to close. Klima reports his best performing pre-listing inspection translated into four additional inspections. “We got 13 leads off the InspectedHouses system and we ended up doing inspections for three of those buyers, plus an inspection for the seller who was buying another home as well. And it works the same way for Realtors—we’ve had Realtors we work with that have turned one transaction into four. Think of what that can do for a Realtor—and if you are the one helping them grow their business, who do you think they are going to want to work with?” Klima says.

With interest rates expected to continue rising into 2023, home inspectors (and all real estate related professions) will be watching home sales activity with a careful eye—and doing everything they can to drum up business. Make sure you stay informed with the latest news and information by subscribing to Working RE’s digital newsletter at WorkingRE.com. WRE

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Infrared Camera and Home Inspections

by Bill Fabian, Monroe Infrared Technology

Figure 1: Water Damage in Flooring

Infrared

cameras (IR) have been steadily gaining popularity with home inspectors for more than 10 years now. This is partly because Inspectors want to provide a more thorough inspection and ideally add more revenue to their business. It is also because the next generation of home buyers are more technically savvy and expect the use of all available technology for their prospective home’s inspection.

Figure 2: Faulty Electrical Panel

Infrared cameras have been used for industrial and commercial inspections for over 50 years with the primary application being electrical systems. Today, many commercial insurance companies require an annual infrared safety inspection of electrical systems for their insured clients because history has proven that no other inspection is as effective at reducing the risk of electrical fires and related injuries.

Why Infrared?

IR allows home inspectors to “see” issues that are not visible to the naked eye. Infrared also can confirm potential issues that are only partially identified like staining, deformation, etc.

Simply put, infrared will make you a more efficient, effective, productive, and profitable home inspector. Do you want to differentiate, charge more, grow your revenue and company?

Water Issues: The #1 find for home inspectors is locating hidden water leaks. There may be no visual signs, but, if the conditions are right, the presence of water will stick out like a sore thumb with an IR camera! We can’t live without it but water is very damaging to homes (See Figure 1).

Figure 3: Missing Insulation

Figure 4: Bees Nest in Wall

Safety Issues: From a safety perspective, every home inspector should be looking at the electrical system. As a past student, Bradley Scott, said, “If you don’t look at anything else, look at the electrical system. It is not a matter of if, it is a matter of when you save someone’s life.” Do everything you can to keep your clients safe from harm (See Figure 2).

Bill Fabian is a Level III Master Thermographer and Vice President of Monroe Infrared Technology. Bill designed Monroe Infrared’s two-day Certified Residential Thermographer (CRT) Class which includes over 2300 home inspector graduates all across the USA and part of Canada. Reach Bill at (800) 221-0163 or by email at training@monroeinfrared.com.

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Figure 5: Termites in Fence

Energy Loss Issues: With steady and substantial material cost increases over the years and especially in the last 2 years, understanding the conditions of the insulation, or more importantly locating areas with “NO INSULATION” is an extreme

benefit to home buyers. Missing insulation not only can make a home very warm or very cold/drafty, it increases the homeowners energy bill substantially while prematurely wearing out mechanical parts with unnecessary extra runtime (See Figure 3).

Pest Infestations: While infrared is NOT like an x-ray, warm blooded animals, termites, rodents, bees and other creatures often create a thermal difference that a professional home inspector’s infrared camera will detect. A bees nest in the wall can be nearly impossible to detect or termites eating through the joists of a deck. (Note the dark lines on the bottom of the deck joists are termites inside the wood).

What you don’t see could hurt or sting your client! (See Figures 4 and 5.)

These are just a few of the applications home inspectors check for every day with their infrared cameras.

There are so many applications for infrared cameras to be used as part of a home inspection including solar panels, water temperatures, stucco, EIFS, roof leaks, radiant heating systems, duct leakage, air infiltration, pool pumps, forced air distribution (supplies & returns), and many more.

What Infrared Camera Should a Home Inspector Use? The major IR Camera manufacturers in the home inspection market today are Teledyne FLIR and HIKMicrotech (or HIK

for short). This competition among manufacturers for market share has resulted in professional infrared cameras which are easy to use, and offer amazing application support features that were never available for less than $8,0 0 0 to $10,0 0 0 even just a few years ago.

Infrared cameras designed for consumers start at about $4 0 0.

Experienced home inspectors do their homework and opt for professional tools when selecting an infrared camera. Though the underlying science of heat transfer is the same, the better you are at using infrared, the more confidence you will have in your findings.

Regardless of the infrared camera you decide to incorporate into your home inspections, make sure to invest in yourself with Infrared Certification Training to use it properly and maximize your ROI. The better trained you are in the use of infrared, the more confidence you will have in your findings. Competent, confident IR-certified home inspectors report increasing revenues by 10% to 20% offering infrared.

If you are a home buyer or Realtor looking for a professional home inspector who is trained, certified and offering the proper use of infrared in a pre-buy or pre-sale home inspection, go to https://monroeinfrared.com/infrared-training/graduate-locator/ and put in your zip code for a listing of certified infrared home inspectors in your area. WRE

Working RE Inspector Fall 2022 11

Notes on the Limitation of Liability

by Kendra Budd, Associate Editor

Odds are that if a limitation of liability clause is allowed in your state, you’ve already included it in your pre-inspection agreement. However, the legality of the clause can be confusing and difficult for your clients to understand, making it easier for them to sue you if something goes wrong in their new home. It can be hard to know how to properly outline this clause both legally and for your client to have a full understanding of it.

In December 2021, Isaac Peck, President of OREP Insurance gave a presentation on Pre-Inspection Agreements. In it he highlighted the importance of the Limitation of Liability clause, and how to sharpen it.

Here’s what we learned.

Limitation of Liability in Detail As a home inspector, your Limitation of Liability can simply restrict the price of liability to an amount equal to your inspection fee. This means when a client signs your pre-inspection agreement, they are agreeing that the maximum amount that you, the inspector, is responsible for is the total cost of the inspection. A vast majority of home inspectors choose this approach however; there are other ways to write this clause— especially depending on your state laws.

In his presentation titled “Sharpening Your Pre-Inspection Agreement,” Peck, points out that another way to approach the limitation of liability is to set a higher base amount for the limitation of liability. For example, instead of limiting the maximum liability to the inspection fee, you could set your maximum liability between $1,0 0 0 to $2,0 0 0, or even two or three times the cost of the inspection fee.

One reason you might do this is, it could be more defensible in court depending on the state law and precedent in your state.

Peck points out that some states have completely banned the limitation of liability, or some have strict constraints around it.

He uses California as an example. Their law states, “contractual provisions that purport to waive the duty owed pursuant to Section 7196, or limit the liability of the home inspector to the Kendra Budd is the Associate Editor and Marketing Coordinator for Working RE magazine. She graduated with a BA in Theatre and English from Western Washington University, and with an MFA in Creative Writing from Full Sail University. She is currently based in Seattle, WA.

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cost of the home inspection report are contrary to public policy and invalid.”

In other words, in California, it is against public policy to limit your liability to the cost of the inspection. However, you might have a more defensible argument if you limit your liability to $2,0 0 0, $3,0 0 0, or even $5,0 0 0. This is definitely a case of something being better than nothing—and is precisely why some inspectors may choose to set a higher price of limitation —some don’t even include a maximum at all.

Choosing how you outline a Limitation of Liability clause all depends on you, your business and your state laws. All of these are great options so be sure to consider all of your choices before writing your pre-inspection agreement. The next step is how to format the clause.

Unconscionability Unconscionability is an important concept for you to understand when it comes to the Limitation of Liability clause. Peck outlines that unconscionability refers to a doctrine in contract law where the terms are unjust, unclear or unreasonable. “Generally speaking, it will involve exploitation of a stronger party by a weaker party,” says Peck.

Several states have made laws against unconscionability and many courts will not uphold a contract if they feel it was unconscionable in nature. State courts have different interpretations of what makes a contract “unconscionable,” but it’s widely understood in the legal community to refer to terms that are substantially unfair and one-sided. For example, South Carolina defines unconscionability as the “absence of meaningful choice on the part of one party due to one-sided contract provisions, page 14 8

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7page 12 together with terms that are so oppressive that no reasonable person would make them and no fair and honest person would accept them.”

The prospects that your limitation of liability will be held up as unconscionable might be a good reason to (A) set a slightly higher Limitation of Liability price, such as $2,0 0 0, and (B) make the clause conspicuous.

Make It Conspicuous As well as making your Limitation of Liability conscionable, Peck urges to also make it conspicuous. There are multiple ways you can make your Limitation of Liability clause conspicuous—in fact, in most states it’s a law. If the Limitation of Liability clause is NOT conspicuous, then your opposing counsel will have a higher chance of getting the clause ruled as unenforceable. For example, Texas attorney Geoff Binney says if the Limitation of Liability in an inspector’s pre-agreement is “the same font, not bold, or not in a different color, then the Texas Courts are not going to enforce that, and many other states would carry this same position. Here a couple of ways Peck suggests to make your limitation of liability conspicuous.

• All Capitals: Editing this clause, or even certain paragraphs and sentences into all capitals is a great way to catch your client’s eye. Putting your Limitation of Liability clause in all capitals tells your client this clause is important, because capitals are often associated with urgency.

• Bold: Bolding your Limitation of Liability clause is a great tool to catch a client’s eye. Putting anything in bold emphasizes the clause, and reflects importance. Consider combining bold and capitalization to further the attention the Limitation of Liability.

• Font: By changing a the limitation of liability clause’s font lets your client know it is well worth paying attention to. However, you’ll want your new font to be different enough from the original so your client can notice the change—making it as conspicuous as possible.

Otherwise, if it blends into the document, it may be hard to defend it in court.

• Color: Changing the text color of your Limitation of Liability is another great way to draw attention to it. We recommend the use of red to indicate urgency to the clause.

Just make sure whatever color you choose is easy to read, and not too bright.

All of these can really help your Limitation of Liability build conspicuousness not just for your client’s sake, but for a court’s sake. It’s extremely important to always highlight the Limitation of Liability, because it is arguably your most important clause. Below is an example of implementing two of these tips into a standard Limitation of Liability clause.

Example:

BY SIGNING THIS FORM, THE CLIENT ACKNOWLEDGES THAT THE INSPECTION FEE PAID TO THE INSPECTOR IS NOMINAL GIVEN THE RISK OF LIABILITY ASSOCIATED WITH PERFORMING HOME INSPECTIONS IF LIABILITY COULD NOT BE LIMITED. CLIENT ACKNOWLEDGES THAT WITHOUT THE 14 Working RE Inspector Fall 2022

ABILITY TO LIMIT LIABILITY, THE INSPECTOR WOULD BE FORCED TO CHARGE THE CLIENT MUCH MORE THAN THE INSPECTION FEE FOR THE INSPECTOR’S SERVICES. CLIENT ACKNOWLEDGES BEING GIVEN THE OPPORTUNITY TO HAVE THIS AGREEMENT REVIEWED BY COUNSEL OF HIS OR HER OWN CHOOSING AND FURTHER ACKNOWLEDGES THE OPPORTUNITY OF HIRING A DIFFERENT INSPECTOR TO PERFORM THE INSPECTION. BY SIGNING THIS AGREEMENT, CLIENT AGREES TO LIABILITY OF THE INSPECTOR BEING LIMITED TO THE AMOUNT OF THE INSPECTION FEE PAID

BY THE CLIENT. Initial It If you feel like your Limitation of Liability clause needs extra attention beyond bolding or changing the font, then Peck suggests having your client initial it. “Initialing this clause guarantees your client has both read the clause in its entirety and understands the terms of it,” says Peck.

The client can’t go back on their own signature because it shows that not only have they read the clause in detail, but that you also went over the clause with them. A sign off on the Limitation of Liability will be your best defense in court.

Final Thoughts Having a clear and conspicuous Limitation of Liability could be what stands between you and a lawsuit. These tips by Peck are great to have in your arsenal; however he does warn these will not guarantee a protection against any potential lawsuits, but it does help reduce the risk.

When writing up your Limitation of Liability clause it’s a must to remember the laws of unconscionability and conspicuousness in your state. If your clause needs a bit of fine tuning, then we hope we were able to you help you with some of these tips to clean it up.

Stay safe out there! WRE

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Mysterious Leaks into Home and Basement The Science Behind Your Inspection

by Tom Feiza, Mr. Fix-It, Inc. HowToOperateYourHome.com

New Home—Inspection—Purchase—Then Leaks The one call a home inspector never wants: “You inspected my home a year ago and now water leaks into my home every time it rains.” Ouch! Worry? Headache! Legal? Insurance? Lost Sleep?

Figure 1: Front of Leaker

Inspectors don’t have x-ray vision, nor can they predict the future performance of a home. They must depend on visual signs and clues that exist at the time of the inspection. In this leaky home case, there were no significant signs of leaks at the inspection but the inspector did not mention some flashing issues.

The Leaks, Background: The homeowner called me to help determine why his newly purchased, 20-year-old home was leaking. He wanted to know who was responsible and the necessary corrective work. He had owned the home about one year and leaks occurred at the rear of the home near the deck. Water leaked in below doors and windows on carpeting and over the top of the basement wall. He also knew the home had experienced hail damage and the seller recently replaced roofing, siding and parts of the decks.

Figure 2: Rear of Leaker, Note Decks

When investigating water intrusion, I often take a quick look at the outside of the home to orient myself with the structure.

Then I look at the signs of leaks or active leaks while the owner explains the leaks issues. In this case, the home only leaked with heavy wind and rain. The owner had videos and pictures.

Outside The front of the “leaker” was typical 20-year-old construction.

There was adhered masonr y with vinyl siding. There were no obvious issues but, I always question the installation of adhered masonr y. Looking further, I saw the adhered stone was too close to the soil and entrance stoop. Flashings weep screeds were not visible, but leaks had not occurred near the adhered stone (See Figures 1 and 2).

exterior door. The owner stated the carpet became wet during heavy rain. The cut-out in the carpet was for the heating duct below the window.

Leaks were occurring at the rear of the home per the owner’s claim (See Figure 2). Some leaks were occurring on the second story near the deck on the exterior wall. Leaks were also occurring at the top of the basement wall below the deck. I suspected roof, gutter, flashing, water barrier, and deck issues.

At the kitchen area below the upper deck there were no visible signs of moisture damage and the owner reported no issues. I checked the exterior wall’s drywall with a moisture meter and found slightly elevated moisture levels but nothing significant or wet.

Next Step—Inside with the Leaks Inside on the second story near the deck the owner had pulled back carpeting (See Figure 3). The carpet was stained below the

At the basement below the deck there were slight water stains (See Figure 4). The wall was block construction with very slight tracks of water down it. The owner stated water runs down the

16 Working RE Inspector Fall 2022

Figure 3: Stain on Second Floor Carpet

between the floor trusses. You can also see a stain on the lower edge of the right truss. Below this truss, there are barely visible stains /streaks on the block.

The owner’s video clearly showed the significant leaks—there was little visible evidence for me to see. The home inspector who was there a year earlier noted none of this and it was not readily visible to him.

Figure 4: Basement Leaks Below Deck

Next Step—Outside Looking for Source of the Water I always start at the top of a leak area and work my way down.

I walked the roof and inspected the shingles, gutters, valleys, overhangs, flashings and saw no real issues.

Figure 6 (see page 18) shows the second floor deck and siding.

My black folder for notes is laying on the deck. With a casual look, the siding and deck looks pretty good. But what about the flashing of the deck surface below the siding?

Figure 7 (see page 18) shows lifting the siding just above the deck trim and looking at bare (OSB). The vertical trim at the deck is fastened directly to the exterior OSB below the siding. Where is the house wrap (water barrier) and where is the flashing to direct water over the deck walking surface? Where is the water barrier behind the deck trim?

Figure 5: Stains at Top of Basement Wall

wall at the laundry tub and puddles on the floor. He had videos showing significant water entry—but there was limited visual evidence during my visit.

Figure 5 shows a close-up of the top of the leaking basement wall. The limited visual evidence is a slight stain on the 2 by 4

Next Step—Exterior Vinyl Siding Near the Deck Given the lack of a moisture barrier on the OSB sheathing and no deck flashing, one starts to wonder about the siding installation. All siding leaks. Vinyl siding leaks. Siding manufacturers all require a water /moisture resistant barrier and proper flashings. Codes and code officials require a moisture resistant barrier and flashing in most areas. page 18 8

Working RE Inspector Fall 2022 17

7page 17 Look at Figure 8. This illustration shows the correct installation details. Since all siding leaks, we need house wrap, tar paper or a water resistant barrier below the siding. Water then flows over the water barrier to a flashing that directs water outside any penetration or attachment to the wall. Simple right?

Looking Under the Siding Home inspectors would not lift siding, but I had a good idea the siding installation was defective and I was investigating a water leak. So, with a siding removal tool, I popped up the lower edge of the vinyl siding in several areas around the deck and then around the home.

Figure 6: Deck and Siding

Figure 9 shows one area where I lifted the vinyl siding. As I lifted the siding, water dribbled out and streaked down the siding below (there had been recent light rain.) The wall was covered with yellow extruded polystyrene insulation. Over this rigid insulation was thin, clear plastic like you would use for a cheap drop cloth when painting. One joint on the thin plastic was covered with a branded house wrap tape.

Figure 10 shows another area under the vinyl siding. The yellow extruded, ridged insulation is not covered in the upper area. In the lower area, it is covered with clear plastic packaging tape.

You can see the saw-tooth edge of the tape—it is designed to be easily torn without a tape dispenser and cutting edge.

Multiple layers of the packaging tape are visible.

Figure 7: No Flashing, Bare OSB

Figure 11 (see page 20) shows water running out of the siding.

The rigid insulation is bare with some house wrap tape, but no tape at one open vertical joint.

I continued to lift about 10 areas of the vinyl siding and found similar conditions. Either there was no moisture barrier, incorrect clear plastic, incorrect tape or no tape. Flashing was not installed at penetrations through the wall. Flashings were not installed over horizontal attachments. I never found any proper water resistant barrier.

So, What Happened?

The owner researched the area before my visit and found heavy hail damage. The seller had received money to replace the roof and siding, but did that work without the required municipal permit. In our area, the seller should have disclosed this in the real-estate transaction paperwork required by the state.

Water entry occurred because all siding leaks and there was no proper moisture resistant barrier. Once water entered behind the siding there was no water barrier and flashing to keep it outside. At window and door penetrations, water ran in through the framing to the subfloor and carpeting. Once water entered the wall assembly, it flowed down through the hidden framing onto the trusses and the top of the block basement wall. The wall cavities are probably wet where water entered and moved.

The Fix? Expensive—remove all the siding and install a water resistant

18 Working RE Inspector Fall 2022

Figure 8: Wall Flashing—Water Flow Fundamentals

Figure 9: Clear Plastic House Wrap?

Figure 10: Packaging Tape and No House Wrap

barrier and flashings. Fortunately, some of the house wrap manufacturers now include instructions to flash around an installed window and door. Flashing at the deck should include a barrier behind and over all ledgers and horizontal trim.

issues with the stone.

At this point the owner was not ready to dig into the adhered stone veneer—but I know there were original construction

The home inspector did an OK inspection—I wish he would have noted the lack of deck flashings and the adhered stone issues. BUT, adhered stone is almost always improperly page 20 8

Working RE Inspector Fall 2022 19

7page 19 home from rain water with water resistant barriers and flashings. When you see signs of minor water intrusion, you should call for further evaluation. Stained carpet and stained framing should be identified.

But inspectors don’t lift siding and have the advantage of an owner identifying the active leak issues. Inspectors must rely on understanding the science behind home performance and noting issues that may result in serious, non-visible issues.

With this home, corrective work must be completed to prevent future serious structural issues, rot and mold. WRE

Figure 11: Water Running Out of Siding

installed in this area of the country and if protected from rain by overhang and gutters—it may not leak.

The Takeaway Inspectors should understand the principals of protecting a

20 Working RE Inspector Fall 2022

Tom Feiza has been a professional home inspector since 1992 and has a degree in engineering. Through HowToOperateYourHome.com, he provides high-quality marketing materials, books for homeowners, and illustrations that help professional home inspectors educate their customers. Copyright © 2022 by Tom Feiza, Mr. Fix-It, Inc. Reproduced with permission.

Visit HowToOperateYourHome.com (or visit htoyh.com) for more information about building science, books, articles, marketing, and illustrations for home inspectors. Contact Tom Feiza with questions and comments by email at (Tom@htoyh.com), or by phone (262) 303-4884.

Working RE Inspector Fall 2022 21

Managing Client Expectations

by Kendra Budd, Associate Editor

There

are a lot of misconceptions on exactly what a home inspection entails—often frustrating a home inspector’s clients. Over the years, the myth that a home inspector can and will find every and any problem in a home has become increasingly harder to subdue. This leads to trouble later down the road, once a client feels as if they have been “cheated” by their inspector.

We’ve talked about in the past how your pre-inspection agreement will be your best line of defense when it comes to potential illegal allegations (search for Pre-Inspection Agreements on WorkingRE.com). However, what if you could avoid a client’s anger before the inspection even begins?

Learning how to manage a client’s expectations before and even during the home inspection could save yourself a headache later down the road. Many people tend to oversell their capabilities in order to grow their business, but as a home inspector that is possibly the worst thing you could do.

From your website, to your communication skills, to walking through the pre-inspection agreement with your client—these can all have an impact on your customer satisfaction.

Here’s some best practices on managing client expectations.

Never Oversell The biggest problem home inspectors may face, is overselling their business. Much of this comes from advertisements and websites. Obviously, you want your business and services to stand out above the rest, but you never want to be dishonest.

We’re not saying that you should by any means undersell your business, but you can make your business sound better than others without overselling either. You want to find a way to market your services in a way that is both appealing and honest to potential clients.

The reason you never want to oversell is because you don’t want a client to turn around and sue you later down the line because you exaggerated your services. An example of this could be using the cringe-worthy slogan “we can see through walls with infrared technology.” Most home inspectors would

never dare to even think about saying something like this, but there are other inspectors who do.

Let’s say that same inspector gets sued months later because they weren’t able to see mold growing in the walls—and now their client’s house is infested. Even if this inspector had a pre-inspection agreement outlining this was part of their excluded services, the client could argue that through their website, advertising, and communication, they were being dishonest. Who would dare say they can see through walls if they actually can’t? A slogan like this could spell out big trouble later on.

So, how do you properly sell your business to a potential client? Answer questions, be honest, and always bring it back to the positives. If a client asks you about a specific service, and you don’t provide that service, don’t be afraid to be upfront about that fact. Don’t twist words around to make it sound like you do. Before you think you’ve lost a client, take a breath and bring it back around to a service that you do provide.

This can look like: “I’m sorry. Unfortunately, we don’t offer X service, but we do offer a Y service.” This is a sales tactic that is used everywhere, even in department stores. This allows you to be honest with your client, while still maneuvering them to the reasons why they should hire you, instead of the other guy.

This tactic allows you to sell your services ethically and honestly, without facing future repercussions. By accurately selling your business without under or overselling it, you will be guaranteed page 248

22 Working RE Inspector Fall 2022

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7page 22 to see less client complaints and more customer satisfaction.

Which in turn will grow your business and reputation.

The Pre-Inspection Talk Now comes the pre-inspection talk, also known as the driveway talk. You want to have this conversation with your client before you step into the house. This is when you’re going to want to go over the pre-inspection agreement in great detail, answer any more questions, and reiterate what your inspection and walkthrough will entail.

First and foremost, don’t show up on time…show up early.

Showing up just five minutes early will make you look efficient and reliable—which could give you a leg up on getting recommended more.

Once you’ve arrived, go over the most imperative parts of your pre-inspection agreement again. How many times have you been told to read and accept the terms and services on a website? Have you actually read through it all the way? More than likely, you skimmed it. The same can be said about pre-inspection agreements. Make sure your client has a full understanding of exactly what they signed. Otherwise, they could argue that your clauses were misleading. By verbally going over this, you can ensure they fully comprehend the agreement.

When you are going over this information, keep a nice even pace—don’t rush your client. Look up often to be sure they are listening and taking in the information correctly. Allow time in between each clause for your client to ask any questions they may have; this way they don’t forget any of their questions.

Also, you want to make sure when explaining the clause that you’re not talking as a home inspector. You want to communicate in terms that your client will easily understand.

Finally, once you have fully gone over the pre-inspection agreement, and you feel confident that your client has a clear grasp of it, you’ll want to explain the inspection in detail. Let them know what spaces you’re searching and what you’re looking for in each one. Most importantly let them know the why. When a home inspector walks into a person’s home, the truth is the client usually has a vague understanding of what you’re doing and why you’re doing it.

Explaining your process in detail, in an easy to digest kind of way, will allow the client to not only comprehend the services you provide but also ease their anxiety as well. Let’s be honest, it’s awkward when a stranger comes into your home to provide a service, and you’re not exactly sure what that service entails, which is why it’s also good to be forthcoming even during the inspection.

During the Inspection Let’s face it, people are nosey and they’re going to want to know what you’re doing during your inspection. Many inspectors find this to be a nuisance or even a safety hazard, which is why it’s best to work with your client, rather than against them.

24 Working RE Inspector Fall 2022

Let your client know that you will need at least an X amount of distance—whatever you deem is necessary. However, you never want to tell a client you need full and complete space during the inspection. This is actually a great opportunity for you to explain to your client what is going on during the inspection, this way they better understand their report later down the line.

Think about it this way: when you go to the dentist, your dentist knows you’re more than likely nervous to some degree.

This is why dentists tend to talk through the procedure, and even ask you questions, no matter how annoying you may find it. This is to lessen your anxiety; the same method could be used during your home inspection.

Not to mention, it actually could be ver y beneficial to have your client with you during the inspection because they might know about a problem that you can’t find or see. Many times, clients second guess themselves, and if you don’t find an issue in your report that they suspected was going on, they might just forget about it altogether. Asking your client if they have any specific concerns in their home should be the first task. So long as it’s in your scope of work, it will be beneficial to your rapport with a client to get this solved first. This will also allow your inspection to go faster.

So long as your client understands the safety measures needed to complete a home inspection, there should be no problem allowing your client to accompany you, ask questions, and point out concerns.

Final Thoughts We’ve all heard it before, “the customer is always right!” Well that simply isn’t a true statement. It should be, “The expert is almost always right.” Almost, being the key word, because your clients must know that you are by no means a superhero that can see through walls.

Managing your client expectations is by no means an easy task, but with practice you’ll start to become an expert at it. Soon enough, you’ll be able to procure a script of all the need-to-know information your client needs. Most importantly, managing these expectations will protect you and your business. By preparing your client for the services you can and can’t provide, going over their pre-inspection agreement, and helping you with parts of the inspection will make it less likely for them to call back with complaints, and more likely to call back with referrals.

Stay safe out there! WRE

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Lead Testing and the Correlation of Decreased Violence

By Kendra Budd, Associate Editor

The war on crime has only seemed to increase over the years, with people citing violence in places like Chicago and New York. However, since the 1990s, the crime rates in the United States have decreased significantly and continued their downward slope. In fact, by the end of the decade, homicide fell 45 percent.

Many theorize reasons why this decrease occurred, including the reduction in alcohol consumption, the increase in incarceration rates, and even the legalization of abortion at the time. Recently though, another theor y has emerged: lead testing in older homes.

This article will explore the histor y of lead production and its banning in the United States, the increasing need for lead testing inspectors, and its possible effect on the crime rate.

Here’s what we learned.

History of Lead Lead paint was widely used across the Americas and Europe.

Its popularity skyrocketed during colonial times but peaked in the 19th century, partly due to its durability and fast drying time. Today, most homes built before 1978 in the United States may contain traces of lead-based paint—even if painted over.

At the beginning of the 20th century, health concerns surrounding lead-based paint and other products began to rise.

Lead was found to damage the human nervous system—stunting bodily growth and brain development. Lead poisoning was discovered shortly after the turn of the century, with the organs being greatly affected when ingested, leading to kidney, liver, and other organ failures.

Now, most people don’t tend to eat lead paint, unless they’re children. When paint peels, it tends to come off in chips. These chips are known to taste sweet, so it’s no wonder that lead poisoning became so prevalent in toddlers and young children.

26 Working RE Inspector Fall 2022

Not only that, but when lead paint peels, it coats the objects around it in dust—often contaminating children’s toys. In fact, even inhaling this dust can be extremely harmful. So, adults could also become infected if their walls begin to peel.

By the 20th century, European officials grew increasingly concerned with the health risk of lead-based paint, choosing to forgo the lead white color with zinc and titanium white instead.

Though Europe began to taper off lead paint, America’s transition took much longer.

Lead Banned The United States Congress did not ban lead-based paint in any newly built residential or commercial building until 1971, despite almost every other country doing so earlier in the century. However, this was only if these buildings were constructed using federal funding or assistance.

Six years later, in 1977, the U.S. Consumer Product Safety Commission finally entirely banned the use of lead-based paint in residential and public properties, toys and furniture.

In 1996, legislation was passed to require owners of homes built in 1978 or earlier to disclose the presence of lead paint

to potential buyers and renters by the U.S. Environmental Protection Agency (EPA). It’s also imp ortant to note that unleaded gas was virtually available ever ywhere around the same time, but due to the Clean Air Act of 1970, gasoline containing lead was effectively banned in 1996.

In 2010, the EPA created standards for construction on buildings with lead paint built before 1978 with lead paint under the Renovation, Repair, and Painting regulation. Contractors disturbing more than a 6 square foot space where lead paint is present must have proper certification.

Shortly after these bans, some noticed a decrease in the crime rate. What once was a huge problem in the United States, used often in political campaigns, began to dwindle, and some wondered if the ban led to better brain function, which led to less anger, which led to less crime. This theory is known as the lead-crime hypothesis.

The Lead-Crime Hypothesis The lead-crime hypothesis wasn’t coined until 20 07, after economist Jessica Reyes conducted a study attributing a 56 percent drop in violent crime in the 199 0 s to the removal of lead from gasoline after the Clean Air Act. Since then, several other studies have been conducted, supporting the idea that not only did the Clean Air Act decrease violence, but the ban on lead in general and an increase in testing was a contributor.

Specifically, the lead-crime hypothesis holds firm that childhood exposure to toxic lead is a major driver of criminal behavior in adulthood. We already know that lead exposure stunts brain growth in children. Still, more than that, these studies discovered it also carries into adulthood with behavioral problems, including reductions in IQ, impulse-control, and anger management.

The theory comes from the relationship between two trends.

Firstly, the lead content of gasoline rose steadily from the 194 0 s until 1970, after which point if fell quickly due to the bans. Then the violent crime rate, as measured by the FBI’s Uniform Crime Reports (UCR) followed the exact same trend but was delayed by 20 years. Thus, sparking intrigue that early-childhood lead exposure may have led to both the increase and decrease in crime as children born in those time frames became adults. When you include the banning of lead-based paint in the home, this theor y seems rock-solid—as it followed the same trend as the other two.

However, the theory by itself could be seen as simply a coincidence. Then again, many other analyses from the past decade show more than just a simple correlation between lead and crime. One study found “natural experiments” where lead levels changed more or less randomly across different countries and cities—allowing researchers to divide these places into treatment and control groups.

in lead exposure from gasoline alone, corresponded to an 8 percent average change in violent crime two decades later—and that the overall elimination of leaded gas could have reduced violent crime by more than half. Whereas a Swedish study found changes in lead exposure, as measured by moss found in neighborhoods, corresponded to changes in criminal convictions, as well as academic performance in high schools.

Another study looked at crime in the United States between the 1920 s and 1930 s. During this time, both lead paint and pipes, used to deliver water, were being used in the home in some cities. When compared, homicide rates were discovered to be far higher in cities exposed to lead through these factors.

Despite lead-based paint not being studied as high as leaded gasoline and leaded pipes, experts agree its exposure continues to threaten the United States’ crime rate. Especially since New York City’s Housing Authority revealed in 2017 that 9,000 of its apartments housing children are contaminated by lead paint, and if the lead- crime hypothesis is correct, we could see crime rates rise in New York in less than 20 years. The growing evidence proves this hypothesis could be true, which is why lead remediation and inspection are more critical than ever.

The Importance of Lead Testing Home inspectors that specialize in lead testing are becoming vastly more important than they were just a couple years ago. Lead testing encompasses more than just paint—like the water, dust particles, and soil, just to name a few. One could argue that testing for lead paint is most important because it’s incredibly easy to disturb lead-painted sur faces.

Lead paint can cover a wide range of surfaces in the home, and before its ban, it was used throughout the house. Not to mention, lead is extremely easy to disturb even if covered by newer paint. Areas that receive a high-volume of traffic are easiest to disturb and present the most risk to homeowners. Some of these areas include kitchens and living rooms, but there are other ones you might not think of, such as handrails or banisters. When surfaces covered in lead paint are constantly being grabbed, touched, or bumped into, it can pose a serious threat.

Stairs may also be covered in lead paint, and people disturb the paint when walking on, making it airborne easier. Windowsills and frames also need to be tested since many contained lead paint in the 20th century. When chipping and peeling occur, this results in contamination issues. Even outdoor areas, such as porches, can cause a high risk. Weathering can cause significant damage to lead paint, which can cause lead to end up in your soil. With all these potential risk areas, it is no wonder children are affected by lead poisoning at such a high rate.

Due to all these risk factors, testing and removing lead from paint, drinking water, and topsoil could have a variety of benefits. So why hasn’t the United States undergone a nationwide

Using American data, Reyes found that a 10 percent change page 288

Working RE Inspector Fall 2022 27

7page 27 lead remediation? Well, it would be extremely costly to the U.S. government. Before you go on thinking, “well lead poisoning doesn’t happen that much anyway.” Think again.

The World Health Organization (WHO), estimates that nearly 150,0 0 0 deaths due to lead poisoning occur every year in the U.S. On top of that, in 2018 over 4 0 0,0 0 0 deaths occurred alone. Most of those deaths were children under the age of 6.

Since the government is unwilling to help fund widespread lead remediation, home inspectors have been the first line of defense in preventing these deaths. Obviously, a majority of home inspectors don’t check for lead paint because of licensing requirement, plus the liability of performing these inspections and tests. However, there are many that only do lead inspections and these home inspectors should be applauded for taking the extra time, effort, and risk of performing such potentially dangerous inspections.

Final Thoughts Lead inspectors play a role in helping families stay healthy and safe from potential lead exposure in the short term, and the ever-growing body of evidence also shows that lead exposure can create huge problems, not just in one’s health but also in their social environment.

We have seen a significant decline in crime and an increase in lead inspections. Home inspectors can perform lead inspections with special training and licensing. While training and licensing are costly, they could save people from lead poisoning and decrease crime.

Stay safe out there! WRE

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28 Working RE Inspector Fall 2022

Exploring “Pay at Close” Inspections

by Aaron Fuhriman, Guardian Inspection Payments

The role of home inspectors is often overlooked in real estate

transactions, but it’s an essential job—an inspector’s work, more than that of most others supporting home sales, can give uncertain buyers real peace of mind. But as one of many professionals supporting the real estate transaction, home inspectors can also provide peace of mind by offering seamless service, from the first touch to the invoice payment.

Put simply: clients want hiring an inspector to be easy, just as inspectors want service providers at other points along the real estate transaction to make it easy for their clients to work with them—and vice versa. A thorough inspection report is essential, but the ease of doing business can make a real difference between a long-term relationship and a one-off job.

And ultimately, the ease of doing business with an inspector can also pay long-term dividends in terms of positive reviews and referrals—a happy client is more likely to provide support for the business, even if they never return for further inspections in the future.

New-home sales and existing-home sales both declined by roughly 20 percent year-over-year during the summer, and mortgage applications were 18 percent below last year’s volumes as well. Zillow is now anticipating a 2 .4 percent rise in home prices through the next year, a rate which falls far short of the current high level of inflation rampaging through our economies. While the cooling market has decreased the number of home inspections being waived, the decrease in demand could also limit a home inspector’s workload as the market works on correcting itself. For these reasons, providing superior service, standing apart from competitors, and maximizing “per inspection” revenue is more important than ever. One simple way to do that is offering Pay at Close.

The value of superior service and streamlined payments are more important than ever in a rapidly cooling housing market.

Aaron Fuhriman graduated from Boise State University in 2001 with an Education degree and taught high school for four years before starting Guardian Financial with Ben Tolman. Aaron seized the opportunity to launch Guardian Financial in 2003 and has been grateful for the opportunity ever since.

Guardian is a customer-first driven organization that provides payment processing for home inspectors at inspectionpayments.com.

30 Working RE Inspector Fall 2022

New-home sales and existing-home sales both declined by roughly 20 percent year- over-year during the summer, and mortgage applications were 18 percent below last year’s volumes as well. Zillow is now anticipating a 2. 4% rise in home prices through the next year, a rate which falls far short of the current high level of inflation rampaging through our economies.

What is Pay at Close?

Most home inspections are invoiced on an upfront or whencomplete basis. The typical home inspection can cost anywhere from $250 to well over $1,000 for larger homes and/ or jobs involving multiple ancillary inspection services. Most homebuyers tend to allocate so much of their saved capital towards the down payment on their new homes that there simply isn’t a sizable pool of spendable cash on hand.

Pay at Close offers the option to roll a home inspector’s fee into the fees due to their title company at closing. Instead of having another sizable service fee due before they even move into their new homes, homebuyers using Pay at Close can simply pay for their inspection through their regular closing costs and/or mortgage payments.

Mortgage lenders tend to recommend against making any large purchases in the weeks leading up to a closing, so by allowing inspection clients to avoid such purchases, inspectors can place themselves in good stead with potential (or current) mortgage partners.

A pay at close option can also simplify the inspection process, particularly when inspectors identify the need to perform multiple ancillary inspection tasks with additional costs (like radon checks or sewer scopes). Going back and forth with clients about the importance of having a sewer scope done, on top of standard inspection fees, can slow down the transaction—but since pay at close rolls all added inspection costs into the title transaction, it should be easier (not to mention faster) to get a client’s enthusiastic approval for the services an inspector knows they need.

Why Inspectors Hate Pay at Close?

Historically, “pay at close” has given home inspectors a negative reaction due to the risk and hassle that often came along with it. In the past, home inspectors offering this option had to wait 30, 60, and sometimes 90 days to receive payment and had to work with the title companies to ensure the amount owed made it to escrow. If the sale on the home fell through, home inspectors were then forced to chase down payments from their client which is both timely and costly.

How it Works One option for home inspectors to consider is Guardian Pay at Close, which offers the option to roll inspection fees into the fees due to a client’s title company at closing. Homebuyers can simply pay for their inspection through their regular closing costs and/or mortgage payments, avoiding significant onetime expenses that might deplete their cash on hand. Guardian Pay at Close ensures inspectors get paid for their work whether or not the sale closes—and handles everything between clients and their title companies.

In addition to removing the risk and hassle that traditionally comes with a pay-at-close payment option, Guardian Pay at Close helps home inspectors increase their average revenue per inspection. In early rollouts, inspectors using Pay at Close were able to increase their average invoice value by 24 percent, with some achieving growth of up to 100 percent. This translates into an average dollar-value increase of $124.18 per inspection, with some firms achieving five-digit ($30,000+) revenue growth in June and July. Ultimately, Guardian Pay at Close was developed to minimize friction in the inspection transaction, improve satisfaction for both inspectors and clients, and ultimately can help inspectors build a stronger business and deeper relationships with their favorite real estate professionals. WRE

Working RE Inspector Fall 2022 31

Animals, Skeletons, and Creepy Home Inspection Stuff

by Reuben Saltzman, StructureTech.com

There is zero educational content in this post, and these figures

Chimney swifts in a chimney.

aren’t for the faint of heart. It’s all gross or creepy stuff we’ve seen over the past year as home inspectors. We’ve shared several of these figures on our Facebook page, but certainly not all of them. Enjoy!

Bat guano city in this attic.

Dead fish. How did it get under the stairs?

Bird stuck in the soffit.

Reuben Saltzman is a second-generation home inspector with a passion for his work, and is the owner and president of Structure Tech. He grew up remodeling homes and learning about carpentry since he was old enough to hold a hammer. He is now the owner and President of Structure Tech. Visit https://structuretech.com/ to connect with him.

Why are dead dolls so creepy? And what are you supposed to do with them? You surely can’t throw them away. SO, WHAT ARE YOU SUPPOSED TO DO? Hide them in the attic! Yes, that will do. page 348

32 Working RE Inspector Fall 2022

Working RE Inspector Fall 2022 33

7page 32

File this repair bill under scary. This “flat rate” plumbing contractor severely gouged this senior citizen for some very basic plumbing work. Over $4 0 0 for new fill valves and flappers at two toilets. Over $50 0 for a backflow preventer on a shower valve. $325 for 3 hose bibb backflow preventers. We’re not singling anyone out, but watch out for who you hire.

It never seems to work out well for mice who find their way into electric panels.

I smell a rat.

Is this not the cutest skeleton ever?

Hot dog skeleton. This stuff isn’t so bad when you see a picture of it, but when a home inspector is walking around in a dark basement in a strange house, seeing this out of the corner of your eye will stop your heart.

Hey buddy, we see you.

34 Working RE Inspector Fall 2022

This is iron ochre, or iron bacteria, growing inside of the drain tile. It’s just about impossible to get rid of.

Murder of crows.

Yes, yes, we can clearly see that the opening is more than 4”.

Now let us do our job, please.

Speaking of murder, this was a note left behind for us. Or does it say “Marder?”

The obligatory and cliché skeletons in the closet.

Speaking of notes left behind, here’s a subtle clue indicating a strong seller’s market.

You’re not invisible.

And finally, the remains of a snake in a sub-slab duct. No, thank you. WRE Working RE Inspector Fall 2022 35

How to Deal With Cancellations as a Home Inspector

by Ian Robertson, Inspector Toolbelt

Cancellations are, unfortunately, part of doing business as a home inspector. I have been there many times. I have even had clients cancel on me as I walk up to the door of the house. No one likes it—it kills your day, hurts your bottom line, and is just plain rude on the part of the client and irritating.

If people cancel with enough notice, then that is fine—stuff happens. But short notice cancellations are the real problem.

People often find an inspector cheaper or sooner and cancel on short notice. Something may have happened and they forgot to tell you, or any number of reasons.

We have worked out several ways to reduce (not completely eliminate, but reduce) the number of short notice cancellations.

Below are some of the ways we have successfully done that.

1) Agreement Signed Early & Automated You probably thought that we were going to say a cancellation fee first, but in actuality, this was the best deterrent. We automate our agreements and make sure they are sent to the client just a few moments after they schedule. By doing this, most clients sign pretty quickly, and that leaves them feeling contractually obligated to the appointment, even if they find a better price or someone sooner. When we started doing this, we cut our cancellations by half or more.

2) A Cancellation Policy So, this one is the obvious one—charge people for last-minute cancellations. Before I get into it, the arguments we always hear are “you will never collect it, so why have it.” or “the agents won’t recommend you if you do that.” But I am here to tell you

Ian Robertson is a veteran home inspector, owner of three inspection companies, owner of Full View Home Inspector Marketing, and one of the founders of Inspector Toolbelt. Inspector Toolbelt is simple administrative and scheduling software for home inspectors that makes running your inspection business easy and automated.

36 Working RE Inspector Fall 2022

that I have done it for years, and it works like a charm if you handle it with grace.

The first thing to know is that this policy is mostly a deterrent.

If people know there is a cancellation fee, that in itself reduces the number of cancellations. We have our people on the phones tell the clients when they schedule in the “this is our process speech” that they give on each phone call. No one has ever complained or even brought it up since we added it years ago.

To answer the next question you likely have on your mind—yes, we have collected, and yes, there are times that we haven’t.

Most people have been good about it and have paid the cancellation fee, the ones who seemed difficult—well, we just let them go. We also don’t try to collect when stuff is outside of people’s control. For instance, we had a client try to pay the cancellation fee because they felt bad because the seller got cold feet and canceled the whole thing the day of the inspection. That’s not something we are going to beat people with—so we let it go. Our policy is there to deter people from abusing our page 38 8

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7page 36 service—not to get money out of people in a tough spot trying to do the right thing.

3) Collect Payment Upfront This is another thing that we have experimented with over the years. We use Square (which integrates with Inspector Toolbelt) to send the invoice when the client gets the agreement as well.

This has been effective, since we already have their money and they really can’t disappear on us. Collecting payment upon scheduling (or at least a deposit) is very effective against last-minute cancellations.

4) Automated Reminders Let’s be honest—sometimes we forget our dentist appointment, or forget that we scheduled a time with the mechanic. The kids are running around, a pipe bursts, or some other issue comes up and we just forget. That is why automated reminders are so great. It reminds the client via email or text that there is an inspection coming up. We also send them to both agents. We set the reminders for a week before the inspection, a couple of days before, and then a day before the inspection as well. This cuts down on a lot of accidentally forgotten inspections.

Conclusion Home inspection cancellations are still going to happen—no matter how hard we try. By applying those four suggestions above, you can heavily reduce the number of cancellations you have like we did. But if one still happens, don’t get frustrated.

Go for a long lunch, take a walk, read a book, or in some other way enjoy the unexpected time off. WRE

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