速
Winter 2015
INSIDE:
HIGHLIGHTS
2014 National Education Conference & Trade Show
Contents
w i n t e r
2014 NAHI BOARD OF DIRECTORS
2015
FEATURES Inspecting or Not Inspecting Safety Devices | 11 (1 NAHI CE) 2014 NAHI National Education Conference Highlights | 12-13 Home Inspection: New and Better Paradigm | 23
COLUMNS Commentary | 5 New Members | 17 It’s Your Business | 19 Developing a Photographic Memory Why Photos are Important to Your Lawyer
Now I’ve Seen Everything | 26 BYOB / Build Your Own Business | 25
President | Forrest A. Lines, CRI, NIT By-Lions Home Inspections, LLC PO Box 93 | Blacklick, OH 43004 P: (614) 855-9310 | F: (614) 855-9320 bylionshi@gmail.com Vice President | Troy M. Bloxom, CRI Home Inspection Plus, LLC 17640 Lacey Drive | Eagle River, AK 99577 P: (907) 694-7587 | F: (907) 694-6649 homeinsp@mtaonline.net Secretary/Treasurer | Charles Kleindienst, CRI Open Sky Inspections 10800 Canaan Valley Ct. | Glen Allen, VA 23060 P: (804) 346-4588 | F: (804) 346-4277 openskyinspections@verizon.net Past President | Curtis S. Niles, CRI, NIT Armored Home Inspections, LLC 7101 Wayne Ave | Upper Darby, PA 19082 P: (610) 352-2212 | F: (866) 203-0656 nilesent@msn.com Director | Charles Allen, CRI National Property Inspections 713 Augusta Drive | North Aurora, IL 60542 P: (630) 879-5715 | F: (630) 406-0759 callen2777@sbcglobal.net Director | Steven Burnett, CRI Journey Property Inspections, LLC 403 Burt St. | Tecumseh, MI 49286 P: (517) 920-2888 | journeyinspection@gmail.com Director | Jeffrey Fletcher, CRI Fletcher Inspections, LLC 8991 Austin Rd. | Saline, MI 48176 P: (734) 944-8547 | F: (734) 322-4424 jeff@fletcherinspections.com Director | Sean McKenzie, CRI Burlington Home Inspection Service 137 Mansfield Ave. | Burlington, VT 05401 P: (802) 238-6558 sean@burlingtonhomeinspection.net Director | Peter Rossetti, CRI Pete’s Friendly Home Inspection, LLC 1227 N Peachtree Pkwy | Peachtree City, GA 30269 P: (678) 329-7198 pete@friendlyinspector.com
Executive Director | Claude McGavic (800) 448-3942 | claude@nahi.org 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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National Association of Home Inspectors, Inc. 4426 5th Street West | Bradenton, Florida 34207 (800) 448-3942 | Fax: (941) 896-3187 info@nahi.org www.nahi.org
Winter 2015 | 3
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commEntary By Forrest Lines, CRI, NIT
By Claude McGavic, CRI,
From the NAHI
From the NAHI
By-Lions Home Inspections, LLC
President’s DesK As the year approaches it’s end, I look back on 2014 and am happy to be in the home inspection business and to be a NAHI member. Real estate in my area has come back with a vengence. Sales are up and interest rates still are very good. Most of the realtors® are cautiously optimistic.They are looking forward to 2015 to be good as well. It is a great time to be in our business. We have software that is stateof-the-art. Companies now share marketing stradegies and make it easy to grow your business. Warranties are now available to us. I could go on, but the point is that inspecting is a good business to be in.
Photo credit: depositphotos.com/jtiloligo
I believe that there are many more part-time inspectors than we know. People that do it to earn a few extra bucks. There are many that have retired from another profession and became home inspectors to supplement their income. With this comes a closer budgeting of money based upon the limited volume. The need for continuing education and organization membership is more closely monitored and in some cases eliminated. Our conferemce in Pittsburgh was not well attended. This is sad considering the hours and dollars spent to put something like this on. “The time of year was bad,” you might say. We have had conferences at different times of the year and the attendence is low. “It costs too much,” you might also say. We offered a conference just a few years ago for $99 and most did not come. As your board president, I am well aware of the need for member benefits. We are always looking for ways to help you with your business. We spent a lot of money on our website so you can fill out a personal profile and be found. Many have not done it to date. Make it a point in 2015 to get involved and tell us what your expectations are. Go to your local chapter meeting if possible. Call national headquarters or call one of the board members. We want to help you. Help us do this please.
National Association of Home Inspectors, Inc.
Executive Director I hope you have a happy and prosperous New Year. And while I know that many of you lived through a hard winter last year and may be inclined to hunker down for what’s coming, I was reminded this week on the radio that baseball spring training starts here in Florida in just two months. I encourage you to take advantage of any down time you might have to work on certifications such as radon, mold, infrared, termites, ICC, and others which can put additional dollars in your pockets. I am particularly excited about the prospects from a new program which is being offered to home inspectors, Public Insurance Adjusting. Check out the article on page 23 in this issue. This could be a game changer for many of us And if you live near a state line and don’t have a license to practice in the adjoining state, this winter would be a good time to jump through those hoops so you can expand into the adjacent state. While you are at it, check out your NAHI membership status. If you have completed 250 inspections, why not take the NAHI Certified Real Estate Inspector Examination and become a CRI. Certifications are a mark of accomplishment. The world is full of accountants but the CPA (Certified Public Accountant) is the one who makes the big bucks. Improve your status as a home inspector and become a CRI and charge for your expertise. Finally, states are cracking down on CEUs. If you don’t have enough CEUs to maintain your state license, don’t let it slide. Your license can be revoked and your insurance canceled. NAHI requires 16 hours of CEUs per year to keep your membership and states which require membership in a professional association like NAHI expect us to audit our members for compliance. If you don’t have your required CEUs, use your winter down time to get it out of the way. I am a firm believer that everything comes to those who hustle while they wait. And for the rest of the winter, be safe out there. Claude Executive Director
Happy New Year! Forrest
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Winter 2015 | 5
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ARE YOU READY TO JUMP UP? As you progress through your home inspection career, acquiring new skills, qualifications and especially more experience, you will become eligible for higher categories of NAHI membership. Upgrading membership recognizes the additional skills and experience you have acquired and provides your customers evidence of your commitment to your career in the inspection industry.
STEPS TO SUCCESS AS - Associate Member
Successful completion of a 40-hour comprehensive home inspection training program or completion of a minimum of 20 full fee-paid home inspections.
REG - Regular Member
Successful completion of 100 full fee-paid inspections and written confirmation of passing the National Home Inspector Exam (NHIE), State Real Estate Home Inspector Exam (SREI) or the NAHI Certified Real Estate Inspector Exam (CRI).
AS
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CRI - Certified Real Estate Inspector
CRI
6 | Winter 2015
Successful completion of a minimum of 250 full fee-paid inspections and written confirmation of passing the NAHI Certified Real Estate Inspector Exam. Verification of the required fee-paid inspections is done through a signed and notarized Affidavit sent to you by the NAHI office. If you are currently an Associate and have reached the 100 full fee-paid inspection goal, it is recommended that you take the NAHI Certified Real Estate Inspector Exam. Your exam results will remain on file in your member profile, and once you attain 250 fee-paid inspections, you can automatically become a Certified NAHI Home Inspector.
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Questions To Ask When Hiring a Call Center As a home inspector, don’t you hate it when people think all home inspectors are the same?
That you are the same as every other home inspector out there? Of course, you know that isn’t true. There can be a big difference between home inspectors…in skill level, services offered, and price. The same is true when it comes to hiring a call center to take your calls, book and schedule your inspection appointments, and represent you and your inspection company. There is a vast difference between call centers serving home inspectors…from how they represent you to your callers, the range of services they provide, to staff they employ, the systems they use and everything in between. Some do a little, some do a lot. Some do it well, some don’t. So how can a home inspector figure all this out and make the best call center choice for what he wants, for what meets his needs? That is what this list of questions is meant to do, help you become knowledgeable by asking the right questions so you have the information you need to make a good decision for your business.
Category and Question
Why the Answer is Important
Home Inspection focus & Experience •
Do you serve home inspectors only?
•
Focus - Understand home inspections, agents and clients, and the life of a home inspector = more inspections, less hassle & headaches for you
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How long have you served home inspectors?
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Depth of experience, proven track record = more inspections, less hassle & headaches for you
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How many home inspections companies do you serve?
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Breadth of experience, successful track record with diversity = higher quality service to you
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Extent of Services
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What are your hours of operation?
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Coverage to meet your needs
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Are all calls answered “live” or do calls go to voicemail during the day?
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Voicemail during the day means lost inspections, call center understaffed
•
Do you do follow up calls after the original booking call to get missing or additional information I need? Or is that left up to me?
•
Fully ready-to-go order for you (your time saved), or half completed orders you will have to follow up on to make ready-to-go (your time wasted)
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Can you book and schedule to my specific preferences and needs?
•
Schedule/price/arrange orders to your preferences (more inspections, happier callers) verses all inspectors handled the same with no flexibility (less inspections)
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What room do I have for things to be personalized for me different than other inspectors’ needs and preferences?
•
Greater personalization to your preferences better serves clients, agents, and you = more inspections, happier agents/clients
•
Can you arrange my 3rd party services?
•
Less work/hassle for you to have to schedule, reschedule, and handle exceptions = time saved, less headaches
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Can you confirm access for each order? Even if that means calling the selling agent or seller?
•
Less work for you to arrange, plus impresses agents = time save, less headaches
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Can you arrange payment for each order?
•
Automated options provide security to your clients
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Can you handle my email leads?
•
Fast response to email leads = more inspections
•
Can you arrange my 3rd party services?
•
Less work/hassle for you to have to schedule, reschedule, and handle exceptions = time saved, less headaches
•
Can you confirm access for each order? Even if that means calling the selling agent or seller?
•
Less work for you to arrange, plus impresses agents = time saved, less headaches
•
Can you arrange payment for each order?
•
Automated options provide security to your clients
•
Can you handle my email leads?
•
Fast response to email leads = more inspections
•
Can you follow up on my online scheduled orders if I want that?
•
Confirm details and arrangements, sell add-on services = higher revenue per inspection, less hassle for you
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How do you handle my “shopper calls”?
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Educate, sell inspection. Done right = more inspections booked
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What is your close ratio for calls with an opportunity to book?
•
Higher close ratio = more booked inspections
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Can you send price quote emails to my inspection leads
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Turns more leads into booked inspections
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How do you handle my agent calls verses my client calls? The same or different?
•
Both need separate treatment. Leads to happier agents, satisfied clients
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Winter 2015 | 7
8 | Winter 2015
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•
Call Center Staff
•
Tell me about the staff answering my calls. Are they full-time or parttime staff?
•
Full-time performs better, more knowledgeable, you/callers benefit
•
Does everyone there take my calls or a smaller group?
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Smaller group more personal. If everyone, it sounds more like impersonal call center
•
How many? The same staff all the time?
•
Same staff more personal/knowledgeable for you and your callers
•
Do they read scripts or is the call a natural conversation?
•
Natural conversation more personal, better image to caller
•
How much about my company and my needs and preferences will they know and be able to perform to?
•
More personalized to you means more inspections and less headaches for you
•
What are their average age, experience, and background?
•
Maturity & service experience yields more inspections and more satisfied callers
•
What is your staff turnover?
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Low turnover = stability = better performance for you
•
What do you do to reduce turnover or keep it low?
•
Low turnover = happier staff = happier callers = happier you
•
How do you find and hire your staff?
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Pickier hiring means more qualified staff
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What kind of training do you provide?
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Formal training, ongoing training = higher performing staff
•
Systems Used - Phone System
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How are calls to my business number transferred to you?
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Your business number should not have to change
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Does the staff answer with my company name?
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Have to answer with your company name, no generic answering
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What happens to my calls when everyone is already on a call
•
All calls must be answered “live”, no voicemail ever? Voicemail means lost inspections
•
Do you record calls?
•
Needed for quality control, training, and issue resolution...you need to know
•
What caller ID shows to my agents and clients when you call them? Is it my business number
•
Outbound calls showing your business number more professional
•
Systems Used - Scheduling & Message Tracking
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Do you use a business management system such as ISN to book and schedule my orders?tem
•
Reduces re-entering of information by you into back-end systems, saves you time
•
Does your system interface with ISN or other business management systems?
•
Same result - reduces re-entering of information by you, saves you time
•
How does the system you use allow for personalizing to my needs and preferences?
•
More personalizing to your preferences = things done the way you want = more inspections, less headaches and rework for you
•
What kind of quality checks and procedures do you have to ensure accuracy?
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Double checking, triple checking, consistency = fewer errors, less hassle for you
•
How do you handle calls that require a message be emailed or text messaged to me? Can you do that?
•
Handling/delivering messages timely and professionally = happier agents/clients, lass hassle for you
•
Can you handle email correspondence with my agents and clients?
•
leads to more inspections and flexible communications with your agents/clients
•
For email correspondence with my agents and clients, what “from” address will they see? Does it look like an email from my company or a general one?
•
“From” as your company more professional and personalized = happier, less confused agents/clients
•
Can you send me reports of calls received and what happened?
•
Gives you visibility into number of calls, type of call, result, and close ratio
Bonding at the service entrance.
Bonding upstream of first CSST drop.
That’s quite a list of questions, huh! No worries, you don’t have to ask all these questions if you don’t want to. The first thing to do is have an idea of how much help you are looking for from a call center. Do you want them to be as full service for you as possible, providing the most support and benefits for you? Or perhaps you want just a little help here and there when you feel overloaded, still preferring to do most of the work yourself? Or maybe you are somewhere in between those two extremes. This will help you know how much support you want from a call center to meet your needs. The general rule of thumb is the more support you want from a call center, the more important becomes their depth and breadth of services, and skill level…in other words, the more important it is to ask more of the questions on this list. So cruise the list of questions and based on how much support and benefit you want from a call center, circle those questions that fit what is important to you and ask those. And always expect good answers to your questions…no double talk answers allowed! But regardless of the level of support you are looking for from a call center, be sure to feel comfortable with them (heck, if you are not comfortable talking to them, what about your agents and clients!), feel you can trust them, and ask for references so you can speak to other inspectors using their services for a good peer-to-peer discussion. Not all home inspectors are the same, right? Skill level, services, price. Same for call centers. Prepare yourself with what level of service and support you need from a call center, have your questions ready, and you’ll be much more prepared to make a good decision on who to use. And with that good decision should come more inspections and less stress for you! Paul Zak, America’s Call Center
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Winter 2015 | 9
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If You Break It, You’ve Bought It!
Inspecting or Not Inspecting Safety Devices By: Claude McGavic, CRI, NIT, NAHI Executive Director A word to the wise…Always, always, follow your state required Standards of Practice. It’s the law. If you don’t know what your state Standards of Practice say, contact me and I will help you get a copy. Standards of Practice generally do not require safety devices, including smoke detectors, CO detectors, GFCIs, AFCIs, circuit breakers, float switches, TPR valves, limit switches, and home security systems to be checked during a home inspection. Other types of safety devices, such as stair handrails and balcony guard rails are almost always included in an inspection. But, how far should a home inspector go when safety devices are present? Some devices which are not checked on a regular basis are more prone to seize up or fail when they are finally checked. And while we would like to report to our clients that a life saving device failed and should be replaced immediately, home owners will invariable subscribe to the retail sales line that, ‘if you break it, you’ve bought it.’ So, how should we proceed? I have checked tens of thousands of circuit interrupter devices (mostly GFCIs). The inherent risks associated with checking these devices is that if the device trips and will not re-set, lack of power to the circuit could result in an unintended consequences. I have tripped GFCIs which would not re-set and later found out that food freezers were connected to the circuits. I have unintentionally tripped GFCIs and shut off power to critical medical devices including monitors and oxygen. I have erased data on computers by tripping devices. I have tripped devices and messed up timers. And I have shut down circuits and not been able to locate the re-set button. Needless to say, sellers were not happy and real estate agents were less than understanding, even in circumstances where devices should not have been on a GFCI circuit. Some inspectors actually check the main electrical disconnect to the house by shutting off all power. Yikes! Some states require that smoke detectors be checked. Because it was not required in Florida (where I did my inspections) I almost never checked smoke detectors but would advise my clients to either replace the batteries or even entire older units before going to sleep the first night in the house. The same with carbon monoxide detectors. Occasionally, a client would ask, ‘I didn’t see you check the smoke detectors. Aren’t you going to check them’? I would simply
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say, ‘No. If I check them and that test uses the last volt of power in the battery, you would move in falsely believing that your family is protected and I want you to be certain by replacing the batteries before you go to sleep your first night in your new house’. If the house had a pool and if the buyers had children, I made it a point to stress that pool drowning is the leading cause of accidental child deaths in the US, that the inspection did not include checking any pool related safety devices, and that pool safety was the sole responsibility of the client. And as silly as it may seem, I used similar language when describing the condition of fences. Make sure the client understands that determining whether or not children and pets can get out of a fenced yard is not part of the inspection and that they should carefully examine each segment of the fence prior to use by children and/or pets. You will never hear the end of it if Fifi looks like flat bread after being run over by a garbage truck. Ask me how I know. Something I never touched was TPR valves. Water related damage is the cause of more than 80% of all homeowner insurance claims (and coincidentally, home inspector E&O claims also). Why would I risk opening a TPR valve (or even a stop valve under a sink) and add to that insurance claim statistic if the valve would not shut off again? I reluctantly checked float valves. I checked the photo electric sensor at garage door openers and if the door was not equipped with a photo sensor, I would put my hand under the center of the door to see if it would reverse with reasonable resistance. I never checked pre-programmed devices, timers, security systems, electric fences, or remote controlled gates. I checked electric roll-up storm shutters until I got to pay $3,000 to replace one! And though I checked household appliances, if I did not understand the operating controls, I would skip that unit. So, where does all this leave us? As home inspectors we check some things and not others but clients expects us to check everything. One of my favorite phrases became, ‘Ask the seller to demonstrate’. ‘Ms. Home Buyer, if you want the TPR valve checked, ask the seller to demonstrate that it will work. If you want that new washing machine with a control panel that looks like something in the cockpit of a 747 to be checked, ask the seller to show you how it works. If you want to know if the safe works, ask the seller to show you that it will open. If you want to see if the food freezer GFCI works, ask the seller to demonstrate that it will trip and re-
Winter 2015 | 11
Inspecting or Not Inspecting Safety Devices
set’. In other words, don’t be the last one to touch something. Ask the home owner to touch it or tell your client to ask the seller to demonstrate it. Remember the storm shutter I got to pay for? On the next inspection after writing that check, I asked the seller to show me that a storm shutter worked. He destroyed three of his own shutters before I could convince him to stop and have a service company come and check the rest. I felt like I had dodged a bullet. In situations where you want to learn how something works so you can check it the next time you see it, ask the seller to show you. Later, go on-line and look it up to make sure the seller knew what he was talking about. I have had several sellers say they did not know how some things worked! Your purpose for doing a home inspection does not include playing a game of You Bet Your Career. And if something looks like it could fail under testing, ask the seller to demonstrate that it works. If the seller is absent (as in a foreclosure), advise your client that specific components were not checked because of concerns about possible malfunctions. Report that service persons or tradesmen should be asked to evaluate those items because they will have tools and training to perform immediate emergency repairs if necessary.
WHAT ATTENDEES SAID... “To those who were unable to attend this years 2014 National Conference, you missed a great event. These are the events that bring us together to share ideas and learn from the best. The facility, food and the speakers were great coupled with a superb marketing workshop.” ...Tim, Safehome Property Inspection “As a first-time attendee of the “Future Home Inspector Workshop” I wasn’t sure what to expect. The presentations were excellent and I had all my questions answered. The vendors were also helpful. I now know this is what I would like to do for the balance of my career.” ...Wayne from Charlottesville, VA
The bottom line, be careful out there.
EARN YOUR NAHI CEU NOW To earn one (1) NAHI CE, log into the members’ area of nahi.org. Click on education and the CEU Credits. Answer the question seen below and click submit. 1. For discussion purposes, assume that you are the home buyer’s lawyer. The home inspector did not inspect any of the items mentioned in the article above so the home buyer is suing the inspector. As the home buyer’s attorney, what arguments would you use to challenge the home inspector for not checking each of the items article?
Thank you NAHI Chapter Leaders Your hard work, service and dedication as Chapter Leaders does not go unnoticed. NAHI extends sincere thanks to all our volunteer leaders who give so much of their time in order to make NAHI a valuable experience for all members. The collective efforts of our Chapter Leaders is pivotal to member education and NAHI growth. NAHI recognizes your contributions and deeply appreciate your efforts.
12 | Winter 2015
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The Lowdown on Lockbox Access Bruce Aydt tackles the issue of what exactly constitutes unauthorized access to property. November 2013 | By Bruce Aydt
Question: A buyer’s agent scheduled an inspection of an occupied home and the lockbox recorded entry to the home with the agent’s code. I learned later that she was not in attendance with the buyer and inspector. Is it a violation of the Code of Ethics for an agent to allow an inspector and a buyer into the house by themselves? Isn’t this the same thing as giving the combination to a buyer to let them go through a property alone?
Answer: Unauthorized access is a violation of the
Code of Ethics, but what constitutes unauthorized access depends on the listing agent’s agreement with the property owner. Standard of Practice 1-16 applies to listing brokers and agents. “REALTORS® shall not access or use, or permit or enable others to access or use, listed or managed property on terms or conditions other than those authorized by the owner or seller.” Unauthorized access by cooperating brokers is covered by Standard of Practice 3-9. “REALTORS® shall not provide access to listed property on terms other than those established by the owner or the listing broker.”
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However, if inspectors are not permitted to access lockboxes, then the buyer’s agent has violated both the lockbox rules and the Code of Ethics by permitting access by the inspector and buyer without the buyer’s agent’s presence. If the lockbox was a combination variety and the listing agent gave the buyer’s agent the combination for the buyer’s agent’s needs in showing and inspections, the buyer’s agent would not have authorization to give the combination to the inspector and buyer and would be in violation of the Code under Article 3 and Standard of Practice 3-9. Bruce Aydt, Columnist Columnist Bruce Aydt, ABR®, CRB, is senior vice president and general counsel of Prudential Alliance, REALTORS®, in St. Louis and a former chair of the Professional Standards Committee for the NATIONAL ASSOCIATION OF REALTORS®. You can send him your ethics questions at ethics@realtors.org. Reprinted from REALTOR® Magazine Online, Dec, 2014, with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2014. All rights reserved.
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So what is “unauthorized access?” Most listing agreements provide that the owner authorizes the use of the lockbox system under that system’s rules. If the inspector is a member of the lockbox system, then the inspector is authorized to enter the property for the purposes allowed under the lockbox rules. Most lockbox rules permit entry to a listed property with an authorized lockbox for several reasons, including inspection of the property.
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L A G LE
DEVELOPING A PHOTOGRAPHIC MEMORY WHY PHOTOS ARE IMPORTANT TO YOUR LAWYER
By: Joseph W. Denneler, Esquire
I have been giving educational seminars and litigating home inspection cases for over fifteen years. A stock part of my presentations always includes a discussion about photographs. I am glad to report that over the years the number of folks who tell me they do not take any photographs during an inspection has decreased. I would like to take credit for pushing that agenda, but in reality the increase in inspectors taking photographs comes from better, simpler technology, a push by many insurance carriers and risk managers, and the drive to set oneself apart from the competition by providing a better report. The reasons given for refusing to take photographs during an inspection have not changed much since I started having this dialogue at my seminars. They generally fall into two categories: hassle and fear. The hassle contingent cites the increase in time spent taking the photographs, incorporating them into their reports and maintaining the photographs. The fear group worries about taking photographs of conditions that they fail to identify during the inspection, then having those photographs used against them in a later lawsuit. Neither position trumps the benefits of taking photographs, particularly if you ever find yourself embroiled in litigation over an inspection. The hassle defense has problems of credibility attached to it like an anchor. Anyone remotely familiar with today’s digital cameras can shoot hundreds of photographs during an inspection without adding significant time to the process. I do appreciate that not all inspectors use some form of computerized report production that would walk them through adding photographs to the report with little trouble. Having the photographs placed within the text of the report certainly add to the “pop” of the experience for the reader, but labeled photographs attached to the end of the report perform the same function: they give your client a face-to-face representation of what you are reporting. Storage and preservation of the images is simply not that expensive anymore. Flash drives are cheap and effective for storing the photographs without taking up too much space on your hard drive or server. All in all, the hassle defense seems superficial. The fear group, I must admit, have a more compelling argument. What if in the course of taking photographs I shoot something that I fail to report and then my client has evidence to sink me in court? I wish I could write that this fear is totally unfounded, but as with most “I never” there is always a first time. I did have a client who took hundreds of photographs, used some and kept the rest on his PC. Litigation ensued over the sale of the property and the inspector’s file was obtained by subpoena by the attorney for the inspector’s clients. The inspector turned over all of his photographs, including the ones he did not use in the report. There was a condition of the plumbing system he failed to note in his report that was evidence of a material defect. He then became “Defendant Number 4” in the lawsuit. But one occurrence of such a situation does not a trend make. This is an anomaly. The inspector simply did not review his photographs before he wrote and issued the report. Had he taken that simple step he would have noted and reported the condition. In my opinion it was not the photographs, but a failure to use them, that caused that claim to mushroom.
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The benefits of taking and keeping photographs from an inspection far outweigh any of the above arguments. As a defense lawyer having those photographs is critical. Part of my job is to recreate your experience performing that inspection as best I can. I need to know if the conditions were changed by humans or by time. I need to see the impediments to your ability to discern conditions. Absent such evidence of that moment in time during your inspection my only evidence comes from the people suing you and your memory. I am not suggesting you have a faulty memory. The fact is that memories fade over time. Recollections are affected by the piling on of additional information, life events and the like. It is a function of our limited ability to take true snapshots with our minds. Specifically for home inspectors you have an average of three to four hours of time at a property. You write your report, and move on to the next job. I hope that most, if not all of you, are so busy that you see over a hundred homes over a year. Now take into account that most lawsuits are not filed until a year or in some cases several years after your inspection. Can you remember the color of that house? Do you recall what the exterior cladding was, or how many windows were on the front? The answer to these questions is likely no. If you ever find yourself involved in litigation related to your profession you will likely not be able to remember details about the home. Photographs are the great equalizer. Having many digital records of the conditions you saw allows your memory to recall events more clearly. They orient you to which areas were readily accessible, and perhaps more importantly, which were not. They put you on an equal footing with the claimants in terms of being able to intelligently describe the home you inspected in better detail. Easily as important as being your memory aide, photographs preserve the evidence I need to defend your interests. Conditions change. Many times repairs destroy the physical evidence of the conditions you saw during an inspection. Weather events can cause latent defects to materialize. Attempts at concealment are revealed. All of this can occur in a very short period of time. Despite the best efforts of defense attorneys everywhere not all cases are dismissed when a plaintiff destroys physical evidence. It becomes a decision for a judge. The test is usually whether the defense was significantly prejudiced by being unable to examine the conditions as they existed. A judge can allow a case to proceed where the only remaining evidence of the conditions are photographs taken by the plaintiffs during repairs. Those photographs are not taken with your best interests in mind, and not taken to preserve the evidence. They are taken to support the claim for damages. In rare cases they are doctored or staged. Having your own photographic record of the conditions eliminates this possibility and ensures that your perspective and limitations in performing the inspection are preserved. I truly hope anyone reading this article never has to defend their work in court. But if you do, wouldn’t you want to have the very best evidence available? The only way to preserve the conditions you experienced, to preserve your memory of the inspection, and to prevent anyone from changing the conditions is by taking photographs. I assure you, if you do ever end up as a defendant, you will be glad you took the time to protect yourself.
Winter 2015 | 19
20 | Spring 2014
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November was a busy month. A huge round of applause to those who recently passed the NAHI CRI (Certified Real Estate Inspector) exam. Exam candidates at 2014 NAHI Pittsburgh Conference: • • • • • • •
Merwyn Bowdish, Home Inspection Srvs. of Lancaster, Lancaster, OH James Brandt, Safehome Property Inspection, Mansfield, OH V. Richard Davis, Davis Home Inspection Srvs., Cartervlle, IL Stephen Morse, 4 Seasons Home Inspections, Morrisville, VT Jaime Nolan, Home Inspections By Nolan, Orlando, FL Ted Ooyevaar, Pillar To Post, Portland, OR Scott Shaw, Dick Delaney Home Inspections, Titusville, PA
Exam candidates sponsored by the IL NAHI Chapter: • • • • • • • •
Lawrence Brady, Brady Inspections, Medinah, IL Richard Sabatino, Sabatino Consulting, Oak Park, IL William Nicholson, Bill Nicholson Home Inspections, Tinley Pk., IL Shawn Little, Dynamic Home Inspections, LLC, Naperville, IL John Maurin, J. Maurin Home Inspection, Glen Ellyn, IL Alan Gindt, Montgomery, IL Gerald Young, Allcheck Inspections, Inc., W. Chicago, IL Dave Yost, Quality Building Inspections, Inc., Glen Ellyn, IL
congratulations!
FHA Flipping Waiver Expires
On December 10, 2014, the Federal Housing Administration (FHA) announced that it will not extend the temporary waiver of FHA’s regulation that prohibits the use of FHA financing to purchase single family properties that are being resold within 90 days of the previous acquisition. The waiver expires on December 31, 2014. NAR sent a letter to Commissioner Galante on October 3, 2014 urging FHA to extend the waiver because of the positive effects of the waiver where property rehabilitation and resale of these homes has increased the availability of safe and affordable homes. In response to a recent a negative HUD Inspector General report, however, FHA decided not to extend the waiver. Source: Dec., 2014. REALTOR.org.
TENNESSEE Home Inspectors New rule by the Tennessee Divison of Regulatory Board went into effect on November 1, 2014. Home Inspectors cannot repeat the same continuing education courses for a period of three (3) years.
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Home Inspection: New and Better Paradigm by: Mark Houser, President, Property Adjustment National Association, (PANA)
Since 2008 until now, the country has lost over 30,000 home inspectors due to the lack of home sales. Home inspectors have been looking for the answer that will fill the hole in their business. Who wants to be another name on some REALTOR’s® home inspection handout sheet, waiting for the “spill over” possibilities of work coming your way? What kind of marketing plan is that? What if I could show you a way to put money in REALTOR deals which saves their bacon and makes you their new best friend! By becoming what is called a public adjuster you may be able to find tens of thousands of repair dollars to put into sales contracts for sellers, REALTORS, and lenders. So what is a public adjuster and what do they do? In 46 states, a public adjuster is licensed to represent the homeowner and business owner for the building and contents in an insurance claim, and getting paid a percentage of the claim in the process. You work against Insurance companies, not for them. If a property has suffered an insurable claim and the policy holder believes the insurance adjuster has ‘low-balled’ the claim amount, she can call in
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a public adjustor who works for her (not the insurance company) to provide a second opinion. One huge help for REALTORS is working short sales. A short sale is when the lender is asked to settle for less than the house is worth just so they can close out a loan to sell a property, or for someone who is behind on their mortgage. REALTORS in 2008 were complaining about short sales having extra repair expenses to do to get the home ready for sale, and half of the short sales were failing because the seller did not have any money to put into the needed repairs. Just imagine what the Realtor would say or do for someone who put money into a short sale. A homeowner’s claim done by the public adjustor could put money into the sale, close out the loan, and save the REALTOR’S commission. I would bet you could hear the scream of excitement for miles. Finally we have an answer to the problem. In a nut-shell, this is how it works. If a home inspector identifies a defect which turns out to be an insurable claim; and if he puts on his public adjustor hat and files a claim for the home owner; and if the claim is paid; then, the proceeds from the insurance claim can be used to make the repairs, and save the sale for the seller, seller’s agent, lender, and ultimately, the buyer. And it does not hurt that
Winter 2015 | 23
Home Inspection: New and Better Paradigm (continued) the public adjustor is paid a respectable percentage of the claim, before anyone else gets paid. I am guessing that right about now that you are wondering what is involved in adjusting an insurance claim. In basic terms, you first determine that the homeowner has a covered loss, known as a peril. You then sign up the claim and scope out the damage and repair for the estimate to determine the value of the claim. You have a little talk with the homeowner about what is happening; then, you make sure they know what to do and what not to do. Next, you inform the insurance company that you are handling the claim, and you will wait to hear from their assigned adjuster. After which you go to your computer estimating software and finish the estimate. The insurance adjuster will connect with you and schedule a date to inspect the damage. After you finish with the negotiation of the amount, a check will arrive with three names on it: the client, the lender and yours (or your company’s name), which means you control the funds. You’re not waiting to be paid by the homeowner. You pay them. There are many benefits to being a public adjuster. It is a recessionproof occupation that is not dependent on the economy. There is no need for building or remodeling of a home to have work. Public adjusters receive business because of the actuarial charts and by understanding that damage happens naturally to homes every day, despite the economy. For example, if you have half a million homes in an area, you will see 60 to 65 hot water heaters burst and cause about $5,000 to $25,000 in damages every day. And that is only one of hundreds of damages that occur each day, no matter what is going on in the economy. This business is also inflation-proof. Just like attorneys, public adjusters are paid on a percentage basis of what is recovered. As the prices of things and services rise, so will your income, making it a great occupation for the times we live in. Annual cost to be a public adjuster is at a minimum: the annual State licensing fee is around $100 and there is a surety bond of $150 a year as well as some CEU’s classes that can usually be done online and a few paperwork expenses such as contracts, business cards, and such. Remember it’s the insurance company that gets sued not the public adjuster. It’s all low risk and high return on your efforts and investment. Home inspection and public adjusting is a powerful combination and will only be found in the NAHI association. Property Adjustment National Association is the only means of learning how to become a field public adjuster with training at the level of a college degree. PANA, as we are called, is expanding the industry of public adjusting with a mission to add not only well trained public adjusters but to also mentor and bring resources to its members. Our association is dedicated to bringing the goodwill principle to our public adjuster industry in the same way NAHI is working to bringing excellence to the home inspection industry. For this reason and a few more, we are giving NAHI an exclusive in working with PANA. Adding public adjusting services provides new possibilities for your home inspection business. When you combine home inspection with public adjusting, you add depth of services to your client’s purchase as well as solve challenges that the Realtors face in this new world. Let me point out that Realtors have new problems as well as old ones like short sales, REO’s, staging costs and the plain old fixer upper. It’s not as simple as just selling it, as the competition coming from real estate investor groups change the rules in real estate. Bringing in the power of public adjusting gives you an answer to “Where is the money going to come from for fixing a listing problem?”. There will be homeowners who have no answers, and
24 | Winter 2015
February 27-March 1, 2015
OHIO NAHI National Regional Meeting Hosted by NAHI & ASHI NAHI CEUs Location: Holiday Inn Convention Ctr N. High St Worthington, OH MORE INFORMATION COMING SOON.
when the Realtor brings you as a home inspector/public adjuster to the table, the problem disappears. The homeowner is amazed and the Realtor thinks they will survive this economy with their new found miracle-worker, you. From that point on, no traditional home inspector will do. What does it take to become a public adjuster? In some people’s minds, estimating alone would be a daunting task. How an insurance adjuster sees something like estimating is different than the how a public adjuster sees it. The insurance company and its adjustor are all about paying the homeowner the least amount of money necessary to settle a claim. The role of the public adjustor is to make sure the policy holder gets the maximum legal amount for a claim. With that said, you can find a few schools to train insurance adjusters, but outside of Property Adjustment National Association (PANA), there are only schools to teach how to pass the state test and how to use insurance company software. PANA was established eight years ago to teach insurance claim estimating and all other aspects of public adjusting. One time, I took Claude McGavic, the Executive Director of NAHI on a tour of our training site. After we were done with overview of our content, he said he felt like he had been drinking from a fire hose because of the extent of the resources we provide our members. I was just told by a new member that we not only think out of the box here, but we eliminate the need for the box. If I were you, I would want to know what kind of time investment it would take to become one of these super home inspectors, able to change real estate with a simple insurance claim. I have designed our training to have a quick start of 80 hours built into the training. You can take 2 or 3 hours a night, Monday through Friday, and be up and running in eight weeks or knock it out in 30 days. Claude McGavic, asked me to create a web address explaining more about Property Adjustment National Association and a place where you could get your questions answered, where we could start a dialog. If you wish to call me first, let me know about your NAHI membership. Call me at 215-499-8629. The address is www.thecompletementor.com/NAHI.html.
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Call for Experts
Build Your Own Business (BYOB)
NAHI has a wealth of untapped resources in its members and it is untapped because we don’t know where it is hidden. Some of you are master electricians, plumbers, or carpenters. Some are AC and furnace technicians, and some are engineers, site contractors, or home builders. And while each of us is an ‘expert’ on one or two things, none of us know it all or even where to go to look. To remedy that, NAHI plans to establish a number of Panels of Experts. These will be ‘Go To’ contacts for NAHI members who need technical information. These panels could also be used to review proposed revisions to the Standards of Practice and could even be used to advise states or other regulators on certain subject matter. The panels would include: Electrical Plumbing Roofing Carpentry Site Development Structure Radon Termites Pools Appliances Docks Energy Efficiency
HVAC Masonry Mold Decks EIFS Green Building
If you are interested in serving on a Technical Panel, please send us the following information: • • • • •
Your name The Panel you would like to be assigned to Description of past experience Certifications or licenses you hold How you would like to be contacted (phone, text, email, etc.) when a NAHI member is stumped
These panels are not about your home inspection expertise, they are about your trades or specialty expertise. Please do not sign up for a panel if you do not know the subject material. But if you believe you have something to contribute to fellow NAHI members we want to promote your expertise. Email to: INFO@NAHI.ORG.
Dan Steward, CEO, Pillar to Post Home Inspectors Clichés abound this time of year about entrepreneurial reinvention. From bold proclamations under the guise of New Year’s resolutions to calls to reflect on business carried out in the year past, the beginning of the year is pushed as a time for both fore- and hindsight. Yet as with many clichés, the reason they’re so prevalent is because there is merit in what many of them encourage entrepreneurs to do. Adapting your business is a crucial component of staying relevant, after all. But the important thing for a successful entrepreneur is to be able to demarcate between changing your business for the better, and change that will only harm operations. At Pillar To Post, we distinguish between so-called reinventions that are predicated on following trends, which often prove to be ephemeral, and reinventing around ironclad, dependable principles of good business. We’ve found that one of the things franchisees commend Pillar To Post for is the kind of guidance to determine sustainable changes from those that aren’t, an ability to distinguish that can only be found in a franchise system with experience. Here are a few suggestions that can help you differentiate between the correct and incorrect way to evolve your business.
Be leery of trends
The word “trend” is used a lot these days among entrepreneurs and with good reason. Trends can be useful gauges to judge the kind of services that your customers will expect your business to provide. But by their nature, trends, generally, don’t last. As a consequence, a business that follows trends without an eye on more sustainable, long-term business development runs the risk of sacrificing its longevity for short-term gains. A good business should be run with the same logic behind amassing a good wardrobe; choose a few outfits that appeal to current styles, sure, but always have timeless outfits on hand as well.
Have a goal or endgame
It’s one thing to say you want to reinvent your business, but it’s something else entirely to reinvent with an actual, concrete desired outcome. Just as you wouldn’t get on an airplane without an idea of your destination, you shouldn’t plan to change your business without first knowing what that change should look like. As with following trends too closely, many business owners will miss the forest for the trees by pursuing reinvention because it’s something so many others are doing, without a plan. This “me-too” mentality is dangerous. Being able to visualize your updated business will help ensure its success.
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Be true to yourself
Foresight into the kind of business you want tomorrow is contingent on a healthy dose of hindsight and reflection on the business you had yesterday. A good, successful business reinvention demands going back to the beginning and understanding why you started a business in the first place, with an emphasis on recognizing the principles upon which it was founded. As any home inspector knows, a home built on a flawed foundation is doomed to failure. Inspecting your own business’s foundation can give you tremendous insight into how to best evolve your business.
Learn from the challenge
If you’re reinventing your business, it stands to reason that it has been around for a while. That means you probably know the growing pains often inherent to starting a business. But just as that struggle helped your business become stronger in the end, so too should you prepare for the challenges that come with reinventing your business with an understanding that your business will be better for them. Use the reinvention process as a learning experience. A change in your business that seems too simple probably isn’t a reinvention that has the promise of sustainable success. Running a business is a balancing act between leading and following. A good entrepreneur should be able to both recognize the shape the industry is taking while also determining if that shape fits the individual business. To reinvent a business is to walk a tightrope between building upon earlier successes while also refusing to rest on one’s laurels. Guidance from a knowledgeable support team can help even the most experienced entrepreneur reinvent their business with a level of success not possible alone.
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DINNER IS GOING TO TAKE AWHILE!
GOT GAS?????????
C Photo Credits: (A, B, C) Troy Bloxom, AK (D) Scott Shaw, PA A
B
DEATH WISH!
I’LL TAKE THE RED VALVE HANDLE FOR $200!
Now I’ve Seen Everything
D
26 | Winter 2015
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Nat’l Product Approval Database
Home Inspectors and public adjustors in some markets have long needed to research and recommend sources for code compliant building products to their clients for insurance purposes. Until now, this has been done by visiting various websites or instructing homeowners to do so such as Miami Dade, ICC, Florida, Texas, AAMA, and many others. NAHI is pleased to have formed an alliance with ApprovalZoom.com to provide all that information at the NAHI website and in sync with many certification agencies. This NAHI member benefit offers a wealth of resources for inspectors to easily find and provide a resource on their inspections for homeowners to assist in home sales, insurance discounts, and code compliance needs. Access the database under members, education and then by clicking Nat’l Product Approval Database. Requires a member login.
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Winter 2015 | 27
2015 Standards Of Practice
What’s In It For Me? NATIONAL HOME INSPECTION STANDARDS OF PRACTICE ANNOTATED July 30, 2014 By: Claude McGavic First of all, if you are licensed by your state to do home inspections, use your state Standards of Practice. If you don’t, you will be breaking the law. And, make sure your pre-inspection agreement cites your state Standards of Practice and not the NAHI Standards of Practice. If you are in a state which does not regulate home inspectors, you can do whatever you like (up to a point). Select a Standard, cite it in your pre-inspection agreement, and use it consistently. NAHI recommends that members use the January, 2015 version, but gives its members the flexibility to use earlier versions, a state Standard you are comfortable with, or even the Standards of other associations.
Effective January 1, 2015
So why use the new NAHI 2015 Standards of Practice Annotated? Not only do Standards tell home inspectors what to inspect and not inspect, they tell clients and the courts what inspectors are supposed to do. Courts don’t like ambiguity and inconsistency and in recent years, there have been more and more instances where inspectors have had difficulty defending themselves. The new Annotated Standards clearly spell out what the inspector should do. Those requirements are supported by a Glossary which more clearly defines the intent of the Standards and the expanded Limitations and Exceptions provides more than 100 new protections for inspectors. And for consistency, the Standards, the Glossary, and the Limitations and Exceptions all use the same terms. Finally, most home inspectors report on items not listed in their state Standards, such as household appliances, decks, and pools. By citing the new 2015 Annotated Standard for those items not covered by your state Standards, you set the boundaries for a judge who might have to decide if you did a good job. If you inspect components without citing a Standard, an opposing attorney will accuse you of ‘just winging it’ or of ‘making up you own Standards as you go’. So even if you inspect homes using a state Standard of Practice, you should cite and use the new NAHI Standards for items not covered by the state. You’ll be glad you did.
The 2015 Standards of Practice will not be available in hardcopy. The .pdf version has been formatted and designed to be printed out on 8 1/2 x 11 paper as you need to use as an attachment to your home inspection reports.
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The NAHI® Forum
Winter Safety Tips for
Portable Generators According to the National Safety Council (NSC), the best way to avoid accidents and injuries related to portable generators is to become familiar with their proper operating procedures. The agency recommends the following tips for staying safe around portable electric generators: • Always read and follow the manufacturer’s operating instructions before running generator • Engines emit carbon monoxide. Never use a generator inside your home, garage, crawl space, or other enclosed areas. Fatal fumes can build up, that neither a fan nor open doors and windows can provide enough fresh air. • Only use your generator outdoors, away from open windows, vents, or doors. • Use a battery-powered carbon monoxide detector in the area you’re running a generator. • Gasoline and its vapors are extremely flammable. Allow the generator engine to cool at least 2 minutes before refueling and always use fresh gasoline. If you do not plan to use your generator in 30 days, don’t forget to stabilize the gas with fuel stabilizer. • Maintain your generator according to the manufacturer’s maintenance schedule for peak performance and safety. • Never operate the generator near combustible materials. • If you have to use extension cords, be sure they are of the grounded type and are rated for the application. Coiled cords can get extremely hot; always uncoil cords and lay them in flat open locations. • Never plug your generator directly into your home outlet. If you are connecting a generator into your home electrical system, have a qualified electrician install a Power Transfer Switch. • Generators produce powerful voltage - Never operate under wet conditions. Take precautions to protect your generator from exposure to rain and snow.”
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INSPECTING
Winterized/Foreclosed Homes By Chris Chirafisi, Senior Home Inspection Trainer, American Home Inspectors Training (AHIT)
TAKING THE CALL AND MAKING SURE THE UTILITIES ARE ON
into the property may show up for the party. A lot of these animals can carry diseases so be extra careful and protect yourself.
So you received a call from a new client and they booked an inspection with your company. Congratulations! You ask all the obvious questions when scheduling the inspection. You find out the home is winterized/foreclosed and vacant. Inspecting a winterized/ foreclosed home does not entail a different inspection report or different inspection procedures compared to a lived-in home. Yet there are definitely issues that can arise in a winterized/ foreclosed home that you typically will not come across in a lived in home, for obvious reasons.
Observe any areas that have been damaged by the animals. It may include chewed wood and holes. Don’t forget to look for the droppings.
When booking any inspection, one of the most important questions you can ask your client is “are all of the utilities on?” We are talking about electric, gas and water. The only way we can properly inspect the different items throughout the home is if these systems are on and functioning. As home inspectors, if you are following the NAHI standards of Practice it specifically states we are not required to activate electrical systems or branch systems which are not energized, or inspect any system that are shut down or secured or operate any main, branch or fixture valves except the ones stated in the SOP. By taking the chance and operating something that is shut down or turned off, you increase your liability tremendously.
UNINVITED GUESTS AND MOLD Be prepared for possible pest infestation and maybe even mold growth. If the property has been vacant for an extended period of time animals such as raccoons, mice/rats, termites, bats, birds, and anything else that can get
Mold may be another issue with the home. If there are areas that are damaged and water is leaking into the house that can create a perfect environment for mold. High humidity can contribute to mold growth with the right circumstances as well.
THIEVES, VANDALS AND SQUATTERS Another issue you need to be aware of is that thieves/vandals may have paid a visit to the property. You may encounter a home where all of the copper piping has been removed from the home or all the electrical wires have been ripped out of the walls. You may see the A/C condensing unit is dismantled and missing a good portion of its insides. The list goes on and thieves will take anything worth money. Also be cautious of squatters that may be living in the house as you may come across some unsanitary conditions.
PRIOR OWNER What about the past owner or resident that was evicted from the home? Before they left they may have done some remodeling. You may see damaged drywall, broken windows, damaged doors, damaged countertops, cabinets missing doors. The list goes on. The important thing to remember when inspecting a winterized/foreclosed vacant home is to follow your report and follow the NAHI Standards of Practice or your state standards and document any issues that may need attention.
Reprinted Fall 2011/NAHI Forum
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■ Ohio Forrest A. Lines, CRI By-Lions Home Inspections, Inc. bylionshi@gmail.com (614) 855-9310
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