Jon's Blog

Are home inspections worth the money?

Jon Rudolph (I.D. Property Inspections, Inc.) — Sat, 28 Nov 2009 13:26:57 -0600

This question was posted on www.Trulia.com by a real estate agent.

There were many answers, of course say "yes!" with elaboration of why. I thought this relatively obvious question and answer actually deserved a more detailed and specific answer.

A home Inspector's Answer to the question Are Home Inspections Worth the Money?

The biggest caveat to answering your question being the qualifications and ability of the home inspector. It's in your best interest to find and select a qualified home inspector your are comfortable with choosing based on comparable qualifying criteria. Some states have minimal standards and requirements for home inspectors and some do not. Even with state requirements, you still need to qualify your choice in home inspectors to best ensure you are getting your money's worth. Also, your Realtor may have some or one home inspector referral, it's still in your best interest to screen and qualify that home inspector. Don't assume the nicest Realtor is going to refer the best qualified inspector.

Consider this; you are relying on the professional opinion, the observation skills, technical knowledge and communication skills of someone you may interact with for only a few hours at most, in order to make an informed and confident purchase decision on a home. Are you willing to compromise your time to qualify and fee to hire a reliable and qualified home inspector professional?

Here's are two scary, yet very real considerations:

•· For states that don't have home inspector requirements, such as Colorado, your home inspector could have NO qualifications, have served in prison for federal offense and received a Certified Home Inspector credential from the internet. And you could be hiring that person to enter another person's home unattended. Then relying on their "professional opinion" to make a home purchase decision.

•· General Liability insurance. If your inspector doesn't carry it or an adequate coverage, YOU are generally liable since you are hiring the inspector to go on someone else's property. What if something is stolen or damaged? Are you prepare to carry the liability because the home inspector you hired isn't?

Fortunately, there are a few simple questions you can ask to help ensure you are getting one of the many well qualified and reputable professional home inspectors.

Questions To Ask When Choosing A Qualified Home Inspector:

•1. Do they carry general liability and errors & omission (E&O) insurance?

•2. What, if any, standard of practice do they base their inspections (e.g., American Society of Home Inspectors (ASHI)?

•3. What kind of certification, if any? ASHI Certified inspectors is the only third-party accredited certification. Some are simple online internet or correspondence courses.

•4. What source & level of training, experience & education do they have?

•5. How much time do they typically spend on an inspection?

•6. What additional inspection techniques and tools do they use?

•7. Are they impartial (e.g., independent of anyone with a financial interest in the results except the client)? Did they pay or compensate some way for the referral?

•8. How do they present results? Are clients encouraged to attend the inspection?

•9. What do their clients say? Do they guarantee client satisfaction?

•10. How much is the fee and what is it based on? Is it competitive for the services and qualifications provided?

•11. How do their qualifications compare to the price?

I hope this helps. Also see my blog (http://id-inspections.blogspot.com/) that goes into some more detail on Choosing A Qualified Homes Inspector and or our web site (http://www.id-inspections.com/Home) for Downloadable a Worksheet to compare home inspectors with this qualifying criteria

Home Buyer and Seller Seeking Professional Realtor Advice

Jon Rudolph (I.D. Property Inspections, Inc.) — Sun, 15 Nov 2009 10:34:50 -0600

Home buyers and sellers often rely on thier hired Realtor to provide real estate transaction advice based on the Realtor's professional knowledge and experience. Here's a Realtor question for consideration.

In many states, Home inspectors are not required to carry errors & omission insurance or general liability insurance. Should a professional Realtor advise thier Buyer clients to hire an inspector that carries both types of insurance and their Seller clients not to allow an uninsured home inspector into thier home? Do you provide such advice? Why or why not?

ASHI Inspectors Annual Senior Citizens Home Safety Community Service

Jon Rudolph (I.D. Property Inspections, Inc.) — Fri, 13 Nov 2009 09:09:58 -0600

Northern Colorado Chapter American Society of Home Inspectors (NCC-ASHI)

Proudly Hosted the 3rd Annual Senior Safety Saturday -

a skill-based service that targets improving safety in older adults' homes

----------

The Event

• Seniors 65 and older are eligible | Must be homeowner and reside at the home | Must be present during safety check-up | Must sign liability waiver

• Participating local businesses will provided free or discounted products/services

------------

Result Overview of

Northern Colorado Chapter of American Society of Home Inspectors (NCC-ASHI)

SENIOR SAFETY SATURDAY (10/17/09)

•· 8 Volunteer Home Inspectors; 6 Participating Service Companies

•· 34 senior homes safety checked in one day

•· 106 Specific Safety Defect items reported (not counting recommended upgrades)

•· % of the homes' Safety Defects reported (not counting recommended upgrades)

Unfortunately, we were limited to the number of homes checked. We had many more requests then we were able to work into this year's program. We hope these seniors will try for next year's program or contact one of our professional Certified ASHI Home Inspectors to have their home inspected for safety hazards, sooner than later.

Thank you to all the participating professional home inspectors, service providers and the Loveland Fire Prevention Bureau.

Thank you to the people that helped get the word out and promote this annual public service program.

Don't Let Your Halloween Turn Into a TRIP HAZARD Nightmare!!

Jon Rudolph (I.D. Property Inspections, Inc.) — Sat, 31 Oct 2009 12:53:52 -0500

BOO! BE AWARE, TAKE ACTION!!! Don't Let Your Halloween Turn Into a TRIP HAZARD Nightmare!!

Halloween can be the worst time for trip hazard falls, injury and liability as kids and parents of all ages walk and run onto your dark property eager to receive treats.

Any small to large and irregular surface displacement can be a trip hazard and action should be taken to minimize risk.

Suggestions: Use Halloween decorations as a means to obstruct and slow down foot traffic at sidewalks, driveways, patio, etc.; any walkway path that may pose a trip hazard. For example, Caution Tape over a saw horse or hay bale across the hazards. Use your imagination, for anything that might overt, alert and avoid a trip. Adequate lighting will also help!

Oh yeah, get it fixed as soon as you can ;))

I.D. Property Inspections, Inc. wishes everyone a safe and enjoyable Halloween.

NCC-ASHI Senior Safety Saturday Oct. 17th

Jon Rudolph (I.D. Property Inspections, Inc.) — Sun, 11 Oct 2009 11:53:42 -0500

3rd Annual FREE Senior Home Safety Check-ups, Sat Oct 17th for Northern Colorado Senior Home Owners!

Realtors and other professionals in the real estate and home services industries, this is agreat reason to connect with past clients and inform them of this free community service or let them know to offer to inform their qualifying family members.

The Northern Colorado Chapter of American Society of Home Inspectors (NCC-ASHI) offers this community service once a year. Many of its professional home Inspector memebership performs the skill-based 40+ point home safety check, including furnace and water heaters for gas & exhaust (CO) leaks.

See http://www.id-inspections.com/SeniorSafetySaturday for more details!

Join the PETITION: Face Book Friends Group Request for Presidential Debate on Health Care

Jon Rudolph (I.D. Property Inspections, Inc.) — Sun, 16 Aug 2009 10:53:31 -0500

Based on the size and Proposed Radical Change, Health Care Reform Will Affect Us All (Individuals and Business Owners) Directly and Indirectly.

How do we sort through the rhetoric and understand what's being proposed and the pro & con implications?

Would a moderated formal debate with President Obama (the current architect) be a good starting point? If you think so, consider this...

Joining a temporary petition group to get to the bottom of the health care plan controversy and move on. If interested, please join this FB Group & share the invitation w/others.

This Face Book group is simply a Sign-Up Support Petition to respectful request President Obama debate a nominated & qualified (To Be Determined) individual on President Obama's health care plan and proposed legislation.

You will be required to join Face Book, if not already a member.

This group is NOT intended to be a political forum. This is Group is NOT about taking a position on the Health Care Plan or Legislative proposals.

Simply Join this Group if You'd Like to See a Formal Moderated Debate.

President Obama has stated that he welcomes vigorous civil debate on his health care reform plan.
There have been many Town Hall Meetings on the health care reform plan and proposed bills. However, discussion has not been in a formal and moderated debate.
Many town hall health care reform meetings have been unruly, with focus on attendee's motives and actions, distracting from the subject.
There has not been nor does there appear to be a better means, than a formal debate, to reasonably get into some details and issues of the highly controversial and monumental health care reform plan.

Instructions:

Go to www.facebook.com
Register/join
Search for FB Friends Request for Presidential Debate on Health Care
Join the group
Send invitation to everyone you know and are comfortable in inviting. They do not need to be on Face Book initially but, will be required to join in order to join this petition.

Credit Card Home Inspection Scam Busted!

Jon Rudolph (I.D. Property Inspections, Inc.) — Tue, 11 Aug 2009 13:56:58 -0500

Credit Card Scam Busted!

This is interesting. I recently posted on FB the wonderful benefit of the internet in terms of customers finding your business and ordering services without having to spend time selling.

Well, that still holds true. However, like everything there is an equally disturbing dark side.

My so called internet client ordered an inspection, through www.nationalreclocation.com. Through a series of e-mails to schedule the inspection, they slipped in the request to have an extra $800 charged against the credit card and the balance wire transferred to their client (alleged home buyer). At this point it was clear this was a scam.

However, the "buyer's agent" persisted and e-mailed me the credit card information. This information contained the full name, address, credit card number, expiration date and CVV2 number on back of card. This information was for a 3^rd party person.

I gave the story and information to the police. I just heard back from the officer.

It turns out the potential victim (the person whose credit card information I received) had no idea her credit card information was stolen. She was holding the card in her hand as the officer explained the situation. She was totally stunned.

She is now in the process of cancelling the card and reporting the ID theft to her local police. Fortunately, it doesn't sound like any stolen charges have been processed yet.

Three points to this event:

•1) Don't hesitate to act. It may never be too late. This could have easily been dismissed as a waste of my time or doesn't affect me don't get involved scenario. This victim could have been me or anyone else I know. She may get by with only a scare and no monetary losses because someone acted.

•2) Any place you run your card is a potential source for ID theft. This victim had no idea how her credit card information was stolen.

•3) Anyone that processes credit cards needs to be alert to someone trying to use them and their services for part of a scam. This scam was obvious, others may not be.

Colorado's New Carbon Monoxide Alarm Law NOW in EFFECT

Jon Rudolph (I.D. Property Inspections, Inc.) — Wed, 01 Jul 2009 13:25:30 -0500

Colorado's Carbon Monoxide (CO) Alarm Law goes into effect TODAY (July 1, 2009) see http://www.id-inspections.com/CarbonMonoxide for more information.

Briefly:

1. The law applies to dwelling units that have a fuel fired heater or appliance, a fireplace, or an attached garage.

2. If any of these conditions exist, then the law applies to sellers of dwelling units offered for sale on or after July 1, 2009; dwelling units where, on or after July 1, 2009, remodeling occurs that requires a building permit; or dwelling units used for rental purposes that have a change of occupancy after July 1, 2009.

3. If any of these three events occurs, then the unit must have an operational carbon monoxide alarm installed within fifteen (15) feet of the entrance to each room lawfully used for sleeping purposes or in a location specified by any applicable building code.

4. This latter requirement is overridden if the multi-family dwelling has a central alarm system and the carbon monoxide alarm is installed within twenty-five feet of the fuel fired heater, fireplace or garage.

5. In addition, in connection with rental units, the law mandates certain actions that the unit owner must take with respect to installation and replacement of alarms, and provision of batteries to assure that the alarms are operational.

6. While the law is somewhat vague with respect to who is obligated to install the alarm when the circumstances giving rise to the requirement is either remodeling or rental, it does not appear to require associations to be responsible for compliance or assurance of an owner's compliance. Rather, it appears that the onus is on the unit owner to install the alarm and assure its ongoing maintenance and operation.

7. If the alarm is installed according to the manufacturer's instructions and the new law, then the owner of the property, his/her authorized agent, person in possession of the property and the installer are immune from liability for damages resulting from operation, maintenance, or effectiveness of the alarm

Source: City of Loveland Development Services Building Division

Online Inspection Ordering and Scheduling

Jon Rudolph (I.D. Property Inspections, Inc.) — Thu, 04 Jun 2009 23:57:06 -0500

Question: How helpful is it for Realtors and homebuyers to have online web based inspection service ordering and scheduling?

Very few home inspectors offer this, due to fear of putting their inspection service fees out in public for competitiors or price shoppers.

Well, I just added this feature because of the positive feedback from some. We'll see how it works.

Benefits: Can't answer all phone calls at all times. Should reduce risk of lost inspections due to short-term missed calls.

Should reduce time spent on phone with price checkers or people checking availability.

Should increase add-on services due to customer exposure of menu options.

Any thoughts?

Jon Rudolph

http://www.id-inspections.com

Checklist Information for a Successful Home Sale: Preparing for a Home Inspection

Jon Rudolph (I.D. Property Inspections, Inc.) — Thu, 23 Apr 2009 09:10:16 -0500

Realtors,

If you don't already do this, this simple guidance communicated to the buyer & seller clients will go a long way to set proper expectations with your clients and help ensure a smooth transaction.

I do about 400 inspections a year in Northern Colorado and it always amazes me how poorly informed or how much a client will forget some key points for one of the more nerve racking parts of a real estate transaction.

Other states/areas may have subtle differences.

What to Expect:

Typically inspections take 2 to 4 hours
Home Buyers may attend inspection and the home inspector does not monitor (watch) the buyer and their family members during an inspection.
Ideally Seller is not present.
Inspection is confidential information for paying party in Colorado - Seller's shouldn't expect the inspector to give them a written or verbal report or discuss the inspection with them.
Home Inspectors generally inspect exterior & interior from the foundation basement/crawlspace through the roof/attic; opening built-in drawers/cabinets and windows/doors; operating furnace/AC, water heater, stoves/ovens, fans, lights, fireplaces, smoke detectors, GFCI outlets, jetted tubs, faucets -They try to minimize disturbance and return settings/position as found.
Inspectors don't/shouldn't move furniture or personal items. The seller should provide ready access to the home's systems and components.

What to Do:

Provide ready access to electrical panels, furnaces, water heaters, attics, crawlspace, water valves, areas under sinks, locked areas, etc.
Ensure all furnaces, water heaters, fireplace pilots are operating (e.g., power, pilot flame on).
If unable to provide ready access or ensure operation of systems/components, proper disclosure is recommended. Additional fee may be charged if inspector is requested to return.
Secure all valuables, firearms or other items of concern.
Secure pets, provide instructions if needed.
If testing for RADON - Entire house must be closed-up 12 hrs. prior to test and remain primarily closed during test period. Normal door use to come and go is okay.
Protect Yourself and Your Clients - Insist that the Buyer's inspector have proper insurance of Errors & Omission (E&O); generally liability and bonding. Most people would consider it irresponsible not to make this reasonable request.

I hope this is helpful. Feel free to copy these points into you Buyer and Seller packages.

Jon Rudolph, ID Property Inspections, Inc.

Home Warranty's for Home Lisitings on the Rise in Loveland?

Jon Rudolph (I.D. Property Inspections, Inc.) — Tue, 14 Apr 2009 09:26:10 -0500

I'm seeing a notable increase in Blue Ribbon Home Warranty (BRHW) inspection requests in Fort Collins, Loveland, Greeley Colorado area.

BRHW's are often purchased for home listings to help provide a marketable edge with warranty coverage on a listed home's major systems and appliances, protection for the seller and buyer. A second benefit is a cursory limited inspection by a professional home inspector.

Either the market is picking up and/or more Realtors are using BRHW's to help market their listings.

Home Warranty's for Home Lisitings on the Rise?

Jon Rudolph (I.D. Property Inspections, Inc.) — Tue, 14 Apr 2009 08:58:50 -0500

I'm seeing a notable increase in Blue Ribbon Home Warranty (BRHW) inspection requests in Fort Collins, Lovleand, Greeley Colorado area.

Either the market is picking up and/or more Realtors are using BRHW's to help market their listings.

The Journal of Light Construction Article on Stimulus Package: Good Overview

Jon Rudolph (I.D. Property Inspections, Inc.) — Wed, 08 Apr 2009 08:44:43 -0500

Here's a link to a JLC article summarizing the "Economic Stimulus Package" with a breakdown on home energy improvements.

It doesn't get into to "where to go" but provides an idea of what kind of home energy projects might qualify and the extent of the benefit.

One key message I give my home buyer clients is that some of their planned home improvements, if done with consideration to energy improvements, may have addition tax and incentive benefits.

I suggest they look for Federal, State, City, Utility Company and Product level incentives.

http://www.jlconline.com/cgi-bin/jlconline.storefront/EN/UserTemplate/82?c=e5d808b12b3acfa258e43de27bde3b85&p=1#Stimulus

Heads-up: Did you know that Polybutylene water supply pipe may make a home uninsurable?

Jon Rudolph (I.D. Property Inspections, Inc.) — Mon, 06 Apr 2009 23:02:23 -0500

I have now had a couple of home inspection clients inform me that their insurance companies would not insure the home unless the polybutylene (PB2110) water supply pipe was replaced. Replacement is generally not cheap.

I find PB 2110 occasionally in homes between 1978 and 1995. It's a listed item in the Colorado property disclosure form, albeit mostly as an "unknown" by the seller.

I have done informal surveys of various insurance companies in the past and found many insurance agents aren't aware of PB2110, yet when they inquire about the plumbing material with their underwriter's they told me that their company would not insure it (the home).

Well, I just had another home buyer client tell me that their insurance company would not insure their prospective home with PB 2110. It's unfortunate that the current seller apparently unknowingly inherited the problem and apparent cost burden. Additionally, it may impede the sale of the home at this time. If the seller didn't know they had the disclosure item of PB2210, they do now.

Heads-up!

Checklist Information for a Successful Home Sale: Preparing for a Home Inspection

Jon Rudolph (I.D. Property Inspections, Inc.) — Sun, 05 Apr 2009 13:08:47 -0500

Realtors,

Other states/areas may have subtle differences.

What to Expect:

Typically inspections take 2 to 4 hours
Home Buyers may attend inspection and the home inspector does not monitor (watch) the buyer and their family members during an inspection.
Ideally Seller is not present.
Inspection is confidential information for paying party in Colorado - Seller's shouldn't expect the inspector to give them a written or verbal report or discuss the inspection with them.
Home Inspectors generally inspect exterior & interior from the foundation basement/crawlspace through the roof/attic; opening built-in drawers/cabinets and windows/doors; operating furnace/AC, water heater, stoves/ovens, fans, lights, fireplaces, smoke detectors, GFCI outlets, jetted tubs, faucets -They try to minimize disturbance and return settings/position as found.
Inspectors don't/shouldn't move furniture or personal items. The seller should provide ready access to the home's systems and components.

What to Do:

Provide ready access to electrical panels, furnaces, water heaters, attics, crawlspace, water valves, areas under sinks, locked areas, etc.
Ensure all furnaces, water heaters, fireplace pilots are operating (e.g., power, pilot flame on).
If unable to provide ready access or ensure operation of systems/components, proper disclosure is recommended. Additional fee may be charged if inspector is requested to return.
Secure all valuables, firearms or other items of concern.
Secure pets, provide instructions if needed.
If testing for RADON - Entire house must be closed-up 12 hrs. prior to test and remain primarily closed during test period. Normal door use to come and go is okay.
Protect Yourself and Your Clients - Insist that the Buyer's inspector have proper insurance of Errors & Omission (E&O); generally liability and bonding. Most people would consider it irresponsible not to make this reasonable request.

I hope this is helpful. Feel free to copy these points into you Buyer and Seller packages.

Jon Rudolph, ID Property Inspections, Inc.

Realtor Liability: What do you do to protect yourself and your clients?

Jon Rudolph (I.D. Property Inspections, Inc.) — Sun, 05 Apr 2009 02:05:59 -0500

As a Realtor, how well have you really considered the liability you're exposed to in your business?

Do you know someone that's been sued, settled out of court or compensated someone else to avoid legal action, lawyer expenses and negative publicity? Have you encountered a situation that made you think, "That could've been me" or "that situation could have gone really bad?"

How often have these situations involved hidden surprises in the condition of a home, inaccurate or misunderstood disclosure or even a client's false expectations in their purchase?

Adding to the potential risk of liability is the fact that the State of Colorado and Federal Government does not regulate or control home inspectors or home inspections. In Colorado there is no governing set standard of practice. There are no governmental requirements for basic skills, training or proof of competency. No insurance requirements. There are no background checks on individuals that are literally given the keys to people's homes.

So, how closely have you looked into the liability risks of Home Inspections? What does this mean for a Realtor? What about liability to a home buyer or a home seller, your clients? Do home inspections potentially increase or decrease their liability in the transaction? Are there practical ways to minimize you and your clients' risk?

Although professional home inspection training emphasizes reporting techniques and language designed to minimize liability, significant liability risks still exist. This is where errors and omission (E&O) insurance can help offset the risk to all parties involved, not just the inspector.

E&O insurance not only protect the consumer from human and gross errors in an inspection, most policies carry a rider to indemnify the referring Realtor.

So why wouldn't a Realtor only refer professional home inspectors and insist that the inspectors also have E&O insurance? As a Realtor, do you? How many Realtors do you know that at a minimum only refer professional home inspectors carrying E&O insurance?

There can't be too many, as it has been informally estimated that only around 10% of the national home inspectors carry E&O insurance. This percentage is consistent with what I'm aware of among home inspectors operating in Northern Colorado.

Working with a professional home inspector that carries E&O insurance seems like an easy, responsible and prudent practice to protect yourself and your clients.

Can a home inspection be too thorough?

Jon Rudolph (I.D. Property Inspections, Inc.) — Wed, 29 Oct 2008 07:35:19 -0500

I want to throw this out there to the real estate blogosphere for debate. I know there is an obvious safe answer. However, I also know there is a range of passionate opinions from "you can never have a thorough enough inspection" to "omg, this is overkill".

I'm interested in seeing specific opinions with reasoning along this range. I'm hoping it will be enlightening and help understand where people may be coming from in their various perspectives. This, in turn helps improve communication. I believe this is not just a home inspector challenge, but that Realtors run into this challenge of differing viewpoints among their colleagues on the opposite side of the negotiation table with respect to client interests.

So, can a home inspection be too thorough?

Criteria for Choosing a Qualified Home Inspector!

Jon Rudolph (I.D. Property Inspections, Inc.) — Sun, 03 Feb 2008 09:43:39 -0600

I just read a Realtor's web post on choosing a qualifed home inspctor based on experience. I applaud her for bringing that to her perspective client's attention. However, I believe there are several other criterion that are also crticial considerations. I've posted these here before in a different format and context.

Here's a list I recommend ALL Realtors or real estate professionals use to guide them and their clients when making an INFORMED DECISION in PROPERTY INSPECTORS.

Criteria for Choosing/Referring

A Qualified Home Inspector

The following list is not intended to be exhaustive list but, a guide to the nature of a profession and criteria to consider when choosing/referring a professional home inspector. This is a person who will provide you or your clients with a professional opinion on the condition of your/their prospective major investment and generally a sanctuary for you/them and your/their family.

How important is that to you?

Consider the following:

STANDARD OF PRACTICE

•- There is no set standard of practice in Colorado. Anything goes!

•- What, if any, standard of practice do they base their inspections (e.g., American Society of Home Inspectors (ASHI))? If another, how does it compare to the nationally recognized ASHI standard in terms of proven and broad state-level acceptance?

COMPETENCE/CERTIFICATION

•- There is no regulatory oversight on home inspectors. Anyone can call themselves a home inspector, not everyone can provide a professional home inspection.

•- What source & level of training, experience & education do they have?

•- Are they certified with a reputable organization such as ASHI or NAHI (e.g., qualified with proctored exam, peer reviewed reports, 250 inspections min. level of experience)? Or, did they obtain a designation as being certified by taking a simple open book, open notes online test with no experience basis or proven test of knowledge? Beware!

•- Do they maintain continuing education? Are those continuing education credits legitimate in terms of a maximum 1 credit for 1 hour of training or multiple credits hours for 1 hour of credit? Not all credits are equal.

•- Colorado does not require any training of home inspectors, let alone a professional mentor/journeyman/apprenticeship. Other than a possible 1 or 2 week training course and continuing education, practical experience for home inspectors is generally based on unsupervised learning as they go with "on the job training only.". How many home inspections have they performed? ASHI uses a minimum 250 inspections to qualify certification prospects.

THOROUGHNESS

•- How much time do they typically spend on an inspection?

•- What additional inspection techniques and tools do they use?

OBJECTIVITY

•- Are they impartial (e.g., independent of anyone with a financial interest in the results except the client)?

•- What relationship do they have with the referring party? What criteria has the referring party used to qualify the inspector referrals?

•- Has the inspector disclosed any relationships and related services they may comment on or offer?

REPORT STYLE & QUALITY

•- How are their reports presented, organized & written? How much detail?

•- Is it prepared on site? Do they include pictures, diagrams, etc.?

INSURANCE

•- If you're hiring a home inspector to enter someone else's property, you are also assuming potential liability.

•- Do they carry liability and errors & omission (E&O) insurance?

REPUTATION & OVERALL SERVICE

•- How do they present results? Are clients encouraged to attend the inspection? How well do they explain the condition and operations of a home?

•- How well do they interact with clients? With trades people? With other real estate professionals?

•- What do their past clients say?

•- Do they guarantee client satisfaction?

PRICE

•- How much is the fee and what is it based on?

•- Is it competitive for the services and qualifications provided? Know that a common practice for a starting inspector is to discount prices to obtain experience on their client's "dime." Decide on the trade-off between price and experience.

•- Insurance, tools & equipment, ongoing trainings, and demand will add to an inspector's fee - you should be paying for professionalism, expertise and service.

VALUE

•- How important is this service to the home buying/selling investment? How do their qualifications compare to the price? - Client must decide.

•- It's in your best interest to compare wisely as you may be relying heavily on your inspector's abilities and opinion based on a $10 to $100 difference. What's that worth to you or your clients?

Jon Rudolph

President/Principal Inspector

I.D. Property Inspections, Inc.

idpi@id-inspections.com

http://www.id-inspections.com/

Evidence of Positive Market Movement and ASHI's Role to Provide Value

Jon Rudolph (I.D. Property Inspections, Inc.) — Sun, 20 Jan 2008 21:44:50 -0600

I'd like to share a recent press release from our home inspector chapter. I think it's a positive statement of our local area market and ASHI's value to the home inspector professional

The Northern Colorado Chapter of the American Society of Home Inspectors (NCC-ASHI) was recognized by ASHI for the Greatest Percentage of Chapter Membership Growth in 2007. This award was especially noteworthy this year as the real estate market and home inspection industry in general has been down over the last few years. NCC-ASHI focuses on home inspector continuing education, member support and increasing market awareness of ASHI's rigorous requirements in certifying home inspectors to ASHI's nationally recognized Standard of Practice.

NCC-ASHI was presented with the award January 18, 2008 at the Annual ASHI Inspection World, held in New Orleans, LA. ASHI is the most respected and oldest home inspector society.

NCC-ASHI meets monthly at various locations in the Loveland, Fort Collins, Greeley, Windsor and Berthoud areas. See http://www.ncc-ashi.org/ for more information including meeting information and training schedule. NCC-ASHI meetings are open to the public.

Jon Rudolph, President & Principal Inspector of I.D. Property Inspections, Inc., http://www.id-inspections.com/

Founding/Former NCC-ASHI Chapter President, http://www.ncc-ashi.org/

Realtor Liability: Inspection Protection or Risk

Jon Rudolph (I.D. Property Inspections, Inc.) — Wed, 12 Dec 2007 20:51:18 -0600

As a Realtor, how well have you really considered the liability you're exposed to in your business?

Do you know someone that's been sued, settled out of court or compensated someone else to avoid legal action, lawyer expense and negative publicity? Have you encountered a situation that made you think "that could've been me" or "that situation could have gone really bad?"

How often have these situations involved hidden surprises in the condition of a home, inaccurate or misunderstood disclosure or even a client's false expectations in their purchase?

Consider this, the NAR⁽¹⁾ biennial 2005 Legal Scan is a systematic collection of information on over 92 issues involving the legal liability of real estate brokers, agents and managers. Some of the tabulated data and documented trends indicate issues involving specific types of physical disclosure and even third party inspections as some of the more significant and prevalent areas of legal liability.

So, how closely have you looked into the liability risks of Home Inspections? What level of risk are you exposed to and are there practical ways to minimize you and your clients' risk?

Recall that home inspections are an important part of the real estate transaction process. They originate from the purpose of a prospective homebuyer wanting to know the property condition in order to make a fair purchase decision without hidden safety risks or costly defects. Consequently, the inspection then reduces the likelihood of lawsuits and settlements from post purchase defect discoveries. In general, this works well! A joint 2001 NAR & ASHI⁽²⁾ study has shown a high level of homebuyer reliance on inspections and satisfaction with their informed purchase decision.

Unfortunately, the home inspection industry is not immune to its share of liability too. Although quantified lawsuit/settlement data appears limited, it is interesting to note that the home inspection industry has very few errors and omission (E&O) insurance company options and pays significantly for the coverage. A single home inspector may pay between $2,500 and over $4,000 per year in premiums for about $500,000 to $1,000,000 in coverage. Professional home inspection training emphasizes reporting techniques and language designed to minimize liability.

What does this mean for a Realtor? What about liability to a home buyer or a home seller? Do home inspections potentially increase or decrease their liability in the transaction? Do Realtors have an obligation to be informed of the risks and inform their clients of these risks as well as the rewards of a home inspection? Ask yourself, "What would a judge or jury say?"

Common sense suggests the answers are yes; home inspections can either increase or decrease a Realtor and their client's liability. And, that Realtor's do have an obligation to provide some due diligence, be informed and inform clients.

So where do you begin?

To limit your liability with respect to home inspections you're commonly advised:

•1. Recommend home inspections to your clients, if they decline get it in writing.

•2. Provide a list of at least three home inspection companies/inspectors when providing a referral.

•3. Do not attend the home inspection to avoid potentially influencing or being accused of influencing the inspection.

•4. Disclose any material facts known about the property.

Is this enough?

Consider the following:

•1. Know the inspectors you refer based on qualifying criteria that by definition and due diligence on your part is defensible in justifying your referral list.

•2. Suggest your clients choose a home inspector based on the same defensible qualifying criteria.

•3. Home Inspector selection criteria should include, but not be limited to:

•a. Standard of Practice - What if any standard of practice do they use to perform their inspections? For example, the ASHI standard is well known and recognized throughout the country.

•b. Proven Competency - Are they certified through a reputable organization such as ASHI? Know that "Certification" has a significant and different meaning and requirements among various organizations. For example, are they certified via the internet or through a comprehensive program and set requirements such as ASHI? What is their education and work experience background? How many inspections have they performed? Do they maintain continuing education?

•c. Thoroughness - How much time do they typically spend on an inspection? What kind of tools and techniques do they use?

•d. Objectivity - Are they impartial or do they have financial or other business arrangements with Realtors or service contractors?

•e. Report Quality/Style - How are their reports presented, organized and written? How much detail is provided? How long does it take to receive after the inspection? See samples! You shouldn't have to interpret an inspection report.

•f. Reputation & Service - What do their past clients say? Do they use an inspection agreement to ensure client acknowledgment of home inspection limitations? Do they guarantee their services?

•g. Insurance - Do they carry liability and E&O insurance? How much coverage? Does their E&O insurance indemnify referring Realtors?

•h. Criminal Record - Consideration should be given to knowing your inspector's background. Do they have felony convictions? Realtor's are now required to undergo a background check, what about home inspectors?

•i. Price - How defensible is "I recommend this inspector, he's the cheapest." Price should not be considered without considering all other criteria. Qualifications are often a function of price. For example, are insurance, inspection tools, training and time per inspection included?

•4. Pre-Sale Inspections are potentially a greater area of liability. Protect yourself when doing a pre-sale inspection by:

•a. Using a "qualified" inspector.

•b. Have a buyer sign an inspection limitation agreement if a buyer chooses to forego their own inspection and uses the pre-sale. The buyer needs to know and acknowledge in writing that there are limitations to a home inspection.

•5. Protect your sellers! Insist that a buyer only be allowed to bring an insured and qualified home inspector into your seller's home.

Home inspections by definition and practice should reduce the risk of liability. However, due to the nature of the inspection service and real estate industry liability to all parties exists. Applying due diligence to qualifying a home inspector provides reasonable assurance and defense in minimizing liability risk and is a responsible practice for your clients and your business.

Jon Rudolph

I.D. Property Inspections, Inc., www.id-inspections.com

Certified ASHI Inspector #211581

•1. NAR - National Association of Realtors

•2. ASHI - American Society of Home Inspectors