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Home Inspector News, Home Inspector Magazine, Home Inspector Information
Below are all of the stories that made it it to print in our last issue of the Working RE Magazine Home Inspector Edition – News and Information especially for Home Inspectors.
From the Publisher
Glad to Meet You
If we’ve never done insurance business together or you’ve never seen a copy of Working RE- glad to meet you! My name is David Brauner and I’ve been providing insurance services and publications to home inspectors for over 20 years.
Working RE: Home Inspector Edition is a new spinoff of our flagship publication, Working RE magazine. This new digital publication is dedicated entirely to home inspector issues. We hope you enjoy it, post links in your favorite online forums and tell your friends about it if you do.
I am Senior Broker at OREP.org, and because we are insurance and risk experts (20 years and counting), you’ll find a number of stories showing you how to reduce your liability and minimize complaints.
I started this business from scratch and because I’m passionate about improving services and growing business, you’ll also find stories showing you how to make your business more profitable and more valuable to your customers. That means showing you how you can be better at customer service, marketing and inspection reporting. We’re all in the customer service/sales business, like it or not (I like it!).
Thanks for reading and please check out OREP’s E&O insurance program (www.orep.org). The base policy includes many vital coverages that you pay extra for elsewhere. Take the time to shop and compare. With our custom program you don’t have to give up complete coverage to save money. Now you can have both coverage and value in one policy.
Home Inspector News, Home Inspector Magazine, Home Inspector Information
Playing the Not Readily Accessible “Inspection” Card
By Isaac Peck, Editor
From a pad-locked electrical panel to an obstructed attic, sooner or later every home inspector encounters a situation where something is “not readily accessible.”
Some inspectors say it’s a disservice to their clients to not go the extra mile (including moving personal property) to access items requiring inspection. Others insist that any extra steps taken by the home inspector to gain access, such as moving personal property or unscrewing an access door, needlessly increase the home inspector’s liability and create added risk.
Jack Feldmann, a home inspector from Tennessee, explains that most Standards of Practice (SOP) for home inspector associations define what is “readily accessible” and allow inspectors to pull the “I can’t get to it, so I’m not inspecting it” card if they so choose. Feldmann also points out that most home inspection agreements absolve the home inspector of the responsibility of reporting on items and areas that they couldn’t access.
For instance, InterNACHI’s Home Inspection Standards state: “The inspector is not required to move any personal items or other obstructions, such as, but not limited to, throw rugs, carpeting, wall coverings, furniture, ceiling tiles, window coverings, equipment, plants, ice, debris, snow, water, dirt, pets, or anything else that might restrict the visual inspection.”
ASHI’s (American Society of Home Inspectors) SOP are very similar, stating that the inspector is not required to “move personal property, furniture, equipment, plants, soil, snow, ice or debris.”
Despite this, Feldmann feels that he owes it to his clients to do the most thorough job possible, within reason of course.
He explains, “If the electrical panel or crawlspace door has a padlock on it, I will call the listing agent and ask them to get in touch with the property owner and see if there is a key somewhere in the house. If they cannot get in contact with the seller, I ask permission (from the listing agent) to cut the lock.” In his 23 years of home inspecting, he says that he has never had a seller or listing agent refuse to let him cut the lock. “Each and every time, I offer to replace the padlock. Most of the time they tell me not to bother,” Feldmann says.
Feldmann explains that he takes this same approach with crawlspaces that are blocked off. “I have gone to crawlspaces and found the access panel screwed in place and I have always just removed the screws, and replaced them when I was done. According to my SOP, I could have disclaimed getting into the crawlspace, however I would have shortchanged my client by not inspecting one of the most important components of the house,” says Feldmann.
Despite his desire to be as thorough as possible, Feldmann says that he always considers his potential risk and liability before moving anything. And he does occasionally use the disclaimer: “Not Readily Accessible” in his reports. For instance, attic access is frequently blocked by owner’s belongings in the closet. Feldmann says that if the seller or the seller’s agent is present, he will ask them to help him move the belongings, but when he’s alone it really depends on the potential risk involved in moving the items. “If I am by myself, I will make the determination if I want to move their stuff or not. It depends on what is stored and the potential risk for damage/liability. Frankly, I hate doing this!”
Feldmann says that he’s only had one complaint so far– one seller filed a claim with the Better Business Bureau alleging that he damaged her clothes. Fortunately for Feldmann, he says he was able to settle the claim with an eight-dollar check for cleaning costs.
Just Saying No
On the other hand, some home inspectors simply refuse to move any of the seller’s personal belongings due to liability concerns. Aaron Miller, a home inspector from Texas, says that he doesn’t move anything that doesn’t belong to him. “If it is not readily accessible, it gets disclaimed. I am an inspector, not a moving company,” says Miller.
When asked about his responsibility to perform as thorough an investigation as possible, Miller insists that his approach is as per his inspection agreement and his SOP. “My clients are fully-informed at least a day or two in advance of the inspection as to what the inspection covers and what it does not cover. I explain such things preemptively in my inspection agreement. Everyone is aware of whose responsibility it is to make things accessible for me prior to that time. My policies are in alignment with the state and ASHI SOP. They are also in place to protect the seller’s property and to reduce mine and my client’s liability should something become damaged due to my moving it,” says Miller.
Greg Filian, from Mobile Home Inspectors, says that he tries to take a balanced approach when it comes to deciding what to move. “My policy on moving things is, if it looks like the resident moves the items all the time, I will move them- trash cans, hanging clothes, lawn mowers, etc. If items are never or nearly never moved, like beds, couches dressers, parked car, storage in a closet, I don’t move them and disclose it. I have a standard disclosure for this,” says Filian.
Filian explains that sometimes it comes down to common sense and experience. “Let’s face it, sometimes you just can’t get to it. No inspection fee is worth me paying for damage or hurting myself. If there are clothes in the washing machine or dryer and no one is there to move them I don’t run the appliances or touch the clothes. Once I shrunk a ‘favorite’ piece of clothing and had to pay for it. I’ve done this long enough to have learned from mistakes I’ve made and then incorporate them into my business,” Filian says.
Christopher Chirafisi, Director of Technical Training at AHIT, agrees that common sense plays a very important role in these decisions. “If I am performing an inspection and the electric panel has some boxes or some other personal property blocking access to it, I have a few options. I can ask the seller (if the seller is home) to move the storage, or I can follow the Standards and document in the report that the ‘electrical panel was inaccessible, blocked by sellers personal property’ and document that the panel was not evaluated. Conversely, I can decide to move the boxes myself and try to inspect the panel,” Chirafisi explains.
Chirafisi says that if it is safe to move the boxes without damaging any of the seller’s personal property, he believes the best thing to do is to move the boxes to gain access to the electrical panel and perform a proper inspection of it. “I can’t speak for every inspector but I think it is the duty of the home inspector to have the best interest of the person buying that house in mind and make sure the major systems are safe. Inspectors should try their very best to access all systems and inspect them thoroughly,” Chirafisi says.
Nick Gromiko, Founder of InterNACHI, had this advice for home inspectors: “If you can move it safely without hurting yourself or the item…. I say move it. There are a lot of things in business that you should do, even though you are not technically required to do them.”
The decision to move personal property, unscrew a panel, or “get access” to obstructed areas during an inspection is something that each home inspector approaches differently based on their experiences, risk-appetite, and home inspecting style. A good piece of advice for all inspectors is if you are going to move something, be very careful and put it back where you found it when you’re done. The challenge is to find a good balance between meeting the client’s needs and not being exposed to unreasonable risk and liability. From what we’ve heard from home inspectors, experience may be the best teacher. Be careful out there!
Editor’s Note: If you are responding to a complaint from a client, or to your insurance company with your side of the story, there are some commonsense basics to keep in mind. Here are some tips for responding and an example of a good inspector rebuttal letter to a customer complaint.
Home Inspector News, Home Inspector Magazine, Home Inspector Information
Rebutting Complaints
By David Brauner, Senior Broker at OREP.org
Commonsense goes a long way when dealing with customer complaints.
First, contact your insurance agent right away. Why not get the help of the insurance company pros when responding to a complaint? Get the experts on your side. Not only is it smart but it is typically required: most insurance policies obligate you to notify the insurance company immediately and prior to responding to the complaint directly, as a condition of coverage. Having said that, if you are going to respond with your side of the story, to either a disgruntled client or to your insurance company, there are commonsense basics to keep in mind.
When a dissatisfied homeowner dashes off a complaint that is heated, insulting, inaccurate or not very well thought-through- maybe just a belligerent phone call, it is human nature for us to take it less seriously and to want to respond in kind: garbage in, garbage out. But that’s a mistake. No matter how crude or “stupid” a customer’s complaint seems, your response must be professional; after all, it is your livelihood on the line not theirs. Think twice before dashing off an angry reply to an emailed complaint especially; most of us regret not exercising better judgment and patience before hitting “send” at least once or twice in our lives.
Shooting Yourself in the Foot
Many professionals damage their own defense by ill-advised, half-baked responses to complaints. It’s called shooting yourself in the foot. Not taking every complaint seriously is how it happens. Often, shortly after receiving a homeowner’s irrational, undocumented and half-baked complaint- one that seems not even worth considering, the formal notice arrives on legal letterhead, usually via certified mail, from his cousin Joe the attorney. When this happens, you’re a whole lot happier if you have kept your powder dry and your mouth shut.
If you ever do have occasion to respond to a complaint, either to the client or to your insurance company, it is important to remain rational, unemotional and professional. Below is a good example of such a response. A good rebuttal/response letter doesn’t guarantee a successful outcome, but it does help you avoid doing any unnecessary damage to your own defense.
What’s professional? Proper spelling and grammar are givens. Avoid profanity and not taking the complaint seriously and/or dismissing the client as “an idiot” or scammer or something along those lines. If you are unable to put together a rational, thought out, clearly-communicated response or don’t bother to verify as accurate what you’re saying, what does that say about the kind of inspector you are and the quality of your service/product? And what does that tell the insurance company about the kind of risk they are taking on by insuring you for $100,000 or $1,000,000?
If you did something wrong, admit it. Whether you made a mistake or not, try to learn from the complaint. In your response, note any routines or procedures you will set in place to avoid the same situation happening again, if possible. (After all, innocent or guilty, responding to a complaint costs you time and money. If it can be avoided in the future, everyone is happier.) Here is an example of a prudent response: “While I clearly never said anything like that to the client, and my report bears that out, I understand how discussing an issue of that nature with the client opened the door to this type of complaint. To avoid this happening in the future, I will take notes of every verbal conversation of this nature or avoid them altogether and put everything in writing, into the report.”
Sometimes the insurance company claims adjusters will not ask for much beyond a short statement and your report and contract. Usually your report and contract contain most of what they need to know. If they need more, they might conduct a verbal interview with you over the phone. This may seem informal but again, be on guard-everything you say matters. Be truthful and careful.
Whether you respond over the phone or in writing, the same rules apply. Be prepared. Have the facts at your fingertips. Document everything you say. Don’t guess. If you don’t know, find out before answering. Never be pressured into making a decision or to respond before you’re ready. If you’re uncomfortable giving responses verbally, request the questions in writing so you can take your time preparing your written reply. Some people think on their feet better than others. You can always say, “Please send me the questions in writing so I can be as accurate as possible in my responses.”
Below you’ll find a complaint letter from a homeowner, claiming the inspector did not properly inspect the chimney and roof. Below that, you’ll find the response from the home inspector. Note the impression left by a well written rebuttal letter.
Letter from Joe Homeowner to ABC Inspection
I hired a contractor to paint the outside of my house after we purchased the property at 1234 Main St., Sunnyville, OH. The contractor said he had bad news for me. He said that the backside of the chimney had never been painted, it was rotten and water had been running inside the house. This we found to be true when we took up the carpet in the back bedroom. He also said the rest of the roof was in very poor condition. Large sheets of shingles were loose over the entire roof and nails had been driven through the shingles in many places.
To confirm his assessment, I had three different roofing companies come and evaluate the roof. All three companies said that the roof would be lucky to make it through the winter. We took several pictures to show the damage; the nails that were not driven in correctly, the lose shingles and the rotten chimney. They said the repairs that resulted from the Hurricane Katrina damage were not done properly either and they all said that the roof should have been replaced at that time. They said if the roof had been inspected properly it would have easily been caught. When we contacted the previous owner, she repeatedly stated that she fixed everything that our inspector stated needed to be repaired.
You stated when we asked you several times that we should not have to replace the roof for at least five to six years. If we would have known the real condition of the roof we would have asked the seller to replace the roof or we would not have purchased the house.
You said you could see everything from the ground with your binoculars and we trusted your inspection of the roof. I believe you should bear this cost of the roof replacement because of your misjudgment and negligence.
Response Letter from Home Inspector
My name is John Inspector. I have been performing inspections since 1992. I have been certified by the American Society of Home Inspectors since 1994. I perform somewhere between 250 and 400 whole house inspections per year. I am also licensed by the Ohio State Department of Agriculture as a pest control Commercial Applicator, which means that I can perform wood destroying insect inspections. I am also licensed by the Ohio Department of Health to perform Radon inspections.
Notes for 1234 Main St, Sunnyville, Ohio
I received a call from the buyer’s agent around August. She had received a call from Joe Homeowner regarding a problem at the above address.
I called Homeowner the next day. He said his painter found weathered and rotten wood on the backside of the chimney that needed repaired. Painter also said the roof looked bad. Homeowner said he had contacted a roofer to look at it too. I told him I would stop by within a few days and told him to call me to let me know what the roofer said. I also understood from this conversation that he had asked the seller to make repairs to the roof per my inspection report. I told him at that time that I knew nothing about any repairs that had been made by the seller. He also said he would call me after talking to the roofer.
I went to the property within three days. Painters were there but homeowner was not. The chimney in question (backside) was not visible from the ground and it was too steep to walk the roof. At this time, I decided to wait and see what the roofer said. Homeowner never called backed.
I received the above letter emailed from the buyer’s agent on Sunday December 13 at 10 pm.
Notes Regarding Letter from Joe Homeowner (emailed from agent)
With respect to the statement, “The previous owner repeatedly stated that she fixed everything our inspector stated needed repaired.” I was not asked to re-inspect the roof so I have no idea what was done after my inspection. Many times buyers will hire me to do a re-inspect before closing to verify repairs that were made by the seller but I was not contacted to do this.
With respect to, “You stated when we asked you several times that we should not have to replace the roof for at least five or six years.” I don’t remember this conversation but I assume it was taken out of context. Dimensional shingles normally have an estimated economic life of 22-28 years. (The shingles appear to be the same age as the house which would mean they are 15-16 years old.) If the conversation took place I’m sure I’d have said- as I always do, with proper repairs the roof may last another five to six years but there is certainly no guarantee.
With respect to, “If we would have known the real condition of the roof we would have asked the seller to replace the roof or we would not have purchased the house.” The buyer was given plenty of information (along with pictures) to know that the roof needed further evaluation and repairs. They obviously chose not to follow the recommendations on the report.
With respect to “misjudgment and negligence,” I judged that there were many problems with the roof. I did not neglect to put these problems in the report and also included pictures of some of the problem areas.
Notes Regarding Inspection Report
My report was conducted per the ASHI Standards of Practice.
I identified moisture stains on two ceilings. My report states “repairs needed” and “recommend further evaluation.”
I identified rotted wood due to roof flashing problems.
The backside of the chimney was obviously not readily accessible or visually observable.
I walk every roof that I can but this roof was obviously not walked due to height and steepness, so was inspected with binoculars as is stated in the report.
Notes Regarding the Residential Inspection Agreement
Buyer agreed to and signed the Residential Inspection Agreement which contains the following information: “Your inspector is a home inspection ‘generalist’ and is not acting as a ‘specialist,’ licensed engineer or expert in any specific trade or craft. The inspection is not technically exhaustive and is not a substitute for obtaining specialized evaluation of any particular component, unit, or feature of the structure, nor is it a home warranty, guarantee, insurance policy, or substitute for a statutory property disclosure form.”
Any claim must be made in writing within three days of the discovery, it was not.
Any claim must be made within 30 days after inspection, it was not.
Home Inspector News, Home Inspector Magazine, Home Inspector Information
Business Basics: Upping Your Game
By Jerry McCarthy, CREIA Fellow
Here’s how you can increase your success by being more “professional.”
Exactly what is “professionalism?” Dictionaries define a professional person as “skillful, proficient, knowledgeable, prepared, talented, competent, and experienced.” Or in other words, a master of their craft.
The perception of professionalism equates to confidence and without the client’s confidence, the inspection process is over before it even begins. Home inspectors who exude confidence in their abilities earn the confidence of their clients and the agents who represent them. Confidence has its own particular odor that can be sensed by most people but one must be very careful because there is a very fine line between self-confidence and arrogance.
The homebuyer’s initial perception of their home inspector usually sets the tone for the ensuing performance. Studies have shown that upon the initial meeting between you and your client, it usually takes less than two minutes for them to form an opinion as to whether or not they feel confident in your ability to do the job. It’s really all about trust, which is vital in purchasing a home. Homebuyers are investing their life savings, in many cases, so their home inspector had better earn their trust.
It follows that the client’s perception of their home inspector regarding his/her knowledge, experience, honesty and skill at detecting and reporting defects is tantamount to the inspector’s success or failure in a highly competitive industry. Can we trust this person? Does he/she know what they are talking about? Will they find anything wrong and will they be thorough? These are the common concerns of most homebuyers when first meeting their inspector. Never lose sight of the fact that home buyers have already found the positive things they like about the home. They have opened escrow and now you’re there to detect and disclose the negative things about their new home. In other words, your job is to help them make an informed purchasing decision.
The client’s perception can occur almost immediately in that personal impressions are made by visual means such as the condition of the inspector’s vehicle, personal appearance, dress, the assortment of tools they carry, their attitude, and most important, their communication skills. It doesn’t matter how experienced or knowledgeable the inspector may be in construction technology or the building codes because without excellent communication skills, they’re in the wrong profession.
Better Early
Was the inspector on time for the appointment? I was taught early on that if you don’t arrive at least ten minutes early, you are late. I have found this to be generally true of many successful old-timers who have shared with me that they always arrive early to their inspections. This allows them the time to check the lay of the land, get set up, alert the property owners (contain their pets) and perhaps even complete their roof and chimney inspections before the arrival of their clients. Never leave your ladder up after you have inspected the roof, especially when your clients have brought their kids along.
It’s important that you put the homeowner at ease and always treat them with great respect, even when they act defensively or have the manners of a goat. If they question you about any of your findings, assure them their agent will share a copy of your report with them. If they have any questions let them know they may call you. Remember, home sellers may become a future client. Also, they or the listing agent may call you anyway if the deal goes south. Then you will join the illustrious ranks of “Deal Killers Anonymous.” How many times have you heard the expression, “Please pardon my messy house?” We don’t care about the mess but we do need to get into the napping baby’s room and the owner’s “friendly” pit bull requires being properly secured.
Trust
Trust does not come easily and can be fleeting. Telling jokes, complaining about local traffic, sharing your political views, becoming overly familiar, and certainly announcing you just came from the “house from hell” are not wise choices. Your clients are not your friends nor do they want to be. You are there to provide a service to them, no more, no less. Credibility must be carefully nurtured and is fragile at best. If you don’t know the answer to a question, admit it but counter with, “I will find out and let you know.” Then do it! Pay absolute attention to your client’s questions and concerns. Keep focused on the job at hand. If your clients don’t follow you every step of the way and elect to start smelling the roses while you’re explaining several defects in the electrical service panel, be patient.
If the seller decides to join your little group and keeps chattering about what a great house he/she is selling, stop and explain to them that you prefer to be alone with your clients as you need their complete attention. I used to say, “I cannot focus on performing a really thorough inspection with distractions and you certainly wouldn’t want me to miss anything, would you?” This generally did the trick and if it didn’t, I went to plan B. “This inspection is a contractual arrangement between my clients and me and the sharing of information is privileged.” Or, in other words, get lost! Never assume anything. The young lady accompanying an older gent may not be his daughter but rather his newly minted trophy wife. Same sex couples are now quite common homebuyers. Direct most of your explanations to the wife because women usually make the purchasing decision.
When I find my client’s attention wandering I tell them, “Look, I’ll proceed with my inspection but every now and then we need to have a short private meeting so I can bring you up to speed on what I have found.” At the end of each meeting I would always say, “What I just told you will be in my written report so when you read it, it will be familiar to you. If you have any additional concerns about it please call me.” I always encouraged my clients to ask questions and try to make them feel part of the inspection process. “Do you have any young children?” I always inquire, not to be nosey but to see if I have to emphasize occupant safety hazards that particularly applied to small children.
Of course no inspection goes on very long before the question arises, “How much will that cost to fix or replace?” The best answer is, “I don’t know.” Anyone who quotes prices, even “ballpark” prices is asking for real trouble. You tell them a new roof should cost about $5,000 and later you get a call that their roof cost is double that figure. They will want to know when you are sending your check for the balance. Remember, the only valid estimate for work is in written form called a “contractual bid,” submitted by a qualified person who is going to perform the work. Qualified, in inspection industry lingo, means state licensed. By the same token, never recommend contractors by name as you are opening the litigation gate for a frivolous referral. Encourage your client’s agent to assume that responsibility.
Summary
At the conclusion of your inspection a short summary is called for. This should always be arranged off site, such as across the street or near your truck if the property owners are present. This conference should only include your clients and their legal representative, their agent. If it’s a dual agent, so be it. The very last thing you want to do is to share your findings in front of the homeowners who have long labored under the illusion their home is in absolute perfect condition and the longer they have lived in it the more perfect it has become. When I first got into this profession, I had an older agent who invariably would announce, “Jerry, when you’re finished, I want you to come into the living room and tell everybody what’s wrong with this house.” Yeah right!
The very last impression you want to leave your client with is your availability to communicate anything they don’t understand in your written report or was later discovered that you may have failed to address. Receiving a call from a client after your inspection and close of escrow sure as hell beats getting one from their attorney.
Don’t accept refreshments and don’t sit down. You’re not exactly a welcome guest. Keep everything on a totally professional level because that is what you must be perceived to be, a professional at all times to all parties involved in the transfer of property. They are not your friends nor do they want to be. You are a facilitator of information of which much may be negative. Maintain a professional attitude at all times. Never become unnerved and blow a positive perception it took you four hours or more to establish. A final word about what has become oh so common in our current society; “perception” often becomes most folk’s reality.
About the Author
Jerry was awarded CREIA’s Inspector of the Year in 2000, one of the 25 Most Influential Members of the California Real Estate Inspectors Association (CREIA) since its founding, was elected CREIA Fellow in 2003 and was awarded the John Daly Award, CREIA’s highest honor, in 2007. Jerry also holds an ICC professional inspector membership and is ICC certified as a Residential Combination Inspector. Jerry is qualified in the California Supreme Court as an expert witness in the standard of care for California home inspectors, residential construction defects and landlord/ tenant litigation.
Reprinted with permission from the California Real Estate Inspection Association (CREIA), www.creia.org, 800-848-7342 for more information about the non-profit association.
Home Inspector News, Home Inspector Magazine, Home Inspector Information
Editor’s Note: What do you do when subpoenaed in someone else’s lawsuit? The best answer is simple: charge an expert witness fee, of course.
Expert Witness Subpoenas: How Not to Work for Free
By Isaac Peck, Editor
Some home inspectors specifically solicit work as an “expert witness” as a matter of choice. Others find their way into a courtroom or deposition hearing when they’re drawn in by opposing parties, usually because their testimony is deemed relevant to the lawsuit at hand. In these cases the home inspector often is served a subpoena to show up.
For many inspectors the question is how to respond when subpoenaed in someone else’s lawsuit. The answer is simple: position yourself to earn an expert witness fee.
Many experienced home inspectors insist that, in most cases, when subpoenaed to testify or be deposed in a lawsuit between two parties, inspectors should submit an expert witness contract to the requesting party and receive compensation for their time.
The rub is that sometimes a lawyer will subpoena an inspector and expect them to testify for free. In situations where the lawyer attempts to play hardball, retired home inspector Jerry Peck, now a construction and litigation consultant, advises fellow inspectors to acknowledge that they wrote the report but avoid offering any opinion unless under contract as an expert witness. “Whether or not you are a party to the case, as soon as they ask ‘What do you think?’ or ‘Is that what you think?’ or any other question that leads to your offering an opinion, you are acting in the role of ‘expert’,” says Peck.
Peck explains the difference: “If a home inspector is asked, ‘Did you do this inspection on this day, at this address?’ That is not an expert witness question,” Peck says. “That is a question for him/her as the Records Custodian.”
Peck insists that no lawyer should get more than a Records Custodian answer unless they are willing to sign the home inspector’s expert witness contract, which includes a retainer fee and advance payment. “The Records Custodian can only attest to things such as: ‘Yes, this is the report which was produced for the inspection which was performed on (date) at (address) for (client’s name).’ Think of it as name, rank, and serial number only, until they retain you for further information,” Peck says.
An inspector can stop answering and get his contract out when a lawyer begins asking questions like, “Why was that your opinion?” or “Why did you think that needed to be corrected?” because the home inspector is now being treated as an expert. “Turn to the judge and bring up the fact that they are treating you as an expert but have refused to sign your contract. I have not heard of a judge yet who will not tell the attorney to sign the contract and get their checkbook out,” says Peck.
Expert vs. Witness of Fact
For Peck, the distinction is clear between expert witness and witness of fact. “If you are testifying that what you wrote up at the first inspection was true and why –you’re giving your professional opinion, i.e., you are testifying as an expert and giving your opinion,” says Peck. Alternatively, witnesses of fact are only allowed to testify about what they saw, not their opinion of what they saw. For example, saying “the tree fell” is a statement of fact, while saying “the wind blew the tree down” is an opinion, as to what caused the tree to fall.
“If you are called as a witness of fact, you can only read from the report. Nothing else can be added: no adlibbing, no explanations, no opinions. The report is ‘fact’ and if it is in the report, you read it as ‘fact.’ If it is not in the report, it is ‘not fact’ and classified as either ‘hearsay’ or ‘opinion’ and you have NOT been retained to offer your opinion,” Peck says.
Peck cites the following definition of an Expert Witness to highlight the difference between a witness of fact and an expert witness, as well as to illustrate that a home inspector can be an expert witness even when they were initially involved in the inspection of the property (underlined for emphasis):
EXPERT WITNESS
When knowledge of a technical subject matter might be helpful to a trier of fact, a person having special training or experience in that technical field, one who is called an expert witness, is permitted to state his or her opinion concerning those technical matters even though he or she was not present at the event. For example, an arson expert could testify about the probable cause of a suspicious fire.
A person who testifies at a trial because he/she has special knowledge in a particular field- this entitles him/her to testify about their opinion on the meaning of facts. Non-expert witnesses [witnesses of fact], are only permitted to testify about facts they observe and not their opinions about these facts. In family law trials, typical expert witnesses include: actuaries, who testify about the value of spouses’ pension plans for the purpose of dividing them at divorce; child psychologists or development specialists, who testify about the best interests of the child when custody or visitation are in dispute; appraisers, who testify about property values when the parties cannot agree, and career counselors, who testify about a homemaker’s ability to return to the work force for the purpose of determining the amount and duration of alimony.
Keith Gipe, a commercial inspector in Florida, confirms Peck’s assessment, saying, “I can’t say how it works in other states, but Florida allows an inspector or other expert to testify as an expert witness even if they were party to prior investigations [home inspections]. I worked several years as an inspector for an engineering firm specializing in construction defect litigation support. We inspected hundreds of commercial properties each year and many of us were regularly subpoenaed to testify and we were paid as expert witnesses,” says Gipe.
Gipe says that his company included “litigation support” and “expert witness” as optional services with the rates in the standard fee schedule. “There was never a problem with the attorneys except that occasionally they wanted to renegotiate the fees or dispute the time we billed for litigation support. If the attorney who subpoenaed you thought your testimony would hurt his case, he wouldn’t have subpoenaed you. Conversely, the opposing counsel can subpoena you if they think your testimony favors their case,” says Gipe.
So what is a home inspector to do when subpoenaed in a lawsuit where the inspection reports (and the inspector’s testimony/opinion) are relevant to the case? Home inspectors who have been through it, advise forwarding an expert witness contract to the requesting lawyer and receiving a retainer and advanced payment before proceeding.
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Editor’s Note: If you are in business for yourself, you better believe you are in sales-selling your services and yourself. In this piece, Carson-Dunlop, a premier provider of software and training services for home inspectors, offers tips for handling client objections and landing the order.
Selling Your Services and Yourself
By Carson-Dunlop
The following are a few approaches to handling objections.
One technique for handling virtually any objection is called the feel, felt, found technique. It goes like this: Your prospect (agent, manager, lender, homebuyer, lawyer) indicates that they don’t want to use you because of objection ‘X.’ Your answer is, “I understand why you feel that way. Many of my repeat clients felt that way initially, too, but they found that …” And here’s where you explain some of the benefits that might convince the prospect to proceed.
This technique validates the objection rather than dismissing it. It also makes the client feel smart because others feel the same way. After you have told them that their concern is valid and shared by others, they relax a little. They then are more receptive to the solution, especially since it is presented as an indirect testimonial: “It’s not me saying this, it’s what other clients have found.”
This technique has the benefit of being simple and you can use it for any objection. If you have it at your fingertips, you can pull it out when you hear an objection you were not prepared for. At least you will have ten seconds to think of an answer.
Hot Button
A hot button is the one thing that is most important to your prospect. If you can identify your prospect’s hot button, you’re as good as there. For example, a real estate agent may lament to you problems are identified during the inspection, as long as the inspector keeps them in perspective. You now have your hot button.
During your presentation, you come up with a half dozen ways how you “keep an even keel.” For example, you present instances of your good “bedside manner,” how you help clients keep things in perspective, your down-to-earth style, your balanced approach, and your non-alarmist presentation of house conditions. Forget about all of the other benefits of your service and work the hot button.
Timing is Everything
We said that the sales process involves discovering people’s objections and addressing them. Until these have been dealt with, you cannot assume the prospect is ready to make a buying decision. There are, however, different times at which you can deal with objections, which can create challenges:
- You can answer objections as they are presented to you.
- You can figure out what the objections are during the course of the presentation and then bring them up yourself, if the prospect is not entirely forthcoming about them.
- You can address objections later when you feel the time is right. This is especially important when discussing price, particularly if it comes up early in the conversation. You are better off acknowledging that you understand that price is an important issue and asking the customer if you can come back to it.
Offering Proof
Offering proof is a good way to diminish someone’s objection. Here’s an example: if you are on the phone with a client who thinks your fee is too high, as we noted earlier, you should agree with the prospect that you are more expensive and ask if you can explain why. Once you have elaborated on the benefits of your service, you can add, “You can see that while we are a bit more expensive than some other inspection/appraisal companies, we offer more value.
Furthermore, we are only $25 more expensive than other professional home inspection companies. My three main competitors charge X, Y, and Z.” This last piece of information is the proof. You are offering specific data. Even better, you could fax your competitor’s price schedule. Some people respond well to concrete information like this.
Providing Testimonials
Another example of concrete proof is the testimonial. This works for prospective clients, real estate agents and others. If you can get an agent to write a testimonial about how great your inspections are, you can pull out the letter as an answer to an objection. For example, say the agent you want to work with expresses concern about trying you because their current inspector is very good with their clients and the agent doesn’t want to lose this benefit. You can use the “feel, felt, found” technique in conjunction with a testimonial letter. “I understand how you feel. Most of the agents who refer business to me now felt that way, too, but they found that my client-handling skills are better than they’d ever seen. In fact, they are so happy with my skills that I get letters like this.” Then you pull out a testimonial letter that articulates how well you handled a difficult situation. This is a lot more powerful that simply saying, “Relax, I know how to handle my clients.”
A website is a great tool for presenting testimonials. The more credible the testimonial, the more valuable it is. If possible, get permission to use the person’s full name, rather than initials. To add another dimension and make the testimonial even more credible, include a photo of the person offering the testimonial. You will have to ask permission, of course.
Copyright 2006 Carson Dunlop & Associates Limited.
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Editor’s Note: There are good reasons for reporting claims and incidents when they happen. Here is vital information, that even seasoned inspectors may not know, that can save you anxiety, money and maybe even your business.
Inspectors: What to do with Claims
By David Brauner, Senior Broker at OREP.org
The return address on the envelope is from a local attorney and as you open the letter your stomach begins to tighten. Unfortunately, your instincts are right: you’re being sued. It’s an inspection you did 14 months ago. Whew! You had errors and omissions insurance coverage at the time, so no problem, right? Not necessarily.
As you dig for the report the interaction with the client comes back in bits and pieces. The client seemed nice. He called upset that his roof was leaking six months after he moved in. You looked up the report, called him back and pointed out where you indicated that the roof showed signs of wear and your recommendation that an expert be called in before the purchase. It looks like you did everything by the book. You offered to come out and take a look. He said it was okay, “Don’t worry about it.” He seemed calm when you hung up.
A few days later a hand written “demand letter” arrives saying it’s going to cost $15,000 to replace the roof and he wants you to pay for it. Included is a quote from a roofer. You call the homeowner right away, leaving a voicemail and again offering to come out and take a look at the roof.
Days and weeks go by and you hear nothing. In your experience no news is good news. You assume your professionalism fended off possible trouble: you responded promptly, confidently and courteously. And your report is solid. Why worry until you have reason to? The trouble is, his brother-in-law is an attorney and you know the rest. Now there’s a claim,
14 months later.
You’ve read the stories in Working RE Magazine (published by OREP.org) over the last 11 years so you are aware of how important it is not to let your Claims Made E&O Insurance policy lapse. So you haven’t. You always renew in plenty of time so there has been no break in coverage. Easy. Since you were covered at the time of the inspection and since there is no break in coverage, you relax a bit; this legal tussle might be a hassle but at least it won’t be catastrophic because you have insurance.
Unintended Consequences
You forward the claim to your agent who forwards it to the claims department at your insurance company. They review the file submitted by the claimant and note that the first letter from the homeowner is dated 14 months prior to the letter from the brother-in-law/attorney. They may ask why you didn’t report the “incident” when it happened. “Because I didn’t think it would amount to anything,” you answer.
The acknowledgment letter from the claims manager, defending you and your report, puts you at ease but the last section gives you a twinge of anxiety: it reminds you of your duty to provide “prompt written notice” of any claims. All policies have similar language- look under “Claims” or “Notice of Claims.” What’s a claim, you wonder? A claim is typically defined as “a demand for money or services.”
What’s more, standard policy language reads something like this: “Underwriters reserve their right to deny coverage, withdraw from the defense, and recoup any Claims Expenses in the event that the lateness in reporting the Claim has or may prejudice Underwriters’ defense of this matter.”
Good News
Well, it could have been worse but your claim is being responded to. You take a deep breath and relax a bit. Even if you’re blameless, it can still take many thousands or tens of thousands of dollars to provide a defense, so having E&O is an effective and inexpensive sleep aid: a good decision.
Reporting Claims and Incidents When They Happen
Now at some point, probably when you’re set to renew, the underwriter reviewing your renewal application will note your open claim, look back at last year’s “clean” renewal application and may ask for an explanation why you didn’t mention the claim/incident on the renewal application last year. “Because it wasn’t a claim at the time,” you answer. Yes, but you answered question seven on the renewal application “No,” which asks: “Do you have knowledge of any circumstances which could result in a claim or suit against you or your firm?” Every application no matter who insures you has a similarly-worded question. You try to make your case: “It didn’t seem likely that it would turn into anything, so why mention it?”
Understand that it is possible for an underwriter to assume that a non-disclosure like this is an intentional attempt to withhold information. If you fail to disclose an incident/potential claim on your new/renewal application, for whatever reason, and your insurance company discovers it (probably when it turns into a claim), they could assume the worst. This casts doubt on your character and could result in a non-renewal. Remember, when you sign an insurance application you are representing that everything stated is true.
It’s unlikely but possible for the worst to happen- they decide not to renew the policy because they think you withheld information. Well, the good news is that it won’t affect coverage of the open claim because it’s already been reported. And there are other insurance carriers, you say, you’ll just take your business elsewhere.
You are honest on the next application (having learned your lesson) and disclose that you were “non-renewed” by your previous insurance company and why. If the claim is not resolved yet and they typically take a while, there will be a “loss reserve” on your account that will show up in your “loss run” statement. This will be part of your file until the case is resolved. A loss reserve is the amount the carrier puts aside to defend and pay for the claim. They set aside this amount to assure adequate reserves. This amount is typically much greater than ever makes sense to a layman but it’s the way insurance companies must operate. Most carriers ask for a loss run before they agree to insure you. The “loss run” is your loss history. Now you are being non-renewed for not disclosing information and you have an open claim.
After your justifiable rant because, after all, you really have done nothing wrong, if you can find someone to cover you, it may be more costly than what you would pay if your record was “clean.” It depends on the amount of loss reserve and the nature of the claim. If only one company offers you coverage and it’s expensive, your limited options will dictate that you pay it, especially if you need insurance because it is required by your state or by those who refer business to you.
To summarize, if you don’t report a claim when it happens there may be no coverage in the future when you need it, especially if you no longer have insurance. Further, if you don’t report it on an application and then a claim arises, that also can have negative consequences. Now here’s the flip side.
Reporting Incidents which may become Claims
The advantage of reporting a potential claim during the policy period when it happens, no matter how insignificant it may seem, is that later, if it does turn into a “claim,” the insurance company should respond even if the policy is no longer in force. This is the best reason for reporting a potential claim when it happens. It is also a great way to get expert advice from seasoned claims adjusters (attorneys) on how to respond- to hopefully stop the complaint in its tracks.
I know what you’re thinking- that reporting every “incident” or “claim” will make your premium go up at renewal time. With most companies, an “incident” typically does not cause a rise in premium. Some carriers might raise your rates if there are a series of “incidents” in a policy period or if one or more is later classified as a “claim” and reserves set. If a potential claim amounts to nothing, it should not affect your premium, with most insurers. Remember, the upside of reporting incidents when they happen is that you will have coverage if a claim arises later whether you have insurance or not and you can get help defending yourself. The possible downside is not having insurance when you need it.
Admittedly these distinctions are not black and white and definitions may differ among insurers. Report anything in writing for sure, especially if it’s from an attorney. If in doubt, ask your insurance agent. The benefits of reporting potential incidents and claims are significant and the downside minimal.
Disclaimer: This article is written from an insurance perspective and is meant to be used for informational purposes only. It is not the intent of this article to provide legal advice, or advice for any specific fact, situation or circumstance. Contact legal counsel and your insurance agent for specific advice.
About the Author
David Brauner is Editor of Working RE magazine and Senior Broker at OREP.org, a leading provider of E&O Insurance for appraisers, inspectors and other real estate professionals in 49 states (OREP.org). He can be contacted at dbrauner@orep.org or (888) 347-5273. Calif. Insurance Lic. #0C89873.
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Professional Marketplace
Continuing Education for Home Inspectors
Online McKissock course Home Inspection Safety. The objectives of the course are to: identify protective clothing that should be worn, recognize safety equipment used, understand limitations and exclusions, discuss general safety issues, recognize lead paint, asbestos, etc., discuss electrical safety, understand, heating and air conditioning precautions, recognize un-permitted additions and more. Visit McKissock Learning for more information: https://www.mckissock.com/home-inspection/.
Group Health Care—No Application / Limitations for Pre-Existing Conditions
California residents qualify for programs offered through Kaiser Permanente, Allied National and United Healthcare. These plans are available to real estate professionals on a guaranteed issue basis. Kaiser Permanente offers eleven plans including the new Tax Advantaged Health Savings Account Plans. United Healthcare offers three HMO and four PPO plans, including a Tax Advantaged Health Savings Account. Allied National offers four Limited Benefit PPO Plans that offer highly affordable first dollar coverage including doctor office and emergency room visits and prescription drugs. These plans are available to California residents only through OREP (OREP membership not required). Please visit OREP.org, click Benefits or email info@orep.org with medical benefits in the subject.
Mortgage Field/Property Preservation
Many home inspectors are now providing mortgage field and property preservation services for bank-owned properties. OREP has provided insurance to this industry for over 10 years and is a leader in the field. If you’d like a quote, please call or visit OREP.org, (888) 347-5273.
Save on Office Supplies, Telecom, more
Corporate Savings is a little-known but significant cost-saving benefit of being an OREP member. Members who take advantage of the program save money with Office Depot, Staples, Dell, FedEx, UPS, Sprint, travel, and more. OREP saves well over $1,000 a year on office supplies alone. Rod Lopez, an appraiser from New Jersey, says that he saved over $100 recently on the discounts at Staples and Office Depot.
Cynthia Traylor, from House Calls Home Inspections, in California, responded, “YES! We are saving 19% on our Verizon bill and I order all of our office supplies through the discounted Staples portal—they provide overnight, FREE shipping, even on Sunday orders! Lastly, we are considering the Six Flags discount. So, yes, yes, and yes. We are taking advantage and truly enjoying your program. Great job!”
If you’re an OREP member, ask about these savings!
Diversify with Additional Training
Complete home study courses on New Construction & Code, Commercial Inspection and Manufactured Home Inspection created by a leading, nationwide education provider are now available through OREP. Save hundreds of dollars on training that will increase your learning and your earning. OREP insureds enjoy even greater discounts on these education packages. The packages are extensive and complete, coming with over a dozen DVDs that take you step by step through the processes and procedures and prepare you for certification. For more information, visit WorkingRE.com and click Home Inspector Discounts (left column).
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Don’t Inspect for Pests – Sued Anyway
By Isaac Peck, Editor
Even if your inspection specifically excludes wood destroying inspects/organisms (WDI/WDO), that does not stop an irate homeowner from suing you if a problem arises. That’s why it is good to have a clear scope of work, a signed inspection agreement, and a broad errors and omissions insurance policy- just in case.
“We see new homeowners move in and begin a remodel only to find termite damage that was hidden behind a wall- so it was unseen and unreported by the inspector,” said David Brauner, Senior Broker at insurance provider OREP.org. “Their first instinct is to try to recover some of the expenses from the home inspector. The inspector responds with their scope of work and agreement, signed by both parties, which specifically excludes WDI/WDO or pest inspections, and is limited to what is visible. That’s great but if that does not stop the homeowner there, the inspector may have to be prepared to prove his/her case in court, and it may be without the help of their insurance carrier if he did not purchase that specific coverage.”
According to Brauner most inspectors who don’t inspect for WDI/WDO, probably don’t think they need to purchase the coverage. So if a problem arises, they may be left on their own. Brauner says that some insurance policies provide what is known as “incidental” coverage for pests and other services- for when a problem like this arises. “That’s why a broad policy form is so important,” said Brauner. Brauner recommends asking your agent when you’re shopping insurance about what is and isn’t covered in the base policy- whether you specifically inspect for it or not- just in case.
“Obviously, if you perform pest inspections, and it’s not included in your base coverage, it is necessary to purchase that coverage. But if you don’t inspect for it, you should be aware whether ‘incidental’ coverage is in place in case the unexpected happens,” says Brauner. “The unexpected is not so unusual in this business, unfortunately. Insurance, more than anything, is about peace of mind and having coverage when you need it.”
According to Brauner, the best policies include the most important coverages in the minimum premium. Brauner says the new OREP E&O program for home inspectors includes most coverages, including Bodily Injury Property Damage (BIPD). BIPD provides premises coverage for when an inspector is on site in case he/she “breaks a vase” (property damage) or causes bodily injury to a person. “Inspectors should not have to pay extra for these coverages, or worse, go without them because they can’t afford it,” Brauner said.
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How to Date a House
By Alan Carson
As home inspectors, we have some tricks for figuring out the age of a house. In newer subdivisions we pick up dates from manhole covers, sidewalks and curbs. This will give you an idea of when the subdivision was built. This obviously doesn’t work in older neighborhoods. Home inspectors are naturals for expanding their services into energy auditing.
Thermal pane windows usually have a metal strip which separates the two panes of glass. On that metal strip you will often find the manufacturer’s name, a CMHC number and the date of manufacture. Again, this information must be used carefully. It will tell you the age of the window but not necessarily the age of the house. Check several windows. If they are all the same, you have just figured out how old the house is or the date when all of the windows were upgraded.
On houses built within the last 20-25 years, you will often find a sticker on the outside of the electrical panel indicating the possession date of the house. Where we live, the Ontario (Canada) New Home Warranty Program placed these stickers on the electrical panel so that the warranty period could be established easily.
If you can be sure that the furnace or water heater is original, the gas inspection sticker on either of these appliances is a good indication of the age of the house. Porcelain plumbing fixtures usually have a manufacture date stamped into them. The easiest place to find a date is from a toilet (no jokes). If you remove the lid from the tank, the date will often be stamped on the underside of the lid and also inside the tank near the water line. The date is usually on the right side of the rear portion of the tank when you are facing the toilet. The date inside the tank is more reliable than the date on the lid because sometimes lids get broken and replaced. Again, you must look for other clues to convince yourself that the toilet is original. Otherwise, you have only established the date when the bathroom was renovated.
Building Material Clues
Certain building materials can be clues about the age of a house. These clues can vary dramatically by region. For example, in Toronto, virtually all houses with stone foundation walls were built before 1930. If you go to Kingston, Ontario however, and ask when they stopped using stone foundation walls, the response might be, “You mean they stopped using stone foundation walls?”
In Toronto, brick foundation walls were popular until about 1935. In other parts of the province, you will find no brick foundation walls at all. With the exception of custom built houses, most houses built with concrete block foundations are pre 1970. Most subdivision houses built in the 70s or newer have poured concrete foundations. Most brick houses in Ontario were solid masonry construction (two widths of brick) up until the late 1960s. Most brick houses built after 1970 were brick veneer construction (one width of brick with a wood stud wall behind).
If you stand in an unfinished basement and look up at the sub flooring, you will find that most houses before 1965 used plank sub flooring. After 1965, most houses have plywood sub flooring, until the early 1980s, when wafer board sub flooring became popular (with the builders at least).
Aluminum wiring began to be used residentially in about 1965, however, it did not really catch on until about 1970. When was it banned? It was never banned. However, it received so much bad press that aluminum wiring stopped going into houses in about 1978. To this day, aluminum wiring is still used to bring power into the house from the street.
As you are probably aware, knob and tube electrical wiring makes insurance companies very nervous. Knob and tube wiring was superseded by conventional modern wiring in the late 1940s. Even though wiring looked modern through the 1950s, it was not until 1960 that modern wiring contained a ground wire. Therefore, houses built before 1960 have two prong outlets as opposed to modern electrical outlets which are designed for three prong plugs.
Before 1950, supply plumbing was galvanized steel. Houses with galvanized steel supply plumbing also tended to have cast iron waste plumbing. In about 1955, waste plumbing was more likely to be copper than cast iron. In the late 1960s, the price of copper went through the roof. Waste plumbing became plastic very quickly. (It was this jump in the price of copper that also led to the use of aluminum wiring.)
Old houses have plaster on the walls and ceilings, whereas new houses are built with drywall. When did the change occur? While there was no magic day when plasterers quit and drywallers began, most houses built before 1960 are plaster and most houses after are drywall.
Dating houses can be helpful for a number of reasons; for example, furnaces sold and installed 20-25 years ago have a life expectancy of 20-25 years. Therefore, most houses built in the early 1970s have a new furnace or will need one shortly. Most houses built in the early 1980s were built with asphalt shingle roofs that last up to 15 years. Again, most of these houses either have a new roof covering or need one. The good news about a 1982 house in need of new shingles is that it couldn’t possibly contain Urea Formaldehyde Foam Insulation. It was banned in December of 1980!!
This story is used with permission of Carson Dunlop, providing inspection services and home inspector training, education and reporting systems. For more information visit: www.carsondunlop.com.
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