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I am The Home Buyer's Advocate
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Pre-Purchase Home Inspections, Listing Inspections, 11 Month Warranty Inspections, FHA 203(k) Consultant, FHA Complance Inspector, Mold Surveys, and Residential Environmental Surveys for Chronic Health Conditions
REAL ESTATE BROKER’S GUIDE TO HOME INSPECTIONS What Every Broker Needs to Know Before It’s Too Late! What Every Home Inspector Should Have Known Before They Started What Every Buyer Wished They Knew Before the Escrow Closed Proposed Training Manual for Department of Real Estate Continuing Education Requirements for Real Estate Agents. By Brad Deal With 27 years in the California Real Estate business, with the last ten in the Home Inspection Industry I have come to understand that the real estate community does not understand the importance of Home Inspections. After 3,500 inspections it has painfully clear that the average real estate agent has little understanding of the inspection process and how it relates to their clients. Most Agents feel they have an intuitive understanding of the Home Inspection process but have virtually no formal education in this subject. Most agents consider a home inspection as a “Deal Killer” and avoid a home inspection like the plague. More enlightened agents embrace a home inspection as a powerful tool to help limit their liability and still be able to negotiate with the sellers for the best possible outcome for their Clients. Many agents believe that because they have lived in a home all their life that they have an understanding of the inspection process. What this really means is that they are equal in knowledge and experience to the average client in regards to their homes. Just because an agent has lived in a home most of their life it in no way qualifies that agent to professionally comment on homes to their prospective clients. There is a significant lack of formal education for the Real Estate Industry regarding home inspections and the inspection processes in general. To put these comments into perspective; it takes about 1,600 hours of training to be licensed to cut a person’s hair but takes only takes about 40 hours of formal education to become a real estate agent. 1600 hours for a $12.00 haircut compared to 40 hours to handle the largest purchase the average Californian will make in their life time. And only a few minutes of these 40 hours is devoted to teaching the agents the very rudimentary names of the various parts of a home. Formal education is necessary for the agents to learn the proper benefits usage and for the inspection processes. Education will allow agents to provide their clients with the fiduciary representation necessary for a successful transaction and at the same time, limit the agent’s and broker’s liability. It has been my experience the ethical agents are more likely to rely on a Home Inspection. The intimidation the Agents feel for home inspections is caused by their fear of losing control of the purchase process. It is the lack of control over the inspection process that instills insecurity for the agents. Agents need to understand that until the home is inspected and accepted by the client that there is no contract, only an option to purchase. Accordingly, very little effort should be invested in any transaction until the inspections are complete and approved by the clients. The following discussion is based on my experiences and will help provide real estate professionals with a basic understanding of the home inspection process. The following is a collection of articles I have written over the years that have been combined into this manual. It should also provide some powerful tools to limit the agent’s and the broker’s liability. Brad Deal has the following Certifications and Licenses: Bachelor of Inspector Member California/National Association of Certified Home Inspectors (CalNachi) Board Member and Chairman of the Standards of Practice Committee, FHA Roster Inspector #N258 FHA 203 K Consulting #S0338 "Board Certified" Council of Engineering and Scientific Specialty Boards American Indoor Air Quality Council-certified Indoor Environmental Consultant #CIEC 0607094 "Board Certified" Council of Engineering and Scientific Specialty Boards American Indoor Air Quality Council-certified Microbial Consultant CMC #0701024 American Indoor Air Quality Council-certified Microbial Remediator #CMR 03807 American Institute of Inspectors Certified Mobile Home Inspector #M-3090 Fireplace Investigation, Research & Education Service F.I.R.E. Certified Fireplace Inspector #66 FEMA / PaRR Disaster Inspector #19250 California Real Estate Brokers License #01149536 Contractors License General Contracting, General Engineering, Concrete #408258 Inactive It Takes More Training to Become a Hair Stylist than it Takes to Become a Real Estate Salesman Anybody can be one! According to California Real Estate Law the salesperson is not expected to have any extensive, specialized knowledge in regards to the product he is selling. The agent is not expected to obtain any specialized training regarding the “product” they are selling except to the extent they receive it through on the job experience. They are however, required to obtain 40 hours of training every 4 years in Ethics, Agency, Trust Fund, Fair Housing, and Risk Management. Contrast this with a luxury car salesman who is expected to know everything about the car’s performance and amenities. While the car salesman probably has no training in the contractual portion of the transaction, they can expound all day long on all the performance characteristics of their product. There is quite a difference between the two industries but the cost of the typical home far exceeds the cost and importance of the car. The investment the typical purchaser makes in their home is probably the largest and most important investment they will make in their lifetimes. While the car salesman has specific training on the cars he is required to sell, the real estate agent is not required to obtain any specific training on the various systems in the home, only that training intended to limit their legal liability. Agents are taught throughout their career just to sell. Just look at the advertisements in the magazines, and the websites online. There is page after page with add after add with each agent proclaiming, “I can sell the best!” or “I can find your dream house,” but when it is all said and done there is little effort to sell the individual properties. It is all designed to promote the agents. There is not any significant effort to distinguish the difference between the agents except in regards to commissions and referral fees. Rarely do you see a resume or even rarer, a curriculum vitae. Everything is based on selling, and not on education. Accordingly the agents are perceived by the public to be all about the same. Just because an agent is successful, that is to say, turns over a larger volume of properties, only indicates that they are more proficient in marketing, not necessarily more educated on the systems of those properties. I had one successful broker describe the business to me as a machine; you put the client in one side and a commission comes out the other side. Don’t give the client any more information than is necessary, it only makes more work for the agent and anything that jeopardizes or stops that machine is to be eliminated. Many times in real estate it is not what you know, but who you know. The cruel truth is that there is a high turn over rate for new agents. New agents are routinely sought out for employment because the brokers know that the typical person has about 100 people in their sphere of influence and within that sphere there are likely to be two or three prospective home buyers or sellers. After the new agent has exhausted their group of likely prospects they are subject to being released; or more often, they quit after having learning of the many long hours that the successful agents invest in their “sub business.” This is one reason why brokers strive to have as many sales persons employed as possible. The Broker is First I renewed my Real Estate Brokers License not too long ago and one of the questions asked on the renewal exam was, “Who is supposed to be protected by Real Estate Law?” and of coarse the answer was the consumer. But when one really gets down to reviewing the law and how the various disclosures and contracts are written, they are really designed to limit the liability of the broker. If the consumer happens to be protected along the way then that is so much the better but the real emphasis on the disclosures is an attempt to provide the agent with a “checklist” of every possible disclosure document for every conceivable kind of real property transaction. As long as the agent can at least be sure to have obtained signed copies of the various disclosure documents, and follow the appropriate time frames then the liability of the broker is significantly reduced. Are You Ready to Run a Business? Yesterday I was a _____, and today I run a Business The new agent is immersed into an operating business (brokerage) without having had to go through any on the job training or job promotions that is usually associated with a traditional business. Usually years of dedication and training must be invested in a business to learn the skills to become a successful. This is not true in Real Estate. A housewife or retired teacher can in a matter of hours be thrust into a business environment without any understanding of any basic training in business operations. It is not even necessary to be proficient in the English language, The broker offers a framework for the new agents to help them get started but the simple details of things like phone etiquette and the importance of answering or returning phone calls is never taught to the agents. The simple tools of business are many times over looked and never taught to the new agents. It can be difficult for the new agent to learn these skills before they are forced to leave the business. This results in an industry where 80% of the sales are made by 20% of the top agents. The remaining 80% of the agents compete over the remainder because they have lesser degrees of education and training. I know from experience that a large portion of the latter group does not really understand the California Association of Realtor (CAR) Purchase contract and especially how it relates to the home inspection industry. The California Association of Realtors “The California Real Estate Purchase Contract and Joint Escrow Instructions” Agents Should have this Stuff Memorized! You are not in the driver seat unless you understand the terms! There are many places in the CAR purchase contract that refers to the various inspections that are performed in the typical transaction. When all these sections in the contract and especially when combined with the Buyer’s Inspection Advisory are, the inspection portions represent a significant total of the purchase contract. We will go through the significant sections of the CAR purchase contract and see how they relate to the various inspections. It is interesting to note that the Home Inspection, the only document, prepared specifically for the home buyer is not mentioned one time in the purchase contract. The entire C.A.R. purchase contract is presented with the sections to be discussed highlighted. Specific discussions can be found following the complete contract. Sometimes there are obvious signs of newly installed improvements like windows or a new roof. While it is not required by the standards a competent inspector will prompt the client and/or agent to ask the seller for any warranties for things like roofs, windows and appliances. Many times the warranties are transferable and represent a significant value to the client. The agents should use the inspection report as a prompt to help include all the important information to their client. In my opinion, a home inspection is incomplete without the inclusion of a competent pest inspection. Pest Inspectors do not comment on mechanical systems but they do comment on water intrusion issues and infestation issues. While home Inspectors are not allowed to comment on pest (wood destroying organisms) issues they are required to comment on water intrusion issues. The two issues are almost always connected. Water intrusion issues are part in parcel of pest and infestation issues and pest inspectors are allowed to probe the suspect areas to locate water damage where a home inspector is performing a visual inspection only, and is not using a probe. A probe can make a world of difference under certain situations. . While the reports are different in nature they do compliment each other to the benefit of the Buyer. Taken together they will provide better information than if each is taken separately. I always recommend a pest inspection be performed even if the there is no contractual requirement for one. Some homes are sold “As Is” for cash and do not have the usual lender requirement for a Pest Report. In these instances the Agent should advise their Client IN WRITING to obtain a Structural Pest Report to limit their liability and best serve their customer. The Pest Inspection Company that is to be used is identified in the Purchase contract. It is important that the Buyer’s agent be informed as to the nature of the company selected. I have learned from experience that there are “Lister’s Inspection Companies” and “Buyer’s Inspections Companies.” While each Structural Pest Control Company is governed by strict standards, each company takes on the personality of the company’s management. Some companies receive their work from agents who want a minimum inspection. These companies count on continued work by providing a minimum inspection. These companies do not serve the best interests of the buyer. On the other hand there are companies who provide a more inclusive pest inspection, which I characterize as “Buyer’s Inspection Company” who routinely discover an increased number of infestation issues. I have had instances where I have discovered water intrusion issues that were missed repeatedly by a particular pest company. Once a person become aware of the differences in the quality of the pest reports it becomes very clear which companies should be recommended. I recommend all agents be informed of the qualifications, experience and personality of the local structural pest inspection companies in order to protect themselves from possible “negligent referral” actions. Sometimes a listing agent may know a particular system on a home is infested or water damaged. Usually, it is the listing agent who orders the Pest Inspection and uses this opportunity to exclude various garages, out buildings, decks, or patio covers from the pest report. The pest inspector has no idea of what is contractually required and can only proceed on the instructions they are given and must rely on the listing agent for proper guidance. I always recommend that the buyer review the purchase contract to be sure the pest report includes all the contractually required components. I routinely find water intrusion issues in out buildings or other peripheral systems that were excluded on the pest inspection but were required on the purchase contract. What’s the difference? Buyers should be made aware that there are Section 1 and Section 2 items in structural pest reports. Section one items are issues of current damage or infestation and are usually required to be repaired by the lender prior to funding a purchase loan. Section 2 items are issues that may lead to future infestation or damage and are not usually required to be repaired by lender. Sometimes specialty loans do require Section 2 items be repaired. It is important that the buyer’s agent be informed as to the type of loan the buyers are intending to obtain in order to be sure if the Section 2 items will need to be repaired prior to funding so that it can be included in the purchase offer. Home Inspectors routinely discover dead animals in the crawlspace or the attic. This is rarely reported by a pest inspection but routinely reported in a home inspection as a health safety issue. While it is excluded by the Standards of Practice most home inspectors will report on these issues. There is the possibility of anthrax being present in the under dead animals along with other health safety issues. Dead animals require the removal by a qualified Class 3 pest specialist. I’ll Take Two When the issues discovered during the home Inspection become known to the buyer it makes it possible for these issues to be negotiated with the seller. A proper Home Inspection will almost always reveal safety issues that far exceed the cost of the report. Most sellers are reluctant to sell a home with known safety issues and will usually agree to repair at least some of these issues as part of negotiating the purchase contract. The amount of repairs is dependant on the market. In a seller’s market, the sellers will make fewer repairs than in a buyers market because the sellers do not have to compete as hard with the other homes to close a transaction. In a buyers market a seller is more likely to make an increased number of repairs because they to have to compete with the other homes on the market. It only takes the seller to agree to one or two repairs to exceed the cost of the report. Not to mention the savings of many thousands dollars should a disastrous defect be discovered. Any additional successfully negotiated issues beyond the cost of the report are all savings to the buyer. It is not uncommon to discover previously unknown issues worth many thousands of dollars in safety issues. An Agent should be wary of any inspection priced under market value. It is important for the agents to understand that these issues will become known over time by the buyer. The Home Inspection provides certainty in the purchase process so that these previously unknown issues are known at the beginning and can be budgeted for future repairs rather than the periodic eruptions of distressing problems without prior warning. It is the unknown problems that can destroy the home owning experience for a client and ruin return business for the Agents The Cheapest Price isn’t always the Cheapest Price Or You Get What You Pay For! It is interesting to note that the majority of agents who call multiple inspectors shopping price cannot be sure if the home has a crawlspace, a concrete floor, or a basement, or even how many square feet are in the home. Sometimes they are even unsure on the property’s age. The ability of the Agents to answer these simple questions quickly provides clues to an agent’s experience and education. When you represent a property, look at the property and see of what it consists. You are expected to be an expert at purchasing and marketing properties, how you describe a property quickly indicates to your clients and all the other people involved your level of expertise and education. The agent’s ability to describe a property will either increase or decrease the client’s faith in your ability. The clients pick up these types of inconsistencies and it will undermine agent’s credibility. Do not rely solely on the listing information, many times these contain mistakes and misinformation. Everyday I receive requests for inspection prices. It is the exception to receive a call for my qualifications. When one understands that a home inspection is free then it can only make sense to retain the services of the most qualified and experienced inspector available. What are the inspector’s qualifications? Does the inspector belong to a trade organization? Does the inspector carry any supporting licenses? What is the inspector’s work history? How many inspections has the inspector performed? These are some of the questions the Home Buyer should be asking prior to hiring a Home. Every Real Estate Agent should understand that the price of the inspection is inversely proportional to the probability of having an unhappy customer i.e. the price of an inspection is inversely proportional to the probability of being named in a law suit. Agents who shop price rather than qualifications are breaching their fiduciary obligation to their client! The Agents mistakenly expose their selves to liability when they shop for the cheapest price. Educated, competent home inspectors will inevitably charge more than a lesser-qualified inspector. The likelihood of an inspector finding issues worth more than the cost of the report is extremely high. The information provided by the report will allow the buyer to negotiate for repairs that far exceed the cost of the report. When the negotiated repairs exceed the cost of the report than all further information is a “bonus” to the buyer. The information in the report can be used to extend the life of the house systems and save even more long-term maintenance and repair costs. When an Agent realizes the reports are free, then it makes sense for the client to obtain the highest quality report available rather than a cut-rate report. From the Agents point of view, if you are going to get a home inspection, be sure to get the most detailed one available in order to limit your liability. Again, by advising your client to obtain the cheapest report you may be negligently referring your client and be liable for a substandard inspection. I routinely receive requests from agents for prices, but rarely qualifications. By shopping price an Agent greatly increases the probability of obtaining a substandard report and a possible negligent referral action. A prudent Agent would recommend shopping qualifications first to protect the Agent and the Client from a poor report. A prudent Broker would require superior inspection reports in every aspect of their business. I was handed a flier from a franchise inspection company recently stating. “We will inspect any home up to 5,000 square feet for $275.00. Interestingly there was no statement regarding the inspector’s qualification and membership association; not to mention any Standards of Practice. 5,000 square feet for $275.00 should be an automatic red flag for an immanent law suit. No inspector can stay in business for long at these prices. Trust the Seller? When you take a used car to a mechanic to determine if the car has any serious problems do you allow the seller of the car to choose the mechanic? Accordingly, the Buyer’s agent should not allow the Seller or the Seller’s agent to choose which company is to inspect the roof, chimney, or any other mechanical systems because of the inherit conflict of interest. The natural inclination for the Seller or Seller’s Agent to choose an inspection company that is more likely to provide a favorable result is a natural conflict of interest; selling Agents quickly learn which inspection companies will accommodate their needs. The custom of allowing the seller to choose and pay for the inspection company is improper. This custom does not serve the interests of the Buyer and promotes the possibility of manipulation and deceit by the seller or listing agent. It should always be clear to the buyer “who is working for who” so that any conflicts of interests can be identified. Service providers hired by the seller or the seller’s agent work for the seller and do not necessarily act in the best interest of the buyer. Occasionally there will be times where the seller is contractually required to pay for a home inspection. In these instances the agents should be extra careful to be sure to consider the consequences of addressing the report. It is important to provide the inspector with the proper information so that the report is addressed to the proper person. Even though the seller is paying for the report, the buyer should still be the client named in the report in order not to breech the confidentiality agreement in the inspection contract. If the seller is named in the report, then the buyer becomes a third party in regards to the inspection and may not obtain all the possible benefits from the inspector; and it could cause problems with the inspector’s E&O insurance. In addition, when the seller is also the client then there is always the possibility of collusion. Effectively the report has become a listing inspection without allowing of confirmation of the report’s findings by the buyer. If the seller is contractually bound to pay for the report the buyer should still be the client named in the report. The inspector does not care who pays for the report or what is stated in the purchase contract, only who signs his contract. To Whom is the Report Addressed? It is interesting to see the headings on the various system reports. They are usually addressed to the seller’s or Broker, sometimes even to the escrow company, but rarely are they addresses to the Buyer, the one person for which the report is created. In order to limit liability, inspection reports should be ordered by the Buyer or the Buyer’s Agent. The reports should be addressed to the Buyer, not the Agents, Real Estate Company, Seller, or the Title Company. Always remember, the ultimate test for any Agent is how a jury would interpret their actions. When you have a defective inspection addressed to the Listing Broker, sent to the escrow company and ordered by the Listing Agent and the Buyer is accusing you of collusion, how will you defend your actions? You may very well have acted properly, but if you look guilty then the jury may say you are guilty. Every one of the Agent’s actions regarding the inspection process must be handled as if it were to be reviewed by a jury. Most Home Inspector approach their inspection with this attitude because of the high liability involved. I recommend that an agent should view the Home Inspection process similarly. It is a sad state of affairs when a report must be written in a defensive legal posture rather than in a user-friendly format. Be Prepared and Be Professional Here is some basic information the Agent should be able to provide a Home Inspector when making the appointment. The Agent should be able to provide the following information when ordering an inspection: 1) Address of the subject property 2) What city 3) Nearest cross street 4) Square footage of the property 5) Age of the property 6) Any known defects or issues at the property 7) Any issues on which the client or agent want the inspector to review? 8) Does the home have a crawlspace, basement or a concrete floor? 9) Is the home occupied? 10) Name, phone number of the appropriate Agent 11) Name, phone number and address of the Client Ideally The Home Inspection should be scheduled first prior to other inspections. The Home Inspection should used by the Buyer as a basis for determining any subsequent inspections. While Home Inspectors are not specialist in any one field they do have a superior understanding of how the various system are interrelated and have enough knowledge regarding the individual systems to determine if there is a need for a more detailed evaluation. The logistics of proper scheduling is difficult given the misunderstandings of the inspection process and the contractual time limits. Lets’ Send The “General Inspector,” Last? I performed an inspection on a little house some time ago. I was the last inspector on the property behind the pest inspector, the fireplace specialist, the roofer and several other specialists. In the old days before there were home inspectors, it was customary for the agents to schedule inspections based on past experience and intuition. More recently, the more experienced agents are beginning to change the way they schedule the various inspections for their Clients and have the home inspector visit the property before any other inspectors. It is not uncommon for the home inspector to find issues that where missed by the previous specialist which causes confusion in the repair process. The information in the home inspection report should be provided to any subsequent specialist prior to their visiting the property in order to eliminate confusion and provide better service to our Client. Home inspectors are trained to know a little bit about all the systems in residential housing and at a minimum should be capable of detecting deferred maintenance issues and defective issues that are in need of further review. What I have come to understand is that the more experienced home inspectors probably know more about the systems in the homes and their safety issues than the specialist who are hired to repair the systems. It is a sign of the changing times. Most years I receive around 50 hours by participating in the various educational programs. In contrast it takes 40 hours of continuing education every four years to maintain my Real Estate Brokers license. To my knowledge there are no requirements for contractors to obtain any continuing education, although I am sure the successful contractors are continuously learning about their trades, but their employees may not be receiving any continuing education. I always recommend that the home inspector be the first inspector in the home. After reviewing the home inspection report with the Clients the balance of the inspections can then be scheduled on the property based on real information and not just past experience. The whole point of obtaining a home inspection is so that a Client can make an informed decision on whether or not to purchase a property, and have reasonable expectations of what is required to bring the property up to the Client’s requirements. Not every issue has to be repaired, but every reasonable issue should be disclosed to the Client prior to the close of escrow. Home inspections are a relatively new industry; the Real Estate Industry is slowly learning just how important a home inspection can be for a Client, and his pocketbook. There’s a Whole Lot to Them There is an important lack of qualified fireplace inspectors. Most people do not realize that masonry and factory built fireplaces have a design life of about 20 to 25 years. As the systems approach the end of their design life the amount of reportable issues increases until the cost of repair become prohibitive. Masonry fireplaces are old technology and are built basically the same way since the early 1900’s. Masonry fireplaces are a high-risk system that should be cleaned and evaluated every year. National Fire Protection Association (NFPA) 211 Chapter 14 guidelines require a “Level 2” inspection upon the sale of real property. This document is accepted as the industry standard for proper chimney inspections. It is widely used by knowledgeable and competent fireplace inspectors, but it is not yet incorporated into Home, Home Inspector, Home Inspections, Home Inspection, Property Inspections, Property Inspector, Home Consultant, Property Consultant, Home Inspector Turlock, Home Inspector Merced, Home Inspector Los Banos, Home Inspector Turlock, Home Inspector Modesto, Home Inspector Manteca, Home Inspector Hughson, Home Inspector Tracy, Home Inspector Stockton, Home Inspector Lodi, National Fire Protection Association (NFPA) 211 Chapter 14 Inspection of Existing Fireplaces Hello...This is the fireplace Standard To Which You Will Be Held Accountable National Fire Protections Association (NFPA) Level 1, Level 2 and Level 3 Inspection Guidelines. The complete text is found in the NFPA 211 Standards for Chimneys, Fireplaces, Vents, and Solid Fuel-Burning Appliances, 2003 Edition Chapter 14 Definitions: A.3.3.1.1 Readily Accessible (for Inspections): Readily accessible can be described as quickly or easily reached for inspection, maintenance, or repair. Readily accessible would not require the use of tools for opening or removal of any panel, door, or other covering, nor would it require the use of ladders. A,3.3.1 Accessible (for Inspections): Access can be described as being reached for the purpose of inspection, maintenance, or repair. Access could first require the movement or removal of a panel, door, or other covering, the use of ladders, and/or the use of common tools, such as a screwdriver or wrench. Access does not require any destructive actions to the building or property. 3.3.61 Non-Accessible, Concealed (for Inspections): Not capable of being exposed for inspection, maintenance, or repair without damage to the chimney or building structure or finish, or without the use of special tools. Level 1 Inspection: Scope: Readily accessible areas of chimney, structure, and flue. Lack of obstruction or combustible deposits in flue. Basic appliance installation and connection. Degree of Access Required: Shall include readily accessible portions of chimney exterior and interior; accessible portions of appliance and chimney connection Circumstances: Annual inspection as required by Section 13.2. During routine cleaning of chimney flue. Upon direct replacement of a connected appliance with one of similar type input rating, and efficiency Indications: A Level 1 inspection is indicated when verification of the suitability of the chimney for continued service, under the same conditions and with the same appliance or appliances, is needed. Level 2 Scope: All subjects of a Level 1 inspection. Proper construction and condtion of accessible portions of the chimney structure and all enclosed flues, Proper clearances from combustibles in accessible locations. Size and suitability of flues for connected appliances. Degree of Access Required: Shall include all accessible portions of the chimney exterior and interior, including areas within accessible attics, crawl spaces, and basements, and accessible portions of the appliance and chimney connection. Shall include inspection by video scanning or other means of inspection. Circumstances: Upon addition or removal of one or more connected appliances, or replacement of an appliance with one of dissimilar type of input rating of efficacy. Prior to relining or replacement of flue lining, Upon sale or transfer of the property. After an operating malfunction or external event likely to have caused damage to the chimney. Indications: A Level 2 inspection is indicated when verification of the suitability of the chimney for new or changed conditions of service is needed, or when a Level 1 inspection is not sufficient to determine the serviceability of the chimney. Level 3 Scope: All subjects of Level 1 and Level 2 inspections. Proper constructions and condition of concealed portions of chimney structure and enclosed flues. Proper clearances from combustibles. Degree of Access Required: Shall include external and internal portions of the chimney structure, including concealed areas of the building or chimney. Shall include removal of components of the building or chimney where necessary. Removal of such components shall be required only as necessary to gain access to areas that are the subject of the inspection. Circumstances: Where necessary for the investigation of an incident that has caused damage to the chimney or building. Where a hazard detected or suspected as the result of a Level 1 or Level 2 inspection cannot be fully evaluated without access to concealed areas. Indications: A level 3 inspection is indicated when the construction of all or part of the chimney is deemed critical to the renewed or continued use of the chimney. A Level 3 inspection shall be required only for those areas that cannot be properly evaluated by a Level 1 or Level 2 inspection. To be sure a chimney is not cracked, it should be “scoped.” A camera is inserted into the flue so that at close up view of the flue to view any cracks. Any crack in the flue is a fire safety hazard and must be replaced or retrofitted. Cracked flues cannot be repaired in place without relining the flue with a “Listed” repair design. Ask your chimney inspector what is included in a Level 2 inspection. If they cannot answer then find another inspector, quick. There are many inspectors who perform fireplace and chimney inspections but are not qualified. What is worse, these fireplace inspectors do not even know that they are not qualified. Just because a person has been building or cleaning fireplaces for years does not necessarily mean they are qualified to inspect a fireplace. There are many chimney sweeps that have been cleaning fireplaces for years but do not have the proper training to perform a proper inspection. Recently has this lack of industry knowledge been address by a few qualified schools and organizations. I attended the Fire Investigation Research & Education Service, more commonly known as F.I.R.E. and became a Certified Fireplace Inspector. www.F-I-R-E.com After having inspections approaching 3,500 homes, almost all of them including fireplaces I realized how much I did not know about fireplaces and chimneys. During my training I quickly came to understand that fireplaces are a complicated and specialized system that requires proper training to inspect and report properly. Most fireplaces are not receiving proper inspections and are deficient in some way. Fireplaces are an extremely high liability issue. Wood Stoves and Inserts Homeowner Installed Nightmares Wood burning rules for stoves and fireplaces Effective date As of November 1, 2003, there will be rules regarding the burning of wood and other solid fuels here in the Exemptions · The burning of gas or propane will not be affected · Homes that rely on wood burning as the sole source of heat. · Existing homes above 3,000 feet in elevation. · Areas where natural gas service is not available. 1-209-577-6400 How Do You Know the Smoke Detector Works? The seller is required to provide a certificate stating the smoke detectors is operating. The Standards of Practice do not require the Home Inspector to test the smoke detectors. Some Inspectors will push the test button to see if the bell works and the battery is charged. Some Inspectors will even spray simulated smoke into the unit to test the sensor system. Pushing the test button only tests are the bell and the battery. The test button does not test the sensor system and does not insure the proper operation of the unit. The unit could still be defective and still respond to the test button. There is the danger of the test button sticking in the on position and the bell not stopping. Many Inspectors refrain from pushing the button for this reason. Spraying simulated smoke into the unit will engage the sensor system is but the debris from the smoke may well coat the sensor and prevent future operation. There is considerable controversy concerning the use of simulated smoke and it is well outside the Standards of Practice. I feel it is important that at least some effort be made to test these units. I push the test button if I can reach it with my finger and disclose in the report the probability of failure as the units’ age. Past research has shown that smoke detectors that are 8 years old will fail to respond to an emergency condition 50% of the time. There are over 77 million outdated smoke detectors in the There should be at least one smoke detector located on the ceiling between the Air Conditioning return air register and the bedrooms. Do not confuse battery powered smoke detectors with battery back up smoke detectors. A hard wired smoke detector must have a battery backup to insure operation in the event of power loss. There is nothing to stop the installation of battery operated unit in additional areas if so desired by the Buyer. Because of their low cost I recommend that there be a smoke detector in the bedrooms, hallway, attic and garage for increased fire safety. Smoke Detector Law In houses and manufactured housing How Do You Know if it Works? How Do You Know if it Works? Carbon Monoxide detectors look very much like a smoke detector and perform a similar function. A carbon monoxide detector is not required by law but it does add significant protection in case of fire. Carbon monoxide is a colorless and odorless gas that is created by improperly operating gas fired appliances. A properly operating natural gas flame does not create any appreciable amount of carbon monoxide. Natural gas combustion creates only water and Carbon Dioxide both of which are harmless in reasonable concentrations. Carbon Monoxide is created when there is an improper air to gas ratio, if there is improper combustion air supplied to the flame, or if the flame impinges (hits or touches) on the heat exchanger. Carbon Monoxide is an insidious gas that can cause multiple symptoms depending to the exposure levels. The symptoms are dependant on the concentration and the length of time that a person is exposed. They can range from chronic headaches to death. Many times a chronic illness is difficult to diagnose and the problem is traced back to a defective furnace or water heater that is emitting carbon monoxide. If the inspector ever expresses concern over carbon monoxide the agent should use extra caution to insure the inspector’s recommendations are followed to the letter. People can and do die from carbon monoxide exposure. If somebody dies due to carbon monoxide then you can be sure that everyone involved with the transaction will be named in the resulting lawsuit. By then it’s too late to mitigate any liability and you could be partially responsible for somebody’s death. I do not inspect carbon monoxide detectors. I suspect carbon monoxide detectors wear out over time much way as smoke detectors and recommend that they be changed out after 4 years. In addition, there is much controversy regarding the proper placement of CO detectors. Carbon Monoxide is very nearly the same weight as air and will slowly collect at the ceiling levels if there are no air currents. Any air movement may cause the Carbon Monoxide to collect at a lower level. I recommend that Carbon Monoxide detectors be installed at the ceilings next to the smoke detectors and about 18" above the floor level under each Carbon Monoxide detector to be sure that all the likely areas are covered. They Can Be Dangerous! Every home owner should know some basic information regarding their hot water heater. While the units are very safe when the equipment is in operating condition, many times age, neglect, or incorrect installation or repairs can defeat the safety equipment. Most people do not realize the explosive force inside a water heater is the same as a pound of TNT. The "TPR" or the "Pressure/Temperature Relief valve is usually located on the top or side of the unit and is designed to release the pressure when the temperature reaches 210 degrees or when the pressure reaches about 140 pounds in order to keep the unit from exploding. A water heater can blow out entire rooms in a home if they burst. The resulting steam scalds anybody in the blast area and the resulting injuries can be devastating. If you notice any corrosion or leaking on the safety valve, any damage or plugging of the relief piping you should immediately have the system evaluated and repaired by a qualified plumber. The safety valve only costs $30-$40. There are very specific requirements for seismic strapping on the water heaters. The purchase contract requires that seller supply the buyer with a certificate stating that the water heater is properly seismic strapped. The State of There is the common misconception that the reason for seismic strapping is to prevent gas leakage from a broken gas lines. While broken gas lines are an important fire safety hazard, another equally important issue is the possibility of broken water lines. Large numbers of broken water heater supply lines can lower the municipal water pressures and decrease or eliminate the ability of firemen to fight fires in the nearby areas due to lack of water pressure. This could be a disaster in an emergency condition. Boiling Sounds Honey, what is that licking noise? The typical water heater is rated to last about 9 years. One important clue that your water heater is nearing the end of its life cycle is when you begin to hear boiling and clicking noises inside the tank during a heating cycle. Minerals from the water will collect at the bottom of the tank. This debris looks very much like heavy sand and can fill the tank up as high as 24 inches. This deposit is called a “Pill.” This mineral debris will trap the water between the bottom of the tank and the bottom of the sand; when this water boils it creates a bubble and lifts the debris off the bottom of the tank. This is what you hear when there are the boiling and clicking sounds. These deposits decrease the heating efficiency of the unit and decrease the capacity of the unit. When you hear these sounds it is best to begin to budget for a new water heater in the near future. Why is that fitting so crusty? Another important clue is corrosion around the fittings. Obviously free water on the unit will indicate a leak in the pipes but when you see corrosion but no water it probably means there is a Temperature Sensitive Leak in that fitting. When the temperature is just right the fitting leaks a tiny amount of water. When the water reaches the surface of the fitting it evaporates and leaves behind the corrosion that you can see but no free water. Sometimes this corrosion can be seen at the upper or lower portion of the tank. This is another important clue that your water heater is nearing the end of its life cycle. Why Can’t YOU Smell It? Have you ever had an odd odor at one of the faucets in your home? This can be caused by anaerobic bacteria in the water heater tank. The bacteria give off hydrogen sulfide gas that collects at the end of the water pipes and can be smelled when the water is turned on. It has been proven that women 3 times better at smelling than men; accordingly, odors can drive male plumbers crazy. Many times the house wife will insist there is an odor and the plumber just thinks she is crazy. Cleaning out the tank with bleach, or better yet, a new water heater, may solve this elusive problem. This is serious stuff! Any time there is a possibility of storing flammable liquids near a water heater the ignition source is recommended to be 18" above the floor. This is a fire safety hazard. Industry Standards recommend raising water heater 18" off floor for fire safety. This includes electric water heaters; in addition I recommend installing drip pan for increased protection in case of a water heater leak. A leaking water heater may not be noticed for some time and is a likely cause mold in the resulting wet walls. Mold can be a devastating condition for some houses. A drip pan is cheap insurance to protect your home. Here is the law for Water Heater Seismic Strapping in Residences 19211. (a) Notwithstanding Section 19100, all new and replacement water heaters, and all existing residential water heaters, shall be braced, anchored, or strapped to resist falling or horizontal displacement due to earthquake motion. At a minimum, any water heater shall be secured in accordance with the California Plumbing Code, or modifications made thereto by a city, county, or city and county pursuant to Section 17958.5. (b) The seller of any real property containing a water heater shall certify to the prospective purchaser that this section has been complied with. This certification shall be made in writing, and may be included in existing transactional documents, including, but not limited to, the Homeowner's Guide to Earthquake Safety published pursuant to Section 10149 of the Business and Professions Code, a real estate sales contract or receipt for deposit, or a transfer disclosure statement pursuant to Section 1102.6 or 1102.6a of the Civil Code. (d) For the purposes of subdivision (a), "water heater" means any standard water heater with a capacity of not more than 120 gallons for which a pre engineered strapping kit is readily available. (e) Notwithstanding Section 669 of the Evidence Code, the failure of any person to comply with this section shall not create a presumption of a failure by that person to exercise due care. Just spend the $12 and strap the stupid thing. You may save some kid from being burned alive! There is some controversy regarding whether a water heater in a mobile home on a leased lot is required to be strapped. Technically this is not Real Property and not covered by Real Estate Law. Many listing agents for mobile homes routinely state that the strapping is not required. Most attorneys indicate it is not clear cut and subject to interpretation. Do not make this mistake. If something goes wrong and it can be blamed on the water heater you can be sure the opposing attorney is going to point out that water heater strapping is required on every 1 to 4 unit transaction in the state and that you had the opportunity to install the strapping. Always keep in mind how a jury will respond to your actions. If the lack of water heater strapping goes to trial and you use the leased lot excuse you will lose. The jury will have to consider if a $12.00 water heater strap could have eliminated the hazard. Remember, water heater have the best safety record of all the appliances in the typical home but when they malfunction they typically result in a steam explosion with terrible scalding injuries, or fire from gas explosion. When a water heater malfunctions it can be catastrophic. 18031.7. (a) Nothing in this part shall prohibit the replacement of water heaters in manufactured homes or mobilehomes with fuel gas burning water heaters not specifically listed for use in a manufactured home or mobile home or from having hot water supplied from an approved source within the manufactured home or mobile home, or in the garage, in accordance with this part or Part 2.1 (commencing with Section 18200). Be Sure to Fill Out the Required Disclosures Lead along with other heavy metals can cause all sorts of health problems, especially in growing children. Once lead enters the body it is hard to remove and accumulates until it becomes toxic. Lead enters the body by being either eating or by breathing in the dust. Lead was used in construction prior to about 1978. The paint manufactures were allowed to use up existing stocks of leaded paint so some leaded paint may have been used after the 1978 date. Do not use the 1978 date as an exact date but as a guideline. Children have been known to eat the flaking paint chips in deteriorating buildings, which caused multiple health problems. These flaking paint chips can become air born if they are sanded during a remodel or retrofit. If there is known lead paint present then any workmen in the area should wear respirators and environmental suits. The simplest way to remediated lead paint is containment, that is to say, apply another coat of paint over the deteriorating lead paint in order to glue it to the wall and prevent any chips from coming loose. Personally I am far more concerned with lead paint dust than any asbestos hazards. Inspecting for lead is well outside of the standards for a home inspection but every inspector should be aware of the basics. If the inspector expresses a concern about lead then the agent should carefully follow his advice. There are very strict requirements from the State of A copy of the EPA’s “Protect Your Family from Lead in Your Home” is included in the appendix. Disclose Everything Up to the Close of Escrow If a seller becomes aware of any “adverse conditions materially affecting the property” (something breaks) or any “material inaccuracy in disclosures” (mistake in disclosure) the client is obligated to inform the client of the condition. There is no time frame in mentioned in the contract but one would assume it would be within a few days. This information should be included on the Transfer Disclosure Statement as an addendum and as such could allow the buyer to cancel the escrow all the way up to the day of closing if not disclosed in a timely manner. Listing agents should urge their clients to be truthful about the condition of the property. This is important to understand in case something that was reported in the home inspection as “operating” but was inoperative at the close of escrow. The home inspection only says that the item was in working condition at the time of the inspection. No warranty is implied or offered by the inspector. This is another reason why the final walk through is so important Now We Get to the Meat of the Coconut A. The home is sold in its condition as of the signing of the purchase contract. It is the owner’s responsibility to maintain all the systems in the home in the same condition as of the date the purchase contract was executed. The Deed of Trust that secures the seller’s loan almost always requires the home be maintained. in order to insure the value of the secure the loan. The lenders want the owner to maintain the home in order to protect their collateral. Accordingly the seller is not only required by the purchase contract to maintain the home in its “present condition” but by the Deed of Trust as well. This is important because many times a disgruntled home owner will become aware of a relatively minor problem with the home and intentionally neglect that problem. This is why a final walk through inspection is so important. The condition of the home must be confirmed just prior to the close of escrow and confirmed by the buyer so that they cannot come back and say “the plants are dead” or the floor is stained. The list goes on and on. B. This is the seller’s “I told you so” clause. It is important that the agents insist that all the concerned parties disclose everything they know about property. Insurance claims usually do not become an issue until the end of the escrow period when the buyer contacts his insurance agent to obtain a property policy and discovers that there was an insurance claim last year and that the property was uninsurable; everybody loses in this instance. I recommend determining the insurability of the subject property during the inspection period. The agents should always ask the escrow company to run a statement of identity during the inspection period to make sure there are no liens or judgments against the buyer. Discovery of an unknown judgment can and often does cause a transaction to fail. C. I am amazed that a potential buyer would decline to obtain a home inspection after reading this clause; especially when they are asked to sign a disclaimer stating that they had the opportunity to obtain a home inspection and declined; extra especially when the inspection is virtually free. D. This section explains the options the buyer has in regards to the inspections. It is self explanatory. The contract is silent to issues or conditions that are discovered during the final walk through. The length of time of any inspection is not specified. I have had several instances where the seller felt that I was taking too long and asked me to leave. On two occasions I had the listing agent and one time where an escrow coordinator told me to leave the job. In these cases the listing agent and seller take on all the responsibility of undiscovered issues in the home. The buyer has every right to spend as much time as he or his inspectors need to complete their inspections. Why don’t they just require a home inspection? What does really mean? A. The purchase contract expressly prohibits “invasive or destructive” inspections without the Seller’s prior written consent. Obviously this is intended to prevent someone from cutting holes in a floor or wall for inspections, but what does invasive really mean? The CREIA definition of destructive is as follows right out of the Standards of Practice: A. A real estate inspection is a survey and basic operation of the systems and components of a building which can be reached, entered, or viewed without difficulty, moving obstructions, or requiring any action which may result in damage to the property or personal Survey is defined by the Random House College Dictionary as: “to view, consider, or study in a general or comprehensive way.” Inspectors are not required to take off any inspection panels. Always ask yourself what an ordinary person would take apart as normal maintenance? Ordinary people are afraid of electricity and will not take anything electrical apart. Dead front covers (the inner cover in an electric panel), the covers on disconnect boxes, furnace covers, the cover over the kitchen hood, the panels on gas fireplaces are not required to be removed during a home inspection but many times some or all of these things are removed for evaluation by a experienced inspector. Exceeding the standards of practice is up to the inspector’s level of education, experience and a “probable cause,” much like the intuition used by a policeman or detective. Remember, do not expect too much for a general home inspection. A qualified inspector is underpaid for his services and there is a limited amount of time available for the inspection. Trim should never be taken apart. Covers on ovens, fireplaces or dishwashers all have a finish to them that could be damaged if taken apart and require extra time to remove and take on the liability of any cosmetic damage from the owner. Every agent and inspector has experienced the mini blind that when pulled comes loose from the wall and falls onto the ornamental decorations on the window sill; likewise, any cosmetic damage becomes critical. Owners can be very critical when they think they may have an inspector over a barrel. “That doodad was my great grandmother’s and is priceless!” Now what do you do? Don’t Even Get Me Started Building code inspections are prohibited by this section. Home inspections do not perform code inspections for multiple reasons that will be discussed. The seller must approve in writing any governmental code based inspection. Code inspections would cause a tremendous amount of work and probably be impossible to pass. Building codes are designed for new construction and have a limited value for existing housing. The code issue is discussed in detail later in this document. Here is an article I wrote for CalNachi which was posted on their web site. CalNachi.org Two Standards: Home Inspectors are held accountable for two standards of practice. The first is the practical standard by which a client will be provided the necessary information to make an informed purchase decision. This is the standard the client expects the inspector to meet in order to compliment his purchase transaction. The second standard is the one that is determined in a court of law. It is based on the B&P Code 7195-7199 and the standard of care for the home inspection profession in that geographical area. There is significant conflict between the two standards that must be recognized by the inspector so that he might provide useable information to his clients and still minimize his legal liability. The standards of practice provided by the various inspection organizations are very similar. After reviewing them carefully, it becomes clear they are conflicted in that they are designed to speed up the inspection thereby increasing profit at the expense of being thorough. While they raise the minimum standards above the B&P Code 7195, they still are minimal and provide for only a basic inspection. In my opinion, there is a need for an escalating scale of standards allowing for a more complete inspection could be performed and still be covered by a yet to be invented higher standard. This would allow the more detailed and experienced inspectors to charge the appropriately higher fees for the product they are already providing. It takes me at least 3.5 hours per home for a very simple inspection, plus another two hours of office time to complete the report. The required time increases significantly with the difficultly of the property. Include with this a 1.5-hour walk through with the client, travel time and I can only perform one inspection per day. I will never get rich this way, but I feel good about my job. Inspectors who go through a home in 1.5 hours may somehow meet the minimum standards but they do not provide the necessary information for an informed purchase decision. Uncertainty: There is some uncertainty in the inspection industry regarding the proper way to report a potential liability issue. The difficulty for the inspector lies in how to determine the difference between the issues to which an inspector may be held accountable in a court of law, i.e. an imminent hazard or code violation, and what is functionally safe. While an inspector may choose not to report a seemingly insignificant code violation, that same code violation could be presented in a court of law as negligence to a jury. The inspector is therefore forced to provide information that will not only influence a purchase decision but also the information that could be interpreted in a court of law as a safety hazard. Thus, for liability reasons both standards must be reported even though code inspections are clearly not included both by contract, and by the standards of practice. Including these liability-reducing issues in the report serves not only to increase the length of the reports but also irritates the real estate agents, and confuses the clients. For example: “Mrs. Client, having both the neutral wire and the ground wire under the same lug is a clear code violation but it is still functionally safe.” “Well Mr. Inspector, how can it be both a code violation and still be safe? I am so confused.” Well, so am I. This is a difficult question but goes directly to the subject, how does this finding influence the client’s purchase decision? The home inspection industry would be well advised to emulate the teachings of every real estate agent in this regard; prepare every transaction (inspection report) as if it were going to be presented to a jury. Note: Quoting building codes in a report is never recommended as that may be used by an attorney to suggest the entire report is a code inspection. While this advice has been around for as long as I have been in the business, I have never seen any case law to support this assertion. If anyone has any case law in this regard, please share it with us. Applicability: The applicability of building codes has a variable function of importance dependant on the age of the home. Codes are of a decreasing importance as a home increases in age. It is impossible to rationally apply a building code to a home built in the early 1900’s, as codes were not available to be adopted, much less enforced at that time. As the age of the home approaches the mid 1970’s when the more modern codes were adopted, they become more important. Moreover, as the age of the home approaches a new home, the codes importance proportionally increase until we reach the new home inspection, (the new home walk through) where codes are of their highest importance. Even at the new home walk through inspection the codes are not the only standard; the manufacturer recommendations, and building practices must still be included. Thus, codes move through a spectrum of lower to higher importance to the home inspector and homebuyer. Conversely, the older the home, the more the inspector must rely on alternate sources of information and training to determine whether a particular system is safe. The older homes require the inspector to understand why a system is deficient rather than relying on the “cook book” building codes. Only by understanding why a system is deficient or unsafe, can an inspector apply his knowledge and provide his customer with the appropriate purchase information. Manufacturer’s installation instructions become more and more important as the age increases. Ultimately, the inspector should report his findings in such a manner as to inform the client of the basic reasons on which a finding was based. The inspector must never forget that codes are not retroactive. They apply only to new construction. Take for example the electric panel on a mid 1970’s home. It has been suggested that only a code inspection can be performed in this instance. I disagree. First, the inspector must look at the electrical system and note if it has operated for the last 35 years without serious failure. Next, it is a Federal Pacific, or a Zinsco panel, or some other manufacturer that has inherit design problem that may require replacement? Is the outside of the panel badly deteriorated? Are the doors present? Are there holes in the panel allowing children access to the energized components? Is this panel worn out? The insurance industry typically depreciates an electric panel over 15 years. Is there sufficient access to the panel as required by code? Is there reasonable access to the panel? Current codes do not allow the panel to be placed inside a closet but many older homes have sub panels in all sorts of odd locations. Does the client really care where the panel is located? Relocating these panels is costly and not necessary. These are not code issues per se but they are related to the manufacturer recommendations, which supersede the code. These are issues that may be important to the client but they require a combination of code and practical knowledge to provide useable information to the client. Police Power: The government enforces building codes by the use of “Police Power,” http://www.answers.com/topic/police-power?cat=biz-fin and as such are not subject to the usual democratic process to which Imposing current codes on older homes would throw the entire real estate industry into unnecessary chaos. Having said that, every experienced home inspector has seen such poorly installed systems as to be negligent with absolutely no oversight that place the occupants at risk. Unregulated flips, additions, and changes need to be more closely monitored not only to protect the occupants but also to keep the nation’s housing stock healthy. In my opinion, only a licensed general contactor should be allowed to “flip” a home, as there are far too many fraudulent flippers in the resale market. Also, in my opinion, our tax system should be revised to promote long-term ownership of homes and penalize speculators who take advantage of the industry for short-term profit. Many of our current industry problems are related to speculation and uncontrolled greed. Whether this may seem right or wrong, this is the reality of the home inspections industry Scare Tactics: The new inspectors are subject to all sorts of influence and pressures from trade organizations, vendors, schools, and other inspectors with a personal agenda. It takes years to understand the home inspection business and how it relates to the real estate industry. There are people who will extol the importance of becoming “code certified” and recommend joining the International Code Council. Others will tell you to pay your tuition and go to school to learn to be a home inspector as if a true profession can be learned in two or three weeks, or even a year. In addition, there are trade organizations who demand proctored testing prior to acceptance. All these entities presume to have all the answers and will demand to be paid for their services. The new inspector must quickly learn to differentiate between meaningful training or possibly go out of business. These pressures are used to scare the hell out of the new inspector but if he stays in the business, he will realize that they use fear to induce participation. In my opinion, the real and final answer is this: it does not take much training to meet the minimum requirements of Business and Profession Code 7195-7199. A minimum home inspection does not rise to the level of a “professional” inspection but only a “tradesman” inspector. Any reasonably intelligent person can meet these standards with some training and a few ride alongs. The problem is that this minimum inspection does not provide the necessary information to allow a client to make an informed purchase decision. A home inspection is the beginning inspection on which every thing else is based. It is the first inspection in a long line of inspections and research that instigate the fireplace inspection, the roof inspection, and HVAC systems, ultimately moving up to structural investigations, environmental, mold, asbestos, and lead. Each one of these ancillary inspections can have a significant impact on the appraised value of the home, thus home inspections are a form of an appraisal. If the inspection does not induce the client to move forward with the “appropriate specialist,” then the client will be at risk for a poor investment i.e. unforeseen expenses. When the inspection finally provides for a truly informed purchase decision, the inspection then meets the threshold for a “professional” designation. A professional home inspector is truly a powerful tool for the homebuyer. I foresee the day when there will be a B.S. degree for a “residential hygienist” that will encompass all the facets of home inspections. Conflicted Interests: Home inspectors have the least amount of influence in the real estate industry. Accordingly, they do not receive the industry wide respect that a well-trained and experienced inspector deserves. While inspectors may not have industry wide influence, they do have a definite influence on the client. What is not commonly known is that the home inspection report is the only document prepared specifically for the client during the purchase process. Every other document has dual functions to benefit the other participants in the purchase transaction and only protects the client secondarily. While the client is presented with mountains of agent disclosures, loan documents, transfer disclosure statements, etc. virtually all of these documents are designed to protect the agent from litigation. It is interesting to note our clients, (the typical homebuyer) do not have representation at a legislative level that they deserve. They are left to the conflicted interests of their agents. Lobbyists represent the lenders, title companies etc; virtually every real estate related business is represented. In addition, one of the most powerful lobbies in the nation represents the real estate industry. Even the lowly home inspection industry is represented, barely, but the homebuyer has no lobbyists to protect their interests. The basic precept in a capitalistic society is that everyone acts in his or her own best interests. While real estate law says that an agent must use fiduciary duty when dealing with their clients, it is rare that this is the case. Agents are salespersons in the business of selling property. Anything that interferes with this process is eliminated. Accordingly, the more detailed an inspector, the less likely he is to receive referrals from the agents, particularly the higher volume agents with their salesperson personality need to close the deal ASAP. High volume agents need to have easy home inspections in order to close the transactions and make their money. The high volume agents require an inspection that is just enough to convince their clients that an inspection has taken place, but not so much as to jeopardize the close of escrow. Conversely, the lower volume agents tend to have a more personal tie to their clients and are a little more concerned with their client’s welfare. These agents usually use a more detailed inspector. This is probably part of the reason why these agents are not higher producers. Safe Enough: How safe is safe enough? Somewhere between living in a cardboard box and living in a padded cell, there must be a reasonable acceptable level of safety. In my opinion, every citizen must take responsibility for their own actions. Our homes in Is a This is an interesting point about the invasive or destructive investigations. The contract is silent The contract is silent to when the inspection reports are to be delivered to the Seller. I have had clients who have specifically instructed me not to give my inspection report to anybody, including the buyer’s agent, and not to give out any information what to anybody what so ever. These are usually more experienced buyer’s who have specific reasons for not wanting the seller to have the report. Sometimes they may feel it compromises their bargaining position, and sometimes it may be because they do not trust the concerned parties. In any case the buyer only has to supply the reports sometime before the close of escrow. Don’t Spread Around These Reports Every Broker should be aware of THIRD PARTY liability in regards to Home Inspections. The buyer can take as long as he wants There is no time limit to the amount of time any inspector may stay on the property to complete his report. The listing agent will many times inform the seller that the home inspector will take only 30-45 minutes to perform his inspection. This may well be true for an inspector who is not following the standards of practice, but for a true inspection it takes at least 3.5 hours for an easy home not to mention the extra couple of office hours it takes to complete the paperwork and include the pictures. The contract specifically says the water, gas and electricity and all operable pilot lights to be on for Buyer’s investigations. I have had many instances where one or all of the utilities have been turned off, usually for non payment or to save money. A home inspector cannot completely perform his tasks if the utilities are not provided. The seller is responsible for the extra charges to return to the property to reinspect after the utilities are supplied. By law agents are exempted from needing a contractor’s license when scheduling repairs on a home under contract. But Agents need to understand that just because a permit to perform certain work may not be required due to the small scale of the project it does not mean that the work does not need to meet current code requirements. This is the one area where the codes do play a role in the inspection process. Home owners are generally not qualified to perform any substantial repairs on their homes. When a homeowner performs a repair the probability of having defective work increases dramatically; many times they may make the repair their selves in order to save money or time. Rarely does the homeowner installed repairs meet industry standards. This usually comes into play when the homeowner has performed the section 1 or 2 items on the pest report prior to the home inspection. It can be distressing to the homeowner when the inspector discovers the poor workmanship and reports it to the buyer. The buyer is immediately suspicious of all the repairs and is therefore more circumspect. It is important that the purchase contract be followed in this regard. Seller is to provide receipts for the repairs performed by others, prepare a written statement indicating what repairs were prepared by the seller and the date of repairs, and the receipts for the materials prior to the final walk through. This is akin to the pest inspector’s certification that all the work was done properly. This process is rarely followed and can lead to a poor experience for the buyer. I recommend that the agents follow the contract in the regard to prevent a disgruntled homeowner from escalating this issue into a negligence accusation. Don’t Do IT! Occasionally a home inspector will be asked to revisit a home to inspect repairs performed that were disclosed original home inspection. While on the surface this appears to be a reasonable request but it is fraught with liability. First, reinspections are not insured. Second, the inspector can only report what he sees. He cannot comment on conditions that are hidden from view. It is unfair to try and transfer the liability for poor repairs onto an inspector. If you really want a proper reinspection the inspector must first be notified before the work is started so that arrangements can be made to inspect all the phases of the work, including parts that would normally be covered. This would be similar to the course of construction inspections for new construction. A reinspection amounts to a code inspection with all the implied liability. I will do it only for customers that I have a working relationship with the understanding that I report only what I can see and I do not inspect what I cannot see. I make no guarantee to the quality of the work. This is a grey area where an inspector must make a business decision based on the circumstances. If the agent insists on a reinspection they may be taking on the liability of non insured work and be in breach of the insurance portion of the purchase contract. In addition the E&O insurance may not cover the inspection. FOR ENTRY UPON PROPERTY Sign the Inspectors’s Contract! Sign it first! Sign it Now! Sign it for your client to cover your assets. The buyer’s agent should keep in mind that the Home Inspectors insurance is not validated until the inspection contract is signed either by the buyer or the buyer’s agent. Without the signed contract there is no inspection insurance. Failure to have the inspection contract signed is used to show negligence on the part of the buyer’s agent. By contract the agents are required to confirm that all the workmen working for the Buyer on the home carry the usual business insurances. Every agent should be aware that they can sign the contract for their client; there is far more liability to the agent and broker if the contract is not signed. In my opinion the agent should sign the contract anytime the buyer is unavailable to sign. If the buyer will not sign the standard contract, or if the buyer insists on changing the terms of the contract then I recommend passing on this client and moving on to another low risk customer. The litigation rate skyrockets when a client insists on changing an inspection contract. In over 3,500 inspections I have never had a customer refuse to sign a contract and have never allowed any changes or deletions to one of my contracts. Don’t You Want Insurance? Get the contract signed!! As an agent with a fiduciary relationship with the client you have the authority to sign an inspection agreement for your client. What is not commonly known by most agents is that the liability of not having a signed contract greatly outweighs the liability of signing a contract on your client’s behalf. There is only liability to the agent if the inspection contract is somehow defective or the inspector is not qualified, basically the same parameters as negligent referral. The IMPORTANT issues here is that the insurance companies will accept a contract signed by the agent as being sufficient to activate the errors and omission insurance. Insurance that covers the agent and the broker! If the contract is not signed then there is no insurance. It could be argued that the failure of an agent to sign an inspection contract as being negligent; and an unsigned contract as an extremely poor business decision for the broker. The agents should be using inspectors that are a member of a state organization, and they should be using a contract prepared by the state association; then there is virtually no liability to the agent for signing the contract. It is important that the Agent understand that the Home Inspector has a contract with the Client, NOT with the Agent or Broker. While the Agent is accustomed to being in control of the transaction and is used to having the auxiliary reports being issued to their selves, the Agents have no control over the Home Inspector. The Home Inspector has no contractual obligations to the Agent what so ever. From a business standpoint, a Home Inspector should involve the agent with the inspection process as necessary to build a working relationship. The Home Inspector should explain the contractual obligations to their Clients and to the Client’s Agent to insure proper understand of responsibilities for all parties involved with the transaction. In addition the Home Inspector is not a party to the purchase contract and accordingly is not required to provide extra copies of the inspection report to the other parties named in the purchase contract. The report is usually supplied to the Client and it is up to the Client to distribute the reports. The contract between the Inspector and Client usually has a confidentiality agreement and an indemnity agreement holding the Inspector harmless for third party liability. Agents distribute inspection reports at their own risk. In addition, the purchase contract is silent in regards to WHEN the copies of the various reports are to be supplied to the seller. One issue I have come across twice so far in my career is the client’s position of stating they did not receive a copy of the home inspection report prior to the close of escrow. In one case the agent forgot to give a copy of the report to the client and it was not discovered until my bill was sent out. And the second was when the client claimed he did not receive the report when it was in fact in his files in an unopened envelope. Neither case developed into a problem but the potential was there. It is common practice to have the pest report signed as received on the front page and kept in the agent’s files but this is not common practice on home inspections. I recommend that a copy of the report be signed and dated by the client be kept in the agent’s file to insure there is no misunderstanding of the client receiving a copy of the home inspection. The Agent is NOT a Party to the Inspection Contract! Most Brokers and Agents do not understand the importance of having the inspection contract signed the Clients. Almost always the Home Inspector’s Errors and Omission Insurance covers the Broker and the Agent in case of a dispute with the inspection. The E&O insurance is very specific and requires that an approved Home Inspection Contract be signed prior to the inspection in order to validate the insurance policy. If the contract is not signed there is no insurance for the Inspector or the Agent. I recommend that the Agent assist the signing of the inspection contract and that a copy be kept in the Broker’s transaction file. Claims Made vs. Occurrence. Be sure you know the difference, Occurrence Coverage is the traditional coverage. Occurrence coverage is the traditional form of insurance used to proved liability insurance during the policy period and 4 years thereafter. This is by far the superior insurance. There are several advantages to occurrence coverage for inspectors; fixed costs, long term protection(4 years), mobility from one insurance company to the next, and peace of mind, (even if the inspector is cancelled the prior inspections are still covered). But occurrence coverage is generally more expensive that claims made coverage. Claims Made Coverage is an alternate form of insurance designed to lower the insurance costs. This type of insurance covers claims made and reported for the policy period only. Any prior claims are not covered. Remember that the business and professions code requires Inspectors to be responsible for 4 years for negligent inspections. The claims made inspection insurance may not be adequate for this circumstance in Oh and don’t forget the Liability Insurance too! Error and Omission insurance is not enough to satisfy the insurance requirements in the purchase contract. General liability is also required by the purchase contract to protect the buyer for damage to the property during the inspection. Example: the inspector’s ladder falls onto the homeowner’s piano and damages the finish. This repair could be quite costly and is required to be covered by the purchase contact; besides having one very unhappy client. All inspectors should be required to have occurrence coverage and general liability insurance on file at the broker’s office. Not my problem The “Notice of Non-responsibility” is part of the mechanics lien law. It is a notice that is posted in a conspicuous place at the job site informing any workmen or material suppliers that the property owner will not be responsible for paying any of their bills. It effectively prohibits an unpaid workman or material supplier from filing a mechanics lien on the property. It’s not always 17 days The Title of the CAR Purchase contract is misleading and should be changed to “The California Real Estate Option to Purchase During the Inspection Period Contract and Joint Escrow Instructions.” The inspection period as stated in the contract is typically 17 days long but this time period can be shortened to any time agreed to by the concerned parties. What is not commonly known is that the inspection period automatically extends past the stated inspection period until the “Notice for Buyer to Perform” is presented from the Seller to the Buyer. In reality the 17 day inspection period really has little effect if the Notice to Perform is not presented to the buyer. In the case of the Transfer Disclosure Statement, the Buyer has the right to cancel the sale up to the close of escrow if the TDS is not properly delivered to the Buyer. The point I am trying to make is that there is a high probability for the escrow to cancel during the inspection period. Agents will get caught up in the momentum of the transaction and invest a substantial amount of time in opening escrows, ordering appraisals, etc. and create the unreasonable expectations in the minds of the seller and the buyers for a successful closing. All of the involved parties are disappointed when one of the inspections discovers a problem with the home and the buyer cancels the transaction. When the Agents allow the expectations of their Clients to become out of control then there is the probability for the Clients to become disenfranchised with their agent and look for alternate representation. Only after the inspections are approved by the buyer then there is high probability that the home will close. This becomes especially important in contingent sales where multiple transactions are waiting on the inspection on the first home. (This is always a 100 year old fixer upper) I recommend that the agents refrain from investing too much effort in the transaction until after the inspection reports are accepted and approved by the Buyer. This circumstance should be explained to the Buyer and the Seller so that their expectations can be controlled. The Agent can then move forward with the transaction with a reasonable expectation of a successful closing. This is equally as true for the Selling Agent as for the Buyer’s Agent. The selling agent needs to accept the responsibility for overpricing their listings. A home that is over priced or a home has some other known (including suspected conditions) but not yet disclosed condition, a condition that will ultimately be discovered during the inspection period, will require renegotiation of the sales price. Undisclosed conditions will be discovered and a request for repair or a discounted price will be requested by the Buyer to bring the sales price into an acceptable sales price. When the true value of the home is finally determined then the sales price will have to be adjusted or a new buyer will need to be located. (I believe “Listing Inspections” will become the norm as it already is in the The Selling Agent is obligated to disclose any existing reports to any subsequent buyer. I am unaware of any time limit in this regard. If you are aware of an inspection report from a previous transaction 4 years earlier you had better report it to the Buyer just to be sure that you are not exposed to any liability. Once the Seller is informed of the issues in a report he/she must disclose the newly disclosed conditions in the home to any subsequent buyers. Listing Agents who convince their clients that they will receive unreasonably high prices for their properties are doing a disservice to their client and to the industry in general. Your Last Chance to Document the Property Condition The CAR contract allows for a final walk through about 5 days prior to the close of escrow to confirm all the contractual obligations of the seller have been performed and the condition of the property is unchanged. According to the contract this walk through is not required and the agents many times do not use this final opportunity to document the condition of the property. It is my experience after having listened to many agents and home inspectors that this final walk through could be used to eliminate many complaints from unsatisfied customers and limit possible litigation. I am surprised to see that there is little documentation provided by CAR regarding final walk though inspections. The agents generally quickly walk through the home and take a few notes. The buyer is busy checking the colors and deciding where to put their furniture and do not pay attention to the details. Buying a home is a person’s most important investment and every opportunity should be given to insure the buyer understands exactly what they are buying. I believe that an agent should have a written inspection list with all the rooms and appliances listed with a check mark stating “acceptable” or “not acceptable” much the same as one would perform a “Rental Walk Through” with a prospective tenant prior to occupying the rental property. This document should be fill out in the buyer’s own hand and signed by the buyer and the agent. Every appliance should be operated, every floor inspected for staining, every ceiling checked for staining, every sink checked for leaks etc. The agent should take digital pictures of everything in the home to document the condition of the home at the time of inspection. When you are filling out the forms be sure to include any comments like, “We are going to remodel the kitchen anyway”. It is amazing how many times a disgruntled buyer will find undisclosed issues in the rooms they are planning to remodel. They sometimes used this as a way to get a free kitchen out of the inspector or agent. This may sound like over kill but when you are called to testify there will be no opportunity for your performance to be attacked. Proper documentation will stop any attack before it is started. The important issue is to remember is that some unsavory people will lie about the condition of the home, both the seller and or the buyer. Documenting the condition of the home prior to the close of escrow is an overlooked part of the home buying process. I recommend taking pictures of everything. There is very little difference between the mechanics of the buyer’s final walk through inspection and a Renter’s walk through inspection. Both activities are basically performing the same function. They are confirming the condition of the home at a stated date in time. It is interesting to note the C.A.R. Move in/Move Out rental form is far more comprehensive than the C.A.R. Verification o Property Condition (Buyer Final Inspection) walk through form. Lastly it is interesting that the clause “NOT AS A CONTINGENCY OF THE SALE” is included. If the repairs are not completed as contractually required, or if the repairs are poorly installed than what recourse does the Buyer have? What if the home is somehow substantially damaged and not in the same condition as the time of sale? The typical response is to refuse to close the escrow, which is in violation of this clause. In reality, the final walk through is a contingency of the sale. Whether or not it is a legal contingency is unknown but the agents should be aware that even a buyer with average experience will not close an escrow on a home that has substantial problems with the repairs or worse, problems that were either unknown or undisclosed in the proper time frames. What Do You Really Know About Your Inspector? When the agent recommends a particular inspection company they can be held responsible for negligent referral. This clause offers little protection when you have a “fiduciary duty” to act in your client’s best interests. Every Agent must understand there are no licensing requirements for Home Inspectors in the State of But I gave them 3 cards! This can only be done if you have done your due diligence and researched the different inspection companies. The Agent must be knowledgeable about each company and inform the Client about their qualifications. One agent was sued for negligent referral and was asked in cross-examination, “What steps did you take to qualify the three companies you provided to your client?” The response was “I heard they were good.” Given that the agent did little or no investigation of the three companies, the arbitrator ruled against the Realtor. These Guys are Builders, Not Inspectors Architects and engineers should only be retained for specialized issues as recommended by the home inspector. I have been a licensed contractor since 1981 with a B.S. Degree in Heavy Construction and tons of experience. While the experience I obtained during my construction career greatly contributed to my understanding of home systems, it did not qualify me to perform home inspections. I was astonished at the different ways an inspector and a contractor view the same issues. Contractors rarely have any knowledge of the required Standards of Practice and do not understand proper inspection protocol. I know that I would never have been able to perform a proper home inspection prior to my inspection training. Even though contractors are mentioned in the civil code as being able to perform a home inspection they are almost certainly not qualified to perform a home inspection. A Realtor would be exposing himself or herself to a negligent referral action by referring a contractor to perform a Home Inspection. The California Contractors License Board will not act on any complaints regarding Home Inspections. Here’s My Diploma (Hot off the Presses) In order to prevent negligent referral, a Broker should verify the qualifications of any inspector used by his or her agents. While I do not advocate any “list” of recommended inspectors, I do recommend preparing a detailed resume of any inspector who is allowed to inspect for your Agents. This list of resumes should be available for review by all clients without bias. Any inspectors not willing to provide this information is suspect and should not be included on the Broker’s list. There should be a disclaimer on the list indicating that the client is in no way bound to use any of these inspectors and is free to locate and use an inspector of their choosing. But the client should be advised to obtain and VERIFY the same information for any other inspector they may choose. This availability list of home inspectors should be presented to the client at the same time as the “For Your Protection: Get a Home Inspection” CAR FORM HID-11 is presented. 1) Name of the inspection company? 2) Names of all the inspector employees of the company? 3) Contact numbers and addresses for the inspectors? 4) How long have the inspector been in the area? 5) Work history of the individual inspector? 6) What professional licenses and credentials does the inspector have and are the active? 7) Are they a graduate of an inspection school? 8) How many years have they been inspecting? 9) How many inspections have they performed? 10) Does the inspection company offer to make repairs on inspected properties? 11) Does the inspection company use the term “licensed”? 12) Is the inspector a member in good standing with a recognized professional trade organization? What does a first time homebuyer expect out of the home buying process? I think we can all agree that they hope to get the best value for their dollar. Also they are afraid of making a poor business decision; but mostly they are afraid of being cheated by the seller or by one of the sales agents. When the buyer’s review process is reduced its essence, the buyer’s are only interested in the home’s value prior to the close of escrow. The buyers try to determine the home actual value by reviewing the documentation provided by the agents. To this end the homebuyers gather the various reports provided by the agents, in the mistaken belief these documents were prepared for the buyer’s protection when in fact these reports are designed to limit liability for the agents and sellers. The Home Inspection is one of the few, if not the only disclosure document addressed specifically to the buyer. A secondary use of a Home Inspection is using the reported issues to renegotiate the sales price. Only after the close of escrow does the inspection report take on the accepted role of defect inspection. Home Inspection reports are ultimately used to help determine the value of a property for the buyer. Any argument that Home Inspectors do not assign monetary value is naïve. Knowledgeable buyers very quickly come to understand that a Home Inspection provides a basis on which to determine a final value for their purchase. When a report recommends further evaluation and repair of a discovered defect by a qualified specialist along with a recommendation for estimated cost to repair prior to the close of escrow, the Home Inspectors are by de facto assigning value, through the estimated costs of repairs. The adjusted value is always a negative value. It is this negative value that has given the Home Inspection the reputation as a “Deal Killer” where the real responsibility lies with the lender’s appraisal being based on incomplete information. A home inspection is the final step in completing the appraisal process to determine the final value of the home. Buyers have the mistaken belief that the appraisal was prepared for their benefit. While the appraisal is generally accepted as the value of the property it is not the absolute value. Keep in mind, “fair market value,” or “a willing Buyer and a willing Seller” can be the basis of value, but the appraisal industry standards do not acknowledge the importance of disclosing the condition of the property to the appraiser so that the defective issues can be included in the appraised valve. A buyer might not be so “willing” to purchase a property if he knew there was a significant crack in the foundation. Only recently has Buyer was been allowed to have a copy of the appraisal. Recent changes in appraisal law now allow a home buyer a copy of the appraisal if it is requested with in a certain amount of time and in writing. The buyers generally have no idea how the basis of value was determined on their homes; the vast majority of homebuyers never see the appraisal, the document on which they make the largest purchase of their lives. The lenders are not concerned with the Home Inspection because the negative value discovered in the report rarely impacts their loan; i.e. no losses to the lender. This negative value can be very important to the homebuyer as it represents the net equity in their home. This net equity may represent the difference between a satisfactory homeowner experience and a disastrous homeowner experience. I would summit that an appraisal is the value of a home in its undisclosed condition. A home inspection represents the final process in determining the home’s final actual value for the buyer. Accordingly a home inspection must be an appraisal. A typical residential appraisal is performed for the lender based on guidelines designed to protect the lender. The appraisal and the associated loan have built in margins designed to protect the lender from loss so that the usual issues in the Home Inspection do not impact the lender’s security. In addition, the lender also has the Borrower’s credit as a backup to cover any discrepancies in the Appraisal. Even more protection is provided by the homeowner’s insurance policy that covers lender’s potential losses. The buyer’s are responsible for the loan regardless of any yet to be discovered issues that may arise in the property. If, after the close of escrow the home is found to be infected with mold and has to be vacated the buyer is still obligated for the loan. The buyers are obliged to repair these issues, or at least live with them in order to protect their credit and equity. Do not make the mistake in believing the Appraisal was prepared to protect the Borrower. In my opinion the Home Inspection Reports will become more important to the lenders as their loans approach 100% financing. If these types of loans ever go into foreclosure on a significant scale you will see the lenders become more interested in Home Inspections and require them on high ratio loans in order to protect their investments. If the lenders begin to require Home Inspections then proper regulatory legislation will not be far behind. An Appraiser spends approximately 20 minutes at the subject property reviewing the various components. An Appraiser develops a general knowledge of the property and a specific knowledge of the neighborhood values. A Home Inspector spends up to 5 hours or more at the subject property developing specific knowledge important to the value of the home but has a limited knowledge of the neighborhood conditions. Only by combining the two processes can the Buyer develop a true value of the property. In my opinion the Home Inspection should be performed prior to the appraisal and supplied to the Appraiser so that accurate valves can be assigned. Accordingly the Home Inspection would officially become part of the appraisal process. CALIFORNIA CODES MONTOYA ACT 11422. The office shall, on or before February 1, 1994, and at least annually thereafter, transmit to the appraisal subcommittee specified in subdivision (d) of Section 11302 a roster of persons licensed pursuant to this part. Adding a Home Inspection to the appraisal could result in a new classification for an appraisal; i.e. “The Buyer’s Appraisal?” In the real world of Salesmen are not Technical People!! After dealing with so many agents it has become clear that the typical agent does not have the proper training to even understand the inspection report, much less be able to use the report as a success full tool for purchase negotiations. Agents, particularly male agents, feel they have some intuitive knowledge regarding home design and construction. Just because a person has lived in a home for their entire life does not qualify one as an expert, or even competent in their knowledge regarding homes. There is no training for the appropriate use of the only disclosure document prepared solely for the home buyer! Agents are never taught how to understand the technical issues or how to handle the reported issues contained in an inspection report. While many agents have experience with pest reports and equate a pest inspection with a home inspection, they are very different reports. Where almost anybody can understand the pest report, the home inspection can be far more technical and difficult to understand. In addition, the quality of the inspection report is largely based on the training and experience of the inspector. A new inspector will not be able to provide the same level of information as an experienced inspector. Accordingly, a new agent who obtains an inspection report from an experienced inspector may be buried by the sheer volume of information and may not be able to cope. These agents will automatically be steered toward inspectors who provide less information in the mistaken belief that because there is less information it makes the report more understandable. As the detail of the inspection report increases the higher level of education is required by the reader. While the better inspector will try to write the report in such a manner to help the client understand the report, someone must have the skills to identify the issues in the report that are important to the purposes of the transaction; the typical agent is unable to identify the truly important information. If you do not understand anything in the report CALL THE INSPECTOR and ask for an explanation or advice. I am always happy to talk to my clients; this is part of my service. The inspector should always be an unbiased third party participant but the inspector also has an obligation to be sure the client makes a properly informed decision regarding the purchase transaction. No inspector wants a failed transaction; rather the inspector should work towards making a successful transaction by providing accurate information regarding the home. No inspector wants to be known as a “deal killer.” The inspector has a duty to be sure the client and agents are properly informed, which almost always results in a successful purchase transaction. The gutter system is very important to the welfare of your home. Water causes most of the damage I see during my inspections. It is important that all the water from the roof be controlled so that it cannot cause water damage to the eaves or be allowed to penetrate the wall systems. These are the obvious reasons for maintaining the gutters but the biggest reason is to protect the foundation. Water should never be allowed to pool against the foundation. Soil is like a sponge; it will expand like a sponge when it gets wet and it will shrink like a sponge when it dries out. Over the seasons this movement sometimes causes a foundation to move and crack. Under the right conditions it can actually cause a foundation to fail. While the soil moves only a tiny amount, the force it exerts is measured in tons per square inch. This force can be more than a foundation can resist. Another reason is when water pools against the foundation the water can move through the soil under the foundation and into the crawl space or create wet spots under a slab foundation. This water movement is called sublimation. Water should never be allowed to pool under a home; in the case of a raised foundation ponding water can cause the piers to settle into the wet soil, attract all sorts of insects including termites, and allow mold to grow under the home. In the case of a slab foundation the concrete can absorb the water and create moist areas in the floor over the sublimated water. The moist concrete can cause vinyl floors to discolor and cause mold under the carpet pads. The exterior walls are the typical place for this moisture to show up but it can extend into the interior areas of the typical slab home. If you have an odor that you cannot find this could be the reason. Check the carpets with your hands to see if there is a moist area; if you find a wet area then pull back the carpet and look under the pad and see if there are any growths. This could be the cause of the odors. Water should always drain away from the foundation for at least five feet and then be directed toward the street. This has been required by code for many years, and even before it was a code issue the good builders understood that proper drainage was important for the long term welfare of their homes. What I find on many of the older homes is that there is a smooth negative slope towards the foundation causing unwanted ponding. What happens is that when a person rakes the leaves away from the foundation they pull back a small amount of soil with the leaves. Over the years this tiny amount of soil becomes large enough to change the grade from the original positive slope to a negative slope resulting in ponding water along the edge of the foundation. Another important source of ponding is the landscape sprinklers. Sprinklers should always spray away from the exterior walls, never ever towards the walls. Water sprayed at the exterior walls over a long period of time will cause damage regardless of the type of wall. Many times the sprinklers will have a slow leak that keeps the soil wet; this is the same as if there were ponding water from a rain storm. Any sprinklers that spray toward the walls should be relocated and any leaking valves should be replaced. Simple little things that are low cost and easy to fix but I see them every day that cost thousands of dollars to repair when it comes time to sell your home. As you live in your home walk around your foundation to see if there are any areas that are ponding. Then when the yard dries out you can either re-grade the low areas or add a wheel barrow full of soil to the low areas so that the water drains away from the foundation. These simple steps can save you a ton of money over the life of your home. What is a roof and more importantly, what does your Client think is a roof? What a roofer considers a roof can be quite different from what your Client believes to be a roof. When a Home Inspector looks at a roof he sees a system on top of the structure designed to shed water and to protect the structure from the elements. The system includes not only the roofing, but also the flashings, valleys, vent pipes, electrical penetrations, gutters and downspouts, A/C units, TV antennas, Chimneys and Chimney Flashings and any supplementary roof systems at the subject property. In addition the attic should be included as part of the roof inspection. The Client may be thinking of a roof certification in terms of systems life expectancy, and the roofer is providing a leak free only roof certification then there is the possibility of negligent referral on the part of the Agents. I recommend that the Broker prepare a standardized list of the various components of the roof to be filled out by the roofer who performs the certification so that at least a minimal amount of proper information is provided to the Clients in order to limit exposure and liability. In my opinion, a proper roof certification should include at a minimum the following: 1) The description of the roof covering including all the subsidiary roofs. 2) Condition of the roof coverings 3) An estimate of the remaining useful life expectancy of the roofing and related systems. 4) The condition of the roof flashings, many times the original flashings are reused on a replacement roof and will not survive the life of the new roof. 5) A statement regarding the condition of the paint on the flashings, or the lack thereof 6) A statement of the condition of the gutter system along with an estimated remaining life expectancy, including the lack of any roof to gutter flashings 7) Is there any vegetation impacting the roof systems? 8) Evaluation of the accessible spaces in the attic. 9) Suggestions to extend the life of the roof systems. 10) The certification should include the living space, patio, overhangs and any auxiliary buildings included in the purchase contract 11) A visual inspection of the attic 12) Any supplemental roofs on garages or patios should have the same guidelines It can be embarrassing for the Agent when the roofer has certified a roof prior to a Home Inspection. When the Home Inspector points out to the Clients that the roof is at the end of its life cycle and will need to be replaced shortly. The Agent steps up and says “But we already have a roof cert!” The Home Inspectors pointed out the defective issues in the roof and recommends further evaluation by a qualified roofer. The roofer provides a roof certification with no supporting observations or documentation. The Home Inspector’s recommendations for further evaluation were not followed. The Client may very well feel short changed when he discovers the roof is certified but still needs to be replaced. An Agent should not be expected to know the various systems and intricacies of the pool plumbing system. Typically if any of its systems are leaking, deteriorated or rusted the entire pool should be evaluated. There are many important safety systems that need to be evaluated by a qualified specialist on almost any pool. Child safety is the highest liability issue. If you obtain a home inspection always include a pool inspection, preferably from the same home inspector who inspected the home. Always get the pool inspected to protect yourself from negligent referral. Remember if a child should drown in the pool then everybody will be called to the matt to answer for their actions. Do not put yourself in this position; and it could save a child’s life. And it is not your money anyway that pays for this service. Pools and Spas Pool safety is probably the most important responsibility of a homeowner. The following comments are generic and may be a prompt to help you identify a potential hazard. ASK YOURSELF THESE QUESTIONS EVERY TIME YOU USE THE POOL. REVIEW THESE QUESTONS WITH YOUR CHILDREN EVERY TIME THE POOL IS USED. Is the barrier fencing deteriorated between the pool and the neighbor's yard? Is the fence child proof with an unclimbable design? Are the gates self closing with latches that are unreachable by the younger children Do the gates swing away from the pool? Are all the gates locked when not in use? Are the doors and windows open to the pool area alarmed to notify child care people of access by children? Can these windows and doors be locked to keep out children? Is rescue equipment such as a long handled hook and a ring buoy kept near the pool? Is the pool cover properly installed? FACTS YOU SHOULD KNOW ABOUT POOLS In Swimming pools are a wonderful and important recreational system for your family. There are multiple safe and fun things a family can do together in a pool, just be sure to learn the safety recommendations to protect your family. And remember to put on your sunscreen. There are multiple child safety hazards at the pool fencing. There are multiple safety recommendations regarding barrier fencing around swimming pools and spas. These include but are not limited to the following: 1) Fences are recommended to be 60" high measured from the side opposite of the pool 2) Any gates or doorways into the pool area including patio doors from the home should open away from the pool to prevent inadvertent opening by toddlers 3) All doors opening into the pool area should be self closing and self latching 4) All latches on gates or doorways opening into the pool area should be 54" high on the opposite side of the pool or if on the inside of the gate it should be at least 3" from the top with a screen with no more than 1/2" openings extending 18" past the latch to prevent unsupervised access by children 5) The fence should not allow a 4" ball to pass through and should be no more than 2" above grade at the bottom 6) The fence should be unclimbable from the opposite side from the pool, including any shared fences with the neighbors 7) All doors and windows opening into the pool area should be equipped with an approved alarm to notified supervising adults of unauthorized pool access by children 8) Chain link fences should not be greater than 1-1/4" square or 1-3/4" with slats These recommendations vary from jurisdiction to jurisdiction. I recommend evaluation by qualified pool safety specialist and inquiry at the local building authority. I also recommend inquiry with your insurance carrier to determine coverage and policy costs. Very difficult and high risk inspections Septic systems require specialized knowledge to evaluate properly. The systems are usually designed based on the number of bedrooms in a home and an estimation of water usage to determine the size of the septic tank and the size of the leach field. When there are additions to a home there is no way to know if the septic system was enlarged to accommodate the increased usage. Many times a system will be adequate for a small family but when a large family occupies the home, the septic system will be overloaded.
Table of Contents
Introduction, Training, Who is REALLY Protected by the Purchase Contract, Are You Ready to Run a Business?, “The California Real Estate Purchase Contract and Joint Escrow Instructions”, Structural Pest Inspections, Other Inspections and Reports, Home Inspections are Free to the Buyer, Do Not Shop Price, Who is Working for Whom, Addressing the Report, Scheduling the Inspection, First Man on the Job,
IntroductionC.C. 2079.2. The standard of care owed by a broker under this article is the degree of care that a reasonably prudent real estate licensee would exercise and is measured by the degree of knowledge through education, experience, and examination, required to obtain a license under Division 4 (commencing with Section 10000) of the Business and Professions Code.
Who is REALLY Protected by the Purchase Contract
Section 1 and Section 2
Health and Safety Code 13113.8
13113.8. (a) On and after January 1, 1986, every single-family dwelling and factory-built housing, as defined in Section 19971, which is sold shall have an operable smoke detector. The detector shall be approved and listed by the State Fire Marshal and installed in accordance with the State Fire Marshal's regulations. Unless prohibited by local rules, regulations, or ordinances, a battery-operated smoke detector shall be deemed to satisfy the
requirements of this section.
(b) On and after January 1, 1986, the transferor of any real property containing a single-family dwelling, as described in subdivision (a), whether the transfer is made by sale, exchange, or real property sales contract, as defined in Section 2985 of the Civil Code, shall deliver to the transferee a written statement indicating that the transferor is in compliance with this section. The disclosure statement shall be either included in the receipt for deposit in a real estate transaction, an addendum attached thereto, or a separate document.
www.documents.dgs.ca/dsa/pubs/waterheaterbracing01.31.02pdf
This includes electric water heater too!
CALIFORNIA CODES
HEALTH AND SAFETY CODE
SECTION 19210-1921
19210. (a) The Legislature finds and declares that there exists a serious threat of fire, explosion, or electrocution to the people of California from water heaters that overturn or experience damage to the plumbing or electrical wiring during an earthquake, and that a large number of structures will suffer damage from water heaters due to the lack of adequate strapping or bracing.
CALIFORNIAHEALTH AND SAFETY CODE
SECTION 18025-18033.1
(b) Replacement fuel gas burning water heaters shall be listed for residential use and installed within the specifications of that listing to include tiedown or bracing to prevent overturning.
(c) Replacement fuel gas burning water heaters installed in accordance with subdivision (b) shall bear a label permanently affixed in a visible location adjacent to the fuel gas inlet which reads, as applicable:
__________________________________________________________________
WARNING
This appliance is approved only for use with natural gas (NG).
'__________________________________________________________________'
OR
_________________________________________________________________
'
'
' WARNING '
' This appliance is approved only for use with liquefied petroleum gas (LPG).
'________________________________________________________________'
Lettering on the label shall be black on a red background and not less than 1/4 inch in height except for the word "WARNING" which shall be not less than 1/2 inch in height.
18031.8. (a) Nothing in this part or the regulations promulgated. There under shall prohibit the replacement in manufactured homes or mobilehomes of ovens, ranges, or clothes dryers with fuel gas burning ovens, ranges, or clothes dryers not specifically listed for use in a manufactured home or mobile home.
b) Replacement fuel gas burning ovens, ranges, or clothes dryers shall be listed for residential use and installed in accordance with the specifications of that listing to include tie down and bracing to prevent displacement.
(c) Replacement fuel gas burning ovens, ranges, or clothes dryers installed in accordance with subdivision (b) shall bear a label in compliance with subdivision (c) of Section 18031.7.
Agents do not need to be a licensed General Contractor
Inspection Contracts
CIVIL CODE
SECTION 3094
(a) A description of the site sufficient for identification.
(b) The name and nature of the title or interest of the person giving the notice.
(c) The name of the purchaser under contract, if any, or lessee, if known.
(d) A statement that the person giving the notice will not be responsible for any claims arising from the work of improvement.
Within 10 days after the person claiming the benefits of non-responsibility has obtained knowledge of the work of improvement, the notice provided for in this section shall be posted in some conspicuous place on the site. Within the same 10-day period provided for the posting of the notice, the notice shall be recorded in the office of the county recorder of the county in which the site or some part thereof is located.
Home inspectors have the right to file a lien on the property in order to be paid for their inspection just the same as any other material supplier or workman.
CC 2079.5. Nothing in this article relieves a buyer or prospective buyer of the duty to exercise reasonable care to protect him self or her self, including those facts which are known to or within the diligent attention and observation of the buyer or prospective buyer.
BUSINESS AND PROFESSIONS CODE
SECTION 11422-11423
11423. (a) For purposes of this section:
(1) "Applicant" means a person who has made a written request for an extension of credit which is proposed to be secured by real property. The term does not include a guarantor, surety, or other person who will not be directly liable on the loan.
(2) "Appraisal" shall have the same meaning as set forth in subdivision (b) of Section 11302.
(3) "Residential real property" means real property located in the State of
(b) A lender in a loan transaction secured by real property shall provide notice as described in this section to a loan applicant of the applicant's right to receive a copy of the appraisal, provided he or she has paid for the appraisal.
An applicant's written request for a copy of an appraisal must be received by the lender no later than 90 days after (1) the lender has provided notice of the action taken on the application, including a notice of incompleteness, or (2) the application has been withdrawn.
(c) The lender shall mail or deliver a copy of an appraisal within 15 days after receiving a written request from the applicant, or within 15 days after receiving the appraisal, whichever occurs later.
(d) Where the loan is proposed to be secured by residential real property, the notice of the applicant's right to a copy of the appraisal as provided in subdivision (b) shall be given in at least 10-point boldface type, as a separate document in a form that the applicant may retain, and no later than 15 days after the lender receives the written application. The notice shall specify that the
applicant's request for the appraisal must be in writing and must be received by the lender no later than 90 days after the lender provides notice of the action taken on the application or a notice of incompleteness, or in the case of a withdrawn application, 90 days after the withdrawal. An address to which the request should be sent shall be specified in the notice. Release of the appraisal to the applicant may be conditioned upon payment of the cost of the appraisal.
(e) Where the loan is proposed to be secured by nonresidential real property, the notice of the applicant's right to a copy of the appraisal shall be given within 15 days of receiving the appraisal.
The notice shall specify that the applicant's request for a copy of the appraisal must be in writing and that the request must be made within the time specified in subdivision (b) and that the applicant is only entitled to receive the appraisal or appraisals obtained by the lender for the purpose of evaluating the applicant's pending request for an extension of credit. Release of the appraisal to the applicant may be conditioned upon payment of the cost of the appraisal and the cost of duplicating the appraisal.
(f) Nothing in this section is intended to effect a change in current law in any manner with respect to reliance on an appraisal by anyone other than the lender who released the appraisal.
(g) This section does not apply to appraisals obtained by lenders on property owned by the lender, nor to appraisals obtained by the lender in anticipation of modifying any existing loan agreement if the lender has not charged for the appraisal.
(h) In the case of loans secured by residential real property, compliance with Regulation B (12 CFR Part 202 et seq.) of the Federal Reserve Board is deemed to be compliance with the provisions of this section and Section 10241.3. Roof Inspections
But We Already Have a Roof Cert.!!
I have spent considerable time trying to track down the proper protocol for a roofing contractor’s roof certification/inspection. The closest I can find is an obscure reference in the FHA lender guidelines asking for a roof certification if the subject roof appears to have less than two years of remaining life. It merely asks for a certification from a qualified roofer stating the roof will not leak for two years. There does not appear to be any guidelines from conventional lenders. This lack of guidelines is unknown to the Buyers and leads them to believe the roof system has somehow been certified by a roofer to be satisfactory. If one examines the typical roof certification, you will note they are very limited in scope and offer to repair only a leak in the roof for a given period of time. Usually they do not offer to repair any subsequent damage to the ceiling or the contents of the building if a leak does occur. In addition they do not describe the condition of the roof or the roof systems and do not offer any advice on how to extend the life expectancy of the roof system. By providing a “Roof Certification” to a Client without the properly explaining the process the Agent may misleading the Client to believe that a roofer has performed an roof evaluation, where in fact the roofer has only guaranteed to fix any roof leaks for a given period of time.
This is serious business
A pool or spa report is incomplete without inclusion of home inspection. Many house issues may impact the pool and some pool issues could impact the house. If you obtain a home inspection you should try to have the same inspector perform the pool inspection at the same time. This will provide an increased level of inspection protocol than having the pool inspected separately. The Agents should always keep in mind that the typical pool technicians probably never have been taught any inspection protocol and probably do not apply the same emphasis on safety issues as would a qualified home inspector. A swimming pool is a high liability item; if a child is injured in the pool then there is a high probability of the inspection being included in any law suit. An informed agent will always include the pool in the home inspection.HEALTH AND SAFETY CODE
SECTION 115920-115929
115920. This act shall be known and may be cited as the Swimming Pool Safety Act.
115921. As used in this article the following terms have the
following meanings:
(a) "Swimming pool" or "pool" means any structure intended for swimming or recreational bathing that contains water over 18 inches deep. "Swimming pool" includes in-ground and above-ground structures and includes, but is not limited to, hot tubs, spas, portable spas,and nonportable wading pools.
(b) "Public swimming pool" means a swimming pool operated for the use of the general public with or without charge, or for the use of the members and guests of a private club. Public swimming pool does not include a swimming pool located on the grounds of a private single-family home.
(c) "Enclosure" means a fence, wall, or other barrier that isolates a swimming pool from access to the home.
(d) "Approved safety pool cover" means a manually or power-operated safety pool cover that meets all of the performance standards of the American Society for Testing and Materials (ASTM),in compliance with standard F1346-91.
(e) "Exit alarms" means devices that make audible, continuous alarm sounds when any door or window, that permits access from the residence to the pool area that is without any intervening enclosure,is opened or is left ajar. Exit alarms may be battery operated or may be connected to the electrical wiring of the building.
115922. Commencing January 1, 1998, except as provided in Section
115925, whenever a construction permit is issued for construction of a new swimming pool at a private, single-family home it shall be equipped with at least one of the following safety features:
(a) The pool shall be isolated from access to a home by an enclosure that meets the requirements of Section 115923.
(b) The pool shall be equipped with an approved safety pool cover.
(c) The residence shall be equipped with exit alarms on those doors providing direct access to the pool.
(d) All doors providing direct access from the home to the swimming pool shall be equipped with a self-closing, self-latching device with a release mechanism placed no lower than 54 inches above the floor.
(e) Other means of protection, if the degree of protection afforded is equal to or greater than that afforded by any of the devices set forth in subdivisions (a) to (d), inclusive, as determined by the building official of the jurisdiction issuing the applicable building permit. Any ordinance governing child access to pools adopted by a political subdivision on or before January 1, 1997, is presumed to afford protection that is equal to or greater than that afforded by any of the devices set forth in subdivisions
(a) to (d), inclusive.
115923. An enclosure shall have all of the following characteristics:
(a) Any access gates through the enclosure open away from the swimming pool, and are self-closing with a self-latching device placed no lower than 60 inches above the ground.
(b) A minimum height of 60 inches.
(c) A maximum vertical clearance from the ground to the bottom of the enclosure of two inches.
(d) Gaps or voids, if any, do not allow passage of a sphere equal to or greater than four inches in diameter.
(e) An outside surface free of protrusions, cavities, or other physical characteristics that would serve as handholds or footholds that could enable a child below the age of five years to climb over.
115924. Any person entering into an agreement to build a swimming pool shall give the consumer notice of the requirements of this article.
115925. The requirements of this article shall not apply to any of the following:
(a) Public swimming pools.
(b) Hot tubs or spas with locking safety covers that comply with the American Society for Testing Materials-Emergency Performance Specification (ASTM-ES 13-89).
(c) Any pool within the jurisdiction of any political subdivision that adopts an ordinance for swimming pool safety that includes requirements that are at least as stringent as this article.
(d) An apartment complex, or any residential setting other than a single-family home.
115926. This article does not apply to any facility regulated by the State Department of Social Services even if the facility is also used as the private residence of the operator. Pool safety in those facilities shall be regulated pursuant to regulations adopted therefor by the State Department of Social Services.
115927. Notwithstanding any other provision of law, this article shall not be subject to further modification or interpretation by any regulatory agency of the state, this authority being reserved exclusively to local jurisdictions, as provided for in subdivision
(e) of Section 115922 and subdivision (c) of Section 115924.
115928. Whenever a construction permit is issued for the construction of a new swimming pool or spa, the pool or spa shall meet all of the following requirements:
(a) (1) The suction outlet of the pool or spa for which the permit is issued shall be equipped to provide circulation throughout the pool or spa as prescribed in paragraph (2).
(2) The swimming pool or spa shall have at least two circulation drains per pump that shall be hydraulically balanced and symmetrically plumbed through one or more "T" fittings, and that are separated by a distance of at least three feet in any dimension between the drains.
(b) Suction outlets that are less than 12 inches across shall be covered with antientrapment grates that cannot be removed except with the use of tools. Slots or openings in the grates or similar protective devices shall be of a shape, area, and arrangement that would prevent physical entrapment and would not pose any suction hazard to bathers.
(c) Any backup safety system that an owner of a new swimming pool or spa may choose to install in addition to the requirements set forth in subdivisions (a) and (b) shall meet the standards as published in the document, "Guidelines for Entrapment Hazards:
Making Pools and Spas Safer," Publication Number 363, January 1998,
115929. (a) The Legislature encourages a private entity, in consultation with the Epidemiology and Prevention for Injury Control Branch of the department, to produce an informative brochure or booklet, for consumer use, explaining the child drowning hazards of, possible safety measures for, and appropriate drowning hazard prevention measures for, home swimming pools and spas, and to donate the document to the department.
(b) The Legislature encourages the private entity to use existing documents from the United States Consumer Product Safety Commission on pool safety.
(c) If a private entity produces the document described in subdivisions (a) and (b) and donates it to the department, the department shall review and approve the brochure or booklet.
(d) Upon approval of the document by the department, the document shall become the property of the state and a part of the public domain. The department shall place the document on its Web site in a format that is readily available for downloading and for publication. The department shall review the document in a timely and prudent fashion and shall complete the review within 18 months of receipt of the document from a private entity.
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