I. Beware of Conflicting Interests 3. II. The Nature of the Home Inspection Profession 5

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1 I. Beware of Conflicting Interests 3 Agent vs Buyer regarding Choice of Inspector 3 3rd Party Code Inspectors on Builder s Payroll 3 Termite Inspectors 4 II. The Nature of the Home Inspection Profession 5 90 Hours 5 Regulating Competency 5 What Does an Inspection Cover? 5 Dubious Advertising 6 Guaranteed Inspections 6 Inspection Warranties 6 Certifications 6 Termite inspections by home inspectors 6 Home Inspector Associations 6 III. Finding Your Inspector 7 IV. A Few Suggestions for Homebuyers 9 Newly constructed homes 9 Seller repairs 9 Prior inspection reports 9 Repair prices 10 DO NOT DUPLICATE WITHOUT PERMISSION. Page! 1 of! 10

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3 I. Beware of Conflicting Interests The home buying process usually involves several professionals working for you as home buyer. It s vitally important to know of any interests these professionals might have that conflict with yours. If you don t, you can t manage them properly and they might end up influencing the result of the home buying process in a way that better favors the professional than you. If you think the professionals of real estate always do what s best for you, then buckle down your seat belt, prepare for a healthy dose of enlightenment, and read on. Agent vs Buyer regarding Choice of Inspector Agents and home inspectors constantly rub shoulders while on the job and both solicit the same clients for work. Agents come together under a brokerage in large numbers that allows them to support expensive advertising campaigns. Home inspectors are much fewer in number and can t afford such advertising power. Home inspectors crave what agents have but don t have anything to offer in trade for a referral that doesn t conflict with the interests of the buyer. Home inspection reports do not help agents sell houses. If anything, they only trouble agents by giving the buyer a reason to pause or even to walk away from the purchase. If that happens, the agent doesn t earn a single penny despite the time, money and effort they ve invested in trying to sell the house. The only thing an inspector could have that could help the agent is an altered report that is pruned of everything substantial so that it doesn t get in the way of the transaction. For this reason, any close association between an agent and a home inspector, when they are both in service to a buyer, is potentially poisonous to that buyer and should be avoided at all costs. Such an association and exchange constitutes an act of Collusion. Collusion is defined as any clandestine cooperation between two professionals for an unethical or dishonest purpose. Home inspectors who solicit agents for referrals are opening the door to the influence of agents and to collusion. They can experience quick success by doing it and agents can experience fewer lost commissions with watered down reports. It s a win/win for agents and inspectors with the buyer paying the price since his/her interests have been betrayed by both inspector and agent. Home inspectors don t need expertise or experience to gain referrals from agents, just the willingness to jump on the bandwagon with the agent and betray the buyer. Collusion is in widespread practice in this business because home inspector regulatory bodies and associations just don t have the backbone to do what s right and prohibit it. Until enough consumers recognize what s going on and push their legislators to do something, the problem won t get fixed. 3rd Party Code Inspectors on Builder s Payroll A 3rd party code inspector is a state registered code inspector that works for himself or a private company instead of a city or parish government. Ethically, his clients would be the folks that are buying new homes but there is no law stopping him from directly working for the builder instead. Builders can offer an inspector more work than a buyer since they are constantly building new homes. They love this arrangement because, as issuer of the inspector s paycheck, he s in a strong position to compel the inspector to pass the inspection. If the inspector doesn t pass it, he doesn t get more work from this builder. DO NOT DUPLICATE WITHOUT PERMISSION. Page! 3 of! 10

4 Termite Inspectors Termite inspectors are required by Louisiana law to work under the supervision of a pest control operator and are either an employee or sub-contractor of one. The conflict here is that the home buyer wants to know exactly what the inspector has found but the pest control operator wants the termite inspector to use the report to help sell a termite treatment instead. Termite treatments bring in more sales than inspections so inspections are just used to gain access to the client and to leverage a sale for a treatment or termite contract. Termite inspectors are considered salesmen within the walls of the pest control operator s company. They are typically burdened with a quota of treatment sales and stand to lose their job if they don t sell enough. It s not unlike a used car salesman on a car lot. If he doesn t sell enough, he s fired. Its a unique conflict of interest in that it s built into Louisiana law. As with home inspectors and agents, the buyer loses representation by the professional that he/she has paid for. One solution to this conflict of interest is to transfer the regulation of termite inspectors to the Board of Home Inspectors. Home inspectors don t sell termite treatments and are free to tell the client exactly what the want to know. It would also solve another problem: home inspectors are prohibited by the Structural Pest Control Commission from identifying the damage as termite related on their home inspection report. Even if a home inspector is fully knowledgeable about these things, they can t disclose it. Transferring the regulation of termite inspectors to the Board of home inspectors won t burden home inspectors much. I once offered termite inspections for over three years. It s a small requisite body of knowledge, nothing like home inspectors draw upon when they complete a home inspection. Two days of training and some field work is all that s need to get started. The biggest obstacle is changing the law. Pest control operators have a bigger lobby than home inspectors. DO NOT DUPLICATE WITHOUT PERMISSION. Page! 4 of! 10

5 II. The Nature of the Home Inspection Profession 90 Hours A very wide range in expertise can be found among home inspectors that all meet the same state requirements and offer the same home inspection service. That s because the classroom requirement for home inspectors is only 90 hours. Almost anyone can be a home inspector. I have an excellent 8 1/2 by 11 book recently written for home inspectors. It has over 300 pages and covers only the electrical aspects. Electrical is but one of 8 topics that I consider crucial to the knowledge of home inspectors. A home inspector cannot be taught all this in just 90 hours. The requirement is only for 90 hours because that s pretty much all that s available in this country. Washington State has a 120 hour requirement but that s about it. No one in this country has yet to successfully write and market a curriculum that can properly prepare an individual for a career as a home inspector. If you chance upon a knowledgeable inspector, its because that inspector has taught himself his job. It s the only way to learn it. Regulating Competency The Louisiana Board of Home Inspectors regulates competency by use of a Standards of Practice (SOP). It s what most states that regulate home inspectors do, but how can an SOP list all of the thousands of things that can go wrong on a house? It s a faulty concept that the bar for home inspectors can be set with an SOP. It doesn t work. The way to regulate competency is to require a certain level of education but with only a 90 hour classroom course available, that solution isn t available. The lesson here for the home buyer is that when you begin screening prospective home inspectors for your new house, don t rest your laurels on state licensure. A good way to screen prospective home inspectors is described below in Section III. Finding your new house begins with finding your home inspector. What Does an Inspection Cover? If you ask almost any home inspector in the country what their inspection covers, you ll get almost the same answer every time a short version of the minimum requirements of the Standards of Practice. That minimum, in Louisiana, generally takes under half an hour for an inspector to complete and if that s all you get, you ll wonder why you even bothered to hire a home inspector in the first place. What each particular inspector covers actually depends on four things: 1) What can he see. He can t inspect what s hidden in walls, etc. 2) How much does he know about houses. How well can he read houses. 3) How well can he write. No amount of inspection skill in the world can make up for an inspector that cannot write. 4) How hard will he work for you. When asked what I cover, I tell my prospects that I generally cover whatever I can see. Except for contractual and regulatory limitations and exclusions, that about says it. DO NOT DUPLICATE WITHOUT PERMISSION. Page! 5 of! 10

6 Guaranteed Inspections Dubious Advertising A guaranteed inspection generally involves the return of the inspection fee if the inspector has missed something, but the repair of a missed finding can easily exceed the inspection fee many times over. Individual findings involving tens of thousands of dollars in repairs or upgrades are not uncommon in this business. Furthermore, if you signed a release of liability statement when you received the returned fee, you may have lost your chance of ever realizing an award for damage that was done by the inspector. Inspection Warranties Inspection warranties are offered by inspection companies to assure the buyer that if the inspection were to miss anything, the warranty would cover it. But like home warranties, much is excluded in the fine print. Also, anything that was missed by the inspector is not covered. Certifications Many home inspectors claim to be certified. While certifications do sometimes have value, most are rubbish. If I wanted to, I could place a link at the bottom of this page that would lead to a certificate with gold colored trim that would certify that you ve read this web page. Termite inspections by home inspectors Recently, some local home inspectors have been offering termite inspections. To my knowledge, only one home inspection company has home inspectors in their employ with dual registration as termite inspectors. The other companies advertising such service are actually diverting the termite inspection to a local Pest Control Operator that the home inspector himself has chosen. A similar conflict of interest is present in this association as the termite inspector still needs to meet a quota of termite treatment, or contract sales, in order to keep his job. Also, you should find you own termite inspector. Would you allow someone else to choose your home inspector? Or your agent? Home Inspector Associations There are several professional societies that home inspectors can join. Membership fees are as high as about 400 dollars per year. Most of these dollars go towards promoting the membership. Education was once their primary aspect but competition from other societies has changed that. Education now is just the guise. Once possessed of a meaningful mission, they now amount to little more than a chest thumping bunch of societies. One particular society automatically grants certification once you join with no additional testing required. They have a logo for inspector members to attach to a badge, brochure, website or even embroidered to their shirts. Nearly any home inspector can join any society as long as he pays the fees. Some may require a review of a number of inspection reports before granting full membership. DO NOT DUPLICATE WITHOUT PERMISSION. Page! 6 of! 10

7 III. Finding Your Inspector The best way to find a good inspector is the same method you d use to find a good author read their works. In the case of home inspectors, works refers to sample reports or any actual report that you can get your hands on, including those that friends and family might have. There s hundreds of sample reports available online. Judging inspection reports is a skill and that skill is acquired by reading many reports. When honing that skill, there s no need to limit your search to local inspectors. Any sample report from any place in the country is fine. Once you re comfortable with your new found skill, you can begin searching for your inspector by looking for sample reports from inspectors in your area. If a particular inspector has gotten your attention and doesn t have an online sample report, call him and ask for one. If he doesn t have any, it s my suggestion that you keep looking. Inspectors with good reporting skills like to brag and disseminate their sample reports. DO NOT DUPLICATE WITHOUT PERMISSION. Page! 7 of! 10

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9 IV. A Few Suggestions for Homebuyers Newly constructed homes Buyers of newly constructed homes often think that the house must be perfect because it s new. Much faith is put into the building codes and into local code enforcement authorities. The truth is that the perfect house is a myth and that building codes are only bare minimum requirements. They are a point from which to begin rather than a point to strive for. A lot of misunderstanding results when a builder tells a buyer that their new house is code-compliant because it has passed all code inspections. That s not necessarily the truth. Passing a particular parish s code inspection and complying with the Louisiana Uniform Construction Code are two different things. Many provisions of the Louisiana Uniform Construction Code are not enforced by the individual parishes and municipalities, for political reasons. Builders might not like certain features and complain about it. Local government officials don t want their popularity to dwindle, so they sometimes accommodate builder complaints by relaxing certain requirements. I say relaxing certain requirements but what s actually happening is that they don t enforce certain requirements. Louisiana adopts the building codes but leaves enforcement to the individual parishes and municipalities. Unless your build contract includes specifications in addition to pass all local code inspections, you may find issues on your new home when you do the walk-through with the builder and when you receive your home inspection report. I ve inspected hundreds of newly constructed homes, none were without issues. Most had at least one major issue. Home inspectors generally are not code inspectors. It may seem natural that a home inspector would also have the qualifications of a code inspector but very, very few actually do. Home inspectors and code inspectors are parallel professions with neither answering much to the other. They are almost entirely independent and very different from one another. Very few home inspectors are as well versed in the building codes as registered code inspectors but are privy to a great deal of knowledge that code inspectors generally don t have. Home inspectors aren t allowed to proclaim compliance or non-compliance with the codes, even if they know it, but they can use citations from code books to support their findings in their reports. Seller repairs If a seller agrees that a problem or issue needs to be fixed, don t let him fix it himself. Ask him to amend the sale price so that YOU can fix it once you become owner of the house. He has no vested interest in fixing it properly because it won t be his problem once the house is yours. Prior inspection reports You might be offered a previous inspection report by an agent or even the seller to use as your own. The problem with these reports is that they might be found invalid later because you didn t actually commission them, someone else did since that report doesn t bear your name. Also, if the inspection was done before you signed the Louisiana Residential Agreement to Buy or Sell, it s invalid because it was done outside of the due diligence period. If the due diligence period has passed by the time you learn that the inspection is invalid, you will find yourself obligated to complete the purchase of the house without further option to have it inspected. Another issue is that an inspector is strongly influenced by the entity that pays for his services. Since the seller and agent both have transactional interests that collide with the DO NOT DUPLICATE WITHOUT PERMISSION. Page! 9 of! 10

10 buyer s, the buyer s interests are betrayed by using such reports. Always hire someone that answers only to you. Repair prices Repair prices are the next step following receipt of the inspection report. Buying a house is a financial transaction and the major findings of a report must be translated into dollars to realize potential value. When looking for a source of repair prices, the home inspector is the nearest one among the professionals so far involved in the home buying process so he becomes the bulls-eye. There is much pressure on him to furnish repair estimates for his findings and many do yield to such demands. As an inspector who is prohibited by law from completing any repairs on the house for one year, he s no more qualified than the agent to render repair estimates. An estimate by either could be off by thousands of dollars on a single major repair and each discrepancy from the eventual repair cost could represent a loss to the buyer. With a signed bid from a contractor, the potential loss becomes negligible since the contractor has signed a contract, contingent on the sale of the house, to complete the repair for a previously agreed amount. DO NOT DUPLICATE WITHOUT PERMISSION. Page! 10 of! 10