Home Inspection 101 For Real Estate Professionals

1. Home Inspection 101 For Real Estate Professionals Independently owned and operated

2. Course Objective This course will leave you with the following: • A good understanding of the home inspection process • How to manage your client’s expectations of the home inspection • How to increase your client’s satisfaction and lower your liability.

3. Inspection Completes the Sale Information gathered from an inspection helps bring together buyers and sellers. • Information leads to knowledge • Knowledge leads to understanding • Understanding leads to agreement Inspectors should understand their role in the sales process. Buyers, sellers and real estate professionals all have a role in the sales process.

4. Goals of Inspection • To share unbiased information about major components and safety issues • To discuss repair, maintenance or safety issues beforehand • To move the sale forward

5. Informed Buyers • Most buyers know little about construction • Answering questions puts mind at ease • Informed buyers are better satisfied and can better anticipate and plan for repairs and maintenance • Real estate professionals can focus on the next sale

6. Common Documents Associated With a Home Inspection • Preinspection agreement: Defines scope of inspection, standards used and fee charged • Home inspection report: Should be clear and concise, and incorporate photos

7. Inspection Report Formats Formats vary: • Checklist or narrative • Combination checklist and narrative • Computer-generated • Handwritten • Oral (from a friend with no report) • May or may not include summary • May or may not include photos • Delivered at time of inspection or later

8. Report Basics In any case reports should: • Be clear and concise • Adhere to the standards of practice as per major trade groups (ASHI, NAHI, NACHI) • Cover all major components • Be delivered in a timely fashion • Define terms used therein: “acceptable,” “marginal,” “defective,” etc. Who owns the inspection report?

9. Professional Home Inspector Characteristics of a good inspector: • Trained, thorough and unbiased • Courteous, professional and has the necessary tools and equipment • Adheres to industry standards • Has good written and oral communication skills • Is insured and, if applicable, licensed

10. Insurance Coverage for a Professional Inspector • Should carry general liability insurance • Should carry E&O insurance • Many E&O policies have a “referral” endorsement

11. Inspection Reduces Complaints/Liability Source: FREA

12. What an Inspector Should Do • Adhere to industry standards of practice and code of ethics (ASHI, NAHI, NACHI) • Inspect readily accessible systems and components • Report: • Systems/components that aren’t working properly • Recommendations to correct • Explanation of the deficiencies • Reasons with fact that certain systems or components were not inspected

13. What an Inspector Should Not Do • Predict remaining life of system or component • Offer advice on methods, materials, costs to fix component —unless qualified to do so • Offer to make repairs, refer specific contractors or receive referral fees • Comment on market value • Perform code inspections

14. Educate the Buyer

15. Order the Home Inspection • Immediately after reaching written purchase agreement with home seller • Advise buyer what to look for in an inspector • Advise buyer where and how to find a good inspector

16. Explain the Scope of the Inspection A good inspector: • Explains the scope and limitations of an inspection: visual review of readily accessible areas, random sampling of like items, etc. • Invites the buyer along for the inspection • Explains how long the inspection will take, what it will cost and when the client can expect delivery of the inspection report • Discusses their training, experience and affiliations

17. Set Realistic Expectations • Very few homes are in perfect condition • This sale went through, even though it had severe wind damage, because the buyer better understood what had happened

18. Preparing the Seller

19. How to Prepare for a Property Inspection • Secure pets • Turn off alarms • Remove obstructions to: • Furnace and water heater • Electrical panel • Attic • Garage • Crawl space, etc.

20. After the Inspection A good inspector will: • Leave things the way he/she found them • Verify that the furnace/AC is running and return thermostat to original setting • Turn off lights or running water • Make sure doors are locked, etc.

21. The Inspection Process: Grounds

22. Grading and Drainage • Great curb appeal, but the inspector is looking for positive drainage • Water is the No. 1 issue in most homes • Need positive drainage on all four sides of the house • Most drainage issues are easy to fix

23. Driveway, Walkway and Steps • Loose or missing handrails (inside/outside) are a safety issue • Driveway/sidewalk/patios: • Heaving • Differential settlement • Excessive gaps • Are tripping hazards but easy to repair

24. Porches, Stoops, Decks, Balconies, Patios • Ledger board should be bolted to the structure • Railing should have proper height and spacing • Railings/hand railings should be firmly attached • Support posts and stair stringers should have no earth-to-wood contact • Decks can be expensive, but are fairly easy to repair

25. The Inspection Process: Exterior

26. Exterior • Trees can abrade roofs, heave driveways and sidewalks • Tree roots can affect foundations, sewer lines, etc. • Other vegetation should be kept away from siding, air conditioners, etc.

27. Roofing System Inspection of roof: • Estimate age • Number of layers • Type of materials • Leaking or not • Types of valleys • Flashing

28. Chimneys • Chimneys are a frequent maintenance issue and can be expensive to repair. • Inspect for: • Proper alignment • Proper height • Flashed property • Lined and capped

29. Siding and Trim • There are many exterior coverings, including wood, vinyl, stucco, brick, stone and synthetics • Some are more high-maintenance than others • Vegetation can affect siding

30. Windows and Doors Inspect for: • Operation • Alignment • Weather stripping • Evidence of leaks

31. Garages • A single garage door such as this one receives a lot of use • Examining the operation, tracks, springs, openers and fit are important • For child safety, “auto reverse” is a must

32. Pools, Hot Tubs and Spas • Swimming pools and hot tubs are high-maintenance • Could involve filters, skimmers, gas, electric or solar heat, a pool house, etc. • Must have a self-closing gate with a 6-foot-high security fence

33. Irrigation Systems Sprinklers are mostly out of sight, but not out of mind: • Underground leaks/erosion can greatly impact driveways, sidewalks, etc. • Poorly placed heads can lead to water intrusion in the basement, etc. • In the best case, sprinklers are high maintenance.

34. Miscellaneous Inspections Some inspections might require specialists: • Well inspections • Septic inspections • Water potability tests • Seawalls, private docks • Other: Termite, radon, mold, etc.

35. The Inspection Process: Electrical

36. Electrical Inspect for adequacy and safety: • Amperage/voltage • Service cable • Panel • Branch circuits • Grounding • Wire conductor • GFCI • Smoke detectors

37. GFCI Current standards require GFCI protection: • GFCI bathrooms • GFCI all kitchen countertops • GFCI unfinished basements • GFCI garages • GFCI crawl spaces • GFCI all outside electrical outlets • AFCI in bedrooms

38. Smoke Detectors • National safety standards require smoke detectors • Can be battery-operated, hard-wired or both • Can be monitored by a security company • Some areas require one outside each bedroom • Now in some areas they are in each bedroom and living area • Inspectors activate test button only

39. The Inspection Process: Other

40. Plumbing and Fixtures • Water is the No. 1 concern: plumbing; plumbing fixtures are a significant part of inspection • Inspector is looking for leaks, adequate flow and pressure. • Are drains plugged or sluggish?

41. Plumbing Plumbing leaks can also damage: • Cabinets and vanities • Wall behind shower tile • Subfloors, ceilings below

42. HVAC System • Overall size, age and condition of unit • Proper location of unit • Adequate combustion air • Adequate temperature rise • Heat source in each room • Condition, size and location of ducts • Condition of blower/humidifier • Heat exchanger (mostly hidden) • Exhaust system (check for flue gases and other leaks) • Dirty filters obstruct flow and affect temperature rise • Thermostat — unit responds to normal controls Check for adequate heating (gas furnace):

43. HVAC System • Overall size, age and condition of unit • Outside unit, clean, level and up off the ground, suction line insulated • No obstructions interfering with unit • Discharging heat-ambient test • Adequate temperature drop (14 to 22 degrees) • Blower clean and variable speed • Dirty filters obstruct flow and affect temperature drop • Thermostat — unit responds to normal controls Check for adequate cooling:

44. The Inspection Process: Interior

45. Kitchen • Cabinets:Countertops, tile and backsplashes • Stove:Operable burners, not timers • Disposal:Inspect for smooth operation, excessive noise • Dishwasher:condition, leaking, proper air-gap device • Ventilator:Recirculating/noncirculating • Other Built-ins:Microwave, trash compactor, refrigerator, etc.

46. Bathrooms • Can be most expensive areas to replace/refurbish • With simple maintenance, expensive repairs can be avoided

47. Walls, Ceilings and Floors • Walls, ceilings and floors can be covered by a wide variety of materials • Inspector checks for deflection/tolerance in floors, bowing or cracking in walls, cracks, stains or wet spots in ceilings • Operation and fit of doors and windows from the inside

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