Category: Inspect the Inspector

Interviews and discussions with practicing and established inspectors.

“HELP!” Two Home Inspectors Weigh In

Two new home inspectors weigh in on their greatest challenges and seasoned pros show how to fix them.

Some inspectors work for larger companies, but most of us in the business are on our own to sort out problems and find solutions. In an effort to start opening a best practices dialogue amongst inspectors, we asked two brand new inspectors to admit their greatest business challenges and sought the support of some inspectors who have been around the block. We also want to hear from you. If you’ve got a question you need answered, a problem that needs troubleshooting or just want to get some thoughts from others in your industry, contact us at chris@tapinspect.com and we’ll be delighted to help you get connected to the right people. In the mean time, check out how these pros solve pressing problems for newcomers in the industry.

The Problem: Landing Those First Clients

Like every other inspector getting started in a post-recession market, John Keener of Mountaineer Inspection Services in Bridgeport, West Virginia has questions about breaking in.

“There’s already established home inspectors in my area,” he says. “I went to a few of the real estate agents, put on a little ‘This is who I am. This is what I do.’ I really haven’t seen any return from that…What’s the best strategy to try to form those relationships?”

Solution: Forget the Agents  

“I actually try to market to the public versus realtors,” says Casey Patten, who’s headed Root River Inspections in Minnesota for the past five years. “…I’m professional and polite, I’ll answer questions if they have them, but I’ve never gone out of my way to market myself directly to them.” Instead of tapping into real estate agents, Patten focuses on marketing to home buyers directly as well as to loan officers, mortgage lenders, contractors and anyone else involved in the home construction and buying biz. To do that, Patten makes his online outreach efforts a top priority.

“I hit my web site as much as I can,” he says. “‘…I hit social networking. I’ve got a Facebook page for my business. I’ve got a Google Plus page for my business. I’ve got LinkedIN and Twitter, all so I can try and stay as independent as I can.”

New home inspectors can also beef up their client list by joining networking groups like BNI and LeTip, becoming a housing expert for local publications and getting the word out in their local PTAs, civic groups and volunteer and religious organizations.

The Problem: Assessing the Add-Ons

Sure you can inspect homes, but clients may wonder what else you can do too. Amidst a sea of licenses and certifications, Aaron Frasher, owner of ACF Home Inspections, LLC in Huntington, West Virginia, wonders what additional services are worth offering. After all, training, certification and equipment required to provide ancillary services can cost thousands.

“There are different things that we want to be able to provide for our clients like mold inspections, air quality inspections, that sort of thing,” he says. “…A lot of home inspectors offer home warranty and recall checks and mold inspections. Each one of them costs money out of our pocket. I’m wondering if it’s worth going and getting those certifications. How often are they used and required?”

The Solution: Test the Market

Whether add-on services like mold inspections and radon testing will boost your business or sap your bank account depends wholly on the market in your area says Bill Dare, owner of Spotlight Home Inspection LLC in Harleysville, Pennsylvania.

“About 40 percent of the work I do is with stucco [inspection] because that’s a big thing here,” he says. “I imagine if I were in a place like Florida, mold and termites would be at the top of my list.”

Ancillary services are a crucial part of many home inspectors’ businesses. Dare says that inspectors frequently earn 30 to 35 percent of their revenue through add-ons like wood-destroying insect, mold, thermal imaging and radon tests. To find out which services work best in your area, Sergio Angione, president of SRA Home Inspections,  a franchise of HouseMaster located in Towaco, New Jersey, recommends that new inspectors listen to their clients and check out their competition.

“Call [competing inspectors] up as if you were going to book the home and ask what services they could provide,” he says. “If you see that no one in your area is providing a radon screening, then there may be a reason for that. Maybe there’s no radon in the area…or maybe you could be the only company that provides that service.”

Until new inspectors have a solid grasp of which add-ons will pay off in their neck of the woods, Dare recommends finding contacts so newbies can subcontract work out. The tactic not only makes you look good to clients; it can also provide referrals when your subcontractor has a client who needs an inspection.

Inspect the Home Inspector(‘s Attorney): Joe Ferry

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It wouldn’t truly be our “protection” edition of the newsletter if we didn’t shed light on the legal aspect of home inspecting.  Joe Ferry is an attorney in Philadelphia who specializes in home inspection cases. He currently serves as General Counsel for InterNACHI home inspection association and has more than 10 years of experience representing home inspectors under his belt. The good news, according to Ferry, is that home inspectors are rarely the ones who make lawsuit-worthy mistakes. Out of the approximately 300 cases Ferry has taken, he says that he’s only seen three where the home inspector was legally to blame. The down side is that despite the positive odds, you’ve still got to protect yourself. Here’s how:

 

Tap Inspect: How can home inspectors prevent a law suit before one starts?

Joe Ferry: First, they need to manage their clients expectations. A lot of people that hire a home inspector have no idea what the home inspection entails…They think that the inspector is going to take the house apart and put it back together again. Inspectors need to tell clients that it’s going to be a limited, non-invasive, visual inspection and explain what the standards of practice (SOP) are that they’ll be following. The second thing that they need to do is follow the SOP…One thing you can’t fail to notice if you read SOPs is that there are a lot of things home inspectors are not required to do. Inspectors should know what those are. The third thing they need to do is strengthen their pre-inspection agreement. A lot of [agreements] are really inadequate to protect the inspector and a lot of them are internally inconsistent. Something in the front of the agreement contradicts something in the back of the agreement which means that the agreement can get invalidated in court.

Tap Inspect: How can home inspectors beef up their pre-inspection agreements?

Joe Ferry: An arbitration clause and an attorney’s fees clause are the two main elements. You want an arbitration clause because most cases involving a residential real estate transaction are multiple defendant cases. You have the seller, the real estate agent, the buyer’s agent, the seller’s agent, the home inspector and sometimes others. If the client has agreed to resolve any disputes in arbitration, then the inspector’s attorney could prevail upon the client’s attorney to voluntarily dismiss the inspector. The client’s attorney will generally do this voluntarily because otherwise the inspector could file a motion to dismiss based upon the arbitration clause and then seek recovery of his attorneys fees because the refusal to voluntarily dismiss the inspector would be unreasonable in that circumstance.

An attorney’s fees clause says that the prevailing party in litigation would be entitled to recover his [or her] attorneys fees. The inspector is almost always going to be the prevailing party…Another clause that inspectors should have in their agreement is a clause that waives the statute of limitations. In most jurisdictions, the statute of limitations for tort claims is two years and the statute for contract claims is four years. Inspectors are in the house for two hours. If a client doesn’t discover the problem in a year, how are you supposed to have discovered it in two hours? If inspectors put a clause in their agreements that limit the time that a claim can be brought to one year, they would eliminate 40 percent of all potential claims.

Tap Inspect: What else do home inspectors need to do to stay out of court?

Joe Ferry: They need to do a professional inspection and disclaim appropriately. The final thing that they need to do is establish what I call The Killer Defense. The Killer Defense is the contributory negligence…If an inspector finds an issue that he’s concerned about, say, with the roof. Maybe it’s at the end of its life or the inspector had accessibility issues. The inspector has to say in his report “Listen, this roof is very close to the end of its useful life and I was really unable to inspect it properly because  the attic was inaccessible.” If that’s in the report and there’s a subsequent issue with that roof and the claimant did not engage in the services of a professional roofer, the client would lose because contributory negligence of any degree is a complete defense to cases involving mere economic loss.

Tap Inspect: What should an inspector do if they do get hit with a lawsuit?

Joe Ferry: If they’re insured, they need to notify their insurance company. If they’re not insured, usually they notify [an attorney]. Most cases don’t start with a lawsuit. Most cases start with a phone call from an unhappy client or a letter from an attorney. It may be counterintuitive, but the people represented by attorneys go away faster than they ones who are not because once I explain to attorneys all the reasons that they can’t win, they lose interest in the case.

Joe Ferry is an avid blogger and public speaker on home inspection related cases. His writing is available at Joeferry.com.

 

If you’ve got a question on the home inspection business you’d like answered or you’ve got a tip you’d be willing to share with our fans, send us an e-mail at chris@tapinspect.com with “Inspect the Inspector” in the subject line.

Inspect the Inspector: Anthony Morganti of SureLook Homes Property Inspections

In southern Cali, becoming a home inspector isn’t hard. Surviving as one is damn near impossible. For the past six years, Anthony Morganti of SureLook Homes Property Inspections in Inland Empire, California has risen above the competition. Armed with a background in building and more than a decade of firefighting experience, Morganti broke into home inspections after spending years doing fire inspections. Today, he’s the sole inspector for 160 real estate agents throughout the region, a success he credits to his personal approach to the inspection process. Here’s how he does it.

Tap Inspect: Ok, give us the skinny on doing business in Cali.

Anthony Morganti: In southern california, there are so many guys doing home inspections, you have to lock down the area where you do business. There’s really no licensing requirements here, so inspectors are a dime a dozen. There are tons of guys who say “Hey, I want to be a home inspector today.”

Tap Inspect: So how do you carve out your piece?

Anthony Morganti: When I first started doing this, I did about 50 ride-alongs. I probably shadowed six different guys which gave me an idea of how different people do business. Everyone has their own way, but the way I conduct my inspections is it’s a true hands-on inspection with the client there the entire time. I really want them to trust me and talk to me. If the client can’t trust you in a purchase like this, who can they trust? If someone feels comfortable with me, my business is going to go that much further. If they ever have a quick question or an issue down the road, if they’re comfortable, they’ll call and talk to me instead of suing me. Some inspectors want to do their thing and send the client the report later, but I like to answer questions while we’re looking at the problem. It’s right there. It’s right in front of them. They’ve seen it and they know what they’re getting into. I try to tell them exactly what the problem is and how they can fix it.

Tap Inspect: Taking that approach, do you run into problems with real estate agents who desperately want to make the sale?

Anthony Morganti: It’s a fine line. It’s all about being honest, but also explaining the situation. The more information you can give on what the problem is and what they can do to solve it, the better. I am required to be a non-biased third party. My main goal is to let the client know that everything can be fixed and how they can fix it. Everything, even structural problems. There’s obviously a cost to fixing things, but I try to remind the client that every house has problems and that’s not the end of the world.

Tap Inspect: What’s the biggest lesson you’ve learned in your six years of business?

Anthony Morganti: To stay away from the minor cosmetic issues. When I first started, I wrote up every little paint chip, every little tear in a screen. All that does is make people nervous. Now the life saving issues are the ones that I really key in on. That is really what my business is based off of.

Tap Inspect: We ask this of all inspectors—what’s the strangest thing you’ve seen on the job?

Anthony Morganti: In one situation, I inspected a house where someone had used coat hangars to splice wires together on an electrical panel. That’s a life-threatening issue.

You can read up on Morganti’s business by checking out SureLook Homes Property Inspections.

Inspect the Inspector: Forrest Lines, Vice President of the National Association of Home Inspectors


Vice President of NAHIAs the Vice President of the National Association of Home Inspectors, President of NAHI Ohio and owner of By-Lions Home Inspections in Columbus, Ohio, Forrest Lines is well-versed in the home inspection game. A former draw inspector, Lines has run his own inspection firm for the past 14 years and weathered everything from hard times to on-the-job nudity. In an age where inspectors are scrambling to cram more and more inspections in per year, Lines takes his time and spends an average of three hours on each home. Here’s how he built a smarter business.

Tap Inspect: What’s been your biggest challenge so far?

Forrest: The biggest challenge in the home inspection business is all of us want to inspect homes. We don’t want to market. We don’t want to do business development things. All of that takes a back seat because we’re really interested in homes. One of the biggest challenges is to stay in a position where you are always marketing your business.

Tap Inspect: In terms of marketing, what works for you and what doesn’t?

Forrest: I’ve found some decent ways that you can reach people and get some reasonable results. One of the big ways is through the internet. People are searching for home inspectors and they’re not looking in the Yellow Pages. They’re much smarter about what they do and by the time they reach you, they know a little bit about home inspecting and they know something about you too. The best marketing tool that we have is doing a good inspection. That is what will get us more business than we ever even know because people talk to people so we just need to stay sharp, stay smart and fresh about what we do.

Tap Inspect: What’s been the most effective tool for you?

Forrest: One of the single most effective things I’ve ever done, and it’s so simple, is just not to leave money on the table, to be able to do ancillary services so that we can be more efficient at each inspection that we do. Ohio is a pretty strong radon state. Right on my [home inspection] contract, I have people accept or deny a radon test. You’d be surprised how many home inspections go from $350 to $475 in a blink because people go, “Oh yeah Radon. I’ve heard about that. Tell me about that.” Get yourself educated about radon and get licensed if your state requires it and you can add that to six, seven, eight out of ten inspections. I’m also educated in termite inspection.

Tap Inspect: What’s the number one thing you’ve learned about the home inspection industry?

Forrest: It’s not what you know; it’s how you say it. We all know about plumbing, electrical, heating and cooling, but that’s not what it’s about. It’s all about relationships. It’s about connecting with people and telling them the story that you read from the house. There’s a guy in my neighborhood who tells people, “Don’t ask me any questions. I’ll answer everything at the end.” That blows me away. I can’t get my home inspections done because I talk too much. I know i spend too much time connecting with people, but when I get done with a home inspection, people love me.

Tap Inspect: How do you handle the inherent conflict between giving all the gory details on a house to a client and keeping the realtor, the person providing your business, on track with the sale?

Forrest: We have to hold onto our standards and ethics and they state quite clearly that we inspect and report. The real estate agent has nothing to do with what we do, even though they sometimes try to be a big part of it. If the roof needs replacing, you have to say it. The home inspection is the last piece of the sale negotiation, so it’s a good thing that I found the bad roof. The buyers can use that as a negotiation tool. If I succumb and say, “Well the roof doesn’t look that bad” and then a couple of seasons down the road it starts to leak, I couldn’t sleep at night. You’ve got to tell the truth and it’s got to be clear. You can’t tap dance.

Tap Inspect: What’s the most surprising part of the business to you?

Forrest: I’m very surprised that the banks aren’t smart enough to figure out that if they would leave the utilities on in a vacant home, they would spend a few hundred dollars to save hundreds of thousands of dollars in mold mitigation. People come in, see the mold and end up negotiating these houses down by tens of thousands of dollars. I can’t believe that someone hasn’t figured that out.

Tap Inspect: We ask this of all our Inspect the Inspectors, what’s the strangest thing you’ve seen on the job?

Forrest: I was doing an inspection on a piece of property that the owner was home. The buyer was with me. We started out early on a saturday morning. We did the outside, the basement and the first floor. We were going up to the second floor and as we walked up the stairs, the owner of the home stood at the top of the stairs. He guided us to the first door on the second floor, opened it and stepped aside as if to say “Go on in.” I stepped into the bedroom and there lay his wife on the bed, completely naked. I turned around right away and looked at him and he just shrugged his shoulders like “Oh well.”

Check out By-Lions Home Inspections here.

Home Inspectors – Why Did You Launch Your Business?

Entrepreneur Magazine is holding a video contest aimed at small business owners. Entrepreneurs who describe their AHA! moment, when they first decided to go into business for themselves wins serious bragging rights. Regardless whether you enter (the deadline is today, Yikes!), the most inspiring ones will be posted on the Entrepreneur blog throughout Independence Day weekend. We’d love to see some home inspectors represent!

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