buyers Hiring Contractors to do Home Inspections

[Larry N. Lake]

Originally Posted by ecrofutt

First, expand your market. All of these are within an hour or so of you.
OK CITY
Tulsa
Wichita
Enid
And I'll bet that people in Ponca are working in those areas.

GENERIC TO ALL ADVICE:
There is a service and cost difference between home inspection and technically exhaustive inspections.

Set yourself up to do both. Offer your customer choices.

Home inspection with just you.

Technically exhaustive with subs and you compile and report. (Home Team Style)

You need to get a marketing line together for both of these and sell them on the one you want to provide.

You need to be able to identify the gaps that this customer is leaving open and explain to her (and her lawyer) why she should hire you to fill those gaps.

You can be the best inspector in the world but if you can't make the phone ring and sell yourself when it does, you're going hungry.

Learn to sell yourself. (NO, not for that, for home inspection services!)

NACHI is a great resource for that. USE IT!

<Thank You for the excellent positive post. I have been trying to expand for years and has been difficult. Most of my inspections either come from people finding me on the web or by word of mouth. Believe it or not I do more inspections out of town then right here in my home town. It was because of the Realtors. Clients have told me Realtors really cuss me and have told all kinds of lies about me. If I had enough evidence I think I would sue them. My inspections are a little slow but manage to keep my head above water. One time I traveled from where I live North Central Oklahoma to SE Oklahoma close to the Texas border. I jump in my Honda and will go where ever the money takes me. The big problem is Realtors, and the pubic needs an education, that Realtors are in the business of selling homes we are in the business of finding probmes with the home so the two do not mix very well. We are there to help our clients so they will not be walking into a money pit, or safety hazards. We give them the ammunition for negotiations or to walk if need be. Sometimes I feel bad when business is slow but my reward is not just the money but knowing I have helped my clients. When they praise me for my work it is Worth it all.>

[jmichalski]

RR is Russel Ray. He is the first one I am familiar with who began offering different levels of inspections.

The TECH inspection works like this: subcontract with a group of local trade pros. They each do their own specific trade inspection, including a report (which I have not found to be poorly written, but I do find I have to reformat them - with permission - into my own template to make them consistent). I then perfrom the overall inspection. This provides the client with a specific, thorough, professional-level evaluation of all of their systems which far exceeds generalist knowledge (as this client appeared to want) and also gives them the benefit of the generalist inspection.

You, as the generalist, coordinate the inspection and all the subs. The client gets an exhaustive inspection that is better in each specific trade than nearly any HI can offer. And you are providing a useful service that people like the attorney may refer to for clients like this.

You will also find clients who are fairly saavy and can identify trip hazards or broken thermal seals on their own, but are a bit apprehensive about electric.

If you think you provide a better electrical inspection than a qualified electrician, then I might suggest that you know some poor electricians (most of the ones I work with have taught me a thing or two about electric).

In then end, it sounds like you are trying to sell a single style of inspection to a client who wants something else. I'm not trying to change the way you do STANDARD inspections, but by getting alittle creative, you can offer different levels of inspections, and serve more clients' needs while making yourself a more valuable resource for a wider range of prosective clients.

[Brian A. MacNeish]

jmichalski:

"Liability is reduced by using trade pros"

Be carefull of the "trade pros" you use!!! In the past 3-4 weeks I have inspected the "for sale" homes of 2 certified electricians (mentioned on another post elswhere on this site). The first sale was broken by the house electrical; the second is still pending and has a good chance of not going through because I found so many electrical items. This makes 9-10 times that I have gone up against electricians in the last 2-2.5 years and each time I have come out on top.

Last year, in one home (engineer owned) previously inspected by others only 4-5 years before, the installing electrician used the wrong wire size for an electric water heater. It was checked by a second electrician (called in by the engineer) and said to be "OK". The local code inspector (called in by the engineer because I fought the opinion of the second sparkie) said "you should listen to your home inspector". This house also had 60% knob & tube wiring- not mentioned by his HI 4-5 years ago, "OK'ed" by the present code inspector, and refused by the buyer's insurance company (all as I had mentioned / warned at my inspection). In the end, the deal still went through but at $10,000 reduction to the buyer.

Once more: If you're going to use a tradesman in your business, make sure they're passionate about their knowledge and leadership in their industry. If not, learn much more about the particular specialty and do it yourself. At least you'll have some control then.

[jmichalski]

I would stop short of scolding an electrician from having soem electrical concerns in his home, since mine is not perfect, either. (I can tell you exactly what is wrong, however! )

But your point is well taken, in that all trade pros are not created equal. Here, I have found many through my affiliation with local groups and chambers of commerce, as well as via Angie's List or client referrals (people who they used to address problems idenitified in my reports, that they found to be worth tellin gothers about.)

It is also important to verify that they carry insurance, and establish their responsilibity for their portion of the inspection.

[Larry N. Lake]

Originally Posted by jmichalski

RR is Russel Ray. He is the first one I am familiar with who began offering different levels of inspections.

The TECH inspection works like this: subcontract with a group of local trade pros. They each do their own specific trade inspection, including a report (which I have not found to be poorly written, but I do find I have to reformat them - with permission - into my own template to make them consistent). I then perfrom the overall inspection. This provides the client with a specific, thorough, professional-level evaluation of all of their systems which far exceeds generalist knowledge (as this client appeared to want) and also gives them the benefit of the generalist inspection.

You, as the generalist, coordinate the inspection and all the subs. The client gets an exhaustive inspection that is better in each specific trade than nearly any HI can offer. And you are providing a useful service that people like the attorney may refer to for clients like this.

You will also find clients who are fairly saavy and can identify trip hazards or broken thermal seals on their own, but are a bit apprehensive about electric.

If you think you provide a better electrical inspection than a qualified electrician, then I might suggest that you know some poor electricians (most of the ones I work with have taught me a thing or two about electric).

In then end, it sounds like you are trying to sell a single style of inspection to a client who wants something else. I'm not trying to change the way you do STANDARD inspections, but by getting alittle creative, you can offer different levels of inspections, and serve more clients' needs while making yourself a more valuable resource for a wider range of prosective clients.

I have never heard of TECH Inspections before, I suppose it might be a good idea sometimes but I think it would rarely be used in my small town. It seems like it would be complicated to corrdinate all the Contractors and then make up the reprot and hopfully nothing gets missed. I wonder if it is even legal to do that here in Oklahoma. A guy would have to charge a lot of money to pay for all of the contractors, and doubt many people in this part of the country are willing to pay. Anyway I thought that home inspections were created to supply a need. Do a search on the net and you will find almost infinite web site of home inspectors and training for home inspectors etc. Then do a search on contractors doing inspections and you will be hard pressed to find anything. So to me contrators doing home inspections is not the norm and a little weird. I still say that many many things can fall through the cracks if people hire contractors. That is why we are here to fill that gap. If you needed a check up would you go to a brain surgeon or a heart specialist? No! You would first go to a regular MD for physical because he or she will look at the whole picture of the condition of your body, then if problems show up you would be sent to the specialist in the particular area that was needed......doesn't that make sense? I still think it is error for people to hire contrators and not have much respect for the professional home inspector. The public needs to be educated, and inspectors need to become better inspectors.

[jmichalski]

OK - it sounds like either you or I are misunderstanding the motivation of the clients in this given scenario.

To me, these people were not at all interested in the smaller items that an HI might find (to use your example: broken thermal seals and tripping hazards), and are instead worried that the major systems and components of the home are good. That is someone who is either a candidate for a BASIC inspection (if they want a generalist's opinion of their electric, plumbing, etc) or a TECH (or exhaustive) inspection if they want a professioanl evaluation and money is not a concern.

Yes, TECH inspections are expensive. Yes, they do take some significant amount of coordination and manipulation to produce a concise and useful final report form several individual reports (that's why you can charge more).

They are, however, lucrative if you have very high end communities in your area.

Now, if they just want a generalist's opinion and don't mind someone referring out evaluations of the specific systems and items (i.e "recommend evaluation and correction, as needed, by a qualified ....") then a BASIC inspection by an HI would be appropriate (assuming that they are not interested in, or can recognize for themselves, the items we listed earlier).

Since they went the route of seeking out contractors, that tells me that they were seeking a "specialist's" (trade pro's) opinion right from the start. They wanted a complete evaluation of specific major systems and components by a pro who would not refer out the work or equivocate about what they see and how much it will cost to repair. It does not mean they disrepect home inspectors, it just means they wanted something specific that most home inspectors cannot offer.

There are a lot of buyers for whom a generalist's opinion is useful, informative, and appropriate. There are other buyers who want a specific professioanl opinion about specific items and systems. There are buyers for whom cost is the single biggest factor, and buyers for whom cost is no object.

For all of these reasons, offering a variety of inspections makes perfect sense, and does work. I have offered choices in inspection levels here for going on 6 months now, and business has picked up each month.

It may not be for you, or your area, but it doesn't cost anything more to offer. Not all clients have the same needs and expecations of an inspection. Clearly, these people wanted something specific but could not find an inspector who offered anything like what they wanted.

[John Bauer]

Unfortunatly folks we live in a "SUE HAPPY" world. The InspectVue program is proof of this. It boils down to this... how much "risk" are you willing to take on in your inspections and are you comfortable with the service you provide? I think it`s a matter of conscience that you have to live with after you collect your fee for "services rendered".

[Larry N. Lake]

I hear what you are saying but do not agree 100% This so called wise woman that called in these contrators is missing the point. She is only calling in a plumber and an electrcian. Do you see a big gap here? I do. Remember early in my post I mentioned that we had a hail storm here in Ponca City, OK about 2 months ago. People all over town are getting new roofs, I was one of them. I gave this so called wise or smart woman some free advice about her roof. She replied that the roof was new, she did not need a roof inspection (do you see flawed logic here?) I said it is new? How new? when was it installed? She said she did not know. I advised her again, you really need to get the roof inspected by someone. This same woman that hired me over the phone to do the structural inspector for only $100 bucks called me back to fire me after I called her about her lawyer calling me. I guess she did not like me questioning her about that. After her lawyer gave me a hard time on the phone I called NACHI legal department and they said that was a RED FLAG and I might want to decline that job. That is why I called her back about the lawyer I was concerned that maybe she was sue happy. So this whole deal did not set well with me and was a big turn off to say the least. I do not think this woman is very samrt at all but a puppet and will do anything her lawyer tells her to do.

The wise people who hire me (not saying I am the best but I give it 100%) are usually people who heard about me and how good I was and people who are smart enought to think for theirselves and research to find a true independent inspector which I am. One time I did an inspection for a big shot that managed the CONOCO refinery that we have here. He was a very intellegent educated man, and knew exactly what he wanted. Did go and hire a bunch of contrators? No he did not. He hired me and I also did some mold testing, we really took a hard look at the floor registers (around this part of the country a lot of slab foundation homes have the HVAC vents embedded in the slab) and found corrsion, mold and tar where they had been patched. My client did not like that and I dont blame him. We did 2nd mold test and finally got permission to move a big screen TV and found a floor vent that was completley rusted through. Later on he wanted to check the HVAC more thouroghly which I said was a good idea but the seller had a ton of boxes stacked in the way. We got permission and my client, seller and I started moving boxes, then we got an HVAC contractor out so we could dismatle the HVAC Unit to look inside. The first contractor which by the way is married to a Realtor did not find much. My client was nto satified, I told hoim about another contrator which I thought was good and he did a better job. He found water standing in the bottom of the plenum. Guess what? my client got a brand new HVAC unit top notch, placed in the attic, all flor vents plugged off and installed new ceiling vents. The cost which the seller paid for was about $10,000. My clioent was very very happy with all of my work and staying with the job until completed. We had to go through two contractors but problem solved. So you see here is a case where the client was very savy and knew what he wanted and he knew I was independent and would not be soft on inspections. My client by the way had plenty of money and could have hired a truck load of contrators if he had wanted to. I still say that a wise client will first hire a darn good inspector that will really get in there and work for them, then call out the contractors that are needed.

Originally Posted by jmichalski

OK - it sounds like either you or I are misunderstanding the motivation of the clients in this given scenario.

To me, these people were not at all interested in the smaller items that an HI might find (to use your example: broken thermal seals and tripping hazards), and are instead worried that the major systems and components of the home are good. That is someone who is either a candidate for a BASIC inspection (if they want a generalist's opinion of their electric, plumbing, etc) or a TECH (or exhaustive) inspection if they want a professioanl evaluation and money is not a concern.

Yes, TECH inspections are expensive. Yes, they do take some significant amount of coordination and manipulation to produce a concise and useful final report form several individual reports (that's why you can charge more).



They are, however, lucrative if you have very high end communities in your area.

Now, if they just want a generalist's opinion and don't mind someone referring out evaluations of the specific systems and items (i.e "recommend evaluation and correction, as needed, by a qualified ....") then a BASIC inspection by an HI would be appropriate (assuming that they are not interested in, or can recognize for themselves, the items we listed earlier).

Since they went the route of seeking out contractors, that tells me that they were seeking a "specialist's" (trade pro's) opinion right from the start. They wanted a complete evaluation of specific major systems and components by a pro who would not refer out the work or equivocate about what they see and how much it will cost to repair. It does not mean they disrepect home inspectors, it just means they wanted something specific that most home inspectors cannot offer.

There are a lot of buyers for whom a generalist's opinion is useful, informative, and appropriate. There are other buyers who want a specific professioanl opinion about specific items and systems. There are buyers for whom cost is the single biggest factor, and buyers for whom cost is no object.

For all of these reasons, offering a variety of inspections makes perfect sense, and does work. I have offered choices in inspection levels here for going on 6 months now, and business has picked up each month.

It may not be for you, or your area, but it doesn't cost anything more to offer. Not all clients have the same needs and expecations of an inspection. Clearly, these people wanted something specific but could not find an inspector who offered anything like what they wanted.

I guess you can view a deal killer several ways, and I am sure there are some inspectors that will call out every tiny crack. I am not one of those people. I explain to my clients not to worry about hairline cracks and such on a foundtaion or even wall, but if they are larger and say diagonal above a doorway or window then you have settling and maybe structural problems, it really depends. So I try not to be alarmist and have tried to explain things better and what can be done. But still buyers will choose not to buy a house cometimes just because my inspections are good and they make that choice. This does not happen all the time, it happens sometimes. So I have come to the conclusion it is not me, it is the greedy Realtors that want to make the sale and they do not care about the buyer. I have been yelled at threatened, you name it by Realtors over the years. I now have very little respect for them. My clients on the other hand love me and some have hired me twice, they love my reports and I have saved a couple of clients $10,000 which does not happen very often. One was when I found record levels of radon here in Ponca City, OK. I was yelled at by a Realtor over that, even the buyer did not believe my findings but it was verified later on. The old saying do not shoot the messager applies. I feel if you are doing a good job for your clients you will not be liked very well by most Realtors, if you are liked by Realtors then you need and think maybe you are getting to cozy with them. Go to IHINA and read the philosophy on that web site about Realtors.

[Russel Ray]

Originally Posted by Brian A. MacNeish

Be carefull of the "trade pros" you use!!! In the past 3-4 weeks I have inspected the "for sale" homes of 2 certified electricians (mentioned on another post elswhere on this site). The first sale was broken by the house electrical; the second is still pending and has a good chance of not going through because I found so many electrical items. This makes 9-10 times that I have gone up against electricians in the last 2-2.5 years and each time I have come out on top.

Last year, in one home (engineer owned) previously inspected by others only 4-5 years before, the installing electrician used the wrong wire size for an electric water heater. It was checked by a second electrician (called in by the engineer) and said to be "OK". The local code inspector (called in by the engineer because I fought the opinion of the second sparkie) said "you should listen to your home inspector". This house also had 60% knob & tube wiring- not mentioned by his HI 4-5 years ago, "OK'ed" by the present code inspector, and refused by the buyer's insurance company (all as I had mentioned / warned at my inspection). In the end, the deal still went through but at $10,000 reduction to the buyer.

Once more: If you're going to use a tradesman in your business, make sure they're passionate about their knowledge and leadership in their industry. If not, learn much more about the particular specialty and do it yourself. At least you'll have some control then.

That is exactly why home inspectors should offer re-inspections (at a cost) to their Clients. Just because other professionals did repairs on a structure doesn't mean the repairs were done right, and we're the only ones who are going to tell our Clients that. Charge for that knowledge and charge for the additional opinion. It's a very lucrative business, money left on the table for people liike me who are willing to HELP before, during, and after the inspection.

[Russel Ray]

Work with your business advisors to set up several different inspections from your prospective Clients can choose. For example, I have LIST, BASIC, STANDARD, PREMIUM, TECH, RENTER, SPOT, MAINTENANCE, DRIVEBY, FLYBY, VOICE, ASK, WALK, and CARRY inspections. The meet different needs for different Clients in different circumstances. The structural inspection she wanted you to do would have been my SPOT inspection.

These would be my prices on a 1750-SF SFR:

LIST - $299
BASIC - $399
STANDARD - $499
PREMIUM - $799
TECH - $1,399
RENTER - $299
SPOT - $100 per hour
MAINTENANCE - $299
DRIVEBY - $199
FLYBY - $79
VOICE - $109
ASK - $139
WALK - $199
CARRY - $159

Because of the volatility in gas prices, my prices are adjusted on a daily basis, so prices might change tomorrow.

[Russel Ray]

Sounds like you also need the doctor/surgeon analogy:

Home inspectors are like family doctors in that both are generalists. When you have a chest pain, you go to the family doctor. The family doctor runs some tests and tells you that you need to see a heart specialist, so he schedules an appointment for you. The heart specialist runs some additional tests and tells you that you need heart surgery so he schedules an appointment with a heart surgeon.

Same thing with home inspectors. Being a generalist is not bad, it's just the first line of defense. And that first line of defense is usually much less expensive than hiring all the required specialists.

When one is working with a prospective Client who just wants a plumber, an electrician, and a structural inspection, ask them if the plumber built the chimney, ask them if the electrician installed the roofing, as them if the structural engineer built the windows and doors, etc. It took many, many individuals to build the house, and to inspect it would require someone who knows something about everything (a generalist home inspector) or lots of specialists.

For a 1750-SF SFR, here's some average prices in my area:

STANDARD home inspection - $399

or complete system evaluations by:

Plumber (water and sewer plumbing only) - $200
Electrician - $300
Roofing contractor - $200
Chimney Sweep - $150
Structural Engineer - $500
Pest Control - $150
HVAC - $100
Window and door installer - $150
Garage vehicle door installer - $85
Landscaper - $50
Kitchen appliance installations (home inspector) - $100
Total - $1,985

The only person I can find who will inspect all the kitchen appliances is another home inspector, so since he is already there, why not let him do the whole inspection for another $299?

It is highly unlikely that a home inspector would recommend a complete system evaluation by all those other professionals, so it is highly likely that a prospective Client can save a lot of money by using the home inspector.

Additionally, try scheduling and coordinating all those other inspections. Mr Client is going to be taking a lot of time off from work, or have a Realtor who will really be earning those commission dollars.

Note from my previous post that my TECH inspection on that house would be $1,399, so they even save money by letting me coordinate all the various professionals. That's because these are the only licensed members of my TECH inspection team:

Plumber (water and sewer plumbing only) - $200
Electrician - $300
Roofing contractor - $200
Chimney Sweep - $150
HVAC - $100
Total - $950

I do everything else within the confines of law (seller does pest control). If a structural engineer is required, that cost is extra.

Note also that my STANDARD inspection of $399 gets increased to $449 as part of the TECH inspection for the aggravation of having to coordinate all those other professionals. Additionally, note that a TECH inspection requires 14 days notice, so it is not for short escrows. I did have one TECH inspection where the Client called two weeks into the 17-day inspection contingency period. They were quite adamant (they were from Boston) that they wanted a TECH inspection and wanted to know what to do. I told them that they should have their Realtor request an extension. Realtor was not happy with me since I guess that obviously pushed her commission paycheck out by another two weeks. Seller also was not happy. But the fact of the matter is that in those high-end properties, it is always easier to keep a buyer in the fold than it is to go out and find another buyer. Ultimately, everything got accomplished and everyone was happy.

By the way, many home inspection companies throughout the nation quite often use licensed professionals in other industries as members of their inspection teams. It's a great way for a home inspector to inspect the roof without walking on it.

[Larry N. Lake]

That is interesting offing different levels of inspections, I wonder how it would work around here? The only problem I can think of right off hand is if a contrator screws up and misses something wouldn't we be responsible?

[Russel Ray]

Originally Posted by llake

That is interesting offing different levels of inspections, I wonder how it would work around here? The only problem I can think of right off hand is if a contrator screws up and misses something wouldn't we be responsible?

Not if you, your attorneys, your insurance advisors, and your report writers word things appropriately.

[James H. Bushart]

Originally Posted by llake

That is interesting offing different levels of inspections, I wonder how it would work around here? The only problem I can think of right off hand is if a contrator screws up and misses something wouldn't we be responsible?

Yes...and your E&O would not cover their mistakes...just yours. Be careful with this kind of stuff.

[Charley L. Bottger]

She is only calling in a plumber and an electrcian. Do you see a big gap here?

No Larry she did not call a plumber or an electrican she called me I filled your gap.