Repair Cost Estimate by Home Inspectors

[tflaro]

Some times the closing is too close to get the pro's in. If you work closely with contractors as I have you can get a good idea of costing. Let your clients know that they are only ballpark estimates and that for a real quote call in the pro's. This is a service that only seasoned inspectors should do. If I don't know the cost then after the client gets the quotes I call back to get the info so I will know for the next time. The more you know and do, the further apart you set yourself from the others.
Todd

[jmichalski]

Originally Posted by poliner

However it is the thin end of the wedge once you start, I would have though client are generally more concerned about expensive defects such as foundations/ roof structure etc. which is where giving costings based on a 3-4 hour non-invasive Inspection could be high liability.

Exactly how would you expect a layperson to differentiate between the expensive and non-expensive items?

If you offer them in the form of a proposal, then you have problems. If you offer them as background information, and specifically mention that the estimates are not meant to be substituted for obtaining quotes from qualified contractors, I can't see the elevated liability.

If you are not describing "the nature of the problem", and not identifying major items from minor ones, I am not at all sure what service you are providing the client. It would seem that inspection would result in a report that basically says "Damage observed, contact a qualifed tradesperson for evaluation" for any and every item you find.

[Marcel R. Cyr]

I would be more than happy to provide an Estimate for deficiencies found while inspecting a property and be accurate. They will only have to wait a year and I can go back under a different hat, or I can go back and inspect the work done by someone else.

We are Home Inspectors, and not Estimators, if we were, we would be working for a General Contractor or Sub Contractor. We have to be carefull in wearing to many different hats. Liabilities increase for every change in hats.

Marcel
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[mpilipczuk]

During Home Inspection several years ago, going over the electrical panel. Updated 200-amp, shiny clean, full of circuit breakers,...etc. Looks Great. The Seller, a kind lady in her 90's standing behind me and my Clients. She says, "Oh, the nice young man that updated my panel said you should never have the cover taken off." -Took the cover off...only four of the circuit breakers were wired. The rest were dummies. "How much did the nice young man charge you to update?" Answer, "$5000." Broke my heart. Couldn't break the news to the lady. None of the specific receptacles or GFCIs she paid to have updated were wired properly. (these were receptacles the contractor identified that should be updated for safety reasons, and re-sale value.)

Several morals to this story, however-
We don't have control over what a contractor actually performing the work will charge given the condition of the home, the amount of expensive jewelry/clothes the clients are wearing, the demand on the industry at the time (more demand = more $), or what the client's occupation is--Dr./Lawyer vs. Laborer....Or AGE/GENDER.

Let the pros actually doing the work investigate the problem/causes/fixes and give an accurate estimate(s). Time before the closing or contract expiration is not our concern. That is what the Agents pressure the clients with. We encourage our clients to present the major concerns to their attorney, and they often negotiate a time extention to have proper repair estimates. If the Sellers or Agents aren't going to be flexible to allow further evaluation, that my friends equals a Red Flag.

My .02, thanks and sorry for the rambling. Happy Easter All.

By the way, the contractor charged his client over double what several other similar jobs went for in our area, as I've experienced. I've seen this specific upgrade go for between $1,500 -$3,200. As an inspector, giving a client that number range doesn't necessarily convey confidence. "Will it cost over $500?" - "Yes, Consult with a professional electrical contractor to determine needed upgrades/repairs and estimate repairs in writing."

[poliner]

Originally Posted by jmichalski

Exactly how would you expect a layperson to differentiate between the expensive and non-expensive items?

No problem here, people do generally ask if say a new roof is expensive. Its giving clients an expectation of costs they may incur, that I personally feel may be missleading and not our job, a few misinformed costings and the new home owner has a money pit on their hands.

If you offer them in the form of a proposal, then you have problems. If you offer them as background information, and specifically mention that the estimates are not meant to be substituted for obtaining quotes from qualified contractors, I can't see the elevated liability.

The home owner will remember that the HI said there was about $2k worth of repairs when they are staring at contractors fees for thousands, maybe not a provable legal liability but could be bad for business PR.

If you are not describing "the nature of the problem", and not identifying major items from minor ones, I am not at all sure what service you are providing the client. It would seem that inspection would result in a report that basically says "Damage observed, contact a qualifed tradesperson for evaluation" for any and every item you find.

Water in basement, describe nature of problem, how much to fix?
I do agree that "damaged observed" is probably not much help in giving clients an answer, but again I can see too many scenarios where HI may find a defective item, and put a number on the line. This could range from overestimating and scarring a client off their dream home, or the other extreme.
At the end of the day there are numerous defects that are probably easy to identify, but wearing the sub-contractor/estimators hat will raise your clients expectations that you can give costings for everything.
It may be a wise business choice for some, but costing/estimating is a profession to itself and not necessarily just based on guesstimates for time and materials.

[dplummer]

As a customer, I have the opportunity of choosing between two HI. Both charge the same amount for their inspection. HI#1 gives me pages of fluff & refers everything, well almost everything, to a trade professional. HI#2 gives me pages of fluff but can include an approx. price range for repairs. Guess who I'm going to choose? In fact I'd pay more for HI#2 report. Nothing ticks me off more then hiring a "professional" who can only refer me to more "professionals" Just my 2 cents. Doug

[Joseph Burkeson, CMI]

Originally Posted by poliner

Interesting replies, but answers go to prove costing/estimating is a skill in itself. I still think its an area which opens up a great deal of customer dissatisfaction if HI's get it wrong. By definition costing entails diagnosing the nature of the problem, I would have thought the nickel and dime stuff in isolation would not necessarily create problems for Inspectors.
However it is the thin end of the wedge once you start, I would have though client are generally more concerned about expensive defects such as foundations/ roof structure etc. which is where giving costings based on a 3-4 hour non-invasive Inspection could be high liability.

I think it is important not to mix up the concept of cost verses estimate. The only time anyone will truly know the cost of a project is upon its completion. An estimate on the other hand is a tool which will give your customer information on which they can better arrive at a financial decision and that I believe is a value added benefit our customers can use.

[Marcel R. Cyr]

I have to agree with Joe on this one.

To provide an Estimate to a Client on the repair or remedial work required to make something right, would have to be guess work at best, unless you are a Contractor.

I work for a General Contractor with Commercial Work Value of up to 22 Million Dollars a year.
The last thing I would do is to insinuate to a Client that because I am involved with this that I could give them an accurate Estimate of repairs.

The biggest variable in Estimates to do the work is the one that will actually do it, and that is a very wide variable. The finale Dollar amount will be whoever does the work for a fixed amount.
I would be very skeptical in providing a Dollar amount for a fix, because what I would charge and what someone else would charge could be like day and night.

Be cautious in Estimates.

Marcel
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[Jae Williams]

Originally Posted by dplummer

As a customer, I have the opportunity of choosing between two HI. Both charge the same amount for their inspection. HI#1 gives me pages of fluff & refers everything, well almost everything, to a trade professional. HI#2 gives me pages of fluff but can include an approx. price range for repairs. Guess who I'm going to choose? In fact I'd pay more for HI#2 report. Nothing ticks me off more then hiring a "professional" who can only refer me to more "professionals" Just my 2 cents. Doug

So your inspector is, maybe, OK with HVAC, but no great shakes, and the furnace didn't come on with the thermostat. He gives rough estmate to replace it (big dollars) because he has no expertise in repairing the machine. You would really prefer his report??

Good luck, but you're working with very limited information.

However, having it inspected by a HVAC technician (who finds an inexpensive repair) saves many bucks in the long run.

But, I guess you've got money to burn--

...so most of us would rather deal with clients who truly appreciate what we do for them.

[poliner]

Originally Posted by jburkeson1

I think it is important not to mix up the concept of cost verses estimate. The only time anyone will truly know the cost of a project is upon its completion. An estimate on the other hand is a tool which will give your customer information on which they can better arrive at a financial decision and that I believe is a value added benefit our customers can use.

It is when you get it right,
I still think its a risky area, which is worth letting other professionals take the risk.
Just as your doctor would refer the suspicious lump on your....(fill in the gap)
To a specialist.
I think a lot of the talk of estimating is based upon trying to give a perceived better service to Home buyers, perhaps a marketing one up in a competitive environment. Personally unlike many ex-contractors who feel comfortable offering estimates, my experience as a contractor firmly leads me to believe that its a liability I can do without ...too many variables to cover on a 2-4 hour visit, especially without the "honest" input from the homeowner who likely knows the problem the best

[jmichalski]

I have no problem offering up a generalized estimate sheet including ballpark ranges for typical items found on an inspection, or routine maintenace. I give it to every client.

Numbers were obtained in the following way: I tallied up the 15-20 most common defects I found in each area (roofing, electrical, etc). I gave them to the trade pros I work regularly with in each field and asked for alegitimate ballpark range for each.

I give the sheet to each client so that they can set expectations for typical potential repair costs, and future maintenance costs. The disclaimer tells them that not every situation is typical; often hidden or more extensive damage is observed after work begins; cost vary over time and in relation to geography, the availability of qualified professionals, and materials; and that the sheet is not a substitute for obtaining quotes for three qualified contractors.

My lawyer has no concerns for any additional liability, clients get what they want, and I get to be helpful. Everyone wins.

If I can't identify the problem, clearly I cannot provide an estimate (to use Jae's exmple), however if I can identifiy a bad thermocouple as opposed to a coplete failure of the unit, then I can set a resaonable expecation for the client. If you don't kow what is wrong in the first place, no one can expect you to provide a reasonable cost estimate, and a referral is appropriate. But referring nearly everything out and providing no helpful information, even when it is easily obtained, is just bad customer service.

[dhelm]

After thirty years as a building and remodeling contractor, I have personally come to realize that estimating or bidding is a very inexact science. There used to be a joke going around: What do they call a remodeler who works on a fixed bid? Answer: Bankrupt! A visual inspection does not give enough information to give accurate estimates. Just keeping up with materials costs is almost a full time job. I don't put fluff in my reports and I don't give cost estimates for repairs. In my opinion, the proper thing is to call out the damage and refer costs to experts in the given field.

[Brian C. Hoagland]

The problem with estimates is that they are estimated. In Florida licensed contractors are not permitted to give estimates at all. They can only issue proposals for work they are prepared to perform. If contractors licensed by the state can't perform written estimates, why should we? The most costly repair work is likely to be that which is most difficult to "estimate" from a visual inspection. HI's have been sued and lost for recommending the wrong type of further evaluation. I think it is likely that they will also be liable for less than accurate representations of costs to repair.

[dplummer]

Thus my point! Why pay a HI to find problem area's only to have to bring in a contractor(s) to find an aprox. repair cost? I mean no offense to HI's. For my money I'd be better off bringing in a Restoration Contractor who can point out problem area's & still give me a cost estimate. I think I would get a bigger bang for my buck! Doug

[David A. Andersen]

Don't you think your customer deserves to know the difference between major defects (items that will cost over $500 to repair) and the nickle & dime things used to fill up a report?

For anyone interested in case law; I have been in court and they were all over the minor repair/major repair headings that I posted on deficiencies. The first page my report lists all the categories which I put on the deficiencies in my report to identify them for quick reference. Basically, minor repairs are under $500 in major repairs are over $500.

If you have water damage in the ceiling is a repair over $500? Probably.
If you're gutters are stopped up with little trees growing in them, is gutter maintenance less than $500? Probably.
If gutters that are stopped up caused the ceiling damage, is it now over $500? They seem to think so.

Even though the state law does not put a dollar tag on what they consider considerably deficient, the lawyers were all over my interpretation of what major and minor was.

So, if you want to play their game in court, put some numbers in there!

My lawyer advised me to take everything out of the report. I modified it to be associated with the state law:

MAJOR REPAIR: These are repairs that are significantly deficient.

MINOR REPAIR: These are repairs that that do not function as intended. It should be noted that items annotated as being minor are by no means insignificant and should not be ignored.

As you may gather, the plaintiffs lawyer tried to make minor repair so insignificant that their client simply overlooked it and didn't give it any consideration.