Repair Cost Estimate by Home Inspectors

Most of the Realtors like these estimates which they can use for quicker renegotiation to close the deal right away, rather than waiting for cost estimates from three different contractors…
But there are concerns about these estimates. including the following.
If a home inspector thinks he/she can provide a cost estimate based on only a VISUAL inspection, that covers hundreds of items in a couple hours, then that estimate is flawed from it’s origin. It takes an exhaustive inspection by a competent professional in the field of those repairs, to make a proper cost estimate. Because Home Inspections are non-invasive it would most likely be an inaccurate estimate anyway that is why we call in experts. A home inspector does not look behind the wall, a professional competent contractor (Mike Holmes ?) may rip the wall apart to find the problem. MANY times the competent professional will indeed find more than the visual inspection done by the Inspector. The competent professional is supposed to do a more exhaustive inspection and when he finds more problems, then the process has served everyone very well, and the Home Inspector is just the beginning of this process The licensed and competent professional should be called in to do whatever invasive inspections are needed (more than just a visual inspection), discover ALL the items and related items that have been affected by the problem, and make repairs as needed. That Professional should give full warranty, and a detailed receipt of all findings and repairs so the Client has someone who is accountable for anything that may go wrong in the future.
Forum members opinions about providing written cost estimates in their inspection report is greatly appreciated
Nalliah Thayabharan
Markham ON

Leave the estimating to the contractors. We’re Home Inspectors.

Estimations (from our Office) can be provided on a specific need basis but they are provided on an R&R and T&M basis.

Estimations are also provided on an Estimate basis and not in the form of a Proposal.

Personally I think our liability is high enough without adding an extra dimension of client conflict. I tend to add a link to my report with a download of estimated costs, http://www.cmhomeinspection.ca/downloads/Costs2007.pdf
Kind of gives them the answer in a objective way.
As a former contractor I can guarantee that many contractors like to score merit with clients by dismissing the last professionals input.
This is why even contractors give estimates and provisional costings.

Paul,

Where do you see incurred liability in a R&R and T&M scenario with regard to estimations?

In the performance of Commercial Inspections, Cost to Cure is many times required/requested in the delivery of a report.

Personally I do not think we are qualified to make the the costing call. There are too many numerous scenarios to mention that could lead to client disatisfaction in my eyes. The bottom line is it may give clients unrealistic budget requirements for a property.
Good luck to Inspectors who feel confident enough to quote numbers, but a few underestimates on a home could leave a client feeling badly advised.
My 2 cents worth.

I never give estimates to repair.
I have the ability to estimate cost (especially in areas of my so called expertise) as well as anyone, but I was taught not to wear that hat, while performing as H/I for my Client. Conflict of interest, SOP, etc.??
Why would we want to estimate cost of repairs. That’s like telling the customer, “come and get it” when we under - guesstimate. I’ll help by advising what type of service or contractor they should get with, but I stay away from numbers.
IMO

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?

Exactly Joe!

Thank You…

Joe

If my Client (Buyer) ask “Do you think that will be expensive to fix or replace”, I’ll say that you need to contact a specialist in the field, but “probably no” or “probably yes”.

I don’t get into $$ because as we all know, it buyer beware. A repair on a W/H could vary from $65 to $300 on a given small repair and the cost to replace could go from $650 to $1500 to $3000, with the right salesman.

Besides, I thought SOP, NACHI and pretty much all of the major associations prohibit wearing different hats with the same Client.

Greg,

The service provided to a Client is dependent upon the contracted service to the Client.

Greg,

I was a builder most of my life, and still flip properties, knowing current building costs is necessary…many inspectors are not builders, and those who are not, or do not have any idea what costs are, or don’t know how to get them, should probably steer away from the practice.

With this experience, and knowing many many contractors in different fields of expertise I feel very confident giving “rough” estimates.

Repair estimates are needed doing commercial inspections especially, as Joe H stated.

I have never had a problem with anyone after giving a “rough” estimate…not a quote.

It is not an SoP issue, on the east coast of Florida from say Jacksonville to Miami attached estimates are expected and those who don’t provide them are soon out of business.

I started providing them here in an attempt to differentiate myself from my competition but it didn’t seem to matter then, maybe now that the market is depressed it will. I have over twenty years experience estimating projects and my software is designed to include prices for defects. In any case I always segregate major defects (those costing more then $500 to repair) from minor defects.

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.

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

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.

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 :slight_smile: :smiley:
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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.”

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.