PODCAST TRANSCRIPT:

Ian R: Welcome back, everyone to Inspector Toolbelt Talk, home of not tool belts, but Home Inspection Software. Today we have a repeat guest with us. We have Isaac, how are you, Isaac? Isaac Peck, I should say.

Isaac Peck: I’m doing well, Ian. Thanks for having me. Excited about the conversation.

Ian R: Yeah, well, I’ll tell you, our editor after going through the last episode, said your episode was one of the most interesting ones that he had listened to. He said he learned things and he enjoyed the conversation.

Isaac Peck: Oh, that’s awesome. That’s awesome. It’s mutual.

Ian R: Yeah. Well, that’s why we appreciate having you back on. So Isaac, can you reintroduce yourself a little bit to our listeners?

Isaac Peck: Yes. So, my name is Isaac Peck, I’m the editor of Working RE home inspector. We have the most widely read magazine for home inspectors in the country. I’m also the president of OREP insurance. We’ve been serving home inspectors with their, you know, general liability insurance for over 20 years. You know, our background is risk management claims management, and insurance for the home inspector professional.

Ian R: All right, thank you. Yeah. If you haven’t listened to the last episode, Isaac was on, take a look, he had some great insights into home inspection agreements and some other things. Today, he’s going to help us with mitigating risk, something that’s on our mind quite a bit as home inspectors in general, how do I keep my risk down? How do I avoid getting into a lawsuit situation, to begin with, or getting into some other legal problems? Before we do that, as I was talking with you a little bit before the show here, I’ve been going on a ranting tirade for the past few weeks about the changes in the home inspection industry. You know, I’m only 41. I had to think about that for a second. I’ve seen a lot of changes in our industry over the years. It seems to be changing more rapidly. Now, vendors are being bought up our data being used in ways that had never really been used before. What are your overall thoughts on the changes in the industry going on? Then we can dig into our subject here in a minute.

Isaac Peck: Well, I think it’s, you know, it’s definitely something that home inspectors and that anyone in the industry, you know, wants to keep an eye on. OREP doesn’t just only serve home inspectors, but we also do a lot of business in the real estate community at large. So we do business with real estate agents with Real Estate Appraisers, and then with other, you know, professional service firms, such as pest control, private investigators, those kinds of things. So you and I had talked about this a little bit previously kind of industries, where you have a lot of, you know, private money and private equity coming in and trying to buy up large sections of that industry, it’s certainly not unique to home inspectors. You know, there’s an interesting kind of comparison, if you compare kind of what the pest control industry has been through for the last decade, there’s been a ton of private equity, operating in the pest control space, where they’ve gone through and tried to buy up. You know, not just the service providers, but the actual pest control firms themselves. That’s where you get, you know, the orphans and the huge pest control service companies that kind of took over that entire industry. We’re not to that point yet, in the home inspection space, nobody’s been able to, to kind of build a really, really large and dominant home inspector company but we’re definitely you know, we’ve been seeing that in the software and a lot of the companies that are providing services to home inspectors, some companies are having a lot of success going around and buying those up.

Ian R: Yeah. So let me ask you about that with the pest control industry because I think that is a good comparison, we’d we get home inspectors might kind of like go well, no, it’s not. It kind of is we’re service-based industry. The difference is they have recurring income, and we’re, for the most part going to be involved with real estate transactions. So there are obvious differences but was that good for the pest control industry? Or bad or neither? Or how do you did you kind of view that transition?

Isaac Peck: I think it definitely made things more difficult for independent operators, right? If you’re a small business owner and let’s say you’ve got, you know, 4 or 5 6 7 employees and you’re trying to be very competitive in your local market, having really large, sophisticated corporate competitors can definitely be a challenge. So I think it poses a threat or is potentially scary for the small business owner or home inspector who is up against kind of much, much larger competitors potentially with deeper pockets.

Ian R: I think that speaks to two aspects of the home inspection industry. First of all, with the consolidation of the inspection industry. There are way more multi-inspector firms and bigger ones than I’ve ever seen. I was one of the first guys to go multi-inspector that it wasn’t like, you know, your cousin that was working with you or your wife, husband, wife, team. People were like, Oh, hey, that’s weird. Now it’s like everybody is like, consolidated into four or five inspectors. The other part that it kind of speaks to our we’ve talked with a couple of our guests here about management companies, kind of coming in and with appraisers, specifically, right, so there are companies out there. We’ll avoid naming them, I guess, for now. We’ve talked about them before, they are basically doing that at least two that I can think of where they’re building a national brand, sending the inspectors out, and delivering a report to their client. The home inspector really doesn’t have direct interaction with the client. It’s that corporation. So they become the face of that part of the real estate transactions to that individual home inspector. Is that kind of how it happened with big companies in the pest industry working or how did they squeeze their way in there?

Isaac Peck: Yeah, I mean, I think the home inspection industry is different. In that sense, in terms of, you know, in pest control, you could have really large clients that have a ton of work that needs to be done. So then, as a small company, say, competing against a larger company, for those bigger contracts, the bigger corporate companies are always going to have an advantage because they’ve got more resources, they’re better equipped to serve those needs. So we haven’t seen a lot of that yet, in the home inspection space, I think, you know, we are seeing some kind of larger investment clients, right that have national portfolios of single-family homes. You know, even some of the larger tech companies like Redfin and Zillow are putting together kind of panels of, I mean, Zillow is not in the home acquisition space anymore, right, but an open door, and a lot of these companies that are going out and trying to acquire a lot of homes, until we’re seeing kind of the introduction of larger clients that have a need a national need for Home Inspection Services if you will. That does create the opportunity to build a larger inspection firm or to build a management company like you’re talking about an intermediary that can potentially get in between the client and the home inspector. So it’ll be interesting to see how those services evolve and to what extent they’re successful.

Ian R: Yeah, and I guess that’s kind of what I’m getting at. So I see pieces of it coming together. So management companies stepping in, and it’s kind of like the difference between owning the restaurant and serving your client. Then a management company comes in, buys out your restaurant, and you’re still cooking the burgers in the back, but they’re still right, they’re the ones the food’s passing through to the client, and the money gets handed to them. Right? That makes me nervous. Then you get bigger corporations buying out, you know, software vendors and other vendors in the industry. Now that data that we collect, that that’s in somebody else’s hands, that’s being used for other things, we spend all this time money, building a business, getting those clients and the software we use, it kinda goes off to them. It’s funny, we were talking about venture capital, I still think it’s hysterical that in our little home inspection world here, we got approached by venture capital, I was very open about it when it happened. They’re like, hey, we’d like to talk and I’m like, Alright, so this is weird. We’re not the largest software company by any means. We’re independently owned. You know, I’m just like, what do you guys do in here? This is, and they knew a lot about our industry, they’d been talking to a couple of other software vendors. You know, what, if you have venture capital, they install a board, and they give you direction on where things go. So that board gives direction on where your software goes, which directs the home inspectors, and how they do their work. Now, you know, I see a lot of that happening.

Isaac Peck:  Right, the list of independent service providers to the home inspector, you know, software providers, and all of that the list of independent companies is definitely getting a lot shorter, especially when we just look at the dominant players in the space.

Ian R: Yeah. So it is, it is a pattern that I see happening, and I liked your comment saying that it’s not you didn’t address that it’s not good or bad because in my mind, maybe I’m thinking the same way you are. It’s not necessarily good or bad but it is bad for independently owned home inspection companies that are on the smaller side. Let’s define smaller if you have, you know, five or under inspectors. That’s still considered a small business. You’re really gonna have a hard time competing with a management company that’s nationwide with a recognizable brand and a $3 billion-a-year marketing budget? It really it’s really hard to compete with that.

Isaac Peck: Right. Yeah, I mean, a lot, a lot of home inspectors are happy kind of, you know, just doing the inspections themselves and running at a small scale, and some are very successful, you know, the polling down 200-250k a year. I remember I saw a presentation. Years ago, I really experienced a home inspector who was really successful, and his pitch to the room was, you’re an entrepreneur, you’re in business for yourself, it’s just not worth it to take all this risk. If you’re not trying to build, you know, a larger firm with 10 to 12 home inspectors under you, right? If you’re going to be taking all the headaches of being a business owner and taking the risk, you know. The goal should be to build a larger company. I know not everyone agrees with that but I have never kind of forgotten that.

Ian R: Well, I’ve always been about the bottom line when it comes to business. If you have 10 inspectors and your bottom line at the end of the year is $500,000. If you work alone, or with one other guy, your bottom line is $450,000. Why wouldn’t you go smaller? So there was a rule and construction we always went by it was two or 20. In terms of employees, right? Make you make money when you have two employees or 20. Right, it was kind of a general rule of thumb that worked. You know, once you got in the middle, you’re just taking all our risks. I’ve always been about boutiques, we talked with James Galante, about this actually, he’s like, we need to be boutique because he works by himself and makes a very good living because he’s just like, I’d rather work less and charge way more and do a way better inspection and then go have a glass of scotch and you know Cuban coffee later.

Isaac Peck:  Right. So, right. I mean, I think even with everything that’s happening that I don’t see any fundamental, you know, a worst significant threat to, to those home inspectors that are operating in that way, right? Nope, it doesn’t seem like anybody’s going to be able to be an intermediary, in those kinds of relationships, right? If you’re a really good home inspector, you’re very well connected in your community, and you’re doing marketing directly to homebuyers and I have a lot of relationships with real estate agents. I think that those kinds of businesses are often very profitable. I don’t think that they’re particularly threatened by private equity coming in but there’s always the question of kind of where’s my data going, right? Who’s my software provider? Who’s my warranty provider? You know, how long is it? If I switch to a different software provider, how long will it be until they’re acquired those kinds of things? Right?

Ian R: Yeah. I see a lot of apathy when stuff like this happens, oh, and other vendors bought up, oh, well, but we can’t just go about our lives, we either have to go along with the change, fight to change, or adapt to the change. We can’t just sit here and do the same thing that we were doing 10 or 20 years ago, we had something has to be done in the way we look at things. Well, I guess we had a guest say we can only control our side of the situation. So you know, what are we doing to change for that? I really appreciate your thoughts. We’re, we could talk about that all day but I really do want to get into some of your thoughts on how to mitigate risk. So when we’re talking about risk, we’re talking about legal risk. We’re not talking about whether should you have a harness on when you’re climbing the roof, although maybe we’ll make that another point for a podcast, but legal risk. So how real is litigation risk in the home inspection industry? Isaac?

Isaac Peck: It’s very real. I think, you know, I’ve talked to home inspectors who say, you know, I’ve been in business 20 years, and I’ve never had a claim. I think those people are incredibly lucky. I think many home inspectors who have been in business for any significant period of time have probably dealt with their fair share of angry clients. I think that the home inspection industry is such that buyers often have unrealistic expectations. As far as you know, they think the home inspector can see through walls, they think the home inspector can predict the remaining life of various systems. They think it’s the home inspector’s fault when you know the roof starts leaking or the water heater breaks and what have you. That often results in a demand for money, right? They will often get angry and demand kind of unreasonable things, and potentially, you know, leave bad reviews and try to try to hurt your reputation. So I mean, I guess it’s easy for me to say that because we, you know, we insure a lot of home inspectors across the country. So we see this kind of stuff all the time, but it’s a very real risk. Home Inspectors are much more likely than other real estate professionals or other professionals generally to be on the receiving end of an angry phone call and a demand for money.

Ian R: I liked that you mentioned that point because I was actually gonna ask that question. Are we more likely than other professions in the real estate industry, which is high risk anyways? Real estate is known to be litigious. So we’re at higher risk, in your opinion than, you know, real estate agent or others in the transaction? It sounds like.

Isaac Peck: Yes, absolutely.

Ian R: So that’s important for us to remember as home inspectors because I’ve gone a long time in my career without having a legal issue. I hear a lot of guys say, oh, you know, everything’s fine. I had one guy, and he goes, I did 800 inspections and never had a problem. So I got rid of my E&O insurance. I know, we all sat in the room, we’re like, Oh, okay. You know, it sounds like, maybe you might want to think about your strategy there. Let’s break this up into two parts. What are some ways that you’ve seen practically home inspectors do well, in mitigating risk? Then maybe we’ll talk about where you’ve seen them have a few fails.

Isaac Peck: Yeah, I mean, I think the, as we talked about on the last podcast that we did together. You know, it starts with a really strong inspection agreement or pre-inspection agreement. Having the right clauses in there, if you can. If you’re in a state that allows the limitation of liability clause. Having that agreement be really clear on what it is that you’re looking at and what it is that you’re not looking at, having it conformed to. You know if there’s if there are state-specific requirements, as far as you know, what you need in your agreement. Then, more generally, you know, setting expectations with your clients, making it clear that you know, what a home inspection is, what it is that you’re looking at when you’re actually doing the inspection, and what it isn’t. So what you’re not looking at, what you’re not commenting on setting those expectations really clearly, and then also communicating that to the client, both in the report and if you have any kind of verbal interaction with the client. You know, expectations and communication are really important.

Ian R: Okay, so we did talk about inspection agreements last time. If you haven’t listened to that podcast, please do because you actually had some great clauses in there that we want to think about adding. Is it important to have an attorney look at our inspection agreement? I asked that because a lot of us walk around thinking, my inspection agreement is great until something happens that our inspection agreement doesn’t really cover, or we find a hole in that when somebody makes a complaint, do you think we should have our inspection agreement looked at by an attorney, somebody else?

Isaac Peck: OREP organization is working on providing pre-inspection agreements to all of our insurance. I know that there are other organizations and inspector associations that also provide templated pre-inspection agreements. So I think, you know, a lot of the leading organizations like, oh, rep and some of the other associations, they’ve spent a lot of time in this space. They’ve handled a lot of claims. So I think those agreements are a great place to start. Then if you have a local attorney that’s familiar with real estate and familiar with the home inspection industry in your state, I think it would make sense to just have them, you know, do a once over for anything that might be, you know, state-specific adjustments that might be necessary.

Ian R: Yeah, I like using an industry attorney, someone who’s familiar with home inspections in general, using the agreement, that’s the basis like yours, but then also going to a local attorney, because it’s interesting, the local attorney will say, you have this works in the United States, but you get right down to our county or our state. Things change, like, for instance, in New York State, I think we talked about this at some point where you can have a limit of liability clause, and an arbitration clause in New York is one of the few states where you can have both. In most other states, you can’t have both. So you need a local attorney to kind of look and say, oh, yeah, our state allows this or it doesn’t, you know, I don’t recommend arbitration. I do recommend arbitration, whatever it happens to be. So besides the inspection agreement, What have you seen some guys that have done a really good job of mitigating the risk over the years? do or not do? Maybe we could even talk about that? Where have you seen them fail?

Isaac Peck: Yeah, I mean, I think, again, it, I would come back to kind of set expectations properly, being really clear on what a home inspection is and what it is not, you know, it’s, we’re not going to be going through this, this and this, we’re not going to be taking anything apart. This is a visual, non-technical inspection, right, I’m not unscrewing and taking things apart, and then communicating that to the client, oftentimes, the way a claim will come about is, let’s say you couldn’t get to something, or you couldn’t access something in the attic, you didn’t have a good bead on a particular home system, because it was inaccessible, etc, that’s a really good time to make that just abundantly obvious to the client. Because that’s often where it comes back on you. Right? There was a problem there that you couldn’t see, because it was accessible, etc. You know, maybe there was some fine print in your report that says, hey, we couldn’t access this. They’ll come back and say, Well, you’re not going to, you know, you’re not going to tag me, I’m not going to lose this because of the fine print. Right. That, I think, I mean, we’re happy to defend those home inspectors all day, right? Often there is verbiage in that both in the agreement and in the reports that say hey, we can access this. The more you can just obviously communicate those kinds of things to your, your clients, the stronger position you have, and the more likely they are to be reasonable and say, hey, look, Ian told me about this. He made it really obvious in the report that that wasn’t accessible, and they weren’t able to look at that, and I bought the house

Ian R: Anyways. So I like how you brought it out making it obvious. So for me personally, let me know if this works for you. I send an inspection agreement within two days, or within two hours of them signing up for an inspection, they get that it outlines it as a link to you know, New York State, you know, standards, or it tells them these are New York state standards. Then I send them emails, and then in my report to say this is what we do, this is what we inspect, this is what we don’t inspect. Then if I am not able to inspect something, just like an agreement, if something’s very important, we need to put it in bold, underline, italicize, and make it stand out in the agreement. In our reports, we try to make them stand out. It’s easy to say, Well, I’m just gonna bury that I couldn’t get in the attic. So don’t get the callback. I make a big note, I could not find access, there is no access, there could be undone, known damage and issues. Recommend evaluation by qualified contractor etc, etc. I make it obvious.

Isaac Peck:  Yeah, I think I think that’s a really good idea. Every month, I see complaints, you know, against home inspectors for things like that.

Ian R: So with, with our language, if we’re disclosing that we’re not going to do something. What should we recommend afterward? Or should we recommend anything afterward? So we just let them know I couldn’t get into the attic? Or should we add something to it? Like, I couldn’t get into the attic? I recommend XYZ. What’s your opinion on that? I get asked that quite often.

Isaac Peck: I mean, in some cases. I mean, we just had a case where they made it into the attic, but they couldn’t see very much because there was insulation everywhere and it wasn’t decked. So they couldn’t kind of walk around, their policy was you were not going to walk on rafters right? There has to be decking for us to go anywhere in the attic. Know if there are defects somewhere in that attic. A home buyer is going to come back and say, you know, Ian, you went up there and you didn’t see the defects that were just so obviously there. So that’s the whatever the system is, you’re looking at that’s one, it’s a great time to to make that exceedingly clear look that we weren’t able to look at the whole attic, we weren’t able to see the air conditioning ducting or this or that because of the accessibility and this stuff is concealed. Then yeah, I think that I’m kind of a middle-of-the-road person in terms of recommending specialists right? I don’t think that your report should kind of recommend a licensed roofer to look at this and a licensed HVAC guy to look at this and licensed foundation specialists to look at the foundation but I do think that there you know, there are ample opportunities to use your judgment in terms of recommending specialists to come in and look at certain things.

Ian R: So um, I’m not necessarily middle of the road on that. I like to have a specialist come in, or recommend one anyways, but I do it through the ratings. So If I rated this, I recommend a specialist come in, right? So that way I just give it a rating, I say what the issue is, and that pretty much kind of connects the two dots. Then if it’s something really serious, I’ll make sure I re-emphasize. We want a roofing specialist to come in, etc. That sounds about right.

Isaac Peck: I think, you know, home buyers and lots of real estate agents, right that they take issue when a home inspector goes in and just you know, recommends six specialists to look at every home system, right? Where it and then you know, if, on every home system, you’re recommending someone else come in and take a look at it, right? It kind of cheapens the service that you’re actually providing.

Ian R: That’s true. It’s like the boy who cried wolf, you never know which thing you actually need a specialist to come in for.

Isaac Peck: Yeah. So I think you can definitely go too far the in the wrong direction there. Yeah. It is helpful when we’re defending a claim, if you said, hey, you know, bring in an HVAC technician to check this thing out. There are some problems with it. Now, here’s what I was able to observe. I recommend you hire a specialist. So we see the value in that, but we wouldn’t recommend the kind of just in a general sense. Recommending six specialists every home inspection you do, right?

Ian R: Yeah. I think I’m agreeing with you, but slightly a little bit up on the scale. That’s why I do put it in my ratings. All right. This is a marginal item. Like it’s not.

Isaac Peck: Yeah, like your approach, I think it makes a lot of sense.

Ian R: Thank you. I like it when people agree with my approach. Just agree with me, Isaac, and we’ll be all fine. No, I’m teasing. So you’ve talked about two different things, hard resources, and soft resources. I think I would have had resources being agreements, your insurance carrier attorneys, hard language and disclaimers in your report, we will do this, we won’t do that your state’s law, SOP, then there are software resources like good communication, customer service, things like that. When it comes to the report, it’s a little bit mix of the two. Are there any things in the report that kind of get guys in trouble? Like I’ve heard attorneys talk about using the past tense versus the present tense. That’s kind of an argument among home inspectors, should I use the past tense that the roof appeared to be more or the roof appears to be or calling out certain things, not calling us? What are some things in the report that usually stick inspectors in the foot?

Isaac Peck: I think a big one for me there is estimating the remaining life of items. I think we posted some stuff on LinkedIn over the last couple of months. Someone pointed out well, in Florida, when we’re doing, you know, a four-point inspection, we have to do that. I’m not an expert on everybody’s state laws. Unless you’re required by your state law to predict how long an item is going to last going anywhere near that is really dangerous and risky. I mean, we’ve seen claims where, you know, the gentleman says roof looks good, should last another 15 years with proper maintenance. That’s a great way to you know, buy yourself a new roof. In that case, you know, the people moved into the house and the roof started leaking within three months. Really seriously, and it turned up that the roof was 15 years old. It can be very difficult to defend those kinds of claims. So why would a home inspector want to comment on how long you know, a particular home system is going to last? If it has a manufacturer’s tag on it. This water heater was new and installed and 2021 or 2020. You can definitely report on those things and say, you know, here’s a picture of the tag and how old it is. Yeah, a big strong recommendation to not predict/comment on/opine about how long water heaters roofs. Is any home system going to last? If I mean that’s kind of predicting the future, and when it doesn’t happen, the homebuyer will be calling you saying, Hey, Ian, you told me this was going to last another 10 years and now it’s broken.

Ian R:  I’m really glad you mentioned that point because I teach home inspectors about report writing in one of my classes about report writing and one of the things that guys are always arguing with that is like hey, don’t put that in there. Why do you need to say the roof has five more years with proper maintenance? They’re like, but that’s my out. That’s my legal out. If I say with proper maintenance, then I can come back and say you didn’t do proper me. It’s like, I don’t think it works like that man because it doesn’t sound like that gives them any kind of position at all, does it?

Isaac Peck: No, it did I mean, it really I don’t see any world where it helps you from a liability standpoint. You know, I’ve talked to home inspectors that say, you know, this is what my clients expect. I give them the best, you know, the remaining economic life or the remaining functional life as a service to my clients and a service to my real estate agents. From a liability standpoint, it’s big trouble. I don’t think that you, you have to do that, or do you need to do that in order to provide a valuable service to your clients, you can report on what you see report on how it’s doing, then everything that you can gather in terms of how the roof is doing, or what the water heater is doing or what the HVAC system is doing. You don’t need to try to predict or opine about how long it might last. Or how long it might be functional.

Ian R: Yeah, I totally agree with that one. How about a couple of questions, I really wanted to hear your thoughts on that, like using past or present tense in our language.

Isaac Peck: Yeah, I mean, what I would say about that is people see too often see the home inspector as a guarantee, right? Yeah, Ian is a Superman, and he can see through walls, and he can predict the future. He knows when things are going to break. So he’s the guarantee that I have when I buy this house, that everything’s going to be fine. If anything’s not fine, then it’s his fault and he’s going to pay me, right, the home inspection is not a guarantee. So not to kind of go overboard but imagine if they had that sentence, you know, the water heater appears to be functional. This is not a guarantee of the future performance of the water heater. Right? Imagine if they had a sentence like that directly after that, then I think that they may have had a stronger defense. So I’m not suggesting that you know, everything that you say in your inspection report is this is not a future guarantee of future performance or future functionality but I don’t think that your report would be worse off if you went through and added that a few times throughout various sections of your report.

Ian R: Yeah. I guess that’s kind of what I was wondering because a lot of home inspectors argue that is it past tense or present tense. Maybe it doesn’t necessarily matter as much as maybe I was thinking. So I appreciate your perspective on that. What about certain things that inspectors call out? That gets them in trouble for calling it out. Or get them in trouble for not calling it out? What are some things that you can think of like just off the top of my head while you’re thinking about that question that I asked in a weird way. So I see inspectors get in trouble for calling out things that they’re not licensed to do. So for instance, if they are not led certified, and the call-out led. Now somebody is writing a complaint to their state board saying he’s calling out things about led and he’s not led certified, acting outside of his license but then on that same thing, I’ve seen home inspectors get in trouble like, Hey, you didn’t call out this lead pipe. My family and I have been drinking lead in our water. You know, we’re doing a remodel and there’s all this lead pipe everywhere. Why didn’t you mention that? Is there anything that’s kind of like that, that you can think of?

Isaac Peck: Yeah, I mean, plumbing, in particular, I try to be really careful about reporting the different pipe types. Right. Some houses were built with old piping that is about to fall apart, you know, maybe had a 50 or 60-year lifespan and say the house is 50 or 60 years old, you go in there and you say, Hey, this is copper piping, turns out, the whole house was built with non-copper piping and they need to replumb the whole thing. They’re going to come to you and say Ian, and you told me that this was copper piping, we would like you to buy copper piping for the entire house because you lied. So as an aside, try to be really careful with how you label those types of things, we would prefer that inspectors kind of err on the side of disclosing everything that they can see. That doesn’t mean that you need to, you know, go 100% beyond, you know, SOP. So you have standards of practice, you’re responsible for doing certain things, and you’re not responsible for doing other things based on your state’s standards of practice, generally, when there’s licensing in your state but if you see something, you know, even even though you’re not doing a mold inspection, often right? Though, it’s in your agreement, you say, this is not a mold inspection, we’re not here to look for fungi and mold, etc. If you can see, you know, spores or, you know, fungus or something growing in that in the kitchen cabinet, definitely want to take a picture of it and put that in, in your report. Right. So if you see something, say something, I think it is a fairly decent rule, right? If you see something that is potentially problematic or dangerous or will cause a problem for the homeowner, you need to report that and make it really clear what it is take pictures of it, and make sure the homeowner sees it. You know, this would be a good time perhaps to recommend a specialist in that particular thing, and so on.

Ian R: So I think that’s a great point, too. If we’re worried, well, I’m not qualified. I’ve never had a problem taking a picture of something saying I’m not qualified but this could be something that’s potentially harmful. Recommend getting somebody who’s qualified, you know, obviously a little bit more concise than that but I’m not a led specialist. I’m not an asbestos specialist. If I see something that’s going to be a problem, I take a picture and I say, Hey, I’m not a specialist, so that way when they find asbestos on their pipes, but you know, the siding underneath their vinyl siding is asbestos, when really what it says right there. He’s not an asbestos specialist. So he wouldn’t be taking the siding off. All right, you know, hey, here we go. That’s fine. It’s going to be a little bit calmer for a client but it’s interesting that you mentioned identifying material types. So in my state and several other states, we have to identify the plumbing material and the wiring type. So hopefully, you’ll agree with me, let me ask you another scenario that I do. So I learned this from a flipper, I learned all my crazy stories from flippers mostly early on in my career, everything was pecs. So I’m ready to write my report PEX. Then I’m like, I can’t imagine this guy even said in the listing, all the plumbing was replaced. Like I can’t imagine this guy went through and replaced all the galvanized plumbing that I know exists in his neighborhood. So I went over and I shined a flashlight up where I could find some openings that went up to the plumbing upstairs, and about a foot in I could see the connection to the galvanized piping. So all the walls of galvanized. So what I do is I always say the majority of what could be seen at the time of inspection was copper and PEX. Other plumbing materials could be present but were not able to be seen at the time of inspection. Does that sound like a reasonable approach?

Isaac Peck:  Yeah, I like that. I like that wording a lot. Okay.

Ian R: I like that you like the wording. Cool, more agreeing with me.

Isaac Peck: Yeah, I think kind of general, you know, anything that you can do to hedge your bets, right with piping that you can’t see is highly advisable, right? If you’re just going in and saying, Hey, this, this copper piping, right, there’s a lot of problems with that. So anyone that’s listening to this, rewind it and copy down what he said, I think that that’s very smart.

Ian R: Okay, cool, because I use basically that same language when I find wiring. I say, Okay, it looks like, you know, NM cable. Cool, but what’s up in the walls, it’s a 200-year-old house in my area, that’s pretty common. Pretty sure there’s going to be a knob and tube because they didn’t bother to change the light switches on the second floor. They say they changed all the wiring, but why would they change the light switches stuff like that happens all the time. So I’m a little careful with that. Drain drain lines too. Do you ever run into problems with home inspectors not calling out Orangeburg piping at all? Or is that not a common one?

Isaac Peck: I didn’t add anything like that in recent history, okay? We have, you know, a fair share of broken drain lines and backed-up houses.

Ian R: We also talk a lot as home inspectors about polybutylene. Do you run into a lot of issues with that with claims?

Isaac Peck: Yeah, we’ve had, we’ve had some claims around that. Yeah. Okay. So…

Ian R: I’m glad we’re talking about that. Then, with polybutylene. I see a lot of guys write down, there is PEX. It’s not as polybutylene. So if you’re listening to this, and you don’t know what polybutylene is? Learn it, because there’s quite a bit of it out there. Isaac, why is it such a dangerous thing to not know what it is?

Isaac Peck: I think that the most recent claim that I have that I’ve seen around that is home inspector was in the laundry room, he saw, you know, I think he saw copper piping coming out of the wall. He said, Okay, this whole house is copper piping. You know, turns out the house had been plumbed with polybutylene. When homeowners move in, the problem happens. They come back to him and they say, Hey, you know, you told us this whole house was built with copper or was built with PEX, and now we’ve got this piping and it’s breaking and it’s leaking. We expect you to pay to have it all fixed. Yeah.

Ian R: So, I’m glad we mentioned that if you don’t know about polybutylene, exactly the scenario Isaac described is exactly the scenario that I wake up in the night in a cold sweat thinking about. Just two more points for my own education, walk, and talks. Those have become very big over the pandemic, to get inspections done quickly. Are that high-liability? Are they okay?

Isaac Peck: Well, I mean, I’m really hoping that kind of dying off given the balance of power swinging from sellers to buyers in the current environment. So we’re hoping to see a lot less of those. I mean, there’s not that much work. I mean, not that there’s not that much work, but work has slowed down for a lot of home inspectors. Right. So to cheapen kind of the home inspection services that are being provided and not provide full home inspections, I think would be folly for home inspectors generally.

Ian R: Have you seen claims come from the walk and talk? They’re, I mean, they’ve been around for many years, but they really became big, only just about a year ago?

Isaac Peck: Yeah, we weren’t super excited about our insurance doing walking talks. Especially when, I mean, the reality is that a lot of the leading insurance providers in this space to find a home inspection, you know, the definition of professional services in your insurance policy, is a good chance that it’s defined as in part by the delivery of a written report. So in some cases, many home inspectors may be out there doing walking talks, and they’re their insurance policy isn’t actually going to cover them, for that service. Right. If Home Inspection Services involves the delivery of a written report, and you know, you’re giving the client anything, then it could be that there’s no coverage for that but even if there is coverage, we would still recommend delivering a written report. You know, we think that there’s a big, there’s a big risk involved in a kind of he said, she said, If you don’t deliver anything written to your client, yeah. So if you absolutely, you know, wanted to and had to do a walk and talk inspection, where you’re only getting paid 100 bucks or 150 bucks, I would tell you, you know, you’d still need a signed pre-inspection agreement with that client. That agreed that agreement should not say, you know, this is not a home inspection, right, because your insurance actually covers you for home inspections. If you’re, if it’s not a home inspection, then perhaps you’re excluding coverage on yourself, defining the services that you’re providing as not being a home inspection service, but you could call it a severely limited inspection or something like that. That agreement would outline that, you know, really, they’re not getting a home inspection. They’re paying for a super limited service. Then once you do that walk and talk with the client to deliver them like a one-page paper on your letterhead that says you know, hello, Mr. Buyer, these are the things that we talked about. These are the things that you asked me to look at. These are the things that we talked about. I highly recommend that you get a full home inspection on this on this property. It is impossible for me to identify every defect, just walking through for 30 minutes or an hour or whatnot. At best You know, you’d have a contract with your client, and you’d potentially be able to avoid any kind of He Said, She Said, I mean, imagine that you inspected a house for me on a walk-and-talk basis, we walked in, and there was mold all over the kitchen wall. You said, Look, Isaac, there’s mold. Then, you know, the, I come back to you later and say, Ian, you never told me that there’s mold on the kitchen wall? Yeah, you know, if you aren’t delivering anything, to me even something on your letterhead that says, hey, Isaac, you know, these are the things that we looked at together. These are the defects that I noted, there isn’t there’s mold on the kitchen wall, looks like your AC is really old. You know, the roof is? It looks a bit worn, but at least you’d have in writing what you actually said to me because without that, I can say whatever, you know, I can say you never told me about anything. So it’s risky, I guess is what I’m getting at.

Ian R: Yeah, and I totally agree with you but I do like the point, don’t say it’s not a home inspection, say this is a severely limited inspection. I like that. So that way, we’re still covered. Okay, one more quick one. Re-inspections? Do you like them? Or not? For instance, I find, hey, the deck was collapsing, then I go back to inspect it after the contractor fixes it. What are your thoughts on that? I know a lot of guys do that.

Isaac Peck: Yeah, I mean,  I don’t have I try not to insert myself and kind of the business decisions that you all make as home inspectors, right? So you need to make decisions in your business about how best to serve your clients. So I’m not I’m not one to kind of come and say, Okay, well don’t do that. We would like to see, you know, a clause in your, and I know, some people would say, get a whole separate agreement signed, if you’re going to be doing a reinspection. I would say at a minimum, it would be nice to have an agreement in your clause in your pre-inspection agreement that says disagreement applies to any re-inspections. If I have to come back and look at something all the terms and conditions of this original agreement apply to any re-inspection. Like it makes sense if you’re going back to look at a particular home system to communicate that with the client when you send it over to them. For example, if you’re going back to look at the deck, go look at the deck and notate that when you email it over to the client or the realtor. Or if you’re included in your original report, right? You need something that says hey, I went back on this date and all I did was look at the deck, right? If conditions changed in the house, and something happened in the attic, or something happened in the kitchen, and you’re going back and you’re just looking at the deck, you know, you’re not going to re-inspect the entire house, right? So some way to delineate that, you know, if you’ve already turned in your report, then when you send over the additional analysis on the deck, you should say kind of in big bold letters, I only like went back on X date at this time, and I only looked at the deck. It only applies to this particular home system that you asked me to go back and look at. We have it in our agreement that all the terms of this agreement apply to any re-inspection.

Ian R: Awesome, I love it. Isaac, as always your wealth of knowledge, you see a lot of the stuff on the back end more than most people. So your insights are very helpful. Thank you for taking us over and thank you for your opinion on, you know, the changing home inspection landscape out there. So we’ll have you on again, we love hearing from you and I look forward to having you on the show hopefully again sometime soon.

Isaac Peck: Yeah, man. Thanks a lot for having me. I really appreciate it.

Ian R: Yeah, anytime. Thanks again.

Outro: On behalf of myself, Ian, and the entire ITB team, thank you for listening to this episode of inspector toolbelt talk. We also love hearing your feedback, so please drop us a line at info@inspectortoolbelt.com.

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