Dotting the “I’s”

There are many great things about working as a home inspector. We get to be in a different place every day, never stuck inside the same cubicle day after day. We get to see many different kinds of houses and all different types of people. For the most part, everyone we deal with is in a happy place, either moving on to a better place in their lives or making money off those people that are moving on to a better place. And we make a decent living while doing our job. But, without a doubt, the best thing about being a home inspector is that we get to help people for a living. A decent income and the good feeling that comes with helping people navigate the largest financial decision most of them will ever make. That’s a win-win in my book!

winning the home inspection race to success

That’s why we have such a hard time whenever one of our clients has an issue with the service that we’ve provided them. Even if we’re the most thorough inspector that’s ever walked the earth, and we try to dot every “I” and cross every “T”, the fact remains that we’re human, so we’ll never be perfect. (Even though some of us sure act like we are…)

No matter how good we are, or how good we think we are, eventually, we’re all going to have problems. Maybe we did (or didn’t do) something, or our clients think that we did (or didn’t do) something. Either way, we’re going to have to deal with a problem.

And how we deal with that problem can have an effect on our future. Maybe it’s a financial effect, or maybe it’s simply a psychological one, but either way it’s something we’re going to have to deal with in order to move forward. Problems rarely solve themselves, so we’re going to have to do something in order to make sure that we’re not dealing with this problem for the rest of our career.

Today we’re going to do a case study exercise, explaining a specific situation that could happen to almost any professional home inspector. We’ll walk through the issue and look for the best possible outcome to an unfortunate situation, trying to minimize the financial and psychological impact this issue has on us and our business.

BACKGROUND INFORMATION:

A relatively new inspector has a job inspecting an older home. The inspector is using one of the standard home inspection software programs and enters information on his phone as he proceeds through the house. He finishes the inspection and, as his client has already paid for his services and digitally signed the inspection contract, the inspector sends the completed report as soon as he’s done with his inspection. He thinks “another job well done,” and moves on to his next inspection.

WHAT’S AT ISSUE:

The client moves into the house not long after, and soon notices some moisture damage around the older, wooden windows of her “new” home. She consults with a friend, who tells her that she needs to get new windows, as her old, drafty windows are not very energy efficient and are costing her money each month on her electric bill. The client calls a window company, who’s all too happy to explain that yes, those old windows need to be upgraded to make her home safer and more energy efficient.

The $8000 quote for new windows catches her off-guard, and now she’s not sure what to do. The window company’s salesperson was pretty convincing, explaining that all that hot, humid summer air leaking through those drafty windows into her home is going to lead to unchecked growth of deadly, toxic mold throughout her “new” home, causing an untold amount of health problems for her and her family. The salesperson is amazed that her home inspector didn’t tell her about this major issue, and not wanting to lose this potential sale, suggests that maybe she could get the inspector to pay for her new windows, since he’s the one that neglected to tell her that her whole family’s soon going to die from exposure to toxic mold.

The client, after talking to the same friend that recommended that she call a window company, is now talking to her friend’s attorney, who recommends that she file a complaint with the board that regulates home inspections in her state. Not much later in the story, the unsuspecting home inspector receives notice that a complaint has been against him about these windows, and he’s now required to attend the next board meeting to defend himself against her accusations.

And now, the stress begins.

THE FACTS OF THE SITUATION:

The house: This is a very old home, constructed in a manner that’s consistent with the building practices of it’s time. The windows are double-hung, wooden models, and have been used for the past 70+ years by each of the home’s owners. They’re showing typical wear, and as a result, are loose in their casings and easily allow outside air to be drawn into the home every time the HVAC system is run. The negative pressure created by the HVAC blower sucks hot, humid air through all the openings of the loose windows, creating condensation on the wooden windows and frame, as the moist air cools when it enters the conditioned living space. This condensation soon leads to mold growth at the windows, and the resultant “moisture damage” soon becomes noticeable to the homeowner.

The inspection report: The inspector works in a state with licensing, is regulated by a state board of home inspectors, and is governed by a board-mandated set of inspection standards. The standards require that the windows are inspected from the interior as well as the exterior, and the inspector is required to state in his report that those items have been inspected. The inspector is also required to report on items that are found to be deficient while inspecting the home.

The inspector noted, in the report’s exterior section, that the windows were inspected, and damage was visible. A few pictures of the damaged windows were included, and the inspector recommended further evaluation. In the interior section of his report, however, the inspector made only minimal comment about the windows, describing them simply as “aged.” The inspector also commented that “the windows were not inspected,” as he mistakenly clicked the wrong checkbox in his inspection software.

(I usually refer to this situation as “fat-fingering” your report, and it’s a common occurrence, especially for older inspectors who are using their phones to enter inspection information and are often in a rush to get through a home as quickly as they can, i.e., most of us.)

THE REALITY OF THE SITUATION:

Now that the client has filed a complaint against the inspector, he’ll have to attend the next board meeting in order to be present for a hearing in which the board will rule whether or not he was negligent in his reporting and, if found guilty, impose fines and penalties against him.

The fact that his report states that he didn’t inspect the windows in the interior of the home makes this a pretty cut and dry case for the board. Even though he clearly made a mistake in checking the “not inspected” box in his software, the fact remains that the report states that he didn’t inspect the windows (that the standards require to be inspected).

(Our state standards do allow for situations where items cannot be inspected, such as where access is restricted due to personal belongings or a locked door, but inspectors are required to explain in their report why an item was not inspected.)

As he reported that he didn’t inspect the windows inside the home, but didn’t offer any reason why, he is in violation of the standards and will likely be found guilty of not meeting the state standards. Historically, a violation of this type will result in a fine (likely around $500), a requirement to attend a Report Writing seminar at the inspector’s expense (approximately $150) without getting continuing education credit for attending and the requirement to cover the administrative fees related to his case (likely around $100).

Armed with a board judgement in her favor, the client and her attorney now have additional ammunition, should they decide to pursue a court case against the inspector.

REPORT RECOMMENDATIONS:

Unfortunately, in the home inspection industry, it’s costly when home inspectors learn lessons. Whether it cost money, physically hurts us, embarrasses us, or some combination of the three, we’re always paying a price for lessons learned. Regardless of the associated costs, the most important take-away is that we should never let a learning opportunity pass by without implementing some type of changes that can help keep us out of future similar situations.

In this instance, the first thing to realize is the importance of reviewing our inspection reports before sending them. While it’s a great feeling to hit the publish button before we leave the house and have the whole evening to ourselves, as the old adage tells us: an ounce of prevention is worth a pound of cure.

By taking time to proofread our inspection reports before sending them, we give ourselves a chance to correct mistakes like this before they can cause us problems. None of us are perfect, and it’s folly to believe that we’re so good at our job that we don’t need to look over our reports before publishing.

(FYI: I’ve been inspecting for over 20 years, have done close to 15,000 inspections, and I still proofread every inspection report before sending them. If I look close enough, I’ll find a mistake in almost every inspection report I do. Yes, this does take extra time, and ultimately means that I’m making a lower per-hour rate in my job, as factoring in proofreading means that my inspections now take me longer than just my hours on-site, but the payoff is that I rarely have problems with my customers and have nothing but 5-star ratings on my Google page.)

The second thing to realize is that our inspection report is the only thing that we have to defend ourselves against accusations. In this instance, the inspector is going to argue that yes, he did inspect the windows during the interior portion of his inspection and simply clicked the wrong box in his software. Unfortunately, the fact that he had no pictures of the windows from the interior, coupled with a one-word comment on the state of the interior condition of the windows is likely to be his downfall.

By making sure that we provide our clients with enough information to make an informed decision regarding their home purchase, we not only deliver a better product, which leads to happier customers, but we also ensure that we’ve got enough ammunition to defend ourselves in the future, if necessary. In this instance, the inspector could have described the worn state of the windows and taken a few pictures to document the current condition of the house (like he did on the exterior).

While we can certainly debate on the “ideal” length of an inspection report (and inspectors, buyers, sellers, and their agents constantly do), there is certainly no debate about the importance of having enough information in the report to defend our position as an inspector. Once that inspection’s done and we leave that property, anything that’s not documented in our inspection report might as well not exist.

If it’s not documented, it didn’t happen.

-Unknown author

(FYI: In my inspection report, I have a statement about older wooden windows that states that they tend to be worn and drafty, and that the resultant air infiltration into the home can lead to condensation, mold growth, and damage to the windows and surround areas. I also recommend that my clients have this issue evaluated by a qualified professional prior to the end of their inspection period. Regardless of whether there is current visible damage or whether or not my clients follow my advice, I’ve got a protective statement in my report that I can use to defend myself if there’s ever a future issue regarding the windows.)

SITUATIONAL RECOMMENDATIONS:

This inspector now faces a situation where he’s likely to lose money and be faced with increased stress in his life. It would be wise for him to do almost anything to remove himself from his current circumstances before things get worse.

He’s now facing a day off of work to attend his hearing at the board meeting. That means losing inspections for that day. Assuming (conservatively) that he does two inspections a day at $350 each, that’s $700 in lost revenue. He’s also losing the ability to connect with two new buyers/clients and their agents on each inspection. He’s also lost the chance to have two sellers and their agents see his inspection report and literature. That represents at least eight distinct marketing opportunities that he’s lost and eight chances (four on each inspection) for direct business through future inspection opportunities from those involved in the transaction. He’s also lost any chance of getting referral business from those eight parties in the future. Those people will never meet him, never see his report, and never receive direct marketing from someone they’ve been introduced to (through his inspection report).

It’s likely that he’ll be fined by the board ($700 fine + $150 fee for the Report Writing class + $100 administrative fees = $950), so there’s the direct monetary costs involved. Throw in the day of work he’ll lose by having to attend the Report Writing class (another $700 plus eight more contacts he’ll not be able to make), and this is quickly becoming a costly endeavor.

losing money after a bad home inspection decision

Assuming the client, buoyed by her win at the board, decides to file a lawsuit, we can throw in a $2000 insurance deductible into the mix, and now we’re talking about a considerable impact to his bottom line. ($1400 in lost revenue + $950 in fines and fees +$2000 deductible = $4350). And that’s not even accounting for the lost marketing opportunities or toll that mental anguish is going to take on him while this situation plays out.

In the case of this client, as in most problem situations we find ourselves as inspectors, the best course of action is probably to write a check, get a release signed, and put it behind us as quickly as possible. While the direct short-term hit is likely to be negligible (in this case, $950 owed to the board), it’s the ancillary damage that’s the unknown. Collateral damage is real, it’s impactful, and needs to be accounted for when making a decision like this.

We’re all wired to do whatever it takes to defend our honor, but when our pride starts to overwhelm our pocketbook, it’s time to change tactics. We all hate to be wrong, but sometimes it’s better to step back from the fray, do a bit of situational analysis, and decide whether it’s better to dig in our heels or to cut and run, living to fight another day.

Learning to live on less pride has been a great investment in my future.

-Katerina Stoykova Klemer

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Thanks, Joe

pic of me, Joseph Cook Jr, home inspector

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