PODCAST TRANSCRIPT:

Ian R
Welcome back, everyone to Inspector Toolbelt Talk. Today we have on the show Christian Adams from Repair Pricer. How are you, Christian,

Christian Adams
Good Ian, thank you very much for having me here.

Ian R
Yeah, I’m glad to have you. Thank you for… you guys actually reached out which I’m happy you did, because we’d love to have a conversation with you. Before we get into your background and why we’d love to have a conversation with you. We were talking a little bit beforehand, about you’re from England originally, right?

Christian Adams
Yeah, I actually moved over from the UK back in 2000 to go to university over here, and then stuck around. So you can kind of tell I have my, my London twang, I call it. A mix between Texan and English, so…

Ian R
So, Beon my counterpart, as you’ve listened to the show, you’d hear him. He has a South African accent. And he says when he goes back to South Africa, people say you sound American. And when he comes over here and he sounds South African. He’s like, now I don’t sound right in either country.

Christian Adams
Basically, so no matter where I go, nowadays, I don’t belong there although I do get accused of being Australian quite a bit. Just fine as well, I guess there is a similarity in the accent?

Ian R
Well, yeah, I guess so. Yeah, I could see that. So what kept you around in the state? If you don’t mind me asking.

Christian Adams
Um, you know, I went to university, up in Denton, University of North Texas back in 2000. Graduated in the fall, I’m actually from then got into real estate. And that’s what really kept me there wasn’t what my degree was, in my degree was actually in advertising and marketing. And I use that aspect of my kind of education to build a real estate business. And that kept me around and got me to where I am today.

Ian R
Great. And I think that kind of leads me into why I think you have a good perspective on the market. What, what year did you start to get into real estate?

Christian Adams
So I actually launched a marketing company in 2003. And we were focusing on video marketing for real estate, which was really early days, we probably should have done something more with it. But as we’re working with one of the realtor clients, I kind of found that I really liked that aspect of the business. And actually, in order to understand it, I went got licensed. And then I just kind of fell in love with. I’ve always loved architecture and homes. And I kind of love the idea of actually getting paid just to do that and help people do that. And so I got licensed in ’04, actually got rid of the marketing company and got into real estate full time.

Ian R
Oh, fantastic. So that brings me to the point though, you’ve been in real estate for a long time, you’ve seen changes in not only the real estate industry, but the real estate market, the home inspection industry, the appraisal industry, you’ve kind of seen it for quite some time now, especially with the last recession, the Great Recession.

Christian Adams
Yeah, yeah, it’s interesting. So ’04, when I got licensed, right, there was no GPS, we were using maps, old books, right, like get your pencil and it’s on section e4. And you have to drive to there and know the streets, just basic things like that there was not a lot of technology in real estate, you couldn’t access the homes with super keys in the majority of it. So I’ve gotten, you know, the full gamut from there and into 2008, when things got really tough. Luckily, here in Texas, we were pretty lucky, it was bad, but it wasn’t as bad as some areas of the country, right where the bottom fell out of the market, especially with the appraisal issues. We actually started up a leasing and property management company at that time to address that. And we did really well out of that we were very lucky, we helped investors acquire properties for a lot less than they should have been. Helped them lease them out market managed and eventually go on to sell them and, and that’s kind of where we built that real estate business from but yeah, into this massive technological advancement of the last, say, 5 to 10 years, where things have just kind of got insane and seen Zillow and these other players come into the space, everything, go online, everything become digital, you know, to the point where you can do virtual showings of 3d homes remotely. We have inspection companies that we work with who actually are using that technology in their inspections, right. There’s a lot of things that have changed not just in the industry, but in the tools that are available to people. So yeah, I’ve been on almost 20 years at this point.

Ian R
Yeah. The market is completely different. You got into it around the same time I did in one form or another. And sometimes they’ll just sit back and go, Wow, this is not even like the same ballgame anymore. It’s like you’ve switched from baseball to football. You know, just completely different rules and everything.

Christian Adams
Yeah, yeah, it’s night and day.

Ian R
So tell me about Repair Pricer for a little bit, though. I know about Repair Pricer, but for anybody who might not know it, how did all of that evolve into Repair Pricer? And that’ll kind of lead into our subject for today.

Christian Adams
Yes. So, as I said, you know, I was working primarily in the Dallas-Fort Worth market. We had offices in San Antonio, Houston, Austin, and we’ve worked primarily on the buyer’s agent side, not really doing a lot of listings. So we interacted really heavily with home inspectors and a lot of home inspection reports. And we did some development and build and flip as well. And what was happening is as the markets got tighter, what we call the option period in Texas, which is where you have the time to negotiate and make a decision after the inspection, those went from about 7 to 10 days to 3 to 5 days. And that includes the time to book the inspections, what was happening is our clients were being forced into making these really rushed decisions after seeing the findings of the inspection report, and that’s not good for anybody, right? Like, this is not something that should be rushed. So we actually went out looking for a way to turn home inspection reports into repair estimates, we thought somebody must be doing this, right. And we wanted a way to do that. And nobody was. So we started doing that on the local level, first in the Dallas market. And we had like to say we have building teams and crews that we worked with. So they’re able to do that in a very kind of small level. But what happened is it got so popular, it picked up so much, we had to start essentially charging for it to make it worthwhile. And that’s when myself and it was Rob Tire at the time who’s just certified master builder and inspectors Well, we kind of looked each other and said, right, this needs to become separate from the brokerage. We can’t have agents from outside our brokerage paying our crews to to essentially do these inspection reports. So what about late 2016, we spun off Repair Pricer as a separate brand. And it really was from demand first. And then you kind of fast-forward to today. And it’s a nationwide, you know, artificial intelligence-powered estimation software and platform that’s helping 1000s and 1000s of homeowners a week make these decisions. But it really came from that initial need that we had as an agency as a brokerage.

Ian R
So I’m going to ask you a dumb question. I do want to talk about this subject. But this always rattles around in my brain. So I remember when I first got into contracting, we’d have the blue book. And I don’t remember what it was called. But it was just a blue book and had national pricing for things down to regional counties and your state and things like that. So I would use that kinda estimate things and it got me in the ballpark actually got me pretty accurate. And it will change every year and you get the new book. How do you keep things accurate with Repair Pricer? Like, I’m in upstate New York, Beon my counterpart, as I just mentioned, he’s down in Florida. How do you I mean, even from one county to the next, how do you keep things accurate?

Christian Adams
Yeah, I mean, it’s one of the biggest issues we face. What we build in is feedback loops from contractors, market surveys from contractors, you can tap into databases for labor rates, Home Depot actually publishes an API you can hack into, essentially, that lets you get materials, right. So you can you can track those shifts in markets, what we tend to do is look at the changes by zip code. So we know what something should cost. But, you know, in one zip code to another, it’s going to change. And so those are more like ratios that we track. And then we also look at things like the home, let’s imagine that you’ve got a $350,000 home, and you call up a plumber to come do a water heater replacement, he’s going to charge you about $1,500. Okay, let’s say that your neighbor five miles down the road is going to $4.5 million home, magically, that repair becomes a $2,200. I don’t know how it happens. But the water heater increases exponentially in value, and it crosses into a gated community. So we look at things like that too, right? The price of the home, the location, the age of the home, the materials looked into. And I think what a lot of people maybe don’t know about Repair Pricer is there is very clever software. But every report that we publish has eyes on it from a professional pricing expert. So they actually will look at MLS photos of the home, right? Those kinds of databases that you’re talking about. And we’ll have their guide price, and they’ll make a decision based off what they see. So at the end of the day, it is like yourself with that blue book, making that estimate, is it as accurate as a contract with boots on the ground? Probably. Contractors vary by about 10 to 20% themselves, right from one guy to another. So we just say it’s the most accurate way to get a remote estimate. Right? There are some things though, you don’t want Repair Pricer doing. Massive foundation shifting, water penetration, retaining walls, maybe things where you need an engineer. And in those situations, we will come back and say you know what? We can’t estimate this remotely, you need to get a boots-on-the-ground expert there. And I think that’s that’s one of the key points we make is yeah, it’s not right for every situation. But for those run-of-the-mill homes, it’s about as accurate as texting your buddy who’s a GC in that market and saying what’s this going to cost to fix? That’s the degree of accuracy.

Ian R
Interesting. Okay. I appreciate you explaining that, because I actually didn’t really know.

Christian Adams
Yeah, we get that question all the time. And like I said, it’s a big challenge, but it’s something we put a lot of energy and focus into.

Ian R
Right. So you’re the guy to talk to for this because you’ve probably by now seen 10s of 1000s of inspection reports. I imagine if not hundreds of 1000s or more. You have been in the real estate industry since the last before the last crash all the way up until now. You’ve dealt with contractors, investors, the whole gambit. There is a lot changing in the industry. What are your initial thoughts on that?

Christian Adams
Yeah, I see this. There’s a few different sides of the change right? One is the attitude of consumers towards real estate I think has changed dramatically. It used to be when we first started selling out like flipping and investing was a very small part of the industry. Right? That that’s, that was not something that you tended to work with a lot. And I think that’s changing attitudes of buyers, like you saw what happened the last few years with low interest rates, how tight the markets became. Because you now have about 20% of purchases being done by financial institutions, not even people who were just looking for a home to live in. So the whole way that real estate is kind of bought and sold is changed, not only I think, from the technology, but the demand aspect, right? People expect things faster, they expect to find their home online, right? They expect every bit of information to be online, they expect things almost instantly, you have Realtors now who are almost like Uber drivers, you can just hit a button, an agent is going to go and like essentially show up and show you that home. What concerns me about that is that’s leaking over into the inspection industry maybe. And that people used to take a lot of time, like I said, to, to glean information from an inspection report to consider it, to read over it and to essentially use that to weigh the biggest financial decision of their life. I see that people are being forced, maybe less the last few months, but the last few years into waiving inspections, right, ignoring the information inside those reports, and essentially they’re left holding the bag after that, that’s my concern is that right now nature of the whole real estate industry is really leaking over into inspections. And that’s something I saw with the appraisal industry. Remember back in 2008, that’s what happened is people were rubber stamping home loans. Right, we’ve got to be very careful about getting into this side where somebody’s just rubber-stamping a home and saying, yeah, it’s completely fine. There’s no issues here, move on, you know, next house. And I think that hopefully, the changes in interest rates will stop that happening. I was getting really concerned earlier this year with what I was seeing in the market. But I think now, buyers are being forced to kind of take their time, think more about the financial implications of their purchase, and not just rushing through. And that’s what was happening in 2008. Everybody was just buying kind of anything they could and qualifying for loans as fast as they could. And that’s something I would not like to see repeated.

Ian R
Yeah, it’s funny, because we just did another podcast. And some of those same points you brought up are very near and dear to how we think about the home inspection market. That you know, the whole skipping inspections or even when you don’t skip inspections, it’s just like, okay, whatever, I want the report fast I want this and that. It changes people’s mentality of how they go about the process. So for me, home inspection, let’s say 15 years ago, it wasn’t nearly as rushed. And I remember how people thought it was crazy when I started offer same-day reports They’re like, that’s insane. Nobody does that. Fast forward, and if you don’t have the report the same day people are angry. And sometimes they want it like right on site. And… so now you have to develop things to make that happen.

Christian Adams
Yeah, and I think that’s powered not just by the real estate industry. It’s just this right now culture that we have at the moment, right? I mean, I’m only 40 years old. But I consider myself a veteran, kind of, of the real estate industry. And I’ve seen it, yeah, being able to like request a showing online and these things that for some reason, I think technology has had this amazingly positive impact on most parts of the industry. But this is one bit for me that I feel it hasn’t it has made people essentially more demanding. And they want things now now now, rather than saying, You know what, maybe it’s better to kind of wait and take your time. And I think it’s really pervasive and culture as a whole. Not necessarily, like I said, just our industry. But you know, technology has improved the process, right, like getting reports on site, getting reports the next morning, I remember when the rule in Texas previously was that the option period for the end of our inspection period ended at midnight. Right? You routinely as an agent, were waiting up now because your client didn’t feel bad about texting and emailing you at 1130 at night because they wanted to make sure everything was done before the wire. Thankfully, the Texas Real Estate Commission moved that to five o’clock. So the option period ended five o’clock in the afternoon. So you can still go to, you know, happy hour or have dinner with your kids or whatever you want to do. But yeah, it’s funny. It’s this catch 22 of the technologies improve the process. We’ve got better software, we’ve got better tools, infrared, sewer scopes, all these things. But I think it’s caused this demand to have things instantly which I think forces people to make bad decisions sometimes.

Ian R
How do you think any of this fits in with, you know, larger corporations reaching into our industry now, that didn’t happen 15 years ago, there’s big corporations, big money, all sorts of Uh, well, let me just leave the question at that. What are your thoughts on any connection there? Don’t you think there’s a connection?

Christian Adams
No, I definitely think there’s a connection. I mean, like I said, I come from a lead-gen background, right. So understanding how the role of data and consumer data has played out over the last 20 years has been significant. You didn’t have websites, collecting data about you and following you around the internet, and essentially, trying to design your customer journey and trying to guide you through that and funnel you through that, that this technology yeah, like I said, has an amazing impact. I can call my friends all across the world in East Africa and New Zealand, and, you know, for free basically in in England. But also, every time I do that, I’m using WhatsApp, that’s a Facebook meta company at this point, right? So they know what I’m doing. And I think the reason you hadn’t seen that impact earlier on the inspection industry, I mean, it happened in real estate, right? Let’s talk about Zillow. I, when they came along, and I saw what they were doing, I kind of as a company said, we’re not giving any money to them, I know exactly what’s going to happen. They’re going to essentially use the listings and the MLS data to go and power their own ad network, they’re going to take your money to sell your own customer back to you. And that’s exactly what happened. It was pretty easy to see the writing on the wall. But real estate is also a pretty money-centric industry. So agents were happy to be like, no, no, no, I’m getting good leads, I’m selling more, I’m selling more. And then along came the ibuying. fiasco. And luckily, that kind of petered out. But I do think, the large kind of institutional money, the VC money is looking at the real estate space, because it is now possible to access that data and make use of it. Right? It doesn’t mean that doesn’t help the consumer per se, right? There are ways to do that, where you can still help the customer make decisions. But whether or not these large companies are looking at doing that, that’s another thought entirely. Like I said, it comes back this catch-22 of the technology is amazing. We can do these incredible things like Repair Pricer, or AI Artificial Intelligence 10 years ago, would have been prohibitively expensive for us to do what we do, there’s no way we could build a product and make it like we have today. We try and take it and make it a better experience for the customer. Right. Whether or not other companies are hoping to do that, you know, we’re not sure. But I think the focus has been because of the changing technology. And people have said, Wow, this is an untapped industry. Right? It’s quite fragmented. The amount of volume that you have going, let’s say, within five and a half million inspections a year approximately, at this point, you’ve maybe got 25 30,000 people doing that, look at the real estate industry, same amount of transactions, 1.6 million agents, right. And I think that’s one of the reasons that people are looking at the home inspection industry. Now, there’s not that many people that many companies that many platforms that I have to talk to, I can go get the same information I would from almost 2 million Realtors from 25,000 inspectors.

Ian R
Yeah. And that’s a beautiful point you just made. So I remember an agent telling me I sold over 100 houses last year. I’m like, that’s good, that’s a good month for us at the time, and I’m like, and they were really taken aback. And I’m like, I wasn’t trying to be rude. But I’m like, we’re part of a lot of transactions. We kind of know how this goes. But I was… It makes me wonder how nobody ever figured that out before. I mean, InterNACHI has published his numbers for years now saying, Oh, this is about how many home inspectors there are. Why chase after a million agents when you can go up to 30,000 home inspectors for the same data, like you said,

Christian Adams
Well, let’s talk about why it’d be hard. I mean, as well, right? Like, let’s say that 10 years ago, we were doing things with pen and paper. The Home Inspection industry has lagged behind the real estate industry in whole from a technological standpoint, which has made it harder for other companies to come in and access the information. We’ve still got home inspectors doing pen and paper reports. And that’s fine.

Ian R
That’s true.

Christian Adams
…and digital camera uploads and things like that. Whereas with real estate very early on, we have things like zip forms, right and Docusign. And these online platforms that came in and RESO standards, I’m not sure if you’re familiar with them, but they were trying to tie together the fragmented MLS boards across the country to use standardized data RESO has been around for a long time. We don’t have anything like that for the home inspection industry. So even though it was smaller, and it’s more compact, it was quite hard until recently until everybody was using software. Right? Until almost 90% of inspectors using software, it was very hard for someone to come in and say, Hey, I’m going to acquire my way into this industry. It would have been really hard 10 years ago.

Ian R
That’s a beautiful point. I don’t think I thought about it from that perspective. Going back to my own experience. I was the first one of the first home inspectors in my area to use electronic software it was paper and pen and that wasn’t that long ago. I’m like, why aren’t you guys using I still remember pulling out my Pocket PC, the old ones that Windows used to make with the little stylus and tapping on the dots.

Christian Adams
When was that? How long ago were you switching to software versus pen and paper?

Ian R
Oh, man, I’d have to go back and think I remember, it was early 2000s really early.

Christian Adams
That was quite early on. I mean, you said you still got people who have not to this day, we still ingest reports written in Microsoft Word. Right. In templated format. They’re not on the software platforms. I guess I think that’s why that adoption is changing. We’re seeing younger people getting to the home inspection industry, which is fantastic. You know, and adopting technology at a higher level. And I think that’s probably also going to drive that change.

Ian R
I’d like to go back to another point that you made about Zillow, because I thought that was a an interesting perspective too. Zillow moved into the market. Hey, guys, this is going to be great. And then all of a sudden, like you said, reselling the leads, taking the leads that you would have gotten and reselling them to you, packaging them up. And everybody’s like, this is great. I’m getting leads, like they’re just taking the leads and reselling. I do see that in the inspection industry. When I do a search for an inspector, sometimes the first results are larger companies that own software.

Christian Adams
Angie and people like that.

Ian R
Yeah, yeah, yeah. Or even within the home inspection industry, specifically niche. And you know, here’s a list of home inspectors. And then so you’re looking at that you’re like, okay, if I’m not on that list, I’m not being seen as much. So now you use that software, and all they’re doing is selling your leads back to you. That would normally have been yours anyways. Yeah. So does that concern you with the home inspection industry at all?

Christian Adams
You know, it does. Somewhat, I think you’re always going to have people that outmarket other people, right? Yeah. And I think a lot of the industry luckily does get its revenue, and its leads, and its referrals from the other side of the real estate industry with the agent population. So I think, yeah, for people that survive on purely consumer-directed leads, that presents a challenge. But for people who have cemented their kind of relationships, and their experience with the realtor community, it’s actually producing because of those by the agent who said, she or he does 100 homes a year. That’s top tier that really helped here. And I did an InterNACHI presentation where I dived into how many agents are actually selling more than a dozen homes a year. And you’re talking about 5%?

Ian R
Yeah.

Christian Adams
Right. So if there’s another way into the business, right, and I think the inspection industry is a relationship business, because my best inspectors that I’ve used over the years are the ones that have created a relationship with me that talk to my clients that take the time to explain, right, and they will get consistent referrals, but also, it’s as a newer inspector and these younger inspectors getting into the business, they’re more used to, let’s say, traditional marketing, lead gen. That kind of thing. So it’ll be interesting to see if it stays a relationship marketing industry, or if it does switch more to that Zillow model, right. I mean, as an agent, though, I will say, when I was an agent, I never had a homeowner not ask me who my inspectors were, it would be very rare for them to go on. And I think Zillow is probably introducing a find an inspector tool at some point, I would imagine they would. But it would have been very rare for a client not to ask me personally, who I recommend as an agent, and I think it’s over was it 85 86% of transactions that agent driven? In the US?

Ian R
Yeah, pretty much, if not a little, if not a point or two higher.

Christian Adams
Yeah, right.

Ian R
So I guess we are tied the home inspection industry more to the real estate market and how they operate than we may think about. Agents are going to do what they’re going to do is oftentimes what I hear, but if it’s not an agent-driven market, then they’re gonna find their home inspector somewhere else. Then on top of that, there’s customer journey. You know, I’ve used the illustration before, when I went to hire a paving contractor. If you were to map out my customer journey, I was all over the internet. And I found this one guy and landed on him. That doesn’t mean he was the guy that I started out with, or that my friends recommended or anything like that. So I was always proud of myself, because I could take the leads from the agent-driven leads from the other inspectors by creating a better customer journey. So I’ll be perfectly frank, I don’t have the resources that a giant multibillion-dollar corporation has to out market them. I can niche market them, but out market them in that arena? That gets to be quite a bit more difficult.

Christian Adams
Yeah, yeah. I mean, I would say for a service business, like a home inspector, your best bet is your local marketing and that niche marketing Yeah, yeah. You can’t afford to plaster your information all over the internet everywhere and follow people around necessarily because maybe your ROI on… your return on investment on that lead and that spend is a lot smaller, because you’re not going to go then resell that information for that customer and that lead five times over, you’ve got one opportunity to close them, essentially monetize them. Whereas for these multibillion-dollar corporations a lot of value in just getting the customers to the website, let alone actually getting them to submit a form and actually get an inspection booked. And at the end of the day, they may not even care if they book the inspection. They really may not, they’re just like, look, send us a form, so I can sell the information in that form to somebody. And we don’t really care if you get an inspection, that’s one of the negative sides of it, where the home inspector really actually is going to be driven to say, oh, yeah, please get a home inspection. Right, which again, that’s going to have a positive impact. Whereas the large marketing company – no they probably don’t care about the end result.

Ian R
You know, I really like your, you have a very moderate view, a balanced view of it, I tend to be on the complete opposite side, I’m just like, let’s grab our pitchforks and go after them. So I appreciate your, your moderate standpoint on that. Everybody always laughs at me, because I’m just a little wild and crazy with that. But going with my wild and crazy pitchfork ideas. I think a lot about management companies. So you were around when management companies kicked in for appraisers. Most of them are run by management companies now. Do you think that the inspection industry is headed in that kind of direction where we’ll be so regulated that it’s not… it’s not the industry we know now?

Christian Adams
You know, I think the Dodd-Frank Act was one of the worst things that happened to the real estate industry that I’ve ever experienced, right? The experience from the agent side and the buyer side of the appraisal industry, and what happened and how it limited the number of appraisers in market. Right? Specifically saying that if you want to get licensed as an appraiser somebody has to sponsor you for X amount of hours, and oh, magically, the guy that had a monopoly on your market doesn’t want to sponsor you and doesn’t legally have to, wow, how could that possibly have such a negative impact? It was, I think the intention was there and fully because of what happened to regulate it more heavily. But the outcome was a nightmare. And I’ve done pieces on this with the Washington Post and The Telegraph and just saying this needs to change. This is terrible. So yeah, more regulation does scare me a little bit. But then again, on the other side, what I would like to see is home inspectors being part of the process as standard that is required. Okay, so how do you have one without the other? I’d like to see maybe people get the inspection fee rolled into the closing cost. Great that everybody says it’s better for everybody concerned if we know what’s going on with this home. But it comes back to your point of these management companies that are now managing the inspectors and regulate everything and setting the fees. And you get to this kind of like, I don’t think ever got bitten off of inspectors, but the antitrust acts right would have to kick in at some point if they get big enough. And the whole industry has been regulated. So yeah, how do you get to inspections being standard, though.

Ian R
So Beon and I were actually talking about this on last week’s podcast, that there are states already talking about it and at least one province in Canada. And that’s what scares me because what ends up happening when people skip inspections, or get quick inspections, and then buy the house, and then there’s all these problems. It’s a similar issue to at least part of the Great Recession. Some people were underwater because of just cruddy appraisals. Now people are underwater, because I was reading this one article where they’re like, we’re just gonna have to let this house go. Heating unit went bad, bad Foundation, $30,000 roof and they were just listing stuff out. It’s a different reason. So states are starting to see that.

Christian Adams
Yeah, I mean, the house is deteriorating, I think because people not only people skipping inspections, we look people getting inspections and not having stuff fixed. A younger generation maybe wouldn’t get up a ladder on a weekend with a caulking gun that’s going to, you know, have a really, really big impact. Yeah, I mean, it’s interesting. In New Zealand, I’ve got some friends that live down there. A home inspection is actually required by the bank. Because they want to know what’s going on with the home. Whereas here, I feel like you have the mortgage lenders who repackage the loans and sell them. They want to be like, Nope, I don’t care what’s going on with the house. If I can close on that loan. If it meets appraisal, I can resell that package on as debt. Great. So maybe there’s more of these moving parts that create the problem, right?

Ian R
Oh, yeah.

Christian Adams
Yeah, I think it’d be fantastic if it was included as standard. But how do you still give the consumer choice? You can’t choose your appraiser anymore? On my refi I did last year here in Austin, Texas. I basically had to bribe the inspector to come out. The inspector sorry. I had to pay appraiser. Yeah. An inspector would never take a bribe, an appraiser would I’m pretty sure. I mean, he was basically saying, hey, I can come out now, for 650 or I can come out, you know, next week, it’d be like 500 or something like this. And they were essentially charging these rush fees. Your hands a tight like that’s your appraiser. That’s it. You’re talking about an inspector being able to market themselves successfully to consumers and consumers should have that choice. That’s one of the sticky bits

Ian R
But I think that the choice is gonna go away if that happens. So if the government’s gonna say, yes, you have to get an inspection, licensing isn’t going to be enough to, they’re gonna run into the same issues that they ran into with appraisers. Okay, licensing isn’t enough, you have to get an appraisal, you have to do this, you have to do that. Then now they’re like, Okay, now we have to regulate it a bit. Okay, here’s a pool of inspectors you can choose from.

Christian Adams
Right.

Ian R
Okay, well, the pricing is wildly different. Let’s standardize pricing. Then they standardize management companies to oversee them. And then instead of taking control of the individual inspector, that’s the whole point of management companies. Now you apply for your management company certifications, and licensing. Now you watch over them, and we manage you. So we manage five management companies, instead of 30,000 home inspectors.

Christian Adams
Yeah, it’s a slippery slope.

Ian R
It is a slippery slope. And that’s, I think, for me, I don’t think home inspectors are worried enough about it. And that’s just me being an old dog, you know, loving my life as… oh man home inspections. It’s just, it’s just blast. I love it, driving around doing cool things, seeing cool things meeting cold people, it’s just, you know, eating out for lunch in between your inspections, it’s great. That’s changed so quickly, to less and less of that. Now it’s more of a, you got to hustle hard, you got to do this, you have to do this. And and now it’s, well, hey, we can be even more regulated. I don’t think there’s any home inspectors that said, hey, regulations were great when they came out with them in my state.

Christian Adams
Right? I mean, I think the licensing and the education requirements that I have no problem with those whatsoever. I feel like there’s someone be able to hang their shingle and call themselves an inspector, they should have gone through a certain degree of training, right? Whether it’s like in real estate, I was allowed to take a bunch of my hours that I had previously for certain degrees, right in advertising and marketing, because that specifically deals in real estate. And they were like, Oh, wow, you’ve actually, you’ve tested out of essentially 1200 hours of your real estate licensing, because you’ve got an accredited degree. So maybe if you came from a construction background, you know, a tech background and you had HVAC license or a journeyman license or something like that. Should you be able to put it towards training? Yeah, absolutely. Because your knowledge is is way higher. But I do get concerned that anybody could call… like me, right? You don’t want me crawling around your house, doing a home inspection. But in some states, if I decided that that’s what I wanted to do, I wouldn’t be able to do that. I’ve got a great background in marketing, I’m going to have really amazing websites and reviews and media campaigns, and you’re gonna think I’m the best inspector ever. But that’s probably not going to be true. So I think it’s difficult. Yeah, I’m not a fan of big regulation at all. But which is worse, right? Monetization and privatization and industry by large VC backed companies or government regulation? Right? Or are they as bad as each other?

Ian R
Yeah, and I want to talk about that VC comment in just a second. But going back to the whole regulation thing, I tend to take an opposite view of that, I use the example of a home inspector have been around for 30 years. And now somebody comes in and says, hey, I have the same qualifications as that home inspector. And he does on paper. The standards in most states are extremely low, in my opinion. The, for instance, New York State. Standards are ridiculously low. Continuing education – most of it’s a joke. Matter of fact, I teach continuing education, I teach home inspectors in New York, I refused to actually teach the licensing course, because it was so incredibly stupid. You spend hours on windows, and the same amount of time you spend on windows you spend on the entire structure of the home. And there was no time to actually teach somebody about how things work and how the industry actually works. It’s, you know, 100 plus hour course. And then you go take the world’s easiest test. Now you have a license to either make someone’s life better, or make it infinitely worse. But I see what you’re saying at least it’s something.

Christian Adams
Yeah, I mean, that’s my point, we can say with a real estate license, right? Anybody, and this is why there’s 2.8 million realtors. It doesn’t mean you’re a good realtor. We have to pass it right. Yeah, that’s what it is. It’s something right. And each state is very different. You know, Texas Real Estate Commission is quite strict. I’m sure some of the ones in other states are not familiar with, are not as much and they just kind of rubber stamp your thing. Yep. You’re a Home Inspector now.

Ian R
Yeah. And that’s a tough part of our industry. I think if I don’t want to get to off the chart here. Actually, let’s swing back around. Because I want to talk about that VC comment. So for those who don’t know what VC is, he’s talking about venture capital. I was surprised at the level of venture capital interest in the home inspection industry. So we got approached by a venture capital company. I mean, we’re a smaller home inspection software company. We’re not huge. There’s like eight of us. Okay, cool. But wait, why are you in here? What are you doing? And they met with us. And they asked very pointed questions. They knew a lot about our industry. And they have been talking to a lot of vendors. But it’s interesting to see what happens after venture capital, you lose a lot of control as to what your software does. What you do for home inspectors, how you go about helping them if you go about helping them? Do you think venture capital would have a good effect on our industry? Or do you think maybe it’s a little bit too wild of a thought on my side?

Christian Adams
You know, I, again, I think it comes back to where’s the money come from? What’s the point behind it? What’s their goal? Often VC companies, venture capital companies, are focused very heavily on an exit, right? Take a company, invest some money into it, inject some capital to get it bigger, and then sell it off. Right, and hang the consequences for the customers and the employees and the rest of it. So from that standpoint, no, but there are other types of VC money that are there to go for a long term. I mean, not well, they are focused on real estate. Let’s talk about Softbank, right based out of Japan, they invested in Compass. That’s a 400 year fund. That’s insane. But their actual length of time is 400 years, what they’re looking at it for. Most VC companies are not like that. And they’ve been insane amount of money into Compass, and I’m not quite sure why. Like one of their big innovations was a sign that lit up. Wow, cool, guys. That silly side of it, that comes into it. But I think when we talked earlier that the inspection industry is lagging behind the real estate industry as a whole in technology, could VC have a positive impact on the industry with that? Yeah, I think it could, but you’re gonna have to be very selective about who you work with and what their goals are. Right. But when you talk about, let’s say, the, what we call a TAM, that the total addressable market of the home inspection industry, you could break it out into different sections, right? So there’s like five and a half million approximately Home Inspections a year that are worth X amount, let’s call it $600, in inspection. So like, that’s, that’s a pretty big market when you think about it. But then there’s also like, what we do with the findings of reports, right? They say that residential remodeling and repair in the United States is a $600 billion market. Okay. And then you look at companies that try and monetize the move, and you know, security and insurance and TV and Internet, right, those are massive markets, too. So I think this is why you’re seeing VC interest, because it’s like, you’re a small outfit, maybe moving like 3000 consumers a month. But it’s big enough to see, could we take that? Could we scale it? Can we make it bigger? And get access to that? Because otherwise, if you’re not working through the home inspector, and the home inspection industry, how do you get access to those people? Right. It’s difficult. And I think like you’re saying, maybe people have slowly started to tweak with some of the changes that we’ve had in the industry over the last five years. And saying, oh, that’s a good idea, we should look at this. This industry is becoming less fragmented, and it’s gonna be easier for me to kind of buy my way into it. It’s just us as the owners of the companies that have to be selective, I think, to protect the industry.

Ian R
Right You know, I think that’s an important point that you’ve made at least twice now, in our conversation, maybe three times that our industry is fragmented, we may not see it like that we may be in a couple of Facebook groups, be in a couple of local chapters and be like, boy, we’re united, we really aren’t. It’s a very fragmented industry as home inspectors, we don’t have a whole lot of commonality in what we use and how we do it. It’s this is a software I use this is the standards of practice I use, I belong to NACHI, I belong to ASHI and it’s kind of all over the place. So I think that’s important for us to recognize. So with that in mind, what should we do, do you think, as home inspectors to be able to adjust to changes? Or do you think we should not adjust to them? But fight back?

Christian Adams
Yeah, I mean, I don’t think you should fight against changes necessary. I’m not sure that’s the productive way to do it. I think you have to decide which changes you’re going to adapt to. Right? You don’t have to take everything that’s coming along and saying I’m on board with this, I’m going to do this. But I think it’s it’s important for everybody to analyze them and say just because it’s different. It’s not bad, right? Like somebody will have that kind of reaction of something’s different. I’ve done it for 30 years, but look at it and say, Is this going to have a positive impact? And can I use this to have a positive impact? That’s really the difference. I mean, things are going to change anyway. Right? So you can kind of rail against it, but not everything that comes along is gonna stick as well. That united front you talked about is interesting because, you know, from a realtor background, we had an NAR. Yeah, who also came along and sold realtor.com off to a media cooperation, which is insane, because I’m not sure if you’re aware of this, but even a realtor, a licensed realtor is not allowed to use the word realtor in their domain name.

Ian R
I was not aware of that.

Christian Adams
It’s copyrighted. Yeah. So from a lead gen standpoint, it’s a nightmare, because you can’t put realtor in anything. You’re not allowed to have a domain name. And yet the same trade group that was meant to represent realtors sold off that specific domain, the only one in the entire US you’re allowed to use that word in, right? So people who were around at that time claim that it was a lack of foresight on their part, I’m like, it was the middle of the dot-com, boom, I’m pretty sure they knew exactly what they were doing. Right. So that was kind of interesting that even the real estate community to have this united front as it were that probably 80 90% of real estate agents or realtors, they couldn’t deal, essentially, with the changes that came along. So again, I think it comes back down to the individual. You may have these big organizations and these big groups, but each person needs to look at their decisions, because it’s gonna affect it. Look at acquisitions that happen in the space, right? He’d say, hey, we do 40% of market share comes through our platform, it only does that if the inspector makes the choice to do that. You have the right to leave anything any one time. So you inspectors may be thinking we’re fragmented, but their purchasing power is not. They each have these individual decisions that they can make, to choose the companies that work with to choose the products they work with. So the easiest way to kind of fight against change is to take action. You know.

Ian R
I think that’s a fantastic point you made because, you know, there’s InterNACHI, and there’s, you know, legislation and all this stuff going on. But ultimately, if we choose not to use a product or a service that changes our industry in a way that we don’t like, then , that’s one less person that they can use. And if we all make a good decision, the problem I guess, is we were talking about it before, Beon and I, sometimes we just get used to the change, just like oh, okay, somebody else has my data, whatever. I’m gonna go about my business. Personally, I don’t think it’s a “Go about your business” kind of situation. I think it is a situation where we need to stand up and say, “Okay, let me see what I can do to not be part of that.” Lead in the direction that we need to go instead of fighting against the current of where it is going.

Christian Adams
Yeah. And I think it’s a part of the companies that are in that space, too, as well. I don’t think it’s anything wrong, per se, when you see money coming in and it’s making products better. If they do. Yeah, if it makes it better for everybody. So I wouldn’t think say hey, just abandon a platform because somebody’s invested in it or something like but but analyze it and say has this investment has this acquisition had a positive impact on like, you talk about customer journey, right? When I was listening to podcasts you have with Erin from ACC about that as well, right? Is does it make this this journey in this experience better for everybody? It does find because there is this kind of conspiracy, conspiracy in the inspection space that people are out there selling data and acquiring it. I don’t think that’s necessarily happening. And people are definitely profiting off the work of home inspectors, right. So if these investments in this work, and these improvements came in and actually just either brought more revenue for inspectors or just improved everything, I don’t think it’s a bad thing at all. But again, it’s up to the individual inspector and the company owner to to look at that and make those decisions that has this made it better for me.

Ian R
Again, I do like your moderate view of that. That’s a nice even keel view of it. I’ll save my rantings for another time. But I think that’s an important point, to reiterate, make our own personal choice, does this bother us? Okay, can we step out of whatever we’re doing or using and supporting what bothers us? Because that’s really all we can do. We’re not going to fight a several billion dollar corporation or multiple billion dollar corporation, we’re going to, as an industry look appealing, as you said, to venture capital and other companies, and I heard even there’s another insurance company looking to buy, you know, more parts of the home inspection industry. We’re not going to stop them from doing that. But what we can do is make an educated choice, and be a part of the parts of our industry that we want to be part of.

Christian Adams
Yeah, like like you said compared to the realtor community. It’s not that big of a community, like when I go to conferences, I know people by face and by name. And you know, I mean, the Facebook groups and all the rest of it. There are a lot of people that are connected. And so I think it is easier to have this kind of groundswell movement if one needs to happen. But like you said, some people will become complacent. They’re not concerned about it. And maybe there is nothing certainly nefarious happening to the industry. But there’s a lot more focus on that. Yeah, research tasks to analyze and make a decision as a business owner because almost every inspector unless you’re working in a large, large multi, I mean, a multi-inspector firm, you’re an entrepreneur, whether you kind of like it or not, right, you’re an individual and you have the right to choose what you do with your business and it is your business. Like I said, the kind of strongest thing inspector community can do at this time.

Ian R
Yeah, those are fantastic thoughts, and I really appreciate you being on the show today and helping us think from a different angle. Because that’s, that’s important for our show here. Inspector toolbelt talk is getting people with a different view, slightly different view or just a different angle on the same subject. Because whether we like it or not, like you said, there are more changes coming. So are we going to adapt to it? Are we going to fight it? Are we going to, you know, just be apathetic about it one way or the other. That’s all up to us. So thank you for being on the show, Christian. And again, we’ll put a link to Repair Pricer in the transcript of this podcast for anybody who wants to learn more about them, contact information is there and thanks for being on the show. And we’ll have you on again, hopefully soon.

Christian Adams
Yeah, no, I really appreciate the time and the opportunity to kind of bring that outside view as it were, hopefully, it wasn’t too far outside. And if anyone wants to continue the conversation, I will be at almost every single full-content conference coming up this year as well. So I appreciate your time.

Ian R
Awesome. Thank you so much.

Christian Adams
Thank you

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