PODCAST TRANSCRIPT:

Ian Robertson
Welcome back to Inspector Toolbelt Talk everyone. Today we’re going to continue our series on inspection report writing, something that I’m very passionate about, and every time I post a podcast about something, inspection report, writing that topic, we get all sorts of great comments and then some people disagreeing. But overall, just a lot of interaction, you can tell that we as an industry are passionate about it as we should be. This is what we ultimately provide our clients, is a written report of what we found.

But today I want to talk specifically about ratings. So we may listen to this and say, well, I have my ratings all set. Or, you know, I got my ratings from, you know, the school that I went to, the home inspection school I went to. But listen in for just a moment, because we’re going to go over some finer points that could actually really help in the long run. And some of these things are my opinion, but most of these things are experienced home inspectors, inspection industry specialists and mostly attorneys have helped us to develop in our rating system, and they’re pretty simple, and if you take even just one or two points away from this, it could save you from a big headache in the future. These things can help protect us, our clients, and just help us write a much better report.

So first of all, I still, and I’ll get a little bit of flack for this, I’m still a little confused by some in our industry not using a rating system. Some states even dictate that, not only you have to use a rating system, but that what your ratings have to be like. Texas is one of them, TREC, and by the way, if you’re listening in and you say, well, TREC has our required rating system, and there’s a couple other states, still listen in, because there’s some stuff that you can use, that you can use as an addendum to your rating system. But ratings really help our clients, because they categorize things for them. So listen, I use an illustration of a doctor all the time. I got a narrative from one of my doctors. I don’t go to the doctor a whole lot, actually. I talk about it a lot on here, but whenever I go, I’m like, man, this is just like a home inspection for my body. But I got one and, you know, it just, it was just a narrative. And I still don’t know what it means, but the doctor just looked at me, goes, you’re fine. Okay. I really don’t want to have to ask the question, am I fine? And I find a narrative inspection report causes most clients to stop and say, so is everything okay? Whereas a rating system, even if we use a mixed mode, narrative report with rating, which is a very common one, then at least the client can look and say, oh, red is bad, that’s red, that’s bad. Green is good. Oh, then there you go. That’s fine. It gives them some clear direction. Also makes our job a lot easier, because we don’t have to answer as many questions about it. And when something’s bad, we just say it’s bad. It’s right there. It says it’s defective. It’s also very defensible in court and all this other great stuff. Again, I’m not an attorney. These are things that attorneys have told me. Always consult with your attorney, yada yada yada, legal disclaimer. But here are some ratings and a disclaimer that I’d like to share with you, that if you can incorporate these into your inspection reports, great, if you have a variation of thereof, great. But there’s some fine points that I want to share with you.

First of all, there’s a disclaimer that you can put somewhere in your report. I’d like to put this toward the end in the one, what I call the big disclaimer at the end, you can put it at the beginning of your report. You can put it somewhere before your ratings, however you’d like to do it, but I’d like to read this to you. It says, “All ratings in this report refer to the property or item listed as inspected at the time of inspection. Any pictures used in this report were for the purpose of providing examples of problems, and do not necessarily indicate the whole problem or all of the problems. Further investigation of every item in this report by a qualified specialist is recommended. The report represented a snapshot in time when the inspection was done and does not represent the condition or conditions of the home or its components before or any time after the inspection.” So if you look in our transcript for this podcast, if you’d like to copy that, go for it. I do encourage you to run it by somebody with a better legal mind than mine. But there’s a couple of things in here in this that has been very useful, and a couple of attorneys helped me refine this over time. I wrote the original, and then some others helped me. I have a lot of attorney friends and guys that I’ve worked with in the industry, guys and gals. Actually shout out to somebody who told me to say, not, not say guys so often, because we have definitely mixed gendered industry now. Years ago, it wasn’t as much, and now it is way more. When I say guys, I like say that to my wife and daughter. I’m like, come on, guys, let’s go. So I don’t mean it as excluding women at all.

But anyways, so first of all, it calls for any rating, anything that gets added to the report as needing further investigation. So we’ll talk about that word further at some other point and why we use the word investigation. But what that does is it puts the obligation on the client to get someone to look at it. I can’t tell you how many times that one disclaimer has saved me. I can tell you the times that I’ve learned about it saving me. So for instance, I called something out, and they said, you neglected to tell my client. An attorney called, you neglected to tell my client to get this evaluated. Now they are in a harder spot, and you’re going to have to pay up. I said, well, if you look at this paragraph in my disclaimer at the end of the end of the report, mine was actually at the beginning of the report,I’m like, it’s one of the very first things that you have to scroll by. Even before you you see the rest of my defects. You have to read this. And then it got quiet and that went away. There’s been other times where basically it protected my client because the seller side was like, oh, well, home inspector didn’t say this or that. I’m like, well, actually it says it right here. It needs to be evaluated by a contractor. Agents used to love that. They still do because it protects their client and gives them a little bit of wiggle room to find issues or explore things a little bit more. So that’s a great thing to have in there.

Also mentioning again, even though it’s in our contract, it’s nice to be able to say this was a snapshot in time, does not represent anything before or after the inspection. We’ll talk about that on a future podcast, as to why, especially, saying before is an important one, but just that, that becomes very defensible in court. An attorney told me, he’s just like, you want to not be able to say just that it was in your contract. Well, that’s buried in a contract. It’s like, it’s in the contract, it’s in the report disclaimer, it’s in three different emails that I sent, and it’s also in all of my advertising. Did the client not read those 15 different occurrences? So that’s a great spot to just slip that in again. I don’t say slip it in, put it in. We want people to know that. We don’t want to just hide it somewhere, so put it in that paragraph as a disclaimer. Also, too, we have a guest coming up who talked about this, making sure that we let them know that any photos in the report do not represent the entire issue, and that’s for a very important legal issue.

So again, use that disclaimer or not, but um, the one thing that I like about saying that everything in the ratings need to have further investigation is that we don’t have to write that a million times in our report. Imagine if we went to the shoe store and they said you were a size 10. Oh, thank you for measuring my foot. I’m a size 10. Every time we turn the corner, they said you’re a size 10. Okay, thank you. You told me that. Hey, you’re a size 10. Thanks. You’re trying on a size 10. And they’re like, hey, you’re a size 10. And finally, you’re like, just stop saying it. That’s kind of what we do after when, after every comment, if we write hey, further investigation by a qualified contractor, it makes our reports annoying to read to be honest with you. When I would teach my report interpretation course, basically teaching agents how to understand inspection reports, because there’s so many different variations of it, that was the one thing they would always laugh and just carry on about. They’re like, if I never read that line again in my life.

Here’s how I like to do it. I like to put it in each of my ratings. So I like to say at the end of the rating, so just assume that that’s at the end of each one of these ratings that I’m going to read you. Evaluation by a qualified contractor, is recommended. Poof, done. Then everything that gets that rating will automatically require someone to come and look at it. We don’t have to write it a million times. Put it in that disclaimer. The only other time that I actually write it in a comment is when it’s something big or something dangerous. So now I just want to re-emphasize. It’s like, listen, guys, I’m not talking about a wood rot on the corner of a deck that nobody can walk on. I’m talking about, you know, something that could start an electrical fire or just something that’s a really big issue. So I will re-emphasize it at those points, and when I do, I just make a note, evaluation by a qualified contractor is recommended. So that way, even maintenance items at that point technically require evaluation by a qualified contractor and how an attorney explained it to me why that’s still important to put in and put in somewhere. Like, listen, we find a tiny little leak up on a ceiling, and that little leak is like, oh, well, okay, that’s probably related to the valley. We’re thinking, you know, maintenance issue, you know, maybe there’s a contractor there. He’s like, oh, yeah, I can fix that in 10 minutes. I’ll just do itwhile I’m up there, 500 bucks. I don’t know, this is just an example. Now they get up there, and it’s not a leak in the roof, or maybe anattic AC unit with a little condensation leak or something, all of a sudden it’s a $7,000 pest infestation, like there’s nests and there’s birds and there’s rats and there’s everything. And this isn’t an exaggeration, actually, that really happened. Fortunately, I called it out. But now we don’t say, we’re just like this is like a small, little nothing maintenance issue. So we don’t say evaluation by a qualified contractor. What’s going to happen is the attorney for the buyer who comes to sue us is going to say, why didn’t you recommend evaluation by a qualified contractor? Wouldn’t this warrant it because of X, Y and Z, and we can try to defend that all day long, but that’s going to start to get really expensive, because at the end of the day, we could have just said in our report, evaluation by a qualified contractor for even any of these minor issues, and then that’ll protect us. I’m like, they should have gotten somebody to look at it. I said it right there in my report, but again, that doesn’t mean we need to write it after every single line, put it in our rating system. That’s the beauty of the rating system. Maintenance item, boom. Evaluation by a qualified contractor recommended. The client reads it once. They go, all right, whatever. And then, you know, they never see it again in the report for maintenance items. But if something big comes up later on, it’s like, well, I I did technically tell you to do that.

Now I’m going to get some pushback, because there is the whole well, you should stand by your report. I’m like, yeah, but I also can’t see everything. I do stand by my reports. I’m very proud of my reports. But if I can’t get into that attic, would I want them to have somebody look at it? Sure. And you know what also has happened before? I’ve said that, and then while one of the other contractors is walking through there, they start reaching up, and they’re like, oh, man, there’s a rats nest in here. So now they go and look, and says, well, it says that somebody should look at it. So now my client can get either the price reduced or have the seller fix it, or at least get out of the deal. It protects us and it protects our clients, but we just don’t need to put it on every single line in the report.

So one by one, here are some ratings that actually the attorneys helped me develop, and we would do this in the course, man, we did this course, I don’t know, decade or more together, several attorneys. First one was functional. So a lot of us write acceptable, but here it’s functional, I’ll tell you why. It says performing its function and its condition is appropriate for its age and use, although an item may be functional at time of inspection, and then it says further evaluation may be needed, and will need regular maintenance and upkeep. Couple of things about this. The reason we do not say acceptable and we use the word functional, two very different connotations. So for instance, let’s say, well, I’ll use an example of a septic system, because there’s a municipality near me where you have to have the septic system inspected by the county. So now, if I go and I do my own septic inspection, I say things were acceptable, they will come and they say, well, it’s not acceptable when we did a bacterial test. They actually do a bacterial test. It’s got to be a pretty gross job. So the client’s gonna be like, you said it was acceptable, they said it’s not. But things like that can happen all over the house. I said the heating unit was acceptable, but the HVAC guy comes in and says it’s not. So it becomes a subjective rating, which we do not want. We do not want a subjective rating. We want a direct rating. So acceptable can be taken a lot of different ways. Functional, not so much. So now they say, well, the septic system is not acceptable. I’m like, but it’s functional, yeah, but it’s not acceptable. I’m like, I didn’t say it was acceptable. I said it was functional. People are like, okay, so it works, but they don’t like it. Heating unit. It’s like, I said it was functional, and heating guy’s gonna be like, it is, it’s just not what I would want. Okay, but it worked. So functional is a much better rating than acceptable, according to the attorneys. It’s less ambiguity, more direct, and it just makes more sense. When I switched probably 17 years ago from acceptable to functional, I actually got less phone calls and listen, we’re talking about units of inches here. We’re not talking about if I do this, this is going to blow my business into the stratosphere. It’s going to be amazing. We’re talking about games of inches here. This will save us an inch of trouble, but when you add up all these inches of trouble, it really starts to add up. Functional is just a better rating for things that work. It’s functional. And that saved me with all sorts of different contractors. You know, they’re like, he said it was fine. I’m like, I said it was functional. No, you said..I’m like, read that. It says functional, not fine. Well, technically, but okay, yeah, it does work, yeah. And then the conversation, or their argument, rather, starts to kind of fall apart.

Also, too, we are not code inspectors, and that’s actually by law in several states, including my state, it’s illegal actually in New York, it says shall not, a home inspector shall not inspect for code. So that kind of makes this weird thing, where I had to put this in there, where it says, whatever we are inspecting is appropriate for its age and use. So if something is 20 years old but doesn’t meet code, really hard to argue that. I said, well, it’s appropriate for its age. So when they put this in 20 years ago, this would have been normal. Or when the quintessential HVAC guy comes and says, this unit is 18 years old, you have to throw this out. And they come and they say, he said, we need to throw it out. I’m like, I mean, it was functional and it was appropriate for its age and its use. So that seems really subjective on their part, functional is just a better term. And again, you can find all these in the transcript if you want, and feel free to use them. But again, have them checked out by an attorney. A lot of yada yada yada, legal disclaimer.

All right, this next one is, I broke a rule, and I’m going to tell you why, lacks maintenance/unconventional. That’s a weird rating, right? Now, that is actually not the optimal rating, and I’ll tell you why. The optimal rating is actually deferred maintenance. So when you say something lacks maintenance, you are inferring that the owner of the property did not maintain it properly, and now you are writing stuff down saying that they did not maintain a bunch of things properly. They can get kind of tiffy about that. And while it doesn’t open you up to great legal issues, because it’s still just your opinion, it does open you up to some possible legal trouble according to the attorneys that worked on this. The reason I put lacks maintenance, even though it could create an inch of trouble, so to speak, is because nobody knew what deferred maintenance meant. And if you look at the large national and internationals, we used to work for a couple of international firms, and we’d go out and do inspections on their commercial buildings and things like that, they would always have us use deferred maintenance. These moving companies that would move people from large corporations, from one part of the country to the other, they would always say deferred maintenance for those very reasons. But nobody ever knew what I meant. My clients would call and they would say, what is deferred maintenance? Who do I defer it to? Why am I deferring? I’m like, no, it means they deferred it. They’re like, who did they defer it to? I’m just like, no, that’s not what that means. So it’s just a weird term, and I get why people were confused about it. So lacks maintenance, people go, oh, okay, yeah, that makes sense. There’s peeling paint and lacks maintenance. So it opens up to an inch of trouble, so to speak. I mixed it with unconventional, so lacks maintenance/unconventional. Just because something is weird doesn’t mean it’s the worst thing in the world. You know what I mean? Let’s be practical about it. It might be unconventional, and we want them to keep an eye on it, but no one’s gonna die from it. It’s off the top of my head, the pencil used for a plunge lift in the back of a toilet kind of thing. It’s just like, all right, that doesn’t lack maintenance. It’s not deferred maintenance, it’s unconventional, but no one’s gonna die from this. It’s just like, you just need some new guts for the toilet, but this is what it was defined as, functional, but is in need of normal maintenance and upkeep, or is unconventional and needs further examination, and then obviously the whole evaluation by qualified contractor.

So the next one, this is my favorite. And this was actually something that I fought for a long time, and then when I did it, it finally made sense. After talking to a bunch of attorneys about it, it just made sense after I started using it. It’s called marginal. It’s defined as performing some or all of its functions but not as intended and/or its condition is not appropriate for its age and use. Requires repair or maintenance to become functional or fully functional. Cost estimates may be required by a qualified specialist and is at the discretion of the client if estimates will be obtained..and then just some other stuff about estimates, because that’s a big thing in my area. Why is marginal so good? Because sometimes things are not defective but you just kind of know that they are. And it’s not like it lacks maintenance or even falls under the monitor one that we’re going to talk about in a minute. It’s marginal. It’s like, it’s like a water heater. There was this one particular brand. It was like clockwork, nine and a half to 10 years old, boom, dump water on the floor. I’d find them all the time at like, eight, nine years old, sometimes right at the nine and a half year old mark, and I just look at them, and I’m like, oh, man, this thing’s gonna blow. And I’m like, listen, I cannot fail this because it’s working fine. It’s not that I cannot, it’s just I would not if it was working. But I’m like, I’m gonna put this in marginal. I’m like, get rid of this thing right at the beginning, and you know how many times marginal, that rating has saved me? I remember an agent, his kids were buying a house, and he only wanted me because he was the pickiest guy around. So I go in and I find one of these water heaters, and he, no joke, calls me two days after they close and goes the whole basement flooded. My heart dropped because I thought he was going to be upset and be like, I’m going to tell all the agents in the area not to use you and blah, blah, blah. And he goes, I can’t tell you how appreciative I am and how mad at my kids I am that they did not change that the day they moved in like you told them to. He’s like you said right there in your report, it was marginal, right on the edge. And that’s really what it comes down to. It’s a 24 year old roof on a 25 year shingle, but it’s not leaking yet. It’s really kind of marginal. There’s so many things that I find that are marginal where I don’t want to make part of this monitor or functional, and I hate that when something’s almost dead, we say, well, it was functional at time of the inspection. I’m like, I still want to give my clients a bit of warning here. I want a rating for that. And marginal has saved me so much time and issues, and it saved my clients. I’ve had clients say, Ian, we moved in, that water heater, we got rid of it right away, you know, or whatever else I told them. And, you know, it makes my heart happy, because now they’re protected and they don’t have to worry about those things.

The next one, easy one, defective, not performing its function or its condition, is not appropriate for its age or use and will require repairs or replacement. Easy. I always put in its condition is not appropriate for its age or its use. You’ve heard that a couple of times from different ratings. Again, sometimes it’s still working, but it’s not appropriate for its age. Maybe we have a three year old AC unit, and it’s just clunking like crazy, and we’re like, that’s not appropriate for its age or its use, or we have a ductless mini split, and they have all these bits of hose coming out of there, and it’s not a model made for that, and they’re trying to cool the whole house with it. Is it technically functioning? Yes, but it’s not appropriate for its use, so I’m going to call that a defect. So that’s good wording to have. And that one actually came from a home inspector who actually helped write New York State law. Super, super knowledgeable guy, way back in the 90s was his peak of his career. Then in the early 2000s he was part of the committee for New York State, and he had some really good insights on that, and the attorneys always loved his wording on that.

Monitor. Now this one, we’re probably going to get some kickback on, because there’s, there’s some guys out there that don’t like to use this. I’ve had good results from it, and the attorneys like it that I’ve run it by. Monitor – these items did not seem to be directly affecting the major components of the home in any adverse way at the time of the inspection, but should be monitored to ensure movement, damage, or other issues do not occur and will likely require repairs over time. These items should be repaired as needed by a qualified specialist. So this is for things that haven’t reached marginal yet. It’s like, all right, I know that garage door opener. It’s looking a little wonky, but it’s not defective. There’s nothing moving. It’s like, just keep an eye on it. And I’ve always liked that, because then, you know, I use monitor a lot because I’m like, these are the, these are the 10 to 15 things that I really want you to keep an eye on. Fix these other things that I mentioned, but keep an eye on these too. It’s helped my clients. And to be honest, if I say, monitor the garage door opener, really saves me the phone calls six months later when it actually does break. We all hate those phone calls like, okay, monitor this dishwasher, it’s looking a little old, and then the guy calls you a year later. My dishwasher broke a year after I bought my house. How are you going to deal with that? It’s like, okay, that’s not, that’s not my business, and I did tell you to monitor it. So I found that very helpful. The attorneys liked it too, because it gave their clients warning.

Not present. Now listen very specifically to this wording. Not present or visible at time of inspection so was not able to be inspected. Very important wording there. Not present or visible, because one of the biggest things that home inspectors have gotten in trouble with that I’ve seen is when they say something is not present, and then it is behind a box or something. So now people go and give them pushback for that. With the not present or not visible at time of inspection so it was not able to be inspected. Now, they go in and find the water meter that you said wasn’t there, and they’re like, well, it is there. It’s like, well, I couldn’t see it. Oh, well, it says it right there. Okay, this is good for diffusing situations.

Our final one is an important one and probably the most overused rating, and that rating is hazardous. So I see home inspectors cry wolf a lot in their reports with hazardous. There’s one report I looked at, everything was hazardous. Crack and sidewalk, hazardous. You could fall on that. Handrail did not extend within so far the steps, hazardous. Wrinkles in the carpeting, you could trip on that, hazardous. I’m like, there’s like 30 hazards here, and actually one of them was a real hazard. One of them was like a dangling live wire at eye height in the basement. And I’m like, there was an actual hazard in there. But the average person, they cried wolf the whole time, so the average person is not gonna know, is that like tripping on the carpet, or is this going to burn my face off? It’s going to burn your face off. So very overused. We would use it only when it met this definition. An imminent threat or danger to safety, health or life of occupants of property, and in all caps, DO NOT USE UNTIL HAZARD IS REMOVED. A hazardous item is always considered defective. That’s it. Very rarely would something go in as a hazard. Now, is there a balcony with a loose railing or rotted boards? Oh, yeah, don’t use that. That’s hazardous. Like I said, electrical wires dangling eye height, yeah, hazardous. If it’s an imminent threat or danger to safety or life. And every attorney that would guest speak at one of our classes for this course, they’d all say the same thing, that they wanted a hazardous when it was only something that was actually hazardous, because it was very difficult for them to know what was an actual hazard if we were using that word all the time.

So those are the ratings. We can see that they have benefit. We can use these as they’re written, if you’d like, adapt them to yourself, and hopefully there was at least something that we could use to tweak things in our report a little bit. But I am a firm believer in using ratings and using ratings as I brought out here. But thanks for listening in, and we look forward to the next episode.

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 [email protected].

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*The views and opinions expressed in this podcast, and the guests on it, do not necessarily reflect the views and opinions of Inspector Toolbelt and its associates.

PODCAST SUMMARY/BLOG

In today’s episode, we dive deep into the intricacies of inspection report writing, with a special focus on the importance of a comprehensive rating system. Most home inspectors understand the necessity of delivering a report that captures the condition of a property at a specific moment in time, but few recognize that how we communicate that information can significantly impact our client’s understanding and their overall experience. This episode emphasizes that a good rating system provides clarity and direction, preventing confusion that often arises from vague narratives.

During our discussion, we outline how a well-structured rating system can aid not only in clarifying the findings for clients but also protect inspectors from potential legal ramifications. Our host shares illustrative anecdotes, likening a home inspection report to a medical report from a doctor—without clear ratings, clients may be left confused and anxious. A rating system effectively categorizes findings, making it easier for clients to grasp what requires urgent attention and what is functioning satisfactorily.

Additionally, the episode highlights the necessity of incorporating disclaimers into inspection reports. These warnings serve multiple purposes: they remind clients of the temporary nature of inspections, provide essential context for evaluative photographs, and emphasize the importance of further investigation by qualified contractors. A well-crafted disclaimer not only protects the inspector legally but also empowers the client to take necessary follow-up actions. The discussion includes specific wording suggestions for disclaimers, grounding them in legal advice and common industry practices.

We also venture into recommended ratings that inspectors should consider using. Terms like “functional” replace the ambiguous “acceptable,” reducing misinterpretation and potential disputes. We dive into the importance of clarity, discussing how each chosen term—such as “marginal” or “defective”—serves a unique purpose in communicating findings. The episode reveals that clearer terminology drastically reduces unnecessary follow-ups and client phone calls.

Moreover, we tackle common pitfalls associated with rating systems, focusing on the frequent mislabeling of issues as “hazardous.” The episode discusses the implications of overusing this term and provides guidelines on when to genuinely classify something as hazardous versus merely defective. Our expert insights, supported by attorney perspectives, bolster the argument for restraint in labeling conditions to maintain credibility and prevent alarmism in reporting.

By the conclusion of the episode, hosts encourage listeners to critically evaluate their current rating systems. From legal protections to effective communication, implementing a solid rating framework is essential not only for enhancing client relationships but also for maintaining professional integrity. The content empowers home inspectors to re-evaluate their approach, ensure client education, and ultimately foster a better understanding of what their reports mean.

In summary, the episode serves as a timely reminder that how we communicate our findings matters immensely. Crafting a thoughtful rating system not only enhances clarity but also protects all parties involved, ensuring that the home inspection process is as transparent, educational, and effective as possible.