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Jon Rudolph

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The Journal of Light Construction Article on Stimulus Package: Good Overview

04-08-09
Jon Rudolph

Here's a link to a JLC article summarizing the "Economic Stimulus Package" with a breakdown on home energy improvements.

It doesn't get into to "where to go" but provides an idea of what kind of home energy projects might qualify and the extent of the benefit.

One key message I give my home buyer clients is that some of their planned home improvements, if done with consideration to energy improvements, may have addition tax and incentive benefits.

I suggest they look for Federal, State, City, Utility Company and Product level incentives.

http://www.jlconline.com/cgi-bin/jlconline.storefront/EN/UserTemplate/82?c=e5d808b12b3acfa258e43de27bde3b85&p=1#Stimulus

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Heads-up: Did you know that Polybutylene water supply pipe may make a home uninsurable?

04-06-09
Jon Rudolph

I have now had a couple of home inspection clients inform me that their insurance companies would not insure the home unless the polybutylene (PB2110) water supply pipe was replaced. Replacement is generally not cheap.

I find PB 2110 occasionally in homes between 1978 and 1995. It's a listed item in the Colorado property disclosure form, albeit mostly as an "unknown" by the seller.

I have done informal surveys of various insurance companies in the past and found many insurance agents aren't aware of PB2110, yet when they inquire about the plumbing material with their underwriter's they told me that their company would not insure it (the home).

Well, I just had another home buyer client tell me that their insurance company would not insure their prospective home with PB 2110. It's unfortunate that the current seller apparently unknowingly inherited the problem and apparent cost burden. Additionally, it may impede the sale of the home at this time. If the seller didn't know they had the disclosure item of PB2210, they do now.

Heads-up!

4 Comments
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Checklist Information for a Successful Home Sale: Preparing for a Home Inspection

04-05-09
Jon Rudolph

Realtors,

If you don't already do this, this simple guidance communicated to the buyer & seller clients will go a long way to set proper expectations with your clients and help ensure a smooth transaction.

I do about 400 inspections a year in Northern Colorado and it always amazes me how poorly informed or how much a client will forget some key points for one of the more nerve racking parts of a real estate transaction.

Other states/areas may have subtle differences.

What to Expect:

  • Typically inspections take 2 to 4 hours
  • Home Buyers may attend inspection and the home inspector does not monitor (watch) the buyer and their family members during an inspection.
  • Ideally Seller is not present.
  • Inspection is confidential information for paying party in Colorado - Seller's shouldn't expect the inspector to give them a written or verbal report or discuss the inspection with them.
  • Home Inspectors generally inspect exterior & interior from the foundation basement/crawlspace through the roof/attic; opening built-in drawers/cabinets and windows/doors; operating furnace/AC, water heater, stoves/ovens, fans, lights, fireplaces, smoke detectors, GFCI outlets, jetted tubs, faucets -They try to minimize disturbance and return settings/position as found.
  • Inspectors don't/shouldn't move furniture or personal items. The seller should provide ready access to the home's systems and components.

What to Do:

  • Provide ready access to electrical panels, furnaces, water heaters, attics, crawlspace, water valves, areas under sinks, locked areas, etc.
  • Ensure all furnaces, water heaters, fireplace pilots are operating (e.g., power, pilot flame on).
  • If unable to provide ready access or ensure operation of systems/components, proper disclosure is recommended. Additional fee may be charged if inspector is requested to return.
  • Secure all valuables, firearms or other items of concern.
  • Secure pets, provide instructions if needed.
  • If testing for RADON - Entire house must be closed-up 12 hrs. prior to test and remain primarily closed during test period. Normal door use to come and go is okay.
  • Protect Yourself and Your Clients - Insist that the Buyer's inspector have proper insurance of Errors & Omission (E&O); generally liability and bonding. Most people would consider it irresponsible not to make this reasonable request.

I hope this is helpful. Feel free to copy these points into you Buyer and Seller packages.

Jon Rudolph, ID Property Inspections, Inc.

5 Comments
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Realtor Liability: What do you do to protect yourself and your clients?

04-05-09
Jon Rudolph

As a Realtor, how well have you really considered the liability you're exposed to in your business?

Do you know someone that's been sued, settled out of court or compensated someone else to avoid legal action, lawyer expenses and negative publicity? Have you encountered a situation that made you think, "That could've been me" or "that situation could have gone really bad?"

How often have these situations involved hidden surprises in the condition of a home, inaccurate or misunderstood disclosure or even a client's false expectations in their purchase?

Adding to the potential risk of liability is the fact that the State of Colorado and Federal Government does not regulate or control home inspectors or home inspections. In Colorado there is no governing set standard of practice. There are no governmental requirements for basic skills, training or proof of competency. No insurance requirements. There are no background checks on individuals that are literally given the keys to people's homes.

So, how closely have you looked into the liability risks of Home Inspections? What does this mean for a Realtor? What about liability to a home buyer or a home seller, your clients? Do home inspections potentially increase or decrease their liability in the transaction? Are there practical ways to minimize you and your clients' risk?

Although professional home inspection training emphasizes reporting techniques and language designed to minimize liability, significant liability risks still exist. This is where errors and omission (E&O) insurance can help offset the risk to all parties involved, not just the inspector.

E&O insurance not only protect the consumer from human and gross errors in an inspection, most policies carry a rider to indemnify the referring Realtor.

So why wouldn't a Realtor only refer professional home inspectors and insist that the inspectors also have E&O insurance? As a Realtor, do you? How many Realtors do you know that at a minimum only refer professional home inspectors carrying E&O insurance?

There can't be too many, as it has been informally estimated that only around 10% of the national home inspectors carry E&O insurance. This percentage is consistent with what I'm aware of among home inspectors operating in Northern Colorado.

Working with a professional home inspector that carries E&O insurance seems like an easy, responsible and prudent practice to protect yourself and your clients.

16 Comments
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Can a home inspection be too thorough?

10-29-08
Jon Rudolph

I want to throw this out there to the real estate blogosphere for debate. I know there is an obvious safe answer. However, I also know there is a range of passionate opinions from "you can never have a thorough enough inspection" to "omg, this is overkill".

I'm interested in seeing specific opinions with reasoning along this range. I'm hoping it will be enlightening and help understand where people may be coming from in their various perspectives. This, in turn helps improve communication. I believe this is not just a home inspector challenge, but that Realtors run into this challenge of differing viewpoints among their colleagues on the opposite side of the negotiation table with respect to client interests.

So, can a home inspection be too thorough?

8 Comments