This old saying has some relevance in the world of home inspection.  It means you shouldn’t get rid of something valuable while getting rid of something worthless.  It’s a problem for home inspectors, because if we make one little mistake in our report, it throws our whole credibility into question.  People often dismiss an entire inspection report because of one error.  It’s not necessarily fair, but people wonder where else you messed up.  We need to be really careful, and we need to stay within our scope when writing reports to reduce the risk of errors.

Sometimes issues are raised in the media that are of considerable concern to our clients.  A lot of times, we don’t have any particular problem with these issues, but need to recognize that our clients may be concerned and need good information.  This may include things like urea formaldehyde foam insulation, vermiculite insulation that contains asbestos, aluminum wiring, radon, knob and tube electrical wiring, and so on.  The way we like to address these issues is to find authoritative sources that can be quoted to refute a media buzz that has created an issue for consumers.  We try not to be dismissive of the issue, but help the client put it in perspective.  In some cases, we don’t believe it’s any problem at all; in other cases, we point out how it can be dealt with easily and inexpensively.

Sometimes there is nothing broken, but we think there’s a problem about to happen.  A badly worn roof, a 35-year-old forced air furnace, a lot that directs all the surface water toward the house, or a corroded pipe are all examples of things that I think we should write up even if they’re still working.  Where we think failure is imminent, we include it in our reports.  If you were a lay person buying the house, wouldn’t you want to know?

This is the meat and potatoes of the report. Homebuyers want to know what’s wrong with the home. We think there are a few elements to reporting each recommendation as listed above. Let’s look at each:

• Component – We need to tell the client what component or system has the problem.
• Condition - We need to say what the problem is: Inoperative, loose, broken, missing, sagging, etc.
• Location – If the problem could be anywhere (front left downspout), or there are several problems (windows), you probably need to give the location. If the whole roof is the issue, location may not be necessary.
• Implication – The client needs to understand what will happen if they don’t do anything about the problem. Let’s look at cracks. The implication of a cracked pane of window glass is very different from a cracked furnace heat exchanger. And the implication of a foundation crack is different than either. By the way, the implication of a foundation crack can be anything from nothing, to possible leakage, to foundation failure. Some implications require a little explanation. Most people do not know what reversed polarity means.
• Task/Action Item/Direction – Whatever you call it, we have to tell the client what to do about it. Some things are fairly straightforward, like a rusted, leaking plumbing trap. Some things may not be straightforward, like that foundation crack. Your instructions may be repair, replace, provide, improve correct, monitor or further evaluation if you are not sure of the implications, extent of the problem, etc.
• Time – While not required by most Standards, you may want to help clients prioritize by telling them when they should do things. You might say Immediate for the plumbing trap, Within the next year for that old roof, Unpredictable for that 13-year-old air conditioner, and Discretionary for the lost seal on the double-glazed dining room window.
• Cost - Some home inspectors include ballpark costs to improve problems. This is often market specific. The majority of home inspectors do not include costs. The Standards do not require it. We do include costs, and typically provide a range of 100%. I might say that a mid-efficiency furnace costs $2500-$5000. We also say that any cost up to $500 is described in the report as Minor. Our Life Cycles and Costs document might be helpful with ballpark costs. It’s available on www.carsondunlop.com.
• Cause – You may have noticed I did not include the cause of the problem as something to report. That’s because I think it’s often a bad idea. Why?
  • Speculating on the cause increases your liability, since it often includes a lot of guesswork. If you are wrong, that can hurt you. It can be very tough to know the cause. Look at something as simple as an inoperative light. What is the cause?
    1. No bulb
    2. Bulb burned out
    3. Faulty ballast on fluorescent light
    4. Switch defective
    5. Fixture damaged
    6. Bad connection
    7. Wire damaged
    8. Fuse blown or breaker tripped
    9. GFI or AFCI tripped
  • The Standards do not require it.
  • If you speculate on cause for one condition, you may be expected to do it for all. We think reports should be written consistently, and we consistently do not discuss the cause of problems.
  • Most of your peers don’t do it.
  • The cause does not usually matter. Whether the roof was damaged by hail, raccoons, squirrels or people hacking away at ice dams with axes doesn’t really matter. The roof needs to be repaired or replaced. Why the pipe cracked doesn’t matter; it’s leaking! Fix it!
  • Sidebar: If the problem you see is a symptom of a condition, you need to understand the real condition. That sometimes feels like a cause. The basement gets wet every time it rains because the downspout is disconnected.

This mostly for the benefit of the Standards, and this section was originally required primarily for the benefit of people who reviewed reports trying to decide whether to let you into the group. Your ability to describe the house components gave reviewers some indication of your competence. The Descriptions may not be of much interest to clients unless they need it to answer questions. The Descriptions may be helpful if the insurance company wants to know some details about the home, for example.

I think some of the things many inspectors put in their reports are a waste of time. They don’t help the client or the inspector much. More about that in another discussion.

The contract includes general limitations; for example, “We don’t test alarm systems.” The Limitations in the body of a report addresses specific issues for that inspection. We might say, “We could not inspect the rear of the house because of the vicious dog in the backyard.”

• Get some legal advice. Don’t just copy another company’s wording.
• Get it signed before the inspection.
• Your contract should be consistent with the Standards and may reference the Standards, or even have the Standards attached.
• The contract typically contains a number of general exclusions and limitations that apply to all inspections.

The Standards give us a start. I’m going to build on their guidelines and tell you what we put in reports. I’ll list them first, then provide a comment on each.

• Contract/inspection agreement
• Executive summary
• Descriptions
• Limitations
• Recommendations
  • Component
  • Condition
  • Implication
  • Location
  • Task
  • Time
  • Reference material

They want it to be clear, and they want it to be simple. What does the perfect report look like from the client’s perspective? “This is a good house; buy it.” Or “This is a bad house; don’t buy it.” At least, that’s all they’re interested in at the time of the inspection. Once they move in, it’s a different story.

What is the perfect report from our perspective? What I would like to say to clients is, “Just remember everything I told you as we went through the house. For all the things I said might be problems, get a specialist in to check it.”

We are not prepared to tell them what they want and they aren’t going to be happy with what we want, so we have to compromise. Let’s try this: “We’ll tell you, based on what we can see in a couple of hours, what’s broken or is about to break.” We might be able to work with this. Let’s look at what we should include in the report.

The inspection agreement is a good place to start adjusting unrealistic expectations.  We need to make sure the client understands the scope of the inspection and the fact that it is a sampling exercise.  While we are going to look for major issues in the house, there are tons of minor defects you would find if you spent days in the house.  We tell our clients that we will come across lesser problems while we are looking for big ones.  As a courtesy, we will include those in the report, but they should not mistake our home inspection report for a comprehensive list of minor home defects.  We tell clients that we will miss some issues that we could have seen, because of this sampling exercise.  We also tell clients that problems can crop up quickly, and it is often hard to know whether a problem that is clearly evident today existed three months ago.

We try to reinforce this at the beginning of the inspection, throughout the inspection and in the written report.  Sometimes we are successful, but not always.  In fairness to our clients, if we don’t try to set the appropriate level of expectations, they will default to an unreasonable and unlimited set of expectations, because people believe what they want to be true.

Not an insurance policy: We often tell people that a home inspection is not an insurance policy.  Anyone would be foolish to offer an insurance policy on anything that could go wrong with a home with no exclusions, no deductible, and a one-time premium of a few hundred dollars.  That is not what a home inspection is all about.