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MONDAY MORNING MESSENGER

Message prepared especially for Members of the American Institute of Inspectors® as well as Home Inspectors abroad

December 4, 2000

GOOOOOD MORNING, A.I.I.™

It's a great day here in Orem, Utah! 21 more days to go till Christmas. Last week was quite the week. We didn't do that many inspections because I had the privilege of putting on a 2 day intensive training course for State of Utah Rehab Inspectors. I'll share more about that next week. Today's issue has turned into quite an opinionated issue with my opinions flowing forth freely. Looking back on its creation, I was amazed to watch my fingers flying over the keyboard as my thoughts flowed freely. It was as though a dam had broken and a huge wall of my opinions rushed down through the valley. I hope that you enjoy it and please try not to be offended if I touch on any topics that are too close to home.

NOTE: The first part of the MMM deals with the "F" word (FEES). If this topic is offensive to you and you are put off by the use of such a word, then please CLICK HERE and move on to the next portion of the MMM.

It is a well known fact that we, as a group of professionals, are not supposed to get together and fix our BLEEPS in unison and discussion of the topic is grounds for Big Brother to exile us to the isle of Patmos in the Agean Sea. It really doesn't matter because the Federal Censors will probably get into this MMM through a governmental Top Secret back door and bleep out the use of any such offensive language before you can read it...... Personally, I feel that the discussion of the "F" word is quite appropriate for both the seasoned Inspector as well as the Newbie, when we discuss the theories and methods verses the actual BLEEPS.

INSPECTION BLEEPS

I received the following e-mail from Eric Smith this week in relation to his visiting my website and reviewing my BLEEPS.

Hi Michael, I'm trying to figure out my BLEEPS. And I noticed on your web site that when a structure gets to be larger than 5600 feet. there are two fees. Could you please tell me why? Is it because of multiple kitchens, bathrooms, laundry? Thanks for your help. Eric Smith

Eric's message made me stop and rethink how I arrived at my current BLEEP structure. It was not easy and it has been ever changing. Here is my expanded response to Eric.....

Figuring out BLEEPS is an art form. It has taken me years to learn the types of houses I encounter in northern Utah. Remember that we have basements here and you probably don't in your area. I was miffed over time that the little 1200 square feet homes took as long as a more modern 2200 square feet home because newer homes had the basement and older homes had the crawl space. I always felt that it was unfair that the 2200 square feet home buyer was paying quite a bit more that the 1200 square feet home buyer when I invested equal time and effort.... Then came my brainstorm to add $50 to any inspection that had a crawl space.

The added crawl space BLEEP helped to equalize the inequality of a straight square footage BLEEP schedule. I wanted close to the same amount of money for the little piece of junk as I did for a standard 2200 square feet starter home. Keep in mind, Eric, that putting this BLEEP schedule into practice in other areas just doesn't work because most Inspectors are in areas where habitable basements are not the norm.

The next inequality that I noticed in my BLEEP schedule occurred when I entered our larger mansion-type homes. When I say mansion, I do not mean the $3 million dollar homes. Instead, there is a change in the quality of basement homes when they cross the 5600 square feet line.

SIDE NOTE: We have an area in Provo known as the River Bottoms that is built in a flood zone if the dam breaks and they cannot have basements because of the high water table. In the River Bottoms, that caliber of home changes to mansion status at about 3200-3600 square feet. I think that this is the line that most other parts of the country would consider the next BLEEP schedule that I will describe.

The larger homes in the Mansion class were also a source of frustration to me. You would show up at some that were without the deluxe features and others that had the most and best of everything. My fixed fee just didn't seem to work. Sometimes I felt jipped and other times I felt like my fee to my client might have been a little high. On rarer occasions I felt like my BLEEPS were just right.

I was talking with Steve Bradley when he was inspecting in Oregon about a year ago and we were just jabbering about inspection war stories when he shared that he was inspecting a home that turned out to be much different that was originally described by the agent that booked the inspection. He then said that he elicited the highest BLEEPS in the range that he quoted them....... I said "What do you mean range of BLEEP quoted?" Steve then went on to say that in his piece of junk home corner of the world he never knows what caliber of house he will be showing up at. The homes were mostly older and it was always an unknown if he was in for 2 hours of inspecting or 4 hours on a supposedly typical sized home. Steve then described that he used Range BLEEPS.

A Range BLEEP is "Mr. Home Buyer the BLEEP for that BLEEPITY BLEEPIN type of potentially rundown house is $315-$485. The final amount will be determined by the amount of time required due to the condition of the home. If everything is as you describe it (which I highly doubt), the BLEEP will not be over $485."

This type of range BLEEP was an absolutely brilliant method of protecting your dignity and honor when the home is much worse or more involved that the caller originally described to you on the phone. Personally, I did not feel like I needed the Range BLEEP schedule for the majority of my inspections because I have done enough standard homes in my area to know pretty much what I'm getting into. This is complicated by the fact that the mid and lower range home buyers have a tough time dealing with Range BLEEPS because they want to shop the market and can't deal with $150 BLEEP ranges..... It's a psychological thing.

The idea of a Range BLEEP stuck in my head and I knew I had to figure out how to take advantage of the concept. While re-evaluating my fees on the larger homes, I noticed that as I crossed the 5600 square feet line that I was into a Mansion. Once the size of the home crossed that line, it starts to get into lots of advanced systems and saunas, spas and multiple heating systems and multiple subpanels. I always found myself being a little miffed when I showed up and it took an hour longer because of the extra items that were not originally disclosed to me on the phone. Hence the Range BLEEP. Steve Bradley's idea seemed to fit this portion of my BLEEP schedule. "The BLEEP for this home will be between $535 and $785." The idea is that the BLEEP will be about $635 unless it has an unfinished basement which would drop it down to the $535 BLEEP. It gives me the latitude to up the BLEEP to $785 if in fact the home has every latest greatest feature and takes extra time.

It also turns out that people buying that caliber of home really don't care about the ultimate BLEEP..... Instead, they want you to be straight up with them and take the time it needs to do the job right. They are usually directly referred to me and many times the inspections are booked without ever discussing the fee. I also never previously felt comfortable when I had quoted a firm BLEEP and felt like I was should have quoted a higher BLEEP, to tell the client I wanted more money as I was inspecting. The Range BLEEP works perfectly to resolve this.

Now take all of this back to your area.... If you don't have basements then my square footage ranges won't work for you. I also recommend that you always put expiration dates on your advertised BLEEPS if you are going to post them on fliers. Otherwise you get an agent 2 years later wanting your lower BLEEP from a flier they have kept in their file. Also remember that it is hard to raise your BLEEPS once they are set. Long ago I wanted my lowest BLEEP to be $235 at a time when everybody else in the area was "I'll inspect any home for $185.95." I made my cutoff for the lowest inspection BLEEP to be under 2400 square feet = $235. This got the agents and clients used to my BLEEP starting at $235.

I originally issued a coupon for $50 off my normal inspection BLEEPS to try and get the phones to ring...... It worked and at the expiration of those original coupons my BLEEPS were the $235 that I originally wanted. Six months later I lowered the cutoff of my base inspection BLEEP to 2200 square feet. It was interesting because nobody noticed the increase in the BLEEPS and if they did ask what the base BLEEP was it was still unchanged at $235. Next I lowered the base BLEEPS to 2000, then 1800, then 1600, then 1400, then 1200, then 1000 and my current base BLEEP cutoff is 900 square feet.

The testimonial of this lowering the base square footage BLEEP is the increase in the bottom line of my Gross Inspection BLEEPS. Compare that to the now 2400 square feet BLEEP of $315 to the original BLEEP of $235 years ago. If you did 200 inspections on 2400 square feet homes in 1995 at the $235 base BLEEP you would have earned $46,000. If you did the same 200 in 2000 at the newer BLEEP you would make $63,000. That is a substantial increase of $17,000 in the Gross Inspection BLEEPS. This process has worked very well for me over the years and there has been no flack from my clients. The same is true when I instituted the crawl space $50 BLEEP 1 year ago; there was no flack.

Eric, my goal now is the $305 base BLEEP instead of the current $235. I want to raise the BLEEP on all residential homes to at least $305 and break off a separate Condo BLEEP schedule that will continue to be the original $235. Hence, if anyone asks I can tell them that my BLEEPS start at $235. I plan on making this change to my BLEEP schedule here at the start of 2001. I think that I will raise the base square footage back on normal residential structures to 1800 square feet and keep the $50 crawl space BLEEP. This will allow for the BLEEP increases by dropping the square footage process and I figure that this will carry me over the next couple of years and continue to increase my Gross Inspection BLEEPS.

The underlying fact is that I think that we as Home Inspectors should get at least $300 for a residential inspection, yet that is unheard of in my part of the world. Our local Inspectors as a whole are afraid to raise their fees because they think that they will lose business. What a bunch of BLEEPITY BLEEPIN wimps. Appraisers earn a $300 BLEEP on even the smallest structures, why shouldn't we??? Eric, in your area, all of this will be different, yet the principles of structuring your BLEEP schedule should be same.

Good Luck and let me know what challenges and hurdles you are encountering as you set your BLEEP schedules so that I can share your tips to the MMM readers and we can get their feedback on BLEEPS so that different opinions can be shared and we can all learn from each other. Michael Leavitt

Your Name: Please include your name or I don't know who it is from...

Annual Meeting Seminar Binders

For those of you who were not able to attend the Annual Meeting; We have a few Participant Binders left. They have some great information from the seminar classes (Polybutylene Pipe, Scary Stories From the Attic, Air Conditioning/Heat Pumps and Heating Systems - Boilers are Re-Entering the Residential Market). If you would like to have one please send a check for $24.00 to: A.I.I. * PO Box 177 * Midland OR 97634

HIGH TECH 3D & CE

In response to last week's MMM came some interesting questions from both the curious and the current users of 3D...

Is the 3D report format locked in? Text heading on the left side of the page and shaded text boxes on the right for comments? Can this format be altered? I would like to see the comments under the heading and no text boxes. Jon Gudnason

Jon: All of that is modifiable in the 3D Report Writing system. With the Report Writer open just go to the OPTIONS and REPORT LAYOUT menu. This will open a box that contains all of the fonts, locations and details that control the printed out report. When you have toyed with the settings just do a save as and give it a new report layout name. Then you can switch back and forth with ease. These settings do not affect the way that 3D looks on your computer, just the way it prints out.

Does 3D have any plans to expand the viewable menu items beyond the current limit of 18? There is space remaining on the screen for at least several more items. Also, couldn't a smaller symbol be substituted for the ">" and ">>" in front of the menu 2 and 3 items (like a ":" or a "-")? The ">" is is a wide character and takes up so much of the limited space on the line that several of the characters in the abbreviations disappear from the screen. The length of the abbreviations are already short enough as it is. Gary Holzbauer - OR

I agree with you Gary on your observations. You must first understand that it wasn't until the latest version of the Power PC Operation system combined with the quicker Pocket PC processors has allowed for smooth operation of the 3D system. The number of 18 menu items was set around the processor speeds of the older Compaqs and HPs. When they had more than 18 menu items showing on the little screen it took forever for the new screen to refresh itself when you clicked to the next section of the report. With 18 menu items the refreshing rate was acceptable. Now that the little machines are quicker 3D is going to increase this number. People with the older machines will curse the day that this happens and they will be forced to upgrade.

Steve Bradley shipped his Compaq iPaq to me last week and I have been test driving it side by side with my Casio. I like the little machine, but it doesn't want me to shelve my Casio. Both machines run the 3D software quickly and efficiently. Both of them have different strengths and weaknesses...... I will share my test drive of the Compaq iPaq next week in the MMM.

Hello, Michael! I am a new Inspector, barely computer literate but would like to know something about the 3D system for future reference. I will take your warning to heart. Please send the disk and reports anyway. Thanks Will Etherington

Will, please send me your address and I will speedily send it along to you.

Michael, First let me say that you and Shelly are great. All the information that we receive from the MMM is terrific! As we discussed before (but for the benefit of others...)What about the folks who have yet to get e-mail or a computer? Or have problems opening up a report? Faxed reports look like #@!%$Z^* (So that's out.) What if our agents like telling their clients when referring us that they get their report on site - no delay. Just thought you might like to tell every one else what you've already told me. Now can you e-mail my trial disk? And a trial form set. Thanks. Chris. PS where the heck is Jon Larsen? Chris Burkhart - UT

Chris, I think that Jon Larsen's computer died. Since he is out in the middle of nowhere we will have to send out a search party when the snow thaws....... Thanks for the praises on the MMM and you are now forcing me to share my thoughts on the method of getting a report to a client. So the readership understands a little better, Chris has currently been using an informational book style report from Carson Dunlop. The actual report is about a 14-page confusing checklist with lots of circles and abbreviations that a client could actually find everything they need somewhere in the several hundred pages of top notch material. Each checklist page is inserted behind a different tab in the large 4" thick binder and another set of the carbon checklist is given to the agent.

• Firstly, the information book is probably the best informational resource on the face of the planet complete with detailed explanations and excellent diagrams and pictures.
• Secondly, the checklist report format they use is HORRIBLE. I looked at one of Chris' reports and I had a hard time figuring out what the reporting format was telling me. This is not a reflection on Chris' ability to inspect because he is a good Inspector. Instead, it is a direct reflection on the quality of product that his client receives.
• Thirdly, the reporting system is very expensive. Each inspection requires a large binder that is very informative, yet misses the mark..... In my opinion! This means that Chris could quite possibly be forever hooked to the Carson Dunlop reporting system. If Chris starts to do 300 or more inspections a year, every year, than they will make tens of thousands of dollars off of him. The computerized format requires the initial investment, but it is an unlimited use of reports after that (with 3D, other vendors may have a per inspection fee). Even with annual software upgrades, an Inspector would save a great deal by cutting the umbilical cords to reporting systems that require you to keep giving them money for each inspection you perform........ What a ripoff.

So that Chris does not hire a Mafia Mechanic to do me in, let me explain my thoughts further. I do believe that a client is hiring us to tell them about the conditions of his home. I do NOT believe that our client is hiring us to tell them about every aspect and system of every home. I have found that good home repair manuals can be purchased at every home center. I do NOT believe that we are hired to sell our client a home repair manual with our inspection report. I do believe that our reporting methods need to provide the information about the home clearly, concisely, and accurately. This is why I do not like checklist, handwritten style reports. The AII™ checklist is better than most, but it still provides the client with 80% of each page filled with worthless information. Each checkbox selected leaves 6 more items on the page that were not selected. The Carson Dunlop reporting system that Chris uses is horrific in that you can check off some boxes, circle some words, enter letter abbreviations, and you can write a little bit at the bottom of each page. The poor client is left with looking at the crib notes and you literally have to keep turning the page over to see what the abbreviations stand for on the back side of each sheet. The Carson Dunlop checklist reporting system is unclear, confusing and allows the inspector to literally conceal every condition with gibberish if he so desires (Chris does not do this).

Agents love the reporting system because the client gets a HUGE manual with a report. I could make a strong case for a shady agent loving this report because their clients can't figure it out and it allows the agent to put their spin on each reportable condition later in the transaction. Chris defends the product by saying that all of the information is in the book. The Carson Dunlop manual is a topnotch systems manual it complete with detailed illustrations of the conditions described within the home and within the inspection report. You can find everything in that book. This is also its main drawback.... Too much information that doesn't pertain to the house and very few clients ever read it.

Chris is too close to the product to see its weaknesses, but his defense is.... "Did you read the report?" He also has to tell the agents repeatedly..... "If you had been on site for the inspection you would have heard me explain the conditions to my client and you would have heard me teach the client how to use the book to understand the crib notes in the report." (That was my spin on your explanation, Chris)..... It is a good thing that Chris is such a good Inspector or he would really take what I am saying as piercing daggers when it is not meant to be that...... As I sat at Chris' table looking at the reporting system, I humorously asked what his confidence level was with business and he said it was low. Not wanting to destroy the man, I responded, "Then I love the book reporting system!" and we both laughed..... The truth of the matter is that I believe that his type of reporting system is more of a "cover your rear" approach to inspecting and it is specifically suited to Inspectors who can't communicate their thoughts through the written word. The checklist w/book approach gives them a way to look smart as well. (Ouch!.... that zinger may have hurt =:>).

With that being said, I believe that it is the wrong reporting system for Chris. Chris is able to convey his thoughts through written word and he does not need to hide behind a checklist report w/book. Having inspected homes since 1992, he knows how to identify reportable conditions and he knows how to adequately express the conditions to his clients while on site. I believe that his current report does not reflect the caliber of his inspections. Instead, I believe that it makes him look like just another inspector with another checklist reporting system...... I believe that Chris could really benefit from a computerized system that would allow him to share his thoughts, observations, and opinions in his own full sentences. His ability to inspect and report are severely limited by his current reporting methods...... But..... it is quite an impressive book. My response to clients that want a big book is ..... "Would you rather pay me for a big book that covers everybody else's house as well as some scribble notes on your home, or do you want a detailed book written specifically for the house you are buying???" (Ouch!.... Another zinger). The answer is always the same. They would rather buy their own repair manual and pay me to write a book (report) specifically on the house that they are buying.

The wonderful thing about computers is that Chris could add all of the information in his big book to the computerized reporting system. Then, when he came across an outlet with Reverse Polarity he could click a button that would discuss in detail that topic in HIS own words. Then Chris' report would contain only the information pertinent to the inspected home and not try to cover every topic on Earth in relationship to homes. For example, a woman buying a house with a typical northern Utah forced air heating system does not need several pages of report information on steam boilers, does she?

COMBUSTION AIR???

"I asked a question on e-mail forum a week or two ago and never had any replies. The answer may have some bearing on this discussion. Put a water heater and clothes
dryer in the same laundry room that has no exterior combustion air supply. Turn on the washing machine so that the water heater comes on. Turn on the dryer and close the door to the rest of the house. Where is the make-up air for the dryer going to come from? It is exhausting 250 cfm of air out of the room.

Take this a step farther. Build a nice new modern tight house. Leave the door to the laundry room open. Now get the water heater going and turn on a bath fan or two and the new high volume kitchen range hood along with the dryer. Where will the make-up air for the fans come from? Jon Gudnason, Placerville, CA