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MONDAY MORNING MESSENGER

Message Prepared For Home Inspectors and Especially for Members of the

American Institute of Inspectors®

October 11, 1999

GOOOOOD MORNING, A.I.I.™

It's a great day here in Northern Utah. The weather has been very pleasant, although the fact that the cold is coming is a given. I have had to put my cold weather gear into the back of the van just in case. I refuse to load up the snow shovel because I'm sure that we are at least a couple of months away...... However......... We did get 3 inches of snow on our local mountains last Tuesday.

WOODPECKERS LOVE EIFS

Many Northern Utah homeowners are experiencing EIFS damage from the woodpeckers. This is a difficult situation because the birds are Federally protected and the homeowners cannot poison, hurt or kill the menaces that are damaging and residing in the nests. The Deseret News in Salt Lake City first reported on this in 1998.

Federally protected woodpeckers won't leave new Riverton Library construction site Riverton, Utah

(AP) -- Construction workers at the new Riverton Library have been unable to get rid of two woodpeckers who have made the site their home and are protected under federal law. Construction on the exterior of the building is nearly complete, and officials of Paulsen Construction Co., the prime contractor, hope they can find a way to get the birds to move elsewhere. The library is scheduled to open next spring. D.J. Waters, a nuisance wildlife control operator and owner of Urban Wildlife Control, said he has filed for a permit with the U.S. Fish and Wildlife Service to eradicate the woodpeckers. But he said it may take time to get approval from the federal agency to act on the request.

Woodpeckers are a protected species under the Federal Migratory Bird Treaty Act. In the meantime, Waters said the contractor would place a birdhouse on the library property on Wednesday in an effort to divert the birds' attention from the library. Efforts so far, including placing shiny streamers to produce a scarecrow effect, have been unsuccessful. Lack of wood on the exterior of the building has not deterred the birds. They pecked through a one-eighth-inch-thick layer of stucco and into styrofoam insulation material to make a home.

"For some reason, the woodpeckers like to nest in the styrofoam," said Toby Cordova, project manager for Beneco Enterprises Inc. Beneco manages construction projects for Salt Lake County.

The birds, which Tracy Aviary education curator Betsy Price said are most likely the northern flicker -- a variety common in Utah and other states -- burrowed in and started making a nest above the front entry on the west side of the library. Two or three holes about 4 inches in diameter were the result of the woodpeckers' two-or-more week stand on the library. The holes were repaired on Monday, but the woodpeckers were spotted on the building again the next day.

"They were resting on the rain gutters or on the roof, as they usually do," Cordova said.

Dave Black, vice president of Paulsen Construction, said he just hopes the woodpeckers will find a new home.

"We are expecting they will go away," he said.

MICHAEL'S POSTSCRIPT: The woodpeckers haven't left yet and it is very doubtful that they will ever be motivated to leave...... Let's see, a warm insulated nest combined with Federal protection. I would say the chances for their departure is slim to none and slim just left town.

E&O LAWSUITS???

Last week the topic of E&O Lawsuits was discussed that inspired a little dialogue on the AII™ Inspector Hotline. Jon Gudnason shared the following warning about over inspecting........

Brent says: "Inspectors, be careful out there. Some people are setting you up as a "deep pocket." The most troublesome client has always been a single divorced female that works for the state or an attorney, in every case. Keep in mind, if you are inspecting 500-700 structures a year you are going to have some issues. That is life."

If an inspector is doing that kind of volume I wonder if they are doing a thorough job or are they hurrying to get to the next inspection. I would suggest a significant fee increase. That way you will cut down on the number of clients and most likely make the same amount of income. There is overhead that is associated with each individual inspection. Less inspections = Less overhead. The overhead per inspection should be about the same. More gross income per inspection with the same overhead
= more net income per inspection. Fewer inspections = less liability. Just think, you could make the same income, have more personal time and less liability and stress. Jon Gudnason - Placerville, CA

For some reason I felt that it was important to come to Brent's defense, as well as defend the attainment of high inspection numbers......

Jon: I must come to Brent's defense. Brent is a full-time inspector with a wonderful business in Northern Washington. He has worked hard to be a successful Home Inspector and Pest Inspector. He may do 2 full home inspections and two separate pest inspections in a single day. That would be 4 inspections at 4 different properties. But let's do the math anyways..... 365 days a year..... Let's say that you do 2 inspections a day and you work 5 days a week. 260 work days in a year and you've got 520 inspection from just 2 a day. Let's say you work six days a week.... 312 days or 624 inspections a year.

Let's not be too judgmental on Brent... His work schedule is booked solid at least a week out with at least 2 inspections a day. His workload is steady and strong. Brent's lawsuits have never been related with overlooking anything. His lawsuits have been related with items that he has either documented exactly, or with unusual acts of God. It is unfair to think that he is being sued because he is hurrying to another inspection and being careless. I'm glad that Brent was willing to stick his neck out and share his experiences with us...... Let's not be so quick to cut his neck off.

As to inspection numbers..... A good full-time inspector should be able to easily do 400 inspections a year. That is 2 a day for only 200 days a year. That gives you 165 days off each year..... What a kick back life. The killer to this are the numerous days with only one, or none, inspections. Michael Leavitt - Orem, UT

Jon came back with a valuable lesson in Inspection Economics vs. Quality of Life.......

My comments on doing a large volume of inspections were not intended to be derogatory of Brent or his inspection skills. What I did mean to get across was a lesson in economics. Michael and Bill have told us that Brent does a great job, is very knowledgeable, and always puts his client's interest first. Kudos are due anyone that fits that description. It is a goal I personally strive for.

Michael has also told us that all the claims against Brent generally have no merit. This proves my original point. There is a given amount of "overhead" that goes along with each and every inspection we do. Part of that "overhead" is the assumed risk or liability. Part of it is also mental fatigue. Personally, when I do more than 10 inspections a week for any extended period of time, I get mentally lost. I can't remember one job from the next, my response to calls is not always what it should be, details seem to get lost in the mix. I end up putting out fires instead of handling things in a more timely fashion.

One solution is to reduce the volume and keep the same income. You can do that by raising your fees. Less volume means fewer call backs and less stress. It is simple math; callbacks are a percentage of the total volume. Higher fees means less jobs but more $$$ per job. That is supply and demand. You may need to raise them more than once if you are really good and in demand. Two inspections per day, six days per week, fifty weeks per year makes 600 inspections. That would be 65 days off. Two per day, five days per week makes 500 per year with 115 days off. 500 inspections at $250 per inspection generates $125,000...400 inspections at $300 per inspection generates $120,000...350 inspections at $325 per inspection generates $113,750. I would think that the overhead not incurred on the 100 inspections not done should more than make up for the $5,000 less in gross income. How many insurance deductibles does it take to make up the difference? 350 inspections per year at two per day is 175 working days and 190 days off. Now that would be a life style! Jon Gudnason - Placerville, CA

INSPECTOR TORPEDOES

My wife Shelly found this article at http://realtytimes.com/rtnews/rtapages/19991005_inspection.htm and thought that everyone should read it. She says....... This sounds like it is anti-inspector but turns out to be pro-inspector. This is a must read!!

How to Save a Sale Torpedoed by Inspection

How many times has it happened that the sale of a home falls through after the buyer's inspection? Not only is the seller penalized and back at square one, but as the seller's agent, you have lost valuable time spent marketing a home and negotiating with a buyer that is now either intractable or gone.

In the worst case, the seller may even subconsciously pass the blame to you, by insisting that you reduce your commission to cover the loss. After all, didn't you tell them that you would be able to get X amount for their home? It no longer matters that you did everything right. You looked at the home, suggested structural or cosmetic repairs to make the home ready for marketing and your seller signed a disclosure form. Enough to insure smooth sailing? Hardly.

Along comes the buyer, and the inspector, who finds a litany of problems that you or your seller didn't even know existed. And many repairs such as foundation troubles are so expensive to make that the seller may find themselves unable to convey the home. Perhaps they've relocated or have no means to make extensive repairs. Unless there is considerable equity in the home and a home improvement loan can be obtained, or the seller has the cash to cover the expenses, your sale may be shipwrecked.

The trend in real estate today is to prequalify the buyer in preparation of home acquisition. Buyers know exactly how much home they can buy, but sellers are seldom as well informed about their need to prepare their homes for market. They may be surprised at how up-to-date the competition really is.

When you do a comparable analysis for your seller, make sure you look at more than the numbers. Take a quick peek inside the homes that are offered for sale in the area or have recently sold. Compare the condition and features so you'll know where your seller's home ranks in the pecking order.

Then look closely at your seller's home for signs of neglect or age. These can signal potential problems. A crack in the walls could be more than just "settling." If the settling turns out to be foundation-related, repairs could cause additional cracks, which would then have to be repaired. This is a case in which covering the problem with patching and paint won't work, and a good inspector will flag the cover-up anyway.

Find out if the home has been treated for termites, recently repaired and if new major appliances have been installed. Make sure the A/C system is adequate for the home.

As further insurance of a smooth sale, suggest getting the home inspected. Not only will an inspection help you to price the home and assist with the seller's disclosure, it will save trouble later on. The seller will then have a better basis to understand how their home compares to the market.

If your seller refuses to have an inspection, make sure they clearly understand how important a tool the buyer's inspection is to the buyer and his/her agent. Inspections are designed to reveal the structure behind the fresh paint and new carpet. Should the worst happen - an unfavorable inspection - then the buyer is immediately put in the Captain's seat and you will be the one who will have to hold the rigging through the storm or watch the ship sink.

If after all your preparation, you still receive a bad inspection report, act quickly with a creative, equitable solution.

Your broker or title company may have a form that can serve as an addendum to an existing real estate contract to cover such contingencies as major repairs and other changes to the real estate contract of sale.

Such a form recently saved a sale for Carol Blair. She had a 40-year old home in fair condition listed at $124,000. A contract came in at $123,000, but the buyer went VA. Since the amount was close to asking price, and the home was not in tip-top shape, the seller agreed to pay almost $1,300 in additional closing costs, but insisted that no repairs found during inspection would be paid. When the inspection revealed foundation problems, a large leak and sub floor damage amounting to about $5,000 in repairs, both buyer and seller were shocked and the sale was jeopardized. Blair acted quickly, helping the seller get bids to complete the work needed, and reopened the contract negotiations by asking the buyer to pay their own closing costs if the seller made the extensive repairs.

To help the seller pay for the repairs without coming up with cash or getting an interim loan, the title company agreed to hold the amount of the repairs in escrow to be paid to the contractor at closing. Everyone was happy and the sale proceeded as planned.

The most important advice is to trust your own judgment. When you make your initial tour of a home you are listing, pay attention to what bothers you and don't dismiss it as unimportant. Don't make getting the listing more important than selling the home. It is your job to tell the seller what he/she needs to know to effectively close, not just sell, their home.

AII™ ANNUAL MEETING

Don't forget to register for A.I.I.'s(TM) Annual Meeting. The event is being held at the Riviera Hotel in Las Vegas on November 9th-13th. We are offering the Mobile Home Seminar for certification on Tuesday & Wednesday Nov. 9-10. The main conference starts on Wednesday evening with an opening reception in the exhibit hall. There are several exhibitors this year who can help you with insurance, business planning, and expanding your business potential.

Don't miss your opportunity to meet other inspectors from around the country, learn about new industry matters, review the basics, and earn your Continuing Education credits for membership renewal.

To register or for questions, phone 800/877-4770.