Barbara's Blacklist

Clients can look on Angie's List to minimize the chance that they hire the contractor from hell. But what about contractors? How about a list that contractors can look at to make sure they don't sign up to work for the client from hell?

Let's just say that we had to jump through one hoop to even do business with this client in the first place. And we went that extra mile because it was an Angie's List client. It's a new build house and the builder wanted to be issued a certificate of insurance listing them as an additional insured. (I am now of a mind that if this is a condition of doing the inspection, the client can just find someone else. - This is the second time a builder has made this demand and it just never ends well.)

When the client arrived to do the walk through with Mark, he pulled out an inspection report that another inspector had done a week or so earlier. He immediately wanted to know why Mark didn't mention some of the items that the other inspector had mentioned. Mark pointed out that he hadn't even written the report yet. It got worse from there. The client left Mark to go argue with the builder. When he came back, he resumed arguing with Mark. He wanted to make sure Mark incorporated all of the other inspector's comments into the inspection report. Well that's just not going to happen. The other inspector was a certified code inspector so the report is different from a standard TREC (Texas Real Estate Commission) report because a code inspector cites code violations. The client announced that he was upset with Mark. Mark asked what he could do to make it right and was told "Nothing".

Then Mark got a conciliatory email. The client claimed to understand the difference between the code inspection and the inspection that Mark did. He ONLY wanted Mark to review the other inspector's report to make sure that everything of importance was incorporated. He ONLY wanted to submit one report to his builder and he wanted it to be Mark's report. Well, when you put it that way... Mark made it clear that he would not critique the other inspector's work, but that he would review the report to make sure nothing was left out.

When this client finally got around to paying for his report and downloading it, the real fun started. He didn't like the way the report was formatted. He wanted Mark to reproduce it in a different format. Another thing that wasn't going to happen. Then he wanted Mark to guarantee that there were no errors in the report. Really?? Who guarantees that? (We don't. It's in the disclaimer on the front page of the report.) Mark's reply indicated that while we do our best to produce an error-free report that we could not guarantee that absolutely nothing was missed or that the report did not contain an error. This client's response indicated that this was both unprofessional and unacceptable.(Not sure what world he works in, but apparently it's a world where errors and omissions do not occur.)

This client has 86 issues, (some of which are quite serious - like improperly installed water heater flues) but instead of talking to his builder and addressing these issues, he is busy demanding that we reformat the report and guarantee that the report is error free. Really? Ask your doctor if he or she will guarantee your diagnosis.

Out of curiosity, Mark called the first inspector. He described this client as "a pill". That's kind and gentle. I think their encounter started out with the client attempting to tell him what to do and how to do it. That inspector informed him that he had over 35 years experience, and in addition to being a licensed inspector, he was also a certified master inspector and had no intention of being supervised by the client. Then he offered him a choice of one of them leaving. (It seems the client left.) But it turns out that the client didn't bother to get that insurance certificate for the first inspector. Although he'd done a phased code inspection, the builder threw him off the site during his final inspection, but not before he'd gathered all the information he needed for the final report. But the client knew better than to try to submit a report from someone who wasn't authorized by the builder to be there. That's where we came in.

If only I'd known. I'm braced to be charged back by the credit card processor (although in all the years we've been in business, I've never had a charge back - knock on wood) and I'm expecting to be chewed up on Angie's List. I'm prepared to fight back if it comes to that. He got a good report. The fact that he doesn't like the format is irrelevant. If there were a site like Angie's List for contractor's to find out about potentially pesky clients this situation might have been avoided. How about Barbara's Blacklist? I think I'll see if that URL is taken.

It's Not Over Yet

Remember that guy I wrote about yesterday? The one with the bad water heater. Seems it's not over yet. The buyer's agent called again this morning trying to get a copy of the inspection report. I told her that the buyer explicitly instructed us not to release the report to anyone but him.


"When did you talk to him?" the agent asked.

"Last week."

"I talked to him yesterday and he said it was okay."

"Tell him to call me and tell me it's okay. Unless he calls me and tells me it's okay, there's nothing I can do."

I immediately phoned Mark to let him know. In turn, he phoned the former prospective buyer who said that he had spoken with his agent yesterday and informed her that she could NOT have the report. He told Mark that she said she wanted to get a copy of it so she could help the seller sue Mark. (Really? Sue him for what? If the guy had maintained his property, he wouldn't have lost the sale.)

But it really bothers me that this agent told me an out and out lie in an attempt to get a report from me so she could turn around and help someone sue me.  Lying to me was bad enough, but lying to me to collect "evidence" to turn against me?? That's just outrageous.

Fortunately, the "buyer" (even though he's not buying that one) sees that Mark saved him from buying a money pit - a money pit that his agent was recommending. The buyer no longer trusts her. Given that he didn't want her to have a copy of the report, I assume that perhaps he never did.

Just wondering - should I file an ethics complaint against this agent? Or just wait to see what happens next.

Leaks, Explosions and Fixes

It's been a bit over a month since I posted anything. We took a couple of weeks off to spend time with family in the UK. Mark has been relatively busy since we got back and everything has been good, no issues. At least not until last week.

Last week he inspected a house that had a number of issues - a Federal Pacific electrical panel and a water heater that had reached the end of its useful life being at the top of the list. Based on the number and magnitude of issues, the buyer pulled out of the deal. It happens. The buyer is free to pull out of the deal without making the report available to the seller, which is what happened in this case.

Mark typically doesn't inform the seller of anything wrong unless it is a serious safety issue. The water heater on this particular house was a safety concern and the seller was notified. But the seller chose to ignore that information and Mark's recommendation to call a plumber. Instead, when the temperature pressure relief valve started leaking, the seller chose to call Mark to come back and fix it. (The temperature pressure relief valve is actually what keeps the thing from exploding. If it doesn't work, it needs to be replaced. Period. You could end up with this! Or worse.)

Mark is not obligated to "fix" things that aren't right in the house he's inspecting. He'd already advised the seller to call a plumber. But because he's a nice guy, Mark offered to email the seller information about replacing the temperature pressure relief valve. That wasn't good enough. The seller refused to provide me with an email address and insisted that Mark call him or better still, just come by and fix it.

Mark phoned the seller. He told him how to change the temperature pressure relief valve and advised him to get a plumber if he wasn't able to do it himself. (The part is less than $20.) The seller called me back again the next day to tell me that Mark's information was useless and that either Mark or the buyer needed to come by his house and fix it. By this time, it had been leaking for several days. Mark phoned him again and pointed out that his temperature pressure relief valve has a tag with maintenance instructions on it and that if the seller had actually maintained the valve, it would not be leaking now. The seller stated that it had been fine without any maintenance for over 15 years (there's a clue!) and that he fully expected Mark to replace the water heater. (Not the valve anymore, now it's the whole water heater!)

It was time to call the buyer's agent and explain the situation to her so she could involve the seller's agent to help the seller understand what everyone's roles and responsibilities are. Three days later, we got a return call from the agent asking that we send a copy of the inspection report to her and to the seller.

A quick call to the buyer revealed that he had not provided his realtor with a copy of the report. He didn't trust her not to give it to the seller. It was his feeling that since he wasn't going to buy the house, if the seller wanted a copy of the report, he could buy one. And he's right. It's his report. He can give it to whomever he chooses.

It's been three days now since we last heard from the seller or his realtor. I hope he got that leak fixed. But at least the tank won't explode.

Minimums are Non-Negotiable!

Some people like haggling over price. I suspect that for some it's just part of their culture, but for the most part, our Angie's List customers are not hagglers. They are primarily concerned with getting good value for their money. But this week I had two Angie's List callers try to renegotiate the deal price. (The deal offers $171 off just because they found us on Angie's List and they wanted me to lower the price even more?? Maybe they just wanted to prove that people in America CAN negotiate.)

I sort of see where they get the idea. Our Angie's List deal offers a set price on homes up to 4200 square feet. They think that if the home they're looking at is only 2100 square feet that the price should be halved. Ummm, no. Even if it's a 1000 square foot condo, it has a foundation, a roof, an HVAC system, a water heater, kitchen appliances...you get the idea. In fact, there have been several instances where Mark has spent over four hours inspecting older 1000 square foot condos.


Our pricing is based on square footage, age, and foundation type, but we have an established minimum price.

The minimum price is based on a maximum square footage of 4200 square feet. We arrived at the somewhat arbitrary 4200 square feet because this is where square footage really starts to add additional time to the inspection. Homes over 4200 square feet tend to have more than one HVAC system, multiple water heaters, more kitchen appliances, and more bathrooms.

As a rule, older homes have more wrong with them than newer homes. Consequently it takes longer to inspect them. If two houses are exactly the same size but one was built in 1955 and the other built in 1995, it almost always takes an hour or more longer to inspect the older one. But I don't always add on for age. For example, if the home is under 2000 square feet, I typically don't add the "age" charge, just because our experience with these properties indicates that it isn't necessary. Plus the age factor isn't even taken into account for Angie's List clients.

Then there's the foundation type. We charge extra for a pier and beam foundation. Typically we charge $250 extra. If it applies, it's added on to the Angie's List deal price. It's not negotiable. I've been asked why it's so high. My answer is in the form of a question. "How much can I pay you to go under the house?" Most buyers tell me they wouldn't go there for any price. Makes $250 seem like a deal.

And aside from that we have to consider fixed costs, such as insurance, web hosting, auto expense,  telephone, advertising, etc. There is a point where it no longer pays to leave the driveway. That's why we have a minimum charge. It allows for all the fixed costs, most of the costs associated with the specific job and a margin for profit. I already know we're not the cheapest - but we're competitively priced, especially when you consider what you get for the money. I guess that's why one of those two "would-be negotiators" called back to schedule an appointment without any additional price discussions. 

When the Gas is Shut Off

When the gas is shut off, Mark really can't do a thorough inspection. He can check for a leak at the meter, but that's about all. He won't be able to test the gas HVAC system, the gas fireplace or the gas water heater.

You would think this would be common sense, but apparently it isn't. The house Mark inspected this morning had the gas turned off and the meter locked. The buyer's agent is annoyed because he made it clear to the seller's agent that all the utilities needed to be on  for the inspection and the seller's agent assured him that they were. Now Mark will have to go back to reinspect those things that couldn't be inspected this morning once the gas is turned back on.

The buyer and the buyer's agent expect the sellers to pay for the re-inspection. All well and good except that the buyer just phoned me to let me know that the sellers are only willing to pay a little less than half our standard re-inspection fee. The buyer doesn't think he should have to pay because it wasn't his fault and he already knows he's going to have to replace the water heater. (Granted, I don't have to replace the water heater, but it wasn't my fault, either.)

We have a re-inspection fee for several reasons:

1. It costs money to go back. There are fixed costs and variable costs every time Mark leaves the drive. It takes the same amount of time to get there for a full price inspection as it does for a recall.
2. It takes time. Even though it won't take as much time as a full inspection, he'll still have to get there and set up the needed equipment, and
3. Call backs interfere with the scheduling of full inspections. If I can schedule an inspection at full price, why would I want to fill that time doing recalls for a fraction of the price?

The thing I find most annoying about this whole scenario is that the buyer expects us to accept the price the sellers are willing to pay. I don't recall opening the pricing up for negotiations. I understand that it isn't the buyer's fault. It isn't our fault, either. Aside from that, our service agreement is with the buyers, NOT with the sellers. It's my personal opinion that the buyers should pay it and collect the money from the sellers.

But that's not going to happen. I suspect that the buyers do not trust the sellers. These particular sellers took an extra day to execute the contract and we had to reschedule the inspection. (Apparently their agent did not school them on the principle that time is of the essence in a real estate transaction.) Now they're dictating what the inspector can charge to return to the property, which is necessary because of THEIR failure to have the utilities on. Yet the buyers want to believe that they will be able to negotiate repairs and price with these sellers. (I say "want to believe" because I detect a sense of doubt on the part of the buyers.) I have my doubts about it, too. I'd like to think that if I were the buyer, I'd tell the seller to return my earnest money and get stuffed. Then I'd start looking for another house, preferably with sane people selling it. But I'm not the buyer, and in the end we're going to do everything we can to help these buyers and their agent because, while we don't work for nothing, it's not all about the money.

Penny Wise and Pound Foolish

Mark got a call yesterday from one of the realtors who frequently refers us. She wanted to know why the inspection report didn't mention anything about the pool. These types of calls tend to make inspectors a bit nervous. Did we miss something? Is someone going to sue us?

As it turns out, the client had called the realtor to complain that the pool needed $2000 in repairs. In turn, the realtor called Mark because she knows how thorough he is and couldn't believe he'd have missed something that big.

Even though it was well over a month ago, a quick look at the job sheet told Mark that the client had declined to have the pool inspected. He asked me what I remembered about making that appointment. I went back to my notes and I could tell him that the client declined the pool inspection, the foundation level measurement, and the sewer cam. (It's in my notebook AND in the notes section of the scheduling software.) Anything that was optional was declined. I remembered that she gave me the impression that if she could have declined the termite inspection, she would have. She seemed very put out that it was going to cost her an extra hundred dollars. But the VA requires a termite inspection, so she had to have that done. (Mind you, there were active termites at the property and both treatment and repairs were required - saving her far more than it cost her.)

But the VA didn't require a pool inspection. It would have cost her $100. If she'd had it done, she would have known that the pool needed repairs and the sellers could have repaired it or she could have negotiated the cost of the repairs off the price. So the $100 she saved by not inspecting the pool is going to end up costing her $2000 in repairs. And that is an excellent example of penny wise and pound foolish.

You Go Girl!

I got so excited a month ago when someone from WFAA - Channel 8, (the local ABC affiliate) phoned me up. Tiffany (names have been changed to protect the innocent) asked if I was familiar with WFAA TV.

"Yes, I am." I just knew they'd heard about what a brilliant inspector Mark is - how he uses all kinds of technology other inspectors don't have - and they wanted to do a feature story on him. This was going to be MAJOR.

Imagine my shock when I discovered that all she wanted was for me to buy an ad on their website. I was still suffering from the shock of realizing that there was not going to be a "featurette" that I actually listened to her spiel. (In truth, I listen to most spiels because regardless of what you might have heard, it's really not in my nature to be rude.)

In addition to telling me about how wonderful the ads on their website are, she wanted to show me. For some reason, she thought we were based in Allen, Texas. We service Allen, but it's not where our office is. But I'll play along, I'll set my "community" to Allen. But I couldn't see any ads. She couldn't understand why, because she could see them perfectly. We changed the community to Frisco, but I still couldn't see any ads. She wanted me to describe what I did see. I could see the national ads and the regional ads almost perfectly. (I say almost because there was a car dealership whose ad was split in two and was displaying with the sides reversed.) But I never saw a local or "community" ad - which is what they were trying to sell me. After struggling with it for 20 or 30 minutes, Tiffany left me with "Why don't you show it to your husband when he gets in and you can call me."

I believe I told her that I didn't think he'd be particularly impressed with a website that didn't work and we said our good-byes.

So Friday, when Britney (remember the names have been changed) called and said she was with WFAA, I did not get excited. I mentioned that I'd spoken with someone a month or so previous and that the website hadn't worked.

Britney: "Yes, you spoke with Tiffany. If you have a pop-up blocker, you won't be able to see the community ads."

Me: "You want me to pay for something that nobody will see?"

Britney: "Just companies have pop-up blockers, so people don't see the ads while they're at work."

Me: "Lots of people have pop-up blockers."

Britney: "You can't see the ads if you have a pop-up blocker."

Me: "My point exactly."

She still seemed to think that we are in Allen. I said that we were not in Allen but Celina and that I would select the Celina, Prosper, Anna, and Melissa community for purposes of the demonstration. She said something about the ads for Sanger and I told her that I had selected Celina. I'll admit that by the third time she mentioned Sanger, I lost a bit of patience with her.

Me: "I selected Celina/Prosper, for the third time."

Britney: "I'm sorry. I just don't see that one."

Me: "Because Celina is spelled with a C not an S."

Britney: "Oh! There it is!"

She really should familiarize herself with the product she's trying to sell, but I kept this opinion to myself.

There was a discussion about how if I were looking for a home inspector, the WFAA website would not be the first place I would look, but that did not matter to Britney. She went on to point out that we could have a "coupon". I looked at some of the coupons that were there. A free inspection if you use a particular realtor. A $300 inspection in Flower Mound. $50 off an inspection. Then Britney and I started talking about numbers.

Me: "If my price is $600 and someone else is offering $300, or free, how many calls do you think I'll get?"

Britney: "We give you tools to track how many clicks you get."

Me: "I don't care how many clicks I get. I only care about how many calls I get."

This concept is just too difficult for people who are completely focused on the number of clicks, so I won't bore you with the details. We'll move on.

Britney: "I just know this is a perfect fit for you. I just KNOW it."

Me: "I suspect this will prove to be more profitable for you than for me."

Britney: "I just know it's a perfect fit for you."

How was I going to get off the phone without being rude?

Me: "You know what? We've been so busy lately that I've had to turn business down because there just isn't enough time for him to do them. I'm not sure it's a good idea to pay to increase the number of clients when we can't handle what we've got."

Britney: "Oh. How many people are in your company?"

Me: "Two"

Britney: "I'm sorry this isn't a good fit for you right now. If you'll excuse me, I have clients who ARE a good fit waiting for my call."

You go girl!


  

Cookies and Candy

As I was clearing out some shelves in the office closet today, I ran across a stash of candy jars. Most of them had one or more of  Mark's business cards taped to them. We haven't used them in several years so I decided to pull the business cards off them, clean them up and see what their highest and best use might be.

They are left over from the days of taking candy around to a dozen or so real estate offices. Usually I'd make the rounds once every two weeks if not every week. I didn't take the usual cheap mints. I took chocolate! One office actually asked if I could come by more often because the candy was typically gone in a day. (Unfortunately this wasn't an office that we got much business out of so "request denied". And even if they were responsible for generating the bulk of our business, I didn't really feel obliged to keep them in candy.) In the end, I stopped doing it because in Texas in July, you can't transport chocolate. It will be goo by the time you get to the third office. It turned out to be easier (and cheaper) to take a box of cookies. And eventually, we just got too busy to take anything.

I'm not sure it made a big difference in our business. But I suspect it was more productive than all of those "front page of Google" schemes. But it had some drawbacks. There were any number of agents who had their hand in the cookie jar, but who never once called us to do an inspection. We had two offices where the candy jar "disappeared". (Really? You can buy one at Hobby Lobby for $2.99.) One office told me to take my candy jar and my candy because they weren't going to recommend us unless we paid them $500 per year. (And we weren't.) And of course, sometimes when I took the candy in I found that my candy jar and/or my brochure stand had been commandeered by a competitor. (How observant are some of these guys when they can't look at the bottom of the brochure stand to see that it belongs to someone else? Not much of an inspector, if you ask me.)

The other problem with showing up every week was that I was rewarded with all kinds of sponsorship "opportunities". I could buy the office breakfast, or lunch, or pay for them to have a happy hour, or a round of bowling. The possibilities were endless. When we were first starting out, we didn't know any better and fell into the trap. But eventually, the demands for money from a couple of offices exceeded the amount of money being generated by those offices. It's just not sustainable. These days we sponsor nothing and no one. I've had a couple of agents and offices inform me that they'd remove me from their list if I refused to sponsor. And I guess they did because we no longer get calls from their clients.

But we're very grateful for the agents who refer us because they believe that we do a fantastic job, not because we sponsored their happy hour.

The Fuss About Cast Iron

Within the past few weeks Mark has come across several properties with cast iron sewers. He always call them out which has caused considerable grief the past few weeks. We've had innumerable calls and emails from upset sellers, disappointed buyers, confused plumbers and frustrated agents. All of whom must be handled with care and with tact.

It is Mark's job to identify problems with a property. He cannot guarantee that the sewer line (or anything else) will be maintenance free for as long as you own the property. He CAN guarantee that eventually a cast iron sewer will need to be replaced - and it will probably be sooner than later. They are found in properties that were built in the 1970s and earlier which means that they are 40 or more years old. Very often, a leak in this type of sewer is really seepage that comes with the erosion of the pipe, not a spurting or dripping type of leak. (In other words, a pressure test will not confirm that there is a leak. But really, how do you think mud and bugs get in there if there isn't a hole somewhere?) And look at the picture. Does it look "fine" to you?

I have first hand knowledge of cast iron sewers. It starts out with back-ups. Eventually, the sewer line is backing up at least once a week. You also get rusty water in the guest bathroom shower because it isn't used that frequently and the water stands in the rusting pipe and looks nasty until you run it for a few minutes. (You have to remember to run the shower for five minutes or so several hours before any guests arrive.)

We finally bit the bullet three years ago and had the house replumbed. It was expensive. It was messy. We had to move out of the house for a week. But as I stroll through the neighborhood I can't help but notice that there are usually one or two houses with telltale evidence of trenching. Obviously they've had to replace the cast iron lines. So when the plumber says that the lines are "in as good condition as other properties in the neighborhood", he's telling the truth. But if those lines are cast iron, they're corroding and will eventually need to be replaced. Probably sooner rather than later.

So here's one scenario: Mark said it needed to be replaced. The plumber said it was fine. The home buyer "doesn't know who to believe". We can't tell him who to believe. But as an industrial engineer, Mark can certainly tell him about the properties of cast iron and how it reacts to effluent (a polite term for human waste.)

It's not Mark's job to tell someone not to buy a particular property. It's his job to make home buyers aware of existing and potential problems. Could that buyer get a few more years out of that sewer? Maybe. Maybe not. If he wants it, he should buy it. He is in a position to make an informed decision. But he can't come back to Mark in a few years complaining that he should have been warned about the cast iron sewer.

Look Me in the Eye

When you register a corporation in the state of Texas, you are sent a notice that you must register with the Texas Workforce Commission so they can assign you an account number and start collecting unemployment tax from you. Having owned other businesses in Texas I wasn't surprised when I got the notice.

What did surprise me was the message I got when I completed the online form.

"Not Liable: Not Required to Register

Based upon the information provided, this employer is not liable for state unemployment taxes under the Texas Unemployment Compensation Act. Since you chose not to pay taxes for this employer voluntarily, registering as an employer with the Texas Workforce Commission is not required at this time. For additional information, contact....."

Maybe the laws had changed. Maybe you no longer had to pay the tax if the owner is the only employee. I didn't know. Who chooses to pay taxes voluntarily? I didn't know. Why would I need additional information? This seemed pretty clear. But I did know that I would be wise to print this page because I suspected this would come back to bite me on the butt.

Sure enough, after I paid the federal unemployment tax - and by the way I had to pay the feds more because I hadn't paid the state anything - along comes someone from the state wondering why I didn't register.

"Because your website said I didn't have to." I pulled the notice that I'd printed back on March 30, 2011 at 3:53 PM and read it to her.

She didn't care. If I paid the feds, then I would have to pay the state. I offered to send her a copy of the page that said I was not required to register, noting that it didn't mention that I might need to try registering again if certain criteria were met. She told me I could have chosen to pay the taxes voluntarily and avoided the problem. (Really???!!! Who voluntarily pays taxes that aren't required?? Not me! I pay what I owe and no more.) She sent me paperwork to complete and I promptly sent it back. The next thing I got was a bill for two years worth of taxes along with a bill for late payment interest. I paid the taxes but I really took exception to the late payment portion of the bill.

The fact that we have to pay unemployment tax is an irritation. Mark is the only employee of Yellow Hat Inspections and he is also the owner. Do you think they're going to pay him unemployment benefits if he shuts down the business? They might, but I doubt it. But to charge me interest because I filed late when I was relying on the accuracy of their website is just wrong.

I explained this over the phone and in writing to several people at the Texas Workforce Commission. Finally one of them responded that no one at the TWC had the authority to issue an abatement of the interest - which they assured me was only interest and that no penalty had been assessed. (I still felt penalized.) If I wanted that money back I would have to file a request for a hearing. Fine. I wanted someone to look me in the eye and tell me that this was my fault.

The hearing was granted but it was going to be over the phone. Rats! It's really easy to blow someone off over the phone. Much more difficult if you have to look them in the eye (which is what I wanted). Anyway, the hearing was last Thursday. I figured it would be over in fifteen minutes. ("Request denied! Next!") But it went on for an hour and fifteen minutes. I struggled to hear the moderator, but we managed to get through it. I presented the reasons why I think they should give me back the penalty. They reminded me that it was interest rather than penalty and only countered that they were 'not authorized' to return the money.

As I understand it, decisions are not made at the time of the hearing. Apparently the whole thing is reviewed  by someone who is too busy and important to show up at the hearing and that person makes the decision. (You can't look that person in the eye, either.) This process takes an additional four to six weeks.

There are a couple of things in my favor:

1. When the moderator asked how much I owe right now the TWC rep said "zero".
   
2. When the moderator asked if I had failed to file in a timely manner since the initial filing, the answer was "no".

But there's one big thing that's not in my favor. "They" are a government agency and they make their own rules which rarely have anything to do with exercising judgement or a sense of fairness.

So whether I get my "penalty" abated is anyone's guess right now. I'm guessing they'll keep it. After all, $79.09 means a great deal to a poor state like Texas! But if they keep it, I hope they use it for something sensible, like updating their registration website to reflect reality.

In My Very Biased Opinion

Over the weekend I got a message from a prospective buyer through our website request form. Here it is:

"My husband and I are currently looking into purchasing a home in Allen and we are needing to find an Inspector. Our Real Estate Agent suggested that we use someone that she does business with. Do you think it is wise to pick an inspector that our Agent recommends or someone from the outside? Please advise and contact me when you have a chance." - DD

Well DD, that's a great question! What I'd like to say is that if your real estate agent recommended Yellow Hat Inspections, then I think it's very wise to go with that recommendation. If your agent recommended anyone else, then it is very foolish. Of course my opinion is biased.

But that's not what I said to DD. I assured her that if Yellow Hat is on her agent's list it is NOT because we paid to be there. Some agents recommend us, others don't. Some only recommend us to their "up market" clients. Some agents recommend us only when they are working both sides of the deal or if they are a principal in the transaction. Regardless of who recommended us, we work for the client, never for the agent. I advised DD to check us out on Angie's List because we earned the Super Service Award AND we are highly rated, and those ratings are not something we can buy. I explained that not all inspection companies use thermal imaging technology, and that very few have the necessary equipment to measure the foundation, and that no other inspection company in this area can inspect the sewer line - a very expensive thing to fix.

I sent her a sample report and a video link. But since that was Sunday and it's now Tuesday, I have to assume that either their offer was rejected or they went with their agent's inspector. Not a wise move in my VERY biased opinion.





 

One of Those Days

Yesterday was one of those days. Both the morning and afternoon inspections were small, minimum charge inspections. One in Dallas, the other in Fort Worth. Mark got to the first one and called me because he didn't have the code for the gate. No one had given me the code for the gate. I called Centralized Showing and they had no record of the inspection. Then I remembered, they'd had me call the listing agent to schedule the inspection. I looked at my notes. This was the agent with the weird number. It didn't ring on my phone, but apparently it rang on his and when he answered it, he couldn't hear anybody. I hoped he would call me back, but it didn't happen. In the meantime, Mark was able to tailgate his way through the gate only to arrive at the condo to find that the combination on the combo lock did not work. I would have to try the agent again. And he advised me to get the gate code because he was going to make a run to Home Depot while he waited and the odds of following someone in a second time were slim. After another failed attempt to phone the agent, I sent him a text message and phoned the buyer's agent's assistant. Every agent should have an assistant! She always has the information I need! I got the gate code and the correct combo code and was just about to phone Mark back when the agent called. I was able to tell him that I now had everything I needed and thanked him for responding. I gave the information to Mark. Then he called me back 30 minutes later. The power to the unit was not on and there was a guy there shutting off the water. The guy said the water would be turned back on at 4:30 in the afternoon, but he didn't know anything about the power. You just can't do a proper inspection without power and water. There are just too many things that can't be checked.

Mark called the client and the client's agent. The agent rolled with the punches but the client buying the condo was a bit upset. He was currently out of the country, but was a bit rude, suggesing that we should have known the power and water were off. Really? We're good, but we're not clairvoyant. Besides, all we really wanted to do was let him know that it wasn't going to happen today and why. I made another call to the listing agent to advise him of the situation with the power and the water. I could tell him that the water would be turned back on at 4:30, but I knew nothing about the power. Neither did he. He would have to call me back.

The listing agent for the afternoon inspection had not yet called back to confirm the 1 PM start time even though I'd phoned him on Tuesday. (I really prefer dealing with Centralized Showing.) I phoned him and he told me that it was approved but that I would have to call the office after 9 AM to get the combination code. When I called back, the gentleman who answered the phone was confused. He thought I said Kate instead of Pate. He didn't realize the inspection had already been approved and advised me to call the listing agent and the owners. I assured him that all I really needed was the combo code, which he finally gave me.

When Mark arrived at the house, he could hear a dog barking. He knocked but there was no answer, just barking. He called me. "Is there a tenant in the house?" (Let's just say that this property was not in the most desirable area of Fort Worth.) The owners were not supposed to be home, but no one had mentioned a dog. "I just don't want to open the door and come face to face with a guy with a gun and a dog." Nor did I want that. I would have to call the office again. (Do you see why I like Centralized Showing?) It turns out the dogs are crated, not that he waited for me to tell him that before he opened the door. Poor little guys were just scared.

But Mark said the neighborhood reminded him of Soweto and I encouraged him to finish and leave as quickly as possible.

Meanwhile, I got a call from this afternoon's scheduled client wondering if we could limit the inspection to just the pool and the termite inspection. "Yes, of course we can do that, but I'll still have to charge you the minimum charge. And I'll have to charge separately for the termite inspection because it's a separate company and I only pass through the charge." And because he niggled around for a discount when he scheduled the inspection, (imagine, you're spending over $400K on a house and you want someone to give you $30 off the inspection) the total only came out to be $70 less than doing the entire inspection. He had decided to cancel because the seller had provided him with an inspection report but it didn't include the pool or information about wood destroying insects. Well, it's not my job to fix dumb. And people who rely on reports that were produced for someone else are dumb. I know of one realtor who insists that people who decline having the house inspected sign a paper that says they are stupid and will not blame him if anything goes wrong. Smart man. And I really wasn't going to be upset if Mark had an afternoon off. I keep my honey-do list for just such occasions. (But as it turned out, someone called this morning and was delighted to have this afternoon's time slot.)

Then I got the call from this morning;s appointment advising me that Centralized Showing hadn't made it clear to the seller's that this was an inspection and not another showing. (Did I say I liked Centralized Showing??) We would have to postpone the inspection until next Tuesday. Not a problem, it gave Mark time to go back and do yesterday morning's inspection without being rushed.

So after all that, we were going to Randy's Steakhouse for their monthly wine dinner. What could  be better? As it turns out, just about anything. The appetizers were a bit bland, the first course of avocado and shrimp had turned a bit brown in the overly tart dressing, the gumbo was too thick, and while mine had meat in it, Mark's didn't and the filet was too salty. If we'd ordered it outside the wine dinner we'd have sent it back. To give them a bit of credit, the chocolate mousse was perfect. However then we got the bill. These days restaurants are fond of adding a 20% gratuity. (Really? Give your employees a raise if you don't think a 15% gratuity is enough.) Anyway, the bottom line is that it was too much money to pay for food that wasn't up to the usual high standard.

Thank goodness today was a new day!

Scared Of or Scared Off?

Last week an agent complained to Mark about one of the pest inspectors we use.

"I wish he'd stop talking about brown recluse spiders. He's going to "scare off" the buyers."

Brown recluse spiders are extremely dangerous. A bite can seriously injure an adult and it can kill a child. Unfortunately these spiders are fairly common in this part of Texas, particularly in houses that have been vacant for a while. But there are insecticides that can eliminate them. It's far easier (and less expensive) to fix a spider problem than a damaged roof or a broken sewer line. While buyers are scared of brown recluse spiders (they should be!) most are not "scared off" buying the house because of them. But they do need to know about the problem ahead of time so the house can be treated to get rid of them before they move in.

It is beyond belief that any agent would want an inspector to remain silent about any potential problem, especially a problem that poses such a serious health and safety risk. But to actually say it out loud??? Astounding.

Be Calm

I've always taken a great deal of pride in my ability to calm people who are angry or upset. But every now and then, I fail. Friday was one of those times.

The buyer's agent called me and asked if Mark could call the seller. Apparently there were some issues with the electrical. It happens. Usually it's just a switch that needs to be flipped or a GFCI that tripped. Before I could text the details to Mark, the phone started ringing. It was the same number that I was about to text to him.

"I was just sending him your number so he can call you."
"Do you have any idea what the problem is?"
"I'm told it's something with the electrical..."
"My pool no longer works, my patio lights don't work, my alarm is making a whining noise and the trouble light is on..."
"We weren't given any information about your alarm codes..."
"Don't you argue with me! EVERYTHING in my house is broken! I have been violated! That inspector needs to get back over here RIGHT NOW and fix everything that he broke."
"Ma'am, I will have him phone you as soon as possible. Thank you." And with that I hung up. You can't speak rationally to someone who is convinced that everything in her house is broken because her patio light doesn't come on.

I phoned Mark to let him know he might be walking into a hornet's nest when he phoned her. His one question to me was "Was she rude to you?" At this point I didn't relate the conversation to him. He doesn't tolerate people being rude to me. He would have refused to call her at all. So I just told him that she was very upset and that she felt violated and that I'd been unable to calm her down.

So he phoned her and in his very best Queen's English asked her how he might help. He let her know that he understood how difficult it is to sell a house - strangers coming through it, an inspector poking around. Very invasive. He also explained to her that sometimes after a GFCI switch has been tested, it trips and then he stayed on the phone with her and walked her through resetting the switches. Of course, the alarm was something he couldn't help her with. He doesn't touch them, except to disarm or rearm them when we receive instructions to do so. But the buyers had asked him a question about the alarm system and when he told them he didn't know, they started pushing the buttons. All he could tell the seller was that he understood how she felt, but that he was there to inspect the house, not babysit the buyers. If he were to follow them around keeping them out of things, he'd never get the inspection done. She was happy that the electrical was all working again and although she was still unhappy about the alarm it was no longer directed at him. That's when she told him she'd been a bit rude to me. He assured her that it would be fine, but later that day, she called to apologize for being unpleasant. No problem! I'm just glad I hadn't been unpleasant in return.

The Importance of Granite Countertops

When Mark threw his back out I had to reschedule a couple of days worth of appointments. But you can only delay them so long because the option period clock is ticking, which means that I had to step up and help out. I became the designated driver. Since I can't actually do anything on the inspection other than carry stuff in and out, I had plenty of free time to look around a vacant house.

An investor is buying it. Another investor is selling it. It's small - two bedrooms, one bathroom, a living room, a dining room, a small kitchen and a room at the back with an undefined function. Even though it was built in the 1930s, it has a reasonably usable layout. It would make a decent lake cottage, except there's no lake anywhere close.

The selling investor has "rehabbed" the property. It's been painted inside and out. All the interior walls have been painted a dark taupe and all of the woodwork has been painted white. Some of the painted walls are paneled while others are plain sheetrock that has been stapled and painted. (Taping and bedding was apparently too much effort.) The woodwork consists primarily of rough-hewn 1 x 4s. There is brand new carpet in the living room, bedrooms, and two thirds of the back room. There is also brand new wood-plank-look vinyl in the dining room, bathroom, kitchen and one third of the back room. I don't know how long the vinyl will last because it buckles in the dining room when you walk on it. I think it's because the floor isn't level - you can tell by walking on it.

The water heater looks ancient and there's a hole inside the cabinet under the kitchen sink. There was a light on in the back room that did not seem to have a control switch. The toilet and sink in the bathroom look brand new and the tub looks relatively new. I would have expected one of those vinyl tub enclosures, but this was all ceramic tile. Some of the ceilings are sheetrock and others have been covered with acoustical tiles which have been painted taupe along with the room. There's a washer hookup in the backroom where the vinyl flooring is, but the dryer vent is located where one would need to have the dryer in the carpeted part of the room. A bit odd. I think the technical term is functional obsolescence.

The kitchen cabinets are probably original. The cabinet doors are painted plywood. The door pulls had escaped being painted, but not the hinges. Many of the doors no longer close and many of them no longer align with the adjacent doors.

There is no heating or air conditioning in this house. But it has granite counter tops in the bathroom and kitchen. Are granite counter tops really more important to buyers and tenants than heating and air conditioning? This is why I personally don't invest in real estate - I clearly have no understanding of the market.

Putting Lipstick on a Pig

Sorry, but I just can't get excited about the prospects of a high volume - low budget client. I can see why this might excite some realtors, but as a home inspection company, it really doesn't have much appeal. While the realtor is going to get a steady flow of commission, we're being asked to do more work for less money. We're being asked not to charge for items that most buyers pay a premium for and the "upside" is that there will be more.

Imagine that your boss calls you into his or her office and says, "You've done such a fabulous job for us. So good, in fact that we're going to cut your pay by 10% on this project. This is such a wonderful opportunity because there will be five more similar projects over the next month and we'll cut your pay on all of them! Pretty cool, huh?"

Pretty cool, indeed. Here's the deal. If you're sending us your premium clients, we'll do our best to help you out with your cheapskates. But don't expect us to get excited because some flipper who wants to put lipstick on a pig didn't budget enough for due diligence.

A Happy Problem

January was the best month we have ever had! And February has been pretty good, too - in spite of the fact that we were gone for two weeks.

Right now the first available appointment time is next Thursday afternoon. I hate losing business, but I lost two customers today because next Thursday was just too late for them. No rest for Mark and no chance of getting any of my honey-dos done. It's a happy problem!

Now, if the Congress can just refrain from mucking up the economic recovery...

The One that Got Away

There's nothing quite like word of mouth. Within the last six months Mark has performed six warranty inspections in the same neighborhood. It's not just because we sent them a special offer. We did, but so did a number of other inspection companies. They wanted Mark because word got around that he does a really good job for a reasonable price. So I wasn't surprised when I got a call from another homeowner in the same neighborhood. I had his name, address, email address - everything I needed to enter the appointment into the schedule - when he asked me about the price. Of course - it's a special offer that includes a number of premium options. We charge a flat rate on a warranty inspection - and the special included the sewer-cam and zip level measurement (which normally cost an additional $250) at no additional charge. Most people think it's a good deal (because it is). But this guy seemed to think that other people were getting a better deal than he was being offered. That's happened before. After giving a caller in January the special price, he told me that he wanted to pay the same price that his friend paid. He gave me his friend's name and I looked it up. His friend had his inspection last October, before the special pricing took effect. When I told him the price his friend had paid, he was more than happy to go with the special price.

But not this guy. He was insistent that I was overcharging him. He told me there was a special price for people in his subdivision. He even gave me a promotion code. I don't know whose promotion code it was, but it wasn't ours. And he insisted that his friend had paid $100 less than the price I was giving him. I asked what his friend's name was and confirmed that his friend had paid the going rate, but he didn't believe me. But the price he wanted was $100 less than our minimum charge - without any premium options. And we never but NEVER discount $100 below minimum charge. Bottom line - he decided to use an inspector whose base price was $100 less than our minimum price.

All I could do was remind him that the other inspector may not include an infrared scan, probably will not include a digital foundation plot and most definitely will not include a sewer cam. To which he said "O-Kay".

Seriously, I'd like to be a fly on the wall when the guys in this neighborhood get together. It seems they regale one another with tales of what a good deal they got, even though it was the same deal everyone else got. I think they should take up fishing.

An Odd Request

Last weekend brought in an odd request. A potential client, who was purchasing a "new build" home wanted us to do what's known as a "third party" or independent inspection. That's not new. We get those requests all the time. What was new about this one was that the builder wanted us to sign a contract with them before we could inspect the house.

That's a new one. The buyer sent me a copy of the contract the builder wanted us to sign. It was several pages long and more one-sided than an insurance contract. It's been a while since I took that contract law course, but I still remember a few things. Plus I've always scored pretty high in reading comprehension. Lots of problems signing that thing.

1. The builder wanted us to have a certificate of insurance issued naming them. I could understand this request if we were doing subcontract work for them but this contract was only good for a specific buyer and property. I thought that showing them proof of insurance should be sufficient without specifically naming them.
2. They had a requirement that the site superintendent must approve and be present at the inspection. I took that to mean that the site superintendent was intended to supervise the inspection. Mark is a licensed professional inspector. He also has academic credentials that include an advanced degree. In Texas, builders are not subject to licensing requirements, nor are academic credentials required. So in essence, they wanted us to agree to be supervised by someone who is not qualified to supervise. Additionally, there was no provision for remuneration if the site superintendent was late or failed to keep the appointment.
3. The contract stated that the inspection must be conducted during "normal business hours" without defining what those are. It also stated that the inspection must be performed prior to the "New Home Orientation", without defining what that is or when it takes place. For all we know, we might have a 30 minute window to perform the inspection. It takes Mark a minimum of 2 1/2 to 3 hours. Period.
4. The terms of the contract prohibit the inspector from being on the roof. This doesn't really bother us because we have equipment that allows us to do a very thorough inspection from a ladder and the ground. But not all inspectors have this equipment. The disservice is to the buyer.
5. The contract prohibited the inspector from communicating with any workers other than the site superintendent. Seriously, if the property is ready for inspection, there should not be any other workers present to communicate with. We certainly do not want to set up our equipment when there are tradesmen wandering about because it is clear that the builder is not willing to accept any responsibility for damage to our equipment that might be caused by a workman.
6. Under the terms of this contract, we assumed responsibility for damage to our own equipment as well as any damage to the property. For the sake of argument, let's assume that the site superintendent does not stay for the entire inspection. And since our inspections typically take a minimum of three hours, that seems like a reasonable possibility. But we could be held responsible for damage caused by someone who came in after we left.
7. Under the terms of this contract, we must deliver a copy of the inspection to the builder. It is our practice to deliver the report to the person who paid for it. What they do with it is up to them. We feel it is the buyer's responsibility to deliver the report, not ours.

Most contracts are mutually beneficial to the parties. This contract had no benefit to us at all.

The bottom line - we declined. I don't really understand what this particular builder is up to. But we won't be signing a one-sided contract with them.

I'm sure there are some inspectors who will agree to be supervised and will willingly sign their contract. I hope it goes well for them. But when I'm told the contract is "non-negotiable" I take them at their word. I don't negotiate. I also don't sign.

Your Opinion Please!

We are seriously considering turning down requests to inspect "new build" houses. You might wonder why because with no furniture in them and everything being in "new" condition, it would seem to be an easy job. If only!

Here are the problems:

1. The client typically calls to schedule the appointment weeks in advance. The appointment goes into the calendar and the builder representative is called and informed that the client has requested we do a third party inspection. The builder is asked to notify us as soon as possible if the home is not going to be ready.
   • Often the builder's representative's voice mail box is full making it impossible to leave a message, which means I have to keep calling back until I get someone or until they clean out their voice mail.
2. A day or perhaps an hour before the scheduled time, the client or the builder will call to say that the house isn't quite ready. The appointment is rescheduled (sometimes more than once). In the meantime, I have turned down other business that could have been scheduled for this time. If I'm given 24 hours, I have a chance of filling the time. It's pretty rare to fill it with an hour's notice.
3. The other scenario is that no one calls and Mark goes to the property and finds that:
   • It is locked up and no one is at the model.
   • It is not ready. There are no appliances and/or the gas and water are not turned on.
   • The place is buzzing with tradesmen. Three or four different crews are doing their best to complete the house. - Which presents two problems. 1. The house is technically not ready and 2. It's not practical to try to set up high-tech equipment when it's going to be in someone's way and you can't hold them responsible for breaking it. But we're still back to the place where other work has been declined because there was already an inspection on the schedule.

So, what can be done? We've tried to explain this situation to buyers who agree in principle that if the inspector has to make more than one trip there will be a charge for it. But in practice they either refuse to pay it or whine that it wasn't their fault. We agree, it wasn't their fault. It was the builder's fault, but we can't make the builder pay for it.

We take a great deal of pride in the level of service we provide. We want our customers to feel that they got the best possible value for the money they spent. We want them to give us a stellar rating without any reservation or hesitation. And lost opportunity costs aside, there are expenses every time Mark leaves the driveway, so multiple trips to do the job seriously eat away at the profit margin. (That's right! This business is run "for profit"!)

I'm not convinced that turning away business is sensible. But I'm not sure what to do. I'm very interested in hearing how other inspectors have addressed this problem. I'm also interested to hear how potential clients feel about it. As a home buyer, what are your expectations? And if any of you are builders - what is your excuse?

I Can Get You on the Front Page of Google!

Tell me again why being on the front page of Google is something I should care about? I get these calls all the time. They interrupt my day and distract me from whatever it is I'm doing at the moment. They don't take "no" easily and I don't like to be rude. But the fact is, I don't CARE if I'm on the front page of Google. I care that someone actually picks up the phone and calls to schedule an appointment. And search engine optimization companies can't promise me that.

We typically get sucked into trying one at least once per year. It happens when business is a bit slow and we're on the verge of dancing around a fire with a mask in order to make the phone ring. Someone calls and they're just a wee bit different from the last one. So ever hopeful, we agree to try it and pay the "small" set-up fee only to find that if it generates any calls at all, they are from people who are either outside our service area or who want to know why we're charging a hundred dollars more than the other guy they called.

Some of these search engine optimization (SEO) companies want to replace our grammatically correct text with stuff that makes me cringe. (I certainly don't want to be grammatically incorrect on the front page of Google!) Some of them have added misleading key words, the worst of which was "cheap". That's just not a word we want to own. We want the client who is concerned with quality and value, not "cheap". One of these SEO companies opened a Google AdWords campaign for us and we were hit with charges from the SEO company AND from Google. Now that was an expensive surprise!! And the effort it took to get that cancelled! Have you ever tried to talk to someone at Google? It's like trying to talk to someone at Microsoft. It can't be done. The only thing you can do is appeal to your credit card company. In the end, we had to cancel the card and have a new card issued to keep Google from charging us for the campaign that we had not authorized in the first place.

Anyway, bottom line - I don't care if I'm on the front page of Google. We CAN be found on Google. One of our clients from yesterday told me she'd found us on Google (even though it probably wasn't the first page). Everybody knows that the first page is filled with people who paid to be there. If I'm searching for something, I typically skip right over the "sponsored" results and I don't think I'm the only person who does that. So now, when they call me to tell me that they can get me on the front page of Google, I simply say "I don't care about that." It pretty well ends the discussion. "I don't care" isn't one of the objections they're trained to overcome.

Broken Trust

A lack of trust is what causes most relationships to fail. No different for buyers and sellers of real estate. Mark saw it happen on Saturday. The inspection required that he turn on a faucet that had been shut off. When he turned it on both the faucet and the shut-off valve started to leak. Since the house was vacant he asked the buyer's agent to phone the listing agent and let her know about the problem.

Within the hour the seller and one of his friends arrived at the house and started talking arguing about how to fix the problem. The two of them discussed whether they needed to call a plumber now, or wait until Monday when the plumber wouldn't have to be paid the weekend rate. They discussed getting a handyman instead of a certified plumber. In the end, they called the plumber but the damage was already done.

I'm not talking about damage to the house. I'm talking about damage to the relationship with the buyer. You see, the buyer no longer trusted the seller to repair all the things that were wrong with the house. The buyer feared that the seller would cut corners and not have the work done properly and decided to walk away from that house and look for another one.

It happens all the time. Sometimes it's because the inspection turns up something that wasn't on the seller's disclosure but the buyer feels certain the seller had to know about it. Either way, the buyer no longer trusts the seller and the whole sale ends up in the toilet.

I don't understand why sellers are reluctant to disclose the defects. If you disclose them, the buyer has to assume that you took the defects into account when you priced the house. Taking a chance that the inspector won't find them is very risky and can cost the sale.

Taking a Knife to a Gun Fight

Yesterday was Mark's first day back on the job this year. He's fully booked for today and tomorrow and we've already booked two for next week, so it's a really great start to the year!

Yesterday afternoon's client initially had her brother call to get information and I sent him an email with a sample report, a document that outlines what we inspect, video links to actual inspections, and our standard pricing. I guess she wanted to make sure the Angie's List deal was really a deal (it is!) and not just our standard pricing masquerading as a "deal".

As I was taking down her details, I asked if she was working with an an agent. She said no and gave me the details for the listing agent. People who've decided to go it alone without an agent are in the minority, but they're out there. I don't question them.

When Mark got home I asked him (as I almost always do) "How was it?"

"It was awful. It was terrible. The sewer was shot. The roof was shot. Of course, I didn't use that language with the client because it can all be fixed and it's not my job to frighten them. But she hasn't got an agent. The house has been done up on the inside and the listing agent is also the seller. She really needs someone to negotiate for her. There's a bunch of stuff called out in the report, but not having a skilled negotiator who knows what the property is worth and what it will cost to put it all right is like taking a knife to a gun fight."

It is. At least she'd done her research on Angie's List and got a thorough inspection. The inspection report is a powerful weapon in the hands of a skilled negotiator. At best the buyer will be able to get a combination of repairs and price adjustments. The worst that can happen is the buyer is prevented from buying the money pit because the seller wants to hold out and wait for the uninformed buyer who won't bother with an inspection.

Mark did explain to her that commissions are typically paid by the seller and that having an agent would save her money in the long run. He even gave her the name of an agent who specializes in the area and knows what it takes (and who it takes) to get repairs done on the type of home she was looking at. I do hope she makes that call.