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Bank Owned/Vacant Property Inspections & Utilities


thebkfr
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As many other markets, ours here in Denver Metro is saturated with foreclosed/bank owned homes.

With this increase in vacant property inspections, we are frequently presented with utilities not being turned on to the home. If the buyer is lucky enough to get the utilities turned on, we are then faced with pilot lights not lit, breakers not flipped on and main water valves not on.

Our training and advice from our franchise HQ and ASHI indicates that all items need to not only be on but also made functional inside the home prior to our arrival, and that the inspector should not, due to liability/risk, perform these activities.

So far, the agents that we have dealt with have been less than supportive to the extent that "another inspector will have to be referred if they can't get someone else out there to ready the property for inspection."

I actually prepared pre-inspection checklist forms that I email to our buyer and their agent when they schedule, in addition to the verbal discussion, but they don't seem to be helping.

Please, any and all feed back regarding utilities, liabilities, your experience, your standpoint etc. , what you will or won't do and why...will be most appreciated.

Thank you!

Jack and Brandi Beagle

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Hi Jack,

I broke up your post into paragraphs so it would be easier to read.

It sounds to me like you and your fellow Colorado inspectors need to get together and decide, together, that you will no longer be treated like doormats. Then you - all of you - need to send a letter signed by all of you to every real estate office in the greater Colorado vicinity and tell brokers that it is not a function of home inspectors to turn on utilities, water, light pilots, etc., and if they don't want to face a general unannounced boycott of inspectors, they need to instruct their agents to get their act together and do what they get paid to do - get the home prepared properly for the inspection.

Get all of the local ASHI, NAHI, AII, and interNACHI chapters to send letters of endorsement of that policy and advise brokers that they will advise their membership to join in an unannounced boycott that will jam up sales if they don't start acting like agents.

Then, once those letters have gone out, send copies to a local muckraking reporter so that it makes the evening news. Get someone who will look and sound good on TV to be the spokesperson for the inspectors and get them interviewed for the news piece so that their comments make the agents look like a bunch of lazy slobs.

Betcha that'll get their attention.

ONE TEAM - ONE FIGHT!!!

Mike

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Originally posted by thebkfr

Our training and advice from our franchise HQ and ASHI indicates that all items need to not only be on but also made functional inside the home prior to our arrival, and that the inspector should not, due to liability/risk, perform these activities.

Suggestion #1: Don't use the above paragraph, or text similar to that in the above paragrph, to persuade RE agents, etc. It's a non-sequitur; that is, the logic is mangled, and it doesn't make sense.id="blue">

I actually prepared pre-inspection checklist forms that I email to our buyer and their agent when they schedule, in addition to the verbal discussion, but they don't seem to be helping.

Suggestion #2: Find an HI who can write at the cub-reporter (6th-grade) level, and have him (or her) write the letters to the RE agents and/or muckraking reporters. It is devilishly hard to win a debate with mangled language. It's entirely possible that the RE agents don't respond to these messages because they can't make sense of them.

Just sayin'...

WJid="blue">

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Jack & Brandi,

Let's see if I understand this correctly.

* Your franchise's business model is based on realtor referrals.

* The realtors have told you that they'll stop using you unless you start lighting things on fire and sending water and electricity to places you can't see.

To me, it sounds like you don't have any choice. You'd better start turning on stuff if you want to stay in business. Either that or find a different business model . . .

- Jim Katen, Oregon

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Hi Guys,

Thanks for all your feedback. We are definitely learning fast. We are prepared to "lose" referrals if it means we don't compromise our standards of both the inspection and reporting process and risk reduction! When "learning the marketing model" through franchise HQ, it seemed that going to and working with agents was the main approach, so we have been doing that, but again we are learning fast! We have already (Jack has been doing inspections for just over a year) "lost a couple agents" because they didn't like how much Jack knew and what was passed on to the buyer, but the buyers LOVE us! And that's our goal. I was just curious what is happening in your markets and whether you guys turn stuff on. Losing agents (big deal) is not the issue, it is making the inspection process go smoothly for our actual client (the buyer) and doing what we can within reason to help. Any more feedback? ?? Thanks so much! - Brandi

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Here is how I work the utilities.

When the appointment is made one of the questions I ask is “are the utilities on? If the answer is no, they are not on, I establish the customers expectations by explaining how the inspection will be limited. This often prompts them to say something like “I’m going to call the realtor and see if we can get them turned on, and I’ll call you back.â€

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Originally posted by thebkfr

Hi Guys,

Thanks for all your feedback. We are definitely learning fast. We are prepared to "lose" referrals if it means we don't compromise our standards of both the inspection and reporting process and risk reduction! When "learning the marketing model" through franchise HQ, it seemed that going to and working with agents was the main approach, so we have been doing that, but again we are learning fast! We have already (Jack has been doing inspections for just over a year) "lost a couple agents" because they didn't like how much Jack knew and what was passed on to the buyer, but the buyers LOVE us! And that's our goal. I was just curious what is happening in your markets and whether you guys turn stuff on. Losing agents (big deal) is not the issue, it is making the inspection process go smoothly for our actual client (the buyer) and doing what we can within reason to help. Any more feedback? ?? Thanks so much! - Brandi

Well, since you asked: During my 20+ years in the (independent) HI biz, I concluded that the shortest path to "risk reduction" is writing and speaking in plain active-voice everyday English. If an HI explains the problems and provides a path to the solutions, in a way that nobody can misunderstand, the HI will make customers happy. That will lead to word-of-mouth referrals, which are way better than RE agent referrals.

I also concluded that HIs who seek to achieve "risk reduction" by way of using convoluted CYA language get in trouble, and end up in court sooner or later.

Maybe it's just me, but I think that a good business plan includes telling some RE agents to kiss your ass.

WJid="blue">

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Originally posted by AHIS

I light pilot lights all the time if I see no reason not to light them.

Well, since you brought it up, let me offer two real-life reasons:

1. As an HVAC tech told me a long time ago, "If you light pilot lights every day, sooner or later you will set yourself on fire." He then added, "Richard Pryor was right. When you're on fire, people will get out of your way."

2. A while back, a TN HI set his arm on fire while lighting a water heater pilot flame. (See above.)

That said, it's OK with me if HIs want to put flame to fuel, as long as I'm not there.

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A word of caution if you are set on turning the water on at the street.. More and more municipality's have made it illegal for the public to tamper (turn on) water meters that have been turned off.

No reason on earth for a home inspector to turn the water on at the meter.

No reason for a home inspector to ignite a pilot light on any appliance.

Simply ask the questions about the utilities before you book the inspection and if they are off when you arrive, well you will have to decide what to do at that point.

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I've lighted a couple of pilots on new-ish water heaters before, but it's a dumb thing to do.

Around here a few years ago, some HI lighted a water-heater pilot and was hit full in the face with something akin to Godzilla breath. He got scorched, and still isn't the same after tons of plastic surgery.

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I know that others will disagree, but here is my take.

If the water is off to the home, I do one of three options.

1. Nothing, capture on the report that the water was off and nothing was done with the water system.

2. I will check the lines using compressed air from a compressor ($20.00). You have to ensure that all valves/faucets are closed and use a bungee to hold the toilet float up, but you can let the pressure build up during the inspection and check it when you are done with the exterior. I set my regulator to 60 psi to mimic what most homes are supplied with and shut the compressor down and close the valve when pressure is attained. I record the pressure at this time and again at the end of the inspection. I then document that the lines were tested using air pressure and pressure was held at ??? psi or that it bled off during the inspection to ??? psi. Also document that you did not verify that all supply valves were open and that the drains could not be tested. Check for air flow at all fixtures. An ice blockage (in colder climates) could allow the system to maintain pressure, even if it has a burst line past the blockage. If any fixture does not have flow of air during cold temperatures, assume that it has an ice blockage and that the line may be burst at/beyond that point.

If lines will not pressurize, I report that they will not hold pressure, indicating a leak in the system. I will usually try to locate at least one leak and notify them that more leaks may be present and that a licensed plumber will need to repair as needed and recommend another air pressure check prior to turning on the water.

3. If the client insists that the water be on, (and I recommend that it is because you can not evaluate the supply or drainage system properly with it off) they will have to contact the water company to re-install the meter and turn it on. After passing the pressure check as described above, I will turn it on to the home (slowly at first, you can achieve maximum pressure on the lines without having a high flow rate). Fill the water heater and ensure that the air is out of all of the lines by running 5-10 gallons of water to each fixture. Be careful with the toilets, if the have frozen and busted, it may not be visible. If you can not maintain a water level in the toilet BOWL, do not fill the toilet. Shut the water off to the home again and leave a hot water faucet open on the top floor of the home to accommodate expansion as the water heats. After about 1/2-1 hour, check ceilings, walls and floors for water stains (or check with a moisture meter). Water stains in the ceiling and walls will be visible at the joints long before the water penetrates the drywall itself. If all is good, I re-open the water to the home and test all fixtures as normal. When I am done, the entire home gets re-winterized at a cost of $150.00 (plus the pressure test) to the client. The client and agent signs a release of liability waiver covering any issues with the plumbing system and damage caused from it's operation. A statement goes into the report about what was done and notes that though no issues were found during the inspection, most of the system is hidden from view and that there still may be hidden issues that were not discovered.

The pressure test will give you an idea about the supply lines. If there is a compromise in the drain lines, hopefully it will be found with the 5-10 gallon per fixture test. If any damage occurs from the drain lines it will have been a failure under normal testing conditions, after all the only way to test the drainage system is to run water through it. Items that fail under normal testing conditions are outside the scope of liability to the inspector.

ie. an upper sash that falls, due to an inoperative counter balance, when the latch is released and damages the window

A garage door that is not square in the track and is damaged due to binding or coming out of the track

Rotted roof decking that the inspector puts his/her foot through

A fiberglass tub that is not properly supported and allows the inspectors foot to go through it.

Any part of the waste drainage system that leaks when water is flowed through it.

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Originally posted by AHIS

Here is how I work the utilities.

When the appointment is made one of the questions I ask is “are the utilities on? If the answer is no, they are not on, I establish the customers expectations by explaining how the inspection will be limited. This often prompts them to say something like “I’m going to call the realtor and see if we can get them turned on, and I’ll call you back.â€

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Originally posted by jon_ran

I know that others will disagree, but here is my take.

2. I will check the lines using compressed air from a compressor ($20.00). You have to ensure that all valves/faucets are closed and use a bungee to hold the toilet float up, but you can let the pressure build up during the inspection and check it when you are done with the exterior. I set my regulator to 60 psi to mimic what most homes are supplied with and shut the compressor down and close the valve when pressure is attained. I record the pressure at this time and again at the end of the inspection. I then document that the lines were tested using air pressure and pressure was held at ??? psi or that it bled off during the inspection to ??? psi. Also document that you did not verify that all supply valves were open and that the drains could not be tested. Check for air flow at all fixtures. An ice blockage (in colder climates) could allow the system to maintain pressure, even if it has a burst line past the blockage. If any fixture does not have flow of air during cold temperatures, assume that it has an ice blockage and that the line may be burst at/beyond that point.

If a home inspector came to my house and started blowing air from an air compressor into my water supply lines, I would immediately call my lawyer.

Or, shoot the HI with my pellet gun, until he ran away.

Actually, I'd do both...

But that's just me.

One last thing: Is there any reputable (written, published, peer-reviewed) source that recommends blowing water supply lines full of compressed air?

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I have many horrible stories about turning water on at vacant houses. I'll give you two quick ones.

Vacant $750,000 house which of course was winterized. The Realtor wanted me to turn on the water and when I explained why I would not she tried to embarrass and intimidate me in front of the client by telling me it was my job to turn on the water and every other inspector in town would do it. I held my ground and continued on with the inspection. A week later the client called to schedule a re-inspection of the plumbing. The Realtor had arranged to have the plumbing turned on and who ever did it failed to notice a leak under the kitchen sink. When I arrived at the house the kitchen and finished basement were flooded. They had to replace several kitchen cabinets, the hardwood floor, the ceiling, walls, and carpet in the finished basement. The cost was $65,000.

Another example. Vacant house. Water off. Realtor wanted me to turn it on. I said no. The Realtor decided to turn it on herself. We are are in the basement when she turns in on. She does not bother to run through the house real quick. I want no part of whats going on so I am conducting business as usual, inspecting and explaining things. About ten minutes later we notice water running down the basement stairs. There was a leak under the dishwasher and now there was standing water on the hardwood kitchen floor. The house was vacant so there were no mops, brooms, towels, or any thing at all to clean up the water. I'm sure the hardwood floor was destroyed.

I have many more stories like this. The chance of something bad happening when you turn on anything that is shut down it is just to great.

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What this thread is demonstrating is that there isn't a single consistent approach to how this issue is dealt with. That's the way it is with a lot of the things we do and it's what gets us, as a profession, in trouble and erodes our credibility. I agree with Paul, but ASHI's SOP only applies to ASHI members unless it's written into a state's licensing law; it's the same with the NAHI, A.I.I, CRIEA, CAHPI, and interNACHI SOP's - what about the other 60 to 70% of the profession?

If these so-called "professional" associations really wanted to do something good for the profession and for their members, they'd sit down to a summit and hammer out a single consistent standard of practice. If they did that, I'm certain that most independents would get on board with it immediately. Then it's just a matter of a short period during which everyone works to reeducate the banks, reel-tours, and others involved in the selling of homes that there are certain preparations that must be made prior to an inspector setting foot on the property and there are certain minimum and maximum limits to the job.

Once that kind of consistency is there, we've wrested control of this thing we do out of the hands of the reel-tours.

Now, about that 1,000 acre villa on the Mediterranean that I've also been dreaming about.....

ONE TEAM - ONE FIGHT!!!

Mike

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Well okay then, I guess I’m just going to have to disagree with everyone on this point of lighting pilots and until the day I set myself on fire I say that I’m right your wrong and I refuse to change my mind. Besides as a general guide line I try to avoid using the water heater to light my crack pipe, after all Richard Prior did teach me more then how to cuss.

But seriously we all make our business decisions and we all conduct our businesses differently. I am perfectly comfortable putting flame to fuel after making a situational evaluation. It is a judgment call that I make at the time of inspection. I also turn on stoves and run dishwasher and look up chimneys and go in crawl space less then 30â€

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Originally posted by AHIS

Well okay then, I guess I’m just going to have to disagree with everyone on this point of lighting pilots and until the day I set myself on fire I say that I’m right your wrong and I refuse to change my mind. Besides as a general guide line I try to avoid using the water heater to light my crack pipe, after all Richard Prior did teach me more then how to cuss.

Well, in the interest of keeping the flesh on your body, let me offer this little tidbit, which may or may not apply to you: Here in assbackwards Nashville, one can call the gas company and request that dead pilot lights (water heater, stove, dryer, fireplace) be lit up. The gas company will dispatch a tech to light the pilot light(s), at no charge.

If the gas company does the same in your area, you could go the rest of your career without having to light another pilot light.

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About 7 years ago I went out to perform an inspection on a one year old house that had been a rental. It was the end of January, but a nice day and temperatures in the 40's. Water was off. Called the realtor, they called the local water company who dispatched a guy who was there in a half hour. He cranks on the water at the street but the meter is zinging and I spot water pouring over the garage stemwall below the hose bib. So the water guy shuts the water off and I call the realtor who calls the seller (a builder) who dispatches his guy to come fix the problem. I complete my inspection and leave. The repairman comes fixes the busted pipe to the hose bib, turns on the water and leaves to lunch. He comes back an hour later to water all over this two story house which happened to have 6, I kid you not, 6 breaks in the interior plumbing (inside walls, not exposed to view). There wasn't a single break in the crawlspace and the vents were open.

I have other similar stories.

I have several concerning jetted tubs. I hate those things.

Chris, Oregon

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I can't tell you all how much Jack and I appreciate your input and your stories of experience. As far as risk, falling through or off of a roof or exposure to various unsavories in crawlspaces, to us, is different than causing major damage to a home (or your face) by turning on water to cracked pipes (not crack pipes) etc.!

We try our best to go above and beyond for our buyers, but at the same time are attempting to firm our structure and have some guidelines. I've been in customer service for over 15 yrs so am used to being a doormat, but Jack is not too good at it! :-) And obviously he is the one out there in the field! So again, I appreciate you all helping out to establish and re-establish what we are about. Keep em' coming if you have more stories! Thanks guys!

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I always ask the client if the home is occupied or not. If the home is not occupied and the utilities are not on I tell them to get in touch with their realtor and arrange to have them turned on by the time of the inspection. I explain that I do not turn on any utilities that are shut off and the reasons why. I also explain that if I show up to the home and the utilities are still off (happens 99% of the time) they have two choices: A) I charge 85.00 flat fee to show up and turn back around or B) I will do the home inspection (no discount) and just not check all the items such as furnace, plumbing etc. The client understands it is important to do a "proper" inspection. They also understand that my time is money and why it is important not to waste both.

The onus is on the buyers agent to make things happen - it makes things interesting when you show up and the water is off and the meter is laying on the floor. [;)]

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Originally posted by SonOfSwamp

If a home inspector came to my house and started blowing air from an air compressor into my water supply lines, I would immediately call my lawyer.

Or, shoot the HI with my pellet gun, until he ran away.

...Is there any reputable (written, published, peer-reviewed) source that recommends blowing water supply lines full of compressed air?

WJid="blue">

No disrespect, but...

I know that cold weather is not as common in Nashville as it is in Indianapolis, but have you never winterized/de-winterized a home?

Keep in mind we are talking about a vacant home without the water turned on. Water lines should be (but aren't always) empty.

Ever inspected a home under construction? The plumbers are required to "blow water supply lines full of compressed air", how else can the check for leaks. And they are required to keep the pressure on the lines. How is what I am doing any different. Keep in mind that I said I use a regulator and have it set far below what the maximum water pressure should be. I am extremely thorough at everything I do and you can rest assured that as I do this, all of my I's are dotted and t's are crossed.

If you bought a home that was a foreclosure and didn't have the water turned on, what would you do? I doubt that you would just willy nilly turn the water on.

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Originally posted by Brandon Whitmore

When water is shut off to the home, I show the realtor's how to turn the water on, and provide the tools necessary. I let them know what to look out for, check, etc. ,and place all of the liability on them (I hope).

When breakers are shut off, I do the same.

Does anyone see anything wrong with this approach?

I don't think you are limiting your liability at all by doing it this way. They were acting under your instructions, using your tools ... it might as well have been you doing it. If I was on a jury hearing a case, that's how I would see it.

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Jon, your protocols are off base. I would encourage you to re-think what you are doing.

Often an inspector forgets why he is at a particular house.

I have inspected, and supervised, as many winterized houses as nearly anyone in this business. Thousands! And, I have turned on the water, lit pilots, etc in the past. I have also commented/testified about other inspectors that get the house ready for inspection. I stopped doing anything 10yrs ago.

It is a market decision, but not a liability decision. Do it if you want, but don't think you are not responsible.

For instance:

difference between hydraulic and air pressure.

static pressures

piping materials

ever seen a copper pipe with a bulge?

temp of air vs temp of water - expansion and contraction etc

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