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ZIPLEVEL Foundation Elevations – Helpful or Hype?

We are frequently asked if we utilize ZIPLEVELs for providing foundation elevations as part of the inspection. We have spent a good deal of time researching their use, and this is what we learned about the usefulness of this tool and why we choose not to offer this service:
 

What is Required When Reporting Foundation Performance

 
It’s important to start by discussing what is required of a home inspector regarding the reporting on the performance of the foundation.

All home inspectors in Texas are licensed and regulated by the Texas Real Estate Commission (TREC) and are required to follow the TREC Standards of Practice (Standards). In accordance with the Standards, the inspector is required to “render an opinion as to the performance of the foundation” and “generally report present and visible indications used to render the opinion of adverse performance such as: binding, out-of-square, non-latching doors; framing or frieze board separations; sloping floors; window, wall, floor, or ceiling cracks or separations; and rotating, buckling, cracking, or deflecting masonry cladding.”

The following is specifically NOT REQUIRED in the Standards:

  • “Use of specialized equipment including elevation determining devices”, i.e., ZIPLEVEL.

The TREC requires inspectors to base their opinion of performance on the visible condition of the structure, specifically regarding the indicators of adverse performance noted above using their knowledge and experience in understanding the movement of foundations.

While inspectors are not prohibited from going beyond the Standards and using “specialized equipment”, and there are times when it is prudent to exceed them, the problem arises when the inspection process is exposed to legal issues when the home inspectors’ actions may be infringing on the practice of engineering for which they may not be licensed.

The Texas Board of Professional Engineers (TBPE) issued a Policy Advisory stating that so long as the TREC inspector stayed within the TREC Standards, they would not be in violation of the Texas Engineering Practice Act. Here is the Analysis and Conclusion of the Policy Advisory:

“Analyzing the cause of a condition, recommendations for repair, or providing any other expert engineering
opinion associated with a foundation, including the foundations systems and components, would be considered the practice of engineering per the Act §1001.003(c)(1) and could warrant disciplinary action from the Texas Board of Professional Engineers if conducted by an individual unlicensed as a Professional Engineer (PE). We conclude that a TREC licensed inspector who conducts a visual real estate inspection in conformance with the TREC Standards of Practice does not engage in the practice of engineering.”

For this reason alone, the foundation inspection may not be a time where it is prudent to exceed the Standards of a visual inspection.
 

ZIPLEVEL Claims Made by Home Inspectors

 
Home inspectors that offer foundation elevations often advertise that this type of inspection will provide more information than other inspectors are able to. Here a few samples of the claims made:

  • “Don’t mess around with a visual inspection of your home’s foundation; get your foundation measured. We utilize the latest technology, the Zip Level Pro-2000…. We want you to move in with “peace of mind” knowing for a fact that your foundation is in great condition.”
  • “Foundation worries? If you live in Texas, the answer is probably yes. Before you call in an expensive structural engineer or foundation repair company, we can perform a Foundation Elevation, an inexpensive, thorough way to get the information you need.”
  • “These measurements will show you if, where, and/or to what degree it is out of level. If you are buying or selling a home, it’s a good idea to get this level of detail, particularly in North Texas where movement is almost a given. Knowing whether (and how much) work is needed will affect your decision making about the price of the home and/or whether or not to purchase it.”

The problem with these claims is that:

  • The home inspector is required to perform a visual inspection as they can’t form the required opinion regarding the performance of the foundation without it.
  • The most inexpensive, thorough way to get the information you need is the visual review looking for the indications of adverse performance.
  • No foundation is completely “level” when it is constructed and foundations in expansive clay soil areas of Texas will move. These foundations are designed for movement, and some movement is expected. Certainly, some houses suffer from too much movement. However, many – if not most – are undergoing normal foundation movement created by expansive clay soils.
  • Knowing whether a foundation is “out of level” cannot tell you if the foundation has experienced differential movement without having a second set of measurements taken in the past for comparison. Determining if a foundation has ever moved or deflected (adverse performance) is best evaluated by looking at the criteria required by the TREC. Additionally, it would be problematic if a home inspector gives an opinion as to “whether (and how much) work is needed” as this would violate the Texas Engineering Practice Act unless they are also licensed as a Professional Engineer.

Besides the fact that there are no required certifications or training needed to use a ZIPLEVEL, our greatest concern is that rather than providing peace of mind, foundation elevations might create unrealistic or uninformed expectations from the inspection while not providing any additional risk reduction.​
 

ZIPLEVEL Disclaimers

 
We also found that when home inspectors offer ZIPLEVEL foundation elevations they often include disclaimers that state something like the following:

  • “Elevation measurements can be useful but should not be relied on as a definitive statement of foundation condition.
  • “It should be noted that foundations may reveal some unevenness due to workmanship (as built). Therefore, measurements do not necessarily represent the actual degree of deflection from differential movement of the foundation…. these deviations/slopes are not, by themselves, a measurement of foundation movement.”

These disclaimers are in stark contrast to the claims made and it could be argued that if the elevation measurements should not be relied upon, what’s the point of using the ZIPLEVEL?
 

Are Foundation Elevations Useful for Home Inspections

 
A one-time reading of the elevations of a foundation cannot determine if the foundation has moved differentially. “Movement” is a function of time. Taking the elevations of the foundation during a home inspection can only define the configuration of the foundation at the time of the inspection. Documenting foundation “movement” is not possible without the “as built” elevations to compare with because errors in original construction may indicate movement where movement did not occur.

Without comparable measurements taken at the same locations at different points in time to determine movement, the performance of a foundation can only be determined during a home inspection by observing the performance of the structure. A foundation that is performing adversely will negatively affect the structural integrity of the home thus allowing the inspector to see the indicators. If a foundation is performing as expected, there will be no indications of adverse performance regardless of what the elevation readings are.

Unless you’re willing to pay the price, built into the inspection fee or otherwise, to have a benchmark for future elevation comparisons then real estate transactions are not the time to perform foundation elevations.

If you have repairs being negotiated and performed after a home inspection, it’s important to request the proper paperwork and verify that repairs were completed and in a satisfactory manner. In this blog post, we cover why it’s important to request receipts and warranties after repairs and if a re-inspection is needed after the repairs.

Request Receipts

Requesting receipts gives you validation that the job was completed and helps provide protection for you in the long run. At minimum, it is a good idea to obtain any receipts for repairs should the need arise to speak to any of the repair persons in the future. These receipts will also be proof that any deficiencies noted in the inspection report were addressed.

Understand Your Home’s Warranty

Any items that would be covered under a home warranty need to be repaired in that repair amendment. Receipts of repairs will also be crucial should a claim ever be filed with a home warranty provider. Without receipts they may view the claim as a “known” pre-existing condition, which is not typically covered within a home warranty, and could deny the claim. A home warranty is a service contract that provides financial protection from unforeseen or unexpected repair or replacement costs of essential home components or appliances due to normal wear and tear but does not cover “known” pre-existing conditions. Having a home warranty in place can significantly reduce your risk of facing unexpected repair costs and will help provide added peace of mind.

Re-inspections Never Hurt

It is not uncommon for a re-inspection but almost never necessary if the proper paperwork and procedures were in place. If the repairs completed are judged by both the Buyer and Seller as satisfactory, then there may be no need for a re-inspection. However, if you do not receive the proper receipts and warranties after a repair, then it may be in your best interest to request a second look. While there is no requirement for inspectors to provide services to verify that any negotiated repairs were completed, most inspectors do offer re-inspection services to make these verifications for a fee.

We hope this blog post has provided insight on what to do once repairs have been made. For more information contact an expert today at The Home Inspectors!

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DECODING THE INSPECTION REPORT!

If one of our licensed inspectors performs an inspection on your home, you receive a lifetime subscription to HomeBinder ($300+ value). Below we’ll cover what’s included with your online home binder and the many benefits of having a HomeBinder.com account.

What is HomeBinder?

Your Homebinder.com account gives you access to copies of all your reports, inspection photos, educational videos which are site-specific to each home, and more! Homebinder.com also helps you manage and stay on top of all things related to your home!

Already Personalized with Your Information

You will get a personalized link via email from HomeBinder within 1 business day after your home inspection. Information, such as inspection reports, inspection photos & videos as well as additional resources and maintenance reminders, will already have been uploaded to your binder. All of your information is safe, private, and only accessible to you.

How HomeBinder Helps You

  • Schedule Maintenance Reminders

    We already set up 10 maintenance reminders for you, but you have the ability to add additional reminders as well. Stay on top of your home’s recurring maintenance needs like replacing air filters and servicing HVAC equipment.

  • Store Contractor Information

    Always remember the handymen who work on your home so you know who to call for repairs.

  • Organize Home Projects

    Store photos, paint colors, and project costs for easy repairs and tax deductions at the time of sale.

  • Start a Home Inventory

    Be prepared for a fire or theft with an easy to update repository that makes insurance and tax claims and breeze.

  • Utilize Your Electronic File Cabinet

    Upload important paperwork, reports and receipts to the cloud for safekeeping and easy access.

Enjoy Your Home More, With Less Work

  • Gain peace of mind

    Let HomeBinder reduce the stress and headaches of remembering every home related issue and time frame.

  • Enjoy tailored support

    After we inspect your house, we’re able to populate your binder with recommended home pros and other specific resources to help you best manage it.

  • Prevent costly repairs

    Easily keep up with regular home maintenance, to avoid unexpected issues; spend a little time and money today to save $1000s later.

  • Available on any device

    Have immediate, 24-7, access to all the information on your new home. Rest easy knowing your info is safely stored.

_________________________________________

Additional Resources

In addition to Your HomeBinder Account, we provide you with companies for utilities, security systems, locksmith services, and moving services that we’ve put our stamp of approval on and that offer our inspection customers special offers.

Here are a few other resources The Home Inspectors provide with our home inspections!

Connect ALL your utilities – in one place with Utility Concierge!

Utility Concierge will find the best local services, latest technologies, special promotions and pricing on all services to fit your needs. Your Concierge will present all your options and after you make the services selections, they will send you an itinerary with all of your scheduled installation dates and times. Use their no-cost services to save you time, money, and stress!

FREE Security System with ADT Control (Includes $850 in Equipment)

Your System Includes: 7” touch screen control panel with battery backup, 1 pet-friendly motion detector, 3 door or window sensors, panic buttons, and wireless key-fob remote.

The REKEY Special from MR REKEY LOCKSMITH, America’s Largest Residential Locksmith

For 1 Low, Flat Price You Receive: Service Call, Free Smoke Alarm Check (w/ Real Smoke), Rekey of 6 Locks, 4 Key Copies, Strengthening of Deadbolts and Documentation.

AB Moving & Storage – Texas Moving and Relocation Professionals

AB Moving is a Texas proud and family owned company providing quality moving services for over 20 years with offices in four key metro areas: Dallas, Houston, Austin, and San Antonio. Low Cost, Flat Rate or Hourly Pricing and Same Day Moves! Offering $25 Off Any Move!

DOWNLOAD OUR GUIDE TO UNDERSTANDING YOUR HOME INSPECTION!

In this blog post, we are going to cover the section of the Preamble of the inspection report that speaks about the buyer’s right to have a home inspected as well as a termination option. Even though there is a right to conduct an inspection, it doesn’t require the seller to make any repairs.

Here is the verbiage used in the report form:

Contract forms developed by TREC for use by its real estate license holders also inform the buyer of the right to have the home inspected and can provide an option clause permitting the buyer to terminate the contract within a specified time. Neither the Standards of Practice nor the TREC contract forms require a seller to remedy conditions revealed by an inspection. The decision to correct a hazard or any deficiency identified in an inspection report is left to the parties to the contract for the sale or purchase of the home.

Paragraph 7 in both the ONE TO FOUR FAMILY RESIDENTIAL CONTRACT (RESALE) Form 20-13 and the RESIDENTIAL CONDOMINIUM CONTRACT (RESALE) Form 30-12 outline the access, inspections, utilities, and the completion of repairs and treatments.

Section A specifically allows that the buyer and their agent are permitted access to the property at reasonable times and that the buyer may have the property inspected by an inspector of their choosing so long as they are licensed by the TREC or are otherwise permitted by law to make inspections. Additionally, the seller at their own expense must have utilities turned on and kept on during the contract period.

Section F deals with the completion of any negotiated repairs or treatments and requires that, unless agreed to in writing, the seller must complete all repairs or treatments prior to the closing date. Additionally, permits must be obtained when required and the work must be performed by licensed persons, when required by law, or if no license is required by law then they must be commercially engaged in that specific trade. If there are any transferable warranties received by the seller, the buyer can, at their own expense, have them transferred. If the seller fails to complete any of the negotiated repairs prior to the closing date, the buyer may exercise remedies under paragraph 15 or extend the closing date up to five days.

In paragraph 23 of each of the contracts is the Termination Option. For a nominal consideration (option fee) which the buyer pays to the seller within 3 days after the effective date of the contract, the seller grants the buyer the unrestricted right to terminate the contract by providing notice of termination to the seller by 5:00PM on the date specified. Time is of the essence for this paragraph and strict compliance with the time for performance is required.

Finally, when a buyer opts to have an inspection performed and the inspection identifies deficiencies, it doesn’t mean a potential buyer should or shouldn’t purchase the home, only that they will know in advance what to expect. However, when a deficiency is reported, it is the client’s responsibility to obtain further evaluations and/or cost estimates from qualified service professionals prior to the expiration of the option period. And while there is no requirement for the seller to make repairs, an effort to negotiate the completion of repairs can always be made between the parties of the contract.

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DECODING THE INSPECTION REPORT!

When setting the expectations for the home inspection process, it is important to convey some of the many realities that may be encountered after the inspection takes place.

Inspection reports cannot predict the future

The findings noted in the inspection report provide a snap-shot in time of the general condition of the home on the day and time that the inspection takes place. However, it does not and cannot anticipate conditions that may occur in the future.
The inspector is not required to anticipate any future events or conditions such as:

  • decay, deterioration, or damage that may occur after the inspection
  • deficiencies from abuse, misuse or lack of use
  • changes in performance of any component or system due to changes in use or occupancy
  • the consequences of the inspection or its effects on current or future buyers and sellers
  • common household accidents, personal injury, or death
  • the presence of water penetrations
  • future performance of any item

Property conditions change with time and use

For example, mechanical devices can fail at any time, plumbing gaskets and seals may crack if the appliance or plumbing fixture is not used often, roof leaks can occur at any time regardless of the apparent condition of the roof, and the performance of the structure and the systems may change due to changes in use or occupancy, effects of weather, etc. These changes or repairs made to the structure after the inspection may render information contained herein obsolete or invalid.

Inspection findings are only a snap-shot in time

The inspection report is provided for the specific benefit of the client named and is based on observations at the time of the inspection. If you did not hire the inspector yourself, reliance on this report may provide incomplete or outdated information. Repairs, professional opinions or additional inspection reports may affect the meaning of the information in this report. It is recommended that you hire a licensed inspector to perform an inspection to meet your specific needs and to provide you with current information concerning this property.

The importance of home warranties

Knowing that property conditions can change in a moment’s notice for a variety of different reasons can also bring to light the importance of home warranties and their somewhat symbiotic relationship with home inspections. A home warranty is a service contract that provides financial protection from unforeseen or unexpected repair or replacement costs of essential home components or appliances due to normal wear and tear but does not cover “known” pre-existing conditions. Should one of these unanticipated issues arise, there’s a good chance that it might be covered under the warranty and the inspection report can provide the documentation that it was not a “known” pre-existing condition.

Older reports may contain information that is obsolete

It is also important to note that because the inspection findings only relate to a specific date and time, and there is the reality that conditions can change, the client should choose to obtain their own current inspection as older previous reports may contain information that is obsolete and no longer representative of the home’s current condition. With the due diligence of having a home inspection performed and a home warranty in place, it can significantly reduce the risk of having to face the costs associated with the realities that may be encountered and will help provide added peace of mind.

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DECODING THE INSPECTION REPORT!

In this blog post, we will be discussing the section of the inspection report which relates to the responsibilities of the client as determined by the TREC.

This section states the following:

ITEMS IDENTIFIED IN THE REPORT DO NOT OBLIGATE ANY PARTY TO MAKE REPAIRS OR TAKE OTHER ACTIONS, NOR IS THE PURCHASER REQUIRED TO REQUEST THAT THE SELLER TAKE ANY ACTION. When a deficiency is reported, it is the client’s responsibility to obtain further evaluations and/or cost estimates from qualified service professionals. Any such follow-up should take place prior to the expiration of any time limitations such as option periods.

Evaluations by qualified tradesmen may lead to the discovery of additional deficiencies which may involve additional repair costs. Failure to address deficiencies or comments noted in this report may lead to further damage of the structure or systems and add to the original repair costs. The inspector is not required to provide follow-up services to verify that proper repairs have been made.

I must admit, it seems somewhat confusing that there is an emphasis on saying that there is no obligation to make repairs or take other action and then follow that up with saying the client has a responsibility to act and the failure to do so can have consequences. However, while the former is relaying that while there is no requirement to take any type of action, the latter spells out that it is the client’s responsibility to do so if they desire, and it should be done while still in the Option Period.

The important thing here is that evaluations by specialists can turn up additional deficiencies with the systems or components of the home which may involve even more costs. If these items are addressed during the Option Period, there is at least the opportunity that the cost of repairs can be negotiated between the parties. However, if items in the report are ignored, it may result in additional damage and costs that will not have been negotiated and will need to be addressed in the future.

And finally, while there is no requirement for inspectors to provide services to verify that any negotiated repairs were completed, most inspectors do offer re-inspection services to make these verifications for a fee. At minimum, it is a good idea to obtain any receipts for repairs should the need arise to speak to any of the repair persons in the future. These receipts will also be crucial should a claim ever be filed with a home warranty provider as they will want proof that any deficiencies noted in the inspection report were addressed, or they may view the claim as a “known” pre-existing condition and deny it.

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DECODING THE INSPECTION REPORT!

Since the inception of our business in 2010, it has become clear that the average consumer, and to a lesser degree some real estate professionals, lacks a thorough understanding of what a home inspection is and what it isn’t. This is in no way an indictment of either as the lack of understanding is quite understandable and the solution is evident. We, as an industry, must do a better job of setting the expectations for the consumer and real estate professionals alike.

The Texas Real Estate Commission (TREC) has already done the work of setting these expectations through use of the Preamble (pages 1 & 2) of the Inspection Report which spells out the purpose, limitations, and inspector/client responsibilities. It is our duty to be the messenger and share this information in an easy to understand manner. In this blog post, we are going to discuss the 6th paragraph of the Preamble which defines the expectations of the inspection process and reads as follows:

THIS PROPERTY INSPECTION IS NOT A TECHNICALLY EXHAUSTIVE INSPECTION OF THE STRUCTURE, SYSTEMS OR COMPONENTS. This inspection may not reveal all deficiencies. A real estate inspection helps to reduce some of the risk involved in purchasing a home, but it cannot eliminate these risks, nor can the inspection anticipate future events or changes in performance due to changes in use or occupancy. If it is recommended that you obtain as much information as is available about this property, including seller’s disclosures, previous inspection reports, engineering reports, building/remodeling permits, and reports performed for and by relocation companies, municipal inspection departments, lenders, insurers, and appraisers. You should also attempt to determine whether repairs, renovation, remodeling, additions, or other such activities have taken place at this property. It is not the inspector’s responsibility to confirm that information obtained from these sources is complete or accurate or that this inspection is consistent with the opinions expressed in previous or future reports.

Let’s dive further into the opening sentence

The opening sentence of this paragraph states: This Property Inspection is not a technically exhaustive inspection of the structure, systems or components. First, what does this not mean? It doesn’t mean that you are getting an inferior inspection because it is cursory in scope or not technically exhaustive. The cursory element is the truest part of what a home inspection is. I think developing what the cursory element “is” will be helpful in seeing and understanding this.

So what does ‘not technically exhaustive’ really mean?

So, what is it? What does it mean? Really, it means this: when a home inspector is performing an inspection on the subject property they are offering the client a broad and sweeping stroke as to the condition of the major systems and components of the property: the structural systems, the electrical systems, the HVAC systems, the plumbing systems, the appliances, and in some instances, the optional systems. This “broad overview” may come with some unforeseen detail, but even with this detail, the home inspection has not been redefined: it is still not technically exhaustive and it is still cursory.

Here are a few reasons why the inspection is not technically exhaustive and may not reveal all deficiencies:

  • Home Inspectors are generalists as opposed to subject matter experts and are not required to use specialized equipment or procedures
  • Care must be taken not to use invasive procedures or damage the seller’s property
  • Consideration for Inspector safety
  • The inspection only covers those items that are visible and accessible at the time of inspection

An inspection is meant to provide a broad overview of the home’s condition

Thus, the home inspector, providing a “home inspection” which is not intended to be “technically exhaustive” and is intended to be “cursory” isn’t providing an inferior home inspection: they are simply doing their job, which is to provide a broad overview of the home’s condition. Remember, “a home inspection is a risk reduction tool designed to reflect, as accurately as possible, the visible condition of the home and represents a broad and sweeping stroke as to the condition of the major systems and components of the property at the time of the inspection.” The client hires a home inspector for this purpose. If they are wanting a more in depth examination of the home they would need to hire a structural engineer, a roofing contractor, a licensed electrician, a licensed HVAC contractor, a licensed plumber, a qualified appliance technician, and possibly others for the optional systems—all different professionals, all different professions, and at a substantially higher cost.

An inspection is not meant to guarantee the condition of a home in the future.

A home inspection is a risk reduction tool designed to reflect the visible condition of the property at the time of the inspection. Property conditions can change in only a day or two, so a home inspection is not meant to guarantee the condition of a home in the future. It’s not uncommon for conditions to change between the time of the inspection and the closing date.

Creating realistic expectations for your client

A large part of the real estate professional’s role as well as that of the home inspector is to help manage the expectations of the client. This is especially true when a client has never dealt with the home inspection process before. Explaining the limitations of a home inspection will help develop realistic expectations concerning the inspection report, and what lies beyond the scope of the inspection. Creating realistic expectations in a client’s mind helps prevent misunderstandings and promotes smooth real estate transactions.

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The Preamble of the Inspection Report Form is written by the Texas Real Estate Commission (TREC) and sets expectations as to the purpose, limitations, and inspector/client responsibilities of the inspection report. In this post, we are going to share and discuss the paragraph of the Preamble which deals with the inspection report form and the responsibilities of the home inspector. The paragraph states:

“In this report, the inspector shall indicate, by checking the appropriate boxes on the form, whether each item was inspected, not inspected, not present or deficient and explain the findings in the corresponding section in the body of the report form. The inspector must check the Deficient (D) box if a condition exists that adversely and materially affects the performance of a system or component or constitutes a hazard to life, limb or property as specified by the TREC Standards of Practice. General deficiencies include inoperability, material distress, water penetration, damage, deterioration, missing components, and unsuitable installation. Comments may be provided by the inspector whether or not an item is deemed deficient. The inspector is not required to prioritize or emphasize the importance of one deficiency over another.”

In the example below, you can see how the check boxes are laid out and labeled as well as the Comments section where the findings can be explained. In addition, depending on the inspection company and/or their reporting software, you may also see disclaimers, the relevant Standard or other helpful information in this section.

Standard
 

Requirements of an Inspection Report

 
The TREC Standards of Practice require that for each inspection performed for a prospective buyer or prospective seller of a substantially complete one-to-four family residential property the inspector must prepare a written inspection report on Form REI 7-5 with the following requirements:

  • Note observed deficiencies and other items required to be reported
  • Deliver the report to the client within two days of receipt of payment for the inspection, unless otherwise agreed in writing by the client
  • The inspection report must include the name and license number of each inspector who participated in performing the inspection
  • The address or other unique description of the property on each page of the report
  • The client’s name

 

When do the Report Rules Not Apply?

 
The report rules do not apply to the following:

  • Re-inspections of a property performed for the same client
  • Inspections performed for or required by a lender or governmental agency
  • Inspections for which federal or state law requires use of a different report
  • An inspection of a building or addition that is not substantially complete
  • Quality control construction inspections of new homes performed for builders (phase inspections; inspections to determine compliance with building codes; warranty or underwriting requirements) or inspections required by a municipality and the builder or other entity requires use of a different report. The first page of these reports must contain a notice either in bold or underlined reading substantially similar to the following:
     
    “This report was prepared for a builder or other entity in accordance with the builder’s requirements. The report is not intended as a substitute for an inspection of the property by an inspector of the buyer’s choice. Standard inspections performed by a license holder and reported on Commission promulgated report forms may contain additional information a buyer should consider in making a decision to purchase.”
     
    If a report form required for use by the builder or builder’s employee does not contain the notice, the inspector may attach the notice to the first page of the report at the time the report is prepared by the inspector.
  • Inspections of a single system or component, provided that the first page of the report contains a notice either in bold or underlined reading substantially similar to the following:
     
    “This report was prepared for a buyer or seller in accordance with the client’s requirements. The report addresses a single system or component and is not intended as a substitute for a complete standard inspection of the property. Standard inspections performed by a license holder and reported on a Commission promulgated report form may contain additional information a buyer should consider in making a decision to purchase.”

 

Summary Reports

 
While the inspector is not required to prioritize or emphasize the importance of one deficiency over another, some inspectors will include a Summary Report which might list every single deficiency in a bullet point format or it may just contain those deficiencies which are deemed health, safety or major expense items.
 
Real estate agents and clients often like to use these Summary Reports in preparing their repair amendments but it is important to note that these might only be a portion of the inspection findings themselves and other significant improvements may also be necessary. We highly recommend knowing what is included in the Summary and reviewing the actual Inspection Report in its entirety prior to preparing repair amendments and before the expiration of the Option Period.

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The Texas Real Estate Commission (TREC) has set minimum standards for inspections by TREC licensed inspectors. In the 2nd and 3rd paragraphs of the Inspection Report, TREC addresses these rules of TREC known as the Standards of Practice. These paragraphs state the following:
 
This inspection is subject to the rules (“Rules”) of the Texas Real Estate Commission (“TREC”), which can be found at www.trec.texas.gov.
 
The TREC Standards of Practice (Sections 535.227-535.233 of the Rules) are the minimum standards for inspections by TREC licensed inspectors. An inspection addresses only those components and conditions that are present, visible, and accessible at the time of the inspection. While there may be other parts, components or systems present, only those items specifically noted as being inspected were inspected. The inspector is NOT required to turn on decommissioned equipment, systems, utility services or apply an open flame or light a pilot to operate any appliance. The inspector is NOT required to climb over obstacles, move furnishings or stored items. The inspection report may address issues that are code-based or may refer to a particular code; however, this is NOT a code compliance inspection and does NOT verify compliance with manufacturer’s installation instructions. The inspection does NOT imply insurability or warrantability of the structure or its components. Although some safety issues may be addressed in this report, this inspection is NOT a safety/code inspection, and the inspector is NOT required to identify all potential hazards.

 

In these paragraphs TREC starts to define what a home inspection is and what it isn’t.
The information can be broken down as follows:

 

The entire home inspection process is regulated by the TREC.

Education, professional conduct & ethics, licensing, insurance requirements, enforcement, advertising, the inspection report form, and the Standards of Practice all fall under the purview of the Texas Real Estate Commission. The Commission’s programs and industry regulation ensure that real estate service providers are honest, trustworthy and competent.
 

The Standards of Practice are the minimum levels of inspection required.

The inspector may provide a higher level of inspection performance than required and may inspect components and systems in addition to those described by the standards of practice.
 

Only visible, accessible items which are present will be addressed.

Home inspections are non-invasive in that Inspectors do not make holes in walls, lift carpet, move personal belongings etc.
 

The inspector is NOT required to make any item ready for inspection.

Lighting pilot lights, turning on water or gas at the meter, etc. There may be unknown safety/liability reasons that these items have been decommissioned.
 

The inspector is NOT required to climb over obstacles or move any personal items.

Inspector safety is an important issue but more importantly we are uninvited guests at the property and must respect the personal property of the owner.
 

The inspection report is NOT a code compliance inspection.

Because some of the Standards may be based on current codes it is an important reminder that it is not a code inspection and no action is required on any findings.
 

The inspection report does NOT verify manufacturer compliance.

Inspectors are generalists and not trained in all the various installation instructions of systems and appliances.
 

The inspection report does NOT imply insurability or warrantability.

The findings, whatever they may be, do not guarantee that an insurance provider will extend coverage on the property or that any system or appliance will be covered under any type of warranty.
 

The inspection is NOT a safety/code inspection and the inspector is NOT required to identify all potential hazards.

While the report may address certain safety concerns it is an important reminder that it is not a safety/code inspection and no action is required on any findings.
 
You may have noticed the word “NOT” appears here quite a few times and I think that it’s important to put this in perspective. It’s important to remember that we are uninvited guests into the Seller’s home and the “NOT’s” often refer to maintaining the integrity of the Seller’s personal property and/or the safety of the Inspector as well as setting the expectations as to the limitations of the inspection process.
 
In closing, the TREC exists to protect and serve the citizens of Texas, and as such, the Rules create a balance between providing the client with enough information regarding the general condition of the property to minimize the risk in their buying decision with the limitations that are in place that safeguard the other parties.

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The Preamble of the Inspection Report Form is written by the Texas Real Estate Commission (TREC) and sets expectations as to the purpose, limitations, and inspector/client responsibilities of the inspection report.
 
In this blog post we’re going to cover the first paragraph of the Preamble that states:

“This property inspection report may include an inspection agreement (contract), addenda, and other information related to property conditions. If any item or comment is unclear, you should ask the inspector to clarify the findings. It is important that you carefully read ALL of this information.”
 

Inspection Agreement (Contract)

 
The most important item to understand is going to be the Inspection Agreement. In many cases, it will be a separate document that is not included in the body of the report. While choosing whether to require an Inspection Agreement is up to each individual Inspector or company, TREC rules require every licensed Inspector to carry a minimum of $100,000 worth of Errors and Omissions insurance and the insurance provider will likely require the use of an agreement. It is a good business practice as this is the contract that will define the relationship between the parties, will often mirror the sentiments of the Preamble, and may include the following:

  • Fees being charged
  • Cancellation policy
  • Scope of inspection
  • Exclusions
  • Additional services being performed
  • Exclusivity
  • Notice of claims
  • Limit of liability
  • Disclaimer of warranties; guarantees; insurability; habitability, etc.

Another important role of the Inspection Agreement, at least in Texas, is that it can be used to obtain the clients permission to share the inspection findings with the clients’ agent. TREC rules specifically state:

“Inspectors shall not disclose inspection results or client information without prior approval from the client.”

The only exception to this rule is that, “Inspectors, at their discretion, may disclose observed immediate safety hazards to occupants exposed to such hazards when feasible.”
 

Addenda and Other Information

 
Addenda and other information might include items such as Form OP-I which is now included in the contents of the Preamble or it might pertain to other information that the Inspector would like to bring to your attention, i.e. information regarding Corrugated Stainless Steel Tubing (CSST) or other items that may be related but are not included as part of the inspection report.
 

Read All the Information and Ask for Clarification

 
In closing, make sure that you carefully read ALL of this information (Agreements/Addenda/Inspection findings) and have a clear understanding of each. If you are in doubt or if any item or comment is unclear, ask the inspector for clarification.

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