Chapter 26: The home inspection report

What is a home energy audit?

-Audit - conducted by: Home Energy Rater -evaluating energy efficiency of home

What is a California Home Energy Rating System?

-CA state system -used to (2): 1.) create standard rating for energy efficiency & 2.) certify professional Raters

What are material defect?

-Info about property -which might affect: price & terms prudent buyer is willing to pay for property

What is a home inspector?

-Professional -employed by: home inspection company -to: inspect & advise on physical condition of property improvements -in: home inspection report -for reliance by: seller, seller's agents & buyer as a warranty of condition of improvements

What is a home inspection report (HIR)?

-Report -prepared by: home inspector -disclosing defects in improvements on property -used by: seller's agent -to (2): complete TDS & assure prospective buyers about property's condition

** Rater is trained & certified by one of Department of Energy's (DOE) certified providers (3):

1.) California Certified Energy Rating & Testing Services (CalCERTS) 2.) California Home Energy Efficiency Rating System (CHEERS) 3.) California Building Performance Contractors Association (CBPCA)

Chapter 26 Key Terms (5):

1.) California Home Energy Rating System (HERS) 2.) home inspection report (HIR) 3.) home inspector 4.) home energy audit 5.) material defect

Reliance on HIR prepared by: inspector relieves: seller & seller's broker from: liability for errors in TDS which are: unknown to them to exist. Qualifications to look for in home inspector include (5):

1.) educational training in home inspection 2.) length of time in the home inspection business or a closely related field 3.) errors and omissions insurance coverage 4.) professional and client references; and 5.) membership in a recognized association of professional home inspectors

** When hiring home inspector, qualifications to look for include (5):

1.) educational training in home inspection related courses 2.) length of time in home inspection business or related property or building inspection employment 3.) errors & omissions (E&O) insurance covering professional liability 4.) professional & client references; & 5.) membership in: -California Real Estate Inspection Association -American Society of Home Inspectors or - other nationally-recognized professional home inspector associations w/ standards of practice & codes of ethics

Some real estate service providers typically conduct home inspections, such as (4):

1.) general contractors 2.) structural pest control operators 3.) architects; & 4.) registered engineers

What does HIR do/contain (4)?

1.) identifies each system & component of structure inspected 2.) describes any material defects home inspector found or suspects 3.) makes recommendations about conditions observed 4.) suggests any further evaluation needed to be undertaken by other experts

The purpose of premises physical examination is: to identify material defects in condition of structure & its systems & components. Material defects are conditions which affect property's (4):

1.) market value 2.) desirability as a dwelling 3.) habitability from elements; & 4.) safety from injury in its use as a dwelling.

Home inspector who prepares HIR, company employing home inspector & any affiliated company may not (4):

1.) pay referral fee or provide for any type of compensation to brokers, agents, owners or buyers for referral of any home inspection business; 2.) agree to accept contingency fee arrangement for inspection of report, such as a fee payable based on thome inspector's findings & conclusions in report or on close of sales escrow; 3.) perform or offer to perform any repairs on property which was the subject of a HIR prepared by them w/in past 12 months; or 4.) inspect any property in which they have a financial interest in its sale

Agent (or anyone), may also request the home inspector conduct an inspection on energy efficiencies of property & include the findings on HIR. On request for energy efficiency inspection, home inspector will report on items including (8) :

1.) the R-value of insulation in the attic, roof, walls, floors & ducts 2.) quantity of glass panes & types of frames 3.) heating & cooling equipment & fans 4.) water heating systems 5.) age of major appliances & fuel used 6.) thermostats 7.) energy leakage areas throughout the structure; & 8.) solar control efficiency of the windows

Chapter 26 Learning Objectives (3):

1.) understand use of HIR to mitigate risks of misrepresentation in preparation of seller's TDS 2.) exercise care in selection of qualified home inspector 3.) use: an energy efficiency audit report (home energy audit) (aka energy audit) by: (DOE) Department of Energy-certified (HER) Home Energy Rater to: market property

A buyer has ________ from the close of escrow to recover losses caused by the negligent failure of the seller's agent to disclose a property's observable and known material defects.

2 years

If buyer discovers error in HIR -regarding: existence or nonexistence of defect -affecting: property value or desirability, -->buyer has ______ years from the date of inspection to: file an action to recover money losses

4 years from date of inspection

Altho Home Energy Raters are specially trained & certified to do energy audits, ___________ can perform home energy audit only if: _________ established by: _________

ANY home inspector only if: audit conforms to HERS regulations established by: California Energy Commission

_______ have exclusive rights to train, test & certify professional Raters.

Audit providers

Home energy audit providers are: private, non-profit organizations approved by: ____________ as part of: ____________ program

Department of Energy (DOE) California Home Energy Rating System (HERS)

Besides ensuring seller hired competent home inspector to complete HIR, buyer's broker may also insist home energy audit be performed by: competent _________ which: can be the home inspector.

Home Energy Rater (Rater)

-->W/ _________ in hand, buyer can incorporate costs of recommended energy efficient updates into total costs for acquisition they are willing to pay for property. Buyer can also use that info to compare energy-efficiency of home v.s. other properties before making offer.

energy audit

After training, Rater is certified to do freelance _________, only if: assessment of property's energy conditions is based on: guidelines established by HERS program. Anyone can hire Rater to do energy audit, the cost of which usually ranges between $300-$800

energy audits

** The reason for hiring home inspector in 1st place is to? In turn, HIR reduces risk of errors.

help seller & seller's agent to better represent property's condition to buyers.

A ___________ is: physical examination conducted on-site by home inspector. The inspection of a one-to-four unit residential property is performed for: noncontingent fee.

home inspection

Seller agent of one-to-four unit residential property asks seller to grant them authority to order __________ on seller's behalf. [See RPI Form 130]

home inspection report (HIR)

ANY individual who holds themselves out as being in business of conducting home inspection & preparing home inspection report on one-to-four unit residential property is a _________. No licensing scheme exists to set min. standard of competency or qualifications necessary to enter home inspection profession.

home inspector

Here, broker & seller's agent who: relied on HIR can: force home inspector to contribute to recovery, aka ____________ Unless home inspector has insurance coverage, seller's broker's ability to force home inspection company to pay home inspector's share of responsibility (or having failed to observe defect) will be limited to?

indemnification claim home inspector's personal assets

What does non-invasive indicate? [See Form 130]

no intrusion into roof, walls, foundation or soil by: dismantling or taking apart structure which would: disturb components or cause repairs to be made to remove the effects of the intrusion.

Agent ordering HIR needs to verify home inspection company has ___________ before employing company to: conduct an investigation & prepare a report

professional liability insurance coverage

The home inspection is a non-invasive examination of the mechanical, electrical and plumbing systems of the dwelling, as well as the components of the structure, such as the:

roof; • ceiling; • walls; • floors; and • foundations.

** Who has task of gathering info about property's condition & delivering that info to prospective buyers?

seller's agent