Question 1

There are many reasons to join industry associations. Which is the BEST reason for home inspectors to join industry associations?

Accepted Answer

There are many reasons to join industry associations. The best reason for home inspectors to join industry associations is to gain credibility. Your credibility will increase among other inspectors and referrals sources such as real estate agents if you belong to leading industry associations. You will also be increasing your credibility among current and prospective clients.

Question 2

Which of the following acronyms does NOT represent a leading industry association that home inspectors should join?

Accepted Answer

The acronym that does not represent a leading industry association that home inspectors should join is NLIHC. While members of the National Low Income Housing Coalition (NLIHC) do use inspection services, it is not a home inspection industry association. The leading industry associations are the National Association of Home Inspectors (NAHI), the American Society of Home Inspectors (ASHI), and the International Association of Certified Home Inspectors (NACHI).

Question 3

Which of the following should be included in your pre-inspection contract?

Accepted Answer

Your ASHI certification number should be included in your pre-inspection contract. That number improves your credibility with clients. It indicates you are current on all inspection standards.

Question 4

Home inspectors should be prepared to have which of the following documents before conducting their first inspection?

Accepted Answer

Home inspectors should be prepared to have all of the above documents before conducting their first inspection. Anybody offering a service should be insured and properly licensed. The specific type of license required depends on your state's laws and regulations. Most cities require home inspectors to get a general business license.

Question 5

Which of the following is the most common type of business structure for home inspectors?

Accepted Answer

The most common type of business structure for home inspectors is a sole proprietorship. It is easy to establish this type of company. When you establish your business as a sole proprietorship, you assume full responsibility for your company's debts. You are not required to have a board of directors if you choose this business structure.

Question 6

What is a good rule of thumb when it comes to scheduling inspections?

Accepted Answer

A good rule of thumb when it comes to scheduling inspections is to allow 2-3 hours per inspection. When you include travel time in your calculations, you may need the full three hours per client. Larger homes take longer to inspect. You can better determine how much time will be needed by gathering some preliminary information from the client when they make their appointment. Ask about the number of floors and the square footage of the home.

Question 7

Many states and municipalities allow home inspectors to offer ancillary services in conjunction with the home inspection. Which of the following examples is NOT a recommended service?

Accepted Answer

Many states and municipalities allow home inspectors to offer ancillary services in conjunction with the home inspection. A lawn care service is not a recommended ancillary service. Lawn care has nothing to do with the condition of the home. However, the presence of radon gas, water impurities, or pest infestations does affect the home's condition.

Question 8

How should you respond if a client asks about your professional objectivity?

Accepted Answer

If a client asks about your professional objectivity, you should respond by explaining that you have no vested interest in the inspection outcomes. Inspector impartiality is a must if you want to maintain a good reputation with current and prospective clients. Clients have the right to ask questions that help them determine objectivity before hiring a home inspector.

Question 9

After accepting compensation from your client, the seller approaches you and offers you $100 to "soft sell" deficiencies you identify during the inspection. What is the appropriate response to this situation?

Accepted Answer

After accepting compensation from your client, the seller approaches you and offers you $100 to "soft sell" deficiencies you identify during the inspection. The appropriate response to this situation is to decline the offer and suggest the client get a technically exhaustive inspection. Turning down the offer is simply not enough in this situation. The seller may have an ulterior motive for asking you to "soft sell" deficiencies to your client. There may be something wrong with the home that would not be detected during a traditional inspection or may not be disclosed by the seller during the home purchasing process.

Question 10

When you get to the home that is to be inspected, you realize it is your cousin's home. What do you do?

Accepted Answer

When you get to the home that is to be inspected, you realize it is your cousin's home. You inform your client of the situation and refund their money. It is not ethical for you to inspect a property where you have a personal interest. Even if the client does not have problems with the situation, you should remove yourself as the inspector and refund their money.

Question 11

While conducting an inspection, you notice that the furnace needs to be repaired. Your client asks about the costs of the needed repairs. Which of the following responses is appropriate?

Accepted Answer

While conducting an inspection, you notice that the furnace needs to be repaired. Your client asks about the costs of the needed repairs. You should explain to the client that you cannot give estimates for repairs you will not be making. It is permissible to discuss your experience but include a verbal disclaimer that you are not providing an estimate and that the client needs to contact an expert contractor for a legitimate estimate.

Question 12

Your best friend is a remodeling contractor. The two of you agree to refer clients to one another for a $25 referral fee. Which of the following statements is true about this situation?

Accepted Answer

Your best friend is a remodeling contractor. The two of you agree to refer clients to one another for a $25 referral fee. By doing this, you are violating ethical and professional standards. Home inspectors should not accept any type of referral fee for recommending contractors, including home remodelers. There is an inherent conflict of interest in this relationship. If an inspection is required after the remodeling is completed, your best friend may expect a favorable inspection report from you.

Question 13

A popular real estate agent contacts you and offers to include you on a "recommended services list" she gives to her clients. While there is no charge to be included on the list, she asks that you simply tell your friends and family members about her real estate services. What do you tell her?

Accepted Answer

A popular real estate agent contacts you and offers to include you on a "recommended services list" she gives to her clients. While there is no charge to be included on the list, she asks that you simply tell your friends and family members about her real estate services. You tell her "No thanks. It would be unethical of me to enter into such a relationship." Home inspectors should avoid all potential conflicts of interest. While there is no money being exchanged in this scenario, you are still indirectly compensating the real estate agent for including you on her "recommended services list" in the form of referrals to her.

Question 14

Which of the following activities should home inspectors engage in to build their reputations?

Accepted Answer

Home inspectors should participate in continuing education to build their reputations. The only way to be a good home inspector is to stay abreast of changes in the home inspection industry. Standards do change over time. It is also important to learn about new technologies and techniques that can help you better detect deficiencies during a home inspection.

Question 15

Which of the following statements is the most important one you need to make sure your client understands?

Accepted Answer

It is most important that your client understands that inspections determine the condition of the home on a particular day. Anything can happen in the home between the time you inspect it and your client purchases the home. Your inspection report is intended as a "snapshot" of the home at a particular point in time.

Question 16

Your client asks for the name of a good pest control specialist. You want to recommend your brother, who is well known and has an excellent reputation in the community. What is the BEST way to refer your client to your brother?

Accepted Answer

Your client asks for the name of a good pest control specialist. You want to recommend your brother, who is well known and has an excellent reputation in the community. The best way to refer your client to your brother is to make the recommendation but disclose your relationship with the specialist to your client. You should not be getting or giving compensation in any way for this referral. You might want to consider recommending a few other specialists as well so your client can make their own selection.

Question 17

Why might it be viewed as misleading to market yourself as the "best" home inspector in your community?

Accepted Answer

It might be viewed as misleading to market yourself as the "best" home inspector in your community for all of the above reasons. The public may believe that your self-designation as "best" is actually an official indication of your abilities, because there are licenses and certifications involved. There can only be one "best" inspector in a community, and such a ranking is impossible to determine. If you decide to use "best" in marketing materials, include information that backs up your claim such as number of complaints filed, number of satisfied customers, customer service ratings, and awards received for your work.

Question 18

Why is important to have a business plan even if you are an independent contractor?

Accepted Answer

It is important to have a business plan even if you are an independent contractor because you need to manage expenses and revenue. When you first get started, you need to invest in tools and testers for home inspections. If you have a community-based office, you have rent and utilities to pay. A business plan helps you determine how much to charge clients and the number of inspections needed to cover your expenses and make a profit.

Question 19

You are interested in buying a home when a client contacts you to inspect that exact home for them. How should you handle this situation?

Accepted Answer

You are interested in buying a home when a client contacts you to inspect that exact home for them. You should handle this situation by turning down the client and suggesting they get another inspector. It is unethical to inspect a home that you are interested in yourself for a client. You cannot accept compensation from your client when you are going to use the inspection results for your own benefit.

Question 20

Your pre-inspection contract clearly states that you are only conducting a standard inspection and details all exclusions and limitations. Several months after purchasing the home, your client sues you because of a defect that was not included on your report that cost them $3,000 to repair. Which of the following statements is true about this situation?

Accepted Answer

Your pre-inspection contract clearly states that you are only conducting a standard inspection and details all exclusions and limitations. Several months after purchasing the home, your client sues you because of a defect that was not included on your report that cost them $3,000 to repair. It is that clients can sue you any time for any reason, but it does not mean you are liable for damages. As long as you have a strong pre-inspection contract and inspection reports that have been reviewed by an attorney, you should be able to protect yourself in court. Always retain copies of legal documents and communications with clients in case of a situation like the one described.

Quiz 3: Business Operations