S01E12 - Protecting Your Business: The Importance of Pre-Inspection Agreements

Transcript

Welcome to Moose Tales. I'm Jon with Two Moose Home Inspections and I have some short home inspection topics on my mind, and I think it's time to talk about it. Let's dive right in.

Most insurance companies require a pre-inspection agreement, and you might say, well, I'm a really ethical company. I'm a great guy. You know, I'm here to help out the homeowner. I don't need a pre-inspection agreement. Well, that would be incorrect. But you 100% need a pre-inspection agreement. And it's not that this pre-inspection agreement is there to protect the individual.

You know the person who is hiring you that pre-inspection agreement is to protect you from the person that has hired you to do a job.

The reality is that your pre-inspection agreement more than likely limits your client from being able to take action against you. And it's very important because a lot of companies start off and they have a cookie cutter agreement, and that cookie cutter agreement is going to come from their certifying body.

It might come from their insurance company, but again, it's cookie cutter. Is it actually effective in your state? Is it not? Have an attorney take a look at your pre-inspection agreement. And don't forget to add things that make sense for you and your business based on the add on services that you offer, the location that you may be in, or the types of things that may occur while doing a home inspection that you want to protect yourself from.

Because, again, this is about protecting you and why is it so important to protect you, The business owner? Well, because I employ people. These people have families. These families have children. And if my business goes under, then we lose all of the employees, their families lose all of that income. And now we have children that have instability. And so, I, I will be damned if missing a dent on somebody's refrigerator is going to result in me losing the business and having all of my employees out on the street without a job.

It's just not worth it. So, if somebody's having a bad day and they want to pursue litigation over something that is frivolous, well, that's what the pre-inspection agreement is there to help reduce. Now, obviously, that's why we have insurance and that's why we have all these other protections. But the very first step is that pre-inspection agreement.

And it's so imperative that you do that because we are protecting the families that work for us. That's all there is to it. That's all you need to know about it because there are a few different types of people. And after years in law enforcement, I have seen people who are just having the worst day of their entire life.

And sometimes whenever you buy a home, you can be a person who's having the worst day of your entire life. Or you could be a person who has a few of these other things that occur to them. One is being house poor. So, let's say that you purchase the house, and your lender says you can 100% afford this monthly payment.

I'm looking at everything. Underwriting took a look at it. Everything's going to be fine. But then it turns out things are a little bit more expensive, or the utilities cost a little more. There might be 100 different things and you're just at that point unable to really make ends meet and you feel stuck.

So how can you make yourself a little bit of extra cash? Well, if you go to the home inspector and you say we didn't like all the things that you did and we're going to cause a ruckus, well, then we are going to try to make a couple of hundred dollars off you and you better just refund that home inspection.

Even though we got tremendous value negotiating power and a whole bunch of other things, we're having a bad day. So therefore, you're going to lose money that you have to spend to keep the business alive and to keep paying your employees. We want that money because we made a bad decision. Okay, well, that is great, but here are the limitations of what you can actually do based off of the pre-inspection agreement.

And that's why the pre-inspection agreement is there.

Another example is there are people that don't read the fine print. Whenever you have a realtor jumping from one realtor to the other is not really something that is allowed unless you completely cut ties with the first realtor and you say you're no longer working for me, yada, yada, yada.

And so, what can occur is that whenever you actually jump from one realtor to the other without notifying them of that and you close the house with one realtor, you may owe tens of thousands of dollars to the first realtor that you were working with. And if that's the case, well, who can you complain to? You can complain to the home inspector, and you can say, Home Inspector, you owe me exactly the $20,000 that I owe this realtor, because you miss a $20,000 dent in the wall.

Well, take a look at our fine print, because you didn't read the fine print that was there with your realtor. And it's important for you to understand that. No, we are not going to be totally bankrupting our business just because you made a mistake, and you did not pay your realtor what was owed. That's not our problem. And so, I am protecting the families.

I'm protecting the children.

The next thing is there are unsafe people in this world. And after many, many years in law enforcement, these unsafe people can present themselves either physically or verbally or whatever it may be. And these unsafe people can sometimes cause an issue during the home inspections that may result in somebody being upset with the home inspector.

Let's say we go to a house and there's an AR 15 on the table and an angry person. Well, that's happened. And we leave the house. Let's say that we go to the house and a neighbor is upset because of a neighbor dispute. We're going to leave that house. Let's say that we have an issue where a customer just is not being safe.

We're going to end that relationship with that particular customer. And what's great is that our pre-inspection agreement outlines that we are allowed to end that inspection at any time. And I mean, sure, yeah, if we didn't do the inspection, we're going to refund you your money. But if it's not safe for us to be there, it's not safe for us to be there.

Why? Same point. We have inspectors that have families, which have children that are reliant upon them and their ability to earn an income. And I cannot have them in danger's way. So, our pre-inspection agreement specifically states that if we feel unsafe, we can end the inspection at any time. And if you don't have that and you don't follow through with what your contract stated, that you're going to do an inspection and you say it is not safe for these reasons, are you actually protected or can they come after you to double check your pre-inspection agreements?

I just want to say it is okay for you to not do an inspection. It is okay for you to say, I'm not going to get on that roof. It is okay for you to do anything to keep you safe so you can inspect on another day. And heck, it's even okay for you to get a restraining order if that's necessary.

Now, granted, thankfully, that hasn't happened to us yet, but that could happen.

And it's important to understand that you are important, the customer is important, but safety is of utmost importance. And so, if a restraining order is necessary because of really unsafe people, then you need to go down that path.

And don't be afraid as a business owner to protect your people, because your people are what are most important.

in our Pre-Inspection agreement, we also have a media release. And that media release is because once we give that inspection report to the realtor and to the buyer, we have no control over all those photos.

So, let's say the realtor, well, you have the realtor that has the photos and now you have that realtor's entire office that has access to those photos. Then you have a listing agent. Perhaps they as a realtor, might get some of those photos. And now everybody in that office also has all of those photos. We have the buyer who then gave it to their friend or their family member, whatever it may be.

And now those people have those photos. A lot of times you're going to use those photos, including our 360-degree photos of the inside of the house with all of the identifying information of the house, a lot of sensitive information, more than likely. And that is now going to a contractor. And now this contractor is using those 360 photos to either figure out an interior design or to figure out the number of materials that are needed.

And you know what? They might even use those as a before and after source. So that way, whenever they say, before use those three six the images and then after taking photos themselves, well, if that ends up being on some of their marketing information, I want to make it very clear we have no control over whether or not that occurs.

And so, what we do is we already put into our pre-inspection agreement a full media release. We have no control over what happens to the photos. And if we decide to use it for any of our marketing materials, that's perfectly acceptable as well. It is already predefined in the pre-inspection agreements, so that way nobody can come back to us and say, you know, Bob's plumbing over there used a before and after picture using photos of the inside of my house and that's on all the marketing and on all the social media.

It's on all these fliers that are rolling around the neighborhood. And I feel like my privacy was violated. And that photo was originally taken by two moose home inspections. And therefore, I'm coming after you. Well, thankfully, because of our pre-inspection agreement, that can't happen because they've already signed that the media release, they are absolving us of any wrongdoing with the way in which those photos are presented because we have no control and I have no way of tracking how those photos got from point A to point X, No idea.

So very important to add something like that to your pre-inspection agreement.

Obviously, I am not a business attorney. And so, it's very important to make sure that you and your attorney are figuring out what language you want to add.

What kind of arbitration is there going to be? Is it going to be somebody who knows what home inspections are and what home inspections are not? Are they going to be more in favor of a home inspector or less in favor of a home inspector? What courts can this be tried at? In what level of court is this going to be tried that Then you might say, okay, well, in addition to that, what's the limitation to financial damages that can be asked by one of your clients that you want to go do a home inspection for if you, heaven forbid, miss something that was actually of importance.

And so, when we look at these kinds of things, there's also the idea of time frame. How long do they have to bring something against you?

The statute of limitations is very important to understand because even though there may be limitations by the state, you with your pre-inspection agreement can actually reduce the amount of time that something could be available for a claim. And that's something that you should definitely talk to you with your business attorney.

What I'm saying is that we are responsible for our employees. We are responsible for making sure that they have a job, that they have an income, that they can then support their families, support their children. And for me, I want to protect my employees because we are going to be ethical. We are going to be doing the right things.

We're always trying to look out for our clients. But sometimes people have a bad day, and whenever you have a bad day, it's very easy to find somebody to be mad at and go after them with everything that you have because you don't know what else to do. People are people and we're not saying that anybody is bad, or anybody is being malicious or anything like that.

And thank goodness that we have had really good relationships with all of our clients, and we haven't had to take anything to court yet. But statistically, it will happen, and it will happen someday. And for you, it may happen sooner. It may happen later. And so, you want to be sure that your pre-inspection agreement is as rock solid as it possibly can be, because you are here to provide for your employees’ families, for your employees’ children.

And it's just so important. And I don't want somebody's bad day to completely bankrupt the business and put my employees out on the street. That's what I care about. And that's a pod.