WEBVTT 00:00:00.000 --> 00:00:01.760 I want you to picture a scenario for a second. 00:00:01.879 --> 00:00:04.099 You're standing in a living room. It's a Saturday 00:00:04.099 --> 00:00:06.759 afternoon. The sunlight is streaming through 00:00:06.759 --> 00:00:09.460 these massive floor -to -ceiling windows. The 00:00:09.460 --> 00:00:12.720 floors are this warm, honey -colored oak. It 00:00:12.720 --> 00:00:16.839 just gleams. There is a smell of fresh cookies. 00:00:17.320 --> 00:00:19.300 Because, of course, the real estate agent baked 00:00:19.300 --> 00:00:21.980 them 20 minutes ago. You are looking at the crown 00:00:21.980 --> 00:00:24.519 molding. You're mentally placing your sofa against 00:00:24.519 --> 00:00:27.640 the far wall, and you are thinking, this is it. 00:00:27.760 --> 00:00:30.420 This is the one. That is the honeymoon phase 00:00:30.420 --> 00:00:34.100 of the transaction. And honestly, it is probably 00:00:34.100 --> 00:00:36.479 the most dangerous moment in your entire financial 00:00:36.479 --> 00:00:39.539 life. It really is. Because while I'm looking 00:00:39.539 --> 00:00:41.799 at the way the light hits the floor, I'm not 00:00:41.799 --> 00:00:43.579 looking at the water stain on the ceiling that's 00:00:43.579 --> 00:00:45.939 been painted over three times. Right. I'm not 00:00:45.939 --> 00:00:47.939 thinking about the fact that the furnace in the 00:00:47.939 --> 00:00:50.820 basement is literally rusting from the inside 00:00:50.820 --> 00:00:54.320 out. I am operating entirely on vibes. Which 00:00:54.320 --> 00:00:56.340 is a terrifying paradox when you think about 00:00:56.340 --> 00:00:57.820 it. We live in the information age. If you were 00:00:57.820 --> 00:00:59.859 going to buy a new laptop, a purchase of maybe, 00:00:59.960 --> 00:01:03.299 what, $1 ,000? Yeah, maybe $1 ,500 if you're 00:01:03.299 --> 00:01:05.599 getting a good one. You would spend weeks researching. 00:01:06.219 --> 00:01:08.799 You'd watch unboxing videos. You'd read the technical 00:01:08.799 --> 00:01:11.680 specs. You'd compare processor speeds. You would 00:01:11.680 --> 00:01:13.780 know everything about that machine before you 00:01:13.780 --> 00:01:16.239 swiped your card. Oh, absolutely. I'll read 300 00:01:16.239 --> 00:01:19.659 reviews for a toaster. A $50 toaster. Exactly. 00:01:20.700 --> 00:01:22.799 But when it comes to the single most expensive 00:01:22.799 --> 00:01:26.060 purchase of a lifetime, buying a home, signing 00:01:26.060 --> 00:01:29.340 away 30 years of future earnings, most people 00:01:29.340 --> 00:01:32.040 rely on a visual walkthrough that lasts maybe 00:01:32.040 --> 00:01:34.739 20 minutes. If that. They rely on the aesthetic 00:01:34.739 --> 00:01:37.560 appeal. And that gap between aesthetic appeal 00:01:37.560 --> 00:01:40.819 and structural reality is where financial ruin 00:01:40.819 --> 00:01:43.400 hides. And the only thing standing between you 00:01:43.400 --> 00:01:46.579 and that potential money pit is this one kind 00:01:46.579 --> 00:01:49.780 of administrative sounding document, the home 00:01:49.780 --> 00:01:51.989 inspection. Yeah. Now, looking at the stack of 00:01:51.989 --> 00:01:53.609 research you sent over for today's deep dive, 00:01:53.709 --> 00:01:55.890 I have to admit, I always thought of home inspection 00:01:55.890 --> 00:01:58.129 as a bit of a formality, like getting your car 00:01:58.129 --> 00:02:00.189 inspected for emissions. It's just a sticker 00:02:00.189 --> 00:02:01.909 you need to get the keys. That's what most people 00:02:01.909 --> 00:02:04.670 think. But the more I read, the more I realized 00:02:04.670 --> 00:02:08.030 this isn't just a checklist. It is a full blown 00:02:08.030 --> 00:02:10.830 forensic investigation. That is the perfect way 00:02:10.830 --> 00:02:13.990 to frame it. It is building forensics. It is 00:02:13.990 --> 00:02:17.389 a crime scene investigation. But the victim is 00:02:17.389 --> 00:02:20.439 your future bank account. Oh. That's a good way 00:02:20.439 --> 00:02:22.759 to put it. And the mission of today's deep dive 00:02:22.759 --> 00:02:26.639 is to shatter that checklist mentality. We are 00:02:26.639 --> 00:02:29.460 going to tear this industry apart. We aren't 00:02:29.460 --> 00:02:31.199 just talking about checking if the toilets flush 00:02:31.199 --> 00:02:33.800 or the lights turn on. We are diving into the 00:02:33.800 --> 00:02:36.469 legal landscape, which is shocking. It's a mess 00:02:36.469 --> 00:02:38.349 in places. We're going to talk about the massive 00:02:38.349 --> 00:02:41.129 difference between condition and value and how 00:02:41.129 --> 00:02:44.409 this industry is a regulatory wild west in some 00:02:44.409 --> 00:02:47.310 places and a bureaucratic maze in others. And 00:02:47.310 --> 00:02:48.949 we're going to travel the globe, too, because 00:02:48.949 --> 00:02:51.289 how we inspect a home changes entirely depending 00:02:51.289 --> 00:02:53.770 on where you are. We'll look at the wooden frames 00:02:53.770 --> 00:02:56.949 of California, the damp brick of the UK and the 00:02:56.949 --> 00:02:59.949 concrete high rises of Mumbai. And perhaps most 00:02:59.949 --> 00:03:02.009 surprisingly, we're going to talk about the things 00:03:02.009 --> 00:03:04.449 an inspector is legally forbidden from telling 00:03:04.449 --> 00:03:06.870 you. That part blew my mind. Yeah, the liability 00:03:06.870 --> 00:03:10.069 aspect is huge. So let's unpack this. We are 00:03:10.069 --> 00:03:12.389 working from a comprehensive overview of inspection 00:03:12.389 --> 00:03:15.729 standards across North America, the UK, and India. 00:03:16.530 --> 00:03:19.990 Let's start with the core identity. What actually 00:03:19.990 --> 00:03:22.969 is a home inspection? Because I think a lot of 00:03:22.969 --> 00:03:24.990 us have a misconception here. The best place 00:03:24.990 --> 00:03:27.469 to start is the definition itself, which usually 00:03:27.469 --> 00:03:29.889 appears in the standards of practice for any 00:03:29.889 --> 00:03:33.270 major association. A home inspection is defined 00:03:33.270 --> 00:03:37.729 as a limited non -invasive examination of the 00:03:37.729 --> 00:03:40.469 condition of a home. Limited and non -invasive. 00:03:40.650 --> 00:03:42.969 That already sounds like legal speak for I'm 00:03:42.969 --> 00:03:44.849 not breaking anything. Precisely. And this is 00:03:44.849 --> 00:03:46.990 the first point of friction for many buyers. 00:03:47.110 --> 00:03:49.750 They watch home renovation shows where the contractor 00:03:49.750 --> 00:03:52.030 takes a sledgehammer to a wall and says, oh, 00:03:52.069 --> 00:03:54.270 look, dry rot. Right. Let's just open this up 00:03:54.270 --> 00:03:55.949 and see what's behind here. A home inspector 00:03:55.949 --> 00:03:58.270 cannot do that. They cannot tear down drywall 00:03:58.270 --> 00:04:00.569 to check the wiring behind it. They cannot peel 00:04:00.569 --> 00:04:03.009 up the carpet to check the subfloor. They cannot 00:04:03.009 --> 00:04:05.150 dig up the foundation to check the footings. 00:04:05.150 --> 00:04:08.039 So they are handcuffed. In a way, they have to 00:04:08.039 --> 00:04:09.939 assess the health of the patient without doing 00:04:09.939 --> 00:04:12.520 surgery. That's a great analogy. It's a physical 00:04:12.520 --> 00:04:15.819 exam, not an autopsy. It's about what is visible 00:04:15.819 --> 00:04:17.959 and accessible on the day of the inspection. 00:04:18.319 --> 00:04:20.480 Okay, accessible is a key word there. A huge 00:04:20.480 --> 00:04:23.819 one. If the seller has stacked boxes wall -to 00:04:23.819 --> 00:04:25.660 -wall in the basement, blocking a foundation 00:04:25.660 --> 00:04:29.060 wall, the inspector can't see that wall. They'll 00:04:29.060 --> 00:04:32.670 note in the report, view obstructed. And that's 00:04:32.670 --> 00:04:35.189 it. So there's a giant crack behind those boxes. 00:04:35.350 --> 00:04:37.829 That's on you, the buyer, if you don't ask the 00:04:37.829 --> 00:04:40.009 seller to move them. It's on you. And there is 00:04:40.009 --> 00:04:42.149 another key nuance here that listeners need to 00:04:42.149 --> 00:04:45.470 really internalize. It is a snapshot. The inspector 00:04:45.470 --> 00:04:47.910 is describing the condition of the home at the 00:04:47.910 --> 00:04:50.589 specific time of the inspection. So let's play 00:04:50.589 --> 00:04:52.610 that out. If the inspector comes on a Tuesday. 00:04:53.050 --> 00:04:55.329 And the furnace is working fine. He turns it 00:04:55.329 --> 00:04:57.610 on. It heats up. It shuts off. Everything's good. 00:04:57.750 --> 00:04:59.990 Yep. He'll write in the report, furnace was functional 00:04:59.990 --> 00:05:02.189 at time of inspection. Then I buy the house on 00:05:02.189 --> 00:05:04.470 Friday. And on Saturday, the furnace blows up. 00:05:04.550 --> 00:05:06.310 Is that the inspector's fault? Almost certainly 00:05:06.310 --> 00:05:08.790 not. And that is a hard pill for buyers to swallow. 00:05:08.970 --> 00:05:11.410 But inspectors do not guarantee future efficiency. 00:05:11.629 --> 00:05:13.689 And they certainly don't guarantee life expectancy. 00:05:14.149 --> 00:05:16.370 They're not giving you a warranty. They're reporting 00:05:16.370 --> 00:05:19.329 on what is visible right now. They aren't profits. 00:05:19.569 --> 00:05:22.800 They are observers. A component can be working 00:05:22.800 --> 00:05:25.600 perfectly on Tuesday and suffer a catastrophic 00:05:25.600 --> 00:05:29.439 mechanical failure on Saturday. The circuit board 00:05:29.439 --> 00:05:31.600 on that furnace could have been on its last legs, 00:05:31.720 --> 00:05:33.980 but it worked for the 10 minutes he tested it. 00:05:34.100 --> 00:05:36.600 It's about managing expectations. You aren't 00:05:36.600 --> 00:05:38.519 buying a warranty. You're buying a report on 00:05:38.519 --> 00:05:41.360 the current state of affairs. Correct. And this 00:05:41.360 --> 00:05:43.819 brings us to what I call the triangulation of 00:05:43.819 --> 00:05:45.939 professionals, which is where I see the most 00:05:45.939 --> 00:05:48.800 confusion. You have a team of people involved 00:05:48.800 --> 00:05:51.379 in a house sale. You've got the real estate agent, 00:05:51.480 --> 00:05:54.480 the appraiser, and the inspector. In the movies, 00:05:54.579 --> 00:05:56.579 they all seem to walk through the house together 00:05:56.579 --> 00:06:00.060 having a chat. Right. But in reality, they have 00:06:00.060 --> 00:06:02.439 completely different motivations. Right. And 00:06:02.439 --> 00:06:04.259 different clients, really. Totally different 00:06:04.259 --> 00:06:06.600 clients. And different jobs. Let's break that 00:06:06.600 --> 00:06:08.980 down. I feel like people confuse the appraiser 00:06:08.980 --> 00:06:10.920 and the inspector the most. I've definitely heard 00:06:10.920 --> 00:06:12.920 friends say, oh, the bank is sending their appraiser 00:06:12.920 --> 00:06:15.740 out, so they'll tell me if the roof is bad. That 00:06:15.740 --> 00:06:18.199 is a dangerous, dangerous assumption. Let's distinguish 00:06:18.199 --> 00:06:21.579 them. An appraiser determines value. Their client 00:06:21.579 --> 00:06:23.939 is usually the bank, the lender. So they work 00:06:23.939 --> 00:06:27.060 for the money people. Yes. Their job is to answer 00:06:27.060 --> 00:06:30.379 one question for the lender. Is this pile of 00:06:30.379 --> 00:06:33.600 bricks and wood worth the $500 ,000 you are about 00:06:33.600 --> 00:06:36.680 to lend on it? So the appraiser is there to protect. 00:06:37.240 --> 00:06:39.019 the bank's investment. They want to make sure 00:06:39.019 --> 00:06:41.399 they aren't lending half a million dollars on 00:06:41.399 --> 00:06:44.000 a shack that's worth 10 bucks. Exactly. They 00:06:44.000 --> 00:06:46.399 are looking at comparables. What did the neighbor's 00:06:46.399 --> 00:06:48.660 house sell for? They're looking at square footage, 00:06:48.879 --> 00:06:51.620 lot size, bedroom count. It's an economic analysis. 00:06:51.879 --> 00:06:54.560 What if the roof is bad? Well, if the roof is 00:06:54.560 --> 00:06:57.040 caved in, will they notice? Yes, of course, because 00:06:57.040 --> 00:06:59.199 that affects the market value today. Right. But 00:06:59.199 --> 00:07:02.259 if the roof has a slow leak into the attic insulation 00:07:02.259 --> 00:07:05.060 that isn't visible from the driveway. If it has 00:07:05.060 --> 00:07:07.079 maybe five years of life left instead of 20, 00:07:07.240 --> 00:07:10.019 the appraiser likely won't see it. And honestly, 00:07:10.160 --> 00:07:11.959 they might not care as long as the market value 00:07:11.959 --> 00:07:14.540 holds up against the comps. OK, so the appraiser 00:07:14.540 --> 00:07:16.439 is the economist. They are looking at the numbers, 00:07:16.480 --> 00:07:19.120 the spreadsheets. Right. The inspector, on the 00:07:19.120 --> 00:07:21.560 other hand, determines condition. They are the 00:07:21.560 --> 00:07:24.399 diagnostician. Their client is you, the buyer. 00:07:24.620 --> 00:07:26.980 They are there to tell you what is broken, what 00:07:26.980 --> 00:07:28.959 is unsafe and what is nearing the end of its 00:07:28.959 --> 00:07:32.399 life. An appraiser says this house is worth five 00:07:32.399 --> 00:07:35.000 hundred thousand dollars. An inspector says, 00:07:35.220 --> 00:07:38.720 this house needs $50 ,000 of work because the 00:07:38.720 --> 00:07:40.819 plumbing is shot and the electrical panel is 00:07:40.819 --> 00:07:43.339 a fire hazard. A huge difference. One is about 00:07:43.339 --> 00:07:44.860 the market. The other is about the mechanics. 00:07:45.139 --> 00:07:47.560 Exactly. And then there's a third category that 00:07:47.560 --> 00:07:49.740 confuses people, particularly in the United States, 00:07:49.860 --> 00:07:52.500 the building inspector. Yes. This one always 00:07:52.500 --> 00:07:54.519 trips me up. I'm waiting on the building inspector. 00:07:55.079 --> 00:07:56.759 That sounds official. It sounds like the most 00:07:56.759 --> 00:07:59.120 important one. It is official, but it's a different 00:07:59.120 --> 00:08:01.360 lane entirely. If you hear building inspector, 00:08:01.620 --> 00:08:03.879 that usually refers to a government or municipal 00:08:03.879 --> 00:08:07.660 employee. Their job is code compliance. Code 00:08:07.660 --> 00:08:09.579 compliance. So that's the person who comes by 00:08:09.579 --> 00:08:11.680 when you're building a deck to make sure you 00:08:11.680 --> 00:08:15.300 aren't violating city laws. Yes. They are checking 00:08:15.300 --> 00:08:18.220 against a very specific book, the building code 00:08:18.220 --> 00:08:21.339 for your town, for that year. Did you use the 00:08:21.339 --> 00:08:24.459 right number of nails? Is the railing 42 inches 00:08:24.459 --> 00:08:27.720 high? Is the staircase too narrow? So does a 00:08:27.720 --> 00:08:30.720 private home inspector check for code? Generally, 00:08:30.720 --> 00:08:33.879 no. And this is a critical distinction. A private 00:08:33.879 --> 00:08:36.299 home inspection is not a code compliance check. 00:08:36.519 --> 00:08:39.600 Why not? If something is against code, isn't 00:08:39.600 --> 00:08:42.379 it by definition a problem? It is a problem, 00:08:42.440 --> 00:08:45.309 but codes change constantly. A house built in 00:08:45.309 --> 00:08:48.690 1950 was built to the 1950 code. It would fail 00:08:48.690 --> 00:08:51.990 a thousand points of the 2024 code. Oh, OK. An 00:08:51.990 --> 00:08:53.789 inspector isn't there to tell you everything 00:08:53.789 --> 00:08:56.009 that's not up to modern standards. They're there 00:08:56.009 --> 00:08:58.509 to tell you if it's functional and safe. But 00:08:58.509 --> 00:09:01.009 wait, if my stairs are unsafe, won't they tell 00:09:01.009 --> 00:09:02.750 me? They will tell you it's a safety hazard. 00:09:02.850 --> 00:09:04.950 They might say these stairs are steep and the 00:09:04.950 --> 00:09:07.169 tread is shallow, which is a fall risk. But they 00:09:07.169 --> 00:09:10.110 won't cite you for violating municipal code section 00:09:10.110 --> 00:09:13.730 12B. They aren't the police. They are consultants. 00:09:14.149 --> 00:09:17.009 So we have the economist, the appraiser. We have 00:09:17.009 --> 00:09:19.429 the police, the municipal inspector. And then 00:09:19.429 --> 00:09:21.769 we have the consultant or the private investigator, 00:09:21.909 --> 00:09:24.190 which is the home inspector. That helps clear 00:09:24.190 --> 00:09:27.309 the board. It does. And the consultant's goal, 00:09:27.429 --> 00:09:30.190 the private inspector, is building diagnostics. 00:09:30.230 --> 00:09:32.590 I love that term. It's about identifying problems. 00:09:34.149 --> 00:09:36.950 But here's the catch. They identify the problem, 00:09:37.110 --> 00:09:39.350 but they don't always identify the solution. 00:09:40.129 --> 00:09:43.129 Walk me through that. If they find a problem, 00:09:43.350 --> 00:09:46.090 shouldn't they tell me how to fix it and how 00:09:46.090 --> 00:09:48.389 much it'll cost? That's what every buyer wants, 00:09:48.529 --> 00:09:51.210 right? A neat little list of problems with a 00:09:51.210 --> 00:09:53.850 price tag next to each one. Yes. But they can't. 00:09:53.970 --> 00:09:56.669 In fact, they're often discouraged from doing 00:09:56.669 --> 00:09:58.750 so because they aren't specialists in every trade 00:09:58.750 --> 00:10:01.190 and they aren't contractors. And Spectre might 00:10:01.190 --> 00:10:03.750 say, there is elevated moisture reading in the 00:10:03.750 --> 00:10:06.610 basement wall. That is the diagnosis. Okay. But 00:10:06.610 --> 00:10:08.629 is that moisture coming from a crack in the foundation? 00:10:09.519 --> 00:10:11.960 Is it coming from a high water table? Is it coming 00:10:11.960 --> 00:10:14.200 from a broken gutter outside that's dumping water 00:10:14.200 --> 00:10:16.519 right next to the house? And the fix for each 00:10:16.519 --> 00:10:18.679 of those is totally different. Wildly different. 00:10:19.080 --> 00:10:22.840 And does it require a $200 patch or a $20 ,000 00:10:22.840 --> 00:10:26.000 French drain system? The inspector often stops 00:10:26.000 --> 00:10:29.120 at the, what, there is moisture? They then refer 00:10:29.120 --> 00:10:31.580 you to a specialist for the how and how much. 00:10:32.139 --> 00:10:34.759 a foundation specialist, a plumber, a landscaper. 00:10:34.860 --> 00:10:36.799 So the inspector is the general practitioner. 00:10:37.139 --> 00:10:39.159 They listen to your chest and say, your heart 00:10:39.159 --> 00:10:41.779 sounds weird, but they don't perform the surgery. 00:10:41.980 --> 00:10:44.059 They send you to the cardiologist. That is a 00:10:44.059 --> 00:10:46.980 perfect analogy. The inspector is the GP. They 00:10:46.980 --> 00:10:48.840 know a little bit about everything. Plumbing, 00:10:48.879 --> 00:10:52.610 electrical, structural, roofing, HVAC. But they 00:10:52.610 --> 00:10:54.629 aren't the master electrician or the structural 00:10:54.629 --> 00:10:57.990 engineer. Their job is to triage the house and 00:10:57.990 --> 00:10:59.710 tell you which specialists you need to call. 00:10:59.850 --> 00:11:01.429 Which makes sense. You can't be an expert in 00:11:01.429 --> 00:11:03.250 everything. Okay. But that leads to the question, 00:11:03.389 --> 00:11:05.669 who are these people? If they have to know a 00:11:05.669 --> 00:11:07.070 little bit about everything, they must have some 00:11:07.070 --> 00:11:08.750 serious training, right? This can't just be a 00:11:08.750 --> 00:11:10.830 job you decide to do one day. You would hope 00:11:10.830 --> 00:11:13.809 so. You would absolutely hope so. That tone suggests 00:11:13.809 --> 00:11:16.590 otherwise. Well, let's talk about the regulatory 00:11:16.590 --> 00:11:19.309 landscape in North America. This section of the 00:11:19.309 --> 00:11:21.070 research was fascinating because I think most 00:11:21.070 --> 00:11:23.710 people assume, That to be a home inspector, you 00:11:23.710 --> 00:11:25.509 need a license. You need a badge. You need to 00:11:25.509 --> 00:11:27.889 pass a board exam. Right. My hairstylist needs 00:11:27.889 --> 00:11:30.250 a license. My driver needs a license. Surely 00:11:30.250 --> 00:11:32.009 the person telling me if my house is going to 00:11:32.009 --> 00:11:34.350 collapse needs a license. In the U .S. and Canada, 00:11:34.450 --> 00:11:37.470 it is a bit of a regulatory patchwork. We often 00:11:37.470 --> 00:11:40.409 call it the licensing wild west. How wild are 00:11:40.409 --> 00:11:42.690 we talking? Are we talking like tumbleweeds and 00:11:42.690 --> 00:11:45.669 shootouts at high noon? Pretty close. So currently 00:11:45.669 --> 00:11:48.830 more than 30 U .S. states regulate the industry. 00:11:49.009 --> 00:11:51.330 That's the good news. Okay. That means in those 00:11:51.330 --> 00:11:54.470 states, places like Texas, New York, Illinois, 00:11:54.769 --> 00:11:57.970 you need to pass exams, take strictly regulated 00:11:57.970 --> 00:12:01.289 training courses, carry insurance, and do continuing 00:12:01.289 --> 00:12:03.990 education every year to keep your license. Okay. 00:12:04.009 --> 00:12:05.649 That sounds reasonable. That covers a lot of 00:12:05.649 --> 00:12:08.580 the population. But that leaves... Almost 20 00:12:08.580 --> 00:12:11.240 states. It leaves a significant number of states 00:12:11.240 --> 00:12:13.580 where the profession is completely unregulated. 00:12:13.720 --> 00:12:17.860 States like California, Colorado, Georgia. Big 00:12:17.860 --> 00:12:21.039 states. Wait, California has no state license 00:12:21.039 --> 00:12:23.320 for home inspectors. The place with earthquakes 00:12:23.320 --> 00:12:27.139 and wildfires. No statewide license. Now, there 00:12:27.139 --> 00:12:30.019 are professional associations that inspectors 00:12:30.019 --> 00:12:32.669 can join which have their own standards. But 00:12:32.669 --> 00:12:35.690 the state government does not license them. Define 00:12:35.690 --> 00:12:37.870 completely unregulated for me in one of those 00:12:37.870 --> 00:12:40.009 states. I mean that in those states, you could 00:12:40.009 --> 00:12:42.529 literally wake up tomorrow, decide you are tired 00:12:42.529 --> 00:12:46.850 of podcasting, go to a print shop, print a business 00:12:46.850 --> 00:12:48.909 card that says host speaker, home inspector, 00:12:49.190 --> 00:12:51.330 buy a flashlight at the hardware store and go 00:12:51.330 --> 00:12:53.529 inspect someone's half million dollar asset. 00:12:53.690 --> 00:12:56.509 Without any training, without proving I know 00:12:56.509 --> 00:12:58.490 the difference between a neutral wire and a hot 00:12:58.490 --> 00:13:01.639 wire. Theoretically, yes. In unregulated states, 00:13:01.779 --> 00:13:03.899 there is no state board checking your credentials. 00:13:04.259 --> 00:13:06.620 Now, the market might filter you out eventually 00:13:06.620 --> 00:13:08.679 if you're terrible or you might get sued into 00:13:08.679 --> 00:13:11.100 oblivion. Right. Eventually. But there is no 00:13:11.100 --> 00:13:13.759 government barrier to entry. That is absolutely 00:13:13.759 --> 00:13:16.159 terrifying. It's like having a driver's license 00:13:16.159 --> 00:13:19.220 requirement in one state, but crossing the border 00:13:19.220 --> 00:13:21.399 and being allowed to drive a semi truck with 00:13:21.399 --> 00:13:24.059 zero training just because you own a truck. It 00:13:24.059 --> 00:13:26.870 puts a massive burden on the consumer. If you 00:13:26.870 --> 00:13:29.289 are buying a home in an unregulated state, you 00:13:29.289 --> 00:13:31.070 cannot just assume the inspector is qualified 00:13:31.070 --> 00:13:33.009 because they have a website and a clipboard. 00:13:33.149 --> 00:13:34.789 So what do you do? How do you vet them? You have 00:13:34.789 --> 00:13:37.509 to ask. Are you a member of a national association? 00:13:38.190 --> 00:13:42.570 Are you certified by ASHI or Internatia? Those 00:13:42.570 --> 00:13:44.970 are the two big ones in the U .S. You ask to 00:13:44.970 --> 00:13:47.389 see a sample report. You ask how long they've 00:13:47.389 --> 00:13:50.200 been doing it. you have to become the regulator 00:13:50.200 --> 00:13:52.840 yourself in a way. It really emphasizes that 00:13:52.840 --> 00:13:56.539 caveat emptor, buyer beware. But even if you 00:13:56.539 --> 00:13:59.500 have a qualified inspector, the whole process 00:13:59.500 --> 00:14:02.500 is high stress. The inspection is usually contingency, 00:14:02.559 --> 00:14:04.940 right? Can you explain what that means? Yes, 00:14:05.000 --> 00:14:07.759 the valid contract contingency. In most real 00:14:07.759 --> 00:14:10.779 estate contracts, the deal isn't firm until the 00:14:10.779 --> 00:14:13.360 inspection contingency is waived or satisfied. 00:14:13.720 --> 00:14:15.720 So the inspector is basically the gatekeeper. 00:14:16.080 --> 00:14:18.220 The deal can't close until they say it's OK, 00:14:18.299 --> 00:14:20.279 or rather until the buyer reads the report and 00:14:20.279 --> 00:14:22.440 says it's OK. Exactly. The buyer typically has 00:14:22.440 --> 00:14:25.000 a window, say, 7 to 10 days to conduct the inspection. 00:14:25.299 --> 00:14:27.240 After they get the report, they can do one of 00:14:27.240 --> 00:14:29.759 three things. One, they can accept the house 00:14:29.759 --> 00:14:33.000 as is and waive the contingency. Two, they can 00:14:33.000 --> 00:14:35.580 try to negotiate with the seller for repairs 00:14:35.580 --> 00:14:38.940 or a price reduction based on the findings. Or 00:14:38.940 --> 00:14:41.600 three. Or three, if the problems are too big 00:14:41.600 --> 00:14:43.679 or the seller won't negotiate, they can walk 00:14:43.679 --> 00:14:45.480 away from the deal and get their deposit back. 00:14:45.759 --> 00:14:48.519 The contingency is their escape hatch. And that 00:14:48.519 --> 00:14:51.919 power, the power to kill the deal creates a massive 00:14:51.919 --> 00:14:53.879 amount of tension. A huge amount. Think about 00:14:53.879 --> 00:14:55.879 the players again. The seller wants to move. 00:14:56.000 --> 00:14:58.840 The buyer wants the house. And the real estate 00:14:58.840 --> 00:15:01.519 agent, well, they want the commission. And they 00:15:01.519 --> 00:15:03.519 don't get paid if the deal falls apart. Correct. 00:15:03.720 --> 00:15:06.580 So imagine you are a real estate agent. You have 00:15:06.580 --> 00:15:08.460 a client buying a house. You need an inspector. 00:15:08.960 --> 00:15:10.879 Are you going to recommend the inspector who 00:15:10.879 --> 00:15:13.620 is known as the deal killer? No. The guy who 00:15:13.620 --> 00:15:16.740 spends five hours at the house, finds every single 00:15:16.740 --> 00:15:19.440 loose screw, and writes a 100 -page report that 00:15:19.440 --> 00:15:22.139 scares the first -time buyer away from a perfectly 00:15:22.139 --> 00:15:25.440 good house with minor issues. Probably not. You 00:15:25.440 --> 00:15:28.820 want the inspector who is... reasonable, who 00:15:28.820 --> 00:15:32.059 doesn't make a big fuss, who can manage the client's 00:15:32.059 --> 00:15:35.039 expectations. Yeah, precisely. And that creates 00:15:35.039 --> 00:15:38.059 a massive conflict of interest. If inspectors 00:15:38.059 --> 00:15:40.620 rely on agents for referrals, they have a financial 00:15:40.620 --> 00:15:43.360 incentive to go easy on the house, to minimize 00:15:43.360 --> 00:15:45.519 the problem so the deal closes and the agent 00:15:45.519 --> 00:15:47.779 keeps sending them work. It's the fox guarding 00:15:47.779 --> 00:15:51.779 the hen house. Or rather, the fox inviting his 00:15:51.779 --> 00:15:54.279 friend, the wolf, to come check on the chickens. 00:15:54.480 --> 00:15:56.799 And this isn't just a theoretical worry. It became 00:15:56.799 --> 00:15:59.039 such a problem that it actually shaped legislation. 00:15:59.440 --> 00:16:01.480 We have to talk about the Massachusetts case 00:16:01.480 --> 00:16:05.860 study. Yes. May 2001. I remember reading this 00:16:05.860 --> 00:16:07.980 in the notes. This is a huge deal. Massachusetts 00:16:07.980 --> 00:16:10.200 becomes the first state to basically say enough 00:16:10.200 --> 00:16:12.519 is enough. They recognize that the referral loop 00:16:12.519 --> 00:16:16.159 was anti -consumer. They saw that agents, specifically 00:16:16.159 --> 00:16:18.840 listing agents who represent the seller, had 00:16:18.840 --> 00:16:21.259 a vested interest in a favorable report. They 00:16:21.259 --> 00:16:25.500 amended their real estate licensing law. Listing 00:16:25.500 --> 00:16:27.679 agents in Massachusetts are now prohibited by 00:16:27.679 --> 00:16:30.600 law from directly referring a specific home inspector 00:16:30.600 --> 00:16:33.600 to a buyer. So even if I beg my agent, please 00:16:33.600 --> 00:16:35.220 just tell me who to hire. I don't know anyone. 00:16:35.360 --> 00:16:37.279 They can't give me a name. They cannot say, call 00:16:37.279 --> 00:16:39.480 Bob. Bob is great. They cannot even give you 00:16:39.480 --> 00:16:42.120 a short list of their top three favorites. Wow. 00:16:42.570 --> 00:16:44.970 So what do they do? How does a buyer find anyone? 00:16:45.169 --> 00:16:47.529 They have to hand you the complete list of all 00:16:47.529 --> 00:16:50.269 licensed inspectors in the state. Or they have 00:16:50.269 --> 00:16:52.210 to direct you to the state's official website 00:16:52.210 --> 00:16:54.350 where that registry is published. Yeah, that 00:16:54.350 --> 00:16:56.850 is hardcore. It's basically, here is the phone 00:16:56.850 --> 00:17:00.230 book. Good luck. It feels like it puts the buyer 00:17:00.230 --> 00:17:02.830 in a tough spot, but I see the logic. It forces 00:17:02.830 --> 00:17:05.190 the buyer to do their own due diligence, to make 00:17:05.190 --> 00:17:07.789 their own calls, read their own reviews. It breaks 00:17:07.789 --> 00:17:09.849 the link between the agent's commission and the 00:17:09.849 --> 00:17:11.960 inspector's paycheck. I can see how that would 00:17:11.960 --> 00:17:14.200 be annoying for an agent who legitimately knows 00:17:14.200 --> 00:17:16.500 a great thorough inspector, but I also see how 00:17:16.500 --> 00:17:18.440 it protects the buyer from a soft inspection. 00:17:18.819 --> 00:17:22.039 It's a blunt instrument, but effective. But regulation 00:17:22.039 --> 00:17:24.480 isn't just about consumer protection in a financial 00:17:24.480 --> 00:17:27.960 sense. Sometimes it's about life and death. You 00:17:27.960 --> 00:17:29.940 mentioned a California law earlier, Senate Bill 00:17:29.940 --> 00:17:33.140 721. Yes, the balcony bill. This feels like a 00:17:33.140 --> 00:17:36.880 shift from transactional inspection to maintenance 00:17:36.880 --> 00:17:39.079 inspection. That is the perfect distinction. 00:17:39.359 --> 00:17:41.460 Most inspections happen when a house is sold. 00:17:41.599 --> 00:17:44.039 It's a one -time event tied to a transaction. 00:17:44.660 --> 00:17:49.579 But SB 721, passed in September 2018, targets 00:17:49.579 --> 00:17:53.180 something specific. Exterior elevated elements. 00:17:53.359 --> 00:17:55.960 Exterior elevated elements. That sounds fancy. 00:17:55.980 --> 00:17:57.880 We're talking about decks and balconies. Decks, 00:17:58.019 --> 00:18:00.700 balconies, walkways, stairways. Anything wood 00:18:00.700 --> 00:18:02.660 -framed that is sticking out of a multifamily 00:18:02.660 --> 00:18:05.079 building and is more than six feet off the ground. 00:18:05.279 --> 00:18:07.380 And there's a tragic context to this, right? 00:18:07.480 --> 00:18:09.740 Yeah. I seem to remember a balcony collapse in 00:18:09.740 --> 00:18:12.839 Berkeley. Exactly. The 2015 Berkeley balcony 00:18:12.839 --> 00:18:16.059 collapse. Six students died. Several more were 00:18:16.059 --> 00:18:19.279 horribly injured. It was horrific. And the cause 00:18:19.279 --> 00:18:21.980 was dry rot. So the wood just failed. The wood 00:18:21.980 --> 00:18:23.819 had rotted from the inside out because of poor 00:18:23.819 --> 00:18:25.680 waterproofing during construction, but it looked 00:18:25.680 --> 00:18:27.839 fine from the outside until the moment it snapped. 00:18:28.099 --> 00:18:29.799 God, that is a nightmare. You're just at a party 00:18:29.799 --> 00:18:32.660 and the floor disappears. So SB 721 mandates 00:18:32.660 --> 00:18:35.079 that buildings with these structures must undergo 00:18:35.079 --> 00:18:37.529 inspections by licensed professionals? often 00:18:37.529 --> 00:18:40.549 structural engineers, every nine years for condos. 00:18:40.549 --> 00:18:44.289 And a similar law, AB 721, requires it every 00:18:44.289 --> 00:18:46.730 six years for apartment buildings. And this isn't 00:18:46.730 --> 00:18:48.849 about selling the building. This is just an ongoing 00:18:48.849 --> 00:18:51.890 SASE check. Correct. It acknowledges that buildings 00:18:51.890 --> 00:18:55.809 are organic in a way. Wood rots, fasteners rust. 00:18:56.109 --> 00:18:57.829 You can't just build it and forget it. You have 00:18:57.829 --> 00:18:59.869 to maintain it. And if the owners don't comply, 00:19:00.190 --> 00:19:03.430 they face penalties. It shifts the mindset from 00:19:03.430 --> 00:19:06.759 market value. to structural integrity as an ongoing 00:19:06.759 --> 00:19:09.640 responsibility. It does. It's a huge step. Let's 00:19:09.640 --> 00:19:12.980 look north now, because if the U .S. is a patchwork 00:19:12.980 --> 00:19:16.220 of strict laws like Massachusetts and unregulated 00:19:16.220 --> 00:19:19.420 wild zones like California, Canada sounds like, 00:19:19.460 --> 00:19:21.880 well, a bit of a polite brawl. Polite brawl is 00:19:21.880 --> 00:19:24.240 a very diplomatic way to put it. Canada historically 00:19:24.240 --> 00:19:26.700 followed the U .S. model unregulated in many 00:19:26.700 --> 00:19:29.240 places, with voluntary associations trying to 00:19:29.240 --> 00:19:31.880 set standards. But they made a significant deviation 00:19:31.880 --> 00:19:35.509 in 2016. What happened in 2016? The development 00:19:35.509 --> 00:19:39.130 of the CSAA 770 -16 standard. That is a very 00:19:39.130 --> 00:19:41.329 catchy name. It rolls right off the tongue, doesn't 00:19:41.329 --> 00:19:43.670 it? But it's important. It was a unifying standard 00:19:43.670 --> 00:19:45.690 developed by the Canadian Standards Association. 00:19:46.480 --> 00:19:48.720 The goal was to bring everyone onto the same 00:19:48.720 --> 00:19:52.039 page, a single rigorous standard for what a home 00:19:52.039 --> 00:19:54.180 inspection should be across the entire country. 00:19:54.400 --> 00:19:56.480 And was that successful? Is everyone singing 00:19:56.480 --> 00:19:59.799 Kumbaya now? Not exactly. The standard is there, 00:19:59.920 --> 00:20:02.759 but adoption and regulation are provincial matters. 00:20:02.960 --> 00:20:05.460 And implementation is where it gets messy, especially 00:20:05.460 --> 00:20:07.839 in Ontario. Ontario is the biggest market. By 00:20:07.839 --> 00:20:10.960 far. Estimated 1 ,500 inspectors back in 2013, 00:20:11.200 --> 00:20:14.019 probably more now. And the situation there is 00:20:14.019 --> 00:20:17.500 complicated. Source material mentioned a battle 00:20:17.500 --> 00:20:19.960 of the associations. Yes, I saw that. It really 00:20:19.960 --> 00:20:22.980 is. You have the OAHI, the Ontario Association 00:20:22.980 --> 00:20:25.940 of Home Inspectors, and then you have the Ontario 00:20:25.940 --> 00:20:28.839 ACHI, the Ontario Association of Certified Home 00:20:28.839 --> 00:20:30.859 Inspectors. Okay, those names are way too similar. 00:20:30.960 --> 00:20:33.059 That is designed to be confusing for the consumer. 00:20:33.480 --> 00:20:35.359 It's like the People's Front of Judea versus 00:20:35.359 --> 00:20:37.579 the Judean People's Front. And they both claim 00:20:37.579 --> 00:20:39.339 to be the largest or the most authoritative. 00:20:39.420 --> 00:20:44.180 But the real fight is over a title, RHI or Registered 00:20:44.180 --> 00:20:46.339 Home Inspector. It sounds fancy. Who gets to 00:20:46.339 --> 00:20:48.359 use it? Well, this is where it gets legally weird. 00:20:48.460 --> 00:20:52.180 Under a private act from 1994, the OAHI has the 00:20:52.180 --> 00:20:55.079 legal right to award that designation in Ontario. 00:20:55.339 --> 00:20:58.579 It's protected by law. So OAHI owns the term 00:20:58.579 --> 00:21:03.029 in Ontario. Yes. But here is the twist. The Canadian 00:21:03.029 --> 00:21:07.150 Association, CAHPI, owns the federal copyright 00:21:07.150 --> 00:21:09.710 to the term. So one group has the provincial 00:21:09.710 --> 00:21:12.490 law and the other group has the federal copyright. 00:21:12.670 --> 00:21:15.130 How does that even work? Essentially, it's a 00:21:15.130 --> 00:21:18.170 mess. And amid all this infighting over acronyms 00:21:18.170 --> 00:21:20.930 and logos, the consumer is left scratching their 00:21:20.930 --> 00:21:23.509 head wondering, who is actually qualified to 00:21:23.509 --> 00:21:26.029 check my roof? Is there a solution on the horizon? 00:21:26.910 --> 00:21:28.890 Or are they just going to fight forever? There 00:21:28.890 --> 00:21:31.430 is legislation in the works. The Home Inspection 00:21:31.430 --> 00:21:34.309 Act 2017 has received royal assent in Ontario. 00:21:34.829 --> 00:21:37.170 This would license inspectors directly through 00:21:37.170 --> 00:21:39.769 the government and dissolve that old 1994 act. 00:21:39.990 --> 00:21:42.329 It would theoretically end the association wars. 00:21:42.690 --> 00:21:45.630 But I sense a but. But as with many things in 00:21:45.630 --> 00:21:47.609 government, it is awaiting specific regulations 00:21:47.609 --> 00:21:50.150 to actually become law. It's been in this state 00:21:50.150 --> 00:21:53.150 of limbo for years. So for now, it is still a 00:21:53.150 --> 00:21:54.829 bit of a maze. It seems like no matter where 00:21:54.829 --> 00:21:57.480 you go. Figuring out who is qualified to inspect 00:21:57.480 --> 00:22:00.220 your house is half the battle. It is. And if 00:22:00.220 --> 00:22:02.900 we hop across the pond to the United Kingdom, 00:22:03.039 --> 00:22:05.680 we see a totally different approach. We see what 00:22:05.680 --> 00:22:07.519 happens when the government tries to intervene 00:22:07.519 --> 00:22:11.059 too aggressively and, frankly, gets it wrong. 00:22:11.119 --> 00:22:13.480 This is the Home Information Pact story, right? 00:22:13.599 --> 00:22:17.259 The HIP. The HIP. This was a massive government 00:22:17.259 --> 00:22:20.140 initiative introduced in the mid -2000s. The 00:22:20.140 --> 00:22:22.849 idea was actually... quite noble. They wanted 00:22:22.849 --> 00:22:25.509 to speed up the home buying process, which in 00:22:25.509 --> 00:22:28.390 the UK can be painfully slow. Okay, so what was 00:22:28.390 --> 00:22:31.710 the plan? They mandated that sellers had to provide 00:22:31.710 --> 00:22:34.769 a home condition report up front as part of this 00:22:34.769 --> 00:22:36.710 pack before the house even went on the market. 00:22:36.970 --> 00:22:39.490 That actually makes sense to me. Why wait for 00:22:39.490 --> 00:22:41.529 a buyer to find the problems? Put all the cards 00:22:41.529 --> 00:22:44.650 on the table from day one. In theory, yes. The 00:22:44.650 --> 00:22:46.849 government anticipated they would need 7 ,500 00:22:46.849 --> 00:22:49.829 to 8 ,000 inspectors to churn out 2 million of 00:22:49.829 --> 00:22:52.650 these packs a year. It was pitched as a new industry, 00:22:52.809 --> 00:22:55.529 a massive jobs program. Become a home inspector. 00:22:55.710 --> 00:22:58.109 Secure your future. Exactly. Thousands of people 00:22:58.109 --> 00:23:00.150 paid for training. They went to courses. They 00:23:00.150 --> 00:23:02.289 got certified. They were ready to go. But there 00:23:02.289 --> 00:23:04.910 were two massive problems. What were they? One, 00:23:05.109 --> 00:23:07.890 the global financial market crashed in 2008 and 00:23:07.890 --> 00:23:10.410 the UK housing market went with it. Suddenly, 00:23:10.569 --> 00:23:14.759 no one was moving. Bad timing. And two, the public 00:23:14.759 --> 00:23:17.839 hated the HIPs. They were seen as expensive, 00:23:18.000 --> 00:23:20.019 bureaucratic red tape that the seller had to 00:23:20.019 --> 00:23:22.500 pay for whether their house sold or not. So what 00:23:22.500 --> 00:23:25.119 happened? The political winds shifted. The coalition 00:23:25.119 --> 00:23:27.819 government came into power and canceled the HIPs 00:23:27.819 --> 00:23:30.480 in 2010, suspended them with immediate effect. 00:23:31.299 --> 00:23:34.079 Ouch. So what happened to all those thousands 00:23:34.079 --> 00:23:36.640 of newly trained inspectors? The role of home 00:23:36.640 --> 00:23:38.940 inspector, as defined by that program, became 00:23:38.940 --> 00:23:41.450 redundant overnight. Thousands of people who 00:23:41.450 --> 00:23:43.490 had retrained for this career, who had invested 00:23:43.490 --> 00:23:45.789 time and money, were left with a qualification 00:23:45.789 --> 00:23:48.920 that was... essentially worthless. That is brutal. 00:23:49.039 --> 00:23:51.779 A government created industry wiped out by the 00:23:51.779 --> 00:23:54.339 same government. So who inspects homes in the 00:23:54.339 --> 00:23:57.119 UK now? Did they just stop inspecting? No, it 00:23:57.119 --> 00:23:59.119 went back to the established experts. In the 00:23:59.119 --> 00:24:02.019 UK, inspections or surveys, as they're called, 00:24:02.099 --> 00:24:04.660 are done by chartered surveyors. These are members 00:24:04.660 --> 00:24:07.460 of the RICS, the Royal Institution of Chartered 00:24:07.460 --> 00:24:09.460 Surveyors. That sounds much more posh than home 00:24:09.460 --> 00:24:12.640 inspector. It is more formalized. To become a 00:24:12.640 --> 00:24:15.440 chartered surveyor requires a degree and significant 00:24:15.440 --> 00:24:18.519 professional experience and a rigorous exam process. 00:24:18.900 --> 00:24:21.680 And the source notes that a full building survey 00:24:21.680 --> 00:24:24.859 from a chartered surveyor is generally more detailed 00:24:24.859 --> 00:24:27.839 than what we see in North America. They go deep. 00:24:28.099 --> 00:24:31.480 So they went from a failed bureaucratic experiment 00:24:31.480 --> 00:24:35.279 back to a highly professionalized, rigorous standard. 00:24:35.500 --> 00:24:38.079 It highlights that you cannot just manufacture 00:24:38.079 --> 00:24:41.509 an industry overnight. It needs deep roots. Speaking 00:24:41.509 --> 00:24:44.130 of deep roots or maybe the lack of them, let's 00:24:44.130 --> 00:24:46.750 talk about India. The source describes the home 00:24:46.750 --> 00:24:49.609 inspection industry there as being in its infancy. 00:24:50.109 --> 00:24:51.869 This is the most fascinating part of the global 00:24:51.869 --> 00:24:54.009 comparison for me, because when I think of India, 00:24:54.089 --> 00:24:56.210 specifically cities like Mumbai or Bangalore, 00:24:56.289 --> 00:24:58.789 I think of massive construction, high rises going 00:24:58.789 --> 00:25:02.109 up overnight, entire townships being built. You 00:25:02.109 --> 00:25:03.970 would think inspection would be huge there. The 00:25:03.970 --> 00:25:06.410 scale of construction is staggering, but the 00:25:06.410 --> 00:25:08.250 consumer protection infrastructure is still catching 00:25:08.250 --> 00:25:11.069 up. In India, the concept of a third party inspection 00:25:11.069 --> 00:25:13.990 is very, very new. Why is that? Is it just that 00:25:13.990 --> 00:25:16.150 people don't know it exists? Awareness is a big 00:25:16.150 --> 00:25:18.630 part of it, but there is also a massive cultural 00:25:18.630 --> 00:25:21.589 and power barrier. We have to look at the relationship 00:25:21.589 --> 00:25:24.319 between the buyer and the builder. Okay. What's 00:25:24.319 --> 00:25:26.880 that dynamic like? In the U .S. or Canada, the 00:25:26.880 --> 00:25:29.460 buyer is usually king. There are lots of houses 00:25:29.460 --> 00:25:32.319 to choose from. In a hot Indian market, especially 00:25:32.319 --> 00:25:34.720 for new construction, the builder holds all the 00:25:34.720 --> 00:25:37.460 cards. Imagine you are buying an apartment in 00:25:37.460 --> 00:25:40.279 a high rise. You have put down your life savings. 00:25:40.680 --> 00:25:43.779 You are one of a thousand people trying to get 00:25:43.779 --> 00:25:46.319 a unit. Right. It's a seller's market on steroids. 00:25:46.460 --> 00:25:49.700 Exactly. So if you demand an inspection, if you 00:25:49.700 --> 00:25:52.240 antagonize the builder by pointing out that the 00:25:52.240 --> 00:25:54.609 walls are crooked or the finish is poor, there 00:25:54.609 --> 00:25:56.849 is a genuine fear that the builder might just 00:25:56.849 --> 00:25:59.309 cancel your allocation. Seriously, they can just 00:25:59.309 --> 00:26:01.670 do that. They might say, you are being difficult. 00:26:01.869 --> 00:26:04.109 I have 10 other people with cash who won't ask 00:26:04.109 --> 00:26:06.769 questions. Here's your deposit back. Next. That 00:26:06.769 --> 00:26:09.029 is wild. So people are skipping the inspection 00:26:09.029 --> 00:26:11.529 out of fear of losing the deal, even on the biggest 00:26:11.529 --> 00:26:13.910 purchase of their lives. In many cases, yes. 00:26:14.369 --> 00:26:17.289 They accept the unit as is because they are desperate 00:26:17.289 --> 00:26:19.690 to secure the asset. But that is starting to 00:26:19.690 --> 00:26:23.779 change. A new law called URIRA. the real estate 00:26:23.779 --> 00:26:26.059 regulatory authority, has come into effect in 00:26:26.059 --> 00:26:28.819 recent years. Okay, ERE, what does it do? It 00:26:28.819 --> 00:26:32.099 is a landmark piece of legislation in India intended 00:26:32.099 --> 00:26:34.920 to clean up the real estate sector. It holds 00:26:34.920 --> 00:26:37.660 builders accountable for delays and for the quality 00:26:37.660 --> 00:26:39.400 of construction they promise. So it gives the 00:26:39.400 --> 00:26:41.359 consumer some power back. It gives the consumer 00:26:41.359 --> 00:26:44.400 teeth. It has given more potency to inspection 00:26:44.400 --> 00:26:47.000 companies. Now, a buyer can point to RERA laws 00:26:47.000 --> 00:26:49.880 and say, I have a right to quality. It is empowering 00:26:49.880 --> 00:26:52.279 the consumer to ask for that inspection. And 00:26:52.279 --> 00:26:53.539 the buildings themselves are different, right? 00:26:53.579 --> 00:26:55.460 We aren't talking about checking for wood rot 00:26:55.460 --> 00:26:58.200 in a Mumbai high -rise. Correct. Indian homes 00:26:58.200 --> 00:27:01.400 are predominantly kiln -baked brick or reinforced 00:27:01.400 --> 00:27:03.839 concrete. You don't have the same issues with 00:27:03.839 --> 00:27:05.680 termites eating the structural frame like you 00:27:05.680 --> 00:27:07.460 do in California. But you have different beasts. 00:27:07.799 --> 00:27:09.880 Like what? What are they looking for? Concrete 00:27:09.880 --> 00:27:12.619 curing issues. If concrete isn't cured properly, 00:27:12.880 --> 00:27:15.700 if it's not kept wet while it hardens, it can 00:27:15.700 --> 00:27:17.759 develop microcracks that compromise its strength 00:27:17.759 --> 00:27:20.279 over time. You have issues with the quality of 00:27:20.279 --> 00:27:22.579 plastering, with waterproofing in a tropical 00:27:22.579 --> 00:27:26.279 monsoon climate. So the methodology changes completely. 00:27:26.799 --> 00:27:29.779 Completely. They use primarily non -destructive 00:27:29.779 --> 00:27:32.240 testing things like rebound hammers that measure 00:27:32.240 --> 00:27:35.240 surface hardness or ultrasonic pulse velocity 00:27:35.240 --> 00:27:38.799 tests to find voids in the concrete. Although 00:27:38.799 --> 00:27:41.180 the source mentions that in some cases, based 00:27:41.180 --> 00:27:43.880 on customer requirements, they will perform core 00:27:43.880 --> 00:27:46.759 cutting. Core cutting. That sounds intense. What 00:27:46.759 --> 00:27:49.220 is that? It is. It involves drilling a literal 00:27:49.220 --> 00:27:52.339 cylinder, a core of concrete, out of a column 00:27:52.339 --> 00:27:54.759 or a slab to test its compressive strength in 00:27:54.759 --> 00:27:57.299 a lab. Wow. This is very, very different from 00:27:57.299 --> 00:27:59.380 a U .S. inspector walking around with a flashlight 00:27:59.380 --> 00:28:01.279 and a screwdriver. Yeah, if a U .S. inspector 00:28:01.279 --> 00:28:03.279 started drilling holes in the wall of a suburban 00:28:03.279 --> 00:28:06.140 house, the seller would call the police. Exactly. 00:28:06.319 --> 00:28:08.700 It just shows how the local construction methods 00:28:08.700 --> 00:28:11.500 dictate the inspection protocols. So we've covered 00:28:11.500 --> 00:28:13.660 the who and the where. Let's look at the what. 00:28:14.000 --> 00:28:16.480 Because I looked at the types of inspections 00:28:16.480 --> 00:28:19.059 section of the NOS, and it's like a menu at a 00:28:19.059 --> 00:28:22.470 restaurant. There isn't just one burger. There 00:28:22.470 --> 00:28:24.369 are 10 different kinds of burgers, depending 00:28:24.369 --> 00:28:26.329 on what you're hungry for. That is a good analogy. 00:28:26.450 --> 00:28:29.369 The standard burger is your transactional homebuyer's 00:28:29.369 --> 00:28:31.650 inspection. That is what 90 % of our listeners 00:28:31.650 --> 00:28:34.230 are familiar with. You make an offer, you inspect 00:28:34.230 --> 00:28:37.789 the house, you negotiate repairs. Simple. But 00:28:37.789 --> 00:28:39.710 then you have the pre -listing inspection. That's 00:28:39.710 --> 00:28:42.740 for the seller, right? Yes. Honestly, this is 00:28:42.740 --> 00:28:45.380 a strategic move that more sellers should consider 00:28:45.380 --> 00:28:48.119 using. The seller hires the inspector before 00:28:48.119 --> 00:28:50.319 putting the house on the market. Why spend the 00:28:50.319 --> 00:28:51.880 money, though? Why not just wait for the buyer 00:28:51.880 --> 00:28:54.500 to find the problems? Because surprise is the 00:28:54.500 --> 00:28:57.819 enemy of a deal. Imagine you're selling. The 00:28:57.819 --> 00:29:00.319 buyer's inspection finds a major issue, like 00:29:00.319 --> 00:29:03.039 a bad roof, in the middle of negotiations. The 00:29:03.039 --> 00:29:06.079 buyer panics. They panic. They will ask for a 00:29:06.079 --> 00:29:09.079 massive price reduction, way more than the roof 00:29:09.079 --> 00:29:11.849 actually costs, or they'll walk away. If the 00:29:11.849 --> 00:29:14.089 seller finds it first, they can fix it on their 00:29:14.089 --> 00:29:17.430 own terms with a roofer they choose. Or they 00:29:17.430 --> 00:29:19.390 can price the house accordingly and disclose 00:29:19.390 --> 00:29:22.049 it up front. The house is priced to reflect the 00:29:22.049 --> 00:29:24.329 need for a new roof. Exactly. It removes the 00:29:24.329 --> 00:29:26.769 leverage from the buyer. It controls the narrative. 00:29:27.029 --> 00:29:29.289 Smart. Very smart. Yeah. Then there's the pre 00:29:29.289 --> 00:29:31.390 -delivery inspection. This is specific to new 00:29:31.390 --> 00:29:34.450 builds. Yes, or the PDI. Now, this is one where 00:29:34.450 --> 00:29:36.369 I think people get complacent. They think it's 00:29:36.369 --> 00:29:38.329 a brand new house. No one has ever lived in it. 00:29:38.369 --> 00:29:41.109 Everything must be perfect. That is the new car 00:29:41.109 --> 00:29:44.190 smell fallacy. Do not assume that because a house 00:29:44.190 --> 00:29:47.029 is new, it is perfect. In fact, new builds often 00:29:47.029 --> 00:29:49.569 have what we call teething issues. Like what? 00:29:50.029 --> 00:29:51.609 What kind of mistakes are we talking about? Oh, 00:29:51.609 --> 00:29:54.549 all sorts. I've seen new builds where the vents 00:29:54.549 --> 00:29:56.930 for the bathroom fans were never connected to 00:29:56.930 --> 00:29:59.650 the roof. They were just venting moist air directly 00:29:59.650 --> 00:30:02.069 into the brand new attic, which is a recipe for 00:30:02.069 --> 00:30:04.529 mold. I've seen insulation missing in entire 00:30:04.529 --> 00:30:07.230 sections of the wall. I've seen plumbing that 00:30:07.230 --> 00:30:08.910 leaked the first time the water was turned on. 00:30:09.049 --> 00:30:11.930 I've seen windows installed backwards. Backwards? 00:30:12.190 --> 00:30:14.549 Yep. The weep holes that are supposed to let 00:30:14.549 --> 00:30:17.250 water out were on the inside. Oh, my God. So 00:30:17.250 --> 00:30:19.470 the pre -delivery inspection is your chance to... 00:30:19.470 --> 00:30:21.789 to catch the builder's mistakes before you sign 00:30:21.789 --> 00:30:24.450 off and give them that final check. Yes. And 00:30:24.450 --> 00:30:27.089 typically, the builder is obligated to fix them 00:30:27.089 --> 00:30:29.269 under warranty. But you have to find them first 00:30:29.269 --> 00:30:32.029 and create a formal punch list. Then we get into 00:30:32.029 --> 00:30:34.769 the really heavy stuff. The source mentions disaster 00:30:34.769 --> 00:30:37.390 inspection. This isn't about buying. This is 00:30:37.390 --> 00:30:40.210 about survival. This is a grim but necessary 00:30:40.210 --> 00:30:43.759 part of the industry. This is post -event. Tornadoes, 00:30:43.759 --> 00:30:46.859 floods, hurricanes, wildfires. Inspectors go 00:30:46.859 --> 00:30:49.480 into homes, often working for FEMA or insurance 00:30:49.480 --> 00:30:52.339 companies, to assess damage. I can't imagine 00:30:52.339 --> 00:30:54.500 what that job is like, walking into a house that's 00:30:54.500 --> 00:30:56.539 been flooded with three feet of mud. It's not 00:30:56.539 --> 00:30:58.660 about checking if the outlets are grounded. It's 00:30:58.660 --> 00:31:01.480 about, is the structure compromised? Is it safe 00:31:01.480 --> 00:31:04.000 to enter? What is the dollar value of the loss? 00:31:04.380 --> 00:31:07.960 It is high stress, emotional work, assessing 00:31:07.960 --> 00:31:10.599 habitability. And then there's Section 8 inspection. 00:31:11.069 --> 00:31:13.470 This is specific to the U .S., right? Yes. Section 00:31:13.470 --> 00:31:16.230 8 is a housing subsidy program. The government 00:31:16.230 --> 00:31:18.390 pays a portion of the rent for low -income families 00:31:18.390 --> 00:31:20.829 directly to the landlord. But before they pay, 00:31:21.069 --> 00:31:23.569 they need to ensure the property is fit for habitation. 00:31:24.089 --> 00:31:26.650 So they are checking against a specific standard. 00:31:27.210 --> 00:31:30.670 Yes. HUD's Housing Quality Standards, or HQS, 00:31:30.710 --> 00:31:33.450 they are looking for the basics of human decency 00:31:33.450 --> 00:31:36.599 and safety. Is there heat? Is there hot and cold 00:31:36.599 --> 00:31:39.099 running water? Are there rodent infestations? 00:31:39.099 --> 00:31:41.579 Is there peeling lead paint? Are the windows 00:31:41.579 --> 00:31:44.900 broken? So it's less about is this a good investment 00:31:44.900 --> 00:31:47.940 and more about is this safe for a human to live 00:31:47.940 --> 00:31:50.119 in? Exactly. It establishes a baseline floor 00:31:50.119 --> 00:31:53.160 for housing quality for subsidized housing. Now 00:31:53.160 --> 00:31:55.200 here's one I had never heard of. Immigration 00:31:55.200 --> 00:31:58.619 reports in the UK. Why on earth does a visa applicant 00:31:58.619 --> 00:32:01.500 need a home inspection? This fascinated me, too. 00:32:01.660 --> 00:32:03.940 It connects back to public health laws from decades 00:32:03.940 --> 00:32:06.460 ago. If you are living in the UK and you want 00:32:06.460 --> 00:32:08.440 to bring a spouse or dependent over on a visa, 00:32:08.559 --> 00:32:11.299 the UK Visa and Immigration Authority, the UKVI, 00:32:11.640 --> 00:32:14.660 needs to verify your living situation. They want 00:32:14.660 --> 00:32:16.480 to make sure you aren't stuffing 10 people into 00:32:16.480 --> 00:32:18.859 a one -bedroom flat. Precisely. They require 00:32:18.859 --> 00:32:21.819 a property instruction report to ensure the home 00:32:21.819 --> 00:32:24.339 will not become legally overcrowded under the 00:32:24.339 --> 00:32:27.720 Housing Act of 1985. They calculate room sizes 00:32:27.720 --> 00:32:30.819 and the number of permitted occupants. So the 00:32:30.819 --> 00:32:32.779 inspector is basically certifying, yes, there 00:32:32.779 --> 00:32:35.440 is enough room for this new person to live here 00:32:35.440 --> 00:32:38.619 safely and legally. Yes. It's fascinating how 00:32:38.619 --> 00:32:41.220 home inspection intersects with immigration policy. 00:32:41.599 --> 00:32:44.099 It shows that inspection is about more than real 00:32:44.099 --> 00:32:46.680 estate. It is about standards of living and public 00:32:46.680 --> 00:32:48.599 health. Okay, let's talk about the specialized 00:32:48.599 --> 00:32:51.460 inspections, the add -ons, the ones that go deeper 00:32:51.460 --> 00:32:53.759 than the standard visual check. I keep hearing 00:32:53.759 --> 00:32:55.880 about four -point inspections. What are the four 00:32:55.880 --> 00:32:58.299 points? This is a term you will hear constantly 00:32:58.299 --> 00:33:00.650 if you are buying an older home. especially in 00:33:00.650 --> 00:33:03.349 Florida or other coastal states. Insurance companies 00:33:03.349 --> 00:33:05.450 drive this. They want to know about the four 00:33:05.450 --> 00:33:08.769 big liability risks. Which are? One, the roof. 00:33:09.009 --> 00:33:12.750 Two, the HVAC, system heating and air conditioning. 00:33:13.089 --> 00:33:17.009 Three, the electrical system. And four, the plumbing. 00:33:17.269 --> 00:33:19.269 Why just those four? Why don't they care about 00:33:19.269 --> 00:33:21.289 the foundation, for instance? Because those are 00:33:21.289 --> 00:33:23.990 the four things that generate claims. A leaky 00:33:23.990 --> 00:33:27.119 roof causes massive water damage. Old plumbing 00:33:27.119 --> 00:33:30.400 bursts and floods the house. Bad wiring causes 00:33:30.400 --> 00:33:34.319 fires. An old HVAC system can leak and cause 00:33:34.319 --> 00:33:36.619 damage. So it's all about risk for the insurer. 00:33:36.910 --> 00:33:39.250 All about their risk. Insurance companies don't 00:33:39.250 --> 00:33:41.130 care if the foundation has a crack that might 00:33:41.130 --> 00:33:43.529 cause the house to settle in 20 years. They care 00:33:43.529 --> 00:33:44.970 if the house is going to burn down tomorrow. 00:33:45.250 --> 00:33:46.869 And what are they looking for specifically in 00:33:46.869 --> 00:33:49.109 those areas? For the roof, they want to know 00:33:49.109 --> 00:33:51.349 the age and condition. For plumbing, they're 00:33:51.349 --> 00:33:53.849 checking for old galvanized pipes or active leaks. 00:33:54.269 --> 00:33:56.549 And for electrical, they are looking for specific 00:33:56.549 --> 00:33:59.230 things like knob and tube wiring or aluminum 00:33:59.230 --> 00:34:01.490 wiring. These are old school wiring methods. 00:34:01.890 --> 00:34:04.349 Yes, technologies from the past that are known 00:34:04.349 --> 00:34:07.490 fire hazards. If a four -point inspection finds 00:34:07.490 --> 00:34:10.030 those, the insurance company might say, we won't 00:34:10.030 --> 00:34:12.489 insure you until you rewire the house. Which 00:34:12.489 --> 00:34:15.670 is a massive, unexpected expense. Good to know. 00:34:16.250 --> 00:34:18.570 Now, let's talk about structural inspection. 00:34:19.050 --> 00:34:20.889 This brings us back to that legal distinction 00:34:20.889 --> 00:34:23.469 we touched on earlier regarding who can say what. 00:34:23.670 --> 00:34:26.989 This is a crucial boundary line. A general home 00:34:26.989 --> 00:34:29.409 inspector can look at a wooden beam in the basement 00:34:29.409 --> 00:34:33.010 and say, that beam is sagging. It has a crack 00:34:33.010 --> 00:34:35.949 running horizontally along the grain. That is 00:34:35.949 --> 00:34:38.869 an observation of condition. Right. I see a crack. 00:34:39.010 --> 00:34:42.429 It is this big and it is here. Correct. But in 00:34:42.429 --> 00:34:44.909 many places, like New York, for example, a general 00:34:44.909 --> 00:34:47.150 inspector cannot legally give a professional 00:34:47.150 --> 00:34:50.110 opinion on structural sufficiency. So they can't 00:34:50.110 --> 00:34:52.210 say that beam is sagging and the house is going 00:34:52.210 --> 00:34:54.710 to collapse. Exactly. They cannot calculate the 00:34:54.710 --> 00:34:57.230 load. They cannot say this beam is overloaded 00:34:57.230 --> 00:35:00.849 and structurally unsound. Only a licensed professional 00:35:00.849 --> 00:35:04.610 engineer. A PE or a registered architect can 00:35:04.610 --> 00:35:07.130 render that opinion. They are the ones with the 00:35:07.130 --> 00:35:09.949 license and the insurance to do the math. So 00:35:09.949 --> 00:35:11.849 if your inspector sees a scary crack, what do 00:35:11.849 --> 00:35:13.829 they do? They put it in the report, often in 00:35:13.829 --> 00:35:16.750 big, bold letters. Structural movement and deflection 00:35:16.750 --> 00:35:19.690 observed in main support beam. Recommend further 00:35:19.690 --> 00:35:22.050 evaluation by a licensed structural engineer 00:35:22.050 --> 00:35:24.710 prior to closing. They pass the baton. They stay 00:35:24.710 --> 00:35:27.090 in their lane to avoid liability and, frankly, 00:35:27.190 --> 00:35:29.489 practicing engineering without a license. And 00:35:29.489 --> 00:35:32.909 you, the buyer. have to be the one to hire that 00:35:32.909 --> 00:35:36.170 engineer and pay them to come out. Yes. And honestly, 00:35:36.369 --> 00:35:38.469 you want them to stay in their lane. You don't 00:35:38.469 --> 00:35:40.849 want someone guessing about gravity. That leads 00:35:40.849 --> 00:35:43.510 us perfectly into the final section. The fine 00:35:43.510 --> 00:35:46.650 print. The limitations and exclusions. Because 00:35:46.650 --> 00:35:49.190 for all this talk of forensics, there are huge 00:35:49.190 --> 00:35:52.289 blind spots in a standard inspection. And this 00:35:52.289 --> 00:35:54.269 is where I feel like buyers get the most upset 00:35:54.269 --> 00:35:57.369 later. Why didn't you find this? Huge blind spots. 00:35:57.530 --> 00:36:00.440 And the general rule is... If it exceeds the 00:36:00.440 --> 00:36:03.639 standards of practice, it is excluded. Let's 00:36:03.639 --> 00:36:06.280 run through the big exclusions. Trees, that big, 00:36:06.320 --> 00:36:08.400 beautiful oak tree in the front yard. Not included. 00:36:08.559 --> 00:36:11.639 An inspector is not an arborist. They aren't 00:36:11.639 --> 00:36:14.340 trained to look at that massive oak tree overhanging 00:36:14.340 --> 00:36:15.940 the roof and tell you if it's rotting from the 00:36:15.940 --> 00:36:17.780 inside and ready to fall on your house in the 00:36:17.780 --> 00:36:19.579 next storm. So if you're worried about the trees, 00:36:19.800 --> 00:36:22.980 hire a certified arborist. Goals and spas. Usually 00:36:22.980 --> 00:36:25.260 excluded from the general inspection unless you 00:36:25.260 --> 00:36:28.780 pay extra for a specific pool inspection. A pool 00:36:28.780 --> 00:36:32.219 is a complex mechanical system. Pumps, filters, 00:36:32.539 --> 00:36:34.940 heaters, chemical balance, plus the structural 00:36:34.940 --> 00:36:37.599 shell. Some inspectors have extra certification 00:36:37.599 --> 00:36:39.519 for it, but don't assume it's included. Though 00:36:39.519 --> 00:36:41.980 the notes mention that the Canadian standard, 00:36:42.219 --> 00:36:46.219 the CSA A770 -16, is unique because it actually 00:36:46.219 --> 00:36:49.159 mandates swimming pool safety inspections. It 00:36:49.159 --> 00:36:51.840 does, which is a progressive step. It focuses 00:36:51.840 --> 00:36:54.940 on safety features like fences and gates. But 00:36:54.940 --> 00:36:57.559 in the U .S., standard contracts usually exclude 00:36:57.559 --> 00:36:59.539 the pool system unless you specifically add it 00:36:59.539 --> 00:37:01.239 on. Now, here's the one that I think is the most 00:37:01.239 --> 00:37:04.659 controversial. Thermal imaging. Ah, the infrared 00:37:04.659 --> 00:37:07.000 debate. I mean, the technology exists. You could 00:37:07.000 --> 00:37:09.000 buy a thermal camera that clips onto your phone. 00:37:09.199 --> 00:37:11.960 It can see heat loss. It can see cold spots from 00:37:11.960 --> 00:37:14.000 moisture behind a wall that looks perfectly dry 00:37:14.000 --> 00:37:17.159 to the naked eye. Why isn't every inspector using 00:37:17.159 --> 00:37:19.849 this on every inspection? Many are starting to 00:37:19.849 --> 00:37:22.590 offer it as an ancillary service, but it is considered 00:37:22.590 --> 00:37:25.630 exceeding the standard scope. And here's the 00:37:25.630 --> 00:37:28.969 debate. Liability. How does seeing more create 00:37:28.969 --> 00:37:31.570 liability? Shouldn't it reduce liability? You'd 00:37:31.570 --> 00:37:34.570 think so. But imagine you are an inspector. You 00:37:34.570 --> 00:37:36.710 use a thermal camera on the living room and find 00:37:36.710 --> 00:37:39.610 nothing. Great. But you forget to scan the small 00:37:39.610 --> 00:37:42.949 closet under the stairs. Six months later, a 00:37:42.949 --> 00:37:45.800 pipe... bursts in that closet wall right the 00:37:45.800 --> 00:37:48.559 buyer sues you saying you had the camera you 00:37:48.559 --> 00:37:50.480 were looking for leaks why didn't you find it 00:37:50.480 --> 00:37:52.860 the argument becomes that by using the advanced 00:37:52.860 --> 00:37:55.659 tool you set a higher standard for yourself ah 00:37:55.659 --> 00:37:59.099 if you use it you better be perfect with it exactly 00:37:59.099 --> 00:38:02.659 once you start looking inside the walls you open 00:38:02.659 --> 00:38:06.179 a pandora's box of expectations Many inspectors 00:38:06.179 --> 00:38:08.179 argue that unless they are charging for a full 00:38:08.179 --> 00:38:10.639 thermal audit and doing it methodically room 00:38:10.639 --> 00:38:13.420 by room, it's safer for them to stick to the 00:38:13.420 --> 00:38:15.519 visual standard. I can't see behind walls, so 00:38:15.519 --> 00:38:17.659 don't blame me for what's behind walls. Precisely. 00:38:17.659 --> 00:38:20.480 And that brings us to the hidden stuff. The biggest 00:38:20.480 --> 00:38:23.260 nightmare for buyers. The underground sewer line. 00:38:23.519 --> 00:38:25.320 Oh, God. I have a friend who bought a house. 00:38:25.860 --> 00:38:28.780 Charming 1920s bungalow. Yeah. Week one, they 00:38:28.780 --> 00:38:30.940 flush the toilet and sewage backs up into the 00:38:30.940 --> 00:38:34.420 bathtub. The classic horror story. It turned 00:38:34.420 --> 00:38:36.920 out that tree roots had grown completely through 00:38:36.920 --> 00:38:40.159 the old clay pipes in the front yard. It cost 00:38:40.159 --> 00:38:43.219 them $10 ,000 to dig up the yard and replace 00:38:43.219 --> 00:38:46.079 the line. They were furious at the inspector. 00:38:46.360 --> 00:38:49.599 Why didn't you check the sewer? And the inspector's 00:38:49.599 --> 00:38:52.079 defense was likely valid and written right in 00:38:52.079 --> 00:38:54.860 his contract. I inspected the plumbing inside 00:38:54.860 --> 00:38:57.880 the house. The fixtures drained when I tested 00:38:57.880 --> 00:39:01.039 them. The sewer line is buried six feet underground. 00:39:01.519 --> 00:39:04.280 I cannot see through dirt. So how do you avoid 00:39:04.280 --> 00:39:07.280 that? How do you check for that? You hire a specialist 00:39:07.280 --> 00:39:09.619 to do a sewer scope. They run a camera snake 00:39:09.619 --> 00:39:11.840 down the line all the way to the street. It costs 00:39:11.840 --> 00:39:15.159 maybe $200, $300 extra. And they can see the 00:39:15.159 --> 00:39:17.239 cracks, the roots, the blockages. They give you 00:39:17.239 --> 00:39:19.409 a video of the whole trip. If you're buying an 00:39:19.409 --> 00:39:21.710 old house with mature trees in the yard, it is 00:39:21.710 --> 00:39:24.329 the best money you will ever spend. But a standard 00:39:24.329 --> 00:39:26.250 home inspector does not do it as part of the 00:39:26.250 --> 00:39:28.909 base package. It's an ancillary inspection. That 00:39:28.909 --> 00:39:30.809 is a pro tip right there. Always get the sewer 00:39:30.809 --> 00:39:33.469 scope on an old house. Always. And finally, we 00:39:33.469 --> 00:39:36.590 have to address the no guarantee. The disclaimer 00:39:36.590 --> 00:39:38.389 at the bottom of the report, usually in all caps, 00:39:38.590 --> 00:39:41.909 this report is not a warranty. It is the harshest 00:39:41.909 --> 00:39:44.989 reality. The inspector is not an insurer. If 00:39:44.989 --> 00:39:46.710 they missed something that was visible and that 00:39:46.710 --> 00:39:48.630 they should have seen, you might have a claim 00:39:48.630 --> 00:39:50.690 against their errors and omissions insurance. 00:39:51.090 --> 00:39:53.590 But those policies often limit the payout to 00:39:53.590 --> 00:39:56.150 just the cost of the inspection itself. Often, 00:39:56.250 --> 00:39:59.449 yes. And if something simply breaks the day after 00:39:59.449 --> 00:40:02.090 you move in, the water heater that worked perfectly 00:40:02.090 --> 00:40:04.309 on inspection day just gives up the ghost. That 00:40:04.309 --> 00:40:07.030 is the joy of homeownership. You own the house 00:40:07.030 --> 00:40:10.039 and you own its problems. Man. We have covered 00:40:10.039 --> 00:40:12.260 a lot of ground. We traveled from the specific 00:40:12.260 --> 00:40:14.900 anti -corruption laws of Massachusetts to the 00:40:14.900 --> 00:40:17.860 concrete high -rises of Mumbai. We looked at 00:40:17.860 --> 00:40:20.360 the bureaucratic mess of Ontario licensing and 00:40:20.360 --> 00:40:22.820 the very practical reason why insurance companies 00:40:22.820 --> 00:40:25.440 hate knob -and -tube wiring. It is a massive 00:40:25.440 --> 00:40:27.840 landscape, and it's a lot more complex than just 00:40:27.840 --> 00:40:30.539 kicking the tires. If I have to summarize this 00:40:30.539 --> 00:40:32.599 for the listener who is maybe driving to an open 00:40:32.599 --> 00:40:34.880 house right now, what's the big takeaway? The 00:40:34.880 --> 00:40:37.480 key takeaway is that a home inspection is a tool 00:40:37.480 --> 00:40:40.420 for informed decision making, not a crystal ball 00:40:40.420 --> 00:40:43.760 and not a warranty. It is a visual snapshot in 00:40:43.760 --> 00:40:48.000 time. It reduces risk significantly, but it does 00:40:48.000 --> 00:40:50.460 not eliminate it. And it's not a cast fail exam, 00:40:50.539 --> 00:40:51.960 right? I think people wait for the inspector 00:40:51.960 --> 00:40:54.639 to say the house passed. Exactly. The house doesn't 00:40:54.639 --> 00:40:57.519 pass or fail. The house just is. The inspection 00:40:57.519 --> 00:41:00.239 tells you the condition. You decide if it passes 00:41:00.239 --> 00:41:02.579 or fails based on your budget, your skills, and 00:41:02.579 --> 00:41:04.920 your risk tolerance. Right. A house with a bad 00:41:04.920 --> 00:41:07.940 roof might be a fail for a first -time buyer 00:41:07.940 --> 00:41:10.400 with no savings, but it might be a pass for a 00:41:10.400 --> 00:41:12.260 contractor who knows he can replace it himself 00:41:12.260 --> 00:41:18.920 and wants to fix it. Jim, becoming cheaper. Everyone 00:41:18.920 --> 00:41:21.760 has a smartphone. We talked about AI. How long 00:41:21.760 --> 00:41:24.300 until the definition of non -invasive changes? 00:41:24.719 --> 00:41:27.219 That is the big question, isn't it? As technology 00:41:27.219 --> 00:41:29.780 evolves, will the legal standard of care shift? 00:41:30.059 --> 00:41:32.119 If an inspector could have seen the leak with 00:41:32.119 --> 00:41:34.739 a $200 attachment on their phone, will the courts 00:41:34.739 --> 00:41:37.300 eventually say they should have? Will non -invasive 00:41:37.300 --> 00:41:39.440 come to mean anything short of a sledgehammer? 00:41:39.639 --> 00:41:42.079 And in markets like India, where the builder 00:41:42.079 --> 00:41:45.239 has held the power for so long, will the consumer, 00:41:45.500 --> 00:41:48.280 armed with more information and more legal rights, 00:41:48.539 --> 00:41:51.320 eventually force a fundamental shift in transparency? 00:41:51.929 --> 00:41:54.949 I believe so. Information is power. The more 00:41:54.949 --> 00:41:57.429 buyers know, the less they will fear and the 00:41:57.429 --> 00:42:00.389 more they will demand. The days of buying a multi 00:42:00.389 --> 00:42:03.389 -million rupee flat on vibes alone are numbered. 00:42:03.610 --> 00:42:05.289 Well, next time you walk into an open house, 00:42:05.409 --> 00:42:07.269 maybe don't just look at the granite countertops 00:42:07.269 --> 00:42:09.090 and the backsplash. Look at the corners of the 00:42:09.090 --> 00:42:11.690 ceiling. Look at the grating outside. And remember, 00:42:11.869 --> 00:42:14.510 what you see is only half the story. Indeed. 00:42:14.809 --> 00:42:17.889 Look closer. That's it for this Deep Dive. Thanks 00:42:17.889 --> 00:42:18.289 for listening.