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Glug, Glug, Glug… [Sound of Orange Oil] … Aaaaaargh! … [Sound of Termites Dying]

January 23rd, 2008 · 8 Comments

Fellow 3 Oceans contributor and South Bay Keller Williams Realtor Bart Marchioni forwarded me a rather entertaining newsletter from National Building Inspectors. “Entertaining” and “Building Inspectors” aren’t normally found together…but — perhaps due to my macabre sense of humor — I couldn’t help laughing at this imagery…

Imagine a colony of termites infesting your home . Now imagine pouring orange juice on them. . Termites start drinking . Termites start dying.

Here’s what it might look like:

Orange oil and termites

Ok, actually, the orange substance isn’t orange juice, but rather orange oil, or Limolene, a “terpene hydrocarbon colorless liquid with an extremely strong smell of oranges.”

And NBI is a reputable firm, so no, they wouldn’t recommend dousing your home with OJ in hopes of killing your termite housemates.

According to the NBI newsletter, they’ve been asked by many people about whether orange oil is effective at killing termites. A summary of their opinion:

  • Yes, termites will be killed on contact by orange oil. (Of course, they would also be killed on contact with my foot!) Getting termites to come in contact with said orange oil, however, would be nigh impossible in the hidden wooden structures of the home — ie. in the vast majority of where you would find termites. A handy little diagram from NBI:orange-oil-and-termites-2.png
  • Yes, orange oil will “defy gravity” — ie soak in all directions, including upwards — but, for that matter, so does water. The key problem is that orange oil apparently biodegrades after only 4 days.

The personal opinion of the newsletter’s author is that NBI “would never certify a home as being ‘free and clear’ of a drywood infestation that was treated with orange oil.”

Disclaimer: I am not a termite inspector. More importantly, I am not your termite inspector. If you have termite issues, or questions about termites, please ask your friendly professional termite inspector. Above all, do not pour orange juice over your home in an attempt to kill your termite housemates. ‘Nuff said.

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Tags: Buyer · Consumer · Industry · Inspections · Seller

Four Simple Things Agents Should Consider Before They Refer a Home Inspector

January 24th, 2007 · 2 Comments

Did you ever hear the age old statement that the only stupid question is the one that is not asked? Well that applies to real estate agents too. Agents should consider asking the following simple but important questions before referring home inspectors or home inspection companies (hereinafter “inspectors”) to their clients. Referrals reflect the agent’s own professional judgment and may affect the most important pipeline of potential future business. My opinion is that agents shouldn’t use an inspector just because an officemate or friend recommends one or has been using one “for years.” An agent is a fiduciary who must put the client’s interests above everything else, must make the best possible recommendations, and must not act with expediency and convenience when there may be a better alternative or option that should be evaluated for their clients. The questions below are easy, simple and should be considered each and every time you refer an inspector.

1. Know Your Inspector’s Background, Experience, and Credentials

All agents should consider the inspection experience of the inspector they refer including how many inspections they have performed, their certifications, licenses, memberships, and how long they have been in this business. Why? Because all inspectors are not created equal. Most inspectors are contractors, but many of the best are not. Extensive training in the art of inspection or other code knowledge by far outweighs a contractor’s license, in my opinion. A properly trained individual who is well versed in all aspects of residential construction is critical to a well rounded inspector.

Although some states now require licensing for home inspectors California doesn’t. See California Business & Professions Code §§ 7195 et seq. There are however, professional organizations which require experience and training before an individual can become a member. The two primary associations in California are the California Real Estate Inspection Association, www.creia.org, and the American Society of Home Inspectors, www.ashi.org. Consider referring an inspector who is affiliated with one of these organizations.

Also consider the inspector’s relationship to their company. Are they the owner or just an employee? This is important because in my mind and my experience, an owner of a home inspection business cares deeply about their work and reports they produce because they are concerned about potential liability. However, an employee may not perform as well as an owner-operator because they have less at stake.

2. Does Your Inspector Have Errors & Omissions (E&O) Insurance?

Errors and omissions insurance (hereinafter “E&O”) is an important consideration. E&O may help resolve claims against the inspector, for items they may have missed during the inspection, after close of escrow. E&O insurance is not required for inspectors and there is currently no reliable data on the percentage of inspectors who actually are insured. I have heard it is in the fifty percent (50%) range; i.e. one out of two inspectors actually carries it. Consider asking the inspector for a current declarations page of their E&O policy. The declarations page shows the type of policy, i.e. claims made or occurrence, coverage limits, and the policy periods.

Some agents even request the inspector include the agent’s name and broker’s name as “additional insureds” on the policy. This added layer of protection for the agent and/or broker will also sometimes help resolve and settle potential claims which arise out of the referral. It may prevent an agent from having to pay their own carrier’s deductible if a claim arises and both the inspector and agent are asked to participate in resolution of the claim.

An inspector who does not have E&O may have a broad range of reasons why they are not insured. Whatever the reason consider referring an inspector who has E&O to provide better overall protection and value for your client.

3. Does Your Inspector Use An Inspection Agreement?

Today, most inspectors have their customers, your clients, sign inspection agreements prior to the inspection. These agreements detail the ground rules, the inspector’s scope of work, and items outside of their scope. I have personally reviewed hundreds of these agreements and most of them are fair, however, some have clauses that attempt to circumvent statutory and current case law. Consider getting your client a copy of the agreement well in advance of the inspection to give them a fair amount of time to read, consider, digest and then agree to the terms. If you or your client has questions about the terms make sure they are answered before your client signs the agreement.

A popular attempt by some inspectors is to place a limitation on their monetary liability by stating that their total liability for negligence, errors or omissions is limited to the cost of the inspection report. This is expressly prohibited by statute, but is sometimes cleverly navigated by limiting their liability to two or three times the cost of the inspection. See California Business & Professions Code § 7196. Although there have been no appellate court decisions testing these type of clauses which tip-toe around the limitation described above it is imperative that agents know what the inspection agreements say and give their clients plenty of time to digest this information and make a well-informed decision.

Another common avenue to reduce liability by inspectors comes in the form of a reduction in the statute of limitations to bring an action against an inspector. California Business & Professions Code § 7197 states that an action may not be brought against a home inspector four years after the date of the inspection, however, some inspectors attempt to contractually reduce this time period to one or two years. The issue of reducing the statute of limitations was addressed in the California Appellate court case of Moreno v. Sanchez (2000) 140 Cal.App.4th 1315, which held, that notwithstanding a contractual device to reduce the time period allowed in § 7197 the delayed discovery rule prevents an inspector from contractually reducing the four year statute of limitations if the defect, error or omission by the inspector was found or identified and the claim brought within four years of the date of the inspection.

4. How Does Your Inspector Handle Callbacks?

Callbacks are a fact of life. The first call or email you receive from your client stating that the inspector you referred “missed something” will probably be a frightening moment in your career. It can be a lot less disconcerning if you know the inspector is a stand-up business person, has a procedure to deal with these situations, and has E&O insurance. Make sure you know the procedure that your inspector has in place to deal with this situation. A smooth and simple callback procedure will calm nerves and will hopefully facilitate any repairs that may be necessary before tempers raise and attorneys get involved.


Ideally, issues between your clients and the inspector you referred will not arise, however, that is not reality. If you are interested in increasing your professionalism, adding significant value to the services you already provide your clients, significantly reducing potential risks to your clients, you and your broker, it is paramount that you consider the answers to these questions prior to referring an inspector. Knowing the answers to these questions before your referral may help give you a certain peace of mind and confidence that you are making a quality recommendation based on due diligence and professionalism.

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Tags: Home Inspections · Legal · Real estate