Top 10 Red Flags

1. Top 10 Red Flags What to look for as Real Estate Professionals Instructed by ______________________________

2. Course Objective To provide a basic understanding of defects to look for while showing a home, which could impact IFandHOWan offer is written. This list consists of the top 10 most common issues inspectors find in the field. IT IS NOT A COMPLETE LIST OF POSSIBLE DEFECTS. Knowledge of these items does not replace a full home inspection.

3. #10 – Site Grading & Drainage Issues

4. Grading & Drainage Right. Wrong. High grading around the foundation is one of the most common issues identified on inspection reports. The proper minimum clearance between the façade and the soil should be 4 to 6 inches. High grades are most commonly found in plater areas. Homeowners often place new mulch in platers without removing the old, creating poor conditions.

5. Grading & Drainage Ponding water around a foundation can cause a loss of support and settlement. Poor site drainage can also cause enough water to pond against the house that moisture can get through the façade. This can result in wood rot and mold issues inside the home.

6. Grading & Drainage: Solutions These problems are mostly avoidable by having the proper grade. The site grading should always slope AWAY from the foundation for at least 5 feet. Gutter downspouts should always direct the water at least 5 feet away from the foundation or into a site drainage system.

7. #9 – Galvanized Pipes

8. Galvanized Pipes “Galvanized” pipes are zinc-coated pipes that were meant to prevent rusting. Identify them by their threads and a silver-gray color on the scratched areas. Galvanized piping was common until the 1950s and lasts around 40 to 60 years.

9. Galvanized Pipes: Solution When galvanized pipes are found today, they are usually near the end of their lives and in need of replacement. Replacing an outdated plumbing system would cost buyers thousands of dollars.

10. #8 – Main Drain & Sewer Issues

11. Main Drain & Sewer Clogged or obstructed pipes are extremely common. Many times, underground pipes are damaged by tree roots. Look for RotoRooter or other plumbing stickers, which indicate the pipes have undergone previous maintenance. Signs of potential issues: • Trees and heaved walkways • Clean outs in the yard • Signs of basement flooding • Sitting water of unknown origin

12. Main Drain & Sewer: Solutions If drainage or sewage issues are suspected, a sewer line scan can identify any problems.

13. #7 – Faulty Electrical

14. Faulty Electrical Knob & Tube Wiring • Typically found in homes built between 1880 and 1940; prone to overheating when in contact with insulation or if the wires placed too close together Aluminum Branch Circuit Wiring • Typically used between 1960 and 1970; improper installation cause poor connections, which result in overheating and fire hazards Unreliable Brands of Electrical Panels • Federal Pacific Electric (FPE) Stab-loc breaker panels and Zinsco panels

15. Faulty Electrical: Solution Many of these systems are fire hazards and may be deemedun-insurable. Determine if a home’s electrical system is in need of repairs or upgrades with a professional home inspection.

16. #6 – Drywall Cracks

17. Drywall Cracks Drywall, like any other material expands and contracts with temperature. This movement often causes minor cracking on its surfaces. Cracking is normal at the intersections of walls and ceilings. These minor cracks can be easily repaired without cause for concern. However, diagonal cracks from the corner of doors or windows are often a sign of foundation movement. These types of cracks require professional evaluation to assess the extent of the damage.

18. Drywall Cracks: Solution Following an inspection, your report may identify a possible cause of any drywall cracks and the extent of their damage. For minor cases, a homeowner can easily repair cracks themselves. Depending on the severity, a professional should determine the cause to rule out any foundational issues.

19. #5 – Foundation Cracks

20. Foundation Cracks Most concrete foundation cracks can be easily repaired, but understanding their cause is key. Corner cracks are extremely common and are not a cause for concern unless a piece falls off or is removed. Even then, they only require some patching. When reinforcing steel is exposed or rusting, a coat of rust-inhibiting paint is required, along with a concrete patch to prevent further damage.

21. Foundation Cracks: Solutions Hairline Cracks (1/16 inches or Less) Hairline cracks are most likely cause by shrinkage during the curing process of poured concrete. They do not present any concern. Cracks 1/8 inches or Less Cracks this size may indicate either shrinkage from curing or foundational movement. This crack should be sealed and monitored. Cracks 1/4 inches or More Cracks this large are most likely due to foundational movement. A structural engineer should be consulted.

22. Foundation Cracks: Solutions Basement Foundation Walls Horizontal cracks found in the basement can be minor or major. Some minor cracks may be repairable DIY-style. Depending on their width and severity, some cracks may require stabilization repairs such as wall tiebacks or carbon fiber reinforcement. An NPI inspector would typically suggest a consultation with a structural engineer.

23. #4 – Poor Deck Conditions

24. Poor Deck Conditions Check for post deterioration or chipped paint. Less obvious red flags exist in a deck’s support system. Unstable support is often characterized by uneven or sloped boards.

25. Poor Deck Conditions Industry standards require all ledger boards be bolted to the house, and joist hangers must be installed on every joist with the appropriate type and amount of fasteners. All decks should have handrails.

26. Poor Deck Conditions: Solution Most deck issues can be self-repaired by a homeowner. For any structural concerns, a homebuyer can request an engineer consultation. Deterioration can be prevented with adequate maintenance and updated sealant.

27. #3 – Worn Roofing or Leakage

28. Worn Roof or Leakage Excessive granular loss is a key indicator of poor conditions. Note that the south-facing side of a house always displays the most wear.

29. Worn Roofing or Leakage Water stains on ceilings are the best indicator of a roof leak. Roof leaks happen, but they are often hard to spot and even more difficult to pinpoint and repair. A small leak left unrepaired can cause significant damage to the structure, drywall and finishes of a home.

30. Worn Roofing or Leakage Freshly painted ceilings should be a red flag for homebuyers, as it’s often an effort to conceal previous leaks. Excessive exterior vegetation is also a red flag, as it typically causes or conceals roofing damage.

31. Worn Roofing or Leakage: Solution The current roof condition should ALWAYS be considered when making an offer. Replacing or repairing a roof is a significant expense. For older, worn roofs, sellers can get a Roof Certification from a roofing company or general contractor, indicating a sufficient condition.

32. #2 – Mold

33. Mold Small amounts of mold and mildew around showers, tubs and sinks are normal. Small amounts on window sills are normal and most likely cause by condensation. These do NOT present a major problem or concern. However, mold found on walls or ceilings outside of a kitchen or bathroom DOES signal a problem. Typically, this signals a roof or plumbing leak.

34. Mold: Solution If you suspect a home has mold, encourage the owners to schedule a mold inspection immediately. Locating mold as soon as possible is the key to saving thousands of dollars.

35. Any Guesses for Red Flag Number 1?

36. #1 – Clients Who Don’t Want an Inspection

37. Clients Who Don’t Want an Inspection Whether it’s a homeowner who fears losing an offer or a homebuyer who wants to rush the acquisition process, skipping out on a home inspection should be a red flag to all parties involved. It’s important to remember that all homes have issues - even new ones. It’s always best to identify potential problems and address them prior to closing. Not having an inspection increases the risk for both clients and agents alike.

38. Clients Who Don’t Want an Inspection:Solution Encourage your clients to schedule an inspection by contacting your NPI inspector. A complete inspection thoroughly covers these property systems: • Lots and grounds • Exterior surfaces • Attic • Electrical systems • Kitchen • Heating & A/C systems • Windows & Doors • Foundation • Garage • Bathrooms • Fireplaces • Structure • Plumbing system • Interior rooms

39. If You Find a Red Flag: • Bring the potential problem to your client’s attention. • Consult a professional (property inspector, electrician, plumber, structural engineer, etc.) to determine the severity of the issue. • Determine the repair cost. NPI recommends getting at least 2 separate consultations from licensed contractors. • Keep the issues in mind during negotiations.

40. Congratulations on completing the course. Schedule an NPI inspection today. Your clients will thank you.