Question 1

You have a relationship with a real estate agent who offers to refer additional clients your way if your findings for a particular site are favorable to the prospective buyer. How do you handle this offer?

Accepted Answer

A)  You thank the real estate agent and agree to the terms.
B)  You tell the real estate agent that accepting the offer would not be ethical.
C)  You report the real estate agent to the authorities for breaking the law.
D)  You notify all parties and appropriate authorities of the offer. B

Question 2

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

Accepted Answer

A)  Clients can sue you any time for any reason, but it does not mean you are liable for damages.
B)  Your client can only get back the amount they paid for the inspection, not $3,000.
C)  You will likely lose your general liability insurance if you are found guilty of negligence.
D)  None of the above A

Question 3

When you first meet with a client, you should NOT disclose which of the following?

Accepted Answer

A)  That you have errors and omissions insurance
B)  That you have an inspection contract they must sign
C)  That you will provide a final written inspection report
D)  That you will not be conducting a "technically exhaustive" inspection A

Question 4

A home inspector may test for which of the following?

Accepted Answer

A)  Mold
B)  Radon
C)  Animal infestation
D)  Insect infestation
E)  None of the above

Question 5

While conducting an inspection, you notice a problem with the furnace but forget to include it in the inspection report. After purchasing the home, your client files a complaint against you. Which type of insurance protects you in this situation?

Accepted Answer

A)  General liability insurance
B)  Errors and omissions insurance
C)  Homeowners insurance
D)  Property insurance

Question 6

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

Accepted Answer

A)  Because you want to market your services on the Internet
B)  Because you hope to buy a franchise business in the future
C)  Because you need to manage expenses and revenue
D)  Because you require guidance for day-to-day business decisions

Question 7

The buyer and seller offer to split the inspection fee. Can you accept payment from both parties in this situation?

Accepted Answer

A)  No, this is against the law.
B)  No, this is a conflict of interest.
C)  Yes, this is acceptable as long as the split is 50/50.
D)  Yes, this is acceptable as long as both parties agree upfront.

Question 8

You learn that another inspector is working with a real estate broker to illegally speed up the purchase of vacant homes. As an independent contractor, you know it is impossible for a single inspector to conduct the number of inspections reportedly completed in the identified time period. What should you do with this information?

Accepted Answer

A)  Do nothing since it is none of your business.
B)  Report your suspicions to the American Society of Home Inspectors (ASHI) .
C)  Contact local authorities about your suspicions.
D)  Notify the inspector and the real estate broker that you are aware of their scheme.

Question 9

Upon conclusion of the inspection, your client wants your opinion on whether or not you would purchase the home. How do you respond to your client?

Accepted Answer

A)  "The home is in great shape - I would make an offer today."
B)  "It is not appropriate for me to recommend purchasing or not purchasing the home."
C)  "I believe I could find a better home for the amount of money the seller wants."
D)  "The home is a disaster - I would start looking for another property today."

Question 10

A real estate agent contacts you and proposes a partnership so she can include your home inspection services in her marketing materials. In accordance with professional standards and the code of ethics for home inspectors, you

Accepted Answer

A)  Thank her and send her your home inspection services description to include in brochures.
B)  Thank her and offer to reciprocate by including her services in your business promotions.
C)  Thank her but refuse because you do not want to compromise your integrity.
D)  Thank her but refuse because you already have an established marketing plan.

Question 11

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

Accepted Answer

A)  General liability insurance
B)  Home inspector license
C)  General business license
D)  All of the above

Question 12

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

Accepted Answer

A)  There is no ethical way to do this so you should recommend another contractor.
B)  It is best not to recommend specific contractors to clients for any reason.
C)  Offer to make the recommendation for a small fee from the client.
D)  Make the recommendation but disclose your relationship to the specialist.

Question 13

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

Accepted Answer

A)  Tell the client to find another home inspector.
B)  Get offended and tell other home inspectors to avoid the client.
C)  Explain that you have no vested interest in the inspection outcomes.
D)  Refer the client to another home inspector for questioning your ethics.

Question 14

As a housing inspector, you do not want people wandering around while you are reviewing the property. Should the client be present during the home inspection?

Accepted Answer

A)  No, it is not necessary for the client to be present.
B)  Only if the client wants to be present
C)  Yes, the client should always be present.
D)  Only if the homeowner permits the client to be present

Question 15

Is it true or false that you should not inspect any component or system that is not specifically included in the Standards of Practice for home inspectors?

Accepted Answer

A)  It is true because your insurance company will not protect you if something happens.
B)  It is true because there is no reason to go above and beyond what is expected.
C)  It is false because the Standards of Practice simply establish the minimum requirements.
D)  It is false because you can earn more money by inspecting more components and systems.

Question 16

It is not uncommon for clients to have complaints about inspections, especially after they have purchased a home and realized the cost of certain repairs. If you get a complaint from a client, how should you handle it?

Accepted Answer

A)  Call the client to discuss the matter.
B)  Send a written response to the client.
C)  Offer to refund their money.
D)  Do nothing and hope the complaint will go away.

Question 17

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

Accepted Answer

A)  Buy a franchise business
B)  Establish a partnership
C)  Participate in continuing education
D)  Offer cheap inspection fees

Question 18

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

Accepted Answer

A)  Accept the offer since you will still be sharing findings with your client.
B)  Ask for an additional $100 for your efforts if you find major defects.
C)  Tell your client what has transpired and get her opinion.
D)  Decline the offer and suggest your client get a technically exhaustive inspection.

Question 19

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

Accepted Answer

A)  Take advantage of the opportunity to see the inside of the home.
B)  Conduct the inspection for your client but keep your needs in mind.
C)  Disclose your interest in the property upfront to your client.
D)  Turn down the client and suggest they get another inspector.

Question 20

There are times when you may need to return to a property for a follow-up inspection. What is required of you during a re-inspection?

Accepted Answer

A)  A final recommendation for the client
B)  A complete walk-through similar to an initial inspection
C)  An update of the inspection report
D)  None of the above

Exam 3: Business Operations