Ian R
Hey Beon, I found the most amazing thing to treat poison ivy with.
Beon DeNood
What are you gonna tell me, like peanut butter or something like that?
Ian R
No, no, way grosser. Preparation H. So listen, poison ivy is a real problem for us home inspectors. It’s always like, the vacant house and there’s like, all these plants. All of a sudden, you’re covered in it. So I went and got a tube and put it on my poison ivy. And it is, it is amazing.
Beon DeNood
I just, I’m just imagining.. I’m imagining this guy running into like a drugstore, and buying like, three or four things of Preparation H with all these red blotches all over.
Ian R
The pharmacists are like, whoa, hold up, buddy.
Beon DeNood
I think you got the wrong idea.
Ian R
I’m like, wait, you haven’t met me yet. You haven’t met my personality. This goes exactly where you think it does. But no, I was, I was actually using some other stuff for years, and I’m highly allergic to it. I almost died from it when I was, like, 19. So when I get it, it gets really bad, and nothing ever works on me. And so looking, and I’m like, you know what Preparation H is for swelling and for itchiness. And I’m like, huh? So I did a bunch of research on the chemicals in it, and it’s been the best relief for poison ivy that I’ve ever had in my entire life. So there you go, everybody, if you’re inspecting houses and you get poison ivy this year, especially in the Northeast, where it’s been dry, congratulations. Grab a tube of Preparation H. I am not giving you medical advice. Check with your doctor before, before you rub it all over you. I imagine if you use it everywhere, I think there’s a chemical in it. Man, this is really divergent, but check with a doctor. I don’t know, but it worked really well for me. How are you doing, Beon?
Beon DeNood
I’m doing okay. But yeah, while we were talking about poison ivy, I think the worst case of poison ivy ever saw was, was this one friend of ours. He had a tree, he was a hunter, so he had a tree stand, and he knew there was poison ivy on the tree, so he was always careful to climb around it. But he was climbing out of his tree stand the one day and he slipped, and all he could do was like, hug the tree trunk as he was sliding down, and he got poison ivy literally everywhere, down his entire body. Yeah, it was not good.
Ian R
Well, the reason I bring this up because it’s a nice segue into the rest of our podcast, because we need preparation for what’s, what’s happening in the market.
Beon DeNood
Good, because that’s hurting a lot of people out there.
Ian R
The market is swelling. But no, it’s good to have you back on. This is going to be basically our, it’s not, it’s not our market outlook podcast. It’s basically the state, it’s like the state of the market. What’s going on out there? Because there’s been so much going on, even here at ITB, we’ve been pumping out new features, new design elements in our app, all sorts of great stuff. But in the market as a whole, it’s just been crazy. So we thought it’d be really good idea to kind of update on what’s going on out there, especially as of the recording of this podcast, it was only a few days ago where everybody was screaming, you know, market crash, stock market crash, because there was one bad jobs report. I remember everybody’s emailing me and messaging me, pull all your money out. I’m like, just wait, give it a couple of days. My brother’s a CPA. He’s like, just give it a couple of days. Need more bad job reports than that. And it came back for the most part, as of the recording of this podcast, this podcast will probably not go out for another week, or maybe even two. But, um, there’s just a lot going on. There’s that. There’s also the fallout from the NAR lawsuit, which is happening on August 15, they got some things extended and pushed out. And just overall, what’s happening. Is there anything in particular you wanted to start off with, Beon?
Beon DeNood
No, nothing in particular. But yeah, everybody was kind of freaking out a few days ago when the stock market jumped down. It was interesting. I learned something about how the, what do they call it again, but it’s something to do with the, with the Japanese Nikkei index, with the yen.
Ian R
Yeah.
Beon DeNood
I guess it’s, it’s cheaper to borrow money. But anyway, so their, their market reacted first, because I was actually, I was, sometimes I’m, I’m up late at night, I can’t sleep. So I was just looking at the markets and also, and I looked and I was like, whoa, Japan is down. It was down 10% and of course, our markets are closed, and then they closed 10% so the next morning, that’s when the US markets just freaked out, and they were reacting to the US fears of US recession. And you know, it all kind of played together, but it was generally accepted as an overreaction. So markets have rebounded, and things are are looking a little better.
Ian R
Yeah, and you know what? There may be a recession. We’re actually overdue for one. Some people say we could have had a recession, and we’ve said this before on the podcast, but a real recession kind of takes about 18 to 24 months to get out of, and we haven’t really experienced that. As a home inspection company owner, as a home inspector myself, I want the recession. It’s going to reset the market, going to create inventory. It’s going to do a lot of things for us. Interesting factoid, only 30 some odd percent, about 33% of buyers were first time home buyers on the market.
Beon DeNood
Oh, wow.
Ian R
Yeah, that’s according to NerdWallet. And so I went and checked the National Association of REALTORS website, and they actually said it was 31% were first time home buyers. So it’s about the same.
Beon DeNood
What is the percentage usually like, what is it traditionally been higher or lower?
Ian R
Higher. Yeah. Okay, basically, they’re using it as a number to show that it’s, the market is pushing first time homebuyers out of the market.
Beon DeNood
Okay.
Ian R
And we as home inspectors, especially new guys, that’s where we bust in. So if somebody bought a house 10 years ago, and they used me as the home inspector, I have a good 80% chance that they’re going to hire me again, especially if you have a good marketing campaign. So I get that recurring work all the time. So that recurring work, those new guys don’t even get a chance at, right? So if we’re a newer home inspector, that especially hurts us not having the first time home buyer. So we count on the lower percentage of second or third home buyers not having their inspector around anymore, maybe retired, maybe moved, maybe went out of business, but that’s still a lower percentage and a lower chance. Usually they’re referring out and things like that. It’s a big, complex web but in short, less first time home buyers on the market is not good for most new home inspectors.
Ian R
Yeah, it does make sense. And that also means there’s generally speaking, going to be a higher percentage of investor buyers, too. They tend to push the first time home buyers out of the market. The percentage that was presented on some websites, and it was really hard to, so I don’t want to present it as a hard number, but it was 50% or more would typically be what, what some websites presented as, hey, this year it was 50 some odd percent or more, sometimes a little less. All I know is they’re saying it’s a low, low percentage of first time homebuyers in the US anyways, which makes sense. Higher house prices pushing first time homebuyers out. So that does affect, affect our industry.
Beon DeNood
Makes sense.
Beon DeNood
Higher interest rates, too, obviously have been a big issue, that I guess now we’re, we’re lower than what we’ve been in a while. So some, some guys, are optimistic that we may see a bit of a trickle with. Some folks have been waiting out, possibly considering getting back in or, I guess it doesn’t affect home inspectors. But guys who did get out a mortgage when it was at its peak are now considering, like, you know, refinancing to get a lower interest rate. So, yeah, that won’t maybe necessarily affect home inspector business, but maybe, instead of seeing a fall lull, like we usually do, it could maybe sustain us through, what do you think?
Ian R
Well, I have to disagree with a couple of things that you said there. I think people who had the, the peak rates already went for the lower rates when they were like 2.9 and 3.1% I think that, I think that phase is mostly done. I think there are some trickle effects of that. I don’t think there’s going to be a fall lull. I really don’t. Usually there’s going to be a lull at the end of August and most of September, school season starts. That’s just, you know, families buy homes. I also think there’s going to be a lot of people buying houses that don’t have mortgages anymore. So I don’t think the mortgage rates are going to matter as much, because you think, if you think about only, let’s say, take that lower number, 31% of home buyers are first time home buyers. That means, hypothetically, 69% of home buyers need little or no mortgage, because that means they’re selling a home. So if you’re selling a home for 700,000 and you’re downsizing to a $400,000 home, you don’t need a mortgage. Or even if you’re upgrading a little bit, you don’t need much of a mortgage. So there’s going to be some good things for us in that. I do worry about the number of investors in the market, because that does scare me. I don’t like flippers. I know most of us don’t like flippers. It’s not a great, not a great inspection market to be in. But usually October, November, right up to Thanksgiving, usually the week before Thanksgiving is actually, that’s a six to seven week period of our busiest time of time of the year. Spring is obviously the busiest, summer, summer second, but sometimes that six to seven week period in the fall time can be as a whole, the US and Canada are busiest time for home inspections. People trying to get it all done before the holidays. And then we go through the invariable December. We’re too busy with our families and holidays to pay attention, pick up a few inspections before Christmas. Then January, February, we all think we’re going out of business. We all freak out. I get a million emails, try to tell everybody we’re not going out of business. Then by March and April, everybody’s like, hey, I’m back in business again. Happens every year. But this year, like we said at the beginning, it’s, this isn’t a banner year. It’s not, it’s not going to be our biggest year. You know, something that has a bearing on the market. And what we’re doing is NAR, the settlement, we’re actually starting to see that. Have you heard anything about that, Beon?
Ian R
I haven’t, actually, since the last time we spoke about it, I’ve kind of not, been looking at what’s going on there. So August 15, you said it was, some of the stuff comes in effect, huh?
Ian R
Yeah. And there’s a lot of moving parts. It was supposed to be July, but then how they worded some things and some changes and yada yada yada. But the NAR changes really happen in on August 15, probably around the time that we’ll release this podcast.
Beon DeNood
Okay.
Ian R
Here, here’s some things that are going to make this change. Remember, everyone, though, this is not a law. This isn’t a law that was put in place. This was a settlement for the nation’s largest association of realtors. So it’s not a law. And we could have done all of this before the settlement, and you can still do it the old way afterwards. It’s just that if you’re a NAR agent, if you’re, if you say you’re a realtor, you cannot, you cannot do this. You can’t write it into your contract. But they’re gonna starting August 15, you can’t roll the, can’t roll the commission in to one big percentage, so you can’t have the seller’s agent negotiate that. So it’s kind of interesting. Buyers won’t necessarily pay out of pocket, though. And I said this on one of our previous podcasts. This is changing our industry, not as much as I had hoped, though, and I’ll tell an anecdote here in a minute. But the money can come directly. There’s four ways that they can go about it. The money can come directly out of the seller’s pocket. The money can come directly out of the buyer’s pocket, which is the unlikely one. The buyer and seller may split the payment. That’s still unlikely. Fourth, the buyer may pay indirectly, by adding their agent’s commission to the price of the house when they make an offer. So it’s a buyer’s credit, a credit at closing, however your area terms it. So here’s an example of how an indirect payment might work for a buyer who is paying a 3% commission. So the buyer finds a house, cost him $400,000. The 3% commission is $12,000. The buyer offers $412,000 and asks the seller to transfer $12,000 to the buyer’s agent in closing.
Beon DeNood
Okay, so it’s basically the exact same thing that’s happening now, but it’ll be transparent and actually itemized, as opposed to this mystery deal that was happening in the background.
Ian R
Yep.
Beon DeNood
Okay.
Ian R
That is going to be the most likely one, in my opinion. So interestingly, we were, we are selling a building, and the, the seller’s agent, they don’t, they’re not saying anything. And all sudden, we get the contract, and I’m reading through it, line by line by line, and I’m like, wait a second, it says in here that we’re going to pay the buyer’s commission in addition to the seller’s commission. We paid the seller’s commission and have a contract with them to split it, but they can’t. They’re like, well, we can’t split it anymore. I’m like, well, I’m not going to give you 6% and then pay 3%.
Beon DeNood
Oh, they were still asking for the first… Yeah, you see that just shows some of the delusion out there in the industry right now. I’m sorry. I won’t get on that horse, but man, oh man, really, we’re gonna just take the full 6%.
Ian R
They’re like, I did my job. I’m like, okay, that’s not what our contract says.
Beon DeNood
And to someone who’s not, who misses the other lines, that just looks like normal, yeah, well it’s normally 6%, you know, so here you go. Oh goodness.
Ian R
And then so it’s like, all right, we’re gonna need new contract or something. Because, listen, I don’t mind doing the credit at closing. It’s like, okay, they’re gonna pay me 412 and then I pay them 12 back, or what, whatever. That’s fine, but I have no standing with their agent. So from a legal standpoint, I’m not going to pay them. They want me to pay the buyer’s agent directly. And I’m, like, of all the scenarios that could have happened in here, you choose the one that doesn’t make, that makes the least sense.
Beon DeNood
Pretty, pretty gutsy move. I think, I think it shows some of the psychology that is exactly been the problem in the industry.
Ian R
Yeah, it really has. And she’s a decent agent, not great. Like, I kind of worried. I’m like, Is she worth that 3%? I’m kind of doing a lot of work here, you know. But now she’s like, you know what? I want all 6%, and you have to pay the buyer’s agent. So the reason, I think, though, in reality, besides her delusion, was that the buyer’s agent needed commission, but he can’t get it out of the seller’s agent, so he and the buyer’s agent, or the buyer, was just like, I’m not going to pay you directly. So the buyer, I think the buyer’s agent was asking for commission from us, the seller, okay, yeah, because everybody’s doing it, and that was one of the problems we talked about before, everybody’s doing it different. Yeah, it different. Everybody has a different idea of what should go down. So now there’s no cohesion in the real estate industry. So every deal is going to be a snowflake, completely different than the other one.
Beon DeNood
It’ll probably settle into a pattern of normal practice, you know, after a little bit. But we’re gonna have some interesting moments here. Because, I mean, you’re pretty savvy seller, right? So you were able to pick that up. You dialed into the situation. But there’s a lot of people that are not, and it’s it’s gonna lead to some, some fun times ahead. I can see for some.
Ian R
And so here’s how I think that affects our industry. I already know personally, agents that are leaving the real estate industry. So I love real estate agents. Some of those smartest people I know are real estate agents, but it’s, I also know some of the people that are the least smart people that are real estate agents. So I’m trying to find a nice way to say this.
Beon DeNood
If you’re a real estate agent, and you’re a friend of Ian’s, you get to decide which group you fall in.
Ian R
Yeah, which group you fall in.
Beon DeNood
Whichever one makes you feel better.
Ian R
But I honestly believe that. But this is going to cull the herd of the agents that are less savvy and lessen less in tune with things of how to make it work. Because already I’m seeing agents that are kind of bumbling around in the industry, but for some reason, they find other agents that would carry their load. And they’re like, oh, this somehow magically worked out, and I have money on the table. Now they’re like, I don’t, what do I do? And they’re just walking around their offices, what do I do? What do I do? And everybody’s like, just read this. Do this. And they’re like, that sounds complicated. Those agents are already leaving, and those are the agents that always made business hard for me. I love the agents that we work with, highly intelligent. They’re like, I get what you’re saying. What about this? Easy to work with. Ones who can’t change their own socks are the ones that make our profession hard to do. The ones that call us and are like, you called out the bathroom sink. What’s wrong with it? It’s in the report. You expect me to read your report to understand what you called out? Yes, yes, I do. So you spend a lot of time helping those people, because we run a business, and we want to be polite and loving and kind. I’m okay with that culling the herd.
Beon DeNood
Yeah. And it seems the sentiment is the same, even within the real estate agent community. Because I remember, leading up to that, that lawsuit settlement, I was trolling quite a few of the forums, you know, for realtors and agents, we should say, probably more broader. But that was, that was, that was the sentiment, as well as they themselves, were upset about bottom feeder agents, you know, that were giving the industry a bad name, who show up at the last minute in their flip flops to sign some paperwork, and they walk away with half of the commission. So it seems like, yeah, it is offering a reset, even, even from their perspective.
Ian R
But this is how it affects us. Those as you put it, bottom feeder agents, those agents that show up in flip flops. My favorite one is, we’re doing a million dollar home 15 years ago, so it was a bigger deal back then. She shows up in her gardening clothes. And I’m like, you want to follow around? She goes, no, I don’t care. And I’m like, she’s like, my buyer’s not here. I just, I’m just here to open the door. And she just sat there and played candy crush on her iPad or whatever it was, and so I’m like, oh my gosh, but the problem is, if we rely heavily on real estate agent referrals, we’re going to lose a lot of real estate agent referrals.
Beon DeNood
That’s true, because that comes from the buyer end, right? Yeah.
Ian R
Yep. So now the pool of referrals gets a lot smaller. A lot, lot smaller. So doing more direct to consumer marketing is still the best way to do it in my opinion. You got chatGPT coming out with its own search engine, Google ads are, for some reason, making a resurgence. Google Local Service ads are doing fantastic. Those kind of things are going to allow us to expand our marketing base, rather than going with realtors. Interestingly, a home inspector, we just built them a website. And he’s like, Ian, I never really had need for a website. Then all of a sudden, half my agents left the industry, and three of them died. He goes, I’ve been doing this for 20 years, and he’s like, now, all of a sudden, they’re gone. And I’m like, and he’s like, now people are like, what’s your website? And I’m like, oh, I don’t have one. And he’s like, and I tried to do something myself, you know, it’s just a anecdotal way of saying it matters. And we can’t rely on a small pool of agents, or even a large pool of agents, because I think over the next year, we’re going to see a lot of them, let their license just go off into the sunset, personally.
Beon DeNood
Yeah, good point. So change, change of focus a little bit, if you haven’t been focusing on direct to consumer marketing, definitely time to start ramping up that, that side of your game.
Ian R
Yeah, commercial real estate, still calling it, every bit of worth the effort to get into commercial inspections. And just as a reminder, I get asked this a lot after the podcast we did earlier this year on commercial inspections. I’m just going to review that real quick. In my opinion, the best way to do it is have an LLC, name it whatever you want, then do a DBA for that LLC, for a home inspection company and DBA under the LLC for commercial inspections, and keep them dissimilar enough so you can have ABC Home Inspections, but then your commercial company be called Highline Commercial Building Inspections, whatever you want to call it. I’m just making up names, and have it be different enough. There’s, there’s something called um, citation confusion, or we probably it’s more of an internal term. Basically, if you have two companies named similarly, Google just lumps them all together and it creates…
Beon DeNood
The same entity. Yeah.
Ian R
It creates problems. So if you’re ABC Home Inspections and you’re ABC Commercial Inspections, you’re going to get all those things mixed up in search results, and it’s gonna actually cost you conversions.
Beon DeNood
Yeah, good point.
Ian R
But that’s the way I recommend it personally, because I like to have one big insurance policy for both. Now, if you are running hot and heavy in commercial, completely separate it, do a completely different LLC. But I have had so many guys call me since those podcasts and say, Ian, I want to just add a web page to my home inspection website that I do commercial inspections, but I want to have it work completely as well as having a completely separate website and brand. And they asked me so many different ways, and it all leads the same answer. I’m like, you can do that, but you’re just going to lose conversions. So that’s my public service announcement.
Beon DeNood
Yeah, good advice.
Ian R
Something I want to get your opinion on. And this is a sensitive subject, but the lawsuit with Spectora, Report Host versus Spectora, has come back. Super ugly, super, super ugly, way uglier. It’s like it fell into a vat of poo and acid and then came back and started snarling at you. It’s gotten bad, right?
Beon DeNood
Yeah, like you, said, sensitive subject, but I think we, as a software company, we’re interested in it, you know, because we’re, we’re concerned about precedents that anything like this sets in the industry. And I think any one of our listeners in some way form or another, are interested in the topic, because you don’t want anybody calling you up and, you know, potentially suing legal or, you know, threatening legal action because of narratives that you’re using in your reports. So, yeah, I don’t know all the details of, and I’m not a legal expert, but the fact that these guys are coming back again, it, it’s, it’s not a, I mean, you don’t come back again unless you got something and you know, it’s a very quick succession, so it’s concerning. I’m not sure you know what the Spectora guys are, how they’re viewing it, or what the technical details are of everything, but yeah, I’m just hope that it ends up in a place where it’s good for the industry, because if you know, if it heads in a bad place, it could be a bad thing for a lot of people in the home inspection industry.
Ian R
Yeah, so if you’re just finding out about this, we did a podcast on the lawsuit that Report Host did, and basically the sum of it is, Report Host said that Spectora took their comments and gave them to their users instead. And that Spectora basically had a, what was called a Report Host template or something like that. We’re not legal experts, but they settled. Nick Gromicko did a podcast with us and Nathan Thornberry, and they he actually tried to, Nick, tried to do an injunction and all that stuff because it was a bad precedent for the inspection industry, which is where we have a problem with it. Instead of fighting it, they said, okay, here’s a bunch of money, and we’ll take down all those reports and all that other stuff. And users were upset about it. Individual home inspectors were being contacted by Report Host and or their attorneys. I don’t know how that worked out. From what I was told, at least one or two users ended up paying money. So can you imagine just being some dude out there saying, just as a random example, I don’t know if this is one of their comments or not, but GFCI was not functional at time of inspection. Then all sudden, you get a demand letter for $7,000 saying that you’ve been using their comment. Nick actually went back and found that most of their comments came from InterNACHI, Kenton Shepherd wrote them.
Beon DeNood
Yeah, so that’s an interesting point, because that’s why Nick is so interested in it, because that’s intellectual property that InterNACHI owns. That’s, you know, so nobody can just take that and copyright it, and now it’s, now it’s theirs, and you can sue people for it. So, so that’s, that’s why Nick is engaged. But not that example you just, you just gave there. This is an interesting example, because I guess one of the arguments being made is that it was made out that simple narratives like that is what Report Host was concerned about, you know, more generic narratives, because that’s what was being flagged, I guess, like short statements like that that, you know, anybody can come up with. But I guess what they’re taking issue with is, is longer, more complex narratives that are clearly being used. You know, it’s like one thing to accidentally. I mean, in the scope of being a home inspector, you can have a few single sentence things that you write as narratives, and you take a group of 10 inspectors, and probably half of them wrote it almost word for word. Others will maybe have a slightly different approach, but generally they’re going to be pretty much the same. So copywriting terms like that, there’s no point, right? You can’t do that. That won’t hold up in a court of law. But I guess the point that’s being made now with this, this next right at it, is that there are much more extensive, more research, elaborate, like narratives, that you know, if you put 10 inspectors in the room and tell them to write a paragraph on the topic. Not one of them is going to come up with the same thing, but now they’re seeing it spread across hundreds, or however many reports you know that they found to be violations. So I think that’s what casts an interesting light on it, because it seems to maybe not be as frivolous as what it was originally being made to be. Now I don’t know the truth of that, but that’s, that’s why Report Host is back at the table. They’re saying it wasn’t about all those little one sentence narratives. There’s larger pieces of work that we’ve been working at, and that’s what we want to protect. So how it shakes out? I don’t know. I don’t know. I’ve never seen report host narratives. So I have no idea what they look like, but, but that’s, that’s the claim.
Ian R
Yeah, and we don’t know if InterNACHI actually owns them. That’s what Nick says.
Beon DeNood
Right. That’s between Nick and Kenton and Report Host. We have no idea, yeah.
Ian R
And I mean, they went on record as saying it, so Nick doesn’t say stuff willy nilly like that. But I will say there’s actually more to why they came back. So you can actually go online. What’s that website, Beon, if you type in Report Host and Inspector, is it Justia or something like that, where you can actually read..
Beon DeNood
I think so.
Ian R
You can actually read the court documents.
Beon DeNood
Nick posted it on the, on the InterNACHI forum, that’s where I, I did most of my reading on that was, was on theirs so.
Ian R
So you can find it on InterNACHI forum, you can actually read it. Most of it’s legal mumbo jumbo. But they came back too because they said, listen, we settled in good faith. And they said that Spectora basically didn’t live up to parts of the settlement. Like they said that Spectora was supposed to say things in a different way. And instead, Spectora presented it a different way than they were expecting, or they thought was in the spirit of or in writing, of what they were supposed to do. And then there were some other things that they claimed that Spectora was supposed to do that they didn’t, so they came back, and they came back even harder. And I again, I’m no attorney, but I’m reading the document. I’m like, dude, that’s a strong argument they’ve made, and it looks like they got a new law firm. And these guys are no joke, like they’re not, they’re not the attorney down the road. So I’m really anxious to see how this turns out. I hope Spectora doesn’t roll over like they did before, and just basic, I’m gonna say it. I love the Wagstaffs. They’re great guys, but they rolled over. And basically stuck it to us as an industry.
Beon DeNood
Yeah, and I think that’s, that’s why I said, what I did at the beginning is I just hope whatever happens, how this thing shakes out, that it shakes out where. Because ultimately, you know, the home inspector, using a software platform, all you’re really interested in. You just want to do your job. You want to make your money. You want to feed your family. You want to do a good job, have a good reputation. You want to deliver a good report. And you want to walk away from that job and have confidence that you did the best thing you could do to deliver the best quality, right? That’s what we’re all after. And at the end of the day, you don’t want to be worried about, you know, what content is being used in your report? Where that came from? If I word it like this, it sounds too much like that. And I mean, who can do your job? You know when that is the case, so it sets a the result here will have an impact on the industry as a whole. And at the end of the day, I’m not an inspector, but I know all the inspectors just want to they just want to inspect. You just want to get out there and do your job and stuff like this. This, this is not good for for the guy on the street trying to do his job.
Ian R
So here’s the reality of it too. We could say, Well, I’m glad I use any other software. I don’t, I don’t use Spectora, I don’t use Report Host, I don’t use this or that. You could still get a phone call from this. Have you ever had somebody share a comment with you? Well, I’ve written all my comments. Okay, well, like Beon just said, did you write a comment and it sounds eerily like a Report Host comment, or eerily like, because it’s going to happen, I’ve written 1000s of comments. You don’t think that by the time I’m done writing a comment, that somehow me and some home inspector in Arkansas or Australia all of a sudden had the same thought to word it the same way. So now what that does is it opens it up for not only Report Host, but for anybody else, because now there would be a precedence to call us and say, hey, I saw your sample report online. I used one of these free online tools that will search, do a word search of the entire internet and come back. Come it’s called a harvester, come back, and it’ll tell me, hey, your report that somebody put online, or you put online has a phrase that goes into one of my reports, give me 10 grand. And, you know what? Have fun paying them. Right? That’s what, that’s what this does.
Beon DeNood
Right. Or, or go to, go to court, and, you know, we go to trial. I mean, who’s, who’s got money for that? You know, so..
Ian R
The only wins are attorneys.
Beon DeNood
Exactly so. And you know, it’s a very hot topic, just overall right now, because the whole rise of AI with like chatGPT and conversational AI, all this kind of stuff, that’s where a lot of authors, famous authors, are going back and saying, Yeah, I asked chatGPT to write something in the style of, you know me, and this is what it came out with, and that paragraph is almost verbatim, like my work, you know that I published in this book. So who’s going to get into trouble there, already there’s a lot of people suing chatGPT, but if you the person who have used chatGPT, and you take that content that was, you know, styled according to whatever author, you put that on your blog or your website, guess who’s gonna get sued, you are, you know? And you’re like, yeah, but I got it from chatGPT, yeah. Well, where did they get it from? So I think there’s a much bigger topic. And this is why this is an interesting time for intellectual property law, because nobody knows where the line is, at the moment, it’s gotten fuzzy, but they’ll, they’ll be, they’ll be looking to establish case precedent, obviously, maybe not for a smaller, I called it a smaller case like this, that’s done in like, a, I mean, I think it is a federal court, but it’s like, you know, just a state jurisdiction, but you’re going to see cases like this bubbling up to Supreme Court level, and they’re going to start setting precedents for how these things are going to be handled. Because if I wrote something and chatGPT is regurgitating it and somebody else is using it, I’m losing revenue. My stuff’s, my work’s being used, and that’s something I should be able to protect. But where’s, where’s the line? You know, when can I say it’s actually my work, or when does it become a product of someone else? It’s too heavily modified, and that’s where the law is going to have to try and decide, I guess.
Ian R
And there’s no simple way to go about it, because that’s like, I remember one time somebody copied one of our websites, and they said the CSS isn’t with it, is not within 12% or something silly like that. And I’m like, so you changed the red color around slightly, that’s all you’re saying. And I’m like, don’t do that. And so they, you know, they’re like, fine, you got us. But when you kind of get down to it, it’s at what point is it different enough? You know, if it’s, uh, if it’s a red painting, and you make it purple, but it’s the exact same, except it’s purple. Is that different enough? If it’s done in the style of too close to a particular work or too close to, you know, it’s like there’s no way to draw a clear line. So that’s going to create a large load for cases, and that’s and that’s the problem. It’s going to create a lot of case law and a lot of precedent to bring things to court. And that’s where the demand letters get hard for home inspectors. Just some guy, we make X amount of dollars per year feeding their family, single inspector, you get a demand letter, and the attorney’s like, man, it’s going to cost us 40 grand to fight this. Just pay the eight grand.
Beon DeNood
Right.
Ian R
And then you have to deal with that once every five years, because now you wrote another comment that sounds like somebody else’s comment.
Beon DeNood
Right.
Ian R
You know, it’s like…
Beon DeNood
Right. Yeah. And the more times they get paid, the more it sets precedent, you know? And even if it’s not like an official legal precedent, because when you settle a case, it isn’t entered into case law as a precedent or anything like that. But even among a community like the home inspectors. If I’m in a room again with 10 home inspectors, and you know, six of them have just settled and paid the guy to get them off their back, what am I gonna do? Stand up and say, no, I’m gonna fight this. Forget it, you know. So that’s where I really hope this is gonna go a direction where we can have a good, solid precedent set in the industry. We can put this thing to bed and be done with it.
Ian R
You know what I think is going to be interesting, law precedents. Remember years ago when Getty Images went on a campaign to sue people that were using their images without licenses, and they were doing large demand letters anywhere from a couple grand to 10s of 1000s of dollars or more. And I remember a couple of cases went to court, but ultimately people just ended up paying it. They got paid so much money. And the defense was always, I don’t owe you 10 grand, or whatever the amount was. I owe you for the price of the image. It’s like, I didn’t, I took a sandwich from the sandwich shop. I don’t owe you 10 grand for the sandwich, I ower you for the price of the sandwich, that didn’t hold up very well. Parts of it did. But look up one case in particular, if anybody’s interested, is a dork like me, there was one case, I think it was a bicycle shop, and that set a lot of precedent, but all that did was embolden Getty Images to send out more demand letters. They made a mint on that. I think they were hoping people would take their images, because they just used a harvester. At the time the harvester was, it was expensive, you know, 13, 15, years ago, but now those are, you can get them free online. You know, just once you hit your limit, you go to the next one. So not hard for people to start sending us demand letters and stuff like that, but that, I mean, this is basically an inspection news episode. I guess that’s what we’ll call this.
Beon DeNood
I guess so, we’ve gone from the market to like, case law with intellectual property.
Ian R
I mean, there’s a lot going on right now.
Beon DeNood
Yeah.
Ian R
And when it comes to any kind of news in the inspection industry, it’s all going to be related to what’s going on in real estate. And this case has been one that’s been following us around for a couple of years, and it’s already caused problems. Think of all the users right now. All the people who’ve just written reports, doing their job, that have paid 1000s of dollars or have otherwise, you know, had their reports taken down, and, you know, I think they were supplementally given a PDF version of their report. Man, that stinks.
Beon DeNood
Yeah, no, I tell you, Ian, and that’s why we’ve, like you say, that’s why we’ve been following it very closely, because, I mean, we have our user base, we want to make sure that that we’re doing things right and that one’s not exposed, you know. So we just don’t want to get to a point where, where you are doing everything right, and you can still have a target on your back just because somebody feels like it, you know, that that’s a situation we want to avoid.
Ian R
Yeah. Well, Beon, thank you for being on today. It’s always great to have you on, talk about poison ivy treatments.
Beon DeNood
Well, hopefully everybody feels a little more soothed and the swelling has subsided.
Ian R
Yeah, this feels like a podcast we do with David.
Beon DeNood
No, then we wouldn’t be able to air it, so at least this way it can get out there.
Ian R
Yeah, well, either way, thank you for being on, Beon, everybody listen in for our next episode, and we’ll see you soon.
Beon DeNood
Cool, thanks Ian. Have a good one.
Ian R
You too.
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