PROPERTY INSPECTION REPORT

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Serving The Entire Black Hills Region Phone: 605-391-1608 info@breenandassociates.com www.breenandassociates.com Owner: Patrick@BreenandAssociates.com PROPERTY INSPECTION REPORT Property : 222 Anywhere St., Anywhere, SD Inspected By : Patrick Breen #14687 07-25-12 9:00 am Occupancy : Unoccupied Name and License Number of Inspector Date and Time Weather Conditions : Sunny and Warm Client : John Doe Client Agent : #1 Realtor Name Real Estate Agency Company Seller : NA Seller Agent : NA Name Company

COUPON S COMPLIMENTS OF BREEN & ASSOCIATES, LLC Please visit www.breenandassociates.com and sign up for our monthly news letter of Home Health Care Tips and other propotional coupons. Thank You For Your Business. Good at Any of the Following Locations: 744 Main Street, Spearfish, SD 818 5th Ave. Belle Fouche, SD 203 North Egan, Madison, SD. This coupon good for one FREE drink* *Some restrictions may apply. Valid through 09-30-12 Signed: Dated: This coupon good for one FREE appetizer* or one FREE desert with purchase of entree. Signed: Dated: *Some restrictions may apply. Valid through 09-30-12 523 Main St., Rapid City - 605.348.0089 KNECHT HOME CENTER RAPID CITY 320 West Boulevard Rapid City, SD 57701 (605) 342-4840 NEWKIRK ACE HARDWARE EAST 1602 East St. Patrick Street Rapid City, SD 57701 (605) 343-9797 NEWKIRK ACE HARDWARE WEST 1724 West Main Street Rapid City, SD 57702 (605) 342-5678 Value only at participating stores. Coupon is non-transferable. Good for regular priced merchandise only. May not be combined with any other offer. May not be used for gift cards/certificates, licenses, yard waste bags or stickers. Original coupon must be presented. Limit one coupon per customer. $ 10 off Purchase of $30 or More. No Cash Value. Offer Expires: 09-30-12 Sponsored By:

Serving The Entire Black Hills Region Phone: 605-391-1608 info@breenandassociates.com www.breenandassociates.com Owner: Patrick@BreenandAssociates.com Index Definition of Terms: Page 3 Exterior: Page 4-6 Electrical Systems: Page 6-7 Heating, Ventilation and Air Conditioning Systems: Page 7-8 Plumbing: Page 8-9 Appliances: Page 10 Optional Systems: Page 11 Photos: Page 12-15 Disclaimers: Page 16

Serving The Entire Black Hills Region Phone: 605-391-1608 info@breenandassociates.com www.breenandassociates.com Owner: Patrick@BreenandAssociates.com Dear Mr. Doe; Thank you for choosing Breen & Associates to execute your building inspection.we attempt to give the client a comprehensive, clear-cut, unbiased view of the home.the inspection was conducted in accordance with the Standards of Practice established by the South Dakota State Real Estate Commission and the International Association of Certified Home Inspectors (InterNACHI).The purpose of this inspection is to identify 'MAJOR' problems associated with the property being purchased or sold, although minor items may also be mentioned. Where repairs or replacements are suggested, we recommend licensed professionals in that field be called upon to make those repairs.we can perform verification of repairs to ensure repairs or corrections were made and also advise the client to obtain all paperwork from professionals concerning the work performed. FUTURE FAILURE: Items in the home can and do experience failure without prior indications.this report is a snap shot of the condition of the home at the time of inspection.we cannot determine if or when an item will experience failure.therefore, we cannot be held responsible for future failure. If you have any further questions, please do not hesitate to call. NOTE: All home inspections meet FHA & VA inspection requirements. Only deficiencies are noted. Definition of Terms Inspected: The item was inspected and appeared to function normally at the time of inspection. Not Inspected: The item was not inspected due to inaccessibility, personal items, temperature, weather conditions, shut down or the item is not within the scope of the inspection. Not Present: The item was not present at the time of the inspection. Comment: The item was inspected and found to be deficient in some respect or in the inspectors opinion maintenance needs to be performed. Deficient: The item or system inspected may include inoperative, material distress, water penetration, damage, deterioration, missing parts, and unsuitable installation. Page 3

I = Inspected NI = Not Inspected NP = Not Present D = Deficiency I NI NP D Exterior Our exterior evaluation is visual in nature and is based on our experience and understanding of common building methods and materials. Our review does not take into consideration the normal wear associated with virtually all properties. Exterior surfaces should be kept well painted, stained or sealed to prevent deterioration. Grading & adjacent surfaces should be maintained and pitched away from the foundation to reduce the chances of water infiltration. 1. STRUCTURAL SYSTEMS A. Foundations Type of Foundation(s): Concrete block. The foundation was performing adequately at the time of inspection. Signs of movement with small vertical stress cracks on the south east, south west and west. Negative drainage at these locations have allowed movement of the footing. Recommendation: SEE: Grading & Drainage.With good positive drainage moisture in the lower level will cease - footing will remain stable. B. Grading & Drainage Grading: Structure is built on a flat lot. Grade at foundation appears inadequate on the west, south and south east - negative drainage towards foundation. Recommendation: Repair drainage at these areas to properly drain away from foundation to prevent water accumulation and further stress to structure. C. Roof Covering Materials Type(s) of Roof Covering: Fiberglass Shingles on main structure. Rubber membrane on upper level east deck. Note:With regular maintenance average life expectancy is between 20-25 years under normal installation/conditions. Estimated Age: 6-8 years. Viewed From: Roof level - observed by walking on, from upper level deck and with binoculars. ROOF COVERING OBSERVATIONS: Normal wear for age. D. Roof Structure and Attic Viewed From: Entered attic. Partial access. Approximate Average Depth of Insulation: Rolled type - 2 to 6 inches. No access point to upper attic - view of insulation from east west gable storage spaces. Rolled insulation applied to both lower level ceilings and interior walls in these areas. In this zone it is recommended to have an R-Value of 38 to 40. Blown type insulation of 10" will give approximately an R-38/40. Rolled type insulation of 12" will result in approximately R-38/40. Recommendation: Consider adding insulation in accessible areas. ROOF STRUCTURE OBSERVATIONS: West addition to original main structure - roof decking shows signs of moisture. West gable addition does not have any roof venting. Recommendation: Add vents in gable storage spaces. Page 4

I NI NP D I = Inspected NI = Not Inspected NP = Not Present D = Deficiency E. Walls (Interiors & Exterior) INTERIOR WALL OBSERVATIONS: Interior walls covered with the following material(s): Drywall. Stress cracks noted in several areas - east entry, lower level west and upper level west. Recommendation: SEE: Grading & Drainage. Repair wall cracks after repairing negative drainage. EXTERIOR WALL OBSERVATIONS: Exterior walls are constructed of the following materials: Pressed mineral board - Masonite - cedar shakes - horizontal lap siding over wood framing. Soffit(s), eaves(s), and/or trim are wood. Several small corners missing on masonite siding. fascia board on the south is damaged from leak in gutter end cap. Recommendation: Repair/seal areas where wall board is exposed. Repair leak in gutter end cap - repair damaged fascia boards. OBSERVATIONS: F. Ceilings & Floors Ceilings: CEILING COVERING(S): Drywall Stress crack in upper level west bedroom. Recommendation: SEE: Grading & Drainage. Floors: FLOOR COVERING(S): Carpet,Vinyl,Tile,Wood No problems observed during this inspection. G. Doors (Interior & Exterior) Interior Doors: Wood Hollow core.wood. INTERIOR DOOR OBSERVATIONS: No problems observed during this inspection. Exterior Doors: Metal & Composite. EXTERIOR DOOR OBSERVATIONS: Garage entry door does not have an auto closing mechanism attached - this is a safety code for VOC's and fire. Recommendation: Attach spring wound hinges to garage entry door. H. Windows WINDOW OBSERVATIONS: One cracked window pane in lower level south east great room. Recommendation: Repair. I. Stairways (Interior & Exterior) Stair INTERIOR RAIL(S) & STEP(S): EXTERIOR RAIL(S) & STEP(S): Page 5

I NI NP D I = Inspected NI = Not Inspected NP = Not Present D = Deficiency J. Fireplace & Chimney Fireplace Info: FIREPLACE LOCATION: First Floor, Family Room. FIREPLACE TYPE: Wood burning. Prefabricated metal. FIREPLACE OBSERVATIONS: CHIMNEY OBSERVATIONS: K. Porches, Balconies, Decks and Carports Porches, Balconies, Decks, and Carports: OBSERVATIONS: Back deck is nearing end of life - some deterioration noted in decking. NOTE: Supports are in good shape. Decking and railing are nearing end of life. Recommend that when decking is replaced to repair negative drainage under deck. L. Basement, Crawlspace's Basement & Crawlspace's: OBSERVATIONS: Signs of previous moisture in lower level west great room - carpet has been removed, wall board is warped.this room is in direct contact with areas of negative drainage on three sides. Recommendation: SEE: Grading & Drainage. NOTE: Infrared camera showed no signs of moisture in wall boards at the time of inspection. Electrical Systems Our electrical inspection meets the InterNACHI Standards of Practice and also the South Dakota Real Estate Commission Standards of Practice by sampling visibly accessible wiring and fixtures. Determining the actual capacity of the system requires load calculations, which are not within the scope of this report. Underground circuits and concealed components of the system are not inspected.while age is one factor, most homes have electrical issues created by amateur electrician's.we do not move belongings and do not examine every fixture, outlet, wiring run, etc., nor do we remove insulation, or wall coverings. Covers are not removed, with the exception of the cover of the main electrical panel, when this can be done safely and without risking damage to finish. Much of the wiring in the home is not visible and not reviewed. We use a standard electrical tester to check a sample of outlets. Because electrical defects are safety concerns, we advise the use of a qualified licensed electrician for cost estimates, repairs and upgrades. Page 6

I NI NP D I = Inspected NI = Not Inspected NP = Not Present D = Deficiency A. Service Entrance and Panels Service: Service is underground. 220 Service. 100 AMPS. Main panel is located in the lower level utility room. Circuit breaker's are provided. Sub Panel: NA. B. Branch Circuits - Connected Devices and Fixtures Type of Wiring: Copper, Grounded and ungrounded type branch. Even though property was built prior to code recommend that Ground Fault Circuit Interrupter(s) (GFCI) protection be present on all exterior, garage and other outlets near running water. Missing GFCI protection on the exterior and kitchen. Open ground on some outlets in original structure where two prong outlets were replaced with three prong. Master bathroom ceiling fan has a loose connection or motor has a fault - unit worked intermittently. Missing junction box covers and outlet cover. Recommendation: Install GFCI protection. Repair open ground. Further evaluation on bathroom ceiling fan. Install junction box and outlet covers. Heating, Ventilation and Air Conditioning Systems Our evaluation of major systems is both visual and functional provided power and/or fuel is supplied to the component. Items not listed here as well as things we cannot see, such as utilities, drains, and ducts inside walls, floors and underground are beyond the scope of this inspection. DISMANTLING AND/OR EXTENSIVE INSPECTION OF INTERNAL COMPONENTS OF ANY APPLIANCE, INCLUDING HEATERS AND HEAT EXCHANGERS, IS BEYOND THE SCOPE OF THIS REPORT.THE LOCAL UTILITY COMPANY MAY CONDUCT SUCH AN INSPECTION UPON REQUEST. Our inspection is not a heat engineering or sufficiency review. A. Heating Equipment Type of System: Forced Air. Energy Source: Gas. HVAC COVERAGE AREA: All area. Brand: Lennox. Approximate Age: Manufactured 1997. HEATING SYSTEM COMMENTS: Unit is located in lower level utility room. Heating unit would not activate. Blower fan worked, but heating system did not instigate any sensors. Recommendation: Further evaluation by licensed HVAC technician. GAS FURNACE DEFICIENCIES: Full evaluation of the integrity of a heat exchanger requires dismantling of the furnace and is beyond the scope of this inspection. Page 7

I NI NP D I = Inspected NI = Not Inspected NP = Not Present D = Deficiency B. Cooling Equipment - Unit 1 Energy Source: Electric HVAC COVERAGE AREA: All area. Brand: Lennox. Approximate Age: Manufactured 1990. Est. Size 2.5 ton. COOLING SYSTEM COMMENTS: Cooling System- - Central, - Split System. AIR TEMPERATURE DIFFERENTIAL - Differential of 16. A temperature drop/differential observed between 14-20 degrees. (taken between interior return and supply air) is considered a normal operating range.when a differential of only 14 is noted I recommend servicing - unit could not be operating at highest potential and need cleaning or additional refrigerant. Recommend that since heating unit needs further evaluation to have technician service AC unit as well - unit might need a re-charge. EVAPORATOR OBSERVATIONS: CONDENSER (EXTERIOR UNIT) OBSERVATIONS: C. Duct System, Chases and Vents Ductwork: Electric TYPE: Flexible Metal type ducts were primarily used for distribution/return system throughout. Plumbing Our focus in the plumbing portion of the inspection is directed at identifying visible water damage and/or problems.we may not always mention common faults such as stuck stoppers or dripping faucet's. Shut-off valves and angle stops under the kitchen or bathroom sinks and toilets are not turned or tested during the inspection due to the possibility of leaking.all shut-off valves or angle stops should be turned regularly to ensure free movement in case of emergency.the water supply system was tested for its ability to deliver functional water pressure to installed plumbing fixtures and the condition of connected piping that was visible. Our plumbing inspection also consists of checking for functional drainage at all fixtures. A. Water Supply System and Fixtures Location of Water Meter: Lower level south east corner. Location of Main Water Supply Valve: Valve is located at water meter. Static Water Pressure Reading: 65 PSI.Water pressure from 40 to 80 pounds per square inch is considered within normal/acceptable range. Pressure observed at exterior hose bib. COMMENTS: Public water source. SUPPLY PIPING TYPE - Copper, iron pipe. POTABLE WATER LINE OBSERVATIONS - Appears serviceable. EXTERIOR PLUMBING - Page 8

I NI NP D I = Inspected NI = Not Inspected NP = Not Present D = Deficiency Water Supply System and Fixtures -contunued DESIGNATION / LOCATION: KITCHEN: SINK: Cabinet shows signs of previous leak under sink - no signs during inspection period. DESIGNATION / LOCATION: MASTER BATHROOM: LAVATORY - TOILET/BIDET PLUMBING - Toilet is a little loose at floor mount. Linoleum around toilet may have had some moisture underneath at a previous time. Infrared camera did not indicate any moisture present after several flushes - wax ring may have leaked at one point. Recommend observation. TUB/SHOWER PLUMBING - DESIGNATION / LOCATION: HALL BATHROOM: LAVATORY - Water pressure is a little low. TOILET/BIDET PLUMBING - TUB/SHOWER PLUMBING - Water pressure is a little low. DESIGNATION / LOCATION: HALL BATHROOM: LAVATORY - Water pressure is a little low. TOILET/BIDET PLUMBING - TUB/SHOWER PLUMBING - Water pressure is a little low. DESIGNATION / LOCATION: LOWER LEVEL UTILITY AREA: LAVATORY - TOILET/BIDET PLUMBING - Toilet was shut down. DESIGNATION / LOCATION: UPPER LEVEL BATHROOM: LAVATORY - Water pressure is a little low. TOILET/BIDET PLUMBING - TUB/SHOWER PLUMBING - Water pressure is a little low. NOTE: Iron pipes can react with water to develop mineral deposits in horizontal lines. Low water pressure on some service lines could be the result of mineral deposits. Recommend investigating a couple lines in lower level utility area. Replacing a couple couple horizontal lines in utility area with copper or PEX could resolve low water pressure in bathrooms. B. Drains, Waste and Vents Drains/Waste & Vent Piping: TYPE -PVC plastic, Cast Iron. SEWER PIPE OBSERVATIONS: No problems observed during this inspection period. C. Water Heating Equipment Unit: 1 Energy Source: Gas. Capacity: 40 gal. Approximate Age: Manufactured 2011. Brand: A. O. Smith. Location: Water heater is located in lower level utility room. OBSERVATIONS:Venting is slightly negative - rise in vent pipe is not at proper slope. Recommendation: Repair slope in vent pipe for proper ventilation. Page 9

I NI NP D I = Inspected NI = Not Inspected NP = Not Present D = Deficiency Appliances Appliance inspection is beyond the scope of the Standards of Practice but, as a courtesy to our clients, we perform a visual and operational inspection of all built-in appliances.the appliances listed in this report are operated, if accessible and power is supplied. Cooking systems are checked for burner operation but not for calibration, timers, special features or cleaning cycles. Built-in dishwasher's are run through a full normal wash cycle to determine if the system is free of leaks and excessive corrosion.appliances can fail at any time; including immediately after the inspection. Older appliances (five years or older), of course, are more prone to failure. A. Dishwasher B. Food Waste Disposer C. Range Exhaust Vent D. Ranges, Cooktops, and Ovens Oven present, Electric. Oven worked, but LED reading is out so is difficult to set proper temperature. E. Microwave Oven No problems observed during this inspection period. Note: No microwave leak detection and/or output testing was done during this inspection period. F. Trash Compactor G. Mechanical Exhaust Vents and Bathroom Heaters H. Garage Door Operator(s) Auto reversing pressure is set too high. Recommend maximum pressure adjusted to 5 lbs. I. Doorbell and Chimes No problems observed. J. Dryer Vents Page 10

I NI NP D I = Inspected NI = Not Inspected NP = Not Present D = Deficiency Optional Systems A. Lawn and Garden Sprinkler Systems Number of zones - 10. System tested. Unable to manually test a couple zones. One zone is drip line. One zone in front walkway could not get to manually activate. From the looks of grass all zones appear to be functioning - LED reading is difficult to see. VALVE TYPE - Electric VALVE OBSERVATIONS - No problems observed during limited test run. B. Swimming Pools, Spas, Hot Tubs, and Equipment C. Outbulding's Beyond scope of inspection. D. Outdoor Cooking Equipment Energy Source: Exterior gas line present - unit is not built-in. E. Gas Supply Systems Appliance connections were checked with a gas and carbon dioxide leak detector. A FULL EXHAUSTIVE gas line test is not part of this inspection. F. Private Water Wells G. Private Sewage Disposal (Septic) Systems H. Whole House Vacuum Systems I. Other Built-in Appliances None Present.Water softeners, washer & dryer and refrigerators are beyond the scope of this inspection. J. Security Systems K. Fire Protection Equipment Beyond the scope of this inspection. L. Smoke Alarms Smoke alarms not installed in all required locutions.two smoke alarms present - need batteries in lower level Recommended that smoke alarms be installed in all living areas and bedrooms. Page 11

Negative drainage. Exterior outlet is not GFCI protected. Example of decking nearing end of life. Negative drainage. Vertical stress crack. West. Vertical stress crack. West. Vertical stress crack. West. Negative drainage. Negative drainage. Vertical stress crack. South west. leak in gutter end cap - damaged fascia. Example of masonite siding corner crack. Page 12

Example of masonite siding corner crack. Vertical stress crack - south east. Negative drainage at south east. Stress crack at front entry. Open ground. Open ground. Garage entry door does not have auto closing mechanism attached. Auto reversing pressure is set too high. Damaged cabinet - previous leak. Kitchen outlet is not GFCI protected. Stove LED reading is out. Overhead bathroom fan is intermittent. Page 13

Suspect wax ring in master bath had previous or possible present leak? Water pressure is low in bathroom. Missing junction box cover. Effervescence in lower level - east. water heater vent pipe slopes down. water heater vent pipe slopes down - should have a rise in vent pipe. Cracked window pane. Furnace did not activate. Toilet was shut down. Smoke alarm needs batteries. Signs of previous moisture in lower level west great room. 220 has been disconnected at main panel. Page 14

Missing junction box cover. Missing outlet cover. Stress crack in wall board - upper level west bedroom. Access door is out of square - stress crack. Missing junction box cover. Signs of moisture in gable storage areas. Needs venting. Signs of moisture in gable storage areas. Needs venting. Stress crack in ceiling - upper level west bedroom. water pressure is low. Sprinkler system LED is hard to read. Page 15

This property inspection report may include an inspection agreement (contract), addenda, and other information related to property conditions. If any item or comment is unclear, you should ask the inspector to clarify the findings. It is important that you carefully read ALL of this information. This inspection is subject to the rules ( Rules ) of the South Dakota Real Estate Commission, which can be found at www.state.sd.us/sdrec/ The South Dakota Standards of Practice are the minimum standards for inspections by South Dakota licensed inspectors. An inspection addresses only those components and conditions that are present, visible, and accessible at the time of the inspection. While there may be other parts, components or systems present, only those items specifically noted as being inspected were inspected. The inspector is not required to move furnishings or stored items. The inspection report may address issues that are code-based or may refer to a particular code; however, this is NOT a code compliance inspection and does NOT verify compliance with manufacturer s installation instructions. The inspection does NOT imply insurability or warrantability of the structure or its components. Although some safety issues may be addressed in this report, this inspection is NOT a safety/code inspection, and the inspector is NOT required to identify all potential hazards. In this report, the inspector will note which systems and components were: Inspected (I), Not Inspected (NI), Not Present (NP), and/or Deficient (D). General deficiencies include inoperability, material distress, water penetration, damage,deterioration, missing parts, and unsuitable installation. Comments may be provided by the inspector whether or not an item is deemed deficient. The inspector is not required to prioritize or emphasize the importance of one deficiency over another. Some items reported as Deficient may be considered life-safety upgrades to the property. This property inspection is not an exhaustive inspection of the structure, systems, or components. The inspection may not reveal all deficiencies. A real estate inspection helps to reduce some of the risk involved in purchasing a home, but it cannot eliminate these risks, nor can the inspection anticipate future events or changes in performance due to changes in use or occupancy. It is recommended that you obtain as much information as is available about this property, including any seller s disclosures, previous inspection reports, engineering reports, building/remodeling permits, and reports performed for or by relocation companies, municipal inspection departments, lenders, insurers, and appraisers. You should also attempt to determine whether repairs, renovation, remodeling, additions, or other such activities have taken place at this property. It is not the inspector s responsibility to confirm that information obtained from these sources is complete or accurate or that this inspection is consistent with the opinions expressed in previous or future reports. Items identified in the report do not obligate any party to make repairs or take other action, nor is the purchaser required to request that the seller take any action. When a deficiency is reported, it is the client s responsibility to obtain further evaluations and/or cost estimates from qualified service professionals. Any such follow-up should take place prior to the expiration of any time limitations such as option periods. Evaluations by qualified tradesmen may lead to the discovery of additional deficiencies which may involve additional repair costs. Failure to address deficiencies or comments noted in this report may lead to further damage of the structure or systems and add to the original repair costs. The inspector is not required to provide follow-up services to verify that proper repairs have been made. Property conditions change with time and use. For example, mechanical devices can fail at any time, plumbing gaskets and seals may crack if the appliance or plumbing fixture is not used often, roof leaks can occur at any time regardless of the apparent condition of the roof, and the performance of the structure and the systems may change due to changes in use or occupancy, effects of weather, etc. These changes or repairs made to the structure after the inspection may render information contained herein obsolete or invalid. This report is provided for the specific benefit of the client named above and is based on observations at the time of the inspection. If you did not hire the inspector yourself, reliance on this report may provide incomplete or outdated information. Repairs, professional opinions or additional inspection reports may affect the meaning of the information in this report. It is recommended that you hire a licensed inspector to perform an inspection to meet your specific needs and to provide you with current information concerning this property. This report is confidential for the Client s use only. Page 16