 Okay, we're in the downstairs bathroom combination heating system room, utility room, and the furnace is actually a fairly newer model. It's about a 90% efficient furnace, and you see the PVC pipe for the exhaust and the intake. Pretty good system. Looks like the ductwork has been redone, and I think that's something a person should always look at is, does it look like enough ductwork for the home? From what we can see here, it looks like it's been sized okay. The thing that happens when they put these type of systems in, and if you want to look at the water heater over here, is that water heaters with these natural draft, which means there's a hood on here, depends on its own natural pressures to vent. This is the vent hood. This works by pulling air in the burners at the bottom, and this works to make it vent. It's pulling air in through here, runs up through this metal vent, and goes to the chimney and out. I notice the chimney is lined all the way down with this three inch vent, and the three inch vent actually doesn't meet any of the venting tables, so it's not actually up to code anyway. In a small room like this, when you get the fans running, it's going to be pulling that air back out of this area, and the exhaust gases, instead of going up the vent like they were meant to, are going to be spilling in here. There's a little problem because there's a long, almost horizontal run in the vent that comes all the way across, goes back up over here, and it actually comes in, and it's laying up in here, right on the wood. Now there's no clearance, there should be at least some clearance for any combustibles that you want to be aware of, so right there there's a problem. The other problem with the water heater is, like I said, this is a combination bathroom utility room. Now we've got an exhaust fan here, we've got the dryer over here behind you, and with those two running in this door shut, this small room, there's no way that water heater's ever going to vent right, and I think in this case, you better be aware that you're probably going to have to change out the water heater. These kind of systems just do not work, so that's something to really be aware of. It's a serious safety problem. We can get carbon monoxide spilling out of the water heater, and somebody in here taking a shower could be a real problem. Okay, one thing we want to mention about water heaters and water usage is to make sure that on your temperatures, you keep those down below about 120, anything over that, and you're wasting energy. Most household things can be done with water that's 120 degrees. The other thing we want to make sure is in the showers, sinks that you use low-flow faucet aerators and shower heads wherever you can, toilets when you replace them will always pretty much be low-flow now. You want to just make sure you're conserving water, and that will save a lot on your energy bills also. One good thing that I did notice on the furnace, it looks like it's been serviced. I always like to see a service record posted someplace that shows when the last time it was cleaned and tuned. Furnaces should always be serviced once a year. This one looks like it's been done. Another thing about the heating system I wanted to mention was that it's good to see they've installed a programmable thermostat which they can set so that the furnace and air conditioning system do not run when there aren't people at home. That can show real savings in your fuel usage.