Sizing before selling
The most common mistake is a heater one size too big
A replacement is the one chance to correct whatever was wrong with the last installation, and the first thing worth correcting is usually capacity. Sizing should follow peak simultaneous demand, how many showers and appliances genuinely run at the same time, not the square footage of the house or whatever happened to be there before. An oversized tank costs standby heat loss every month for a decade, which is a small number multiplied by a large one.
The conversation takes two minutes. Household size, how mornings actually run, whether there is a big soaking tub, whether anyone works from home. For plenty of two-and-three-bedroom houses around here a 40-gallon tank with a good recovery rate outperforms the 50 it is replacing, and costs less to run. Where a household genuinely needs more, that is what gets fitted: the point is that it follows from the answer rather than the default.
Then there is everything around the tank, which is where most older installations fall short. Seismic strapping anchored into framing rather than drywall. A thermal expansion tank, because a house with a pressure regulator is a closed system and heated water has nowhere to expand. A T&P discharge routed to a legal termination. A drain pan with a real outlet wherever a leak would reach drywall or flooring. Correct venting and combustion air.
All of that is what the permit and inspection actually cover, and it is why the paperwork is worth having rather than avoiding. It is also the difference between a heater that is merely connected and one that is installed.