T.H.E. Co.

Who Does Your Inspector Work For?

Special Note:

Many people believe that because the home is new there will be no appreciable problems.

They tend to discount the fact that all problem houses were once new.

Don’t put too much stock in the Warranty, it’s mostly just a marketing device.

You should know: When an inspector claims to be “Independent” it doesn’t mean they are, claiming to be “Independent” is just a smart marketing ploy. Do your research.

How to choose a qualified inspector

In response to threats received from the U.S. NACHI- National Association of Certified Home Inspectors, I have refined the expression of my professional point of view and re-writen the contents.

Having posted the re-write, let me just re-iterate that property-inspectors in BC can be certified by either of two Canadian bodies. So it’s good to look for these accredited qualifications. But I also recommend that you evaluate certain other qualities and qualifications of at least equal importance.

a. Associations

i) British Columbia Institute of Property Inspectors (BCIPI) - ASTT- independent certification body

§ Certified Property Inspectors “CPI” - commercial and residential

§ Certified Home Inspectors “CHI” - residential

ii) Canadian Association of Home and Property Inspectors

§ Registered Home Inspectors “RHI”

Consumers should not be confused by home inspector "certifications" offered by, or sold by home inspection trade societies or companies, obtained via home study courses, or provided by home inspection companies that certify their own home inspectors.

b. Qualities to look for

i) Experience: Number of inspections; background and training, e.g., roofing, envelope; building assemblies: exterior claddings including windows; structural; interior materials; building code; heating: electric, forced air, radiant, hydronic, fireplaces, geothermal; ventilation; electrical; plumbing; insulation, IAQ, etc.

ii) Degree of independence from realtors (most inspectors are dependent on realtor referrals for 50% to 90% of their work). Franchise and multi inspector firms are high volume and realtor referral dependent. The inspector is paid approximately 50% of the fee charged. They are employees of the company, so are not in your direct employ.

2. The inspection – What it should cover

The inspection is almost always visual in nature unless special arrangements are agreed to.

a. Detached homes

i) should include: roof, cladding, grounds, drain tile, foundation, structural, heating, electrical, plumbing,

insulation and everything in between

b. Strata properties

i) exterior envelope -- vulnerabilities to water ingress and condition

ii) roof -- age and installation

iii) mechanical to some degree (not tested)

iv) parkade -- indication of leakage and from where; in some cases there could be structural damage caused by water erosion/corrosion and settling

v) common areas: conference rooms, exercise, spa and pool -- safety, health issues, and maintenance neglect

vi) the suite – plumbing, electrical, heating, fireplace, ventilation, appliances, cabinetry, bath/shower enclosures, interior finishing, doors, windows and balcony, any indications of water ingress

3. Cost of an inspection

§ Value is measured in the degree of dedicated service, buyer utility and education.

§ Professional inspections start at approx. $600 to $1000+ depending on the size of a property and degree of client service. Obviously a checklist report takes less time than spacific custom reporting and will be less usefull if at all.

§ Remember you are paying the realtors’ commissions. The cost of a thorough inspection is a bargain. The last place you want to save money is your inspection. However, inspectors and service are not all equal; inspector qualifications mean nothing if the inspector, after a 2.5 hr review, produces a checklist report after racing through your prospective home. By the way you might pay $600 for a 3hr turnaround inspection; some inspectors believe the client's confidence in the inspector is bolstered by charging a high fee. (this industry attracts all kinds of get rich by hardly trying types)

4. What you should look for

a. Detached Homes (Is there a final occupancy permit, were permits taken on improvements ?)

i) Is there roof overhang? (approx. 2' roof projection per floor)

ii) Knob and tube wiring (insurance companies will not insure- Will require Premium Interim Insurance till upgrade is approved)

Aluminum wiring (insurance companies will not insure- interm insurance)

iii) Less than 100amp service (insurance companies will not insure)

iv) Fireplaces need to be CSA approved and/or inspected by a “WETT” certified technician (insurance companies will possibly not insure- interm insurance)

v) Galvanized piping (domestic water) (insurance companies will not insure- interm insurance)

vi) Is there an oil tank? If the house is older than 40 years, this is a good possibility. It needs to be removed at owner’s expense but the onus is on the purchaser to discover it. (insurance companies will not insure- interm insurance) (You may require permit removal documentation for your insurer)

vii) Drain tile: A possible issue for all homes, but particularly older ones, as it may need replacing.

§ Is there drain tile or does the roof runoff discharge at grade?

§ “Big O” drain tile (corrugated black plastic) is problematic.

§ If you smell a musty odor in the basement you likely have water/moisture problems.

§ Look for a white powdery substance (efflorescence) on exposed foundation walls or slab.

§ Ask if there have been any water ingress problems (flooding or plumbing).

§ Is there a sump- interior or exterior?

viii) Age of the roof and quality of installation. Is there a warranty?

§ Asphalt shingles -- 12-15 years

§ Fiberglass shingles -- 20 to 25 years

§ Cedar -- 15 to 30 years

§ Concrete Tile -- 30 to 40 years (manufacturers claim more but it is a new product with no history)

§ Tar and gravel or Torch-On -- 15-20 years (dependent on installation and drainage)

§ Is there soffit ventilation (continuous or just a couple of square holes) and roof vents?

b. Strata Properties

You must ask for:

§ Strata minutes -- generally a minimum of eight years.

§ All engineers’ reports.

The strata or the management company should have copies. You will need authorization from the owner to access their history. Be prepared, though, as the real estate agents may try to charge you for this information, information which you are entitled to review at no charge. You shouldn't have to pay for something that doesn't belong to you and which is public domain. Between the two agents, you are probably paying approximately $8,000 to $12,000+ commission fee. Your agent should provide this service without complication or cost. In light of the current climate of leaky condos where special assessments for repairs can range from $30,000 to $100,000+, you are not asking too much. Don't hesitate to say: “I need this info ASAP; please do whatever it takes to get those minutes and I do not want to hear of any charges."

You must request this information as soon as possible. The sales community is not experienced with people who ask hard questions, so delays are a common occurrence. Tell your agent: "Put a Rush on It" is the jargon.

Don't take no for an answer! The Strata Property Act http://www.qp.gov.bc.ca/statreg/reg/S/StrataProperty/43_2000.htm clearly states that all information pertaining to the building is public domain. If you have any problems obtaining this information the Real Estate Council http://www.recbc.ca/, Home Protection Office http://www.hpo.bc.ca/ and the BBB http://www.bbbvan.org/index.php would be very interested.

You will need information on any and all envelope repairs. Often the repair details reveal band aid solutions to a chronic problem. Stratas often try to get by by doing option "B" or "C" repairs as opposed to the optimal "A" which is usually at least twice the cost. “B” or “C” option repairs are often just stalling strategies to the inevitable option “A” repair which will be borne by new owners and stragglers, and, as always, cost more the longer these repairs are delayed.

You need this information in order to make an informed decision. You must also appreciate an inspection is no guarantee. But it’s a start.

i) Book an appointment with your inspector as soon as you have a signed sales agreement.

ii) Your inspector will need access to the roof, mechanicals, common areas and, of course, the unit. Tell your agent the inspection may take four to six hours, perhaps longer. One never knows and you wouldn’t want a rushed job.

iii) Bring all documentation with you. When you receive the minutes and engineers’ reports, read them over and highlight all issues you have concerns about. There is simply too much paper for your inspector to review everything on your behalf.

iv) Take your camera and a notepad as well; there will be a multitude of minor details you may wish to document or questions to ask.

v) Attend the entire inspection!

Don't be too concerned that some information is unavailable, Your inspector doesn’t have x-ray eyes but can tell quite a lot from the investigation.

Read all you can about your rights: Strata Property Act, HPO, COLCO, CMHC and BBB. All have advice on purchasing a home. Incredibly, most of them recommend asking your realtor for referrals. This is an obvious and possible conflict of interest.

5. The market traps

Staged Homes- take a close look at the furniture: it's often miniaturized (Forced Perspective) for that spacious look. Living room furniture, tables, chairs and even beds- take a measuring tape. Yes Virginia... they do build special toy furniture for staging and no... there is no Santa. Staged homes are an illusionary masterpiece of eye candy!

(You must watch: Flip This House- A&E)

a. Cosmetics (surface touch-ups that can “hook” the purchaser)

i) Detached homes

§ New paint, interior and exterior, even new siding possibly over rot damage

§ New carpeting, laminate, tile and vinyl flooring, particularly in basements where there may be moisture problems

§ New kitchens (cheap quality)

§ New appliances

§ New bath appointments (look for painted grout around tub even painted tubs)

ii) Strata properties

§ Balconies over living space

§ No overhang

§ Discoloured stucco, cracking, freshly painted stucco, caulking repairs

§ Age of building: copper plumbing 18-20 years; roof 15-20 years; landscaping membrane 10-20 years; aluminum wiring can be a risk

b. Grow-Ops (Insurance Companies may not insure until qualified repairs are approved)

i) Look at the electrical service entrance

§ Is there a second masthead (not always a giveaway but ask, “Was this a grow-op?”). Make a list of your questions and answers and have the vendor sign it.

§ Is the elec. service installed on the exterior - exterior conduit (not always a giveaway but ask).

§ Is there a new electrical panel (not always a giveaway but ask).

ii) As one’s sense of smell becomes desensitized very quickly, when you enter a building, go directly to the basement. Use your nose -- is there an earthy smell? (not always an indicator -- may be from other sources).

iii) Are there holes or patches in floors, walls and ceilings (holes used for ducting and services)?

iv) Look for interior moisture-damaged paint and woodwork.

v) Are any walls or ceilings discoloured; are there a multitude of small patches from re-screwing and patching the gyproc?

vi) Are there spill stains on floors and carpeting? (Growers don’t care if they cause damage to a rental.)

vii) Are there plug-in deodorizers or a mothball smell?

viii) Are there disconnected wires hanging or are there chopped junction boxes?

ix) Does the furnace or boiler ducting/venting look original?

x) Are the ceilings flat or are they sagging between floor joists or ceiling joists?

xi) Look for white perlite in the soils around the home; are there black planter pots?

xii) Is there black staining (mold) on ceilings, walls and window frames? (Could be other sources.)

xiii) Is the underside of the roof (attic) black (can also be white) with mold/fungus? (Could be from other causes)

6. The Inspection

a. How long does a thorough inspection take?

What’s the rush? The longer the inspector spends in the home equals more deficiencies discovered. A volume of deficiencies requires a more methodical and connective analysis (takes time). Generally: 1 home- 1 day or longer.

b. Do you attend the entire inspection process or just go for a final walk-through?

A final walk-through will not provide you with detailed explanations or hands-on familiarity with the property. Ignorance is a fear generator. Full attendance will introduce you to the maintenance and repair requirements and provide the depth of comprehension required for you to weigh the degree of required repair, so the home’s deficiencies will be less scary. All homes have a multitude of deficiencies and defects. Most homes can be repaired – it’s just a matter of cost and time.

c. Inspection report

i) on site

generally a checklist is of limited value to your decision process-- Should be an investigative starting point; not the product
computer generated -- generalized and generic in nature- prewritten boilerplate comments- as the term "computer generated" implies

Comment: Both of these are rather blunt instruments for property condition disclosure, buyer comprehension and utility.

- These types of inspection reports are for the convenience and efficiency of the inspector and represent a rather thin veneer of useful detail.

ii) same day (generally the inspector will compose the report on site or go to a separate location)

§ the degree of usefulness of the report is dependent on time spent describing and explaining the findings

iii) 24-hour turnaround

§ possibly the best chance the report will reflect the condition and gravity of the findings in a user friendly presentation

§ In some cases 24-hour turnaround can mean the inspector has two or more reports to fill out, or that a secretary will compose it from a recording or notes. (Ask.)

iv) Formats

§ checklist -- not flexible, the format leads the inspector rather than the home dictating its direction and depth of explanation

o quick, generic and generalized (mainly for the convenience of the inspector, is also preferred by agents)

o an inventory of building components- generalized check boxes denote condition

o Often accompanied with a large binder of building related stuff (the binder is a good seller)

§ narrative

o boilerplate -- generalized and generic. The inspector tries to stay within the boilerplate to describe the findings. The boilerplate dictates what is reported to varying degrees

o point form -- probably the truest reflection of the findings because the inspector doesn’t have to compose a paragraph or true sentence (can cover more detail).

o combinations of boilerplate and point form can be very good

§ photo with narrative or point form narrative

o probably the most useful -- easiest and compelling to read (this type of report takes time to compose)

Then there are combinations of the above, but basically the value of the inspection and report is dependent on your attendance and time spent by and with your inspector.

Your inspector may say “Here is the report -- call if you have any questions,” (inspector’s convenience), or, with proper delivery and review, you will be afforded the opportunity to have explained again how and what needs your attention.

- So... if you want to get the most from your inspection; ask to see a sample of a typical Report.

- The report may well be the most valuable part of the inspection. (don't be suprised if inspectors do not offer samples or if they do- show you a 3" binder full of generic building related information and a simple checklist report)

7. Relationships

a. You are a customer of the real estate agents- Inspection Industry Gate Keepers

§ If the sale doesn’t go through it’s not just the two realtors who are put out, the office managers are also denied or delayed the income from a sale. In some cases agents are given an advance against the prospective sale, thus are doubly pressured to close the deal.

§ If the inspection is the cause of the collapsed deal, the inspector might get demoted on the realtor’s and the real estate office’s preferred list of inspectors. Real estate offices constantly review success strategies and do failure analysis on the screw-ups. Screw-ups are generally awarded to the inspector but the agent may shares some responsibility for poor management skills. (managing the inspectior, inspection and buyer interpretation of the report)

§ Shop early for your real estate agent. Get your own Buyer’s Agent, not a dual agent. Realistically, how hard do you suppose a dual agent will work for your best interests? (Have you ever tried playing a game of checkers with yourself?)

Remember:

The role of your real estate agent is to help you find a home that fits your needs, and then to facilitate (not control) the successful completion of your purchase.

A skilled and knowledgeable "Buyer's Agent" will work in your best interest by seamlessly orchestrating all the information and tasks you will need to make an informed purchase decision. Don't let your agent influence your choice of inspector, do your own research.

A good "Buyer's Agent" realizes that purchasing a home is very stressful and that clients who are overly stressed by the process may not make levelheaded decisions and may needlessly run from a workable deal. Your level of stress will indicate your agent's skill -- the better the agent, the less you stress. Professionals always make things look easy:

You are paying a professional commission, so expect a professional service.

Note: if you make an offer and have no agent, it is valued above an agent represented higher offer (selling agent's commission is not split, also there is more wiggle room for negotiations after the inspection).

b. You are a client of the inspector

§ the inspector is a service provider and should have no allegiances other than to the buyer.

Comment: To succeed in the inspection industry, inspectors may be closely tethered to successful agents, or would like to be.

§ Shop early for your inspector. Check out references -- ask for a random sample from a year or longer. This will provide a historical reference to the inspector’s effectiveness. Looking for an inspector in the yellow pages does not mean the inspector is not going to be concerned with the success of the sale and may very well be realtor dependent; which can mean the inspector might wish to impress the agents rather than YOU.

Do your homework early to avoid having to make compromised choices.

7 steps to Home purchase:

1- Before looking at homes, get a written mortgage pre-approval by an actual lender. Pre-qualified is worthless!
2- Take your time. Research the area you wish to locate: Is it near a railroad or heavy traffic? Is it high crime? Are there good schools? Is there convenient shopping? Is it on a flood plain? What is the commute time? etc. Visit the property at different times of day & night.
3- Get your own “Buyer's Agent”. Ask around -- top-quality buyer’s agents are rare. Avoid agents who ask you to sign an agency contract which lasts more than 30 days.
4- Find out why the home seller is selling. (Ask your buyer’s agent to inquire.) What is the owner's level of motivation? How long has it been on the market? How long has the current owner lived there? How much did they pay? These can be valuable negotiating tools.
5- Ask your buyer’s agent to prepare a Comparative Market Analysis (CMA) before making your purchase offer. With this level of information, your documented reasonable market value offer can be presented. Always keep the door open, they may return to your offer later.
6- Most important, home purchasers who think they have located the "perfect home" should always make purchase offers contingent on their approval of a professional home inspection report. Ask friends, banks, lawyers. Look up inspector associations: BCIPI and CAHPI.

This is the most important part: Check out Credentials, References and Product. Don’t ask your buyer’s agent for a home inspector -- their criteria of preference, might be different from yours.

The buyer should always accompany his/her home inspector to discuss discovered defects, deficiencies, building life cycles and maintenance issues. Your home inspection could be the most critical aspect of your purchase, so shop for your inspector early. Be thorough in your search, as inspection services are not at all equal.

7- Finally: If you think you can’t afford an inspection, how will you ever afford any unexpected needed repairs? Never let a bidding war compel you to drop your condition “Subject to a Favorable Inspection”. Note: A thorough inspection may uncover Negotiable Defects.

If you feel under pressure to put in a clean offer, hire an experienced inspector to accompany you to an open house.

Hiring any service provider- they may all look good but what do you get?

See "Marketplace video" on hiring a contractor: Mike Holmes does his thing on a sting.

http://www.cbc.ca/marketplace/2007/01/contractors.html

How Not to Get Nailed

Aired on January 10, 2007

No one sees more renovation ripoffs than Mike Holmes. Marketplace uses hidden cameras to expose a contractor responsible for the latest disaster he’s fixing.

Also Check out: http://www.holmesonhomes.com/