Home inspections: What you should know in this seller's market

OTTAWA -

Buying a home is normally the most significant, and exciting, purchase a person will make.

It can also be one of the most stressful.

Will there be unexpected surprises with the home? It looks attractive, but is the electrical system safe? Is the roof solid? Are the cracks in the foundation superficial or worrisome? Is the furnace reliable?

In a normal real estate climate, a home inspection allays those concerns. It’s often a condition of purchase.

But the current red-hot real estate market of bidding wars and multiple offers has led buyers to sometimes waive a home inspection as a condition.

“In this highly competitive real estate market, many buyers feel like they no longer have the option of including a home inspection in their offer, leaving them feeling uneasy & vulnerable,” says Taylor Bennett during his bimonthly real estate segment on CTV News at Noon.

Bennett says if you are planning to gut the home and renovate, an inspection may not be necessary.

“If you’re purchasing it and maybe you’re planning to do the whole renovation yourself, maybe it’s a total gut job, you won’t care so much about the home inspection because you’re going to be replacing everything anyway.”

But he advises, “If you’re a first time home buyer, or any buyer for that matter, you want to know what it is that you’re buying and you want to make sure that you’re not going to buy what’s called a lemon out there.”

Home inspections aren’t just for the buyer, though. Bennett suggests getting a home inspection is really beneficial for the seller.

“Sometimes the seller will actually get a home inspection before they list,” says the realtor.

“As a seller, you’d like to know that there’s no major issues with your home because, of course, when a buyer visits your home for the first time, if they see an issue they’re going to start to look for other issues.”

 “You want to make sure as a seller before you put your house on the market there’s no issue the buyer is going to find,” says Bennett, “because they’re going to try to use any problem they find to negotiate down the value of your house.”

“As a seller to maximize the value of your house, get those problems out of the way before you list your home and you’re going to get a nice smooth transaction and probably a record-high price, if you do things right.”

Below, Bennett answers five common questions about home inspections.

1. What Is A General Home Inspection?

A limited, visual examination of the condition of the property, often in connection with the sale of a property. 

Areas Inspected: Heating/Cooling systems, Plumbing, Electrical work, Insulation, On-Site structures, water, and sewage, as well as some fire and safety issues. Inspectors also look for evidence of insect, water, or fire damage or any other issues that may be of concern.

“There are many different types of inspections but the most common is a general home inspection. If there are any areas of concern, a specialist (licensed electrician, plumber, septic, etc...) may be recommended for a more in-depth examination. Home inspections are also primarily a visual inspection - the inspector will open the attic hatch and may run a few of the appliances (eg. A/C, Furnace, Gas Fireplace, etc...) but some areas or elements of the property may not be accessible (locked, dangerous to enter, etc...) or may not be able to be tested (eg. pool or AC units in the Winter).  For inaccessible or unavailable items, an additional clause or condition can be inserted into the contract to add protection or clarity. Some homes are also quite cluttered, which can hinder the inspectors' ability to inspect - if they can't see it, they can't inspect it, and big heavy furniture, carpets, boxes, that can surprisingly hide quite a bit”.

2. Who Does The Inspection?

Most inspections are conducted by a qualified home inspector, but it is not a licensed industry.

“In Ontario, home inspectors do not have to be licensed, but there are fair practice and contract laws they must abide by.  There are also various certifications & qualifications that an inspector can obtain to stay up-to-date on the latest building codes & laws. Inspectors with more certifications and experience tend to cost a little more, but their trained eye will likely catch more potential issues & the small difference in cost will provide a much more thorough analysis of the property. The cost can also be minimized if the inspector isn't providing a formal written report. As the cliché as it is - you pay for what you get, and that's true with inspectors”

3. When To Get An Inspection?

• Before you commit to purchase
• Before you list your home for sale
• Every 5-10 years

“Traditionally, buyers have been the party that is responsible for hiring the home inspector, but future sellers should consider doing this, especially if your property is a little older and hasn't been updated recently. Addressing items before buyers see your home can be essential in getting the highest price for your home - because if/when buyers find an issue with the property, they tend to look for more problems and that can affect their perceived market value of your home, and buyers are the ones who determine market value. While the vast majority of inspections are related to the purchase or sale of a property, even if you aren't considering selling your property homeowners can highly benefit from a periodical home inspection to stay on top of any minor issue before they become major issues. Home inspections can also help in finding ways to get your home more efficient and reduce the monthly utility costs - which can also help improve the value of the property.” 

4. Optimize Your Inspection

• Be There
• Know What They Do and Don't Check
• Cost 

“Home inspections can take up to 3 hours, maybe even longer, but ideally all of the people involved in the purchase should attend the inspection - or they can virtually attend with Zoom or Skype. If attending the entire 3-hour appointment isn't feasible, aim to be there for the last hour to discuss the findings with the inspector. While the inspector will typically have a formal written report to reference, having the expert physically point out certain items of concern is invaluable, plus many inspectors give little off-the-book tips and tricks on how to make the home more efficient.   Before the inspector gets started, make sure you know what they'll be inspected, their certifications, and the cost - this may seem obvious, but many buyers simply compare inspectors based on cost alone, not on what services they'll be getting.  As stated above, it is not a regulated industry and the scope of work between various inspectors can be quite different.”

5. Suggested Questions At The Inspection

• "What Does That Mean?"
• 'How Much Would That Cost?"
• "What Needs To Be Done ASAP?"

“Don't be shy or afraid to ask for clarification. Many times buyers have specific questions about the inspection report AFTER the inspector has left or even worse, after the condition has been waived. The inspector is there to help you gain a better understanding of the property so don't be shy to get clarification from the expert. Sometimes buyers misinterpret or misremember what the inspector said and this can result in small items getting blown out of proportion or, worse yet, serious issues being ignored.  

Experienced inspectors will also be able to give an idea of the cost to replace or repair items helping buyers assess any additional move-in costs.

Home inspection reports can be quite lengthy and potentially overwhelming, but not everything in the report needs to be addressed all at once. The inspector will have a good idea of the items that need immediate attention if not addressed asap, and those that can be looked at later.”