Welcome to our monthly "Dear Urbaneer" post, where each month we answer a question asked by one of our clients.
This month we tackle the issue on the value of a Home Inspection, and the implications of relying on one provided by the Seller in advance of the offer date.
We are well aware of the necessity of having a home inspection done prior to the purchase of a home, so that we can make a buying decision with all the relevant, accurate information on the table. However, what if a home inspection has already been done on the property in question as part of the property listing? Is it a worthwhile investment to bring in our own third party and if so, what criteria should we use in selecting them? We have a relationship with a contractor. Would his experience and knowledge suffice?
Signed, Is Over-Inspection Possible?
Here is our reply:
First and foremost, when moving forward with the purchase of a home, due diligence is one of the home buyer’s greatest allies. Knowledge is power and will contribute to good judgment, responsible decision making, as well as adding to the comfort level around your purchase. That being said, when it comes to property inspection, how much is enough? And how do you vet the professionals who will help you complete your due diligence?
I have owned many properties myself over the years. When I'm considering my own purchase I do bring in my contractor to assess the dwelling. It is important to note that my relationship with my contractor is long-term and is deeply rooted in trust that he has more than earned over the years. I can whole-heartedly rely on his review. Additionally, he is able to provide me with realistic ballpark estimates to repair, renovate or reconfigure the structure to suit my needs, wants and desires.
As a result, I don't need to hire a home inspector for my own personal purchases. However, I will happily review a home inspection report if available. I like how Inspection Reports document the age and condition of all the major building components, and flags potential issues and concerns, in one well-organized binder.
In my experience home inspection companies remain impartial and do not favour the buyer or the seller, but simply assess a property as it stands in that specific moment in time. They remain objective, regardless of who is paying for the service. While some may beg to differ, citing the issue of ethics and morality in business, I have never witnessed an inspector omit a deficiency for the benefit of a seller, nor have I seen an inspector exaggerate a property's flaws so a buyer could negotiate a purchase to their advantage.
Given bidding wars are common in our current frenetic real estate market, Buyers often have to either rely on the Presale Home Inspection Report provided by the Seller or listing realtor or make the $350-$700 investment to hire a home inspection company in advance of the offer review date. While I have had Buyers hire their own inspector before an offer date, they soon discover that the cumulative cost for multiple inspection reports for properties they ultimately lose in competition during their lengthy competitive housing search can be a very expensive proposition. As this reality becomes their experience, Buyers do tend to rely on whatever inspection report is available and, only when the Seller and/or listing realtor are not providing a presale home inspection, will Buyers - for their own peace of mind - hire an inspector as part of their due diligence.
It's important to acknowledge that some companies are more credible and reputable than others. Your due diligence and research should not be limited to just the property and its structure, but the people on whom you are relying for guidance and information. As such, it is advisable to do at least an online review of any home inspector whose opinion you seek and are considering engaging.
While not stringently regulated, there are bodies that support the industry, by promoting reputable, qualified inspectors. This industry does lag behind some others in terms of getting up to speed with accreditation and accountability, but steps are being taken. The Canadian Association of Home and Property Inspectors (CAHPI) runs a National certification program. You can visit their SITE to view if your prospective inspector has this certification.
The Professional Home and Property Inspectors of Canada (PHPIC) is a nationwide body, and while it does not have specific accreditation associated with membership, it does vets its members. Home inspectors have to apply, and have their credentials reviewed, and then if they are accepted, receive a PPHI designation. They describe themselves as “a National organization fully supporting the National Initiative and promoting the National Home Inspector (NHI) Program”.
Again, both of these organizations serve to provide “back-up” when doing due diligence. And while they don’t verify or guarantee quality of the inspector’s work, they also don’t grant membership to those in poor standing, or to whom complaints against have frequently been lodged.
For more grassroots references, you can always do a quick search online. Homestars.ca is a user-based website with recent feedback on home inspectors and renovators too. The Better Business Bureau is a reliable spot for third-party information as well.
Underscoring the need to find an inspector who is accountable and thorough, consider reading a past post called Termites For Our Anniversary in which one of our Buyers had a near miss with a pre-sale Home Inspection that could have resulted in a what would have been a huge bill due to termite damage due to a shoddy home inspection.
While we in no way want to discount the value of a home inspection, home buyers need to be cognizant that most any inspection is completed over a two to three hour period and limited only to what one can see and one can touch. No environmental tests are done (addressing factors such as air quality - mold, radon or off-gassing), nor an in depth exploration for asbestos (found in paint, tile and wrapping radiator pipes), vermiculite insulation (frequently found in attics and ok as long as it isn't disturbed), or termites, carpenter ants, bed bugs or vermin - unless the inspector is sufficiently educated and informed to flag the potentiality of it. Being strictly visual, what lies behind the walls, in the drains, under the floors, within the chimney, inside the ductwork, or under a fully enclosed crawl space or porch of any property is rarely fully addressed.
These “invisible”, elements are potentially negative for quality of life (and future expense). Here is a past post I wrote on the growing issue of Sick Building Syndrome, in which toxins present themselves, mostly in the air circulating in the home, from poor ventilation systems or by other elements within the walls, like mold. The detrimental effects of this can be amplified by recent renovations as well.
We also want to bring to your attention that the 'when' of any home inspection also has a bearing on any home inspection report. We live in a city with some pretty extreme weather systems which change throughout the seasons. Not to be overly dramatic, but an inspection on a property during the spring thaw, amidst a scorching heat wave, after a freak thunderstorm, or in the middle of a freezing ice storm will reveal different issues and concerns.
Ultimately, no matter how many inspectors you bring in to review a property, the truth of the matter is that something in your newly purchased property will inevitably fail, or break, or leak, because that's what buildings do. With so many different materials, components, systems, and moving parts - the majority of which are out of sight - it unfortunately accompanies the privilege of owning shelter. We counsel every Buyer of ours to anticipate that something with their home will go wrong which the inspector didn't catch. And unfortunately this means you will curse, incur some inconvenience, and reluctantly write a cheque.
It's critical to remember that all home inspection reports clearly state the inspector and the company shall be held harmless from any liability for errors or omissions, which bears the question "What is the value of a home inspection?" For us, a home inspection is a general overview and guide for maintenance and repairs, but it should not be deemed a 'building bible'. In our opinion, you should consider it 'for information purposes only'.
At urbaneer.com, we're committed to guiding you through the purchasing process from start to finish. With a comprehensive understanding on the construction and condition of downtown Toronto's housing stock, and an acute awareness on how to navigate through the complexities of the purchasing process, we pride ourselves as being one of the city's more personable boutique real estate services. Plus we're aligned with some stellar Home Inspectors! And don't forget, at urbaneer.com we embrace a pressure-free, hassle-free approach to the purchase and sale of real estate.
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~ Steven and the urbaneer team