Home inspections: What you need to know

When it comes to home inspections, Bruce Cohen has seen the good and the bad.

He found the good as a seller, paying attention when a buyer's inspector gave his house a thorough going-over. Cohen was alert to the process because he'd been burned once before.

“It was only after taking possession that I identified major omissions and errors,” he says of his bad experience. “The inspector listed the electrical service as 100 amp when it was only 60. He failed to report the dining room and one bedroom had no heat.”

Cohen, a freelance writer, also learned that his century home near Toronto had badly rotted floors and an oil tank more than 15 years old, which meant nobody would deliver heating fuel for it.

But he fought back and won.

This makes him part of a tiny minority in Ontario. The home inspection industry is unregulated. Complainants rarely recover more than their fees.

Related: This basement flood led to a lawsuit 

Within days of sending the inspector a registered letter detailing the report's errors, including photos and a copy of repair invoices, Cohen got a certified cheque for about $5,000. He may have succeeded because he threatened to take matters to court and send copies of any favourable judgment to local media.

Although Cohen didn't need the courts, legal action or complaints to inspectors or their associations are the main recourse for victims of shoddy work in Ontario, and this angers industry veteran Rob Hermann.

“There may be as many unqualified inspectors cheating people out of their money as there are legitimate ones earning it,” says Hermann, who is gathering names at his website (homecore.ca) for a petition demanding the creation of a provincial regulator, with licensing powers and tough, uniform standards.

Among Hermann's credentials is “Registered Home Inspector,” issued by the Ontario Association of Home Inspectors.

Queen's Park sanctioned OAHI in 1994 as a self-regulating body, but Hermann says that's not enough, given the rise of competing associations, various certifications, uneven standards and the lack of a clear complaints mechanism.

Related: 5 ways to avoid buying the wrong house 

“Even under the RHI umbrella, there's a vast difference among the quality of inspectors,” he says.

Aubrey LeBlanc of OAHI says his group and some smaller associations support the idea of a regulator. “But the devil is in the details of the model,” he says.

OAHI's biggest rival, the Ontario Association of Certified Home Inspectors (OntarioACHI), claims to represent 50 per cent of Ontario inspectors. It issues Certified Home Inspector designations.

In an email, Nick Gromicko, founder of Colorado-based InterNACHI, the parent of OntarioACHI, says he supports licensing, but warns that “licensing sets a very minimum bar that permits everyone to enter the industry. Being licensed is much like being up to code. It is so low of a standard that if you did anything less, it would be outright illegal.”

Cam Allen, a retired Kingston builder who has done inspections for 13 years, uses the word “ugly” to describe Ontario's market.

“There are excellent inspectors out there, but it's truly ‘Buyer beware!'

“If you own a flashlight, you can be a home inspector,” he says. “You can create any certification you want. Homes are the biggest investment most people ever make. The public puts their faith in this business, but how do they know whom to trust?

“I do know that all the best inspectors have serious experience as homebuilders.”

Allen also warns people to be careful about recommendations.

“There are lots of good, ethical real-estate agents, but conflicts of interest between inspectors and agents who only care about the sale are almost certainly common.”

A spokesperson for Minister of Consumer Services Margarett Best says Ontario “has no immediate plans to regulate in this area.” The Consumer Protection Branch got only three complaints about inspections in 2011.

Tips to follow

Do your homework: Ask savvy people for recommendations and settle on an inspector before getting caught up in the stress of buying or selling. Inspectors should have serious experience in the building trades, errors and omissions insurance, and, at the very least, Registered Home Inspector, National Certificate Holder or Certified Home Inspector credentials.

It's no warranty: Some have sued successfully when inspectors have been wildly inaccurate about a home's structure and mechanicals, and the costs of necessary repairs. But inspectors can't break holes in walls or peel shingles and siding from a house. A report is an analysis based on a largely visual examination. Read the contract carefully.

Who works for whom? Buyers should be wary of reports done for vendors and vice-versa. Inspectors should be impartial third parties, but it's an unregulated business. Some may be willing to sacrifice objectivity to help a sale. Some may have inappropriately close relationships with real-estate agents.

The big stuff: Demand a clear statement on the foundation and structural integrity and estimates of repair costs. Attic mould, signs of basement leakage, substandard wiring or insulation materials such as vermiculite, asbestos and urea formaldehyde can disqualify you from a mortgage or insurance. How long till the house needs a new roof, furnace or windows? Find out what costs to deduct from an offer.

Seller beware: Having your home inspected before listing it can head off untimely surprises. It can let you be up front with buyers or enable you to seek good contractors to get the work done at a fair price. Pre-listing inspections can also help vendors rebut dubious claims from buyers' inspectors.

The bottom line: A typical home should take two to three hours to inspect, covering 400 checks, and cost in the $400 to $600 range. Be leery of an inspector who offers discounts or to fix problems he finds.

http://www.moneyville.ca/article/1160068--having-a-home-inspection-done-here-s-what-you-need-to-know

Posted via email from Markham Real Estate Today with Asif Khan