What you should know about property inspections
By Kathy Schmidt, Broker/Owner, Schmidt Realty Group Inc.
So you’ve found a property you want to buy! Congratulations! There are a lot of steps that come next and your REALTOR® can guide you through them step by step. One of the most important steps is arranging a professional property inspection.
Unless you’re an expert in electrical, heating and plumbing systems and have in-depth knowledge about insulation and grading, you’d better hire a pro! And even if you are a pro, you’re likely too emotionally involved in the process to see things objectively. You need someone with no vested interest in whether you buy or not.
What should you ASK before hiring an inspector?
Before you hire an inspector, you’ll want to ask a few questions. For instance, will they go up on the roof to check the shingles or not? If your inspection is happening in the winter, will they come back in the spring to give your roof a once over? Also, many inspectors don’t check appliances, but if you ask the permission of the seller in advance there’s no reason why you can’t check those out yourself while you’re there. And yes, you need to be there for your inspection! Your REALTOR® will be there as well taking responsibility for the property. We’re not there to direct the inspection – it’s your time to utilize the expertise of the independent property inspector. Be sure to ask all your questions while you’re at the inspection, and also make sure the inspector you hire is willing to answer a question or two after you move in. It’s not unusual for questions to come up that a quick phone call can answer!
What if I’m buying a condo?
Just because you’re buying a condo doesn’t mean you don’t need to do an inspection. If you have your own furnace and hot water tank, you’ll definitely want to hire an inspector. If it’s an apartment style unit with no separate heating units, there’s a lot less for your inspector to look at but for your peace of mind you still might want to have the unit inspected. There are many things you can’t see with the naked eye that a good inspector will catch, such as high moisture content in the bathroom wall by the shower.
What will your inspection COST?
Typically, an inspection costs in the range of $500, more for larger homes or acreages, or if you want to have the sewer line scoped as well. Plus if it’s out of town as most inspectors will charge for driving time and distance.
Does it matter if your inspector is licensed?
It’s important that you choose a licensed home inspector for a few reasons. First of all, there is important required training and professional standards. Secondly, the standard real estate offer to purchase in Alberta states that the inspection shall be done by a professional property inspector. You can strike that clause out if the seller accepts it, but why not hire a pro! Learn more about licensing of property inspectors in Alberta here!
What’s usually covered in a typical house inspection?
- Electrical panel and outlets
- Furnace or other heating system
- Hot water tank
- Kitchen and bathroom plumbing
- Lot grading
What is NOT covered by an inspection?
It’s important to understand that an inspection is not intended to cover normal wear and tear such as marks on the wall, loose door handles etc. Also, it is not the inspector’s job to PASS or FAIL a property. All properties, even those which are brand new, will have issues you’ll want to be aware of as the new owner. The purpose of the inspection is to give you the facts so you are fully informed about the property you are considering purchasing.
What if the inspector finds PROBLEMS?
In most cases the inspector will find a few things that need attention – that’s to be expected. It’s very rare to find a perfect home, even if it’s brand new! At least now you know what those things are, and you can plan ahead and budget for them. If something significant turns up, you have 3 basic options:
- You can request to renegotiate the price with the seller. In some cases the seller will take on the full cost of the repair, but frequently costs are shared. Why? Well let’s say that the furnace has been working fine for the seller and you knew you were buying a house with an older furnace. On inspection it turns out the furnace is no longer safe for use. This is new information for you and for the seller. You weren’t expecting a brand-new furnace so perhaps it’s unfair for the seller to pay the full cost. However, you were expecting to be able to heat your house next winter, even if the furnace was older. In a case like this, frequently the cost of the new furnace is split between the buyer and the seller. You get a new furnace with a much longer life than the one you thought you were buying, and the seller takes on some of the cost.
- You can request the seller to complete some repairs prior to possession.
- You can build the repairs into your personal budget and continue with your purchase with no changes to the offer price or terms. In some cases (such as the furnace example above) the replacement cost might be able to be built into your mortgage through a Purchase Plus Improvements (PPI) mortgage plan. A PPI program may allow you to add the cost of the new furnace to your mortgage. Talk to your lender to see if they offer something like this! Note: Appliances typically are not allowed to be financed through a PPI
- You can decide it’s not the house for you and keep looking! That’s totally your right if your Offer to Purchase has been written with a condition that states that the inspection must be to your satisfaction.
The bottom line is that a professional inspection is a smart investment. While it’s not inexpensive, the cost of a professional inspection is far less than the cost of buying someone else’s problems. Before you spend hundreds of thousands of dollars, spend a few hundred to make sure you know what you’re buying!