Home Inspection 101

1. Home Inspection 101 For Real Estate Professionals *Global Property Inspections is solely responsible for the content of the material used in this course/seminar.

2. 1) Increase your knowledge of the home inspection process. 2) Improve your ability to interact with home buying clients and inspectors regarding the home inspection. 3) Increase client satisfaction with the home buying process. Course Goals

3. This course concerns home buyer inspections only, not pre-listing inspections for home sellers. The terms “home buyer,” “buyer,” and “client” as used throughout this course, refer to the home buying client of the real estate sales representative. The terms “home buyer” and “client” also refer to the client who hires the inspector to perform the home buyer inspection. Home Buying/Client Terminology

4. Home Inspections & The Real EstateTransaction

5. Home inspections are optional but are included in most real estate purchase agreements. The objective of the home inspection is to protect the home buyer from unpleasant and often expensive repair surprises. A home inspection increases a buyer’s confidence in making an offer and their decision to purchase. Role of the Home Inspection

6. Information gathered from an inspection helps bring buyers and sellers together: Information leads to knowledge Knowledge leads to understanding Understanding leads to agreement A Home Inspection Completes The Sale

7. Benefits for Sales Representatives Reduces your liability (transfers to inspector) Deliver higher level of service to clients Demonstrates your professionalism Brings additional referrals from satisfied clients

8. Home Inspection Basics

9. Goals of the Home Inspection • To share unbiased information about major components and safety issues • To discuss repair, maintenance or safety issues • To move the sale forward

10. The Inspection: What it is A visual examination of readily accessible systems and components of the home. To identify conditions that, in the professional judgement of the inspector, are significantly deficient or near the end of their service life. To include the inspector’s recommendations to correct or monitor conditions.

11. The Inspection: What it is Not It is not technically exhaustive It is not a code inspection Will not identify concealed conditions or latent defects

12. Standards of Practice Inspectors normally follow industry Standards of Practice, prescribed by industry trade associations. The standards represent guidelines for the inspector to follow, including the scope and limitations of the inspection. Inspectors in Ontario have several trade associations to choose from, including the following: TheCanadian Association of Home and Property Inspectors(CAHPI), The Professional Home and Property Inspectors of Canada (PHPIC), The Ontario Association of Home Inspectors (OAHI); and The International Association of Certified Home Inspectors (InterNACHI) .

13. Tools and Equipment Even though the inspection is a “visual” examination, inspectors may employ tools and equipment to assist with their inspection. Gas Detector MoistureMeter

14. Inspection Limitations • Industry standards were written to provide consistency in inspections and to be affordable for home buyers. • For instance, if an inspection were more than a “visual” inspection, it would take many more hours or days to perform and might cost thousands instead of hundreds of dollars.

15. Pre-inspection agreement:defines scope of inspection, standards followed and fee charged Home inspection report:Should be clear, concise and incorporate photos Common Documents Associated with a Home Inspection

16. Inspection Protocol Who should attend the inspection? It is important to establish beforehand who will attend the inspection and when they will attend Client (e.g. home buyer) Real estate sales representative Will home seller attend or their sales representative? Local rules may prescribe who must be in attendance.

17. Home inspection reports should be: Clear and concise. Adhere to the industry standards of practice. Cover all major components. Delivered in a timely fashion (such as within 24 hrs.) Should define terms used therein: (e.g. “acceptable,” “marginal,” “defective,” etc.). Who owns the inspection report?The client. Home Inspection Report Basics

18. Home inspection report formats vary: Checklist or Narrative Combination checklist/narrative Computer generated Handwritten May or may not include summary May or may not include photos Delivered at time of inspect or later Home Inspection Report Formats

19. Professional Home Inspectors

20. Characteristics of a Good Inspector: Trained, thorough and unbiased Courteous, professional and has the necessary tools and equipment Has good written/oral communication skills Insured Note: There is currently no home inspector license required in Ontario; no required training or exam. Professional Home Inspector

21. Generally adhere to industry standards of practice and code of ethics. Inspect readily accessible systems and components. Report: Systems/components that aren’t working properly or have reached end of service life Explanations of the deficiencies Recommendations to correct deficiencies Reasons if certain systems or components were not inspected What an Inspector Should Do

22. Predict remaining life of system/component Offer advice on methods, materials, costs to fix component - unless qualified to do so Offer to make repairs, refer specific contractors or receive referral fees Comment on market value Perform code inspections What an Inspector Should NOT Do

23. Insurance Coverage for Professional Inspector • Should carry General Liability insurance • Should carry Professional Liability Errors and Omissions insurance (E & O) • Many E&O policies have a “referral” endorsement

24. Inspection Reduces Complaints/Liability Chart Provided by FREA

25. Educating the Home Buyer

26. Informed Home Buyers • Most home buyers may know little about construction. • Informed buyers are more satisfied and can better: anticipate/plan for repairs/maintenance

27. Client Satisfaction Home buyer satisfaction depends on many factors. The condition of the property is one. Once the home buyer moves in, do they feel they got the home they expected? An inspection can help improve client satisfaction by eliminating or reducing “unpleasant surprises” after moving in.

28. Home Buyer Expectations Home inspectors can improve client satisfaction by managing client expectations. Home buyers often set themselves up for disappointment by expecting that their home will be in near-perfect condition. They often feel a let down when the inspector discovers deficiencies. Inspectors can assist by explaining that few homes are in perfect condition and if issues are discovered they can be corrected.

29. Home Buyer Satisfaction After the Move In Home inspectors also play a role in client satisfaction after the move in. Clients might expect that the home inspection would have uncovered every deficiency in the house, even hidden damage. Inspectors can help set reasonable client expectations by making sure to explain the scope and limitations of the inspection. Sales representatives and inspectors can help by asking the client if they have any questions about the home inspection report and inspection findings.

30. Home Buyer Satisfaction After the Move In What to do when issues arise after the move in? Clients might call about deficiencies discovered after they have lived in the home for awhile. Suggest that the home buyer call their home inspector to have the inspector revisit the property. The client should review their home inspection report to see if the deficient condition was mentioned in the report. A home inspector can make a mistake and might be liable, but sometimes the defective condition was hidden from the inspector’s view, (e.g. behind walls, under linoleum, etc.) or simply failed after the inspection (water heater goes out).

31. A good inspector: Explains the scope and limitations of an inspection Makes sure the client reads and signs the Pre-inspection agreement Invites the buyer along for the inspection Explains how long the inspection might take, what the fee will be, and when they can expect delivery of the inspection report Explain Scope of Inspection

32. Ordering a Home Inspection • Immediately after completing a written purchase agreement with home seller. • In accordance with the Code of Ethics of REBBA 2002 (Real Estate and Business Brokers Act), sales representatives should be cautious when recommending home inspectors. • Best practice is to offer options and provide a minimum of three or more names of inspectors and allow clients to make their own decision. • Refer toREBBA 2002 Sec. 6: ProvidingOpinions and Sec. 8: Services from Others.

33. Preparing the Seller

34. How to Prepare for the Property Inspection • Secure pets • Turn off alarms • Remove obstructions to: • Furnace and water heater • Electrical panel • Attic • Garage • Crawl space, etc

35. The Inspection Process:Grounds

36. Grading/Drainage • Great curb appeal: But inspector is looking for positive drainage • Water is No. 1 issue with most homes • Need positive drainage (slope) on all four sides • Most drainage issues are easy to fix

37. Loose or missing handrails (inside or out) are a safety issue Driveway/sidewalk/patios: Heaving Differential settlement Excessive gaps Are tripping hazards but easy to repair Driveway and Walkway/Steps

38. Porches/Stoops, Decks/Balcony & Patio • Ledger board should be bolted to the structure not just nailed. • Railing should have proper height and spacing • Railings/hand railings should be firmly attached • Support posts and stair stringers should have no earth to wood contact • Decks can be expensive, but are fairly easy to repair

39. The Inspection Process:Exterior

40. Exterior • Trees can abrade roofs, heave driveways/sidewalks • Tree roots can affect foundations, sewer lines, etc. • Other vegetation should be kept away from siding, air conditioners, etc.

41. Inspection of roof: Estimate age Number of layers Type of materials Leaking or not? Types of valleys Flashing Roofing System

42. Chimneys • Chimneys are a frequent maintenance issue and can be expensive to repair. • Inspect for: • Proper alignment • Proper height • Flashed property • Lined and capped

43. Siding/Trim • There are many exterior coverings such as: wood, vinyl, stucco, brick, stone and synthetics. • Some are more high maintenance than others but all need some care (e.g. Cracks in stucco require sealing. Wood needs painting. Brick and stone may require tuck pointing. Vinyl needs washing) • Vegetation should be trimmed back to prevent damage from contact with the siding.

44. Inspect for: Operation Alignment Weather-stripping Evidence of leaks Windows and Doors

45. Garages • A single garage door such as this one receives a lot of use • Examining the operation, tracks, springs, openers and fit is important • For child safety, “auto reverse” is a must

46. The Inspection Process:Electrical

47. Inspect for adequacy and safety including: Amps/volts Service cable Panel Branch Circuits Grounding Wire Conductor GFCI, AFCI Smoke Detectors Electrical

48. Current standards require GFCI protection: Most exterior outlets Not including upper decks Bathroom outlets New kitchen construction/renovation where kitchen counter receptacles/outlets are being installed within 1 meter of the edge of kitchen sink AFCI’s are not required as of yet on most existing homes but are required for electrical outlets in bedrooms of new construction. GFCI

49. Smoke Detectors • National safety standards require smoke detectors • Can be battery operated, hard-wired or both • For best performance, should be mounted on ceiling or near centre of the room, hall or stairway, and at the head of each stairway leading into an occupied area • Inspectors activate test button only

50. Carbon Monoxide (CO) Detectors CO is called the “silent killer” It is colorless and odorless CO detectors are not required in existing homes CO detectors are required in new construction in Ontario.