News Article:  Published by the Ontario Real Estate Association (OREA)

March 1995
OREA
News & Views

Home
Inspections

Who needs them?

If you've ever thought a home inspection prior to closing a deal was a scary idea, you may want to think again.  The consequences of not recommending a professional home inspection can be a lot scarier!  "Advising purchasers to have a home inspection carried out by a qualified company makes good business sense for many reasons - two important ones being credibility and  liability," says 1995 OREA president, Rose Leroux.

" A REALTOR who is concerned that an inspection will reveal information which might ruin a deal, may be trading a short-term commission for a long-term debt," she says.  However, a reputable home inspection firm will identify and disclose any mechanical or structural problems, and minimize the risk of litigation.

Recommending a home inspection to a home buyer
is part of the REALTOR's professional package.

"Recommending a home inspection to a homebuyer is part of the REALTOR'S professional package," says Alan Carson of Carson Dunlop & Associates.   "It can also be a great marketing tool.  If your buyer gets cold fee, sometimes the home inspection can provide enough confidence to push people over the hump."

Home inspection industry doubles

Since it is important for a REALTOR's reputation, sales and potential liability to recommend only qualified home inspectors, knowledge of professional inspector qualifications is essential.  According to Carson, the home inspection industry in Ontario has doubled over the last five years causing a rapid increase in the number of individuals entering the field.  "Approximately 30% of the home sold in the province are inspected prior to purchase," he says.   "Currently, home inspectors are not required to be licensed in Ontario, and not everyone who claims to be a home inspector has the necessary technical expertise, experience and professionalism.

Reliable Source

The most reliable indication of a home inspector's qualifications is membership in the Ontario Association of Home Inspectors (OAHI) or the Canadian Association of Home Inspectors (CAHI).  OAHI estimates that there are 180 inspectors in Ontario of whom only 30 are OAHI members and 95 candidates for membership.

The provincial government recently passed Private Members' Bill 158, The Ontario Home Inspectors Act, enabling the OAHI to grant its members the exclusive right to use the designations, Registered Home Inspector or R.H.I.   "The Home Inspectors Act allows us to be self-regulated and set our own standards for ethics, education and by-laws," says Harry janssen, president, OAHI.   "We're excited because this means the government likes what we have been doing so far and has given us permission to continue.  Now, under Bill 158, anyone can call themselves a home inspector, but only OAHI members can legally call themselves registered home inspectors."

Rigorous Requirements

To become a member, inspectors must meet rigorous professional and educational requirements, including the performance of 250 paid, professional home inspections, successful completion of two comprehensive written exams, and a trial period of six months followed by a review.  CAHI members must also adhere to the association's code of ethics which demands fairness and impartiality towards clients.  In addition, to maintain membership and stay current with the profession, an inspector is required to meet annual continuing education requirements. 

The home inspection helps educate buyers, enabling them to make an informed decision.  "REALTORS should realize that home inspections are not intended to nit-pick every minor problem or defect in a home," says Carson.  "No home is perfect, and the inspection report will focus on any major damage or serious problem that might present a significant financial burden."

Good Investment

Considering how costly major defects can be, the fee for a home inspection may be seen as a good investment.  According to the OAHI, it costs anywhere between $250 and $500, and takes an average of two to three hours to competently inspect a typical single family, three-bedroom home.  A list of qualified home inspectors is available from the OAHI, and REALTORS asked to recommend an inspector should be prepared to offer several names to avoid any suggestion of a conflict of interest or collusion.

Home inspections are part of doing business in residential real estate sales, and REALTORS can use their knowledge of the advantages as a way to increase their professionalism.  "The role of the REALTOR is not to give the seal of approval on a building," says Leroux.  "But as professionals we are prepared to stand behind our product, and know when to call in the experts," she says.

How to prepare for an inspection

Much of the advice a REALTOR offers a vendor to prepare a home for sale also pertains to a home inspection:

• The home should be neat, and routine maintenance work should be done prior to the inspection.  For example: clean mechanical equipment, fix leaky faucets and repair broken items.
• Repair cracked or broken masonry, particularly on steps, walkways and curbs.
• Remove stored material from around the boiler/furnace and the water heater to improve the inspector's access to these areas.
• Check the caulking and grout around the bathtub and tile area.  Re-caulk if necessary.
• Examine windows and doors.  Replace broken glass panes, hinges, springs and locks if they are broken or faulty.
• Since the inspector will check the mechanical and structural components of the home, clear all paths for access.  If doors are locked, have the keys ready.
• Keep records on hand, such as records of termite treatment, waterproofing, and appliance service, as well as receipts for major repairs, heating and electric bills.

Reprinted from the March 1995 issue of OREA News & Views.