Moving costs can add up, and buyers may want to save money where they can. But one expenditure that should be considered is a home inspection.
The average cost of a home inspection in Canada is $500, according to Canadian Residential Inspection Services Ltd. This upfront, one-time cost could save buyers in the long run in the form of lower insurance rates and fewer claims.
How? A home inspection can identify potential risks within the property. If buyers address these hazards, it can help them avoid future claims costs because key defects will have already been fixed. Further, many home insurers may offer discounts on coverage when an inspection has been performed.
So buyers should include an inspection contingency in the purchase offer. It’s recommended buyers hire their own home inspectors, and are present during the inspection, say experts. Here’s what buyers can expect:
• Plan to spend two to three hours at the home. The seller shouldn’t be present at this time. Being onsite might inhibit the freedom of discussion between the agent, buyer and the home inspector, notes Peter Weeks, president of the Canadian Association of Home and Property Inspectors. The buyer should feel comfortable in what could be their new home, he adds.
• Interior and exterior will be inspected. The inspector will check key items both inside and outside the home. For the interior, this includes plumbing, heating, electrical, and even ventilation in the laundry room and any kitchen appliances that come with the purchase. For the exterior, this includes outside walls, foundation, roof and garage.
• Take photos of any damage. It can be hard to remember all the areas of the home the buyer has seen, so the buyers should take their own photos and make notes of any damage they find during the inspection. These will serve as reference points.
• There will be a written report. Following the inspection, the inspector will provide the buyer with a detailed report that lists which items (if any) will need repair and how soon.
Once the inspection is complete and the buyer has read the report, they have the option of whether or not to move forward with the purchase (as long as the inspection was included as a contingency in the purchase offer). The buyer can also negotiate that certain items be fixed before the closing date, or ask to reduce the purchase price of the home if the buyer has to do the repairs.
Finally, once the buyer becomes the homeowner, they should contact their insurance company, and provide proof of the inspection. The insurer can work with the homeowner to create a coverage option that fits their needs.
Tips for sellers
It’s also important for sellers to participate in the home inspection process. Here are some tips to prepare the home.
• Declutter. Home inspectors cannot move personal effects. So sellers should remove furniture, and clear items away from areas, including access panels, crawl spaces, attic hatches, electrical panel boxes, furnaces, hot water tanks and water shut-offs, says Helene Barton, executive director of the Home Inspectors Association BC. Further, if the access panel to a crawl space or attic is in a closet, remove the clothes from that closet, or cover them with a sheet. This will protect the clothing from bits of insulation and debris that might fall down when the inspector removes the access panel.
• Keep pets away or secured. Overly friendly or unfriendly dogs or other family pets can complicate the inspection process, adds Barton. So sellers should either have a friend or family member care for them, or keep pets in a contained space during the inspection.
• Ensure all utilities are connected and active. Home inspectors are discouraged from opening any closed gas or water valves, or electrical breakers, says Leigh Gate, secretary of Ontario Association of Home Inspectors. Gas fireplaces should have the pilot light lit prior to inspection.
• Have paperwork for city permits available. This paperwork may include details on items like knob & tube or aluminum wiring, Kitec or Poly-B plumbing supply lines, cast iron drain lines, as well as other safety-related items like railings, guards, and door closers to the garage, notes Weeks. Some of these items were non-issues 15 to 20 years ago, but they may now be an insurance concern and cost the new homeowner more when they get their coverage, he explains. That’s why the seller should offer full disclosure.
Suzanne Yar Khan is an independent writer and editor with more than a decade of experience in financial, business and lifestyle publications. In her spare time, she enjoys fiction writing, yoga, travelling and spending time with her family and friends.
Suzanne Yar Khan is a paid spokesperson of Sonnet Insurance.