Photo by Justin Baeder, acquired via Flickr.com
The Hidden Risks of Home Inspections
Nowadays, the standard Agreement of Purchase and Sale reminds the buyer that he or she may choose to insert a home inspection clause. As a result, nearly all buyers will insert such a clause, making inspections a common part of selling a home.
In theory, this is fine. But in practice, there is a serious problem: the home inspection industry in Ontario is not regulated.
As a result, home inspections carry some hidden risks that all buyers and sellers should be aware of. This article will explain the risks and how to protect yourself.
Risk #1: Unnecessary Repairs
Some inexperienced inspectors may recommend unnecessary repairs just to "cover" themselves, and others may over-react to a problem by suggesting excessive repairs.
This can cost you thousands of dollars, or cause you to walk away from a perfectly good home you were considering buying.
Some examples that I've seen in the past include: recommending the roof be re-shingled before this is necessary, over-reacting to a minor mold problem, recommending unnecessary replacement of aluminum wiring, and over-reacting to minor cracks in the foundation or structural issues.
The best way to protect yourself against unnecessary repairs is to choose a competent inspector (see below). In addition, if your inspector recommends a repair that will be very costly, it can never hurt to get a second opinion.
Risk #2: Missed Problems
On the other side of the coin are missed problems. What happens if your inspector misses a serious flaw?
As the buyer, you lose the chance to negotiate with the seller for the cost of the repair (or to walk away from the deal if they won't pay).
And of course, in some cases your safety may be put at risk.
Again, the remedy is to choose a competent inspector (see below).
Risk #3: Damage to your Home
It's not unheard of for inspectors to accidentally damage the home they're inspecting. For example, leaving a tap running without realizing the sink is clogged, then leaving the room to inspect other parts of the home, resulting in serious water damage.
Because home inspectors are not regulated, there's no requirement for them to purchase liability insurance.
If the inspector isn't insured, good luck getting compensation if something is damaged.
(Yes, you can go to small claims court, but there's no guarantee of success, and the time you spend may be more than the damage is worth.)
The solution in this case is to make sure your inspector has liability insurance. Ask to see a copy of the insurance before they inspect the home.
Risk #4: Liability for Injuries
A final risk arises if the inspector is injured while inspecting your home. For example, what if they slip and fall while inspecting the attic or shingles?
Injuries like this can lead to extremely costly lawsuits. Thankfully, most home insurance policies cover incidents like this—so make sure you have home insurance!
Picking a Good Inspector
So how do you find a good home inspector? These tips will help:
- Use a full-time inspector, not somebody who does it on the side or as part of some other business.
- Ask them about their background and training.
- Ask if they're a member of the Ontario Association of Home Inspectors.
Dealing with an unregulated industry can be challenging, but there are good inspectors out there if you take the time to find them, and their insight can be invaluable.
Want to know more about home inspections? Just ask me, I'll be happy to help.