It's buyer beware for people hiring a home inspector

They are vital when house hunting but field is unregulated

Smart Money: Buying A Home, Tronto Star March 25, 1998

Jake McCall thinks hiring a home inspector could be the cheapest insurance against unpleasant surprises when buying a home.

``I think for the money that it costs, you'd be insane to move into a house without having an inspector look at it,'' says McCall, who purchased a home in Toronto early this year.

``Home inspectors look at things from a completely different perspective. They are always sounding gentle alarms in your head, but it's also a constructive relationship because they tell you how you can improve your home,'' says McCall, a business consultant who advises companies on ways to market their products.

McCall had a positive experience with his home inspector, but that's not always the case.

Though a formal inspection should be considered a must when buying a resale home, most first-time buyers might be shocked to learn home inspectors work in an unregulated industry. Anyone can hang out a shingle as an inspector, since they are not licensed by the government. If you have a phone and a business card, you can call yourself an inspector.

While there is a self-governing association, the overwhelming bulk of people who call themselves home inspectors aren't members of any association, which means the public is left guessing at their competency. In some cases it can be expensive. Incompetent inspectors can miss crucial structural problems in a home that could cost thousands of dollars to repair.

``Home inspection is not registered anywhere as an occupation or a skill, such as a plumber or carpenter,'' says Terry Marshall, senior researcher at the Canada Mortgage and Housing Corp. ``Consequently it's open to abuse.''

The federal housing body has started an initiative to establish performance standards for the industry, Marshall says. The hope is that a national certification program will eventually take place.

Until then, in the home inspection business it will be buyer beware.

``You hear horror stories all the time about inspectors missing problems such as a foundation crack that ends up costing the new homeowner $20,000 or more,'' Marshall says.

McCall hired inspector Jeff Clarke to inspect his home, but it was a bit of a lucky coincidence that Clarke also happened to be past-president of the Ontario Association of Home Inspectors.

The voluntary association has a registered home inspector designation that calls for inspectors to meet minimal educational requirements at a community college and have some experience and have errors and omissions insurance in case of liability.

Clarke himself has been a building contractor for more than a decade and is a licensed carpenter, as well as a certified engineering technician. In January the Ontario home inspectors group signed an agreement with the Ontario Association of Certified Engineering Technicians to work together on certification, education and accreditation.

But while the association does have some minimum requirements, there's still a long way to go in the industry. The association has 300 members in Ontario, a fraction of the thousands of home inspectors in the province.

The ultimate goal is to ``professionalize'' the industry and make home inspection a four-year college degree, says current Ontario Association of Home Inspectors president Harry Janssen.

`` I think you'll see a time where home inspectors have the same sort of recognition as other trades,'' says Janssen.

While resale homes and condos are generally bought ``as is,'' which makes an inspector strongly advisable, new homes and condos are enrolled with the Ontario New Home Warranty Program that provides protection. The program guarantees the return of deposits to a maximum of $20,000 if the developer is unable to build. It also insures the home for one year against defects.

But you're on your own when buying resale, so it's important to get a good inspector, says Jimmy Lee, president of the Toronto Real Estate Board.

``The quality really varies from inspector to inspector, so you have to be careful,'' Lee says.

Lee says it's common to include an inspector's approval of the property as a condition of sale for home transactions. And in a hot spring market where multiple offers are being placed on properties, it's probably more important than ever to line up a good home inspector since you may have only days to decide whether you want that home.

Some realtors also suggest asking for a discount from your inspector for the second home that you make an offer on if your offer on the first home falls through.

The average cost for a home inspection is between $250 and $500. If you are considering an inspection as part of a purchase, keep in mind that a good home inspection should take about 2 1/2 to three hours and include a thorough written report detailing the condition of the structure.

SEEK REFERRALS

It should outline work needed, and include estimated cost figures. It should be completed within five days of the offer to purchase, and you should be asked to attend. According to the CMHC, inspectors should not perform the actual repair or renovation work for you.

You can also ask a friend for referrals, but be careful when asking real estate agents trying to sell you a house, says the CMHC's Marshall.

``It's a bit of a conflict of interest when they refer you to an inspector that examines the house they're trying to sell you,'' Marshall says.

Unfortunately 80 per cent of referrals are through agents, he says. Better to look elsewhere to avoid any conflict, he cautions.

Once you've got a potential inspector, they should offer to tell you about their qualifications and experience. You should also ask for references and call prior clients. Make sure the inspector has liability insurance to cover anything that's overlooked, such as a leaky basement.

Also, beware of fly-by-night home inspectors who will breeze in and out of a house in an hour.

``I don't know how you can perform any kind of inspection in that kind of time,'' Clarke says.

A good inspector should go over the electrical system, the heating system, and examine the structure of the building carefully, according to Clarke.

As well, an inspector should give the homeowner a clear understanding of the maintenance requirements and location of the important switches and valves.

The biggest problem with any home is simply from natural aging, says Clarke. A home over 15 years old may need a new roof, which could cost $2,500 or more, or a new furnace which could cost $3,000.

Homes tend to be newer in the suburbs. Many homes in the core - within the former boundaries of the old City of Toronto - are more than 75 years old. There are a myriad of problems that could crop up.

One common problem is water from leaks, vapour and condensation.

``The natural enemy of a home is water. A leaky basement is the Number 1 problem and that can be a big, expensive fix,'' Clarke says.

Poor initial workmanship is another problem. ``Some homes are being built so quickly that the builders don't take care, and there just isn't the quality of trades people out there, so work suffers,'' says Clarke. From floorboards not being fastened properly - which results in squeaks - to foundation cracks, Clarke has seen the gamut.

There is another destructive force to watch out for when buying a home, says Clarke, and that is the tampering of a home handyman.

``From the electrical system to the heating system it can be a job that is well done, to absolutely laughable to downright hazardous. What you're trying to avoid is the latter, because you'll pay for it later,'' Clarke says.

Termites are a problem that many people forget to check, especially in older homes in Toronto that can be prone to termite infestation.

Most home inspectors will take a look, but if you're in a problem area, you should call in a specialist, Clarke says.

``Termites are a pretty big problem that can be tough to detect,'' says Pete Kroone, an inspector with pest control company PCO.