Pfanntastic Home Buyers Handbook
Chapter 8 C. – Working On “The Subject To” Clauses; Home Inspections.
In our journey towards buying your 1st home, so far we have covered.
- A broad overview in buying your 1st. Home
- Location, is Everything
- Selecting a Realtor
- Preparing to View Homes
- Watching the Market
- Financing Options
- Finding A Lender
- Getting (Pre) Approved for a Mortgage
- Making and Offer
- Making an Offer in Different Conditions
- From Contract to Closing the Deal
- Working on the Subject to Financing Condition
Please review the previous chapters for more details in our Pfanntastic Home Buyer Handbook Series, and or contact Peter of Linda Pfann.
As part of Buying your First or Next home, a home inspection will give you an opportunity to discover more about the home before your purchase is finalized. In case there are serious problems with the foundation, mould issues, or underground leaks, you will be aware of the condition of the property, prepared to ask for repairs to be completed by the seller, possibly negotiate a reduced price, or if all else fails, to walk away from the property.
Before we dive into the rather complex world of property inspections it is important to explain that; even the best property inspection is at best a reflection of the inspectors opinion and interpretation of the property condition at the time of the inspection, and there is often no real way to accurately predict and or determine how well and or how long all the bits and pieces of your new home will perform under normal and or extreme circumstances.
In and around Greater Victoria, there are many older homes of various era's, each and every era has a set of their own minor to more important issues to consider, however in all cases we need to accept and understand that we basically live in a rain forest (with most trees removed). Meaning that our climate, is mild and moderate but it will rain, and sometimes it will rain a lot, as such water, moisture and how your property and home deals with water will be one of the key indicators as to the current and or future condition and concerns with your home and property.
Home Inspections are really a catch all name for inspections of any and all aspects about the property and may involve a number of independent inspections by trained and or licensed specialists in a variety of areas of possible concern.
In British Columbia, Canada our standard contract of purchase and sale uses the following definition to out line the scope of what a buyer may want to consider as part of a property inspection.
Inspections may include the following (if applicable):
buildings and outbuildings; confirmation of the Property boundaries; records of local government authorities; property appraisals for mortgage purposes;
verification of the operating condition of the septic system; confirmation of quantity and quality of the well water; verification of existence of underground oil storage tanks.
The Importance Of Home Inspections
Finding a home does not mean that your investigative duties are over. Although inspections are not "required" or mandatory, your lender and even your insurance company may require at the very least a basic inspection that will need to be conducted before they agree to approve your mortgage loan.
But what about full home inspections? Are they worth it? In most cases, the answer is yes. Although you will have to pay for a home inspection, it may save you a lot of money in the long run. In most cases we would highly recommend to complete and inspection.
A thorough home inspection will include checking the following:
- Electrical systems
- Heating and cooling systems
- Structural elements
- Doors and windows, and
- Plumbing, drainage, and waterproofing
- Quality and quantity of water supply
- Sewer and or Septic systems
- Common areas, and shared amenities in the case of strata and or other forms of (partial) shared ownership forms
- If there are termites or other insects, the home owners will have to take care of the problem before they can sell the home in most cases.
Having a home inspection will give you peace of mind when you are buying a home. Since you will be taking out a mortgage, it is important to know what you will be buying, and the amount of money you will have to invest after purchasing the home.
A home inspection will also help you make your final decision whether to purchase the home or to keep looking for another.
How To Find A Home Inspector
There are a few places to turn to when looking for a home inspector:
- Your real estate agent
- References from friends and family
- The phone book, and
Ask around and see if you can get references of other homeowners that will give you a good report. Many home inspectors work freelance and only work certain days during the week. They are trained in home inspection and many are retired contractors, builders, electricians, and plumbers who know what they are looking for.
When you find a few home inspectors, give them a call and ask the following questions:
- How long have you been inspecting homes?
- How much do you charge per hour?
- What do you look for when inspecting a home?
- What types of reports should I expect?
- What days during the week are you available?
- Do you offer septic system inspections?
- What type of licensing do you have?
A thorough home inspection should take an inspector about three hours to complete. This will give you an idea of how much the inspection will cost.
Once you have asked these questions, find out if your lender has specific inspections that the home must pass before you will receive a home loan.
If the inspector can complete these inspections along with the home inspection, then it is worth the time and the money to have the inspector complete all inspections on the same day.
The next step after choosing an inspector and finding out which inspections will be needed by your lender is to make sure the homeowners will be home for the inspection. Usually your agent will arrange a time for the inspector to perform the inspection.
What To Expect From A Home Inspection
A home inspection can unearth many problems you did not notice during your visits to the home. Typical findings include:
- Crumbling foundation
- Structural damage to floors, walls, and ceilings
- Water damage inside and outside the walls
- Termite damage
- Porch railings or posts in poor condition
- Heating and cooling systems need to be cleaned or do not work properly
- Roof needs repair
- Broken or leaking pipes
- Electrical wiring not functioning or broken
- Broken water fixtures or light fixtures
- Windows that do not open
- Uneven doorways
- Improper insulation
- Water contamination
- Septic tank issues, or
- Hazardous chemicals
Specific Places That Should Be Inspected
When interviewing home inspectors, make sure to ask whether the following areas are inspected:
- Chimney and fireplace
- Attic and basement
- Crawl space
- Swimming pools, and
- Smoke detectors and appliances
- Drainage and moisture issues
- All mechanical equipment
- Wiring condition and materials
Most homes will only experience a few minor issues, but some older homes may have more problems than they are worth.
The damage to the homes could cost you thousands of dollars if you are unaware of the damage prior to purchasing the home.
While disclosure of some problems is mandatory, many homeowners do not even know that some of these problems exist until they try to sell their homes.
On the day of the inspection, you should expect to hear about some problems. You should be given a detailed report of the findings that will outline drastic problems and those that can be fixed easily.
Some lenders will not approve the home loan until the problems are fixed and another inspection is conducted.
The most common process for an inspection will be that the Inspector will complete the inspection, complete the report and meet with you and Peter or Linda at the property and review the Inspectors findings and discuss any and all concerns with you. Although it is up to you if you would like to be present for the inspection or not, we have found over the years, that spending a little time with the inspector, can avoid mis understanding and confusion. Many times, the reports will be enough to give you a clear idea of what needs to be done.
As it is the Inspector's job to identify any and all issues that he or she has found you will be left with a report with some issues that can be identified as;
- Regular Maintenance
- deferred maintenance
- minor repairs and
- major repairs.
After the inspection is complete and the reports have been reviewed and completed, it is up you and in consultation with your agent, your lender and insurance company to decide how you want to proceed.
- If items are of a minor nature, typically the buyer accepts them as part of buying an older home (in case of buying a new home, we would request the builder to make repairs). However, we can always ask the seller to make some effort to correct, and or compensate for the needed repairs or maintenance.
- It the items are of a more serious and or expensive nature to repair or correct, you have the option to request the seller to correct the issue(s), amend the sale price, or you have the option to cancel the contract and walk away from the purchase. If the seller is agreeable, we can create an amendment to the contract to reflect the changes and new agreement, if the seller is not willing to the repairs and or compensate for them, you have the option to cancel the contract or proceed with the contract as is.
As indicated early on in this chapter, there may a need to consult and possibly hire other specialists to further investigate specific issues and or areas of potential concerns that may be specific to your home purchase.
These may include:
- Septic Field Inspections (which may include the ability for the soil to peculate properly)
- Perimeter Drain and or Storm Water Systems,
- Well water systems for both quantity and quality of well water
- Termite and or insect infestation inspections and or remediation
- Underground tanks inspections and or remediation
- Site, soil and or property contamination of any kind of hazardous materials.
- Evidence and or damage from previous use as a Marijuana Grow operation.
- Mould and or other forms of contamination inspections and remediation.
- Property boundary, and or Site survey inspection and verification.
- Retaining walls and or grade or bank stability testing
- Legal Property use verification
- Inspection and verification of any and all title ,documents, leases, grants, rights of way and or easements and or covenants.
- Review, investigation and inspect any and all Strata and or shared ownership (common areas) in the case of buying in to a Strata and or Coop type property.
It should be obvious at this time, that you as a new home buyer have many options and opportunities during this time to ensure that most if not all of your questions and or concerns can be addressed and answered. However, as may also have become obvious, that there is no way to know exactly all the answers and be completely certain that you will not experience some issue or concern at some time after you have bought your new home.
We have found that one of the best ways to use a good inspection report is to create something like a "Honey Do List". By using the inspection report together with your own plans for changes, improvements and or renovations, you can put together a plan of action to ensure that you will enjoy your new home for many years to come, while securing your investment and increase its value to you, you family and your equity position.
Peter and Linda Pfann are here to assist, guide and consult with you to ensure that your best interest are protected, please contact us with any and all questions or concerns so that we be able to avoid any nasty surprises for you.
As always, if you have any questions, concerns or would like to explore your options, be sure to Talk To Peter or Linda Pfann, we will ensure that our 25+ years of client focused results will benefit you.
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