Why Is a Pre-Offer Home
Inspection a Good Idea?
|In busy, tilted market conditions, when there are far more
buyers than sellers, many purchasers find themselves in
multiple offer situations. In these situations, anything a
purchaser can do to help make their offer more attractive
will increase their odds of being the buyer that gets the
house. One of the things that can be done to help make the
offer more attractive is to go in with a "clean" offer.
While removing a home inspection condition from the offer
may appeal to the home's vendor, it may not be in the
purchaser's best interest. So, what do you do? You want the
house, you want the inspection, but adding the inspection as
a condition of the offer can seriously reduce it's
attractiveness to the vendor. There is a solution that can
be a win win for both the home buyer and the home seller.
The solution is a Pre-Offer Inspection.
A Pre-Offer inspection is the same inspection, only done
before the offer is registered. It involves getting the
vendor's permission to enter the home for the purpose of the
inspection prior to the time offers are being accepted.
Vendors are usually willing to provide this access because
they know if the inspection is done pre-offer, it increases
the likelihood that the offer will come in clean (no
conditions). For the purchaser who has done a pre-offer
inspection, they can feel confident submitting a clean offer
of purchase and sale. The purchaser will have the
information from the inspection when drafting their offer.
This can give a purchaser a better understanding of what
concerns or expenses may need to be considered. If the
inspection uncovers little in the way of concerns, the
purchaser may be comfortable making their offer more
aggressive with relation to price, which will also increase
its attractiveness to the vendor.
In conclusion, the question is no longer to do, or not do,
the home inspection, but rather, when to do it.
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What Are The Issues With Oil
|The issues with oil tanks are both environmental and
insurance/delivery related. For non underground oil tanks
above 15 – 20 years of age, insurance companies are
encouraging their replacements either by requesting very
high insurance premiums or refusing to insure the home as
long as the old tank is present. The reason is that the
insurance companies have concerns about the older tanks
leaking and the costs associated with an environmental
The environmental concern is that if an oil tank (indoor,
outdoor or underground) leaks, it can produce a very
expensive cleanup problem. The worst residential case we are
aware of in Ontario was in the Belleville area and the cost
for that cleanup has exceeded one million dollars! Fuel oil
suppliers are now required to inspect tanks before filling
them. If this inspection finds the tank to be unsatisfactory
in any way, the fuel delivery person is prohibited from
filling the tank. This is based on TSSA regulations enacted
in June of 2001. For more information on TSSA regulations,
go to http://www.tssa.org/.
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Where Can I get Contractor
|When a home is in need of repairs, renovations or even
additions, the question that arises is usually “How much
should I budget for this?”. With each of our inspections,
clients will receive a copy of HomeReport, which contains a
budgeting section to help answer this question. However,
because this information in HomeReport is printed, it can
become outdated with the passage of time. We have discovered
a web site that you may find useful for budgeting purposes
and we’ve found it offers costing information on a wide
range of items. You can find the web site at
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Have You Ever Dated a House?
|I frequently get asked "How old is this house?". There are
many ways (clues) that I use to help determine the age of a
house, some of which are very simple.
In attempting to pin down the actual date of a house, it is
important to be able to differentiate between an item that
is original to the house and one that was installed at a
later date. Two of the simpler and more readily accessible
clues are thermal windows & toilet tanks. Thermal windows
with aluminum framing between the panes will commonly have
the year of production printed or stamped into this frame.
This can be used quite accurately. Toilet tanks and/or their
lids will commonly have the actual casting date (i.e. 02 12
66 for Feb. 12, 1966) impressed into the porcelain. This
impression is made on the inside of the tank and/or lid. You
will need to remove the lid of the toilet tank in order to
see it. Both window and toilet dates may precede the actual
completion date of the home by perhaps as much as one year.
For example, if the windows date to 1980, this suggests that
the home was likely completed no later than 1981.
|Gas furnaces offer options to aid in dating a house. First,
a gas fitter's tag is commonly attached to the gas line at
the furnace. It usually supplies an exact date (day, month,
year) of the pressure test which is done at the time of the
original gas installation. Again, this only works for dating
the house if the gas furnace is original. Since this test
must be done with each new installation, you can use this
method to help determine the age of a newer furnace. Second,
the gas inspection authority (i.e. Consumer's Gas) will
usually place an inspection sticker directly on the body of
the furnace. Like a gas fitter's tag, it will usually supply
an exact date. Some other dating suggestions are offered to
- Knob & Tube Wiring - pre 1950
- Stone Foundation Walls - pre 1930
- Brick Foundation Walls - pre 1935
- Metal Chimneys - post 1960
- Copper Drainage Pipes - 1955-1970
- Drywall Interior Finish - post 1960
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Are There Insurance Issues With
a 60 AMP Service?
|The answer is YES. Insurance companies are quoting homes
with 60 amp electrical services in a ‘high risk’ category.
There may be no concerns with the service from an inspection
viewpoint, but unsuspecting purchasers are getting hit with
quotes for 60 amp homes that are about twice the going rate
for a similar home with a100 amp service.
In the past, it has been our policy to advise clients that
they may find themselves with insurance issues if the home
has knob and tube wiring and/or galvanized plumbing in the
home. We have even advised clients that 60 amp services were
becoming an insurance issue, especially with the larger
homes that may now have two or three apartments in them.
What we have recently become aware of is that any home with
60 amp service will be quoted as high risk. We had a client
from North York call us recently to advise us that she was
not having any success in getting reasonable quotes for her
1100 square foot, 40 year old raised bungalow. We had
suggested that she may want to upgrade to 100 amp service as
a useful upgrade. We told her that we would shop it around
for her, confident that there was simply a miscommunication.
To our surprise, all seven of the companies that we called,
without exception, proposed a high risk pool for this home!
The rates quoted were approximately double the going rates.
This home was being quoted in the $625.00 to $690.00 range.
The same home with 100 amp service was being quoted in the
$325.00 to $380.00 range.
When doing the inspection, we estimated the cost of
upgrading the electrical service to 100 amps at
approximately $1,000. (We always recommend a 32 circuit
panel, not a 24 circuit panel) Our client’s best quote was
for $750.00. She has gone ahead with the upgrade. As you can
see from the numbers, it will only take a couple of years to
have the lower insurance premiums cover the cost of the
As I stated earlier, I may not agree with this definition of
‘high risk’, as a Registered Home Inspector, but this is the
reality many purchasers face when shopping for insurance. I
hope this information will help you and/or your clients
avoid any unpleasant surprises related to homes with 60 amp
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What Are The New Insurance
Issues Homeowners Are Facing When Buying a
|The new rules, regulations, and numerous restrictions that
insurance companies have written and rewritten since Sept.
11, 2001 continue to surprise us. Homeowners that have never
had a problem insuring their homes are suddenly faced with
unbelievably high premiums or facing the reality of no
insurance at all. In the case of no insurance, these
homeowners are being asked to make changes (in some cases
changes that are costly upgrades), in order to make the home
"insurable". I may not agree with the definitions of "high
risk" as a Registered Home Inspector, but this is the
reality many purchasers face when shopping for insurance. It
is also my understanding that some real estate agents are
adding insurance clauses into the offer of purchase and sale
to help protect their clients.
Some companies will still offer a "high risk" category for
homeowners who are either unwilling or unable to comply with
the required upgrades, but these companies are getting
harder and harder to find and the "high risk" premiums are
usually two to three times higher than they are for a
similar home where the upgrades have been done.
Insurance companies today are finding themselves in tough
market conditions. In situations where they are not making
money in the markets, the income they make from premiums is
that much more important. Individual brokers are forced to
be very careful not to write too many of these "high risk"
categories as they need to ensure their "loss" ratio stays
at a reasonable percentage. If a broker's loss ratio rises
too much, the company writing the insurance will cut the
broker off. It is for this very reason that brokers are
reluctant to take on too many new clients in a high risk
I'd like to address some of the common culprits that are
being flagged by insurance companies as the high risk items.
By sharing this information with you. I hope that together
we can help protect home buyers and home sellers from being
side swiped by these new realities.
|Knob & Tube Wiring: Was installed in homes that where built
before 1950. The Electrical Safety Authority (ESA) does not
have a problem with Knob & Tube as a category of wiring,
they only suggest it be reviewed on a case by case bases.
Insurance companies seem to take the simple view that Knob &
Tube = Bad.
Aluminum Wiring: Was installed in homes that where built
from the mid 1960's to the mid 1970's. Insurance companies
attitudes seems to be getting more restrictive on aluminum
Electrical Services Less Than 100-Amps. In Size: These
smaller services have been an insurance issue for a number
of years. Most insurance companies require an upgrade to a
100 amp. service, even though, technically, there may be no
need for such a service size. An example would be a small
bungalow with no air conditioning, gas heating and
Galvanized Water Supply Piping: This category is very
restrictive (insurance companies don't like paying for water
leak damage). Galvanized pipes corrode from the inside out
which makes them a higher leak risk.
Old and/or Buried Oil Tanks, and/or Buried Fuel Supply
Lines: In addition to insurance issues, a homeowner may find
that their supply of oil is suddenly cut off by the fuel
delivery company as well. For a much greater understanding
of the issues with older and buried oil tanks, please refer
to our other FAQ on the subject entitled "What Are The
Issues With Oil Tanks".
Wood Burning Stoves: Poorly maintained and/or improperly
installed units can produce fire/safely concerns.
This is, by no means, a complete list but it does address
some of the more common concerns. For even more information,
you can check out the Insurance Bureau of Canada's web site
It was my intent when I started this FAQ to provide you with
a list of brokers currently writing policies for these high
risk categories. However, with a heightened awareness of
their business practices, I am now suggesting that insurance
shoppers start with their own insurance company or broker
first. If this proves fruitless, I recommend that the
insurance shopper contact a different broker and strongly
encourage that broker to contact one of the following three
insurance companies currently known to write these high risk
policies. These companies will not accept phone calls
directly from anyone other than an insurance agent or
broker. The following is not a complete list of companies
but it is a place to start.
1. South Western, 2. Ecclesiastical Insurance 3. Elliott's
I hope this information will help both real estate agents
and their clients to avoid any unpleasant surprises related
to home insurance.
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How Do I Keep My Basement Dry?
|The unusually heavy rainfall that we have seen lately has
brought this question to the forefront. While nobody can
guarantee that a basement will never leak, there are things
that can be done to improve the odds of keeping it dry.
Once a homeowner is faced with water penetration, they often
seek advice from contractors. Unfortunately, they are often
advised that they need to spend thousands of dollars to dig
up the yard to install new drainage tile and apply damp
proofing. While this may be appropriate in some instances,
it should be considered only as a last resort. Quite often,
the problem of moisture penetration can be solved using
simpler methods which cost a lot less.
In my experience, the best way to keep water out of the
basement is to manage it so that it flows away from the
house. This can usually be accomplished effectively by
improving grading, extending downspouts, adding window wells
and/or covers and trimming or reducing the greenery/gardens
that may be close to the house.
Grading: Lot grading is an important aspect of the water
management around the home. Properly done, it can have an
enormous positive impact on basement dampness concerns. When
reviewing lot grading, emphasis should be placed on a six
foot perimeter surrounding the home. This area should be
sloping down and away from the home to help direct water
away from the structure.
Extending Downspouts: Downspouts should discharge at least
six feet away from the home to help relieve water pressures
near the foundation. Consideration must be given to avoid
creating trip hazards. While mentioning downspouts, it is
important to note that in order to offer effective water
management, downspouts and eavestroughs must be kept secure
and clear of debris.
Adding Window Wells and/or Covers: Basement windows that are
close to, or at, grade present a moisture penetration
vulnerability. Installation of a window well with a clear
plastic window well cover can be quite helpful in reducing
this vulnerability. For window wells currently without
covers, adding an appropriate cover can help reduce the
snow/water/debris accumulation in the window well.
Trimming or Reducing Greenery/Gardens: When greenery (trees,
shrubs, vines etc.) or gardens are in close proximity to the
foundation, they can effectively reduce air flow and
evaporation of moisture in this area. They should be pruned
at least twelve inches away from the house to allow wind to
assist in the evaporation process. Also, when a garden
placed up against the house is watered, so is the
One of the most common foundation materials is poured
concrete. This type of foundation commonly develops hairline
cracks which may allow moisture penetration. Should a
hairline crack actually leak, the homeowner should consider
having a resin injection done on the crack. The cost is
approximately $350.00 (plus GST) and usually comes with a
ten to fifteen year warranty. This can be a much simpler and
less expensive solution than digging up the yard, which is
commonly the first suggestion offered by the contractor.
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What Do I Think About UFFI?
|Urea Formaldehyde Foam Insulation - UFFI is a retrofit that
was used in numbers homes in Canada between 1977 - 1980,
primarily under the incentive of the Canadian Home
Insulation Program (CHIP) and was banned due to public
perceptions about health risks.
It appears the only problem with UFFI is the lingering
public perception and how that may depress a property's
value. After eight years of litigation, which went all the
way to the Quebec Supreme Court, the judgement rendered by
the court, not only did not find in favour of the
plaintiffs, but in fact obliged the plaintiffs to pay the
defendants legal costs.
UFFI is actually a very good insulation! It fell victim to
public hysteria fuelled by baseless media stories. The only
time UFFI was considered to be an irritant was in the days
immediately following a poorly done installation. The
concern was formaldehyde gas which could be emitted in above
average concentrations and irritate those people who had
respiratory sensitivities. Today, you can find higher
formaldehyde gas readings in a house with newly installed
carpet than you would have found in a house with UFFI two
weeks after the UFFI was installed.
Suffice it to say, my opinion on UFFI is that there is no
concern about it. I would personally have no reservations
about living in a home with UFFI and I would strongly
suggest that the real estate boards and mortgage lenders
drop UFFI clauses or penalties from their paperwork. END OF
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