Welcome everyone to Midday Magazine for this July 9th, 2024.
Have your host James behind the mic, and it's time to let's talk real estate with our
Fred David Farmboro from Coal Banker See Your Realitors.
David, thank you so much for joining us.
It's a pleasure as always.
I know that we're going to get into an interesting topic today talking about home inspections,
but before we do, you just brought something to light to me that I hadn't heard of before
that I'd love to take a time to just take a second to talk about.
Right.
I've just been given a designation, it's actually a Certified Ally Program and it's offered
by the LGBTQ+, Real Estate Alliance to say the time a Certified Ally of the LGBTQ community.
And it doesn't involve anything special really.
It's just making sure that I treat everybody equally and fairly, I try and avoid any sort
of discrimination and just respect everybody.
So there's actually one other of my colleagues who got this certification in my office and
that's Cheryl Routon-Barge, so I'll give a shout out to her for doing this as well.
But it is something that any realtor can apply for and can take the course and be given
this certification.
It's noteworthy, it really is, and I appreciate not only you bringing it to us, but your
dedication to this and keep up the great work, man.
That's really great to hear.
I appreciate you bringing that to light.
Thank you.
It's just part of my personal philosophy that I try and give excellent service to everyone.
David, I want to dive into with you home inspections.
This is a great topic one.
I don't think we've talked about very much during Let's Talk Real Estate, so I think
it's a really good one.
Starting into home inspections, where's a good place to start when they're done, maybe?
Yeah, that's a good starting point.
So when I talk to first-time homeowners or first-time home buyers, they sometimes think
that they have to do the inspection before they put in an offer, which is not an unreasonable
thing to think if you've never bought a home before.
But no, generally, nothing's ever hard and fast.
There's always exceptions to the rule.
Generally, home inspections are done once an offer is accepted.
So if you put an offer in which is conditional on having a home inspection, then the home
inspection is usually done a week or two after the offer has been accepted.
And if there's any problems, then that's a point of negotiation between the buyer and
seller.
That is actually news to me.
I didn't know that.
I would have thought, like you were saying before, that this is something that would have
to be done before you even praise the house or anything like that.
It's an interesting note already.
We're learning.
That's great.
How about who pays for them, though, David?
Well, in almost all cases, the home inspection is paid for by the buyer.
And that's because it's done for the buyer's benefit.
So there's a contract between the home inspector and the buyer that means that if the home
inspector makes a mistake, if they miss something and then the house suffers a major problem,
then the buyer can go back to the home inspector and say, well, look, you didn't spot this.
And the home inspector can say, OK, let me make this right.
And they might either give them compensation or claim on their professional indemnity insurance.
So it has to be a contract between the buyer and the home inspector.
Now, there are rare cases where a seller does a home inspection and a seller pays for
it.
Sometimes the seller will do this in order to try and force all any problems that might
come up during the process.
So you know, they can say if you've got an old home, a hundred years old, you might get
a home inspector to go around and the home inspector says, well, look, you've got some problems
in your electrical panel here.
And this was the way it was done in 1965.
But nowadays, we'd expect all this to be upgraded.
The seller can then say, OK, in that case, I'm going to pay to have this done.
And I'm going to produce this home inspection and a receipt from the electrician to prove
that the work's been done.
And that's going to be really useful to a buyer.
Now, a buyer might still want to have their own home inspection done because home inspectors
don't catch everything, you know, they're only human.
And also for the same reason I talked about before.
If a mistake was made in the home inspection, then the contract is between that home inspector
and the seller.
So that home inspector owes no duty of care to the buyer only to the seller of the house.
If a seller doesn't do one of these, and a buyer would like them to, can a buyer request
this being done, a home inspection?
It's possible.
You can request anything in an offer, but I have never heard of it being done.
OK.
I've never heard of a buyer requesting a seller to do a home inspection.
A few years ago, I did see occasionally there was some standard wording in one of our documents
relating to well and septic system inspections where the buyer could ask for the seller to pay
for the well, sorry, for the septic inspection.
And the thinking behind that was that sometimes it's necessary to have the system pumped and
that responsibility would normally fall to the seller anyway.
That I've seen more or less go by the board and almost always all the inspections are paid
for and organized by the buyer now.
Leave it to me to ask a weird question that nobody would think of.
I appreciate that.
There are no silly questions.
Yes.
It's new to buying a house.
It's not always obvious how these things are going to be dealt with.
So I appreciate it.
How much does a home inspection usually cost?
Well, it depends on the home inspector, but I've seen people charge usually between
about 450 to 650.
And it does depend on the size of the home because sometimes I remember I had one about
three years ago where there was actually three units.
It was a triplex.
So they were buying it for one house for their very large family.
But actually there were three units within this one building.
And it meant that there was three furnaces, three electrical panels, three water heaters.
And that one was a much more expensive home inspection than say if you're buying a 700
square foot to bedroom home.
Because the cost is that usually one of those things that kind of you can play in.
You can incorporate into the price of the home when you're selling it or is this saying
of a separate thing?
It's a separate thing.
It's really something that a buyer has to take into account when they're looking at
what they can afford.
A buyer needs to know approximately how much they're going to be paying for all of their
outgoings both after the office accepted and before closing.
That's probably a subject for another conversation between us.
But yeah, it's something that the buyer will have to look to provide.
Some home inspectors provide the ability to pay on credit and will allow for the cost
to be paid at closing.
And that can help a buyer who's a little bit cash short.
Yeah.
That's an interesting note.
Thank you for that.
David, would you, when you have a proposed of buyers or sellers, sellers, I mean, come
into you.
Do you need one?
Do you need a home inspection in order to sell your property or sell it at its highest
that you can get for it?
I would say that maybe a few years ago, sellers were looking to do that when it was more
of a buyer's market.
Say if you're looking at 2012 to 2018, nowadays it's much more of a seller's market and
sellers in the vast majority of cases do not feel the need to provide that to a buyer.
Now when it comes to this, will it help your offer if you don't have one?
Yeah, that's absolutely true.
And if you're in a competitive offer situation, then sometimes what a seller is going to be
looking at is not just the price that the buyer is offering, but also whether they're
going to want inspections or not.
And even if you have a house that is as far as your concern, perfect, a home inspector
is always going to find something.
There will always be something.
There'll be something like there's no firewall between the garage and the house, which
you may not notice because you just don't care, you know, you just get in from your car,
go through into the kitchen and you don't go about your day.
You don't look at what the wall is made of.
Home inspectors also find things with plumbing that we don't even think about, like they find
S traps instead of P traps under the sink, they find lack of air gaps by dishwashers.
And things like steps being the wrong height, lack of handrails, and also things like the
wrong type of insulation.
Now most of those things we just don't notice on a day-to-day basis, but a home inspector
will find them.
What is covered in a home inspection?
Well, the home inspector looks at a lot of things and there's a standard set of things
that their professional association lists that they have to check.
And most of those things relate to the structure integrity of the house, the functioning of the
systems and also safety.
So structure integrity, they will look at the foundations if they're visible.
They will look at the roof, they'll look at the siding, they'll look at the structure
on the inside of the house, looking for cracks and things.
They won't point out every little crack, if you've got a home built in 1933 and it's
got cracks in the ceiling plaster, that's to be expected.
But if you're in the basement and there's crack in the air bricks that are bulging out
through the wall, then they'll flag that up and they'll maybe ask for some specialist
to go in.
They're also going to look at the furnace, they'll look at the water heater, they'll
look at the air conditioning system and they'll look at the electrical system.
And they will, in many cases, check their appliances as well.
If their appliances don't come with a house, then they won't do that.
But if the cellar is leaving the washer and dryer, they will run the washer and dry and
just check that they work, they'll run the dishwasher, they'll open the fridge, they'll
check the water dispenser or the ice dispenser, it's actually quite detailed.
And then the safety things, like I said, they'll check for things like handrails, they'll
check for a lot of things that are code, like if you've got a deck that's above a certain
height, they'll look for railings and check the railings are correctly spaced.
So there's a lot of detail that goes into it.
What isn't covered?
Well, that's a good question.
I suppose it's things which are mainly cosmetic, things that don't have an impact on the value
of the property and I suppose it's worth saying that the home inspectors check some things
using a representative sample.
So they will test the outlets, but they won't test everyone, they'll test a representative
sample.
They'll go around probably a few outlets on both floors and they'll test to see whether
they've got whether they're grounded, whether they've got positive and neutral reversed.
Similarly, windows, they're not going to go around opening a shutting every window, but
they'll check a few of them and make sure they're not painted shut.
So yeah, it's not completely exhaustive.
Also there are certain things that are inaccessible that they can't check.
They can't take down drywall to look behind it.
So if there's a crack in the basement wall but there's drywall in front of it, well they're
not going to be taking the house apart.
They're also generally not allowed to do certain types of testing that you need to get a specialist
in to do like mold testing.
And certain things are just too specialist, electrical testing.
They also tend not to examine things like wood burning furnaces.
It's just outside their remit.
We're speaking with David Farnborough, let's talk real estate with our friends at Coal
Banker, see your realtors and David, have you ever yourself seen in home inspection
or been a part of one just as an observer or anything?
Yeah, actually, I used to attend every home inspection all the way through for my buyers.
And I found that this was really helpful, obviously I'm from another country, I'm from
the UK, and our houses are constructed very differently.
And so when I first started working in real estate in the US in 2018, I thought it would
behove me to attend all of these inspections all the way through and just talk to the
home inspector and say, well what are you looking at now, they probably got fed up with
me and wish I'd come in later on when the buyers come in.
But it actually helped me learn an awful lot.
They do work hard, they are diligent, and a good buyer's agent will want a home inspector
that does find things, you know, will want someone who is honest and thorough and gives
the good service to the buyer.
Yeah, that's great.
You know, from one I got to say, I wouldn't say that this is a requirement, but if I was
buying a home, I would love that my realtor had been a part of the inspection.
They're looking out for me.
So them being a part of this is very helpful.
And nowadays I have enough experience that I don't need to go there for the whole inspection.
I just go there towards the end when the buyer arrives, and then the home inspector will
usually take the buyer on a brief tour of the house and say, look, this is the problem
and then the buyer can ask questions.
And that's by far preferable to the buyer just receiving a report in the email, you know,
for them to actually be there and to be able to have a conversation with the home inspector
is very valuable.
Mm-hmm.
David, as a side note, one of these days you and I will have to have a show where we're
talking about the differences of how they make the homes over there and here.
I just found that very interesting when you said that.
I immediately wanted to go down a rabbit hole.
We got work to do, but one day I'd love to talk about that.
We can.
So David, with all of this that we've talked about with home inspections, what do you
do of the inspector find problems?
Well, there's different sorts of things they can find.
Often they'll just point up things for future maintenance.
So they might say, well, this is actually okay, but it's going to wear out.
And then in 10 years time you're going to be looking at getting a new roof, for example.
One of the most common things that comes up is damp basements.
And damp basements aren't necessarily terrible, but you can make them better usually by doing
two very simple things, guttering and grading.
If you put gutters on the outside of the house and you'd make sure the water is directed
six to eight feet away from the house, then you'll usually be able to get rid of most
of the problem.
If you put graded soil on the outside of the house, so that slopes away again, you can
help it.
So there'll be things that the home inspector points out that are just future maintenance.
There's also things that they can point out that are what you might call borderline.
There are things that have just got to be fixed.
And sometimes you might have a bio who says, that's okay, I'll take care of that.
Like I had a house recently where there was a banister at the top of the stairs and it
was only two feet high.
And if you'd leaned over, you'd have probably fallen down.
Well, you wouldn't build a house like that now, but that house was built in 1900.
And the buyer said, yeah, that's okay.
We can live with that.
Strictly speaking, it's a safety defect and it violates a code.
But we don't expect a house built in 1900 to meet 2024 codes.
And then there's the most serious type of defect, which is something that's really got
to be fixed.
Sometimes it's something that's got to be fixed now.
And I'll give you an example.
It might be something like say the safety eyes on a garage door.
Somebody's moving into a house and there's no safety eyes on a garage door and they've
got little children or pets.
Well, if those safety eyes are not there, then the door's going to shut and it's going
to squash somebody.
So something like that, you can write it into the offer.
You can have an amendment that's agreed between buyer and seller, that the seller will
fix that.
It's a minor point, it doesn't cost very much, but worth getting fixed before you move
into the house with your small children.
There could also be something like that that you think, well, we'll try and get this fixed,
but you can't get the tradesman in in time to do it.
And so the seller says, okay, well, we'll give you $100 to fix that.
And then you can get door works in and they'll sort it out for you.
That's just one example.
I mean, there's a lot of different things it could be, but usually a reasonable buyer and
reasonable seller can come to an agreement through negotiation.
Yeah, and it does sound like that's one of those things that can be figured out in the
process and worked out between buyer and seller, whether, you know, certainly in the contract,
but can be worked out between them, which is kind of a, I don't know, with such a heavy
thing going on and selling and buying of a new home and everything.
I love that that still exists with people and that this, the handshake agreement in some
ways, if you will, well, there is certain contract parts of this and everything.
I don't want to say that it's just a handshake, but it is kind of unique to the industry
or in general that that can still go on.
Well, people generally are decent.
Sometimes you do get people who are very stubborn and they won't agree and you will have
a sale and purchase that falls apart because somebody won't agree to do very minor and
very inexpensive repairs.
And that can be a shame because you're thinking, well, you would have got your house sold
and now you haven't because you didn't want to pay $2,000 to have whatever it was fixed.
David, I know that we are much more informed on this subject now.
Thank you so much.
It's a really good topic today, man.
And again, a big thank you to you about mentioning this, the Ally Alliance and mentioning that.
I think a lot of us learned something with that too today, I appreciate it.
If people have followed the questions, one and a more and reach out to you, David, how
can they do that?
Best way is to text me 715-323-8594 or they can call me on that number or just contact
me through Facebook.
Yeah.
And you can find out more as well at colobanker.com, colobanker.com, David looking forward to
talking again next month.
You take care.
That's it too.
Thank you.
Well, a more midday magazine coming up for you right here at 975 FM 1320 AM WFHR, locally
grown radio.
