Articles by Keith Tripp

House Shopping: A 10 step risk assessment

 

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January 2017

Buy Today! And do your own 10 step risk assessment!  According to reports on cp24 today January 17th is the cheapest day to buy a house, and January is the cheapest month.

In todays GTA market, the no-conditions offer is in and the traditional pre-purchase home inspection is all but gone. And it might not come back. I say that because we are not hearing stories of buyers or salespeople getting hit with costly surprises after taking possession, (yet). That could be because people are sitting on latent defects that they may not discover for years, and lack of consumer knowledge, or because buyers are desensitized to repair cost issues by the massive value of their property. All those involved in the market are becoming accustomed to deals with no home inspection involved.

Over the past 3 years the trend is towards bidding wars where, so I’m told, price offers jump in increments of $25,000 and $50,000 or more. The cost of issues discovered in a home inspection may seem trivial in comparison to these leaps and bounds in purchase price.

The pre-purchase home inspection is part of the total risk assessment process. It is a supplement to information and checks and balances from real estate salespeople, mortgage providers, appraisers, lawyers, and insurance providers not to mention family and friends. All these participants have some interest in the “brick and mortar” risk element, but the home inspection is the most detailed assessment of this risk.  A home inspection does not comment on risk associated with real estate market or economic trends or legal use of the property.

When the inspection condition disappears from the offer to purchase, what’s a buyer to do? Without the benefit of the actual inspection, you need to account for a certain amount of risk, and have a post-possession contingency plan.

Types of risk related to the “brick and mortar”:

  1. Repair costs that are easy to predict. (roof replacement, furnace & AC replacement, window replacement)
  2. Repair costs that are hard to predict (engineering assessments, hidden plumbing and electrical work, foundation drainage)
  3. Health& safety issues that may impact ability to live in the house. (moisture and mould impacting air quality, heating and cooling comfort levels)
  4. Health & safety issues related to risk of personal injury of fire. (unsafe electrical or heating, unsafe guarding)
  5. Insurance costs and mandatory upgrades or coverage exclusions. (removal of knob and tube wiring mandated by the insurance company, asbestos risk)

To get an idea of where a house stands on the risk scale, throw on your “guilty until proven innocent” inspection hat and do the following:

  • Determine house value versus land value. If its worse case and you must quickly resell as an “as-is builder’s special” how much will you lose?
  • Determine age of the house. This means the age of the oldest part, not the newest. The older the house, the more risk both for repair costs and comfort.
  • Determine age of components with predictable life-cycle such as roof coverings and HVAC equipment. Compare to standard information available or to warranty coverage available.
  • Identify additions and modifications to the original house. The more of these the more the risk. Ask for full proof of professional work including work receipts and proof of compliance with all permit processes and approvals by the authorities having jurisdiction. Remember it’s guilty until proven innocent. If there is no paperwork available, then it is non-professional (or out-dated) work.
  • Smell the roses. If the house stinks when you first step through the front door, try and figure out why. If its an organic smell, is it sewer gas or mould? Are there indications of heavy dog presence? Be especially wary if the house appears otherwise clean but still has a bad odour. This could mean nasty things lurking behind the walls.
  • Imagine the storm of the century. The ground is covered with rain water two inches deep. It is flowing everywhere. Is your house in the path of the torrent? This is the old “high and dry” common sense requirement and helps determine flood and basement leakage risk.
  • Don’t miss the forest for the trees. Large tree removal and replacement is a permit-controlled process and can be very costly. Recent pest invasions such as the emerald ash borer are killing trees that may cost you thousands to remove and replace.
  • Determine degree of customization of the house. Was the house built as part of a subdivision (lower risk), or was it a custom home or perhaps designed by some “renowned” architect (higher risk). When faced with the “fine architect” claims, ask for full copies of the as-built engineering drawings, and of course check records for compliance to permit processes and approvals by the relevant authorities. Your reno team will appreciate that in the future.
  • Assess recent reno work. If you are buying a “flip” house, you want to be aware of that. Ask your real estate salesperson about recent sale timing and prices paid. Not all flip-related reno work is bad, but it can be. If you had to strip out all the recent work and redo it, is it still a good deal?
  • For the “brand new” house:confirm Tarion warranty coverage. Many custom homes built in older established areas are built without Tarion warranty. The builders know all the loopholes. I have inspected many 1 year old houses that have no Tarion warranty coverage and have never been lived in, so hence are not even tested for the 1 year. Run to your lawyer before making a move on these homes and they will describe the bucket of risk involved. For any house that is less than 7 yrs. old make sure you understand what warranty coverage is in place, if any.

 

ProVantage Property Inspection does post-possession inspections. Because our report writing is detailed and clear, the result is a to-do list ranked by priority and descriptions and recommendations that really make sense. Consider doing an inspection within the first few days of possession, before you move all the furniture in. This creates an ideal inspection environment, and you can join me for hours of fun filled defect finding!

 

By Keith Tripp, January 2017

 

 

 

House Shopping: Amp it Up?

Do I need that 200-amp service?

A few months ago, I inspected a small 1998 townhouse in Richmond Hill with a 200-amp service. This was way more power than needed so my “high risk” radar went up. Oversized electric services are sometimes related to a history of electric heating, either baseboard or electric furnace. Fortunately, a neighbour was involved in the inspection and could confirm that his townhouse also had 200-amp service, and he knew it had been installed by the builder. There was no history of electric heating.  It’s possible that everyone in the townhouses was sold an upgrade by the builder.

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The picture above is of this panel in the townhouse. Not really doing any harm, but sort of a space-waster and not earning any payback on investment.

I also inspected two new (2016) homes in Aurora recently, and the owners had paid the builder for an upgrade to 200-amp service.

So how do you determine if you need the upgrade to 200-amp service?  One piece of advice NOT to run with is the CMHC blooper below:

This is from the currently posted CMHC document: What to Look for when buying a Home ( www.cmhc-schl.gc.ca/newcomers/pdfs/English/B11.pdf): 

Electrical system—if you are buying an older home, find out if the electrical panel has been upgraded. If the service says 200 amps, it is an upgrade. A 60 or 100-amp panel has probably not been upgraded, and may not be enough to meet the electricity needs of your family.

In GTA terms where we don’t use electric heat any more, this is a blooper. There are two things wrong with this. Firstly, 100 amps is the most common service size, and is adequate for most homes, even new homes that may be around the 3000-sq. ft. size.  and most old homes that are “upgraded”. Secondly, the panel rating alone is a poor indicator of total service size and electrical wiring upgrade status in an older home. It is true that a 60-amp service is no longer considered acceptable.

How do you know if you need the 200-amp upgrade? Simple answer for the new house is you don’t. You may want 200-amp but you don’t need it. If a builder is offering the house with 100-amp service, then it has already been determined that 100-amp is adequate for the house as-built along with a few extra circuit spaces for future consideration as required by code. If the house needs more than a 100-amp service based on the quantity and type of circuits, then it won’t be an option, the builder will simply install the correct size. If electrical loads are added on top of the original builder installations, then at some point the 100-amp capability may be exceeded. Typical additions that may put the 100-amp capability at risk are 240 volt ranges, driers, hot tubs, saunas. To determine when the 100-amp capability is exceeded you need an electrician to do the calculations for you. That is one reason why any significant electrical additions should be done by a qualified electrician.

So, if you don’t have any plans of adding electrical load to your new castle then stick with what the builder is offering as the base model. If you are planning significant addition of electrical loads such as fully finishing the basement with a kitchen and laundry, then ask an electrician to do some calculations for you, or just lay out the $2000-$3000 for the upgrade. If you have an older home that has had many electrical additions to the original circuits provided by the builder, then you may need an electrician to review the service size to see if it is adequate.  p.s interested to know what folks are paying the builder for this upgrade. The $2-3K is my best estimate now!

by Keith Tripp, January 2017

Nice PEX

Plastic water supply pipe.

“Nice pecs” used to be a personal compliment. Of course this was a long time ago. Back in that day, copper was used for water supply plumbing. Plastic water pipe has been used in residential construction for about twenty years now. Plastic pipe is lower cost both to purchase and install. The most common plastic pipe is called PEX. This is cross-linked polyethylene. The X stands for cross linking and this happens at the molecular level, it doesn’t describe the spider web of plastic pipe that you may find in the basement around your water heater. The cross linking of polymers results in a material that is more resistant to deformation and flow, but is less flexible.

There were many growing pains along the way with the advent of plastic water pipe. There are almost too many lawsuits to keep track of for pipe or fitting failures. Complicated by geographical temperature extremes, local building practices, and local water conditions, these lawsuits that originated all over North America were not necessarily reflective of valid issues in the Canadian GTA house. The lawsuits mostly related to leakage at fittings, and less often to actual pipe failure. Mostly the brass fittings were problematic, with an issue called dezincification.

Many of the early issues have been resolved and for the past 8 years or so plastic pipe issues seemed to have calmed down. If you have “old” (about pre-2008) plastic pipe in the house it’s worth checking for any signs of leakage or oozing at fittings, especially close to the water heater.

by Keith Tripp, 2016

Top Ten New Home Issues

Top Ten New Home Issues

Buyers of most new homes built in Ontario are covered by the Tarion warranty system. (see Tarion.com).  ProVantage Property Inspection provides warranty inspections for homeowners. This is the same detailed inspection as in the case of resale, with the report customized to align with the Tarion on-line reporting system.

 

Missing siding at a new home

Missing siding at a new home

Each year I wonder if the builder is going to do such a good job that I can’t find enough defects for my client to justify the cost of the inspection. That hasn’t happened yet. So, I thank the builders for allowing the warranty inspection business to remain viable.

 

The buyer of the new home is getting a better product than in years past. Now that the changes from the “2012” codes are firmly entrenched, the required attention to detail to meet basic code requirements means a better built home. The home also is more complicated, with the installation of energy saving products such as HRVs, DWHR units and hot water recirculation pumps. Sump systems have also make a come-back for different reasons in different municipalities.

 

So here are the top ten new home issues that allow the warranty inspection business to remain viable:

  1. Builders being chronically behind schedule and allowing homeowners to move in to incomplete homes. This means that landscaping, driveways, steps and decks, and gutter and downspout systems are incomplete.
  2. Incomplete or missing exterior sealants
  3. Errors at exhaust installations, including missing terminals, and even complete exhaust systems missing.
  4. Incomplete roofing and flashing details, especially at locations that are not visible from ground level. (See photo above).
  5. Incorrect plumbing installations. This relates to some of the more complicated plumbing systems now used such as DWHR units and hot water recirculating pumps.
  6. Attic Insulation underfills and blow outs. With the R50 requirement, insulation is often about 18-20 inches deep. Underfilling attic insulation has always been an issue. I find fewer underfills now, but the deep insulation is prone to being blown around especially when light fiberglass is used.
  7. Weep hole details in brick veneer walls: Weep holes not fully open, weep holes absent where required. Missing weep holes is most prevalent at “stone-style” brick installations where the brick pattern is irregular.
  8. Poor quality materials and workmanship at sump installations, including the installation of perforated basins where not appropriate.
  9. Builders failing to explain complicated features to homeowners. By failing to educate their clients on what they are selling them, that makes the education side of my inspections beneficial. Homes are more complicated than ever. The builders’ reps are usually poorly equipped to explain the new features and related risks and maintenance requirements.
  10. Poor quality concrete work at basement floors, garage floors and foundation walls. Even though many of the concrete cracks may not be covered under warranty, highly visible cracks cause concern to homeowners and trigger customers to request warranty inspections.

by Keith Tripp, 2016