Meaningful change coming to home inspection industry

Happy Holidays to all of my subscribers. Thank you for all of your emails and good wishes throughout the year. I wish all of you and your families good health and continued success in 2014.

Today anyone can call themselves a home inspector in Ontario. That is a scary proposition since most consumers depend on the opinion of a home inspector before making one of the biggest purchases of their lives. There are over 1500 home inspectors operating in the Province yet there are no mandatory training or technical standards for them to meet. The results are often a leaky roof, cracked foundation or outdated electrical wiring or plumbing that was missed and which ends up costing unwary consumers thousands of dollars to repair after closing. In extreme situations, consumers have lost their homes. Many inspectors do not carry errors and liability insurance, meaning that if they make a mistake, even if you win a lawsuit, you may recover nothing later.

The Ontario Minister of Consumer Services formed a panel of industry experts to make recommendations to change the home inspection industry, which included home inspectors, educators, a Realtor, a lawyer, educators, engineers and an insurance broker.

Their report is aptly titled "A Closer Look: Qualifying Ontario's Home Inspectors".

The main goal of the recommendations is consumer protection. This is proposed to be achieved through the following main principles:

• Home inspectors should be regulated and called "Licensed Home Inspectors";
• There will be minimum qualifications to become a licensed home inspector, including a written exam, a field test and experience requirements. Ongoing professional development and education will also be required so that home inspectors stay up to date;
• Increasing consumer awareness by providing information as to what service is or is not provided by a home inspector; for example, some inspectors may provide additional services such as energy audits, new home warranty inspections, chimneys, well, septic, mold, drainage or termite testing, while others may not. Home inspectors should not be required to enter any area of a home that is unsafe or not readily accessible.
• Access to a centralized registry of licensed home inspectors;
• A code of ethics that outlines expected behavior of home inspectors, including disclosure of any referral fees or incentive programs.
• Mandatory errors and omissions and general liability insurance to be carried by any licensed home inspector;
• A complaint and dispute resolution process for consumers; and
• A delegated administrative authority, similar to the Real Estate Council of Ontario that regulates real estate agents, overseen by the government, to license and regulate home inspectors; For example, the code of ethics referred to above would be written by the government, but the administrative authority would enforce it, with the power to penalize or suspend any home inspector who violates the code of ethics. This authority would pay for itself through the fees charged for licensing and education.

The goal is to move to this new regulatory environment within the next 18 months, to permit home inspectors to become licensed.

I spoke with Graham Clarke, an experienced home inspector with Carson Dunlop who was on the panel. As Graham indicated, almost everyone involved with the home building and selling business, from real estate agents, lawyers, mortgage brokers, lenders, builders and appraisers are all regulated by the government in some manner. It is time for the home inspection industry to become similarly licensed and regulated.

The government is also asking for feedback. If you go to the government website at

http://www.ontariocanada.com/registry/view.do?postingId=14645&language=en

then scroll down, you can get a copy of the form to complete.

If you have your own views on this important issue, send in your feedback to the government now. Change is coming to the home inspection industry, and the consumer should be the winner.

Mark Weisleder, Lawyer, Author

Steven Porter

Real Estate Broker

RE/MAX Aboutowne Realty Corp., Brokerage

www.PorterRealEstateSystem.com

Black Belt Negotiating for Homebuyers

How would you like to save $10,000 or more off your next house? It's really quite easy if your real estate agent has a black belt in negotiating. The challenge is that most people in general and real estate agents in specific rarely take advantage of the power of bargaining, except on rare occasions when making large purchases like cars and houses. In other countries, like Asia, people there negotiate everything everyday and save thousands.

Negotiating is like a martial arts contest where power, leverage and timing can mean the difference between winning and losing. For instance, a martial artist would never go into a contest without first spying on his opponent to find weaknesses. In the same way, you can gain bargaining power by doing your homework. When buying a house find out how long it's been on the market, why the owner is selling, if there have been previous offers and if you will be the only one making an offer at this time. Obviously, finding the answers to questions like these could save you a lot of money.

First, make sure that your agent presents your offer in-person, if possible. It's very difficult to negotiate a good deal by fax.

Before engaging in contest, a martial artist warms up by stretching. Likewise, a savvy negotiator warms up by building rapport and finding common ground with the other party, because people like to do business with people they like. In real estate, a smart agent will try to get the seller emotionally involved with you before he brings out your offer. He should have you compose a hand-written letter about why you want the home and perhaps even show a few photos of you and your family. When faced with several competing offers I know of instances when a client's contract has been accepted even when it didn't present the highest price because the seller took a likeness to the buyers.

Next, fighters will cautiously probe each other looking for weaknesses. In bargaining this is done by throwing offers onto the table to see how the other party reacts. Experienced fighters often use guile to lure their opponents into range by pretending a blow has hurt them more than it really did. Similarly, your agent could pretend to be shocked by a seller's counter to your offer to get him to come down in price. Visibly showing surprise or hurt is called flinching and it used by master bargainers to gain concessions without giving up anything.

Martial artists are taught to read the body language of their opponents so they can see a blow before it is unleashed. Experienced negotiators can literally read the other party's mind by watching body language and listening carefully. If a seller says, "Make us an offer" you know their price is flexible before you even start. Also, without saying a word their body language can also tell you if they like or dislike any offer you make so be sure your agent watches very carefully as they show the seller your purchase contract. If the pupils of the owner's eyes get larger as they read the price you are well on your way to a deal but if his pupils get smaller your agent will have to do a lot of selling.

Martial artists do not believe in win-win and neither should you. Even when sparring with their best friend they want to give their best effort. Expect and demand your agent fight for the best deal possible assuming that the seller and his agent will take care of themselves because they will.

Fighters are supremely aware of time and try to use it to their advantage by saving as much energy as possible for the last few seconds of a round when they can score points against a tired opponent. Black belt negotiators put their opponents under time pressure by setting deadlines. Be sure that your agent mentions to the seller that you are considering several other similar properties in the area and that the seller must give a prompt response to your offer.

In martial arts, as in life, there are unfair fighters who will do anything to win, so you must protect yourself at all times. Negotiators must be aware of unfair tactics such as nibbling, which is asking for concessions after an agreement has been reached. If this happens to you just remember this blocking technique, "Before you give a concession - get a concession." For example, if a seller suggests that to hold the deal together that you'll have to pay for the transfer tax or other fee, simply respond with, "If we did, what can you do for us?" When a nibbler realizes that every time they ask for something you will respond in kind they will stop nibbling.

Finally, when a contest ends, fighters will bow to each other in mutual respect.  You should congratulate the seller for having done good deal  otherwise he might change his mind and try to find a way to wiggle out of the agreement.

So, how do you find a real estate agent who is a black bet in negotiating? Just ask these hypothetical questions and see how he or she answers them:

   1. What information do we need before making an offer and how would you get it?
   2. What's your experience with negotiating?
   3. What's your philosophy of negotiating? (If the answer is "win-win" find another agent!)
   4. Do you prefer to present offers in-person or send them in?
   5. How can we make sure the seller responds to our offer right away?
   6. When you sit down with the seller what's the first thing you do? (If the answer is "I pull out the contract" keep interview agents. You want someone who knows that closing a deal begins with building a relationship.)
   7. How can you tell if the seller immediately likes or dislikes our offer?
   8. How would you react if the seller gives us a full price counter-offer?
   9. What would you do if the seller asks for something additional after the contract has been signed?
  10. If the we were five hundred dollars apart from having a ratified contract what would you do? (If the answer is, "I'd give it to you from my commission" find another agent. Anyone who cannot negotiate their own fee will have difficulty protecting your interests.)

Steven Porter ABR CNE SRES
is a Real Estate Broker of 27 years with
RE/MAX Aboutowne Realty Corp. Brokerage.
Steven is an Accredited Buyer Representative,
Certified Negotiation Expert and has been student of
Japanese Martial Arts for 46 years
Steven can be reached at 905-875-2582, email: steven@stevenporter.ca
Or www.PorterRealEstateSystem.com

Literary credit to Michael Soon Lee

November 2013 Sales Results - Realtors Association of Hamilton Burlington

Residential Sales by Price Range December 2013

Residential Sales by Price Range December 2013