Realtor's Recommendations

September 27th 2016

Do we trust the inspector the realtor recommends?

I know there is a lot of debate back and forth about agents recommending inspectors.  Is it considered impartial, what if they are working together.  Can we trust the inspector that an agent recommends?  These are all very good questions.

At the moment if you were to ask an agent who they recommend for an inspector, they will give you 3 choices.  This is because it really is up to the client to choose who, to create a barrier of neutrality for the agent.  Makes sense, no one wants to be blamed for the ‘wrong choice’ of inspector. 

Some inspectors market themselves that they are against the real estate industry, and you can never trust a realtor that recommends an inspector.  They put up fancy websites that paint realtors as monsters, and ready to prey on the consumer public in selling a house, so they should hire said inspector because you cannot trust your realtor.

Being an inspector, I’ve met a lot of realtors, and learned a lot about how they go about their business.  So let’s look at the career of a realtor for a moment.

A realtor, is very absorbed in the world of real estate.  I know makes complete sense right?  But what does this mean?

It means they look at hundreds, upon hundreds of properties, since their livelihoods depends on it.  Seeing that many properties, they have seen good ones, bad ones, terrible ones, etc.  When they sit down with you to talk about what property you want, knowing all the hundreds of properties they have seen, they can answer questions like price, suitable location, what kind of layout you might want, etc.

Beyond that, since they look at so many properties, realtors will also get to know all the industries that also work alongside of real estate.  This will be things like, lawyers, notaries, mortgage brokers, contractors, and yes inspectors.

Going through hundreds of properties, realtors will cross over into these other industries very commonly, so naturally they will learn who is good at what they do, and who isn’t.  You almost can’t help it because realtors are surrounded by real estate, and would literally have to do business under a rock in the middle of the forest to not be able to hear about these other industries.

So now we go back to the title question, do we trust the inspector recommended by the realtor?  Well based on my point, realtors will know industries that relate to real estate more than the typical person.  So I suppose the real question is, do you trust your realtor?

If you trust your realtor in doing the job you want them to do, then I would hope you trust their word and what they recommend you to do.  After all, they have YOUR best interests in mind, and this includes ensuring the property you are looking to buy is sound.

And do we trust the inspectors that reject realtors all together? Word travels in the grape vine, and an inspector that can’t get any recommendations from real estate agents, well there may be a reason.

Aaron Borsch
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Depreciation Reports

On Dec 14th, 2011, depreciation reports came into effect as a requirement according to the Strata Property Act.


They came into effect because evidence showed that many strata corporations were not able to keep up with repairs and the funding around them, therefore special levies were required to carry out repairs.  In other words, people didn't like paying special levies


So what are they?  Whats the rules around them?  How much weight to they have?


First, they are a tool, that strata corporations (including bare land strata) can use to plan for repair in the next 30 years.  Thats right, plan for repair.  Lets keep that part in mind.


With it being a requirement, there are rules around them too.  First, the act states they are required every 3 years.  Second, you strata corporations can exempt themselves from this with 3/4 majority vote.  However by doing so, they will have 18 months, before they need to decide to exempt themselves again, or get a report.


For a report, there are requirements for information it must contain.  A summary of those requirements are as follows:

  • Physical component inventory of Strata Property
  • Financial forecast that anticipates repairs / replacement for the next 30 years
  • 3 cash-flow funding models towards these repairs
  • current balance of the Contingency Reserve Fund (CRF) and how its funded
  • Summary of repairs and work over the next 30 years
  • Qualifications of the author of the report
  • Indentify areas that owners are responsible for
  • For more information, you can see this link.


One interesting part of the act, is that it doesn't state what qualifications are requirement to prepare the report.  Generally, appraisal companies, and engineering companies have stepped forward with services to prepare them.


The reason I talk about them today is that I get asked a LOT of questions about what my thoughts around depreciation reports are.


Well let me begin by saying they are a tool.  I stress...a tool. 


While there is a lot of information about strata property contained within these reports, a lot is sometimes based on what is considered standard industry life of component. 


Lets use windows as an example  Windows may have a standard industry life of 25 years.  It doesn't mean 100% of the windows MUST be replaced at the 25 years mark, and it doesn't mean it HAS to be done.  They may be performing just fine, or at least sufficient for their purpose, so does that mean they must be replaced?


Another example.  Some strata properties contained exercise rooms, with exercise equipment.  A depreciation report I reviewed contained the 'exercise equipment', and that it will need to be replaced in '10 years', and built this into its recommendation for funding.  Again, doesn't mean this equipment is broken a the 10 year mark, and doesn't mean it even has to be replaced.


What depreciation reports are great for, is review of contingency funds, and a very general idea of component wearing, but again with a grain of salt. 


I've seen, many reports assume the building must be repaired to 100% as if its brand new.  But some items may be costly, and not cost efficient to repair them.  I've seen suggestions to seal concrete driveways every 5 years, for costs of $150,000 every 5 years.  While it would be a 'nice to have', definitely not a requirement.


And my last point with strata corporations, is it all depends on votes.  There is no requirement to follow what a depreciation report suggests.  What gets done to a strata property is based on what the owners all collectively decide to do, and the majority wins.  This means, if the strata corporation majority decides to vote on special levies for all the repairs, thats what happens.


So in conclusion, many depreciation reports suggest increases to strata fees to pay for these repairs.  While people dislike paying for special levies, cost of repairs have to come from somewhere, and people also dislike increase in strata fees.  It has to be one or the other though.  While not everything has to been repaired in depreciation reports, repairs still need to be done.  And again, this what happens is all based on the majority of votes. 


And with repairs, its not any different than a house, because they need to be fixed too, and someone has to pay for that.


Next time, I'll talk about how to read the reports.


Aaron Borsch

Certified Master Home Inspector (CMHI)

A Buyer's Choice Home Inspections - Tricities, BC

Inspected Once.  Inspected Right!


License #: 53540

Phone: 604-880-0818

Email: This email address is being protected from spambots. You need JavaScript enabled to view it.








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