What is a Certified Pre-Owned Home?

Essentially, it consists of two main components/processes.

  1. Pre-Listing Inspection-Prior to being listed, the Seller has a Home Inspection performed on their home, at their expense, by a Member of the Certified Pre-Owned Homes Inspector Network and the Sellers agree to complete the repairs as identified by the Home Inspector. See what Mike Holmes says about Pre-listing Inspections either in our Blogs or by clicking this link: http://certifiedpreownedhomes.ca/wp-admin/post.php?post=133&action=edit&message=6
  2. A  1-Year Home Warranty is then placed on the Listed Home for the benefit of the buyer, which covers breakdowns to the home’s major systems and appliances as well as some structural coverage,  that occur up to one year from the closing date.

About Home Inspections: Historical Background

Purchasing a home is probably the largest investment of one’s life and certainly one of the most important ones. Therefore, it is important to obtain the assistance of professional REALTORS® and qualified  Home Inspectors. Despite how things may appear to the inexperienced eye, there are often material defects in properties that are undisclosed to Realtors and not apparent to the buyer. In response to homebuyer’s growing desire to learn of the condition of a house prior to purchase, Home Inspections have become an important part of purchasing pre-owned homes.  The Canadian Association of Home and Property Inspectors has become the leading force in licensing and regulation of the Home Inspection Industry.  There are also Provincial associations that help set guidelines to monitor the performance of their members.  Not all provinces require formal training of home Inspectors (BC is one exception), so it is very important that you know who you are hiring.  By using a Member of the Certifed Pre-Owned Homes Network of Home Inspectors, you can feel confident that you have hired a reputable inspector.

Role of Home Inspectors in the Certified Pre-Owned Homes Program

Essentially, the pre-listing home inspection provides sellers with the necessary information needed to determine not only the condition of the home he is selling, but whether it will qualify as a Certified Pre-Owned Home and ultimately the added value the Certification will bring.  A certified and well trained home inspector will assess the property in question and identify potential problems that might affect a buyer’s willingness to purchase the property as well as identify areas that will need to be repaired before the home can qualify as a Certified Pre-Owned Home.  Typically the inspection will cover the following areas;

  • Electrical
  • Plumbing
  • Heating
  • Appliances
  • Roofing (flashing, chimney, gutters, downspout)
  • Foundation
  • Interior & Exterior  (wall surfaces, window & doors)

A home inspection on a 1,800 to 2,200 square feet home is conducted in approximately 3 hours. Once the inspection has been completed, the inspector presents the client with a written report outlining the findings. This information enables Sellers to make an informed decision as to whether or not they want to have their home marketed as a Certified Pre-Owned Home™.

What is a Home Warranty?

A Home Warranty is a one year Service Agreement (effective as of the closing date), which offers protection to Buyers against unexpected mechanical breakdowns on home systems and appliances not covered by homeowner’s insurance.

What does it cover?

In essence, a Home Warranty further validates a Home Inspection by placing coverage on the inspected home systems as well as appliances, in the event of unexpected mechanical breakdowns. A Home Warranty covers the following home systems and appliances…          

Structural Coverage

v Roofing
v  Foundation
v  Siding

Home Systems

v Central Heating System
v  Ductwork
v  Interior Plumbing System
v  Interior Electrical System
v  Hot Water Heater

Home Appliances

v Refrigerator
v Range/Oven/Hood
v Built-in Microwave oven, Dishwasher & Central Vacuum
v Garbage Disposal
v Garage Door Opener and Door Bells

It has been reported that 66% of home buyers report the failure of two major items in their home within the first year of ownership. Even though the importance of a home inspection cannot be over stated, it only reflects the condition of the home on the day it was inspected.  It is not a guarantee against future problems that can occur with home systems and appliances through normal wear and tear at a time when you may least be able to afford repairs which  can be quite costly. Such expenses are not easily absorbed by new home owners. A Certified Pre-Owned Homes Warranty, administered by UNIRISC Home Warranty assists its clients by arranging for a qualified service company to repair the appliance or system and in most cases will pay the service company directly.  The home owner is  responsible for a small deductable per service call.

 Home Warranty vs. Home Owner’s Insurance

Home owner’s insurance is something that every home owner should have and if they have a mortgage, MUST have. However, home owner’s insurance covers the home and its contents against such perils as fire, wind storm, lightening and vandalism. A Home Warranty however, covers the inner workings of a home that break down over time.  For instance, if your water heater bursts and floods your finished basement, your homeowner insurance will cover the damage to the basement and the Home Warranty will repair or replace the hot water heater.

Home Seller Benefits

  • Once the home inspection is completed and any repairs made,  the Seller will have a much better idea of the actual condition of their home and what the selling price should be.
  • If during the inspection, items are discovered that need attention, the homeowner can make repairs prior to the buyers inspection, thus eliminating “last minute re-negotiations” or buyers walking away.
  • The seller will have copies of the inspection summary for open house displays as well as a copy being posted on this web site and that of your realtor.
  • The home warranty would give both the seller and the buyer peace of mind
  • Typically, the home seller would receive a premium (currently projected to be from 3 to 5%) for their Certified Pre-Owned Home much like auto dealers do for the Certified Pre-owned Autos (5 to 8%).
  • Sellers should have no post closing calls about their former home
  • The combination ofa pre-listing home inspection and a home warranty provides unparalleled transparency for prospective buyers about the condition of your home and the possibility of unwanted surprises after they move in
  • When your home is listed as a Certified Pre-Owned Home it will differentiate your listing in the marketplace and maximize your number of potential buyers. 

Home Buyer Benefits:

  • An inspection has already be performed by a qualified home inspector and paid for by the seller
  • The buyer can be present and get an updated inspection using the same inspector for 50% of the normal rate.
  • Buyers will be able to identify Certified Pre-Owned Homes on a Realtor’s web site and on this site as well
  • They will be able to rest assured that nothing is seriously wrong with their new home and that they won’t be facing major repair expenses
  • The combination of a pre-listing home inspection  and a home warranty provides unparalleled transparency for prospective buyers about the condition of the home and the possibility of unwanted surprises after they move in
  • Be able to make their mortgage payments because they will have no major repair expenses
  • Convenience of repair if needed by means of a 24/7/365 on a toll free number
  • Intellectual pride of being able to say to family and friends that their home is a “Certified Pre-Owned Home”