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Home buying hazards

Buying a home can be both an exciting and rewarding experience. But it can also be a major headache, especially if you're not on the lookout for potential home hazards that might end up breaking the bank.

"Common hazards include unsafe wiring and moisture issues in the attic, which require a licensed electrician and qualified remediation specialist respectively," says Darren Arseneau, a certified home inspector in Durham, Ont.

Here are the top home hazards to keep an eye out for -- and why they can be problematic for unsuspecting homebuyers.

Aluminum wiring
There is a risk of this wiring overheating and causing a fire, says Anne Marie Thomas, an insurance expert with InsuranceHotline.com [http://www.insurancehotline.com]. "The buyer could ask that the electrical be updated by a certified electrician as a condition of the offer," she says. It's important to keep in mind that an insurance company will often decline to accept a risk where this is present.

Knob-and-tube wiring
Knob-and-tube wiring, generally found in pre-World-War-II homes, can also be dangerous and a fire hazard. It is not uncommon for an insurance company to refuse coverage on a home using this type of wiring. However in some cases, a licensed electrician can inspect and confirm the safety of the system and this may meet insurance company standards.

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Galvanized plumbing
This type of plumbing, historically installed in homes prior to 1950, can rust or corrode and can cause leaking into the home, says Thomas. "The buyer could ask that the plumbing be replaced prior to closing."

Galvanized pipes have a general life expectancy of 50 years. To be more specific, two things happen to galvanized pipes as they age, says Sherlock Mahoney, owner of the Sherlock Home Inspector based in South Carolina. First, minerals tend to slowly build up on the inner walls of the pipe decreasing the inside diameter. In extreme cases, this can slow the water flow to a trickle. But the other common problem with galvanized pipes is corrosion at the joints. In the process of cutting the threads for the pipe fittings, the protective galvanizing is cut away exposing bare metal. Over time, these threaded joints will corrode and eventually break.

An uncertified wood stove
Most insurance companies will require a Wood Energy Technology Transfer (WETT), a certified wood stove inspection to ensure safety prior to accepting the risk, says Thomas. The reason is simple: Uncertified wood stoves may constitute a serious fire hazard.

Old roofing
A roof older than 25 years old is a risk for insurance companies as it may leak and cause damage, says Thomas. You don't want to inherit and take on a problem this big and costly.

60 amp electrical service
"Depending upon what types of electronics the buyer will be using, there is the risk of overloading," says Thomas. "Between today's kitchen appliances, washers, dryers, air conditioning, TVs and stereo equipment, 60 amp service is often not enough." She recommends the buyer ask the electrical be updated by an electrician as a condition of the offer.

Large, old trees near a home offer shade and beauty, but in some cases can also represent a danger, according to InsuranceHotline.com. Homeowners are responsible for the care of trees on the property and can be held liable if a tree falls and causes damage. Any tree that appears to be in poor health or damaged will give a home inspector pause.

Consider pools carefully
Most home insurance companies have strict rules regarding insuring homes with pools, whether above or in-ground. Because a pool is a danger to children who can fall in and drown, it generally needs to be secured and surrounded by a fence of the proper height.

Some other hazards to watch for
Ventilation issues and dampness in the basement are two major home hazards, says Arseneau. As well, there are also safety issues relating to exterior decks and missing handrails, and grading and exterior landscape issues, he adds.

The deal breakers
Most of the aforementioned, if not corrected, would be deal breakers to most insurance companies, says Thomas: "Consumers should double check with their insurance professional prior to purchasing a home to ensure that they are going to be able to obtain a policy to cover them."

If the changes are not made, many insurance professionals have access to a high risk insurer, which may be able to cover the property. However, the coverage may not be as comprehensive as with a standard market and the premium -- if they can get it -- would be more expensive.

But the next step will depend on the homebuyers' current situation, says Arseneau. "If they have access to their own tradespeople, they may ask for a price reduction. If not, they may require the issues to be solved by qualified personnel."

Vanessa Santilli is a freelance writer based in Toronto.

-- Posted: July 9, 2012
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