The importance of a home inspection
It’s no secret that Canada’s real estate market has been hot, hot, hot.
While sales cooled in July, prices remain on an upward trajectory generating price growth the country has rarely seen. Demand, tight supply, and low mortgage rates continue to drive the market.
On a national level, July home sales were down 15.2 per cent from a year ago, the Canadian Real Estate Association reported recently. It’s a reversal after June when sales rose 13.6 per cent year over year. But it’s important to remember July 2020 smashed records and last month still ranks as the second-busiest July on record. Home sales in Ontario came in 5.8 per cent above the 10-year average for July.
Just getting into the housing market presents its own challenges. This "auction fever" can result in buyers and sellers making decisions born out of panic.
More buyers are being pressured to make offers without doing a home inspection. In fact, Len Inkster, the executive secretary of the Ontario Association of Certified Home Inspectors told CBC News recently, adding based on conversations he’s had with inspectors across the province, Inkster believes that less than 25 per cent of all home sales are being inspected.
"It's like playing Russian Roulette with your finances and your home's finances and your family's finances," Inkster told CBC.
Bob Price, a home inspector in the Windsor area for the past 15 years, told CBC “It’s so out of control."
"Homebuyers, I think, … now realize they're making the biggest purchase of their lives, but they have no protection."
Price explained in today's "frenzied market," buyers have a better chance of getting a house without any conditions, including getting an inspection, adding that the pressure of the market and the rush to make a purchase are forcing people to make poor decisions.
In addition, sellers dictate whether a home inspection can even happen.
What is a home inspection?
So, what is a home inspection and why is it so important to the buying process? When the buyer is in the final phase of their home search and is getting ready to present an offer, the Toronto Realty Boutique describes a home inspection as an inexpensive way to discover the universal condition of a home. The most important reason to conduct one is to avoid a costly mistake by purchasing a property in need of major repairs. Sometimes the untrained eye can’t spot issues hidden in the home. For example, do watermarks in the basement indicate a chronic seepage problem or are they the result of a single incident?
Inspections focus on major defects that would cost the buyer a lot of money to repair beyond the purchase price. Because they are brought to the attention of the prospective buyer, they can choose to negotiate with the seller with the intent on getting major components repaired or a reduction in the price.
A comprehensive inspection includes a visual examination of the home from top to bottom, including the heating, air conditioning systems, the interior plumbing, and electrical systems, the roof and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure. It typically takes about one hour and 20 minutes to complete. Depending on the type of home you want to be inspected – for example, condo vs detached home – prices start can range from $250 to $450 or more.
Following the examination, the inspector will provide a report that not only points out possible defects or areas of concern, but also the positive aspects of the structure as well as the type of maintenance that will be necessary to keep the home in good shape. A professional assessment will provide complete information about the condition of the property you are considering and will help avoid any unpleasant surprises after the sale. In addition, a home inspector will be more objective and most times and will be able to walk you through any questions or concerns you may have.
What if there isn’t time?
The TRB notes they’ve been in situations where clients have found their dream home, but the seller is holding back offers and there isn’t an option to include a home inspection as a condition since it may put the buyer at a disadvantage among the competition. Hopefully, the listing realtor has a home inspection on file to share with potential buyers. If one hasn’t been done, you can bring a home inspector with you to visit the house. Many inspectors only need 24-hours’ notice. If you can arrange it in advance, it could offer you some peace of mind before making the biggest purchase of your life.
But it’s not the same as a full inspection, which typically takes about one hour and 20 minutes to complete. Inkster is not a fan of such inspections, which typically only focus on one area of the home
"The problem with the limited-scope inspections, if you do it for a buyer, it's not extensive enough to give the buyer the right information on the condition of the property to let them understand what sort of maintenance costs they might be letting themselves in for,” Inkster said.
The bottom line is prospective buyers should get a home inspection whenever possible before making an offer. It’s for your own protection.
ADDITIONAL READING: