Homebuyers: Why You Still Need Home Inspections
Thursday Jun 03rd, 2021
A typical scenario of forgoing home inspection could end up costing you more than what you bargained for.
A couple went looking for a house and decided on one property. Since it is a seller’s market, there are 11 other bidders on the asking price. The realtor advised them to make their offer stand out -they went over the asking price, tripled their down payment, and waived the home inspection. The couple won the listing but is left with an uneasy feeling not knowing what can be wrong with a 50-year old house. So they asked a home inspector to go and check out the property - but the home seller refused this. In the end, the deal fell through and due to the home sellers not being able to find a place to move in after selling the house.
This is what the usual scenario is in the housing market today.
A hot seller’s market is causing home buyers to compromise and forgo conditions in their listing offers. Home inspectors agree that the hot seller’s market has pushed most home buyers to purchase the property in haste and with no full home inspection conducted. This has become a growing concern for the industry who thinks buyers are in trouble if home inspection continues to decline.
To date, less than 25% of homes are being inspected before finalizing the property sale. Len Inkster from the Ontario Association of Certified Home Inspectors compares the no condition offers to a Russian roulette to the home buyer’s finances.
Limited scope and full home inspections
Home inspectors encourage full home inspections and not only limited-scope inspections that, as its namesake, only do a partial home inspection on some area and not the whole property.
But due to the pressure of closing the sale as quickly as possible, limited-scope inspections are usually done which lessens the risk but does not identify all the risks involved. Some home inspectors cannot do a complete job in a 30 minus window as normally they do it for about 1.25 hours. This inspection window is often placed by the home seller, but can be negotiated with a strong realtor at the home buyer’s side.
For home sellers, always ask your realtor if the pre-listing home inspection is a full or limited scope type of inspection. And then you can decide if you are willing to take the risk.
You win the battle but lose the war
Lesser conditions mean lesser protection for homebuyers who are desperate to win the bidding wars or bully offers.
Conditions are in place to provide consumer protection for home buyers. Although it might lessen your chances of getting the listing right away, in the long run, it will be a smart move to prevent you from buying a house that will only cost you more in vital repairs and necessary renovations.
In most cases, homebuyers who do not have a house inspection done before buying a home, wins the listing but ultimately loses the money invested in the house purchase due to costly repairs.
Home inspection findings can be your negotiating card for your initial offer. With a strong fact-finding report, homebuyers can talk to their real estate agent in lowering the asking price or initial offer to cover the maintenance and repair costs of existing issues on the property for sale.
The home inspection industry got hit hard
For an industry that is in place to protect home buyers, the decline of home inspection demands is not good. Around 65% of home inspectors have left the industry since 2019 and could go higher if regulations are not in place.
A home inspection does not guarantee a 100% no-fault house - but it can make you look at your desired property with realistic eyes. Depending on your level of risk adversity, you can still go ahead with your house purchase.
JoAnn Visaretis can help you in purchasing a home that should not compromise your investment. Contact her today to get your dream home even in a hot seller’s market.