Home inspections are making a comeback as buyers take advantage of a slow real estate market to make sure their dream home isn’t a disaster in disguise.
Jonathan Sheppard, a home inspector in B.C.’s Lower Mainland and president of the Home Inspectors Association BC, says the practice spiked toward the beginning of the pandemic as home sales started to rise, but by the time sales peaked during the pandemic, business was “dead” as frantic buyers were forgoing all conditions in an attempt to win bidding wars.
Before the pandemic, 12 inspections a week would be a typical workload for Mr. Sheppard. These days, he says business comes in short spurts, but he believes the tables have turned, and buyers are using their power to be sure of what they’re purchasing. He’s averaging around five inspections a week.
“If there’s an opportunity for home inspections, people will take it, because the consumer wants it,” said Mr. Sheppard. He pointed to recent legislation by the B.C. government to introduce a three-day cooling-off period for home purchases in 2023, which is meant in part to give buyers time to organize a home inspection even if it wasn’t included as a clause.
Nasma Ali, founder of One Group Toronto Real Estate, says the vast majority of buyers she works with are including inspection conditions to take advantage of the slow market, which has been sluggish in the face of multiple interest-rate hikes.
“Buyers have this mentality that they’re doing you a favour by giving you this offer, so they’re going to include every possible condition,” said Ms. Ali. “It’s a buyer’s market, there’s no doubt about it.”
She says the trend is benefiting buyers in the suburbs and exurbs in particular, since listing agents in larger markets like Toronto had already started to produce their own inspection reports up front in an attempt to promote a sense of confidence during bidding wars on older properties.
Ms. Ali says the practice of seller-organized home inspections is now fading in Toronto, especially because agents sometimes fronted that cost and are no longer even sure if any given home will sell.
Peter Weeks, president of the Canadian Association of Home and Property Inspectors (CAHPI), says it’s a relief that homeowners have more power to push for inspections, since he’s seen a few horror stories in the past couple of years.
When the market was hot, it was common for home inspectors to be hired after a purchase, and the results could be gut-wrenching for new owners.
In one instance, Mr. Weeks inspected a row home in May, which was built around 1910, for a homeowner that had just purchased the property.
When he started looking around, he noticed signs of damage on the back wall. While home inspectors generally won’t do “destructive testing” – where they intrude into the guts of your home – he told the woman that she could poke into the wall with a screwdriver to get a sense of the damage. When she did, she found that the tool could penetrate the wood in the wall with just a little force.
The repair on that kind of damage could cost anywhere from $20,000 to $100,000, said Mr. Weeks.
“It’s concerning. Getting an inspection is truly important, and in terms of consumer confidence, it’s the only thing people have,” he said.
Mr. Weeks says it’s also important for home buyers to be judicious when picking an inspector, especially in provinces like Ontario, where there isn’t a provincial regulating body for the profession. Consumers in such provinces could opt for CAHPI-certified inspectors, who have to pass a rigorous test.
Even in provinces like B.C. and Alberta where there are regulating bodies, Mr. Sheppard says consumers should read reviews and be skeptical of inspectors offering very low prices.
In the Metro Vancouver area, Mr. Sheppard says to expect prices in the $450-to-$500 range for a condo, and from $500 to $700 for most houses, with prices going higher for especially large homes.
He added that home buyers should consider an inspector before they pick a home, so that they have time to do their due diligence when researching and aren’t in a rush to book the first available inspector.
Some of the things Mr. Sheppard says inspectors will look for include safety concerns around shoddy build quality, signs of deterioration in kitchens and bathrooms, water damage, wear-and-tear on a roof and windows, and exterior issues such as damage to the foundation. They’ll also look at attics and crawl spaces, which he says will almost always have issues.
Mr. Sheppard says he’s never done a home inspection without finding at least one issue, and in bad cases, the upfront costs for the homeowner could extend well into six-figure price tags.
“Some people are risking all their life savings – and even their parents’ life savings – just to buy a house,” said Mr. Sheppard, adding that people should be informed when making the biggest financial decision of their lives.
Are you a young Canadian with money on your mind? To set yourself up for success and steer clear of costly mistakes, listen to our award-winning Stress Test podcast.