29 May Hot Real Estate Markets and Home Inspections
Real estate in Montreal has been heating up with some districts experiencing hot market conditions and a shortage of property listings. Stories of tight closing dates and bidding wars are very common. In normal markets, the potential buyers have more control over the transaction. However, in a hot market, home sellers are dictating the conditions, often having one open house and instructing interested parties that they have a limited number of days to make an offer. Multiple offers come in, often over the asking price. Buyers are competing for the home and are reluctant to include many conditions in their offer for fear of losing the opportunity.
In other parts of the country, red-hot real estate markets have resulted in bidding wars to buy properties and buyers sometimes making offers without doing their due diligence. Some buyers are making offers on homes that they have not been seen in person or with no conditions at all on the offer to purchase. This is not voluntary risk-taking; it is the result of multiple offers on a limited supply of homes.
The most common condition to an offer to purchase is the inspection. The home inspection gives the buyer advance knowledge of any issues that may exist with a building, how urgently they need to be addressed and enables the buyer to get estimates for the repairs. It allows him the opportunity to re-negotiate with the seller should large and expensive issues come to light, or to walk away form the purchase.
Stressed homebuyers may feel pressured to do anything possible to secure a home but there are many reasons why it is imperative that buyers resist any trend to forego an inspection.
Some of the most popular districts are where gentrification of older homes has started. These homes are being sold without legal warranty and many of them date back to the early 1900s. Issues with foundations, brickwork, plumbing and electricity are common in these older homes. An inspection by a professional experienced in older homes can provide a lot of information about the kind of work that will need to be done and the cost associated.
If you are already spending more than you budgeted because of a bidding war, it is imperative that you know how much it will cost you to do repairs or renovations. Some of the issues that come out during inspection may have to be addressed sooner rather than later putting a serious strain on your budget.
Contrary to what some people believe, buying a newer home does not mean you don’t need to have an inspection done. Construction defects occur all the time, whether that construction is new or old.
The solution: a pre-listing inspection
A pre-listing inspection is an ideal solution for all parties concerned. Pre-inspected property listings benefit all parties – purchasers, sellers and real estate agents. By having an inspection performed before listing the property, the sales process can move much more quickly and without risk.
In other cities, some buyers are having inspections done before they place an offer on a home. The problem is that if a bidding war erupts then the buyer may lose the home and have to start over with another inspection on another home that they may lose again.
If you should find yourself in a situation where you are unable to have an inspection done before closing, keep in mind that an inspection can also be done post-purchase. If you do opt for this, you need to be aware that you may not be legally protected should a defect be found. According to the law, you will not have done your due diligence before purchasing. Homes will need repair and maintenance and an inspection report can still guide you in terms of what needs to be done. The inspection should be done sooner rather than later, ideally before you move in or start renovations.
Luckily, buying properties without the opportunity to do an inspection is a trend that has not yet come to Montreal. Hopefully, it never will. Buyers know that the inspection is the one condition that is most important and sellers recognize this fact as pre-inspection inspections are becoming common. If you are on the market to buy a home, call the pros at Mose. We have inspectors who are experienced in older homes, new construction, condos, commercial properties, and more. Our goal is make sure you know everything about your home.
Book your inspection now!