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Real estate markets may be cooling across the country, but that isn’t in the case in Canada’s largest city Toronto. Although the new condo market may be slowing, detached homes remain in high demand. If you’re a homebuyer in the Greater Toronto Area (GTA), you probably know all too well the dreaded bidding war you could be faced with. But if you’re thinking about foregoing a home inspection in Toronto, just to get what seems to be your dream home, it’s important to be aware of the many risks you can face.

A Conditional Offer… or Not

Picture this: You’ve been searching for the perfect house for months and you finally found one you’d like to call home. The only problem is you’re not the only buyer who’s interested. When it comes to multiple offer situations, offer price alone doesn’t necessarily guarantee you’ll be the successful bidder. Conditions on offers can make or break a deal – it isn’t unheard of for sellers to accept a lower offer with fewer conditions, just to get the sale over and done with. While you might consider avoiding a condition on financing, if you’ve been pre-approved for a mortgage, what about the condition of a home inspection? Too many buyers in Toronto are being faced with this decision today.

Added Pressure

Last year’s tightening of mortgage rules – which lowered the maximum amortization period from 30 years to 25 years – may have cooled the condo market, but low-rise houses remain coveted in the GTA. While home sales may be dropping, price aren’t falling suit. Instead, prices continue to rise, as buyers compete for a shrinking pool of houses. Overall, sales in Toronto were down 11.5 per cent in March, while the average price for a detached home increased by 7.2 per cent.

It can be frustrating when almost every house you look at seems to end in a multiple offer situation – so frustrating that you might be ready to throw in the towel and give up your dream of homeownership. First-time homebuyers are especially feeling the squeeze – a shorter amortization means you’ll have to either downsize your housing dream or sit on the sidelines for a little longer while you save up a larger down payment. But rather than rush into a purchase, first-time buyers should do anything they can to protect this monumental investment.

Why It’s Still Important to Get a Home Inspection

There are a number of reasons home inspections are one of the most popular conditions buyers include in their offers:

• Although a house may show well, skipping the inspection leaves you at risk of later discovering costly repairs. Home inspectors can uncover expensive repair jobs, such as faulty wiring, structural issues, and old plumbing.
• With that being said, a home inspection is like a medical checkup for your house. Not only will it give you a good idea about your house’s condition, it will provide repair cost estimates, so you can better budget for major repairs, such as a new roof or furnace.
• The home inspection provides a bargaining chip for buyers. If you uncover a major repair after the home inspection, but still want the house, you can ask for a reduction in price or other concessions from the seller.
• A home inspection is a great learning experience. If you’ve been a renter all your life, it provides a great opportunity to learn about maintaining a home. You’ll need to know where the water shut-off valve is, as well as your circuit breaker panel. It also provides a great opportunity to ask questions to an experienced professional.

The bottom line is: Foregoing a home inspection is usually not a wise decision. If a seller isn’t being accommodating with your desire for a home inspection, they might have something to hide. If you want to come in with a clean offer, a pre-inspection is another option. Although you might end up paying for an inspection on a home you don’t buy, at least you’d have peace of mind knowing if you’re buying a money pit or not.