April 12, 2017
Home Inspection Industry Sees Downturn As Offers Heat Up
When buying a home – usually the largest purchase a person is ever likely to make – common sense suggests you put a lot of thought in before making your final decision. The current GTA housing market is anything but common though, so normal thinking doesn’t really apply here. Nowadays, if someone really wants to buy a home, speed, rather than deep introspection, is your primary concern.
Properties that receive an offer the same day as listing would have been unfathomable in the not too distant past, but now it’s the norm. There’s a lot of competition out there among buyers, so any advantage you can gain to speed up the process can make all the difference. For those that prefer to go through their due diligence and really make sure all their bases are covered before making an offer, it’s more than likely they’ll lose out.
Business Isn’t Booming
One of the side-effects of the current market is that home inspections are being deemed an unnecessary impediment by many buyers. Murray Parish, president of the Ontario Association of Home Inspectors, has experienced a significant decline at his firm, Parish Home Inspections, since Toronto’s property boom really heated up in 2016.
“At one time it was common for everyone buying a resale property to get a home inspection, but the way the market is now a lot of people are skipping it,” he says. “If you put a condition like a home inspection on a house, it will often mean you don’t get it because someone will buy without that condition.”
Related Read: New Home Inspector Regulations Coming to Ontario
What Could Go Wrong?
Having started his own business in 2009, Parish became a registered home inspector (RHI) from the Ontario Association of Home Inspectors (OAHI) in 2010. Receiving that certification means the holder can assess a home for many of the deficiencies that could cause a buyer long-term difficulties down the line.
The possibilities for calamity are myriad, including the property’s structural and exterior systems, the roof, plumbing, electrical, plumbing, heating and insulation. The popularity of DIY and home improvement TV shows in recent years has meant that many people may believe they already have the skills to do their own home inspection. That’s far from the case, explains Parish, and receiving your RHI certification entails meeting professional standards laid out by the OAHI.
“Anyone now can say they are a renovator, so the biggest thing I find when I inspect homes is when renovations have gone awry,” he says. “Like putting lipstick on a pig, the house may look pretty, but underneath there’s nothing there. Water damage, mold, cracks in the foundations, structural damage – if you have a trained eye you can see these things.”
Lack of Inspections Expanding Across GTA
Electing to take a chance and buy a home without using a trained inspector is a not particularly positive by-product of the current market. Toronto real estate continues to attract national and international headlines for its price growth over the past year, but this phenomenon extends far past the 416 area code.
“It’s not just the GTA anymore, it is spreading – some of my counterparts in Barrie say the same thing is happening there,” reveals Parish.
A New Real Estate Reality
There does seem to be some relief on the way with the forthcoming Ontario budget, and Finance Minister Charles Sousa has indicated that measures will be put in place to help cool the market. How effective these measures will ultimately be with such limited housing stock remains to be seen.
Faced with that reality, the owner of Parish Home Inspections believes his peers need to recalibrate their businesses to face the new reality of real estate in the Golden Horseshoe.
“Home inspectors will need to adjust or they will go out of business,” he says. “They need to find other avenues of revenue, working for insurance companies or mortgage companies.”