There’s a troubling trend in the country’s hottest real estate markets that’s got some realtors concerned. With few properties for sale and many eager would-be buyers on the prowl, homes in Toronto and Vancouver are often snatched up after just a couple of days on the market. Bidding wars have become the norm in the Toronto real estate market, and that’s left many homebuyers racing to put in offers – leaving little time to arrange for a home inspection. That can leave buyers at the whim of an inspection prearranged by the seller.
“They take that seller’s home inspection as the gospel … without doing their own due diligence and bringing in their own home inspector, or someone that they trust, to ensure that the property is what they’re paying for,” says Derek Ladouceur, a Toronto-based realtor with REMAX Hallmark Realty LTD. “It happens a lot now, because you don’t have a lot of time to make a decision as to whether this is the property for you or not. Sometimes homes are only sitting on the market for two days now.”
Forgoing the Face-to-Face
In extreme cases, buyers may even put in an offer without seeing the property first – a phenomenon referred to as ‘sight unseen’ purchases. However, Ladouceur says that buying a house without first viewing it is not a commonplace occurrence in Toronto. Even overseas buyers looking for investment properties often fly in to have a gander, he says. But there are instances where it does happen, and those instances are likely to become more prevalent in Toronto as foreign investors flood to Toronto en masse in an attempt to skirt Vancouver’s new 15% tax.Vancouver implemented a tax on home purchases for non-residents at the beginning of August, a move that critics expect will cause investment to shift to Toronto – and could lead to an increase in those who choose to buy a home sight unseen.
Related Read: Is a Toronto Foreign Investment Tax a Possibility?
“Because of that there are going to be a lot more ‘sight unseen’ purchases here, because they’re just looking for a place to park their money more than anything else,” Ladouceur says. However, even buyers who do visit properties can find themselves vulnerable without a proper investigation, he adds.
Get an Inside Connection
But with timelines so tight and offers so rushed, what’s a would-be buyer to do?
Ladouceur recommends working with an agent who can help line up a qualified inspector on a moment’s notice. Ladouceur says he has several inspectors on speed dial, so when a client finds a home that they’d like to purchase, he can usually arrange for an inspection the very next day. Not getting a proper inspection can have severe consequences, he notes. For one thing, you could end up overpaying for a house that’s a dud – one that’s got serious issues such as a leaky roof, a cracked foundation or outdated knob-and-tube wiring that can be costly to repair.
Currently, home inspectors in Ontario are not licensed or regulated, although the province has vowed to change that. The Ontario government plans to table legislation in the fall that will require inspectors to be licensed, and that will establish an authority to oversee the industry.
Should You Buy a Home Sight Unseen?
As far as purchasing a house without seeing it first, Ladouceur doesn’t recommend that. Before making such a big purchase, it’s important to get a sense not only of the home itself but also its surroundings, to prevent you from getting duped by an unscrupulous realtor. What is the feel of the neighbourhood like? Is the area safe? These things are often much easier to ascertain in person than through photographs and verbal descriptions. After all, they say that seeing is believing.