Ontario housing market is so hot most buyers are skipping inspections, home inspectors say
Ontario home inspectors say the hot-seller market is preventing most buyers from doing inspections, which in turn is forcing a large number of inspectors out of the industry due to the decline Business. They say the situation also puts home buyers at risk.
Magdalena Bisson and her husband found themselves in this situation after selling their home in Kitchener, Ont., last spring and attempting to buy in Brantford.
After losing several bids, they were finally successful. But like most homes for sale, the offer was to be unconditional, meaning the sale was not subject to conditions such as an appraisal, financing or home inspection.
Some sellers provide a pre-inspection report to potential buyers, but not in Bisson’s case.
“We knew buying a house should have no strings attached, otherwise you lose the house and you could search for months and months and months,” she said.
After moving in – and two floods – the couple found the house needed major work, including excavations around the house, repairing drywall in the basement and adding insulation, which Bisson said , could cost upwards of $50,000.
Ontario home inspectors say the seller’s market and routine unconditional offers lead to fewer inspections, leaving buyers uninformed or settling for “through” inspections that may be less thorough and not conform to the standards of the association. Inspectors say enacting provincial legislation that has remained in limbo would help protect consumers and regulate the industry.
“Massive learning experience”
Ontario’s housing market sees home prices hit record highs; in December 2021, the average sale price was $922,735, up 23% from the previous year, according to the Canadian Real Estate Association.
GTA building inspector Panos Loucaides says he’s seeing more and more people getting inspected after they’ve already made the biggest purchase of their lives.
“We sometimes find ourselves with people crying because of some serious flaws and the money they have to spend,” he said.
WATCH | According to one home inspector, some buyers get inspected when it’s too late:
The problem is not just in the Greater Toronto Area. Windsor-Essex County building inspector Bradley Labute says about half of the inspections he currently does take place after a home has been sold, which hardly ever happened before the housing market will not heat up in 2018.
Labute says about a quarter of the homes he inspects after a sale end up having “major problems”.
“The market has gone from protecting us the buyer before we get into the house to now after they call us and say, ‘I want to know what I bought,'” he said.
Six months after Bisson and her husband moved in, their house was flooded. They hired a contractor to make repairs, but the water flooded again.
“There was water coming from everywhere,” she said. “We ran one of the hoses up and we had feces all over the washing machine.”
They hired a building inspector who discovered several issues including new work that was not up to code, a lack of proper drainage, landscaping and grading that could cause flooding and signs of building damage. water.
“It was such a massive learning experience as to what the market does,” Bisson said.
Inspectors are leaving the industry, says the association
Len Inkster, home inspector and executive secretary of the Ontario Association of Certified Home Inspectors (OntarioACHI), says that, based on information provided by its members, he estimates that only about 15% of sales in Ontario now include a building inspection.
“It’s crazy,” Inkster said. “They are risking everything.”
Inkster says it’s more common in certain price ranges and regions, like Toronto, for sellers to offer pre-inspection reports to buyers, but not everyone does.
No data was available on the prevalence of home inspections in Ontario. Several federal, provincial and regional real estate organizations told CBC Toronto that they do not tally the number of sales that include home inspections.
The 15% estimate comes as no surprise to Re/Max Eastern Realty official broker John Hope, who is based in Peterborough, Ontario. He says even buyers who see a pre-inspection report don’t have enough time to act on its contents.
Inkster estimates that the number of inspectors in Ontario has fallen by around 60% since 2017. He says membership in OntarioACHI, which is voluntary, has dropped steadily each year, from 827 members in 2017 to just 80 in 2022. .
Dianne Guzik’s business plummeted so much that she was forced out of the industry in November after 14 years as an inspector in the Millbrook, Ontario area. She says estate agents who used to call her for inspections stopped reaching out to her and the cost of her insurance went up.
“It’s devastating,” she said. “I’m really not sure what I’m doing [next]. A kind of introspection. I have accumulated this skill, this bank of knowledge and I really can’t use it.”
Buyers are satisfied with “on-site” inspections
Loucaides owns Inspection Services Group and says his business was hit the hardest last year. it started the year with five inspectors and is now down to two hours of part-time work.
He says he was trying to work in the fast-paced housing market by having a team of inspectors from his company visit a home at the same time to greet a buyer on a home viewing. But, many viewings only lasted 15 to 30 minutes and Loucaides says he can’t do an adequate job in that amount of time. Additionally, it is part of an association that requires its inspectors to adhere to a higher standard.
“Consumers need protection,” he said.
Loucaides says even pre-listing inspections ordered by sellers to provide potential buyers have started to dry up.
“A lot of vendors were like, ‘Well, what’s the point of divulging anything when I have 30 people outside waiting to make me a cash offer?'”
Instead, some buyers pay for rushed inspections called “visits” that are done during a home viewing.
“You honestly can’t tell someone what the condition of a property is without spending a good two and a half hours in the house,” Inkster said.
The Real Estate Council of Ontario (RECO) says it encourages buyers to have their homes inspected, but does not recommend who they go to.
“Unfortunately, in seller-favoring real estate markets, there is significant pressure on buyers to submit offers with few or no conditions to be competitive,” RECO Registrar Joseph Richer said in a statement. communicated.
Inspectors call for regulations to standardize industry and build public trust
In 2017, the governing Liberals passed Bill 59 to regulate the home inspection industry in Ontario, which would require inspectors to be licensed, carry insurance and follow a code of ethics.
It was not enacted by the Progressive Conservatives, despite support from industry, including the Ontario Association of Home Inspectors (OAHI).
“You can buy a flashlight and have business cards printed and call yourself a building inspector,” OAHI President Leigh Gate said of the industry. “It’s dangerous for the consumer because we have to make sure that building inspectors are properly trained, educated and qualified.”
While the bill would not require inspections or remove pressure on buyers to act quickly, industry players say that if inspectors were regulated, real estate agents, appraisers and the public could rely more on them to ensure consumer protection.
“We can only be part of the solution if we can be taken seriously,” Inkster said.
Asked why Bill 59 was not enacted, a spokesperson for the Ontario government and the Ministry of Consumer Affairs said it “continues to review this matter to determine next steps.” steps”.