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Why you need to do a home inspection before buying

22 March 2021 by National Bank
Why do you need a home inspection before you buy?

Have you found the perfect home, but are wondering if you really need to do an inspection before buying? Who do you go to if you want to have the home inspected? What are the benefits of doing this? Here are our answers to all these questions. 

1. What is a pre-purchase home inspection?

A pre-purchase home inspection is an examination of the condition of a home and of what is visible to a building inspector, both inside and outside the home. It isn’t required for obtaining a mortgage loan, but it can help you avoid costly headaches. 

Inspections are recommended in all Canadian provinces, regardless of the type of property. Whether you’re buying a 5-year-old house or a 50-year-old house, a downtown residence or a cottage in the country, or a condo or a single-family home, it’s always a good idea to do a pre-purchase inspection. For new constructions, we still recommend doing a pre-purchase inspection even if those are covered by a new home warranty (called a guarantee for new residential buildings in Quebec). In Canada, this warranty is available in Ontario, Alberta, British Columbia and Quebec. 

What is included in an inspection and in the report? 

The inspector will visually evaluate the accessible areas inside and outside the property: the walls, the ceilings, the flooring, the structure, the foundation, the roof, etc. Common areas can also be inspected in the case of condominiums. 

The inspection report must contain:

  • Detailed observations on the condition of the property.
  • Details on any defects, necessary work, possible water infiltration, appearance of mould, suspicious odours, etc.
  • Many photos of the premises. 

How do you choose an inspector?

It’s best to do business with a certified inspector who’s a member of an association or professional order, because their work includes liability insurance in case of malpractice, which protects the buyer in some respects. For example: 

We recommend choosing an expert who’s based in the region or neighbourhood where you plan on buying your home, as they are more likely to know the particularities of that area. 

How much does a building inspector cost? 

Prices may vary depending on the type of building, the area, and the particular inspector, but you can expect to pay $500 to $600 for a proper pre-purchase inspection. Make sure to account for this when budgeting the costs related to purchasing a home. That way, it will be easier to know how much to save so you can cover these costs as well as all the other fees that come with buying a home (like taxes, notary fees, etc.). 

2. What are the benefits of doing a pre-purchase home inspection?

Getting a good understanding of the asset you’re about to buy

Buying property is a major investment; an inspection allows you to proceed with full knowledge of the facts. It’s an important step in your life that requires deep consideration. You’re about to make one of the biggest purchases of your life – would you do it with your eyes closed? The main benefit of doing a pre-purchase inspection is that it allows you to gain more knowledge about the home and helps you avoid any nasty surprises in the future. It’s an emotional time, especially for first-time buyers, so having all the facts is crucial for making sure you’re not being blinded by the home’s aesthetics. 

Limiting risks related to any possible latent defects

An inspector is more likely to see potential issues, but they’re inspecting the accessible areas, so there may nevertheless be latent defects despite their thoroughness and competence. Hiring a certified inspector protects the buyer from certain kinds of professional wrongdoing. For example, if the inspector fails to examine the attic even though it was accessible and the buyer later finds out that it’s contaminated, the buyer can contest the inspection report and take action against the inspector who missed a visible and accessible defect. 

Determining if the home will need any work in the short, medium or long term, and negotiating the price

If, for example, the roof needs to be redone in the short term and this isn’t mentioned in the seller’s declaration, this could affect whether the buyer wants to proceed, or help them negotiate a new price. The work can either be completed by the seller before the transfer of ownership, or the buyer can negotiate for a lower price if they do the work themselves. 

Cancelling the transaction in case of any defects

Plus, if you add a conditional sale clause to the pre-purchase inspection and to the approval for financing, this allows you to cancel the purchase promise if the inspection is not positive. 

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3. When should you do the pre-purchase home inspection? 

There are many steps involved in buying property: saving for a down payment, applying for mortgage pre-approval, visiting homes, submitting an offer, etc.  

The pre-purchase inspection takes place after you’ve submitted an offer to purchase and it’s been accepted by the sellers. But it’s best to wait for the inspection report before making the purchase official. In fact, as soon as you apply for mortgage pre-approval, try to find two or three inspectors to contact when the time comes. The timeframe for the inspection and for declaring your satisfaction of the findings is usually indicated in the offer to purchase. 

If there’s a delay of several months between the pre-purchase inspection and the date of the transfer of ownership, you can add a clause requiring a second inspection a few days before ownership is transferred to you. You would do this to make sure there aren’t any major changes to the state of the home; if there are, you’ll be able to cancel the transaction. 

4. How does a pre-purchase home inspection work?

Before the inspection, the inspector will review the seller’s declaration of the building, which is a document that includes details about the property (year of construction, servitude, etc.). 

On the day of the inspection, we highly recommend that both you and your real-estate broker be there. That way, you can follow the inspector as they visually examine the inside and outside of the property. The idea isn’t to second-guess each step of their work, but to observe what they are doing so you can get a better understanding of what you’ll read in their report later on. 

After the inspection is completed, the inspector will take some time to write an inspection report of the home and issue their initial comments. You will receive the report a few days after the inspection, within the timeframe that was agreed upon. 

Please note that an inspection report isn’t required by the bank, except in very rare cases (such as for foreclosed properties or homes built in a flood zone), but it will give you the opportunity to take a closer look at any defects noted by the inspector or renegotiate the sale price as per the observations noted in the report. 

5. What do you do if you find latent defects?

A latent defect is a hidden issue that a regular inspection wouldn’t uncover, which the buyer wasn’t aware of and that existed at the time of purchase. 

A pre-purchase inspection doesn’t protect you completely from hidden defects, but if you find any, you will have to inform the seller in writing. They are responsible for it even if they weren’t aware of the defect at the time of sale. Depending on the situation, the legal warranty of ownership and quality may give you the right to financial compensation or to a cancellation of the sale. 

In sum, a pre-purchase home inspection is an important examination that could save you from future headaches and give you more of a complete picture of the home you plan to buy.  

We’re here to answer your questions. 

 

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