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HOUSING MARKET'S PERFECT STORM LEFT SOME BUYERS IN A PINCH

TABITHA WELLS twells@metroland.com

Housing prices soared over the past year and inventory dropped, leading to bidding wars. As a result, many homebuyers began to drop conditions from their offers in the hopes of standing out.

"With people in a panic to buy and low inventory, they were caught in this rat-race of going into bidding wars," said Steve Pockett of HMP Home Inspections.

Pockett says this led to a worrying trend, where potential homebuyers are skipping home in

spections.

"In many situations if there are any conditions in the offer, particularly around financing or building inspections, they're not looking at it," Pockett explained. "Unfortunately, a lot of people are getting stung."

After more than 16 years as a home inspector in the region, he says it's been difficult to see homebuyers finding themselves in these precarious positions. Postpurchase inspections have become more common, leaving the buyer to foot the bill for any problems found.

"They went in over asking, got the house and then call me to come and see what they ended up with," said Pockett. "For the most part, it's worked out OK, but for those it hasn't, it's been a shocking experience."

In Dufferin, some have found themselves purchasing houses with a number of electrical issues, foundation issues, massive leaks and other issues.

"People have already budgeted themselves to their maximum for the down payment, so do they really have $10,000 to $40,000 to get the house proper?" Pockett said.

He noted one Orangeville business owner was able to include the inspection condition, which saved him up to $30,000 in repairs. The problems wouldn't have been caught without a full inspection, as it was under the main floors of the house, with the foundations splitting and rotting.

Orangeville realtor Ross Hughes fortunately did not have many clients who encountered these issues.

"It was basically this perfect storm of low interest rates and no inventory," said Hughes.

In January, there were 11 houses on the market in

Orangeville, despite lots of buyers attempting to purchase.

Both Hughes and Pockett explained there are a few ways buyers could protect themselves even without the full inspection and sellers could help buyers feel more secure.

Pre-inspections are one way.

"The seller hires a home inspector so they can have a report on the house that can be shared with potential buyers," explained Hughes. "If agents have questions, they can call the inspector afterwards for clarity."

When Pockett does preinspections, he puts a sign out front noting the house was pre-inspected to give peace-of-mind to both the seller and the buyer.

Another option is bringing an inspector along when they visit the house.

"We know what those big ticket items are to look for," said Pockett. "There's nothing that can replace a full, thorough home inspection, but they can bring me along to look for major concerns in that 30minute window."

In the past month, the real estate market has started to cool off, bringing some relief to the chaos. As of May 13, there were 95 houses listed for sale in Orangeville alone.

"In February at its height, the average house price in Orangeville was $1,000,049. When April closed out, we saw it at $938,000. So there's been a drop in that average price."

This means less competition, and less of a likelihood to end up in a bidding war way above asking.

As the market stabilizes,

Pockett says the best way to protect buyers moving forward is to put pressure on the Ontario government to put more disclosure laws in place.

"We need to have something regulated where people can have the right to a home inspection," said Pockett. "You have to have a car certified to be on the road to be safe. What's the difference? A house has a lot of financial value, more than a car."

“You have to have a car certified to be on the road to be safe. What's the difference?”

- Steve Pockett

STORY BEHIND THE STORY: During the pandemic, the real estate market exploded as a seller's market, with many homes selling in less than a week in Dufferin. Reporter Tabitha Wells wanted to find out what kind of impact foregoing conditions clauses and home inspections had on buyers in the area.

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2022-05-19T07:00:00.0000000Z

2022-05-19T07:00:00.0000000Z

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