If you have been following real estate market news, you would be aware that for the past few years in the Greater Toronto Area, many homes were sold with multiple offers.
In order to win a bidding war, buyers will usually offer the best terms and price that they can afford, and that usually means they will have to make a “firm” offer.
The 2 most common conditions on residential offers are designed to let buyers walk away or re-negotiate if or when:
- the buyer cannot secure appropriate financing of the property
- an inspection revealed some underlying problems about the home that would alter the buyer’s decision about the purchase.
Photo Credits: merfam at http://www.flickr.com/photos/merfam/174212265/
In a perfect world, all offers should include an inspection condition so the buyers know how much the house is actually going to cost them in the future. However, in the hot real estate market that we are in, many would go ahead with a purchase without a home inspection.
So I was reading the book, “Holmes Inspection – Everything You Need to Know Before You Buy or Sell Your Home”. In the book, Mike Holmes emphasize the importance of a home inspection and also identified some red flags to watch out for when shopping for a home.
Let me summarize some of these signs that are easier to identify with untrained eyes. If you see any of these, you should include an inspection clause in your offer, even if it means that you could lose the bidding war.
16 signs that the home might be a money pit:
- The house sits too low in relation to surrounding land.
- Standing waters around the foundation of the home.
- Torn or missing shingles and bare spots on the roof, or the roof is nearly flat.
- Chimey with cracked or missing bricks
- Any structure that looks poorly installed, broken or rotting.
- Any wood structure/ members directly in contact with soil
- Basement or foundation walls buckling, bulging, leaning or there are major cracks.
- Evidence of moisture in the basement with musty smell, mildew, condensation on walls and windows, dampness in floors and walls, visible leaking from foundation cracks.
- Messy looking ductwork, electricals, and plumbing system, new electrical, plumbing that doesn’t look properly tied in to existing system
- Knob and tube wiring, 60 amps service, aluminum wiring, electrical panel changes without permit. (These you might not be able to identify on your own, but your Realtor is responsible to find out about these information for you.)
- Sagging floor joists, notches or cracks in the joists, rotting wood in floor joists
- Slow drains, signs of water/ waste backup, inadequate water pressure
- Oil tanks on the property
- Floor that is bouncing; floor that is not level; floor that slopes towards the middle of the house or slopes towards the exterior walls
- Signs of water damage near windows, floor levels, corners, ceilings, and in kitchen and bathrooms
- Rooms that are inadequately heated
In addition to all of the above, I think you should insist on having an inspection if the home is older; was bought and sold every few years; and maybe when the home have had several major renovations. When deciding whether to make a firm offer, the most important thing is to trust your gut; if there is anything that you don't feel absolutely confident about, just put the conditions in!
If you are looking to buy a home in North York, Richmond Hill, Aurora and Markham, schedule a free buyer consultation with me before the end of 2016 and receive a free copy of “Holmes Inspection: The Essential Guide for Every Homeowner, Buyer and Seller”*.
The tips that you will find in this book is going to change the way you shop for your perfect home!
You can also purchase a copy of the book at:
Have you read this book? Do you have any home inspection experience that you would like to share? Please comment below!
* Subject to availability of the book on amazon.ca