Halifax’s competitive real estate market is forcing potential buyers to make some sacrifices in order to close the deal.
Homes in the city are being sold at record speed, and more often than not, listings field multiple offers.
Real Estate agent James Dwyer says the situation can lead buyers to try and make their offer look more attractive to sellers.
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“We have seen in some cases where buyers will come in and not do a home inspection clause, giving the seller peace of mind that nothing is going to come up and jeopardize the sale of the property,” he said.
But down the road, it could have a big financial impact or even be a safety concern.
“Buying a property and not knowing what’s going on inside that house could open up a whole lot of risk for that buyer,” Dwyer said.
“The unforeseen and unknowns — whether there could be foundation problems or roof problems or any number of factors — that can turn a house into a lemon pretty quick.”
Brian Hutchinson, a Halifax-based home inspector and executive secretary for the Canadian Association of Home & Property Inspectors, says he’s heard from realtors that about two in 10 transactions will forgo an inspection.
Prior to the pandemic, that was unheard of.
“Oh almost zero,” Hutchinson said.
“Most people were getting home inspections, but it’s so competitive right now that people are desperate to win their bid.”
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Hutchinson points out inspectors look for deficiencies within a house, as well as check when items need servicing or are no longer up to code. In some cases, the seller was not even aware the home had safety issues.
“When we do a professional home inspection, we mitigate the risks for three different parties: the seller, the buyer and the real estate agent.” he said.
“In most cases, we are working for the buyer and we’re looking for deficiencies that might impact their decision to buy the house or the price of the home and so forth.”
So what happens if a buyer feels there’s no choice but to waive the inspection?
Hutchinson recommends completing one after moving in.
“It’s putting the cart after the horse unfortunately but you need to know about your house. You need to understand about your house, how the systems work, what deficiencies are present, what safety issues are present,” he said.
In some markets, the trend of buyers forgoing home inspections has been taking place longer, and at a much higher rate. However, in Toronto for example, Hutchinson says about 40 per cent of sellers will actually get their own inspection prior to listing the home.
Sight unseen: More out-of-province buyers purchasing homes without setting foot in it
In its fourth quarter 2020 numbers, released this week, the Canada Mortgage and Housing Corporation (CMHC) has now rated Halifax and Moncton housing markets at a high degree of vulnerability. Specifically, Halifax experienced an increase in overheating and price acceleration.
Both Hutchinson and Dwyer say the COVID-19 pandemic has driven demand for homes in Halifax. They’re noticing interest from out-of-province buyers at a never-before-seen rate.
In fact, Hutchinson says half of the inspections he does now are virtually, for buyers who are not in the province.
“So what we’re getting is home buyers coming down from major city centres setting up shop, you know buying a house here, selling the home they had in Ontario and paying cash for houses down here and making Nova Scotia home.” explained Dwyer.
He says now that working from home has become the norm, it’s easier for people to pick up and move. Halifax, with its relatively-low median sale price, “looks like the value buy.”
That means, many buyers are purchasing homes — without ever setting foot in it.
“Due to our 14-day COVID restrictions, a lot of interprovincial migration is happening where the buyers are buying the house and then quarantining once they take possession of the property and they spend two weeks basically decorating and getting their property ready,” Dwyer said.
While there are several factors that have led to the competitive market that makes homeownership seem out of reach for many, Dwyer says there’s good nes.
He expects more listings to come on the market this spring.
And he advises people searching for a home to remain patient.
“The name of the game right now for buyers has got to be patience and persistence.”
— With a file from Alexa MacLean
