Canada's housing industry has been doing pretty well, especially if we look at how the economic downturn has affected other countries and their housing markets. Canadian housing has even started to pick up some momentum over the last couple years. And all forecasts indicate this year isn't going to be different.
But after reading more stories about how potential buyers can't get into the housing game, I'm starting to get worried.
Why am I worried? Because in this healthy real estate market, homebuyers are more likely to jump through hoops just to buy a decent home. So homebuyers better start stretching, because that's exactly what they're going to have to do to their budgets.
In a healthy and balanced market, buyers tend to commit to things that put them in a vulnerable position. Usually, that means pushing beyond their financial capacity and getting in way over their heads in debt. And for what? For something that seems basic: an affordable, safe home.
It's tough, I know. You have this idea of the kind of home you want, and you think it's within your reach. But with the way things are going, some buyers might be looking at paying close to a quarter more than they thought they would in some Canadian markets. This could lead some homebuyers to make some bad decisions.
What kind of decisions? Well, for one, buying a home you know you can't afford, which is scary enough. But now I'm hearing about homebuyers who are not getting a home inspection to avoid a bidding war.
So what's going on here? Essentially, potential buyers are making their purchasing decision out of fear. They want to avoid a bidding war because they want to spend less. But they end up buying a home that could cost a fortune to repair. If the name of the game is saving money, not getting a home inspection doesn't make any sense.
I can understand the motivation behind homebuyers wanting to avoid bidding wars at all costs. I recently heard of one story where someone got a bad case of buyer's remorse after getting swept up in a bidding war. The result? They had to walk away from a $20,000 deposit.
But you want to talk about buyer's remorse? How about buying a $500,000 house on a $400,000 budget, only to find out it's going to need $80,000 in repairs just a week after moving in.
I've heard, seen and dealt with a lot worse.
Unless you've got an unlimited budget, I get peoples' phobia against bidding wars. But homebuyers need to know that by running away from a bidding war, they could be running straight into a battlefield of land mines.
Homebuyers who purchase a home without first getting a home inspection are essentially playing Russian roulette with their finances and their sanity.
I've seen the chaos, stress and anxiety a house that has problems can put a family through. If people are already overextending themselves just to buy a house, what makes them think they can handle any future repairs? I might be a risk-taker, but that's just going against better judgment.
Buying a house without getting a home inspection is like buying it with a blindfold on -- seriously. You might as well, because you have no idea what you're getting into or how much it's going to end up costing you.
No matter what, you're taking a risk when you a purchase a home, but a home inspection -- a good one -- minimizes that risk for you.
By getting a home inspection, you will have a better idea of what you're investing in. A home inspection may even give you negotiating points that can drive down the selling price of the house.
I know what some of you might be thinking: If you get a home inspection that turns up some bad news and you try to renegotiate the selling price, the seller is just going to move on to the next buyer. But then you have to ask yourself, is this a bad thing?
Maybe they're doing you a favour. In most cases, they are.
If you lose a bid on a house that's overpriced and needs some major repairs, you don't want it. Trust me, you don't. It's not worth the irritation. Life isn't fun when you're giving everything you've got for a house you can't even live in.
So please, do yourself a favour. Get a home inspection before buying a house. For an investment this big, you want to base your decision on skill and knowledge. Not fear.
-- Postmedia News
Catch Mike in his new series, Holmes Inspection, airing Thursdays at 8 p.m. ET/PT on HGTV. For more information, visit www.hgtv.ca. For more information on home renovations, visit makeitright.ca
