While frugality is a financially smart move when you are shopping for a home, there are expenses that you shouldn’t cut out, simply because some money spent now can save you an awful lot of money in the future- like a property inspection, for example.
Similarly, if you are looking for a property in a market where bidding wars are the norm (namely Toronto and Vancouver) you might be tempted to waive your property inspection just to give you that extra edge over other buyers to appease the sellers when competition is fierce. That kind of short term thinking may help you achieve your goal in the moment, but it could set you up for some serious, potentially devastating financial consequences down the road, especially if you are already taking out a big mortgage.
Having a property inspection will not only let you know about the structural soundness of your home, it will give you a clearer picture of some of the costs you may have to shoulder immediately and in the long term too.
“Your home is probably the biggest asset you have, but it is also usually the biggest debt that you take on as well. If you are already scraping the top of your budget just to buy the house, you’re not leaving yourself much room, should extra expenses arise. And the expenses to repair a house can be minor- or can run tens or hundreds of thousands of dollars. The only way to know for sure what you are getting into is to have a thorough property inspection,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
“Even though at first glance your home may appear fine, a trained professional can dig a little deeper and start looking at some of the major housing components that may need repair. In some cases, these extra costs may make the home an unwise buy, either for your budget, or for the price point of the home,” says Schwartz.
Find a reputable property inspector
Think about it. You are placing a large amount of trust in this individual to help you determine exactly what the financial implications might be when purchasing a home. Depending on where you live, property inspectors are not necessarily regulated by your province (although all the other professionals, like your lawyer and real estate agent are). You can also refer to the Canadian Association of Home and Property Inspectors to find accredited inspectors in your area.
Also check with the Better Business Bureau and get referrals from family and friends.
Use your head, not your heart
Buying a home is a hugely emotional process, and you may find yourself tempted to proceed with a home purchase if you’ve already fallen in love with the place, even if a property inspection reveals serious problems. While it might be hard to walk away, taking on those extra costs means adding more to your mortgage debt, which could put you in a dangerous position.
Similarly, if you are getting caught up in a bidding war, you may want to do whatever you have to seal the deal, even if that means rolling the dice without your property inspection. Your fear of missing out can quickly lead to the stress of a crushing debt load from unexpected emergency house repairs.
There is a house out there that fits your wish list and your budget.
Has homeownership saddled you with debt? Did unexpected expenses force you to turn towards debt, just to cover costs? The time is now to rein that debt in while you have the chance. Call us today to speak to our trained credit counsellors at 1-888-294-3130 or visit our free online debt analysis.