The Risks Of A Pre-Sale Home Inspection

Homewatch Newsletter Archive


Not too long ago I recently stood with some of my Buyers on the threshold of a property they had enthusiastically viewed during a weekend Public Open House. The journey to find their perfect home had been a long one (we had just marked the first anniversary of our first year of house hunting together), and so much hope and anticipation had been attached to this dwelling that had caught their eyes and their hearts. But even when it comes to falling in love, especially when it comes to properties, the head generally needs to rule the heart. As such, there was some concern over the Presale Home Inspection being offered by the Sellers in advance of offers.

In a hot Toronto housing market, it isn’t unusual for the Seller and Listing Broker to make available a Presale Home Inspection in advance of the offer date, in hopes that it will encourage condition-free offers. The objective is two-fold. First, it allows the Seller to present a report prepared by an ‘objective’ third party that ‘fully discloses’ the state and condition of the property, including those deficiencies and flaws a Buyer should be aware of in advance of negotiating a purchase. Providing this assurance to a Buyer potentially mitigates any future accusations that the Sellers were intentionally hiding any property defects. Second, by providing a comprehensive report for all Buyers to review in advance of the offer date, the Sellers are potentially eliminating the need for each Buyer to hire their own inspector (at a cost upwards of $600 a pop) to inspect the property as part of their own due diligence. In Toronto, this is a common strategy.

The risk, of course, for both the Seller – and especially the Buyer – is that the Home Inspector isn’t very good and misses some crucial or critical information. The Home Inspection industry is currently self-regulated, and although they are working towards professional designation and regulation, using a Home Inspector is a bit of a leap of faith. This risk can be somewhat mitigated by support from your Realtor, who can draw on their own experiences over time to determine their favourites. While for the most part inspectors are reliable and accurate, it doesn’t mean that they are infallible and mistakes do sometimes happen. The fear of this is a constant presence in the back of my mind.

Back to the property that had piqued my Buyers’ interest. They had done their own due diligence, googling the inspector, only to find a trail of red flags, with warnings of hidden costs lurking for buyers attached to things missed in the inspection. This did not come as any great surprise, as I had similar experience with the very same inspector years ago- and one of my clients had to make major, costly repairs months after closing- contrary to what this Inspector had filed in their report. While I’m no inspector and don’t for a moment present myself as one, I do have a dearth of hands-on experience to draw on from the dozens of properties I have owned over twenty-five years, and have been involved from start to finish in the massive retrofit and conversion of several vintage buildings into boutique loft condominiums. I have also witnessed multiple home inspections in the twenty-two years I’ve been selling real estate. So I did what I always do when we enter one of my prospective Buyers’ ‘Dream Homes’. Icombed it head to toe looking for issues while comparing it to the Presale Home Inspection Report.

Let me foreshadow a little, by saying that I’m acutely aware of termites In this particular downtown east-side semi-detached dwelling, at the back of the house was a frame shed addition on a brick foundation that contained the rear staircase. The stairs went from the kitchen down to an at-grade landing where a patio door opened to the garden, and then the stairs reversed down into the finished basement. The termites I spoke of- they once caused tens of thousands of dollars in damage to one of my own properties. It was a nightmare to reconcile and I don’t wish the experience on anyone. Needless to say, to be standing in a wood frame shed addition where the entire wood beam perimeter was located below ground level and showing signs of moisture served up a BIG red flag. A quick call to Aetna Pest Control at 416-469-4111 confirmed that houses both across the street and a couple of doors north (they do not reveal specific addresses) had been treated for termites. This suggested there was a high risk that this property, if not already infested, was a likely candidate for future treatment and repair. What did this mean, then, for my Buyers? Potential extensive replacements and repairs at significant cost (worst case scenario $30,000), not to mention the stress and the worry of doing so.

Although it did not look like the Sellers had recently repaired this area nor intentionally tried to cover up the issue prior to listing, I was distressed this concern was not mentioned in the report. There were too many clues to miss what could be a massive repair bill. Yikes! Forty-five minutes later my Buyers and I walked away from the property. Once again I did what I do best…. I talked my Buyers out of buying! Alas, it was a bittersweet moment, but I won’t deny I’m extremely proud of my experience, commitment and integrity to serve my clients’ interests. It’s why I’m a Top Producer. All the same, fingers crossed we won’t be celebrating our Second Year Anniversary looking for a Home!

At, we get the connection between cause and effect when it comes to the risks of relying on a pre-sale home inspection. As your Realtor, we’re here to steer you right and apprise you of all potential pitfalls. With a track record of employing the most dynamic and effective ways to market your property, a multi-disciplinary education in housing and over 20 years of real estate experience, we are your pro-urban specialists. Learn more about us on our website, where you’ll find some of our past newsletters on housing dynamics, our custom housing profile, and great images of current listings. Not online? Just pick up the phone and call us now at 416-322-8000 for an introductory package! All without pressure or hassle!

Steven Fudge, Sales Representative

Bosley Real Estate Ltd., Brokerage


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