What is a home inspection & do you need one?

What is a home inspection & do you need one?

Last updated
Oct 2022
6 min
Written by
Chrissy Kapralos
  • Home inspections are a common condition for purchase in Canadian property sales. 
  • Home inspectors look for water damage, structural issues, faulty wiring, cracks, and more in a typical inspection. 
  • You’ll spend $300-$600 on a home inspection. But it could save yourself $10,000+ if you catch any issues and use them to negotiate with a buyer or abandon the sale. 
  • Many Canadians skip home inspections to make their property offers more attractive in a hot market.

You’re walking through an open house, and everything looks great. A separate bedroom? Check. No broken cabinets or windows? Check. No pests? Lovely. 

But every home has issues that aren’t so obvious. You’d be surprised what issues could lurk beneath a home’s new paint and thoughtful staging. 

Does every issue warrant abandoning a purchase? Not necessarily. But some might cost you more than you budgeted for. 

That’s why home inspections exist. 

Today, we’ll walk through what home inspections entail, how much they cost, and why you should consider them before purchasing a home. 

What is a home inspection?

Prospective homebuyers can list all sorts of conditions that must be met before closing the deal, from financing and home inspections to the state of title. 

A home inspection is often listed as a condition (contingency) before closing the deal on a property purchase. Buyers and sellers negotiate the timeline, but most home inspection conditions require completion within 5-7 days. It’s meant to reveal any issues with the home, from structural problems to extreme mold, for example. 

But how much does a home inspection cost? You’re looking at $300-$600 — a low price for peace of mind. 

A home inspector doesn’t work for your lender or the seller. Instead, they’re from private companies employed by homebuyers, sellers, and lenders (but usually homebuyers) to determine any problems with a property. 

Here’s what home inspectors examine: 

  • Roof
  • Foundation
  • Heating, Furnace, and HVAC systems
  • Electrical
  • Plumbing
  • Furnace
  • Building code violations

Sounds like a lot of ground to cover. So, how long do home inspections take? Anywhere between 30 minutes to 2 hours, and in some cases, more. 

Once complete, the inspector records all their findings in a report. They’ll also note anything that needs a major repair or renovation. 

We know what you’re thinking: What’s the worst they could find?

What issues do home inspections usually uncover?

Does this mean you can’t catch any issues in your initial walk-through? Of course not — it’s just that house inspections should catch what you can’t see. 

Before an inspection, look out for any black spots on the walls because they could indicate toxic mold. Additionally, check for any cracks, power issues, extreme heat or cold, and general damage in the home. 

Bring your concerns to the seller and see if they disclose any issues. Technically, they’re supposed to. But they might not always be aware of the issue (or pretend they aren’t). 

Don’t worry if you miss anything. A home inspection will cover the rest. 

Here’s a list of common discoveries by home inspectors

  • Water damage: You’d be surprised at how devastating water could be to your home, from causing foundational issues to more extreme scenarios. Inspectors commonly find water damage from poor stucco construction, unkept or old roofs, and draining problems. 
  • Roof issues: Old materials make your roof susceptible to the elements. Recent band aid repairs might signify previous issues that could likely return. 
  • Faulty or old electrical work: Any wiring problems could be a fire risk, especially with exposed wires. In some cases, knob and tube panels are outdated and costly to update. 
  • Poor insulation: So what if it’s a little chilly? Just wait until you see your utility bill! 
  • Structure cracks: These might require underpinning work that could cost you thousands. 

Now, any of these issues could cost you tens of thousands of dollars. Skipping a home inspection has resulted in immense stress and surprise issues for many GTA homebuyers

Do you need a home inspection?

In most cases, yes. Home inspections make you feel more confident in putting in an offer on a property and could save you thousands in unexpected costs. But conditions aren’t conducive to a quick sale. You could make a home inspection a condition of your offer (conditional offer). If the home inspection reveals issues past the point of negotiation, you’re protected and can walk away from the offer, deposit back in hand.  But a seller might prefer to go with another buyer with no conditions (unconditional offer). 

Home inspections are less common for condo purchases because the status certificate describes the condo’s condition (i.e. structural elements) and the corporation’s finances. However, a home inspection is still a good idea for your new condo. For example, water damage still brings condo owners massive headaches. And unfortunately, your maintenance fees won’t cover that. 

Why wouldn’t you get a home inspection?

Let’s step in the seller’s shoes for a second. Conditions add time to closing a deal. Say you add financing and a home inspection to your offer, with three months to close the deal. A home inspection could introduce new considerations that prompt further negotiation, and even abandoning the purchase. Now the seller has lost a month or more and needs to start the selling process all over again. 

You’d be surprised to know that skipping home inspections is quite common now. Turns out, many Canadians forego home inspections. It’s not about the $500 cost to pay for one. It’s about securing the property they want in a hot market. 

Side note: If you’re curious about the GTA’s hot market prices, check out Lotly’s free GTA market insight tool.

If you’re gunning for a hot property, you might take the risk and add an extra $30,000 to your budget for renovations if needed. 

If you’re a business owner, you might also consider making an offer with minimal conditions. Your mortgage isn’t as secure as someone with a full-time 9 to 5. If you need to wait longer for a property deal and that time takes you into a business slump, the bank might rescind their pre-approval. 

In every other case? A home inspection is a prudent idea. The market is slowly tipping back into a buyer’s wonderland, with many recent homeowners selling after mortgage rate increases

Why should you get a home inspection?

Home inspections are like an insurance policy for your property purchase. Here’s why you should get one: 

  • Avoid high costs for repairs: Foundational issues and water damage can cost you an arm and a leg. Home inspections catch these issues and give you an option to back out and avoid the costs. 
  • Peace of mind: Even if money isn’t an issue, peace of mind is priceless. Do you really want to spend months dealing with contractors or conflicting opinions about how to fix your crumbling foundation? Talk about stress — avoid it with a home inspection. 
  • Secures your rental income: Say you purchased a rental property, or, you’d like to live in one unit and rent the other. Home inspections catch any building code issues. If you miss one, you could risk your investment and go months without rental income as you rectify the issue. 
  • Leverage in negotiation: If a home inspection issue isn’t enough to send you packing, at least use it as a bargaining chip. Use it as leverage to lower the purchase price, or add a condition that the buyer covers the cost before you buy. 

PS: Home inspections are mandatory for Lotly homebuyers. They’re a nice cushion while home buying and protect you from headaches down the line!

Get home buying ready with Lotly!

Bottom line? Home inspections protect you from surprise costs. But certain situations might warrant skipping one — just prepare and budget accordingly for any surprises. 

If the thought of even more budgeting for a property purchase makes your head spin, we understand. That’s why we started Lotly — to make homeownership more accessible with down payment assistance and more. We match investors with homebuyers to foster a win-win property transaction. 

Ready to purchase a property without worrying about a massive down payment? Become a Lotly homebuyer today!

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Chrissy Kapralos
Writer & Editor
Chrissy Kapralos runs a Toronto-based writing agency called No Worries Writing Co. She loves writing about personal finance and real estate topics and helping businesses communicate effectively with their customers. When she's not working, you can find her travelling, practicing yoga, or watching horror movies.