MacDonald: Canada’s housing market frenzy is a recipe for heartbreak

We lost the home of our dreams likely because we wanted a routine inspection.

Article content

My wife and I lost our dream house recently, a 150-year-old home in Carleton Place. The home has been lovingly maintained in much its original condition, complete with beautiful old-fashioned hardwood floors that creak in just the right spots. Unlike many similar homes whose charm has been destroyed over the years by supposedly modern updates such as new carpet or slick plastic laminate flooring, this home has a magical energy that doesn’t exist in modern homes.

But we lost it because we insisted on a home inspection if our offer to buy it was accepted.

Only recently, home inspection clauses in home purchase offers were standard, and many real estate experts still recommend them. But today, in Canada’s boiling housing markets, it’s common for people to make completely unconditional offers, often for prices substantially over asking. The inspection we had requested would have been simply to ensure that there were no major problems with the house — a home we had otherwise fallen madly in love with. Is that so crazy?


This advertisement has not loaded yet, but your article continues below.

Article content

There was only one other offer on the house, but it was completely unconditional. We now believe we would have been successful if we had removed all conditions. We had no intention of backing away from the purchase unless we found any truly major problems, which we doubt we would have, but it feels stupid not to do even a basic home inspection before buying a house, and it feels wrong not to allow serious buyers at least some time to do this without them having to pay for this preemptively before an offer has even been accepted. Yet this seems to be required to buy a house in many real estate markets in Canada. It’s a recipe for heartbreak.

I do understand why sellers would obviously prefer unconditional offers, but there has to be a better way. With COVID restrictions, people are rarely allowed to see a home for more than 30 minutes, and although they can visit it multiple times, this is not always practical. Of course, accepting a conditional offer carries the risk that the sale may fall through, requiring the house to be re-listed. This can make other potential buyers wary, because it may wrongly give the impression that there is something wrong with the home.

But this simply encourages frantic, irresponsible home-buying decisions, driving prices sky-high and exposing buyers to all kinds of risks, from major unforeseen home repairs, to insurance and financing problems, and, as a result of these, potential lawsuits.

Fortunately, the Ontario government has already solved this problem – at least for some home buyers. Under Ontario’s Condominium Act, buyers of pre-construction condos can rescind their agreement to purchase within 10 days without penalty. Known as a cooling-off period, this gives buyers time to consider their decision more carefully without the pressure of having to make a snap, unconditional offer in a race not to be left out – which is exactly what is happening now in real estate markets across Canada.


This advertisement has not loaded yet, but your article continues below.

Article content

At the same time, legislating this right across the board, at least for one subset of condominiums, doesn’t penalize builders by giving the impression that there is something wrong with their condos. Legislation that effectively requires buyers to carefully consider what may be the biggest financial decision they make in their lives? That doesn’t sound so bad.

A similar legislative approach could help stabilize the housing market overall, benefitting buyers and sellers alike.

Matthew A. MacDonald lives with his wife, Shannon, and their four rambunctious children in a perfectly adequate semi-detached house in Ottawa. They continue to look for a bigger, older home with character and charm, and hardwood floors that creak just so — even if they have to drive a bit to get to it.

Listen to Down to Business for in-depth discussions and insights into the latest in Canadian business, available wherever you get your podcasts. Check out the latest episode below:


Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.


Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button