This time last year, we saw record numbers of transactions (approx 25% more transactions than what we saw in April 2016*) – which set the market into an absolute frenzy. It’s no secret that in order to get into that home you had your eyes on, you had to compromise by removing the safety net of “subjects”, otherwise known as conditions to the contract.
By placing conditions on the contract, a seller makes allowances for the buyer to take the necessary time to ensure they have the proper financing in place and that the home can pass an inspection. But when there were multiple buyers lining up to purchase one home – it wasn’t always going to the highest bidder, often it was going to whoever could ensure a quick close without any possibility of “backing out”.
The stakes were high last Spring, and many people have now since realized the risk involved. For example, this Surrey homeowner who purchased his brand new home, subject free:
Global News – Surrey Homeowner Calls for Home Inspection Regulation
While Mr. Loughrey is calling for a legal obligation on behalf of the seller to allow for an inspection, there are still many who disagree and feel that a “subject free” offer is a true advantage to the buyer in a highly competitive market.
Outside of the home inspection condition, as a Mortgage Broker, my position is that every buyer who plans on obtaining mortgage financing, absolutely should include a “subject to financing” condition. A pre-approval will only cover YOU (the borrower), but you’re not the only component that requires approval for a mortgage; the lender (and sometimes insurer) must also approve the home. At very least, ensure you’re pre-qualified before you begin shopping, and find out exactly what your risks are in a subject-free situation! Call me!
-Rebecca Casey
604-833-8938
*statistic obtained from the Real Estate Board of Greater Vancouver
