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Buying a rental property: the one condition you need on your offer

by Andrew C. MacDonald on January 19, 2010

This is a post I wrote for The Rentables Apartment Blog offering some advice when making an offer to purchase a rental property.

home-inspectionWhen making an offer on any property, it is often wise to attach conditions. Three of the most common conditions on an offer include financing, property inspection, and legal conditions. In some markets, for example downtown Toronto condos, Realtors coordinate an offer date and expect competing offers. In these competitive circumstances, an offer with several conditions may be skipped over in favor of a lower offer without conditions.

This is one place where fear and emotion can kick in. Buyers are often pressured by agents into making unconditional offers based on the fear of losing out on a great deal. Unfortunately, making such offers can come back to bite you in the end. If you have your financing lined up, and are clear on your strategy, the one condition you still need is the home inspection clause.

Having a qualified inspector go over the property with a fine tooth comb usually costs between $250 and $500, but is a worthwhile expense to make sure you know what you are buying. The last thing you want to do is buy someone else’s problems, and for a small fee this can be avoided. Some of the things a home inspector will look at include:

  • structure and foundation
  • evidence of leaks or mold
  • heating and cooling systems
  • electrical system and appliances
  • plumbing system and gas lines
  • safety devices
  • interior structures (walls, door frames, ceilings, stairs, etc.)
  • windows
  • roof and drainage
  • garages, porches, and decks

Having a home inspector examine your potential purchase (after an accepted offer) will identify any problems ahead of time, and allow you to make your purchase with confidence. If there are any big problems, you can walk away from the deal. As a bonus, if the home inspector identifies some small problems you’d like to fix, you can often negotiate abatements with the seller.

So, when you’re ready to make your next offer, talk to your Realtor about adding an inspection clause and avoid buying other people’s problems.

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