What does “upgraded wiring” really mean?

The subject of home inspections continues to matter to buyers and sellers.

John says that he would never listen to a home inspector recommendation by a real estate agent because they only refer inspectors who will likely approve the house.

My answer is that real estate agents will normally recommend three professionals. You should take the time to check references for any inspection company before deciding to hire them.

Jim, a seller, complains that buyers use the home inspection condition to come back and try to renegotiate the price. Paul, another seller, asks whether they should do their own home inspection before putting their house up for sale.

Because many sellers refuse to sign disclosure statements about the condition of their properties, there is a concern by buyers that the sellers may be hiding something. As a result, some sellers are having their home inspected before they offer it for sale. By having a home inspection done in advance by a reputable company and handing a summary to an interested buyer, you can give the buyer more peace of mind. The seller can also fix the problems noted on the inspection and show the buyer what was done. This should prevent buyers from coming back to try and re-negotiate the price after doing their own inspection.

I have also noticed many ads out there describing properties for sale, with words like “New Roof, Upgraded Plumbing, Updated Wiring or “Totally Renovated.”

Buyers need to ask for proof as to what the seller means by any of these claims. New shingles on a roof is not the same as replacing the entire roof. Does upgraded plumbing refer only to some new bathroom fixtures, or does it include all new pipes throughout the house? Does upgraded wiring mean that you have installed modern light dimmers or does it mean that the old knob and tube wiring has been torn out and replaced. Total renovation can mean many different things. It is important that buyers ask sellers to produce proof, by way of contracts or invoices, to demonstrate exactly when and what work was done. Are there any warranties that were given with the work? Are these warranties transferrable to the new buyer?

By obtaining copies of any work that was done and providing this to your home inspector in advance, a more thorough inspection can be done to make sure that the work was done as advertised. The home inspector will have a better idea on what to focus on.

Bill, a buyer asks how he can protect himself about termites or mould in a house?

Sellers have an obligation to tell a buyer about serious hidden problems that an inspector may not see, such as foundation problems, roof or basement leaks, mould or termites.

While a home inspection company may be able to look for visible structural component evidence of termites, buyers will probably require a pest control specialist to inspect to see if there are any problems. Buyers need to check whether the area in general is known for termites before deciding if anything further is necessary.

Sellers, remember that more disclosure means more peace of mind. Buyers, asking the right questions in advance will make choosing a home inspector and conducting a thorough inspection easier.

By – Mark Weisleder is a lawyer, author and speaker to the real estate industry.

Fit To Sell – Air Quality

CURB APPEAL

Geothermal: Sharing the Costs of Housing Infrastructure

In Winnipeg, a major subdivision has incorporated a unique feature into all its homes – geothermal heating. While geothermal systems have become quite commonplace in residences, the Manitoba experiment involves shared geothermal infrastructure, with one field and a handful of heat exchange systems servicing hundreds of homes.

The idea of shared infrastructure for homes is not new. Indeed, in the early 1900s, huge numbers of homes across Canada were constructed with shared living rooms (parlours), shared kitchens, and sometimes, shared bathrooms. Apartments are nothing more than homes with shared infrastructure, albeit a series of boxes stacked so as to maximize benefit from hall space, heating, plumbing & electrical. Many of these apartments now are being converted to condominiums. Modern garden townhomes modify the common infrastructure concept.

Geothermal systems that are designed to be used by more than one client offer unique advantages, and unique problems.

In one rural community, a seniors home built adjacent to a curling rink is exploring the idea of a shared geothermal system, with the seniors home extracting heat from the system and inputting cold fluids, while the curling rink is extracting the cool fluids and inputting heat. This symbiotic relationship provides a special efficiency to the common system model.

Geothermal, while carrying a high capital cost, virtually eliminates ongoing energy costs to operate, unlike natural gas or electric heat (which requires less capital but endless energy cost inputs). By joining with one or more neighbours, homeowners can reduce the capital cost, and all can save on the ongoing reduced energy requirements. However, by establishing a shared service agreement between current neighbours, new buyers of those existing homes must also agree to “buy into” the common infrastructure concept, and agree to indefinite easements.

When properties with shared agreements are assessed for value, the process becomes more complex in determining value. Clearly, though, the advantage of both reduced capital costs and virtually non-existent ongoing operating expense is too great to pass up, when the chance to share the value of an emerging, yet proven technology arises.

Biggest Cost of Housing, not Buying – It’s Cost of Energy!

Think the greatest cost of your house is its purchase price? If you intend on living in a purchased home for at least thirty years, then the answer is wrong!

Utilities for most Canadian homeowners will cost an average of $0.32 per square foot per month, or $480 for a 1,500 square foot home. Heating costs alone will set you back $0.14 per square foot, or $2,520 per year. Either way, that’s $75,600 for heat, $172,800 for all utilities over the life of your mortgage. None of that money spent is recoverable.

On the other hand, a home purchased today for $300,000 will be worth a minimum of $476,000 (with an average 8% increase in value each year) after only six years, representing an increase, in your pocket, or $176,000.

But many home energy costs can be cut by more than 60% with proper retrofits, and by capitalizing on various energy efficiency grants that are offered by governments. Couple energy savings from insulation and sealing of your home with grants available for renewable energy systems such as solar hot water, photovoltaic & wind systems and geothermal heating and your savings skyrocket, while simultaneously increasing the profile of your home on the marketplace, as well as its resale value.

Unfortunately, many homeowners are ignoring the opportunity for long term savings in favour of holding on to short term cash. Those people may want to consider low-interest loans, second mortgages and supplier low interest financing as options.

To put the “Pay me now or pay me later” philosophy into perspective, a hot water heater will last an average of eight years, while a furnace will require significant repairs in twelve, and replacement in twenty-five. Incandescent light bulbs last less than 18 months, while CFLs last five to seven years, with huge energy savings. LED lighting saves a whole lot more. An air conditioner requires serviced every three years, replacement every fifteen or so. So, even if you stall making the “big ticket” purchase, you’ll be paying for it soon enough!

The greatest cost in your home is not even the cost of utilities. It’s the cost of procrastination!