Monthly Archives: September 2015

Top Home Inspection Blunders

Getting your home inspected is one of the most vital steps you can take to ensure your new home is everything you expect – a high quality structure, safe for your family, and a compelling long-term investment.

Unfortunately, many people do not fully comprehend the mechanics of a home inspection OR what they are required to do to get the most out of it. A big mistake with this process can result in time intensive and costly repairs. Read more to find out what home inspectors feel are the five biggest mistakes home buyers make during the home inspection.

Avoiding an inspection since the home is “new”

It has been observed that even expert homebuyers sometimes make this costly mistake. Their assumption is that by clearing all local codes and ordinances, a home must be in good shape. However, not all home builders are of equal quality. Some take shortcuts to boost their profits at the expense of the future occupants. It requires a thorough home inspection to identify potential problems with the foundation or structure.

Just because the home has passed its code inspection, do not assume that the builder or the contractors have completed all the necessary work. Your home inspector can detect potential problems and alert you to any potentially costly future work.

Choosing a “wrong” home inspector

When choosing a home inspector, you’re actually selecting a professional who is qualified to give your home a top-to-bottom checkup. Therefore, it is vital to go with someone who is knowledgeable, detail-oriented, professional and reliable. First-time buyers often make the mistake of selecting the least expensive home inspection company. Unfortunately, such “low cost” inspectors often lack the resources and experience to thoroughly investigate your future home.

It is important to ask the home inspection company about the licensing, credentials, and experience of the home inspectors who will be inspecting your home. This is not a decision to be taken lightly!

Not being “present” during the inspection

Though the home inspection report may provide you with detailed information about your home, it can never replicate the experience of partaking in the inspection or interacting with the inspector. The face-to-face interaction is beneficial since it allows you to ask questions that arise as you walk the home.

Ignoring the inspector’s recommendations

Many buyers do not follow-up on the home inspector’s recommendation(s) regarding the property. People may fall in love with the home, and avoid confronting the seller about their concerns. Doing so may result in a very expensive repair, and a bad case of buyer’s remorse.

It is imperative to pay attention to the home inspector’s recommendations and solicit a thorough estimate of necessary repairs.

Expecting “too much” from the home inspector

Even a professional and experienced home inspector cannot predict the condition of your home in the long-term. The inspector can point out the current problems and potentially identify certain future issues that may eventually arise. Regardless, certain problems are unidentifiable. For example, it is impossible to predict future weather that could impact the quality of the roof.

It is important to remember that a home inspector is hired by to comprehensively review the property in question. The inspector provides you with the report based on the current condition of the home – clairvoyance is not part of the job description!

Top Mistakes of Home Buyers and Sellers in 2006.

2006 was an unusal year for residential real estate. The much over-hyped real estate bubble didn’t pop. But, home buyers and sellers did a slow dance to determine who was going to be driving the bus. Seller’s continued to be stuck in the previous mold of “we rule”. Buyers on the other hand saw loads of inventory and rising market times, both signals that they had more clout than ever before. Here are the top mistakes both sides made in 2006.

Sellers

-Used incentives instead of cutting price. Buyers are not impressed by stubborn sellers refusing to lower their price. Who insist on offering buyer incentives of free cars to credits for one-year property taxes or condominium assessments. Buyers, savvy than ever aren’t buying the old sales trick, mark-up to discount. Cut to the chase, lower your price and forget the razzmatazz.

-Marketed an energy inefficient home. Forget the real estate bubble, energy prices are a primary concern for homebuyers. Stung by rising higher commuting costs from recent increases at the pump, homebuyers in the last three months have paid extra attention to energy costs during their home search. From my experience and hearing client reports as they look for seasonal homes in southern climates, natural gas, heating oil and electricity costs have moved dramatically up the list as potential deal-killers. Sellers should be prepared for buyer inquiries about energy consumption and efficiency improvements.

-Thought it was still a sellers market and priced accordingly. Pricing is king in today’s market. Throw your spread sheets away and your dreams of huge circa profits. Look only at sold comparable’s from the last six months, that’s exactly what the buyer’s mortgage lender will use. Price at market, forget wiggle room, you need to sell, act like it. Seven months ago was a different market.

-Wanted top dollar for a “dated property”. Serious sellers should take a good honest inventory of their home. If it lacks recent “must-haves” from buyers such as updated baths and kitchens, a home office or nook, ample and organized closets or features dated paint colors, wallpaper or mirrored walls, take the time and if necessary the money to make your home appealing to buyers that no longer have the time or interest to update a home. Don’t wait for feedback from prospective buyers about a lack of must-have features in your home. Deliver from your first day on market what buyers are looking and willing to pay extra for in their next home.

-Endless Open Houses. The open house pendulum has swung from ” the house sold in the first day” to “we need to have our house open every Sunday”. Desperation is when your home is open every Sunday. Buyers know and track it. Plan on every three weeks to have a public open house.

-Ignored how long it would take to sell an attractive and well-priced home. Figure out the absorption rate for your market. This rate will tell you how many months or years of for-sale inventory there is in your market. Three months is fine, six months is okay, nine months is troublesome and twelve-plus, will not be pretty.

-Refused to accept home-sale contingencies. The contingent-free contract is now just a memory. If you want to sell your home in 2007, keep an open and flexible mind on contingencies. Many buyers want to “move-up” but need to sell their home first, before they can close on yours. Wise sellers realized this early on in the transitional market of 2006.

-Forgot to bury St. Joseph before listing their home. With the slow down in the real estate market even my Jewish home sellers have discovered St. Joseph. A statue of The Holy Family’s foster father buried in the yard of home being sold, buried upside down should bring a buyer, or so goes the folklore. Several web sites on the Internet offer a kit that outlines the correct procedure and includes your own St. Joseph.

-Insisted on smoking inside their home while it was being marketed to buyers. Buyers hate second-hand and stale smoke odors. Agents from across the country reported rising in-house smoking among motivated sellers. If you have to smoke go outside.

Buyers

-Low-balled offers to purchase. Potential home buyers wanted deep-discount deals in 2006. Especially with all the media talk of residential real estate markets “correcting” nationwide. Homebuyers need to understand the dynamics of constructing a home purchase contract and how their first price offer can set the stage for price success or failure with a seller. Use sold comparable’s from only the last six months, that’s what lenders do.

-Thought it was a bubble and not a housing correction. My prediction in the 2006 “What’s In, What’s Out” I said a soft decline in home prices in most markets. In 2007 I will define soft as 5-8% decline in prices on average between single -family and condominium homes.

-Took as fact online home valuation web sites opinion of value. Technology is great when it works, but tread carefully with online valuation web sites. Ask yourself how long does it take your recorder of deeds and real estate transactions to record them? If up-to-the-minute, okay, otherwise plan the lead time into the online valuation to spew out accurate information.

-Disregarded market timing. Spring is high market, the most demand by the largest number of buyers. Summer is a good market, fall is fair, and winter is the remnant market, the left-over buyers and sellers from the high, good, and fair markets.

-Used Option Adjustable Rate Mortgages. Originally used by the wealthy to finance a home for a short-term, predatory lenders rolled out the Option ARM for credit-challenged and/or highly leveraged buyers. The key feature of this not-so-new-fangled mortgage being negative amortization. Buyers should run not walk from Option Arms.

-Walked from a deal based on the seller couldn’t live without them. Bless the patient sellers in 2006 who had to weather uptight, over-cautious buyers who created a surge in contract through’s. Many naive buyers wanted everything their way, savvy sellers tried to placate them and but in over ten-percent of transactions sophomoric attitudes and behavior prevailed and the deal didn’t go through.

-Bought homes with bedrooms not large enough for a bed. In the boom, rehabbers and developers learned the fastest way to profit was to increase the room count of a home. I saw bedrooms shrink to walk-in closet size when a four-room one-bedroom was gut-rehabbed into a four-room two-bedroom. I kept asking, can you fit a queen-size bed in either room? Boy, the looks I got from gnarly sales representatives.

-Didn’t look into reserve funds and special assessments in potential condo purchase. The building or development might look well maintained, but conduct a careful audit of budgets, association meeting minutes and reserve funds balances. Healthy reserves could be your pre-nuptial for a condo building. Reserve funds are set-aside finances for capital improvements such as new windows, roofs and elevators. Substantial reserve funds minimize special assessments levied by ill-managed buildings fro improvements.

How to Buy a Home When Your in Your Twenties

A Single’s Game of Real Estate

(Getting started in your twenties)

Due to the fact that most of us grow up in either a rented apartment or our parent’s single family home, it stands to reason that most people, when beginning to ask themselves the question of purchasing their own dwelling, will come to the conclusion that a condo or small house is probably the way to go. That’s a result of conditioning and it’s a hard mindset to break! After taking the time to talk to or personally guide a respectable number of people in their twenties, I have come to find that firm, direct and accurate information can really adjust the reality of how real estate can be acquired and used to their best advantage starting with property that sets the tone for a much more profitable and rewarding future.

Everyone understands the concept of paying rent, so to begin with a great opening question to our real estate student is, “How would you like to collect that rent as opposed to pay it!” Naturally this question gets their attention and we can begin to open the door of enlightenment. I like to use the duplex example to illustrate the two homes under one roof concept. Some people are unfamiliar with what exactly a duplex is and how it works, so I simply state that quite often you find duplexes composed of one building that has two bedrooms and one bath on each side, all under one roof, some larger, some smaller.

These are as easy to finance as a single family home and in many cases allow you to qualify for a larger loan amount which leads to using leverage and more of other people’s money to get ahead faster in life. Using an example lets say you find a duplex for $150,000 (California is higher), your loans interest rate is 6% that would cost $899.33 a month to pay principle and interest back on a 30 year loan. They would have to insure it, so we use an average of $5 per $1000 of home value to average insurance costs. So $5.00 x $150.00 = $750.00 a year for insurance. We divide that by 12 months to get a figure of $62.50 a month for insurance. We also have annual taxes that are based on what the home is worth multiplied by a millage, or mill rate. Let’s use a tax rate of $11.00 per $1,000 of the homes assessed value: $11.00 x 150 = $1,650.00 a year. Now divide that by 12 months to get a monthly tax of $137.50 and by adding principle, interest, taxes and insurance (P.I.T.I), we get a total monthly mortgage payment of $1099.33.

Now when you rent one side out for (in many cases, approximately $750.00 a month) you are left to pay only $349.33 out of your own pocket every month. When I get this point firmly affixed to the gray matter of their brain, it becomes clear that this amount is much lower than the amount of rent they are now paying to live under someone else’s roof and rules. Now the questions start coming in the following order. Well? How do I buy something like this? The answer most often begins with, “By getting pre-qualified for a loan,” and I go on to say you will need to gather and bring the following things to the bank loan officer to get started:

1. Copies of three years of tax returns for first time buyers + schedules and W2 forms

2. Copies of most recent pay stubs within the last 30 days

3. Copies of your most recent three months of bank statements

4. A list of all creditors with name, address and account numbers

With these initial documents the lender can begin to process your application for a loan. They will determine your assets and liabilities (net worth) as well as verify where you live now, your credit history and a host of other information that begins to validate your existence and ability to borrow money now and in the future.

Once they’ve had a chance to review and verify your information they can pre-approve you for a certain loan amount. Once your approved you can begin your search for a home of your own, typically as a first time home buyer you will find that there are programs that let you put as little as 3-5% percent down in order to buy a home that satisfies the lender’s guidelines according to its value and conformity. Now on a $150,000 loan the down payment can be anywhere from $4500.00 – $7500.00.

There are ways to lower these costs and a great place to start is by attending a first time home buyer’s class. These classes introduce you to the basics and give you further information on programs that are currently available that may offer you the opportunity to buy with nothing down! So with that said, the next step is to get to a free class and get familiar with the process. Often I recommend going to the class before going to see a lender so you don’t appear so green and unprepared upon your initial introduction.

Since I usually find these poor souls wondering and wandering in the land of the lost, the next frown I see come over them is the realization that they just don’t have the money required to start. So the question comes up as to where to get it. I usually ask about savings, whether parents or grandparents can help, if they can sell valuable possessions or take second jobs, get grants, gifts, use trust funds, personal loans or co-signers, or a combination of these alternatives with a complimentary loan program usually gets the ball rolling. Options and hard money lenders usually come later as alternative funding and acquisition sources, so I won’t confuse any one with those now.

The bottom line is this: If someone wants something bad enough there is always a way!
The nice thing about duplexes is that the lender will take into account the fact that 75% of the rental income from the other side of the property can be used to offset your qualifying ratios, so in this case they can use 75% of the rentals $750.00 income to reduce the amount you must earn to qualify for what appears to be an unaffordable loan. Seventy-five percent of $750.00 equals $562.50. Now subtracting that amount from the original mortgage payment of $1099.33 leaves you with a payment of $536.83 which the bank says you must be able to repay every month out of your own pocket. You can do this!

Can you begin to see how with a little information, effort and belief you can actually own something and pay less than what you are currently paying in rent?

Let’s continue on with the way things begin to unfold once you begin the journey. Starting with the day you close the deal and become the new owner you will see that you now have just created a passive income stream that gives you an extra $750.00 a month without you having to punch a clock or trade a certain amount of hours to earn the money. Your new asset works for you day in and day out constantly generating income for you while you go and do other things. This is leveraging your time and money in a very beneficial way!

You also will notice that at the closing of your purchase that the old owners who sold you this property had to prorate or give you a share of the rents due and any security deposits that the tenants had given to them. Now add to that the likelihood that your first house payment won’t come due until about a month and a half after you move in and you find yourself with, low and behold, extra money, probably for the first time in quite a while!

Let’s calculate it using simple math. Assuming you close on the 15th of the month, you will have 45 days before your first payment comes due, you will be credited with 15 days of rent, you will receive all security deposits of the tenant and you will receive another month’s rent on the first of the month from your tenant and you yourself will have no rent or house payment of your own to make for another whole month. What does all that add up to? Let’s break it down:

1. Fifteen days of rent equal to $375.00

2. A half month’s rent as a security deposit equal to $375.00

3. A full month’s rent in another 15 days equal to $750.00

4. No payment to the bank for another 30 days and you’re not paying rent to anyone any longer, so you keep whatever you normally would have had to give to someone else as rent that month (let’s say that was $500.00).

5. Another payment to you for $750.00 from your tenant as well as you having to make your first mortgage payment of $1099.33 on the 1st of the month which comes 45 days later.

Side note: If you decided to rent your second bedroom to a roommate, they would pay $500.00 a month and half your utilities as well, thus your basically living and owning this property for free. Say goodbye to all those student loans as you divert all these freed up funds to pay off loans instead of a landlord!

Adding these up, we get $375.00 + $375.00 + $750.00 + $750.00 + 500.00 not paid to your old landlord. That equals $2,750.00 that you will now have as a result of your first month and a half of ownership. Now subtract your mortgage payment of $1099.33 and you are left with a reserve fund of $1,650.67 in your account. Take your parents out to a steak dinner and celebrate – you’ve earned it!

Let’s review: You decided to buy your own home, you made the choice early to offset expenses by looking at a multiple income property, you went to the homebuyer’s class, you went to see a lender and got pre-approved for a loan, you saved or arranged to have the necessary amount required to buy and you hunted, searched and analyzed more than a few properties in order to find a good one that would satisfy your criteria.

Your next phase is to begin to realize that you are now responsible for the welfare of another family or person due to your willingness to become a landlord. Your tenants pay rent and expect you to take care of their housing needs. If you chose a good property by carefully looking at plumbing, heating & A/C, electrical, foundation, structure, roof, location and price, then you should be well positioned to be able to successfully manage these duties. Often, you as the new owner will begin to make improvements to the property such as painting, installing new carpet and doing some inexpensive landscaping and repairs. These are the things that add value to your property and keep your tenants happy while at the same time not breaking the bank!

With $1,650.67 in your bank account, you’re not exactly Donald Trump just yet, but you’re getting there! Smart landlords establish 6 month reserve accounts and/or contingency funds, which protect them in times of vacancies or when expensive unforeseen repair bills pop up in addition to regular planned-for maintenance items. What I’m saying is don’t spend your reserves frivolously. In my case, a steak dinner is a tradition but the major portion of your funds should only be used to build, protect and enhance your asset’s ability to produce and sustain income generation.

By taking on responsibility in the housing market at such a young age, you will have some added benefits and opportunities coming to you. Let’s look at what starts happening: the first thing is you have overcome fear and lack of understanding by acquiring your first property. In addition, you have begun to offset expenses while saving more money, you are establishing excellent credit while building assets, and you’re gaining tax advantages while getting management, home buying and repair education at an early age. These are outstanding life skills that you can employ for the rest of your life and the longer the period of time that you have to use them, the further the compounding effects will help you to go.

This type of initial home-buying strategy can and does lead to further opportunities to grow and achieve further benefits besides those already mentioned. Individuals who learn to accept responsibility early will by nature grow more mature throughout the process and in effect create for themselves a higher status in the minds of others by being looked upon as a current homeowner and landlord. Once established, you will become known for what you can do. If you were single when you undertook these challenges, then you will appear and become more self-sufficient to the opposite sex.

What do I mean by that? What I’m saying is when you meet someone who may become your spouse in the future, they will recognize your ability to provide for their safety and protection and they won’t question or complain about your fooling around with wild ideas of becoming educated in real estate now. They will accept that this is something you do and will respect your ability to manage this part of your life.

As time passes on and you find this love of your life and the eventual marriage proposal ensues, the time will come when you’re going to want to separate business from pleasure. As a young couple the time will come when you may want to start a family or at least separate yourself from your tenants while moving up to a nicer single family home that suits your changing needs more appropriately. Perfect, because now is the time to consider renting out both sides of the duplex while you begin to investigate your new single family home.

How does this phase work? Hold on, I’m getting there! Okay, let’s assume its two years later and you have been living in and improving your duplex all along. Now taking into account that you bought a decent property in a good neighborhood and inflation and appreciation has been adding value in addition to your improvements, your $150,000 duplex should command a new appraised value of $175,000. Let me explain how the value grows: 3% annual inflation multiplied by $150,000 equals $4500.00 the first year. Let’s also say that appreciation due to demand also adds 5%, so 5% x $150,000 equals $7500.00. Now $150,000 + $7500 + $4500 = $162,000, which represents the new value for year one. The second year we do the same math on $162,000 and we get $12,960 for year two. Adding that to $162,000 equals $174,960. Okay, I was off by $40.00. Don’t forget any improvements and that you may have bought it at a discount because the old owners where motivated and you might find its worth even more.

Now over those two years you have also been paying that old mortgage of $1099.33 each month and the principle amount that you owe on your loan has been reduced by an additional $3,965.96, leaving you with a loan balance of $146,034.04. The difference between the new appraised value of $175,000 and the current amount of $146,034.04 which you owe equals $28,965.96. This number represents the equity, or value, that you currently own in the home. Knowing this, it is entirely possible to apply for and receive a home equity line of credit up to the full value of the new appraisal! If you haven’t gone overboard on buying cars, boats and running up other revolving debt while at the same time your significant other or spouse-to-be has a job and good credit with manageable debt, than the bank is going to approve this line of owner-occupied credit.

Now what you have done is set up a line of credit which can be used to buy a $145,000 single family home with a 20% down payment. This allows you to avoid paying private mortgage insurance (PMI), thereby creating a very affordable new mortgage on your new family residence.

NOTE: Do not confuse homeowner’s insurance with private mortgage insurance. PMI protects the lender while homeowner’s insurance protects you. When you put down 20% of value on a home’s purchase in the form of a down payment, you are in effect protecting the lender from yourself because if they foreclosed on you for non-payment, they could sell the home fast for less than full value and still be paid in full.

Don’t pay for private mortgage insurance if you can avoid it!

Let’s not forget that as the value of your duplex has risen the rents should also be increasing along the same lines. Now instead of $750.00, you should reasonably expect to get $800.00 per month, per side, which now delivers $1600.00 a month to your bank account. Unfortunately you still have to pay for 28 more years on the original loan amount, so you will make that good old $1099.33 payment as usual. That leaves you with $500.67 left over to pay that new equity line back with. Your new $29,000 equity line which you used as a down payment on your new home costs you $336.71 @ 7% for 10 years. Now $500.36 minus $336.71 leaves you with $163.96 left over to maintain a nice little reserve account for vacancies and maintenance/repairs. This is a good example of how to transition to a secure lifestyle while using your existing asset base to buy more.

Review:

1. Break the mold and look at multiple income property to start.

2. Go to a first time home buyer class to get ready.

3. Go to a lender prepared to qualify for an affordable loan amount.

4. Focus your effort on learning how real estate works.

5. Realize the sooner you start, the better off you will be.

6. Offset expenses by renting to others.

7. Manage tenants, deposits and property responsibly.

8. Plan for the future using assets and equity lines to start.

9. Keep reading and learning how to do new things with real estate.

10. Find mentors and use knowledgeable people to help you along the way.

I hope this little plan of entering into homeownership has given you some ideas in your quest for independence. Wishing you all the best! Your investment pal, Dan

Going to Get out of the Dorms

I am going to be out of the dorms at Georgia Tech next semester and I have began looking for inexpensive apartments for rent in Atlanta GA. I have a couple of guys who are interested in going in with me as a roommate. The key is going to be finding one of my friends who I can really trust. It would be a lot better if it were a guy who had parents with a lot of money. That way you would be very likely to get their share of the rent and the utilities each month. I know that this is a big deal because I have a cousin who went to college a couple of years before I did. He was in the same situation as me and he shared a place with this guy. For a couple of months everything seemed just fine between my cousin and this guy, but then the guy began to act strangely. He would stay in his room all day long and only leave it in the middle of the night. It turned out that the guy was supposed to be taking these anti psychotic pills. Continue reading »

Home Inspection – 12 Common Areas of Defects

The Barrie Home Inspector discusses the twelve most common items found during a home inspection. These are items that are commonly found during a home inspection but are listed in any order of importance.

1. Lot and Roof Drainage

Keeping water out of your house in one of the most important areas to be considered in building design and annual maintenance checklists. Eave troughs collect large amounts of water, average is 160 gallons per hour, which is then directed down to ground level to be dispersed. This is where most systems have problems, from missing extensions to reversed splash pads, and it is important to ensure all water is directed away from your home. I have actually come across homes where the sump pump was pumping water out into the exterior corner of the house where the water ran right back down the foundation to be re-cycled again. Areas around foundations are prone to settling and should be built back up to ensure that any water will flow away from home.

2. Foundations

The primary function of the foundation is to transfer the load of your house unto your footings. Water can enter your home through cracks and holes in your foundation. Cement block foundations are required to be parged and then coated with damp proofing product to prevent this. Poured concrete foundations are required to have form holes sealed to prevent water entry. Minor cracks in foundations can be attributed to settlement of building or shrinkage cracks which would appear in poured concrete foundations. Any crack in your foundation is a potential source of water entry into your basement. If your area has excellent drainage and surface water is not an issue then sealing your cracks yourself could be an option, if not then a professional will seal poured concrete cracks using injected foam or epoxy for around 3 to 600 dollars. Sealing with epoxy will make the cracked area stronger than surrounding untouched area. Horizontal cracks in basements are stress cracks and usually should be inspected by engineer to ensure safety of the home.

3. Cladding

There are many types of cladding used in homes today, we are going to discuss brick veneer and vinyl siding, the most common types of cladding used in new homes in Barrie, ON.

Brick – There are two common types of brick in use today, clay and cement bricks, clay being the most expensive and more durable of the two. The most common defects in brick are caused by poor workmanship and settling of the house or foundation. Checking the brick work for cracks in mortar is very important part of your home inspection. Finding cracks prior to moisture and freezing damage occurring can drastically reduce the amount of work required to repair problem. Corbelled brick corners are an area where cracked mortar is very common but is an easy fix. Step cracks usually indicate a structural type problem is present and deeper investigation is required. Home owners can cause damage to bricks by building planters which allow soil to contact brick, this will result in spalling of brick face and eventually the brick will crumble and require replacement.

Vinyl Siding – This product has proven to be an attractive and low maintenance alternative to brick. If not properly installed vinyl siding can come loose which will make it very susceptible to damage. Properly installed siding has to be able to expand and contract without warping, this is done by not hammering in nails tightly and the fastening slot will allow siding to expand and contract with changing temperatures. Washing your vinyl siding spring and fall is also a good idea as this will help prevent staining from air borne contaminants. Vinyl siding is susceptible to cracking, especially in winter months when cold temperatures can make it extremely brittle.

4. Windows

Windows come in all sizes and shapes with many different types of opening models. We are going to concentrate on mainly the casement style window, as this is the type of window, which commonly has defects. Casement windows commonly have problems with the cranking mechanism. Stripped windows cranks are commonly found on windows in children’s bedrooms and are mainly due to the fact that in the winter these windows tend to freeze up and then when the crank is operated, a stripped mechanism results.

Broken seals in thermal units are another common defect found in windows. Windows around 15 years, and older, are usually found to have problems with leaking thermal units. There is a process that involves inserting tiny one-way vents into these units which can eliminate the moisture problem and save you money. The “R” value of windows is not so high that this procedure would create a huge heat loss.

Then there is the common defects in windows, which can include, no caulking, cracked glass panes, improperly trims, sagging headers above windows, require painting and last but not least cracked or rotting wood.

5. Roof

We are going to concentrate on asphalt or fibreglass shingles as this is by far the most common type of product used in new homes today. Shingles can last anywhere from 15 to 25 years depending on quality of product and environment that they endure. Shingles on south side of home usually fail first due to greater exposure to sun and UV radiation. Proper venting is a very important factor that can greatly affect the life of your shingles. Building code requires 1 square foot of vents for every 300 square foot of roof. Ensuring adequate venting is important part of home inspection, a lot of homes have inadequate soffit venting due to insulation preventing continuous movement of air. This allows moisture and heat to build up in your attic and will dramatically reduce life of shingles. Inspecting flashing, valleys, skylights, vents and eave trough are another important factor of your home inspection. Ensure your inspector has a ladder and walks your roof if he is able.

6. Furnace / Air Conditioning

Furnaces have an estimated life span of 15 to 20 years and this can vary greatly with maintenance being the biggest factor in extending life of your furnace. Your furnace cannot have any holes, be rusted through in any area and must be hooked up to an approved venting system. If connected to a “B” vent, a one-inch clearance must be maintained from combustibles, which also includes insulation. Check your flame color, yellow flames indicate incomplete combustion which may be fixed with a simple tune up from your furnace technician. Many furnaces have no cap for filter cover which allows for both heat and cold air to escape into your basement. Your HVAC duct should be taped using metallic duct tape to block any areas where air is escaping from your system. Humidifiers are a common cause of water source for damaging furnaces; they become clogged and overflow allowing water to enter body of furnace causing premature failure of unit.

Central air conditioners are essentially a sealed unit. Using a temperature gauge can determine if unit is operating at a level that is acceptable. I use 58 degrees F as a bench mark in testing in hot weather. This ensures that unit will maintain your home at a comfortable temperature. All lines and insulation are checked for any damage or required replacement.

7. Electrical

The number one concern for homeowners and insurance companies is aluminum wiring. Installed in the early seventies as a substitute for high price copper, aluminum has generated a lot of negative press, some maybe not deserved. Knowledge of aluminum wire is required to be disclosed by the home seller. Consequently some people are creatively hiding aluminum wiring. This might involve installing wire so insulation covers all exposed wire and running copper from main panel to junction boxes where it is connected to the existing aluminum wire.

Adding pony panels, which allowable and recommended, is a great way of expanding your main panels resources. I came across one pony panel, full sized 100 amp, which was powered off supply cables in switch box. This panel was noted in listing as an asset! There are a myriad of minor electrical problems to be checked in your home. Another main panel observation is that many people rather than add a breaker just attach two or more wires to an existing breaker, this is a not permitted and is a potential fire risk. Open junction boxes, missing covers, wiring contacting heat ducts and un-supported wiring are common defects noted on majority of inspections.

8. Plumbing

The other half of the keeping water away from your house equation is your interior plumbing system. Lack of caulking and sub-standard products or workmanship is also a big offender when it comes to keeping your house dry. Galvanized pipe is another item that insurance companies may be concerned about. Galvanized pipe tends to corrode from the inside out leaving no visible signs of impending failure, which tends to make insurance companies a little nervous about insuring homes with galvanized plumbing.

9. Insulation

Homes today have a much higher insulation R-value than older models, the standard for your attic insulation is R-32. Coupled with vapor barriers this is a very important part of your homes building envelope. Many homes have lots of insulation but it has been compromised by workmen installing products such as pot lights and never remedied. The un-suspecting homeowner never realizes the loss of heat and release of moisture that is taking place. I have inspected homes where there has been sun rooms added on and for two or more years that complete area has not had any insulation.

Vermiculite insulation is receiving a lot of attention due to asbestos hazard. Most vermiculite was produced from Libby mine in Montana and contains asbestos. There is some type of vermiculite that has no asbestos risk, which can only be determined by laboratory testing. Homeowners are obligated to disclose any vermiculite insulation that they know of. This is another area where your home inspector can help and possibly save you a lot of money and headaches.

10. Mould or Mold

We are addressing both Canadian and American mould or mold problems, eh!

Mold has been a inspection headliner for quite a number of years. Mold is present everywhere, outside, in your home and sometimes even in the wood you are building with. Moud requires three items to grow, they are; warm environment, protein supply (paper on drywall will do) and moisture. As you can see if you have any water or moisture problems in your home for any length of time then you probably have mold somewhere in your home. That is why it is so important to keep water out of your home and control the water you do have in your home by the proper use of exhaust vents, HRV units and humidity control.

11. Structural

The structural component of your home includes all the items that comprise the supporting elements of your home, which include but are limited to; footings, floors, foundation, walls, columns and piers and roofing system. Visual inspection involves looking for cracks, missing supports, under-sized support construction, twisted or cracked beams, joists, rafters, trusses or support members. Consider your structure as the exterior and interior framework that encompasses your home. Defects in this system can be considered serious and should not be taken lightly as you whole home depends on this system.

12. Miscellaneous

Here is a quick list of some of the items that I have come across that might not have been discussed above:

Septic tanks – Water pooling at the end of your bed or signs of effluent leaking are sure signs that you have some kind or septic bed problem. Buyer beware!
Chimney – Masonry chimneys can be visually OK but not approved for type of appliance you are using. Wood stoves and fireplaces usually require WETT cert for insurance.
Caulking – Any two different surfaces that are exposed to weather should be caulked. For example your window and siding should always be caulked.
Trees – Ensure there are no dead trees on property that might damage your house or any of your neighbor’s property. Also trim branches away from any siding or roofing product.
Concrete Steps – Must be either cantilevered or on frost footing.
Handrails – Required to be 900 mm high in most exterior applications.
Decks – If over 23 5/8 inches (600mm) from ground are required to have guards & handrails.
Basement Bedrooms – Required to have separate exit on same level or window that is minimum area of 0.35 M2 with no dimension being less than 15 inches (380 mm).
Bathrooms – shall have either exhaust fan or opening window.
Hot Water Heater – Safety Pressure valve shall have vent directing blow-off to floor.
Garages – Required to have fume barrier and auto door closure if interior door installed.

These are just some of the common types of defects encountered during a residential home inspection, there are thousands of items that could possibly be identified.

Brought to you by Barrie Home Inspector

Living Side by Side in Baltimore

While living in the apartments in Baltimore, my life has changed greatly from my days living in Alabama. I felt as if things in the south were a bit more laid back in comparison to the north. I sure do miss my mom’s home cooking, but Baltimore has its own food that can be pretty delicious at times. Even though the city has had some trouble times lately, the people still have a community mindset and look after one another as if they were all related by blood.

One of my neighbors asked me if I could watch over her dog while she went to pick up her kids. Continue reading »

What Do Home Buyers Really Want?

While every homebuyer is different, there are some common themes among those that are looking for a new home. Every buyer wants a quality home that they will be proud to live in and won’t fall apart within months or even years. Most homebuyers are focusing not only on quantity in the way of square footage, but also quality, as that is what gives a home its worth.

Common Desires

There are some basic things that homebuyers are looking for when they look at a home. Some of the most common are centralized air conditioning, a walk in closet in the master bedroom, a bedroom on the main floor if the home is two or more stories, a patio for entertainment, as well as an oversized garage that will fit multiple cars as well as provide some storage space.

Even these common desires are not straightforward. An air conditioning unit that is 25 years old cannot provide centralized air; most buyers want an efficient central air conditioning unit. A patio needs to truly be an outdoor living space that has had some thought and planning associated with it. And the bedroom on the main floor needs to be big enough for either a master bedroom or a good-sized guest room for either guests or even an aging relative that needs care.

Rooms that Get Noticed

One room that is important to buyers in today’s market is the living room. Most buyers are giving up the formal living room and family room split and simply want one, big open floor plan that will allow them to entertain company as well as lounge around and watch movies on a Saturday afternoon. Informal spaces such as this are in because they are more functional.

Another room that will get noticed is the bathroom. Not only do buyers want more than one bathroom, they want them to come fully loaded! Luxury items such as soaking tubs, garden tubs, pricey fixtures, and quality tiling always go over well in the bathroom. Pedestal sinks, claw foot tubs, and a separate shower and tub are also very popular in the bathroom right now and are what most buyers are going for.

The kitchen is also another room that will get more than a once over when a buyer comes in. Stainless steel appliances, high quality wood cabinets, marble or granite counters, kitchen islands, and quality flooring will all go a long way toward selling a home. Buyers see the kitchen as an entertainment area, so if things are in order and are updated a home will likely sell much sooner than if it is not. If the dining area also blends well with the kitchen, this is even better!

The Homes Target Audience

Age really does affect what a home buyer wants in a home. Most realtors will report that those that are less than age 44 usually want a home that is in the suburbs or a subdivision. The home will sell well if it is located near schools, parks, and playgrounds. For buyers over age 45, homes that are one story, less than 10 years old, and on a flat lot with items such as sprinkler systems will appeal to them. Location really is important to home buyers as homes in certain areas may contain features that are important to some buyers but not so important to others.

First time home buyers are also likely to overlook items like pricey fixtures, walk in closets, granite counters, or oversized garages. Typically it is the first time buy that will have a shorter list of must haves, because they are just getting into the market and may be on a stricter budget or just not have a whole lot of experience with offered features. Repeat home buyers will be more likely to have a list of must haves, so a home that is well finished and has all of the items described above will likely appeal to a repeat home buyer.

The type of upgrades one has made to their home or is willing to make to their home will decide who the home will generally appeal to. Of course, home buyers all have their own preferences about what makes a home worth buying, but studies have been done and the general consensus is that older home buyers have a longer list of must haves and items in a home that are very important to them, such as a bedroom on the main floor.

As you can see, homebuyer’s want a little of everything, and the specific needs and wants vary widely from buyer to buyer. Generally, a home that is well cared for and offers some modern or updated features will attract many home buyers and if located in the right area, will sell relatively quickly.

The Home Buying Process For The First Time Buyer

It is much better to pay a home mortgage loan and build equity than it is to rent and pay someone else’s home mortgage loan for them. By purchasing your own home you are investing in your own future. The possibility of owning ones own home is easily within reach, if there is someone there to help. When buying your own home there are many programs specifically tailored to meet your needs.

The US government insures many of these programs which in turn reduces the risk for a lender. Due to the reduction in risk lenders are extending more credit to first time buyers than ever before. In 2005 40% of home buyer’s were able to finance their home mortgage loan with no cash down. This dramatic increase is due to government subsidized loans. Stop paying another persons loan and begin earning equity in your own home.

The best place to start is by getting a pre-approval. The best thing one can do is have a friendly experienced mortgage company to help you through the process. There are several steps that one should analyze as a first time buyer. All of these steps will help you in during your first home purchase and first home mortgage loan.

1. Get an idea of what you can afford

There are several factors, that when combined, will tell one what is affordable as a housing expense. It is best to contact a mortgage broker to help with the calculations. Some of the criteria include, but are not limited to: income, current expenses, credit, down payment, interest, job stability, payment history, loan rate, loan term and closing costs.

2. Know your rights

You should receive a copy of a Good Faith Estimate or GFE. You need to know what the fees are associated with the home loan and the total cost of interest to you. These are called the closing costs. Although getting a low rate loan is great, one has to realize that the closing costs have an effect on the annual percentage rate. The annual percentage rate is different than the interest rate. The annual percentage rate is a calculation that includes the interest and the closing costs. It is illegal to be discriminated against based on your sex, creed, race, age, sexual preference and several other issues. You are entitled to know why you were not approved for credit if that is the case.

3. Shop around

There are tens of thousands of lenders and brokers in the United States. Find someone you are comfortable with. A lot of people do not realize that when one goes to a lender they can only take advantage of a program that the specific lender offers. By utilizing a broker you are able to take advantage of the wholesale purchasing power of that broker. A broker can generally save money from what a lender would actually charge.

4. Understand the programs available to you

There are several government insured loans that can help to relax the requirements needed to get a home mortgage loan. Last year 40% of home buyers purchased their new home with no money down. This dispels the myth that one needs to put money down in order to purchase a home and get a home mortgage loan. FHA, VA, and HUD are three government insured loans.

5. Shop for a home

Find a Real Estate agent that you trust. Finding the right home is a very important process. There are more factors involved than the home itself. Look at the school systems, the emergency service personnel, and the town or city government. Make sure the home you pick is in the place you want to live as well. Make sure you look at more than one home. Even if your first impression of the first home you look at is “This is the one!” take a look at a few more just to make sure. This, for most people, is the biggest purchase they will make in their entire lives. Take your time and be sure about the right home.

6. Make an offer

When making an offer make sure everything is put in writing. What items you would like included. Things like curtains, blinds, fixtures, chandeliers. All of these things should be listed on the purchase agreement to make sure you are getting what you requested. Simply because you place an item on the purchase agreement does not mean the seller will agree to it. It does mean that it will at least get addressed and will be factored during the negotiation. Make sure you make the sale contingent on a home inspection and have everything put in writing.

7. Have a professional inspect the home

Hire a professional home inspector. The home inspector will go through the home and make sure the home is in good condition. Although a home may look beautiful from the outside, there could be some underlying issues that would change your opinion. The home inspector will make sure all of the mechanical and electrical systems are sound and will also make sure there is no damage from water, rodents or insects.

8. Shop for home owner’s insurance

There are plenty of insurance companies out there. Just like auto insurance, the premiums can vary greatly between companies. Check several companies and make sure you are getting a good price for the coverage you need.

9. Close on your first new home

When closing on a home it is very important to read everything that you sign. It is important to get copies of the documentation prior to closing so you can go through them. You need to be able to address any concerns prior to the final signing date. If everything is in order, receive your keys, and move into your new home.

Copyright 2006 Jason P Bertrand

I Want To Sell My Luxury Home And Keep It A Secret – Selling Millionaire Homes; The Dilemma

Selling a millionaire home is hugely different than selling any other type of real estate. Many owners quite rightly do not want Luxury home window shoppers trampling over their marble floors. Millionaire home owners by their very nature can be newsworthy individuals. So opening your doors to just anybody is simply not on.

Proud of what they have achieved

Owning a home that makes us mere mortals slip off into a dream-like state is a huge achievement. So the first question a buyer wants to ask is why you are selling. Have you hit hard times? Is your business about to collapse? Are you going through a divorce? Have you got an expensive legal case to pay for? The millionaire home owner does not want the world to know about any negative side to their financial situation. These types of questions are not only a source of embarrassment but could actually affect an individual’s business.

I want to have a peek at how they live!

Well I admit it I want to have a look at that stunning luxury home. We are all curious and when it comes to luxury homes, we would all like to marvel at the tennis courts, swimming pool, helicopter landing pad, and designer bedrooms. So to sell a home you must not only be able to understand the seller but also the average buyer. This will help reduce unnecessary intrusion into the lives of Millionaire home owners selling a luxury home.

Some home truths for Millionaire dollar home owners

To sell a home it unfortunately requires marketing. The Luxury home buyer is a rare breed and they need to see pictures and learn intimate details about your home. But most of all they need to find your million dollar home for sale. The more expensive a home the more likely that the buyer will be from out of state or even from overseas. Marketing your luxury home on the internet will be essential. Find a property web site that represents similar homes and is not hard to find. You will need a web site that is found easily in the search engines. For example go to the world’s busiest search engine google.com and type a typical search term that a luxury home buyer may use.

For example

Millionaire homes,

Millionaire houses,

Million dollar homes,

Luxury homes.

Choose an agent or property web site that makes your home easy to find. The trick is getting a genuine buyer who has the means and intention to buy a luxury home. Our experience shows that genuine buyers will not mind being subject to a few searching questions. This is especially the case if they are really keen about buying your millionaire home.

Your secret is safe

This special part of the housing market requires people that can show empathy for both buyers and sellers. Getting into the mind of a luxury home owner and understanding the mindset of millionaire home owners is not only professional but is essential.

How to Prepare Yourself for Owning a Dual Purpose Second Home

Second HomeIf you are thinking about buying a second home, you are not alone. A 1995 survey by the American Resort Development Association found that 60 percent of households surveyed feel they have a likely chance of purchasing a recreational property in the next ten years, a figure that rose 30% from the survey in 1990. The average age for the majority of vacation home buyers ranges from 40-50 years old. Qualifying as the baby boomer generation, this group of second home buyers consists of 80.5 million people out of the U.S. population of more than 260 million. Demand for vacation homes is rising as a result of consumers’ increasing desire to capitalize on low interest rates, low unemployment rates and a strong real estate market offering many viable second home options.

When purchasing a second home, many baby boomers seek properties that offer access to recreational areas as well as amenities ideal for retirement living. Finding a fully functional dual purpose second home requires meeting a number of physical and emotional characteristics. A trained real estate professional can help you identify your short and long term needs as well as a home that provides the qualities you require.

When choosing the ideal vacation/retirement community, look for services and features which reduce the stress of owning a second home. Furthermore, finding a home with one floor living or limited stairs will be preferable as you age and as your home evolves from a recreational home to a permanent residence. For example, free standing homes require a lot of upkeep, so properties that include gardening services or rubbish removal such as condominiums or gated communities with town houses are an option worth investigating.

Once you and your broker have identified a second home, the following are tips to protect your second home investment:

  • Develop a trustworthy contact who lives near your new home, either a neighbor or a paid caretaker, to keep an eye on the property and collect mail that accumulates. Make sure this person has all of the necessary information to contact you.
  • To make the home appear to be fully occupied, ask your caretaker to park occasionally in your driveway. Timers are good for keeping lights on, but their schedule should be varied regularly.
  • Set up an answering machine. Change the message occasionally and check the messages often.
  • Make sure all doors and windows are locked and secure. Consider installing an alarm to protect your home when you are not there and to serve you when you live there in the future. A quality security system can be purchased through a reputable company.
  • Remove all keys hidden around the property.
  • Enjoy the time spent in your new second home, for vacation, recreation and ultimately for fulfilling retirement living.

I would be pleased to give you additional information about identifying both an area and home ideal for your fulfilling your second home needs.