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| Exercise caution! Fake Renovations need to be figured out |
We are seeing more and more of
'Extensively Renovated' homes in the market. The house looks better than a brand new home with stucco on exterior, newer roof, basement apartment with separate entrance, new light fixtures, and what not!
Are you a first time home buyer and have decided to put an offer on such a home?
You need to read this first.
Do you really need all those renovations for which you have agreed to pay more than area price?
Most of the renovations are meant to attract the unsuspecting homebuyers. Specifically, the one, who just falls for the shiny counterstops, nice gleaming floors and doesn't know about how the electricals should be or how the structure is, and which are more critical to making an informed decision.
Remember: All that glitters is not Gold!
I routinely come across many such stories of aggrieved buyers who get stuck with the property. Even five years later they can't recover their equity as they bought a home too high in the first place. Why should a buyer be forced to pay for some renovations that one can live without?! For example stucco on the exterior. Sure it looks nice, but if the seller is looking at $30,000 hike in price because he did stucco, why should the buyer pay for it?
Some times even the so called 'investors' end up spending too much because they were told by someone that they can sell this home later at a very high return and end up seeing their home on market forever.
A few renos do help in longer run as they reduce the recurring costs like hydro, gas and water bills. While there may be a few frivolous upgrades as well which are more of cosmetic nature than actual use. If I am buying a home I will least consider the following upgrades:
- Paint in home - Won't cost a fortune and I can do it myself
- Electrical fixtures - Great to have them. But if the seller is looking to suck money out of my pocket, I will ask him to take them away. Why pay $200 for a fancy flush light fixture when I can get away with $35?
- Hardwood floor- At a reasonable charge, it is okay to have it. So long as the floors are not squeeking, I will be okay with laminate or broadloom (Has to be neat though)
- Backsplash-If I am tight on cash and there's another home at a lesser price, I will go for that house. The backsplash is not a rocket science and I can do it later.
Renos which are advantageous
- Furnace- A newer energy efficient furnace is the most important upgrade. It reduces gas cost and also hydro cost
- Windows and Doors- helps conserve energy of the home and decreases the utility cost
- Roof shingles - helps conserve energy
- Enhanced ventilation - Roof ventilation helps avoid mold formation. Older roofs have less ventilation and are more prone to mold growth
- Exhaust in kitchen/bathrooms - helps remove moisture, cooking vapors/smoke and minimizes the risk of mold formation
- Bathroom renovations and plumbing- This is hygienic for occupants and avoids wastage of water. Dual flush tanks reduce a lot of water and waste water bill
- Roof insulation - Retains heat and cold of the home
- Copper electrical lines and breaker switches- Reduces insurance cost
Do you have a professional agent working for you?
Some homebuyers are under the impression that going direct they will get a better price from the homeseller. But who will determine the best price? The area sales are a good starting point. But are they sure that the home being compared to the subject home is similar or that price adjustments have been made to account for the asking price.
A real estate sales representative has tools at his disposal that tell the whole history about the home under consideration. The realtor has the professional capability to make adjustment in price vis-a-vis another sold in the neighbourhood. Why not use that expertise which, for a home buyer, is completely free? There are many cases when the homebuyer didn't know that the home is located right under the air corridor and that about 70-100 flights pass through that corridor shaking windows and that a train track just nearby shakes the entire house resulting in cracks in foundation.
Check out
www.Howrealtorshelp.ca for more insight into this.
A professional realtor will negotiate for the best price and for a best home only.
I recently happened to see a house for a client a few months back which was on sale for $380,000 plus. The seller had just bought it a few months back for about $250s and after doing stucco, electricals, flooring, windows, doors is trying to cash over $ 100,000 while the renos may not be worth more than 30,000. Just for info the house is about 900 SF with one bedroom basement.The roof doesn't have soffits and I suspect poor insulation and ventilation there too. My advice to the client was not to buy it and he understood. Wisdom prevails.
For more information on what should or should not be done when you go for purchasing your first home, don't hesitate to call me or text me or leave a voice mail. You will always be responded back promptly.
Dripping 'upgraded' light fixture in porch
An electrical shock/fire risk awaits to happen
(C) PAUL CHEEMA-2012,
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DISCLAIMER: These are my personal thoughts based on my own experience with home buyers and home owners. You may have different experiences and yes, there are always exceptions to everything in this universe. Definitely this content is not provided with an intention to solicit clients already under contract with other brokerages.
