What to watch out for when buying a house
Homebuyers usually worry that their dream home will turn out to be the lemon of a lifetime, and with good reason. It’s not uncommon to find that the foundation is secretly crumbling or that termites are eating the garage. Maybe it’s sitting on top of an ancient Indian burial ground? Not the greatest selling point for future resale.
Don’t get taken in by a pretty face. A house might look great, but do your homework. Research the house and the area, and if there is a major drawback, consider whether it’s worth the reduced price. With the help of industry insiders, realtors Kelvin Neufeld and Drew Scott, we give you a list of house flaws that require special consideration before signing your life savings away.
Marijuana grow operations are big money, with expert growers making millions of dollars a year. Setting up an operation in a basement or attic is worth the risk. Many communities target grow-ops by watching for a spike in a home’s energy usage. Grow-ops require enormous energy consumption to keep the greenhouse-type environment going round the clock.
Imagine what that kind of moisture and humidity can do to a home in terms of structural damage and mould growth. W Network’s “Property Brothers” co-host Drew Scott says if you can get the property for $100,000 lower than market price, for example, you might be getting good value. The lasting damage, though, is an image problem. “Even if the city says you’ve rectified the damage, and the house is safe, the stigma that comes with a grow-op is always there. That scares away the majority of buyers.” And if it was a crystal meth lab, forget it, says realtor Kevin Neufeld. “The carcinogens from those chemicals get absorbed into the walls.”
Another social stigma that scares away buyers is death. If someone died in the house, particularly in a violent way, it could reduce the resale value. Even if the house has a silly reputation for being haunted, it could worry the more superstitious type of buyer. W Network’s “Property Brothers” co-host and realtor Drew Scott says it’s his policy to always disclose such details to buyers. He’ll also refuse a listing if he knows it will be an impossible sell, unlike realtors who love the challenge of selling any house, even one that could be straight out of Amityville Horror.
It’s been more than 30 years since a fear of power lines was triggered in the general population. In 1979, a study suggested that power lines were causing cancer in Denver children. The issue snowballed in the media throughout the late ’80s and ’90s. Today, nobody knows for certain if power lines do cause cancer, but the perception persists that the area underneath power lines is a no-go zone. As well, says 34-year-real estate veteran Kelvin Neufeld, they’re just plain ugly.
W Network’s Drew Scott recalls the time that he was looking at a house for a client. The owners had failed to disclose that they were living next to a loud train that would roll by three times a day, morning, afternoon and night. Scott checked out the property himself at different times of the day and discovered the train noise. When he told his buyers, it killed their interest and saved them a lot hassle. Another way to check out a property, Scott says, is to “talk to the neighbours.”
Houses on busy streets are estimated to sell for 10 to 15 per cent less than the market value of comparable homes on quieter streets. If you do buy a home on a busy street, make sure you are getting fair value. And if you are selling one, make sure it’s got attributes that compensate for the high traffic. In order to get the most money for a home on a busy street, it should present perfectly and have an emotional appeal so that its major flaw is overlooked, say our industry experts. Installing double-paned windows would help, too.
It depends on the buyer, of course. Living across from a graveyard could either spell peace and tranquility, or a case of the jitters. Cities like Vancouver and Toronto are increasingly becoming home to people with diverse cultural backgrounds, according to a recent study released by University of Toronto’s Cities Centre director David Hulchanski. That means the mix of values is changing. For example, living next to the dead could be more of a no-no for some cultures than others. Consider your market, say the pros. Know who is buying the homes in your area, and what that market is demanding so you can gauge whether that house will have resale value down the road.
We all know the house. It’s a rental, full of university students who bust loose every weekend, sometimes throughout the week as well. When they throw a party, it seems like the entire university campus is invited, and the good times roll until the wee hours of the morning. Neighbours can call the police all they want. The city can levy fines. If it’s an absentee or negligent landlord, there’s little to be done but wait until they graduate. As well, the house probably looks horribly neglected, with hubcaps in the weed-filled yard. If there is any indication that your potential dream home is within vicinity of such a house, you might want to have a talk with the neighbours and get the lowdown.
For some cities, such as Vancouver, the buried oil tank has become synonymous with black mould and asbestos siding. It spells trouble. Back in the days when oil was the house’s fuel, everybody had an oil tank in the yard. Once it became obsolete, it was often just left to rust. If the oil tank is full it may require a permit and special environmental handling for removal. If the oil has leaked into the ground, including the neighbour’s property, the cost of remediation could go into the four-figure range. Buyers in areas where oil tanks are a concern therefore ask for certification as proof that the oil tank was properly removed. Disclosure is often required. If proof isn’t available, then the buyer or seller will often arrange for a search using a metal detector or samples taken from the soil. Oil tanks aren’t the end of the world, but they can be a major headache.
Source: Kerry Gold – MSN Money
Tags: buying, Real estate news
