First Time Buyers – More tips!

My last post dealt with getting your ducks in a row with financing and the search itself. Once you start looking at houses, here are some things to be alert to:

1.     Layout. Make sure you like the flow. It’s not alway easy to change the layout of a house, and it can be expensive to start moving walls. This is your first home: make sure that the only changes you need to think about are cosmetic ones.

2.     Big ticket items. Keep an eye out for things like the age of the windows, roof and furnace — these are all expensive to replace. Make sure you get a home inspection either before you make an offer (if it looks like a multiple offer situation) or included as a condition of your offer.

Windows should have intact seals (ie. no signs of condensation).  Roof shingles that are showing signs of curling, cupping, or buckling may be on their last legs. A roof that’s more than 15 years old is going to have a limited remaining lifespan; same thing with the furnace. Most furnaces have a tag attached that will tell you when the furnace was installed. Keep the replacement costs of such items in mind when you make an offer.

3.    Structural issues. Older houses can have structural problems. Some people (like me) can tell right away if the floor isn’t completely level just by standing on it, but not everyone can. If you’re not sure, put a marble on the floor: if it rolls, there’s been some settling.

Another way to see if there has been structural settling is to line up two doorways visually. If they don’t line up perfectly, there may be an issue. Structural issues are costly to repair; don’t buy a house thinking these will be easy to fix. They aren’t.

4.     The foundation. Another place to pay close attention to is the foundation. If it’s cracked, it may simply be cracks in the parging (the skim coat put over concrete) but often cracks run deeper than the surface and water can get in. You do not want to buy a house that has a water issue or a damp basement. Even if you can live with it, it will make it harder to sell your house when the time comes. And at roughly $250/linear foot to repair and install new weeping tiles, it’s a huge expense to fix.

5.     Insulation. UFFI, or Ureaformaldehyde, is a big deal. Experts are divided on whether this  form of insulation is actually a health hazard or not, but it has a stigma attached to it. On the other hand, asbestos is a definite health hazard, and extremely expensive to remove. This is not a DIY job, either — it takes professionals to take it out to prevent microscopic fibres from entering the air.

If an owner assures you it’s been done, make sure to ask for proof that it’s been removed professionally. (And if you see a listing that refers to vermiculite, that’s another form of asbestos.)

6.     Comparables. Make sure you check the comparable sold prices (your realtor will do this) before you make an offer. If you are looking at condos, these should be from the same complex as the one you’re interested in.

For example, I was with clients last week who saw an amazing condo row unit that was beautifully renovated– Shaker cabinets, granite countertops, hardwood floors — it  was absolutely lovely.

The problem?

The most expensive unit that had ever sold in the complex had sold for $ 40K less than the asking price for this one, and the average selling price was about $ 60K less. So even though the asking price seemed reasonable at first, it wasn’t. As my client later said, “wow, if you put your hands over your ears and eyes, it was great, but as soon as you found out what the place next door sold for, not so much.”

7.    Don’t wait too long. When you do find something you love, move fast. There is nothing more heartbreaking than clients who dither and then lose their dream house to someone else. There are lots of first time buyers out there. Most, like you, are looking for a well-priced, well-presented home in good condition. If you don’t move quickly on a good property, they will.

8.     Pay no more than what it’s worth. Finally, don’t pay more than a house is worth, just because you can afford to or because, the owner wants more than what’s fair.  If you do find yourself in a bidding war, set the upper limit of what’s fair  based on comparables and don’t go further than that. Falling in love with a house is an emotional process, but what you pay for one should be objective. Follow your realtor’s advice. Remember, you’re buying the owner’s house, not their trip to Rome or their credit card bills, or whatever else they want to pay for with the proceeds.

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