Archive for June, 2010

Should I Get a Home Inspected Before Purchasing It?

Tuesday, June 29th, 2010

If you are asking the question, then the answer should probably be, yes.  No one should ever advise you not to get a home inspected.   If you do decide to go ahead, make sure the home inspector has experience, training and a broad understanding of home construction and all the bits and pieces that make a house whole.   This advice holds true whether you are looking to buy a Spruce Grove or Stony Plain home, a Parkland County acreage, or property in the Edmonton region or elsewhere.

Should I Get a Home Inspected Before Purchasing It? |Spruce Grove Stony Plain Parkland County Real Estate | Barry TwynamA good home inspector will spend between 2 to 4 hours (depending on the house size) inspecting the home.  He or she should have equipment such as a moisture detector, carbon monoxide detector, ladders, magnifying glasses, mirrors and other specialized equipment in order to check all areas of the home and in cracks and crannies when needed.  A thorough home inspection should give you a good overview of the general condition of the plumbing, electrical, roofing, insulation, windows, grading, drainage, the foundation where exposed, furnace, hot water tank, and general construction and condition of the home.  It is advised that you be there for most of the inspection or at least the latter half of the inspection.  That way you can see firsthand any deficiencies (minor or major) noted by the inspector.  You can also ask the inspector to look more closely at any areas that are of concern to you.

At the end of the inspection the home inspector should provide you with a report outlining his observations. He or she should also give you an overall view of the condition of the home (i.e. sub-standard, normal, above average), and recommend maintenance that should be done over time.

A house put under a magnifying glass like this will create a list of observations.  That list can sometimes seem overwhelming.  Don’t be surprised when your home inspector refers to a 25-year-old furnace as being “fully depreciated”. That doesn’t mean the furnace has to be replaced tomorrow.  If it is operating safely, it could last, with proper maintenance,   another 5 or more years.  But a 25-year-old furnace is only about 60% efficient (60% of the fuel used by the furnace is used to produce heat and the other 40% goes up the chimney). Most people nowadays replace furnaces in order to have a more efficient furnace.  The building code now requires that all new furnaces be high efficiency (90 plus percent). The home inspection needs to be put into perspective.  It should reflect, within reason, what you viewed and bargained for when you negotiated your purchase.

Although a home inspection can be used to try to re-negotiate the original purchase contract or to try to get the seller to do repairs or upgrading, this is usually the exception to the rule, reserved for bigger ticket items that a buyer would not have expected from the original viewing of the home.  Things that fall into this category could include safety issues (for example, a cracked heat exchanger on a furnace), a structural issue that you were not aware of, or such a very large list of minor deficiencies that it now represents a major expense, with the exception of a home that was known to require a lot of work, such as a “handyman special”.  There is no one answer that fits all situations, so it is always best to discuss any concerns you have with your REALTOR®.

See also “How to Pass Your Home Inspection” on BarryT.ca.

Comments or questions are always welcome!  Contact me here, phone me at 780-910-9669 or email me at barry@barryt.ca.

What is a Market Evaluation?

Monday, June 21st, 2010

What is a Market Evaluation? |Spruce Grove Stony Plain Parkland County Real Estate | Barry Twynam

A Market Evaluation is a comparison of your home, whether in Spruce Grove, Stony Plain, Parkland County acreage properties, the Edmonton area or elsewhere, with homes that are currently on the market or were recently on the market. They include “Active Listings”, “Expired Listings” and properties that have recently “Sold”.

 “Active Listings” are homes currently on the market that are similar to yours and are considered to be your competition.

“Expired Listings” are properties that were on the market but didn’t sell.  There can be a number of reasons for a property not selling:  poor marketing, bad location, a house that needs extensive work…   But the main reason that a house doesn’t sell is the price was too high.  There are generally buyers for most segments of the housing market, if the price is right.  There are also strategic ways of adjusting the price of a listed property, usually downwards, while it is on the market.

Recently “Sold” properties that compare closely to your house probably tell the most about how much your house is worth.  These are properties that buyers felt were the best value for them, given the choices available to them at the time. Now if one of those houses that “Sold” were next door to your home, sold yesterday, was built in the same year, same square footage, identical lot, same development and layout, same parking amenities, same number of bathrooms and bedrooms, same basement development, same condition… and was exposed to the market for all to see and then sold, then you would have a really good idea of what your home should sell for.

However, it is never that simple.  So we compare similar homes (“Active”, “Expired” or “Sold”) and we make adjustments to the probable value of your home, either up or down), to compensate for the differences.  The more homes we compare yours with, the better idea we have of the true value of your home.  Some examples would be: busy street versus a quiet cul de sac, larger home compared to a smaller home, large to small lot, extensively renovated compared to everything being original, in let’s say a 20 year old home.  And if you are fair and honest in these comparisons, adding value or subtracting value, one can start to visualize how much your home is worth.

Usually when I do a market evaluation I bring along all the relevant comparisons, full highlight sheets of “Active Listings”, “Expired Listings” and recently “Sold Listings”.  Although I could select a few properties that closely compare and then have a computer program break down averages (days on the market, square footage, number of bedrooms, etc), I find it more informative to show my clients everything I see and explain to them how I analyzed the information to come up with what I think their home is worth.  It is surprising how people will comprehend a seemingly complex calculation when given all the information, and a slight tutorial on how to analyze the information at hand.

See also the article on BarryT.ca entitled “What is Fair Market Value?”

If you are thinking of selling your home in Spruce Grove, Stony Plain, Parkland County or the Edmonton area, I would be pleased to do a Market Evaluation for you.  Please call me at 780-910-9669, or email me at btwynam@telusplanet.net

Not intended to solicit properties currently listed.

Barry Twynam, Realty Executives Leading
#1 14 McLeod Avenue, Spruce Grove, Alberta, T7X 3X3
Tel: 780-962-9696 Cell: 780-910-9669 Fax: 780-962-9699
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