Buying an Old House! A Money Pit or Gold Mine?

By Peter Tarshis Toronto Realtor

It’s like a love affair; some older homes make your heart skip a beat! It is hard not to fall in love with an older home’s historic unique architecture, gabled roofs, hardwood floors, crown moldings, and antique light fixtures—older homes definitely have their charm.The plastered walls, leaded glass windows, original chandeliers, and oak paneling make an old home as attractive as it can possibly be. If you found your love you should be aware of the following money pitfalls of old houses. You do not want to discover that beneath the surface of your dream home lays a dilapidated wreck.

This article provides you with some valuable tips to help you identify potential problems and some renovation rules, should you decide that this love affair is going to be your Gold Mine.

Foundation
The foundation is the most important aspect of any home especially for older ones. One problem that is common for older homes is called the “sulphate attack”. This can occur as a result of a chemical reaction between the soil and the concrete, which causes the foundation to crack and crumble and that can be very problematic. Another major concern with older homes is that the centre beam of the home can begin to sink. This can result in a sagging roof, bowed walls, and sloping floors. If the old house has a bad foundation then renovating it can be very expensive where the cost can range from several thousand dollars to $50,000 depending on the size of the home. Also, in some cases, one might need to jack up the house to replace the foundation and shore up the centre beam.

Electrical Wiring
When buying an older house, it is very important to find out if there are any problems with the state of the electrical and lighting system. Do the lights flicker? Is the current steady or do the lights fluctuate between bright and dull? Is there adequate lighting in the home? It’s important to have the wiring carefully inspected. Also, many older houses use aluminum wiring, which is cheaper than copper wiring but it is a serious fire hazard. Ensure that you factor the cost of rewiring into your offer price. Also, you should consider whether there are enough outlets in the home to suit the needs of a modern household. Install more outlets in order for you to run a number of devices at once like a television, computer, stove, etc.

Lead Paint
In older homes, lead paint is very common as lead was used as a white pigment in paint until the mid-1950s. If you are planning to repaint the home, call in a professional renovation firm as they know the safety precautions needed to be taken when repainting the house. Children and pregnant women should not be in the home during renovations.

Asbestos
Asbestos is a mineral that makes a very effective fire and heat-resistant material that was discovered to cause lung disease. When the tiny particles of this mineral are inhaled, over a period of years they begin to damage the tissue of the lungs. In old homes, asbestos was used in carpet underlay, textured paints, roofing felt, electrical wiring insulation, acoustic ceiling material and insulation. Getting the house checked for asbestos is very critical.

Galvanized Pipe
Galvanized pipes are known to rust very quickly. Most insurance companies now refuse to cover water damage caused by leaks in a home with galvanized pipes.

Condition of the Older Home
Just like people, years will eventually take a toll on homes as well. An older home may begin to sag and slope, which is why it’s very important to know about the conditions of the house you’re planning on purchasing.

Older homes may be beautiful, but they aren’t designed for modern living without a total update or upgrade. Make sure the house structure can be modified easily to suite a current living style.

For older homes, renovations are a challenge. To determine the price you are willing to pay, add up the estimated costs to renovate the property based on a thorough assessment of the house. Then, subtract that from the home’s market value after renovation. Allow for an additional 5% for cost overruns and unforeseen problems plus inflation.
Preserve the Charm of Your Old House

If you have already fallen in love with this old house, then make sure you follow the golden rules in repairing your dream home and preserve its historic features and value.

The golden rule of remodeling is, “do no harm”. As you update your older home, make sure to preserve its historic details. Reuse existing materials. Keep historic moldings and hardware. Wire gas lamps for electricity. Keep distinctive examples of craftsmanship. Restore marbling, stenciling, and carvings.
Don’t try to undo long-ago renovations. Most buildings change over time, and alterations to your house may have historic significance in their own right.
Whenever possible, repair rather than replace. Don’t throw away that old claw foot bathtub—have it re-glazed. Fix damaged doors, refinish old cabinets and patch cracking plaster.
If historic features cannot be repaired, look for a similar item at an architectural salvage centre, or buy a new item that matches the old in design, colour, texture, and other visual qualities.
And best of all make sure you hire a contractor that shares your passion and understands your love affair with your old house.
Good luck, you may have found your Gold Mine

Is an Open House Worth the Effort?

Open houses require a lot of preparation and are inconvenient to the home occupants and the selling agent. Many agents now refuse to hold open houses, considering them a waste of time and a security threat. And many sellers prefer to open their doors to serious buyers only.

Holding an open house might help you sell your home, but it is not the most important factor to consider. An open house is usually not the major marketing tool that agents rely on when they are trying to sell a property.

Many real estate agents believe that open houses serve more to attract semi-interested prospects rather then serious buyers. Agents admit that few sales traditionally come from open houses. As well, the Internet is also making open houses even less valuable.

But there are agents and homeowners who view open houses as an effective marketing tool that does help with sales.

So is an open house worth the effort?

There are times when an open house is not practical at all, such as if a house is off the beaten path, or in a gated community. Likewise, it might be best to avoid an open house on a shabby listing or one that requires a lot of work. It probably won't get much traffic, and agents will be reluctant to have their name advertised heavily in association with it.

However, an open house can be a valuable opportunity to get feedback about what is and isn’t attractive about a house. But it is not a good idea to hold them too often, as it can send a signal that the house is “market worn” and a tough property to sell.

On the other hand, in a hot sellers market where houses are selling rapidly, there is no need for an open house. If the MLS listing and posting pictures on the internet are already generating enough traffic to help you sell your house an open house is also no longer necessary.

The development of internet listings and other online real estate information is quickly making open houses more of an option, rather than a requirement for selling a home.

Many agents believes that an open house is only worth having if it's done properly and this includes sprucing up the house and its landscaping and advertising it well in advance.

If you’re planning an open house:

Clean like crazy beforehand, preferably with good-smelling organic cleaners that won’t upset anyone’s allergies.
Clear out the clutter, pets, toys and even extra cars from the garage.
Draw back the drapes, clean the windows and remove the screens so the most light shines in.
Mow the lawn, trim the hedges and put some blooming flowers in pots by the doorway.
To increase traffic, try some unusual marketing strategies, like holding your open house during rush hour, or coordinating your open house with others in the neighbourhood.

On Your Way Into the Office - 21 Ways to Pray at Work- Beliefnet.com

On Your Way Into the Office - 21 Ways to Pray at Work- Beliefnet.com

Canada Market Watch – June 2010

Canada's Hot Resale Housing Market Starting to Cool

Home sales activity in Canada came up short of the record for the month of April and new listings continued to climb, according to statistics released by The Canadian Real Estate Association (CREA).

“Many of the sales that would normally have occurred in May were pulled back to April, due to buyers trying to avoid the May 1st transitional implementation date for the HST, as well as new mortgage regulations that came into effect April 19th,” said Ottawa Real Estate Board President Pierre de Varennes. “Buyers knew they would be paying 8% more for all of the service costs associated with a real estate transaction if their closing date was after July 1st, and that it might be more difficult to qualify for financing, so they moved quickly to avoid either situation. In addition, by comparison May 2009 was a record-breaking month as the floodgates opened on pent-up demand following the brief downturn in the market,” he added.

In general the Canadian real estate market is moving towards a balanced market where inventory is increasing well to meet demand. Buyers, sellers and REALTORS® can all relax and enter a sales transaction without pressure.

The easing trend in national sales activity masks a rising trend in a number of major markets. Real estate is local, so buyers and sellers should engage the services of a REALTOR® for knowledge about housing market trends in their market. For sellers, getting specific advice about home values in their local neighbourhood is crucial in a competitive market.

Bank of Canada raising interest rate - June 1 2010

The Bank of Canada raised its benchmark interest rate for the first time since 2007, saying inflation is unfolding as expected and that spillover from the European debt crisis has been limited, while stressing there remains “considerable uncertainty” about an “increasing uneven” global recovery.

With his much anticipated decision to lift the central bank’s overnight rate by one-quarter of a percentage point to 0.5 per cent after more than a year at a record low level, Governor Mark Carney has become the first central banker in the Group of Seven to tighten since the financial crisis and recession began in 2008.
In a statement on the move, however, Mr. Carney and his rate-setting panel sought to emphasize that investors should not necessarily interpret the increase as the first in an uninterrupted series.

``This decision still leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in light of the significant excess supply in Canada, the strength of domestic spending and the uneven global recovery,’’ the central bank said Tuesday. ``Given the considerable uncertainty surrounding the outlook, any further reduction of monetary stimulus would have to be weighed carefully against domestic and global economic developments.’’
The central bank’s statement touched on themes that will no doubt be front-and-centre at the Group of 20 leaders’ meeting in Toronto at the end of June, where Canadian officials have said they will be pushing for continued efforts to smooth out the global imbalances that exacerbated the slump that much of the world is still clawing out of.

``The required rebalancing of global growth has not yet materialized,’’ the bank said, contrasting ``strong momentum’’ in emerging markets with recoveries in economies such as the United States and Japan that remains ``heavily dependent’’ on low interest rates and government spending.

``In general, broad forces of household, bank, and sovereign deleveraging will add to the variability, and temper the pace, of global growth,’’ policy makers said.
While flagging the possibility of ``renewed weakness’’ in Europe, where drastic spending cuts and higher borrowing costs will be the likely result of continent-wide debt problems, so far the effects of the crisis on Canada have been ``limited to a modest fall in commodity prices’’ and somewhat tighter financial conditions, the bank said.

The Canadian economy, which on Monday posted a whopping 6.1-per-cent annualized growth rate for the first quarter – the fastest in more than a decade – is ``unfolding largely as expected,’’ the bank said, led mostly by a hot housing market, higher incomes and a labour-market recovery that have helped fuel consumer spending.

Still, the central bank suggested that household spending and the economy will slow in the coming months as consumers deal with higher borrowing costs and try to limit or reduce their debt loads and as government stimulus spending fades. As a result, an ``anticipated pickup in business investment will be important for a more balanced recovery,’’ the bank said.
Inflation, which the central bank has been watching closely for months, has been in line with policy makers’ projections to exceed 2 per cent this year and reflects a combination of strong domestic demand, slowing wage increases and ``excess supply’’ leftover from the recession.

The central bank also said it is making a technical, yet significant, change to re-establish ``normal functioning’’ of the overnight market, whereby its benchmark will return to halfway between the rate it pays to chartered banks to hold deposits and the amount that it charges private-sector lenders for loans.