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9 Common Problems Home Inspectors Find

Home buyers often hire a home inspector to tell them if  their potential dream home has some defect that they themselves cannot detect or diagnose. Hiring a home inspector is one of the most important tasks of the home buyer. It’s important to hire an inspector that knows what he’s doing and preferable to hire one that comes with a friend’s recommendation. As realtors, we are not supposed to recommend any specific home inspector. To do so would compromise our position if problems arose from a poor inspection. It’s much better for a buyer to hire their own.

That said here is a list of common problems that inpectors find:

1. Improper surface grading/drainage: This can result in water ingress in basement or crawl areas.

2. Improper electrical wiring: problems include insufficient electrical service to home, inadequate overload protection, dangerous (amateur) wiring.

3. Roof damage: Leakage caused by poor flashing and old or damaged roof material

4. Heating systems: problems such as blocked chimneys, unsafe exhaust disposal and malfunctioning controls.

5. Poor overall maintenance: where to start? chipped, cracked and peeling painted surfaces, crumbling masonry and concrete, makeshift wiring and plumbing, broken fixtures and appliances.

6. Structural problems: damage to foundation walls, floor joists, roof trusses and window and door headers.

7. Plumbing: outdated or incompatible piping materials, faulty fixtures and wastelines.

8. Building exterior: flaws such as inadequate caulking or weather stripping on windows and doors can lead to water ingress and poor insulation

9. Poor ventilation: modern homes are well sealed which can result in excessive interior moisture which in turn causes rot and premature failure of both structural  and non structural systems.

It’s a good idea for buyers to take note of these items when they are in the early stages of home buying. They can potentially avoid even looking seriously at homes that display these problems.

What’s going to happen in the market this year?

My prediction for the market this year is that it will remain flat or decrease slightly. If we can rely on history as our guide, downturns in the real estate market are long lived. Look at the last 30 years. The market in 1980 was overheated. It crashed in 1981-1982. It remained in the tank until 1988. Prices doubled between 1989 and 1990.  In other words, the market was in a coma for roughly 6-7 years from 1981-1982 to 1988. The market was then very buoyant until 1994-1995. Again, in that period of time we saw prices more than double, we saw scads of condos being built, we saw multiple offers and bidding wars. In 1995 it was like someone turned out the lights. Prices declined steeply (10%) in both 1995 and 1998. Things didn’t turn around again for another, you guessed it, 6-7 years. In May 2001 the BC Liberals took office in BC and I have to tell you, It was like someone turned the lights on again. I’m not saying that it was all their doing.  I do believe, however, that people began to have confidence that things were going to be OK. In reality it was the beginning of a long upswing in the economy in general. Price increases really took hold in the spring of 2002 when interest rates dipped substantially. So 2001-2002 to 2008 is 6-7 years. I’ve been waiting for the market to stall. At the beginning of 2008 there was a sense of waiting for the other shoe to fall. It really doesn’t matter what the specific reasons for a market correction are. In 1981 it was skyrocketing interest rates. In 1995 it was rising (not skyrocketing) interest rates. In 2008 it’s been a global meltdown. Whatever the reason it seems that the market stays flat for 6-7 years and then increases for 6-7 years. I’ve been selling real estate since 1987 so I’ve personally seen a lot of it.

Check my site at www.mcgarrysellshomes.com .

The market has turned

Dear Reader,

The Coquitlam real estate market has turned and it began early in February. Most realtors agree that buyers are out in droves and showings are up significantly. There is however a certain reluctance on the part of those buyers to pull the trigger and make offers. Sales are happening for sure, but buyers are very cautious. Part of the problem is unrealistic sellers. Some sellers are definitely overpriced and that holds buyers back. Another problem is media reports that describe how real estate prices will fall by another 10% in 2009. This definitely causes buyers to hold back.

Despite all this there are plenty of sales happening. My contacts in the mortgage financing business tell me that they are very busy with pre-approvals. I believe that people are tired of waiting. They see that the market has dropped and they want in. They don’t want to wait until the market has bottomed. They want in now, or as soon as they find the perfect home at a great price. The sense of urgency that we all got used to has disappeared and will likely not be back for about 5-6 years.

Copy of letter sent to clients

Dear Client

Another year is upon us. We hope that you are well and that 2009 is a good year for you. As it turned out, 2008 was a very memorable year. The real estate market (as you know) has shifted. After the middle of September buying activity was reduced dramatically. Prices are down around 15%, some would say 20%. A lack of consumer confidence and expectations of further price adjustments seem to be to blame. In fact it seems that the “recession” that we find ourselves in may be partly due to fears and expectations of further bad news than the actual bad news itself.

Here’s a snapshot of home sales for the past few months compared to the same period in 2007. The following table shows all home sales (detached, townhome and apartment) in Maple Ridge and the Tri City area for 2008 and 2007.

Tri City Units Sold

2008 2007 % ChangeDecember                     83      183          – 55%

November                    126     356        - 65%

Oct ober                        171      406       - 58%

 

Maple Ridge Units sold

2008 2007% ChangeDecember                          32           142       -77%

November                        62            173       -64%

October                             67            183       -63%

As you can see, sales are down significantly. Is this all bad though? We say no. Basically we’ve rolled back the price clock to early 2006. Were prices “too low” in early 2006? No, it’s all a matter of perspective. For the “move up” buyer, this price adjustment is excellent news because the gap between the existing home and the new more expensive home is smaller. Again, we wish you all the best in 2009. Don’t hesitate to call if you have any questions about the market.

Yours truly,

Self inflicted pain

Hello Dear Reader,

The current edconomic conditions appear to be self inflicted in part. Sure the US banking and credit system is in disarray and Canada’s exports have been hurt and there are real job losses but at least some of the downturn here in BC appears to be fear related.  For more info on me check our website at www.mcgarrysellshomes.com .

Falling interest rates

Hello Blog Readers,

I’m really encouraged by recently falling interest rates.  First time buyers are essential to the real estate market and falling rates will bring new buyers in. I just renewed my own personal mortgage last week. We managed to negotiate a full .9% off of prime for a closed 5 year variable rate mortgage. That equates to 3.85% and prime is forecasted to fall even further in the coming months. What excites me even more is the prospect of a low prime rate for the next 18-24 months. The way I see it, we are in a bit of an economic pickle and rates have to stay low for a while.

Rates this low also provides a great opportunity for income property ownership too. Provided one has enough equity in a principal residence, it’s possible to borrow at rates that would cost just over $500 per $100,000 borrowed. It would be possible to purchase a typical 2 bedroom apartment with virtually no money down and have the rent almost cover your mortgage payment. Think of it as a bit of a forced savings scheme.

Check out my website for more info on the Coquitlam real estate market. Also see me for the Port Moody real estate market and the Port Coquitlam real estate market.

 
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