Buying a home is one of the largest investments you will ever make. I cannot emphasize enough how important it is you make an informed decision. You don’t want to spend your entire budget buying a home, only to have some unexpected expenses come up that you weren’t planning for.
As much as I believe in home inspections, the reality in today’s market is that they are not always possible. Bidding wars, or multiple offer situations are very common in the Winnipeg real estate market. If you end up getting involved in a bidding war, chances are having a home inspection as a condition of your offer may not be realistic if you want to have a chance of your offer being accepted.
That is why there are certain musts you need to find out about a home before you consider writing an offer on a home. These are questions that most Realtors should know, and if they don’t, they should certainly find out as part of your due diligence investigation beforehand.
So here are the top 10 questions you need to find out about any home that you are considering buying:
1) Shingles – How old are they? How many years left before they have to be replaced? What is the cost to replace the shingles? Shingles are a big expense. Make sure you have a real good understanding of the life left in them.
2) Electrical – This is a big one! If the home was built prior to 1950 ask your agent if the home contains knob and tube wiring. Make sure they don’t just ask. Get them to look. Often when the question is asked, the answer will be that the seller does not know but does not believe there is. That answer wont cover you. If there is knob and tube wiring in the home, you may not be able to get insurance on the property.
If the home was built in the 1960’s or 1970’s ask if the home has aluminum wiring. This is just my opinion, but I believe in the next few years, insurance companies will require homeowners to replace aluminum wiring very much like they are requiring home owners today to replace knob and tube wiring.
There are several things you or your Realtor can do to check the wiring. FYI….. looking in the basement is not good enough. Although never 100% guaranteed, looking in the right places can give you a pretty reasonable assurance of what kind of wiring a home has.
Replacing wiring is a huge expense. It can cost you anywhere from $5,000 up to more than $20,000, depending on the amount of work. You don’t want that to be a surprise down the road.
3) Furnace – How old is the furnace? Again, how much life does it reasonably have left? What is the replacement cost? If the furnace is older than 10 to 12 years old, what is the condition of the heat exchangers? Furnace replacement is another costly item starting at about $4,500. Make sure you know what you have or budget accordingly.
4) Moisture and Mold – Does there appear to be moisture infiltration in the basement? There are usually obvious signs that a basement has moisture problems. Often you can smell it. In the easiest cases, you can see it. But there are other signs as well. If a basement is just insulated, you can usually see it on the bottom part of the insulation. If the basement is finished, do the baseboards look like they have ever been wet? (They tend to look a bit swollen after ever being wet) Does the drywall look like it has been repaired or painted a lot?
An experienced Realtor is usually pretty good at being able to pick out signs of moisture problems in a home.
5) Structure/ foundation – Is the home experiencing differential settlement? Almost all homes in Southern Manitoba shift and move to a certain extent. Because of our soil conditions, that’s just part of what a home does. A home that moves and shifts does not necessarily mean the home has structural or foundation issues. The problem arises when part of the home is moving at a different rate or direction than the rest of the home. This is known as differential settlement. This is generally the cause of structural and foundation problems in a home. Not entirely but a major contributing factor.
There are many things you can look for that would indicate differential settlement. Make sure you ask your Realtor if the home seems to be experiencing any detrimental structural issues. Foundation repairs are by far the most expensive repairs you can do to a home. You can’t afford for there to be any surprises when it comes to a homes structure. It will be a nightmare for you.
6) Hot water Tank – What is the age of the hot water tank. Although not a huge expense, know what to expect. A good rule of thumb is that the life of a hot water tank is about 10 years. So, if the hot water tank is 9 years old make sure you budget an extra $1200 in the next year or 2 for a new one.
7) Windows – How old are the windows? What is the life expectancy of the windows and what will it cost to replace them? This is another huge ticket item that you need the answers to. Windows cost a small fortune. Even if a window seems decent when you look at a home, make sure you know the age. If the windows are 22 years old, there’s a pretty good chance the seals will start to go in the next few years. Replacing a homes windows generally start at around $10,000 to $15,000 on just a modest sized home. As well, the age of the windows will also contribute to how much it will cost you to heat your home.
8) Permits – Have all the appropriate permits been pulled and inspected for any work done to the house? Although this is a question asked on a property disclosure statement, many homeowners may not know. Sometimes a home has had many owners. The current owners may not be aware if there are any permitting issues. Its easy to find out and I strongly suggest you do before buying a home. This could save you a lot of headaches and possible expenses down the road.
9) Cover Ups – Does there appear to be anything “covered up” or hidden. This is a very important question to ask. Especially in today’s real estate market where there are so many people in the business of flipping houses. Personally, this is where I tend to find the most cover ups. An experienced agent has shown many many homes. They should be pretty good at spotting signs that a problem has been covered up. There are hundreds of problems in a home that could be masked. I wont go into listing them all here.
10) Value – So you have found a home you love. But how much should you offer? This is tough to know. Especially if you are competing with other buyers for the same house. You would like your offer to be the offer that wins out. But, on the other hand, you don’t want to way overpay for the home. Ask your Realtor to do a market evaluation for you. This is where they show you all the other similar homes in the same area that have recently sold. It will show you how much they sold for. By studying these selling prices, it should give you a reasonable idea of what to offer on the home.
In fact, I suggest that you ask your Realtor to do an evaluation on any home that you see that interests you. Even if you don’t intend on writing an offer on a particular home. There is no better way to educate yourself on the market than looking at several market evaluations.
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There are dozens of other questions you should be asking your Realtor as well. Rely on them. A knowledgeable Realtor is a wealth of information. They are going to make a big dollar off of you when you decide to buy a home. Make sure you rely on them to make the most informed decision possible. I have said this many times in my blog before. You don’t need your Realtor to tell you how nice the paint colours are or how well laid out the kitchen is. You can determine that for yourself.
I believe, after 22 years of selling homes, these are the most important questions to ask your agent. In fact, I don’t think you should consider writing an offer on a home without having reasonable answers to all of these. My advice, write these questions down, or print this article out and bring it with you when you go look at homes. That way you will remember to ask them when you are going through a home.
If you are looking to buy a home in Winnipeg, please feel free to contact me. I would be happy to take you through a few homes and give you all the answers you need to make a sound informed decision.
If you have any questions, please feel free to call or text me at (204) 999-6493.
Thanks
Carl