Let’s Talk Real Estate
Concerns in the real estate transaction
When buying a house we say “buyer beware.” When selling a house we say “disclose everything.” Let’s talk about environmental/insurance/mortgage issues. Sandy Hill is an old neighbourhood where some and/or all of these concerns may be present.
Evidence of water infiltration must be examined carefully. The “nose” test comes first. You can smell mildew and where there is mildew, mould is often present. Beware basements that are finished and packed to the rafters with boxes and shelving not allowing close scrutiny of the walls. Look for water marks on the drywall, crumbling parging over the stone foundation, water marks on the cement floor, efflorescence.
Ask questions. Demand statements from the sellers about past water issues. Include a warranty from the seller, in your offer, that there have never been any water problems. Your insurance company must check to see if any claims have been made due to water/flooding. Sometimes water infiltration is a result of a leaky roof, toilet or simply bad grading; investigate everything. Always include a condition stating that your offer is conditional upon an insurance investigation.
Lead is usually present in older, un-renovated homes. Many streets in the city still have lead water pipes. The City of Ottawa can help you determine if your proposed “new” street has been changed to copper. Your building inspector can tell if your intake pipe to the house is copper or lead. Filters can be used. Water can be tested. Lead should be removed especially if children are going to be living there.
Asbestos was used in most Sandy Hill homes. This is a big issue especially if renovations need to be done. It was often used as insulation around boiler pipes, around ductwork in forced-air heating systems, in floor tiles, in stippled ceilings, in vermiculite attic insulation just to name a few sources. The issue is whether or not the asbestos is friable with particles easily airborne, or is it contained/encapsulated. Are the edges rough or smooth? When it is contained and not disturbed and no renovations are planned, there is somewhat less concern. But some buyers simply refuse to buy a home once any asbestos is found. Proper removal is a very specific process ensuring that no fragments are left in the air. I suggest that whether you see evidence or not make your offer conditional upon having a qualified technician inspect the home and test any substance that is suspect. The test results only take a few days and the cost is minimal. There are several labs in the city that do this type of work. The cost for fully removing asbestos can be significant.
Knob and tube wiring may be found in most of our century-old homes. It was in common use at the turn of the century and right up to mid-century when aluminum wiring became common in the ‘70s and before copper became the norm. Present owners are grandfathered with regard to insurance and remortgaging but new owners must have it removed in order to insure and mortgage the home.
Aluminum wiring does not have to be removed but it must be copper-pigtailed at every switch and outlet. This is relatively inexpensive and must be done by a licensed electrical contractor and an Electrical Safety Certificate must be issued when the work is completed. Knob and tube wiring is a much bigger job requiring complete rewiring of the house—very costly! A big 3-storey home could run to $40,000 for removal and replacement.
Buried oil tanks
They can leak and cause soil contamination. The cost to remediate can be huge. Inspectors look for unidentified holes in the basement floor.
Many of these issues, if present in your newly purchased home, can cause your lender to have difficulty processing your mortgage. Also many insurance companies will refuse to cover homes identified with these issues and/or give the buyer 30 days to remediate.
What are the options for the seller?
• Do a pre-listing inspection. Identify the issues. Hire a respected inspector. Get a written report that can be shared with buyers prior to offer submission.
• Get quotes for remediation from reputable experts to provide to prospective buyers. Remediate before selling then disclose and provide receipts.
• Do nothing and sell “as is”. This is often done in estate sales.
What are options for the buyer?
• The buyer’s offer can request that the seller have the offending elements removed by a professional and provide the buyer, prior to closing, all the receipts for the work completed.
• During the conditional period get quotes for all the issues noted in your inspection and then do a price adjustment to reflect the expenses you will incur to address the issues (providing you can get insurance and a lender to cover the home while the work is being done).
• Walk away, keep looking.
In the end it is up to each buyer to decide how he/she will proceed. Remember, the conditional period, typically five business days, is for the buyer to investigate/resolve as many issues as possible. At the end of those five days he/she can walk away with no penalty or decide to proceed to closing.
Remember: hire a great inspector, one that primarily deals with older homes; ask lots of questions; do your due diligence. Remember, buyer beware, seller disclose!
Sandy Hill update
Since the June-July IMAGE, there have been three bidding wars in the residential sector: 101 Templeton, 39 Robinson and 226 Goulburn, with payments ranging from $900 to $40,500 over the asking price. There have been six in the condo sector: two at 200 Rideau, 230 Fountain Place, 200 Besserer, two at 20 Daly with payments ranging from $100 – $15,000 over asking price.
Total Sales: residential 26, condominium 64 with one conditional sale. At present there are 16 active residential and 30 condominium with 3 conditional sales.