Category Archives: home appraisals

Mike Holmes: Mid-summer is the only good time to repair your driveway

Driveways help direct water away from the home but require regular maintenance, including resealing, which should be done in mid-summer for best results.

Most homeowners forget about their driveway, but it plays a big role when it comes to proper water drainage around the house.

Driveways and pathways around your home should be designed so as to help direct water away from it. They shouldn’t be completely level to the house, and they definitely shouldn’t be directing water towards it.

That’s why driveways and pathways should slant slightly away from the home, following the grading around the house. If they’re level ,you’re going to get water pooling around the home, and if they’re slanted towards the house you’re actually driving water directly to your garage and/or foundation, which increases the chance of a leak.

MATERIALS
When we talk about driveway materials the top three choices are asphalt, interlocking stone and concrete (or stamped concrete).

Asphalt is the least expensive. It performs well and it’s what most homeowners opt for. But if you’re going to have heavy trucks or toys sitting on your driveway, they can damage it and wear it out prematurely.

Repairing asphalt isn’t easy. In most cases, it’s a complete do-over, meaning it has to get ripped up and repaved.

Interlocking stone is a good option. Not only is it strong, but the gaps between the stones allow for water drainage and the natural expansion and contraction of materials, so it helps prevent buckling and cracks. Also, fixing and making any repairs is fairly straightforward because it’s usually just a matter of replacing damaged stones.

Concrete (and stamped concrete) is typically the top choice. It’s expensive but it can take the most beating. However, salt (a winter de-icer) eats away at concrete, and if there are no gaps for the salt to drain away with melting snow, it will just sit on your driveway, literally eating it away.

That’s why driveways should typically be sealed with a breathable, high-quality sealant — make sure it’s the right one for whatever material your driveway is made of. Just like we have different sealants for different kinds of tiles, we have different sealants made specifically for different kinds of driveways and interlocking stone.

SEALANTS
Sealing your driveway too often can cause problems, such as cracking and peeling, and not sealing it enough compromises its durability and protection. How often you reseal your driveway depends on the material, where you live, the climate, its installation, use and wear and tear; but as a guideline some pros suggest once every three years.

The best time to reseal your driveway is midsummer. Not only is it hot — so it dries faster and you can use your driveway sooner — but materials expand in summer’s heat, and if hit’s resealed when the driveway materials have fully expanded, the pores can take in the sealant better.

If you have an asphalt driveway, use a latex sealant — not oil. Oil sealants might look better — they make an asphalt driveway look shiny and black — and they last longer, but they can cause cracking. (That’s why oil stains from cars are not good for your driveway.) So your driveway might look great the first year, but by next year you might start seeing cracks.

IS IT A DO-OVER?
If your driveway is crumbling and you’re starting to see holes, it’s a do-over.

Asphalt driveways should have a minimum of 10 inches of gravel tamped every two inches — some pros say six to eight inches, but I like 10 to 12 inches — followed by a minimum of four inches of asphalt on top.

So, first we make sure we have proper grading. Then we lay the first two inches of gravel, tamp it; add the next two inches, tamp it again, until we have a total of 10 inches of gravel.

If you can do it, I would let that layer of gravel sit for an entire year, to give it time to properly compress and compact itself, and then do the asphalt on top. That gives you a solid base that protects against driveway cracks, dips and heaving.

It took me two years to do my driveway, so don’t rush yours. Have patience because sometimes that’s what it takes to make it right.

SOURCE:  Mike Holmes, Special to National Post | July 3, 2015 | Last Updated: Jul 3 9:58 AM ETWatch Mike Holmes on Holmes Makes It Right on HGTV. For more information visit makeitright.ca.

Basement renovations start with waterproofing

Lowering your basement floor requires careful underpinning of the foundation, in stages, to prevent the walls from collapsing and destroying the home.

When we first started putting basements under houses, the space was mainly used for storage, laundry and as a place to keep the furnace and hot water tank out of the way.

But as our lifestyles have changed — and property values rose — the basement became an obvious place to add more living space.

But basements are also the parts of houses that are most likely to get flooded. So the first consideration before starting any work on the basement is to make sure it’s properly waterproofed.

With many older homes, there’s virtually nothing to stop water from seeping through cracks and gaps in the foundation and cause all sorts of problems.

Ideally, you’ll want to do it from the outside, by digging a trench around the entire perimeter of the house and then installing a waterproofing membrane to the exterior side of the wall. Of course, with many city homes, there simply isn’t room between neighbouring houses to excavate. In that case, you’ll need to apply the waterproofing membrane on the inside of the walls.

Either way, the membrane will extend below the floor level and get tied into a weeping tile system that collects any water and channels it away from the foundation.

If you’re adding the waterproofing on the inside, you will need to install a sump pit where the water will collect and, once it reaches a certain level, a pump will push it outside. (Note that the building code prohibits the sump pit from being connected to the sewer lines, so you’ll need an outflow pipe to the exterior.)

In the past few years, we’ve had some torrential storms that taught many homeowners a painful lesson. When does the power tend to go out? When there’s flooding. When do you most need your sump pump? When the power’s out and it starts to flood.

I’ve recently come across a great product that helps avoid this catastrophe, the Ion Genesis. It has dual, digital water-level sensors so there’s a built-in backup. It can be combined with a battery backup to keep the system running when you need it. There’s even an alarm system that will automatically call you if there is a problem.

Most older basements have little to no headroom, so before renovating, owners often opt to excavate first. There are two basic options: underpinning and benching. With underpinning, a contractor will excavate below the existing foundation wall, in stages, and then pour a new, deeper foundation below the original.

Benching involves breaking up the floor and pouring a new foundation adjacent to the existing one. Benching is cheaper — it might cost about $40,000 to underpin a 500-square-foot basement; benching would be about $25,000. But for each foot you go down, your new foundation has to project a foot out from the existing wall. So you end up with a “bench” around the perimeter that eats into the usable floorspace.

Whichever route you take, you’ll want to use a reputable, experienced company that has all the proper licences and insurance. (Last year, a house near Avenue Rd. and Lawrence Ave. collapsed while being underpinned and a 19-year-old working on the project was killed.)

Breaking up the floor has the added advantage of allowing you to install new sewage pipes, and make other modifications, such as installing a backwater valve. This device prevents water from municipal sewer lines from getting into your home if there’s a backup. The City of Toronto has a rebate program that covers up to $1,250 of the cost of installing a backwater valve.

You might also want to consider adding radiant (hot water) heating or electric heating cables below the floor to warm the space. Or, if not for the entire floor, at least in the bathroom if you’re adding one.

The layers of gravel and insulation that will go down before the new concrete floor is poured also act as a barrier against radon, a naturally occurring radioactive element in the soil that’s found in potentially dangerous levels in some parts of the country.

Obviously, you’ll need to insulate the walls if that’s not already done. The tried-and-true method is to install batt insulation between the wall studs, then cover it with a vapour barrier and drywall. Another option is prefab panels that include framing, insulation and a finished interior wall all in one.

Finally, if your plan is to create your dream home-entertainment centre in the basement, I’d recommend you soundproof it from the rest of the house. Adding insulation in the space between the ceiling and floor above will help muffle the sound from blockbuster movies. I use Owens Corning’s specially designed QuietZone acoustic insulation for this. Finish it off by mounting soundproofing drywall (or doubled-up sheets of regular drywall) on “resilient channels,” metal strips that help reduce sound transmission, and you’ll be able to enjoy movies and music without disturbing the rest of the house.

Source: Toronto Star

Jim Caruk’s column runs every two weeks in New in Homes & Condos. He’s a master contractor, editor-in-chief of http://www.renocontractor.ca/ Renovation ContractorEND magazine, renovation editor forhttp://renoanddecor.com/ Reno & Decor ENDmagazine, and founder of the Renos for Heroes program and Build It Yourself Learning Centres in the GTA.

Mike Holmes: Remember when homes used to last? When families would keep them for generations?

Using better products that are durable, resistant and long-lasting on your next renovation will save you money in the long run, as well the environment.

June 5th is World Environment Day, and as a contractor and builder, I have a responsibility to be green. In my line of work I see a lot of materials, a lot of products and unfortunately, a lot of waste.

I can’t tell you how many tons of concrete, plywood, shingles, lumber — you name it — I’ve ordered, used and demoed. It’s enough to make your head spin. And it’s part of the reason I have absolutely no tolerance for bad jobs. Not only is it potentially dangerous (for example, a bad reno can lead to bad electrical or unsafe structure) but it’s also a massive waste of new materials.

That’s why I do things once, and I do them right — so I don’t have to do them again and use twice the materials. And whenever my crew works on any demo job, we save what we can — tiles, brick, lumber, fixtures, etc. — anything we can use again, and we recycle whatever materials we can. For example, you can recycle asphalt shingles.

There are plenty of choices you can make as a homeowner, too. For example, you can collect the rainwater that comes off your roof and use it to water your lawn or wash your car; you can install low-flow water fixtures, use eco-friendly paint, power off when you’re not using appliances, and use alternatives to cooling, such as awnings over your windows. You also can switch to LED lights and start incorporating solar lighting around your home. (Going completely solar is obviously a top choice, but it might still be too big of a leap price-wise for some homeowners.)

I read an article that did a very good job of spelling out the situation we’re in today. It said that 50 years ago, we knew we had a consumption problem. But now we have double the population and our consumption has skyrocketed. Just one generation ago, if you bought a car, that was the car you had for the rest of your life. Today we change our cars like we change our tools — almost every five years.

And what about our homes? Remember when homes used to last? Families would keep them for generations. Same with the furniture and the finishes. I’ve seen homes where the tile on the floor is the same tile that was there 70 years ago. Not only did it last, but the homeowners never wanted to change it.

We need to think about why we renovate, what choices we make for our homes and why.

Are you renovating to make your home more energy-efficient, watertight or healthy? Are you increasing its durability and longevity? Or are you just tired of the paint colour, or maybe the neighbours redid their kitchen and now you’re thinking yours needs an update, too?

I’m not saying don’t renovate, but what I am saying is do it smart. Work from the outside in. Before you start updating the kitchen and bathrooms, make sure you have a good roof and a strong building envelope that protects your home and saves you energy. Always hire someone who knows what they’re doing. Yes, it will cost more, but cheaper is always more expensive because you will have to do it again.

And choose materials that you won’t need to replace five years down the road. That’s why I’m a big fan of materials that last — things like quartz, composite wood, metal roofs, quality insulation, etc. And that’s why we make sure everything is installed properly. Because you can have the best materials, but if they are not installed properly they are going in the garbage, and so is your money.

Protecting the environment benefits all of us — every single person on this beautiful planet. The bottom line is that we need natural resources to survive. So let’s be smart and use them responsibly and protect them. We all have a role to play here, and let’s make it right.

Source: National Post

Watch Mike Holmes on Holmes Makes It Right on HGTV. For more information visit makeitright.ca.

Cheap but crucial curb appeal fixes

Curb Appeal Can Curb Buyer Enthusiasm

Source: Real Estate Professional

Jazzing up the exterior of the home will set high buyer expectations – before they even set foot inside. And many of the fixes outside the home represent some of the highest return on investment of all renovations. To boot, they’re oftentimes the cheapest. Here are four easy – and inexpensive – outdoor renos.

1 – Doors
Doors are one of the first things a buyer notices about a house. Changing the front door can change the entire look of the home. Add a door with square feet of glass for a light and airy look; or try a steel door for better security. Plus, lots of doors are customizable, making it easy to set your client’s property apart from others up for sale on the same block.

2 – Gates and Fences
Just as there are several different types of doors, there are a slew of different styled fences and gates that your clients can choose from. And, like doors, these fences can be used to compliment the style of the home. A quaint property might benefit from a traditional picket fence, while a large stone house might be completed with a wrought iron gate.

3 – Front Yard
Nothing’s changed here: Simple landscaping maintenance continues to go a long way to enhancing curb appeal. Suggest your clients lay new sod, if necessary, or add colourful plants to a flowerbed. Lawns will need to be mowed as often as twice a week while the property is listed, and weeds pulled. In the wintertime, ensuring walkways are plowed and salted are also a must.

4 – Back Yard
Canada’s brief summers put outdoor living spaces on almost any buyer’s wish list. There are several ways your clients can play up the house’s backyard space. Again, ensure the lawn and flower beds are well-groomed. If the property has a pool, have your clients clean it of any debris before showings. Staging an outdoor space is increasingly a good investment. That exercise extends to adding a patio set and a barbecue and laying deck tiles. Show buyers what their summers can be like if they’re lucky enough to win this house.

Bidding war homebuyer beware: Appraisers may not be as eager

Hamilton's real estate market remains hot in August.

Appraisals come in lower than buyers’ offers in Hamilton’s hot housing market

By Kelly Bennett, CBC News Posted: Aug 24, 2014 6:00 AM ET Last Updated: Aug 24, 2014 6:00 AM ET

Competitive homebuyers in Hamilton’s hot housing market are often facing a critical disagreement as they try to buy a house – the property appraiser doesn’t share their opinion about how much the house is worth.

And that can leave homebuyers without the financing they need to close the deal.

The tension, between eager buyers and sellers and often conservative appraisers and bankers, is arising more in the hot market, local real estate experts said. ​

Lately, some homes for sale have been attracting “five, six, seven” offers, said veteran local appraiser Bob Schinkel, who owns Schinkel Appraisals, a local firm. The winners may be blinded by their victory.

“There’s a good chance that they’re so excited about getting the house that they’re willing to pay more than market value,” he said.

‘Things like this can set a crux in the deal’

The appraisal is typically the most the mortgage bank will allow a buyer to borrow on the house. If they couldn’t pay their bills tomorrow, and the bank had to foreclose, the bank wants to know it could sell the house to cover the debt.

So when the appraisal comes in under what the buyers have agreed to pay, they may have to scrounge up thousands of dollars more for their down payment, or back out of the deal entirely.

Here’s, roughly, how it works. For the sake of round numbers, say a house is on the market for $200,000. A buyer finds out she has approval from the bank to get a mortgage for $160,000, so she offers $200,000 on the house, planning to pay a $40,000 down payment.

But before agreeing to the deal, the bank hires an appraiser to go take a look at the property, to analyze the house and to compare it to other houses in the same neighbourhood of similar size and quality. The appraiser’s report goes back to the bank, along with a price he thinks it’s worth. If that price is less than the $160,000, the bank will most likely only grant a mortgage for that amount, even though the buyer was approved to borrow more.

“They’re hoping to get 80 percent financing but the bank will only lend on the lower of the two, the purchase price or the appraisal,” said Bill Boros, a residential appraiser at Pocrnic Realty Advisors.

The roadblock is popping up more in an escalating market, said Suzanne Boyce, a local mortgage broker who owns the Personal Mortgage Group.

She said it’s important for buyers to make sure they’ve completed their full application for a mortgage before making an offer, not just submitted initial pre-approval paperwork.

“It’s something that the public should know about when they’re purchasing,” she said. “Things like this can set a crux in the deal.”

Sometimes buyers try to increase their competitiveness by making their offer “firm.” But if they’ve gone into the offer without making it conditional on their loan coming through, they could be in trouble – facing a “lawsuit or loss of their deposit or both,” Schinkel said.

‘You always feel that pressure’

The situation underscores a few characteristics of Hamilton’s housing market.

There aren’t a lot of homes on the market, and the low supply increases demand. More homes sold in July than any July for the last 10 years, according to the Realtors Association of Hamilton and Burlington. But the inventory of homes for sale at the end of the month was 8.4 percent lower than the same month last year.

The fever inspires some homebuyers to seek out charming homes, sometimes fixer-uppers, in previously less popular neighborhoods. But appraisers may not be able to find supporting sales of similar diamonds in the rough nearby to support their estimate of the home’s worth.

The market is seeing an influx of buyers from elsewhere, like Toronto, who are surprised to see such “low” prices compared to their previous cities and may not balk as prices rise in a bidding war.

Realtor April Almeida with City Brokerage had an experience recently where an appraisal came in several thousand dollars lower than a client’s offer.

“They can walk away or they have to basically come up with the difference,” Almeida said.

Almeida’s client ended up switching to a mortgage broker instead of taking a loan from the client’s bank. But Almeida said the hiccup was frustrating.

“We’re seeing more of it here, and it’s making me nervous that [appraisers are] trying to quash this market,” she said. “Or are they giving into this perception of this bubble thing.”

The client ended up switching banks and finding a new loan through a mortgage broker.

Boros said appraisers know their estimates may disappoint some people, but he said his duty is to the lender, not to the buyer.

“You always feel that pressure,” he said. “People are trying to buy a house. It’s a matter of explaining to them: We have to base it on the market.”

The danger in dropping a home inspection…

Most sale agreements in Ontario include a clause that has the seller guarantee that, to the best of their knowledge, there is not and never was any UFFI in the home.

In its reminder, RECO says listing agents must explain the implications of this clause. Namely, sellers must only agree to the warranty based on what they know. For instance, a seller must disclose that UFFI once existed in the home, but was removed.

Also, agents must ensure that the home inspection matches what the seller describes in the warranty.

The reminder comes as a growing number of buyers are expressing a willingness to forgo the home inspection clause when confronted with a multiple-bid situation.

In the case of UFFI disclosure, it is important to note that this warranty extends beyond the transaction’s close. Both the seller and the agent could face litigation if the warranty turned out to be false.

The best way to protect your seller clients is to educate them regarding the implications of a UFFI warranty. Those agents representing buyers, on the other hand, would be wise to insist that a full inspection is completed, particularly for homes built before 1980.

Has your home been fraudulently overpriced?

Eight years ago, back when Laura Kemp began her career as an appraiser, her father-in-law, also in the business, shared one of his weirdest home visits.

The bank once sent him to check out a bungalow on a 20-acre lot outside Winnipeg, requiring a full appraisal before it would release the funds for a mortgage. But when he arrived there after hours of driving, he was in for a surprise.

Indeed, there are all kinds of ways unethical home buyers and sellers dupe their way into a bigger mortgage or better selling price. Whether driven by greed, desperation or opportunity, fraudsters have been caught doing everything from inflating salaries on mortgage applications to posing as a legitimate property owner, taking out numerous mortgages and fleeing with the cash while the real owner is left picking up the pieces.

Yet there’s another real estate scam that tends to fly under the radar, but can still have serious ramifications: mortgage valuation fraud.

Also known as appraisal fraud, it’s used to artificially and deliberately raise a property’s value by having it appraised above its market value. In some cases, an appraiser is in on the con, but more often their report is tampered with after the fact, without the appraiser’s knowledge. Sellers are either trying to convince buyers the house is worth more than it is or the buyer is fudging numbers to make it appear the home is a great deal, thus less risky for the lender.

Value fraud tends to be easier to pull off in hot markets when house prices are skyrocketing, and an unexpectedly hefty price tag seems genuine. What’s more, buyers who are worried they will be outbid on their dream home – again – might be loathe to ask for independent appraisal reports, even if they have a niggling feeling the current appraised price seems unnaturally high.

“If I’m in an overheated market and want to make a deal, that’s a situation where fraud is more likely to happen,” maintains Keith Lancastle, chief executive officer of the Appraisal Institute of Canada in Ottawa.

While there are no hard numbers and national statistics tracking how prevalent this particular type of fraud is in Canada, back in 2012, Equifax, the consumer credit company, released a report stating that two-thirds of all fraud uncovered that year was real estate related, at $400-million.

That might just scratch the surface of Canada’s $1-trillion-plus mortgage industry (and again, it reflects only illegal dealings that came to light), but the problem may have gotten the lenders’ collective attention. Ms. Kemp says many of the big banks and credit unions have put new guidelines in place to eradicate bogus reports.

Want to show your appraisal to the Bank of Nova Scotia or Toronto-Dominion Bank when applying for a mortgage? Sorry. It’s got to come directly from the appraiser’s e-mail account now.

“Obviously they’ve seen enough cases of appraisals being altered to put that new rule in place,” she says.

Raymond Leclair, vice-president, public affairs at Lawyers’ Professional Indemnity Company (LAWPRO) in Toronto, with 25 years as a real-estate lawyer, says fraud goes underreported, partly because financial institutions consider the risk part of doing business.

“They’d rather lick their wounds until it gets out of hand,” he says.

Unfortunately, the cost increases as organized fraudsters turn to house “flipping” to falsify home values and make big money. They buy a cheap home in a good neighbourhood for, say, $200,000, turn around and sell it to a buddy for $250,000, who then sells it again to someone else on the take for $300,000. Eventually, the house gets unloaded on legitimate buyers for an inflated price and they have no idea they have just overpaid.

No one wants to be that person, so it’s not a bad idea for potential buyers to get their own full appraisal, which includes a three-year sales history.

“If you saw bump, bump, bump on the subject property, that would certainly raise a red flag,” Mr. Landcastle says.

WHAT TO LOOK OUT FOR

While most appraisals are requested by banks and lenders, about 10 per cent are requests from individual buyers, says Laura Kemp, owner of Winnipeg-based Kemp Appraisal Ltd.

Experts advise potential buyers, especially those participating in private sales, to stay sharp and cast an eagle eye over details to help protect them from mortgage value fraud.

Quantity counts

You’ve fallen in love with a house back-split in a child-friendly neighbourhood and the private sale is going ahead just fine and the seller gives you the one-page report. Wrong. “That’s not an appraisal report,” Ms. Kemp says, explaining it should be about 10 pages long. “Why haven’t they given you the entire report? Ask for the whole thing.” And don’t forget to look for the appraiser’s signature.

Best before date

Appraisal reports are only relevant for so long. A neighbourhood or whole city’s real estate landscape can change quickly (such as Calgary recently) and that old appraisal might be out of date. The general rule? If it’s more than 90 days old, it’s time for a new appraisal. That is usually the lenders’ rule, too.

A trifecta of trickery

When reading an appraisal report, look at the effective date – and the appraised value – wherever they appear, usually at least three times in a report. Ms. Kemp says that fraudsters might forget to fudge the numbers and dates all the way through the document. “They change one, but are not smart enough to see it’s there more than once.”

Know whom you’re dealing with

Cases across the country these past few years have revealed criminal rings engaging in mortgage fraud schemes, which included lawyers, bank employees and mortgage brokers. Get references from friends and family for real-estate professionals. “You always have to ask yourself, ‘Okay, who stands to benefit from this transaction going through?’” Mr. Landcastle explains. “Will they cross that legal or moral line to make it happen?”