Deciding Between a New or Existing Home

When trying to decide whether to buy an older home or a newly constructed one, many questions come to mind. Start by educating yourself and knowing the pros and cons of each.

Real estate agents don’t like to call a house a “used” house. It makes it sound too much like a used car, doesn’t it? But when you’re buying a home you only have two choices: new or used. Real estate agents prefer to call a used home an “existing home” which sounds a lot nicer!

If you’re deciding between buying a new home and buying one that someone else has owned, you need to consider several issues.

In most cases, existing homes have a touch of character with their own charm and details. They are usually located in more established neighbourhoods with mature trees and desirable landscaping, and may be closer to city services such as schools, libraries, hospitals, shopping centres and public transportation.

Older homes may have better quality materials and workmanship that are too costly for newer homes, and may come with window coverings and appliances which are often included with the home. If you are lucky, you may still get an updated kitchen and bathrooms if the home has been renovated.

However, existing homes are generally less energy efficient and are typically more costly to heat and cool. They may need updating and require expensive repairs, and sometimes it may be difficult to find or match older building materials.

Newer homes usually have bigger rooms, more built in wardrobes and closets, and more bathrooms. If you are building a new home you can also influence the layout and the finishes within the home as part of the negotiations with the builder or developer.

Whereas with an existing home you will inherit what the previous owner built or remodelled over time. Very rarely will an existing home be built and finished exactly to your liking. Think about how much renovating you’ll need to do to an existing home. If you can buy an existing home that’s been totally renovated in a great neighbourhood within a good school district this might be a better choice than moving into a newer neighbourhood with an unestablished school district.

On the other side, buying a newly-built home tends to cost more than an existing home, unless you buy outside of the city, where land is cheaper. Of course, you will have to consider the price of gas to get to your job.

And it isn’t just about getting to your job. You’ll also want to think about how long it will take to get to a grocery store, dry cleaners, your kids’ school, your house of worship and other places you get to by car.

While new homes are more expensive, they might also increase in value faster than an existing home. That said, it may be challenging to buy a new home in your neighbourhood of choice, unless you buy a lot, hire a developer and build your own home-which can get quite costly.

However, with new homes you get warranties and guarantees on appliances that come with the new home. Dangerous building materials, such as lead and asbestos, will likely not be a problem. A new home will meet modern safety and building codes and usually use building materials that offer improved insulation, thereby reducing your heating bill.

You may be able to upgrade or customize such features as floor coverings or paint colours and sometimes the floor plan. New homes often have more closet and storage space and most importantly don’t require as much maintenance.

New homes though have their own disadvantages. Higher taxes could be required to bring water, gas or electrical services to a still under-populated area. Resale could be difficult if the entire neighbourhood is not yet complete, and you may have to cope with construction noise, dust and mud. New neighbourhoods frequently lack the relaxing appearance of mature trees, and your new subdivision may require costly landscaping.

You can make the case for and against buying either a new home or a “used” home. It’s great to live in a brand new home, but there’s nothing like the feel of an established neighbourhood. The bottom line is price: it depends on what you want to spend, where you want to live, and what kinds of amenities you’ll want to have.

© 2010 Canada Realty News™ 

Tips for Securing Your Basement Windows

Basement windows present a significant security vulnerability for many homes. Although the basement itself may not hold anything of value, often doors or windows leading to the basement are not as well protected as other entry points to the home, and therefore, burglars see it as easy access to the rest of your home.

Here are a few quick tips to guide you through improving the security of your basement windows.

Use good outside lighting
Make sure your basement windows are always well-lit during the evenings and at night. A dark place is always more likely to be broken into.

Keep basement windows visible from the outside
A basement window that is concealed by plants or shrubs is attractive to burglars because it provides them a cover under which they can easily operate.

Install security bars and good locks
Heavy security bars made of iron or steel offer sufficient protection against intruders. However, you must install these bars in such a way that firefighters can still use the window as an exit point, in case of an emergency. Most of these bars can be manipulated from the inside so that the window can provide an escape route.

Use a reliable set of locks and keys for the basement windows, if they do not have secure latches or other locking mechanisms. However, you must be able to open at least one window in the basement without the use of keys, in an emergency situation.

Advertise your home security system
A monitored home security system is one of the most effective ways of preventing break-ins. Make sure any passers-by can clearly see your home security stickers. Your basement windows must be secure and set up in alliance with the security system.

Use shatter-proof glass
To improve the security of your basement windows, it can also be beneficial to have shatter-proof glass installed as a replacement for regular glass. Since basement windows are usually fairly small in size, installing shatter-proof glass can be relatively affordable. Unless you have experience in glass installation, it’s highly recommended that you hire a professional to upgrade the glass in your basement windows. Research professional glass installation services in your area, and choose a highly rated service provider that has positive customer reviews.

Block the view into the basement
Use glass block for your windows, so that any outsider cannot peek in and see what is going on inside your basement. The intruder will not be able to tell if the basement is empty or occupied. Glass block is also extremely strong and difficult to shatter.

Plant tactical landscaping
To help limit access to your basement windows, you can also use tactical landscaping methods. Plant low, thorny bushes around your basement windows, making them difficult or nearly impossible for an intruder to access. If you are worried about the appearance of your home, you can use Hawthorne, Rosebushes or Barberry bushes to create a visually pleasing “barrier” around your basement window area. If you need to have access to your basement windows, you can also use thick, thorn-free shrubbery that still provides limited access.

The most effective home security strategies are those devised with your home’s particular layout and weaknesses in mind. Always remember to protect every potential entry into your home, not just the ones you use every day.

© 2010 Canada Realty News™

Seven Keys to High-Energy Living

Energy is a key luck factor. For you to be at the top of your form, to be action oriented, fast moving, and extremely productive, you have to have high levels of physical and mental energy.

For you to be able to take advantage of all the possibilities around you, and to have the continuous enthusiasm that keeps you and others motivated and moving ahead, you have to organize your life so that you feel terrific about yourself most of the time.

1. Eat the Right Foods
The first key to high energy is a proper diet. To perform at your best, you must eat the right foods, in the right balance, and in the right combination. Your diet has an inordinate impact on the amount of energy you have, how well you sleep, your levels of health and fitness, and your performance throughout the day and into the evening.

2. Watch your Weight
The second key to high energy is proper weight. Proper weight is essential for health, happiness, and long life. Being slightly under your ideal weight is best. As they say, you can never be too rich or too thin. If you are not happy with your current level of physical health, you need to set specific goals for yourself for the weeks and months ahead.

3. Exercise is Essential
The third key to high energy is proper exercise. The best activity for high energy and physical fitness is aerobic exercise. This type of exercise requires that you get your heart rate up into what is called the training zone three times per week. This training zone is about 120 to 160 beats per minute, depending on your age. You then keep it there for at least 20 minutes or more each session.

4. Get Lots of Rest and Recreation
The fourth key to high energy is proper rest. You need an average of seven to eight hours of sleep each night to be fully rested. You need to take off at least one full day each week during which you don’t work at all. You should take regular mini-holidays of two or three days each, every couple of months. You should take one and two week vacations each year when you relax completely and get your mind totally off your work.

5. Develop a Positive Mental Attitude
The sixth key to high energy is the elimination of negative emotions. This can be the most important thing you do to assure a long and happy life. Your ability to keep your mind on what you want and off of what you don’t want will determine your levels of health and happiness more than any other decision you make.

6. Start a Personal Mental Fitness Program
The seventh key to high energy is for you to go on a 21-daypositive mental attitude diet, one day at a time. Resolve that, for the next 21 day, you are going to keep your mind on what you want and keep it off the things you don’t want. You are going to think and talk positively and optimistically about your goals, other people, and everything that is going on in your life.

7. Become a Personal Powerhouse
The more you practice the health habits we have talked about, the more energy and vitality you will have. The more you keep your conversation focused on your goals and on the things you want, the greater the amount of strength and power you will feel. You will be more alert and aware. You will feel more positive and action oriented in every situation.

Action Exercise
Resolve to become intensely action oriented from now on; whenever you get a good idea or something needs to be done, move quickly.

By Brian Tracy

Five Steps to a Worry-Free Renovation or Addition

A Solid Foundation for your Renovation or Addition

Canadians love their homes. So much so that homeowners spend more than $40 billion each year repairing, improving, upgrading and expanding them. That’s slightly more than is spent annually on building new homes across the country!

When it comes to major renovations or additions, the stakes are particularly high – costs are substantial, projects can take months to complete, disruption to your daily routine is unavoidable, and the consequences of mistakes can be long-lasting.

Major renovations or additions are usually once-in-a-lifetime projects, and should receive the same care and attention as other family milestones, such as weddings. A dream wedding and a fantastic renovation are candidates for lengthy anticipation, careful planning and thoughtful execution.

To give homeowners confidence, to reduce risk, to minimize inconvenience, and to maximize the pleasure and added value that a well-conceived and executed project can add to your home, the GVHBA offers this guide to a successful renovation.

We are the voice of the residential construction industry in Greater Vancouver. Our members include not just new home builders, but renovation contractors, suppliers, lenders, subcontractors and others involved in all aspects of residential construction.

Our RENOMARK symbol identifies those renovation contractors who have agreed to the GVHBA code of ethics as well as a renovation specific code of conduct, who provide warranties, who understand the value of customer service during and following projects, and who are regularly exposed to information on current trends, the latest materials and new regulations.

We are confident in saying that the first place to start your renovation project is by hiring a RENOMARK renovator. The GVHBA wants you to live happily ever after with your renovation project!

Five Steps to a Worry-Free Renovation or Addition:

1. Carefully Plan Your Project

Some renovations and additions, such as converting a bungalow to a two-storey home, will require that you move out during construction. Others projects, such as an addition above an attached garage or a refurbished kitchen, may allow you to live with the building project – but there will be inconvenience and disruption that you’ll have to plan for.

Major projects may require the services of an architect and other professionals such as engineers and heating contractors. Their drawings are not only required to obtain building permits and other municipal approvals, but they provide the basis for your renovation contractor to price the project.

Be realistic about the time a project will take to get started and to complete; its full costs, including at least a 10 per cent contingency for changes and unexpected conditions; and the impact the project will have on the daily operation of your home and family activities.

If your project is likely to last more than a few weeks, it’s wise to discuss your project with neighbours. In addition to unavoidable noise and dirt, there will be vehicles parked on the street, disposal bins in the driveway, and plenty of truck deliveries. Most neighbours will be understanding and accommodating, especially if notified first.

Include a requirement for daily clean-up in your contract, so that your home, your street and nearby lawns don’t end up resembling a construction site. 

2. Select a RENOMARK Renovator

Look for a RENOMARK renovator as your assurance that you have hired a professional who will provide high quality services.

Ask about the renovator’s experience with projects similar to yours. We recommend that you get the names of homeowners who have had equivalent work done and ask them about their experience.

It’s wise to contact a renovator first. Many RENOMARK renovators have in-house design professionals or relationships with architects and others who specialize in designing residential renovation projects. If you engage a designer first, bring a renovator into the team as early as possible so that the experience and expertise of each party can benefit your project.

At this stage your design professional or your renovator should be able to provide rough sketches satisfactory to give you confidence to proceed or to refine your plans. A preliminary sketch and a general indication of the quality of materials and workmanship you seek (the “specifications”) will allow the renovator to give you a budget estimate and an indication of the time it will take to finalize design, obtain building permits or other approvals, and complete the project.

Your RENOMARK renovator will select and manage experienced trades people for specific elements, such as electricians, plumbers, painters, or those who apply drywall, brick or stucco.

3. Get a Written Contract

Once you are satisfied with a preliminary design, a preliminary budget and a realistic timetable, you are ready to commit to final drawings. When these are complete you are in a position to get an accurate estimate of the cost and to sign a contract with a renovator to perform the work.

If you decide to ask more than one renovator to submit bids, remember that this can be a time-consuming effort. The renovator has to be very precise in pricing materials according to the specifications… because he will be locked in to the price.

When you make your decision to hire a renovator, get it in writing. Include the precise scope of work; the exact price, including a schedule of payments; a reasonable timetable for completing the work; and any instructions for protecting parts of the house not under construction.

If there is any difference of opinion between your renovator and your design professional about procedures or materials, this is the time to resolve it. It is important to avoid any significant changes during construction because this may cause delays and extra cost.

Avoid renovators who offer to do work without a contract in an attempt to avoid payment of the HST. This type of renovator may also not be paying WorkSafeBC or carrying adequate insurance, leaving you at financial risk.

4. Check on Progress

Regular communication between you and your renovator may avoid problems.

During the course of a renovation or addition it is common for the homeowner to request changes or ask for additional work. These requests may affect the cost and time it takes to complete your project. It is important that you have a signed change order for all changes.

Make sure that you are aware of additional costs and that these changes are added to the contract. Better still, try to think of these things during the planning stage – you don’t want to be ordering additional flowers on the wedding day!

5. Discuss Your Concerns

Raise any concerns you may have without delay. Schedule meetings with your renovator when he or she can address your concerns without distraction.

Your renovator will discuss any concerns that you may have with the project or items that do not meet your expectations. But be flexible when minor changes occur that do not affect either the appearance or function of the job. Note any changes that are made as a result of such conferences, and do so in writing.

The Appraisal Institute of Canada regularly surveys its members to find out which renovation projects are most likely to result in “payback” when the house is sold.

In order, the following projects add value that may be recovered:

• renovating a kitchen
• upgrading the flooring
• adding a main floor family room
• renovating the basement  
• renovating a bathroom
• replacing windows or doors
• adding a fireplace
• upgrading the heating system.

Understand whether your project will increase the market value of your home or is just for your own pleasure and convenience.

Why Renovate?

There are many reasons to renovate beyond just increasing the convenience and comfort of your home; and many reasons to build additions beyond just creating more space. Many projects will make your home more attractive, safer, easier to maintain as well as more energy-efficient and less costly to operate.

Except for the most personal of aesthetic improvements, you may also add to the market value of your home.

 Be a member in good standing of the Greater Vancouver Home Builders’ Association (GVHBA).

  • Abide by the GVHBA Code Of Ethics 
  • Provide a detailed, written contract/scope of work for all jobs.
  • Offer a minimum two-year warranty on all work (excludes minor home repair).
  • Carry a minimum of $2 million liability insurance.
  • Have coverage for workplace safety and employers’ liability and/or work only with subcontractors who carry such coverage.
  • Carry applicable licenses and permits.
  • Maintain a professional level of knowledge of current building codes, permit procedures, and technical skills through continuing education.
  • Maintain a safe and organized worksite.
  • Return phone calls within two business days.

Find a RENOMARK
Renovator near you.

For a RENOMARK Renovator near you
call (604) 778-565-4288, email us or visit www.gvhba.org

Five Economies That Have Been Downgraded This Year

This has been a rough year on the road to recovery for the global economy. Abnormal weather has led to higher food prices, persistent demand has pushed up energy prices, the U.S. economy remains in a jobless malaise, the Arab and Mideast world has been rocked by citizen unrest, and Europe continues to struggle mightily with sovereign debt and fiscal policy issues.

With that backdrop, it is not surprising that there have been a spate of sovereign downgrades so far this year. While no country has yet defaulted, the risk is arguably as high as it can get without an actual default, and that has ramped up investor anxiety and borrowing costs.

For purposes of convenience for this analysis, only Standard & Poor’s ratings actions have been included.

1. A Rough Situation Made Worse in Japan
Japan started the year with sufficient problems just from its own economic situation. S&P downgraded Japan’s sovereign rating in January (the first time in nine years) largely on the basis of Japan’s huge debt, struggling economy, and decided lack of leadership in addressing either problem. While most of Japan’s debt is internally-owned, it is nevertheless a significant economic deadweight.
Matters got even worse in March in the wake of a massive earthquake and tsunami that devastated the Tohoku region and prompted a nuclear emergency. In the wake of this disaster, S&P lowered its credit outlook to negative in April (not the same as a downgrade).
Not only is Japan going to have to finance a massive rebuilding effort that will measure in the hundreds of billions of dollars, but this is on top of an already huge amount of debt; while much is made of the U.S. debt problem, Japan’s ratio of debt to GDP is the highest in the world and double that of Singapore (the next-highest country that could be reasonably viewed as “healthy”). Making matters worse are the long-term problems of weak consumer spending and an aging society that is generally opposed to immigration.

2. Ireland Battered by Its Banks
As a charter member of the infamous PIIGS group (Portugal, Italy, Ireland, Greece and Spain) of sovereign debt problem children, Ireland’s downgrade in February was not especially surprising. Ireland continues to struggle with unemployment, weaker exports and a broken banking system that the country has struggled to recapitalize. In point of fact, this recapitalization issue has turned into a bone of contention – representatives of the Irish government complained about the S&P downgrade at the time and stated their belief that the S&P’s estimates for how much capital the banks would need was too high.

3. Portugal Teeters at the Edge of Junk
With a downgrade in late March, Portugal’s sovereign rating now teeters just one notch above junk bond status. Portugal was the third country (after Greece and Ireland) in the Eurozone to get a bailout, and the situation here is a little different. True, Portugal did gorge on cheap debt and fiscal spending got out of hand, but Portugal’s growth had been holding up a little better before late 2010 to early 2011. Unfortunately, Portugal’s growth has trailed most of the EU in the past decade and these deficiencies have now caught up to the country and its credit rating. Making matters worse, there has been a lot of political and popular pushback against austerity measures and it is unclear whether the country’s citizens are willing to commit to the sort of long-term fiscal austerity that may be necessary to fix the company’s image in the debt markets.

4. Greece – the Granddaddy of the Sovereign Debt Crisis
Greece was really the straw that broke the sovereign debt market’s back, and conditions have really not improved. The austerity measures already taken by the Greek government have slowed the economy even more and made the situation worse in many respects. On top of that, the Greek people do not seem terribly inclined to suffer a prolonged decline in their standard of living so that bankers in France and Germany can come out ok on their debt holdings.
S&P ratings actions have left Greece with a sovereign rating of CCC and a negative outlook. That is the worst rating in all of the world; below the likes of Ecuador, Pakistan, Senegal and Uganda (Zimbabwe isn’t rated). Moreover, the general expectation now seems to be that default in Greece is a “when” and “how much” question as opposed to an “if” question.

5. The Arab Spring Comes At a Cost
Political turbulence is one of the biggest fears of foreign bond investors, and the Arab/Mideast world has provided that in spades. While it is hard to argue that the toppling of governments in Egypt and Tunisia was not morally right, the ongoing problems around the region have impacted the economies and the outlook for prompt repayment of debt. As a consequence, countries including Bahrain, Tunisia and Libya have all seen S&P cut their ratings from A- all the way down to BB (junk territory) for Libya and close to junk for Bahrain and Tunisia.

The Bottom Line
Downgrades are not unusual and it is not surprising to some economies face these ratings actions in any given year. What is more unusual, though, is the regional concentration of these moves and the extent of the downgrades. All in all, it has made the sovereign debt world a riskier place and has led to real concerns about the durability of the global economy. With riots and squabbling still distressingly common in many countries, investors should expect a summer of volatility to continue on into the fall and beyond.

Stephen D. Simpson, CFA, July 4, 2011