How to Hire a Contractor

This will be a touchy subject for people who’ve ever hired a nightmare contractor (if this is you and you’re reading this I apologize for not positing earlier). As a REALTOR® in Vancouver, I have seen more than my share of renovation projects gone terribly wrong. Here are a few simple suggestions to help make your renovation project go smoothly.

Create plans and sketches first:
Write down as much as you can before even meeting with contractors to be better prepared for contractor interviews and questions. You can modify requirements after meeting and selecting a contractor but this at least gives a starting point for discussions.

Get references:
Try to speak with and, better yet, meet some of the people who’ve had work done by the contractors in question. If possible, visit one of the contractor’s current project sites to see how he/she carries out the work.  Also, one person’s idea of quality workmanship can vary greatly so do your due diligence with all references. Relatives of the contractor don’t count as quality references!

Get multiple quotes:
This may seem obvious but you have nothing to lose by meeting and discussing the project with several contractors. A little extra time spent before the project gets underway will pay dividends later in the project. You may be alarmed by the variation in quotes you receive. Don’t be surprised if some contractors don’t even bother calling you or submitting a written quote.

Always meet the contractor face to face at least once before the project starts:
This may seem obvious but I know of people who have hired contractors after just a short phone conversation. Remember this person and their employees are going to be spending time in your home. This is your chance to make sure you can tolerate each other before any work starts.

Get it in writing:
Having a good rapport is great but getting all details of the work to be done in writing is even better. You have nothing to lose as a property owner by documenting and agreeing on the terms of work to be done. Run the other way if a contractor refuses or claims to be too busy to submit a written quote.

Agree to a payment schedule:
This is very important and will protect the property owner somewhat. If things aren’t going well and/or you are dissatisfied with the work being performed you can stop the work before further damage occurs. I suggest payments of 10% at the outset and then three payments of 30% as the work progresses and milestones are reached. Be wary of a contractor that wants a large payment up front. Another advantage of spreading payments is motivating the contractor to finish the project in a timely fashion – a frequent complaint about contractors.

I welcome any questions you may have about selling or buying.
Feel free to comment here or contact me directly.

More Info:
Get it in writing! – Canadian Home Builders’ Association

BC New Home Warranty – How protected are you?

Just like any warranty, a new home warranty policy should be closely scrutinized before finalizing a property purchase. Always bear in mind that warranty companies are not in business to payout large sums of money if they have any way of avoiding doing so. Also, do as much research on the builder (not just the developer as this is often a separate company) as possible and research previous projects they have built.

What is it and how does it protect me?
A new home warranty policy provides for deficiencies in construction. If problems are discovered and not addressed by the builder then a claim can be made with the warranty company to remedy the deficiencies.

What is covered and what is the minimum coverage term required by law in BC?
Coverage varies depending on whether or not the property is strata or a detached home. All builders in BC must be licensed by the Homeowner Protection Office (HPO) and must provide at least a 2-5-10 new home warranty. A typical 2-5-10 example:

2 Years – Materials and Labour Defects
5 Years – Building Envelope Defects (including water penetration)
10 Years – Structural Defects

Does the fact that a builder is registered and therefore able to offer me a new home warranty ensure a high build quality?
No. Do your own due diligence and check out the builder’s history. How long have they been building? Any problem projects they’ve been involved in? It will often be much easier to choose a high quality builder at the outset then to try to collect on a home warranty policy after the property is complete.

Are there any limits on claim amounts?
Yes, the limits are as follows:

Fee simple (primarily detached dwelling units):
• The lesser of the first owner’s purchase price or $200,000.

Strata homes:
• Strata unit: lesser of the first owner’s purchase price or $100,000.
• Common property: the lesser of $100,000 times the number of dwelling units in the building or $2.5 million per building.

Is it transferable?
Yes. The warranty is tied to the property and will transfer to subsequent owners based on the initial policy commencement date.

I welcome any questions you may have about selling or buying.
Feel free to comment or contact me directly.

More Info:
New Home Warranty Brochure from the HPO

“I Have an Accepted Offer on a Property – Can I Skip the Home Inspection?”

Are you a gambler by nature? Making the choice to not have an inspection done on your next potential home purchase could end up being a very costly mistake. Even newer properties can benefit from a full inspection for peace of mind. There are several reasons why ordering a home inspection makes sense:

  1. The inspection cost (usually between $400-$600) represents only a very small percentage of the purchase price yet can save you thousands or even tens of thousands in future repair costs.
  2. Home inspectors are now regulated and must be licensed in BC and can advise you on the positives and negatives of a particular property.
  3. Home inspectors are a neutral party and can give you unbiased advice on the condition of your potential home purchase.
  4. All reputable home inspectors will generate a full report for your review after completing the inspection.
  5. In certain situations your REALTOR® may be able to negotiate price reductions on your behalf following an inspection.

The inspection itself will usually take between 2-4 hours. I recommend that the buyers meet the inspector at the property as he/she is finishing so that they can do the walk-through with the inspector as he/she points out deficiencies, etc.

I welcome any questions you may have about selling or buying.
Feel free to comment or contact me directly.

Further Information:
Canadian Association of Home & Property Inspectors (BC)
BC Institute of Property Inspectors (BCIPI)

Top 7 Home Inspection Red Flags for Buyers

A home inspection performed by a licensed home inspector (not your uncle’s brother-in law even though he may have worked as a plumber’s helper in Saskatoon in the summer of 1983) should be a part of the due diligence for every property purchase.  All sorts of interesting tidbits may come out of a thorough home inspection. Certain items can be more costly to remedy to others. A red flag list should include:

  • Health and safety concerns: mould, faulty construction, etc.
  • Roof replacement – one of the most costly home maintenance items
  • Heating/Cooling system problems – these systems, especially furnaces can be costly to repair/replace
  • Foundation issues – cracking, settlement, etc.
  • Moisture/drainage issues
  • Electrical/wiring issues
  • Plumbing problemshome-inspection-house

Other problems may show up on a home inspection report that should all be carefully considered when deciding whether or not to proceed with a purchase. Certain problems may necessitate further investigation by other specialists as home inspectors tend to be generalists.

A home inspection in the Lower Mainland usually starts from around $400.00. This cost is infinitesimal relative to property costs in our area and is money well spent.

I’d love to hear in the comments below if anyone has had particularly interesting home inspection results.

7 Biggest Property Seller Mistakes

Pricing your property too high: Just because the house up the block recently sold for a hefty sum does not necessarily mean your home is worth as much. That new roof and furnace are tangible improvements and do add $20K to the market value. Not being realistic about this can cost you time and money. Buyers may place your property on a backup list rather than a ‘hot list’ of homes to view and worse, they may buy one of the initial homes they visit without ever setting foot in yours.

Not having a CMA created: A Comparative Market Assessment is a survey of recently sold and active listings in your area. The CMA report compares your property to these sold and active listings and forms a basis for predicting a realistic asking price for your home. Other useful data contained in the CMA include: days on market, asking price vs. actual selling price, and other important property comparison details.

Not preparing your property: You want your property to be seen in the best possible light from Day 1. Make sure to clear out the clutter, keep things tidy during showings/open houses, make necessary repairs and do the routine maintenance before your home hits the open market. The items you don’t repair will become apparent during the buyer’s home inspection process anyway so why not get them attended to now.

Doing over-the-top renovations: This can often have unintended consequences as many buyers prefer simple styles and are not willing to stray too far outside the lines. Even if they can be convinced to purchase a home with unconventional upgrades, getting them to pay an amount anywhere close to what they cost to have installed is another story entirely. So think twice before installing that sauna and jacuzzi in the spare bedroom.

Making it difficult to view your home: This ties in with overpricing in that buyers may be busy making offers and buying comparable homes instead of buying yours if they can’t make an appointment on reasonable notice to view it. Giving easy access to buyers will go a long way to ensuring a quick sale and will show buyers that you are serious about selling. So yes, you may have to schedule Poker Night elsewhere while your property is being marketed.

Being too emotionally attached to the property: Don’t be offended if the first offer you see is substantially lower than your asking price. There will always be bottom feeders in the market and these initial buyers may ultimately purchase your home. Once you decide to sell, the property is no longer your ‘home’ but instead simply an asset you need to part with. This may be one of the most difficult things for sellers as people have a tendency to get attached especially if they’ve owned a home for a long period of time.

Not using a REALTOR®: For the vast majority of people, marketing their home without a REALTOR® is not a realistic option. The factors working against you include: substantial time investment required, not being able to maintain an arm’s length relationship with potential buyers, having to be available to show the property at all times, and not having access to the MLS® system. Unless you have no job and no life you will likely find this more work than you are willing to undertake.

I welcome any questions you may have about selling or buying.

Feel free to comment or contact me directly.