Mike Holmes fills us in on the 5 questions you should be asking your real estate agent when you're looking to buy a house.
1 How old is the house?
More than anything else, the age of the house will tell you what to expect. The rule is pretty predictable: the older the house, the more likely it will need major repairs and renos. But don't assume that all newer homes are problem-free. When a house (or a renovation) gets to be twenty or thirty years old, lots of things start breaking down. But some new homes are not so much built as slammed together, and can hide all kinds of problems just waiting to appear.
2 How long has the vendor owned the house?
This is a really important question. Very brief ownership (anything less than a year), and you might be looking at a "flip." That's when someone buys a house, fixes it up, and then resells, looking for a quick profit. There are good and bad flips, but far too often a flip is the worst kind of "lipstick and mascara" job, where they've made a lot of cosmetic changes and overlooked (or covered up) the mechanical and structural issues.
3 What's the sales and renovation history of this house?
Your agent will be able to produce for you a list of recent sales activity on the house you're looking at. You'll want this for a couple of reasons: For one thing, it will tell you if the house has been bought and sold a lot. Lots of sales activity might be a sign of big problems with the house -- as each new buyer discovers he's been taken for a ride, he decides to get off that merry-go-round by selling the house and all its headaches to someone else. On the more positive side, a list of recent sales can help you determine if the asking price is fair. You'll be able to see how much the previous owner paid for the house and when, and your agent can find out (from the vendor's agent) what changes or improvements have been made since that time. Fair market value is not simple arithmetic, though: it also takes into account the natural rise in land and housing prices, especially in hot real estate markets.
From The Holmes Inspection: Everything You Need to Know Before You Buy or Sell Your Home. Published by HarperCollins Publishers Ltd. copyright © 2008 by Mike Holmes. All rights reserved. Reprinted by permission of HarperCollins Publishers Ltd.
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