Once you've completed your consumer home inspection, analyze your findings to identify the positive and negative features of the home. Then decide how to fit them into your analysis. Pay special attention to the quality of the home's construction, the level of maintenance, the quality of individual parts, replacement cycles and any remodeling or other improvements that have been made.
Consider whether a home is especially wellbuilt and decide which factors are most important to you. If a home has been well-maintained, it can command a price much higher than the same home with fair to poor maintenance. On the other hand, homes with poor maintenance can be bought at favorable prices.
The quality of individual parts of a home is also important and may not be what you expect. For example, a big, old home with modest construction features might have a high quality remodeled kitchen or a home with original casement windows may have upgraded to new, insulated glass replacement windows.
A sound home will last indefinitely, but its integral parts will need replacing on fairly regular cycles. You should know the replacement cycles for these parts and be able to recognize where they are in their estimated life cycle. Hot water heaters, for example, normally last about eight to 12 years. If you're looking at a 10-year-old home with the original hot water heater, the unit probably will need to be replaced soon. For a list of replacement cycles, turn to the Schedule of Normal Life exhibit in this handbook.
It's important for you to be aware of any remodeling or improvements because the value they add to a home can be significant. In your final analysis, be sure to consider to take note of any additions, an enclosed porch, a finished basement, added bathrooms or a remodeled kitchen.
Costs of Remodelling, Renovation & Repair
As a prospective homebuyer, it's difficult to be an expert in construction and maintenance costs but a working knowledge of these areas can be valuable. You will most likely need information in the following areas
- Cost of planned remodeling and renovation
- Maintenance costs
- Value of remodeling and renovation work already done
- Cost comparisons of various materials
Value of Work Already Completed
When you inspect a home, your ability to detect and price previous remodeling can be valuable. If a home in a standard subdivision has been substantially remodeled, you should determine the approximate cost of the work and, the increased value of the property compared to other homes in the subdivision.
For example, suppose a home had a 300-square-foot addition built within the past five years. If you take the rule-of-thumb cost for additions of $100 per square foot, that addition may translate into a $30,000 improvement to the property. If the home is priced at $15,000 more than similar homes in the subdivision, you would be getting as much as $15,000 additional value by buying the home with the addition.
Consult with a real estate professional to determine whether the home has been over-improved for its neighborhood. If so, it may affect resale of the home.
Cost Comparison of Materials
When you compare one home to another, it's easier to tell the relative value if you know the cost of materials. Keep in mind the following relationships when comparing material costs
- A slate roof costs about five to six times as much as an asphalt shingle roof.
- The cost of masonry or brick facing is about three times as much as the cost of wood, vinyl or aluminum.
- The cost of hardwood flooring is about twice that of carpeting laid over plywood
- An insulated glass window costs about twice as much as a window with single glass.
- The cost per square foot for plaster walls is about two or three times as much as the cost of drywall.
Estimating Maintenance Costs
If a home has been neglected, it's helpful to know the maintenance costs, such as repainting, installing gutters and downspouts, sanding and finishing floors, window repair and minor carpentry. If you can estimate how much it will cost to restore the home to prime condition, you can better judge whether the home is priced properly.
As the homeowner, you will be paying for maintenance. You can estimate the maintenance expenses and replacement costs for a property by using theMaintenance and Replacement Costs Estimator.
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