Consumer Tips - Housing

Experts say that most consumers spend more time on a visit to the grocery store than they do inspecting the biggest purchase of their lives - their home.

The best way to shop for a new home is to prepare a "must have" list. It is recommended that you spend a lot of time inspecting all the aspects of any home that you're serious about buying. When you have complaints about real estate agents, contact your provincial or territorial consumer affairs office or real estate association or commission.

Figure out what you can afford, based on a mortgage payment of up to 30 percent of your income. Talk to your regular bank, then compare mortgage rates, terms and conditions at a number of financial institutions. They vary widely. You can get a good idea of current prices in the newspaper. Decide which residential areas you want to consider and check the local prices.

Unless you're in a building trade, you won't necessarily see the faults in a home you're considering. Find a competent home inspector. Ask friends and neighbours for references. Be prepared to follow the advice the home inspector offers. He or she should always provide a written report. Keep in mind that home inspectors are not regulated and they are not liable for giving you incorrect information. To find an inspector, you can contact the Canadian Association of Home and Property Inspectors.

For more information on home buying, please see the Buying a Home section of the Canadian Mortgage and Housing Corporation (CMHC) website.

New Homes

Talk to your local branch of the Home Builders Association for general information. Many home builders associations provide brochures and sample contracts to help consumers understand the market.

Provincial consumer and housing ministries and their websites are also helpful. For more information on buying a new home, you can consult the Homeowner's Manual produced by the Canadian Mortgage and Housing Corporation (CMHC).

Condominiums

You may be considering a condo, but if you've never lived in one, you should check into all the restrictions and rules before you buy. Ask to see a copy of the corporation by-laws; they may include very specific conditions, such as whether you may put in a garden or hang seasonal lights outside. Talk to people in the community. Find out about maintenance fees and how often they have increased. Check whether there is a reserve fund in place for repairs and maintenance of major items, such as roofs, driveways and parking lots. Just as you should do when purchasing a house, have a home inspection completed before purchasing a condominium as well.

See also the Canadian Mortgage and Housing Corporation's (CMHC) Condominium Buyers' Guide.

Home Renovations

Before you start, you should keep in mind that there is no such thing as a small, simple renovation project. The process takes time and effort. It's also messy.

However, the more planning and care that goes into the renovation in advance, the better your chances of having things turn out to your satisfaction.

• Understand your own abilities and the amount of time that you can spend on the project. This will help you decide what kind of professional help you should look for, ranging from an architect or general contractor, who will take charge of the project from beginning to end, to a one-person local construction company.
• Write a full, detailed list of the things that you want to achieve. If you change your mind part way through the project, the costs will change too.
• Check with your local building inspection department to find out which permits you'll need (this is not your contractor's responsibility unless that is spelled out in your contract) and with your insurance company to discuss any extra insurance requirements that will add to your final cost.
• Make a list of potential suppliers to interview. After you've followed the first two steps, talk to relatives, friends and neighbours to get recommendations, as well as local business associations.
• Some professional organizations such as architects and building associations keep a list of suppliers who specialize in renovation work.
• Check with your local Better Business Bureau or business association to see whether any complaints have been filed against any firm that you are thinking of hiring (Please refer to the directory at the end of this handbook).
• Contact at least six professionals by telephone to find a minimum of three to interview.
• Ask for references and check that they are valid.

Interviews are a two-way conversation. The supplier should ask you a lot of questions about what you want. You should be prepared to ask the supplier about similar projects he or she has handled, the time required for the job, whether there will be subcontractors involved, what the stages of progress will be, and the requirements of permits.

You should never be given a quote at the interview. Ask the supplier to send you a written estimate of all costs, including labour and any extra charges.

Review all the quotes carefully. They should outline your project and provide at least a partial cost breakdown.

Once you've decided on a supplier and you're satisfied with the details in the contract, sign it. Never allow work to proceed until you have fully reviewed, understood, agreed to and signed the contract.

The contract should include the following information:

• the type and amount of work to be done;
• any extras;
• who is to complete the work (including a list of any subcontractors and who is responsible for their payment and when);
• the total cost;
• the start date and date of completion;
• who is responsible for clean-up afterwards; and
• the name and address of the supplier and your name and address.

On major projects, attach a list of the sections of work to be done and their completion dates to the contract. A payment schedule should also be part of the contract.

Keep payments down to a minimum and check on construction liens legislation in your area. The law may require you to hold back a percentage of the payment until the date when the major work is finished (what's known as the substantial completion date). You'll be asked to sign a completion certificate. Don't sign it until the work is finished and you're satisfied with it. If a contractor asks for a deposit he or she may require a provincial licence. Check with your consumer affairs office.

For more information on what to do when hiring a contractor visit the Get It In Writing website.

Door-to-door Home Repairs

Sometimes salespeople come to your door offering a deal on roofing, driveway resurfacing, or furnace inspection or repair, because "we just happen to be in your neighbourhood." Usually they insist that the contract must be signed immediately to get the "special" price.

This is a high-pressure sales tactic. Don't fall for it. If you were thinking of having the work done anyway, you should ask the salesperson for local references. Obtain quotes from other suppliers as well.

Although the majority of sellers are honest, some are not. The seller may ask for a deposit, then never return to do the work. Or the work he or she provides is substandard. Unless you have personal references, you won't know what you're really buying until your money is gone (please also see the section on door-to-door sales).

When you sign a contract in your home, the contractor may be required to be licensed and bonded, and there may be a cooling off period, during which you may cancel the contract for any reason.

For more information, contact your provincial or territorial consumer affairs office.