Thursday, December 31, 2009

A topographic survey is essential if you are planning a large addition to your house

As I mentioned in a previous post, we were unable to obtain a Real Property Survey from the vendor when we bought our house. And, unfortunately, you cannot apply for a permit from the City of Ottawa for an addition to your house without having a survey. Furthermore, if the planned addition is larger than 500 square feet, then a topographic survey must be submitted with the permit application. In our case, we also required a topographic survey because our land slopes downwards at the back and we are toying with the idea of a walk-out basement or a series of terraced patios. In order for our architect to plan this, she needs a topographic survey to determine exactly what the elevations are.

Just before Christmas, we received the survey report from our surveyor. On the plus side, we now know that we have no property irregularities, and our architect can begin drafting up some conceptual ideas for the house. On the negative side, it cost $2625.00 to have the survey completed.

Now, you may well ask why didn't we just have the survey done as a condition of buying the house, and, thereby, save ourselves almost $400 in title insurance premiums. Well, the simple answer is timing. It took four weeks to have this survey completed, from the moment I contacted the firm, to the moment they delivered the report. There is no way the vendor would have settled for reciept of a survey as a condition of sale, given the trouble we had securing sufficient time from them to get financing in place. So, we had to pay for title insurance and then pay to have a survey done.

If you are interested in knowing what hoops you must jump through with the City in order to build an addition to your house, a pool, finish your basement, etc., the City of Ottawa has an informative Homeowner's guide for small projects, which outlines all the steps involved and a useful Residential Construction Checklist. It's good reading before you begin.

Tuesday, December 29, 2009

Real property surveys and title insurance

When we purchased the our new house in Ottawa, we were unable to obtain a Real Property Survey from the vendor. A real property survey is essential to ensure that there are no issues preventing us from having clear ownership of the property.

Now we know that the vendor must have had a survey done in the past, because they undertook extensive renovations in 1980, and they would have been required to submit a survey to the city in order to obtain their permits. However, we checked with the city and with the Ontario Land Registry Office and we could find nothing.

At the Ontario Land Registry Office, you can do a quick computer search of any property to see if a survey has been registered in the past. If one is registered, then for a small fee, you can obtain a print-out of the survey. However, apparently, while most surveys today are registered with the Land Registy Office, it was not necessarily common practice 30 years ago. Add to that the complications of Ottawa amalgamating with several surrounding communities a few years back and, well, let's just say things fall through the cracks. Either way, there was no survey on record for our property.

So, with no survey in hand, we followed our lawyers recommendation and purchased title insurance. Title insurance is an insurance policy that protects residential or commercial property owners and their lenders against losses related to the property’s title or ownership. It protects against a wide range of title related issues that could affect our ability to sell the property in the future, including unknown title defects, liens against the property, encroachment issues, title fraud, and errors in previous surveys or public documents.

Title insurance is pricey. Our one-time premium, plus lawyers fees and tax came to $378.10. Still, it's well worth the piece of mind.

Friday, December 18, 2009

Picking an architect for our renovation

Once we had settled on a neighbourhood in Ottawa in which we wanted to live, the next step was to find a house. In August 2009, we bought a bungalow on a pretty 56' X 119' lot. The house has good bones, but is just a little too small for our needs. Thus, we need to add more space, either by adding an addition on the back or front, or by adding a second story to the house. This is no small undertaking. There are a lot of structural changes that we are planning for the house. Therefore, we decided that it was best to use the services of an architect rather than hiring a design-build company or an Interior Designer to do the work.

The next step was to filter through the scores of architects in Ottawa to find one that was available, interested in our project, and able to provide a wide range of creative ideas to produce a design that is aesthetically pleasing, adaptable to the growing needs of our family, and affordable.

To tell you the truth, I had absolutely no idea where to start. Fortunately, though, the Ottawa Home Show just happened to be on at the beginning of October, and offered the perfect launch point into the world of designers, builders and architects. The home show had two things in particular going for it. First, a cornucopia of professionals to talk to, and second, pictures of all the finalists for this years Ottawa home building awards.

At the home show, I met a couple of architects as well as representatives from the Ontario Association of Architects (OAA), who were only too happy to describe the usual process for working with an architect as well as the different ways an architect can be compensated. One architect, Toon Dreessen, was especially helpful. He outlined a selection process that is essentially like a mini design competition. He suggested first interviewing six or so architects to find 3 or so who are interested in the project and who we thought we could get along with. Then he suggested that we offer to pay each a small fee to come up with some conceptual ideas for what they might do with the house. Finally, based on the submissions, we could either select the architect whose work we liked the best, or select a different architect who we thought we could get along with, but incorporate ideas that we liked from the other architects. In the end, we selected an architect who we really clicked with, so we did not pursue Dreessen's competition idea, but I thought it was a good one all the same.

But how to come up with that list of 6 or so architects? Dreessen suggested that we first narrow the list of architects by using the Ontario Association of Architects website to search for Architects in Ottawa with the experience and portfolio we like. Using the OAA site search function, we first narrowed the list down to 46 Ottawa Architects with websites. Then we looked at each website and selected only those Architects who do residential construction. This narrowed the list down to less than 20. Then we winnowed it down to seven architects who had portfolios with styles that we liked and who have been in business for several years - two who I had talked with at the Ottawa Home Show, four who were finalists in the home building awards, and one recommended by a friend.

I then contacted all architects on this list. One was too busy to take on any more work until after Christmas, one was located too far out of town, and five agreed to meet for an initial interview. After the interviews, one architect declined to submit a fee proposal, leaving four architects who we asked to submit a fee proposal and a list of references.

The reference checks are essential. The references can tell you a lot about what it is like to work with the architect in question. For instance, we were quite surprised when one reference said that while their house was beautiful, there really did not get along with their architect. Another said their project came in way over budget. In addition, references may have knowledge of other architects on your list, either because they have worked with the other architects in the past, they have friends who have worked with the other architects, or they interviewed the same architects during their search.

For the interview, most architects will come to your home for a free, 45-minute interview, although one that we interviewed would only conduct the interview in his office. Some architects may also charge a fee for the first interview, but it is rare.

So what questions should you ask during the interview? Our approach was to use the interviews to find out about what working with the architect would be like, how are their fees structured, who is on their team, who would we deal with in their firm, etc. We did not focus on getting creative ideas for the house from the interview. To do that, would have had to have spent more time discussing our needs, which would mean less time getting to know the architect.

Here is the list of questions we used for the interviews, which we got from the American Institute of Architects:

1. What does the architect see as important issues or considerations in your project?

2. What are the challenges of the project?

3. How will the architect approach your project?

4. How will the architect gather information about your needs, goals, etc.?

5. How will the architect establish priorities and make decisions?

6. Who from the architecture firm will you be dealing with directly? Is that the same person who will be designing the project? Who will be designing your project?

7. How interested is the architect in this project?

8. How busy is the architect?

9. What sets this architect apart from the rest?

10. How does the architect establish fees?

11. What would the architect expect the fee to be for this project?

12. What are the steps in the design process?

13. How does the architect organize the process?

14. What does the architect expect you to provide?

15. What is the architect's design philosophy?

16. What is the architect's experience/track record with cost estimating?

17. What will the architect show you along the way to explain the project? Will you see models, drawings, or computer animations?

18. If the scope of the project changes later in the project, will there be additional fees? How will these fees be justified?

19. What services does the architect provide during construction?

20. How disruptive will construction be? How long does the architect expect it to take to complete your project?

21. Does the architect have a list of past clients that you can contact?

We were hard pressed to get answers for all 21 questions during a 45-minute interview, but most of them were covered off either from directly asking the question, or indirectly based on what the architect volunteered.

The AIA site also has some great information on what an architect can do for you. If you have never worked with an architect before, I suggest you check out their site. There are explanations of the five phases of design, maximizing your relationship with the architect, how to identify what services you want from the architect, and how decisions with an architect are made. There are also videos of clients and architects talking about the process and their experiences working together and a publication called You and Your Architect, which summarizes the process of working with an architect.

At the end of the process we picked Linda Chapman to be our architect. She seemed easy to get along with, she is a proponent of the Not So big House concept, she's experienced - with over 26 years in the business - and she has done lots of green buildings, including straw bale houses and the Mountain Equipment Coop store in Ottawa, which is considered to be one of the greenest buildings in Canada.

If you have recently picked an architect, I'd love to hear about your experiences.

Tuesday, December 15, 2009

Free information to read before starting a renovation

There are no end to the books and magazines at the local book store on renovation and design. Unfortunately, just about all of them focus on how beautiful the house looks when the renovation is complete. Precious few deal with such mundane topics as how to hire a contractor, renovation contracts, air-leakage control, and so on.

Fortunately, there are a couple of government sites we found with great little booklets on just these topics.

The Canadian Housing and Mortgage Corporation offers a number of great booklets, including a "before you start..." series. These booklets outline a number of things you should know before you start renovating your basement, building a new addition, doing an energy-efficient retrofit,repairing your roof, replacing exterior walls, insulating your house, and many more. The pdf version can be downloaded directly from the site, or a free printed version can be ordered by calling the toll-free number.

Natural Resources Canada has a large portion of its website dedicated to residential improvements. The site has information on applying for grants and financial assistance, choosing appliances, picking heating, cooling and ventilation equipment, windows, doors and skylights, along with information on the Energystar program and the R-2000 building standard. There are tons of publications that can be ordered for free on topics such as controling air-leakage and improving window energy efficiency.

Both of these sites are great sites to check for free information before begining a renovation.

Sunday, December 13, 2009

Home Energy Audit

I was pleasantly surprised recently to find out that our new house is actually a lot more energy efficient than other houses of its age.

After an evaluation conducted by a home energy advisor, the house rates 69 points on the EnerGuide scale (a scale from 0 - 100, with 80-100 points being the most efficient category). The 69-point rating only puts the house in the mid-efficiency range, but when compared with other houses of its age, its quite good. The average energy efficiency rating for a house of this age in Ontario is 42, whereas the highest rating achieved by the most energy efficient houses in this category is 83.

With some relatively minor fixes of air leaks in the house, increasing the insulation in the attic, and changing to a high-efficiency furnace and a tankless hot water system, we can improve the energy efficiency rating of the house to 74, allowing us to save money on fuel bills, and reduce our GHG emissions by 1.5 Tonnes/year! Of course, we are planning some fairly major upgrades to the house, and sustainable living is a big theme of ours, so it will be really interesting to see what the EnerGuide rating is after the renovation.

The home energy audit program is sponsored by the Ontario Ministry of Energy and Natural Resources Canada. For about $300, a licensed home energy advisor will perform an audit on your house showing how the home uses energy and where it is being leaked. The audit identifies improvements you can make to your home's heating, cooling, hot water heating and other energy uses that could result in hundreds of dollars in energy savings each year.

The Government of Ontario will pay 50% of your Home Energy Audit, up to $150.

The audit will explain your home's energy use – attic to basement. A typical audit involves the following steps:
- A walk-through assessment of your home's insulation, heating and cooling systems and other energy uses
- A “blower door” depressurization test to identify leaks and drafts
- A personalized Energy Efficiency Evaluation Report

Many of the energy-saving upgrades identified by your Home Energy Audit will qualify you for rebates under the Home Energy Retrofit Program. These rebates from the Governments of Ontario and Canada can reimburse you up to $10,000 when you complete improvements identified by your audit. We have 18 months, or until March 31, 2011 to complete the improvements in order to qualify for the rebates.

To get started, go the the Ontario Ministry of Energy's website and search for a certified home evaluation company in your area. An appointment with a home energy advisor can usually be set up within two weeks. There is virtually nothing to loose by having it done, but just remember to do it before you start any renovations. Otherwise, you cannot claim the rebates.

Post Script: After publishing this post, I came across the - a site that tells how a local Ottawa home owner, Bill Eggertson, took his house built in 1985 and brought it up to 85 points on the EnerGuide scale. That's within the top 2% of all houses in Canada and even beyond the 80 point rating required for an R2000 home. In the future, the owner hopes to make the home completely energy neutral and carbon neutral by installing a photo-voltaic system on the roof and selling electricity back to the grid during periods when the power is not needed at home. It's a reminder that even older houses can be renovated up the highest energy efficiency standards. there is an article about Mr. Eggertson's home renovation journey in the December 12 issue of the Ottawa Citizen.

Friday, December 11, 2009

The not so big house

Having purchased a house in Ottawa to renovate, the next task was to come up with ideas for what we wanted to do with the place. We had already thought in very broad terms about adding more space, either by going up and adding a story, or going back with an addition. However, we needed to drill down into some of the details of what type of functionality we needed.

For inspiration, we turned to the usual array of renovation magazines that can be found at any local bookstore. However, two of the most useful books that we read were Sarah Susanka's The Not So Big House and Creating the Not So Big House (Susanka has published a suite of related books on not so big remodelling, design and even on how to live a not so big life).

Susanka's philosophy appealed to us. While we did not know what the house should look like, we knew we wanted to stay within the character of the neighbourhood, which is dominated by 1950's era 1 1/2 story victory houses. Some of these homes have since had a second story added on, and many have had additions built on the back or the side. However, the neighbourhood's character is one of smaller houses with larger setbacks on streets where large mature oak trees provide the initial visual impression, and not rows of starter castles. Thus, rather than build a new McMansion on the site, we opted to build something smaller, more tasteful and with better space utilization. Susanka argues strongly that it is better to try and reduce the amount of space and instead put the extra money you saved on space into fine details and better quality finishings. But, to achieve this, the function of each space must be clearly understood.

Susanka's books are great for helping to understand how space is used in a home. In fact, part of the reason she wrote these books is because she felt that while people intuitively know a good space when they are in one, they lack the language to be able to describe such a space to an architect. Through photographs, illustrations and extensive descriptions, Susanka discusses basic concepts such as shelter around activity, interior views, doing double duty, a place of one's own, visual weight, framed openings, and spatial layering. Through discussion of these concepts, she takes the experience of living in a house from mere shelter to the art of dwelling. For example, if you arrange a space so that you can look along the diagonal, from one corner to the opposite one, you are looking along the longest view available, which makes the space feel larger than it actually is. Or, for example, if you use a series of openings and surfaces, implied or otherwise, to subtly break the perceived space into segments, it will have the effect of making the space feel larger.

Susanka's ideas are based in large part on an earlier book called A Pattern Language. Despite being published in the 70's, the ideas in this book by Christopher Alexander are as valid today as they ever were. Alexander believed that the way we intuitively use space in our homes, neighbourhoods and towns can be described by a series of repeating patterns. What was really weird is that when I read A Pattern Language, I instantly recognized some of the patterns in the way I live, even though I had not consciously attempted to arrange my living space in any of the ways described in the book. For example, Alexander describes the concept of a Children's Realm - a space occupied primarily by children in which, when adults enter they feel like visitors. In fact, our kids have carved out a space in the living room where all their toys are that is bounded on three sides by walls and chairs. Even though there was no conscious effort to give them a separate space, a new space has emerged in which adults definitely feel like visitors. A pattern language is a great book to read if you are thinking of designing a new home or undertaking a major renovation where everything will be gutted down to the exterior walls.

After reading A Pattern Language, I started to think about the types of patterns of space I would like to see in our new house. As you can see from the graphic below, they are centred primarily around three concepts: Common area at the heart, the couple's realm, and the children's realm.

Then we came up with a conceptual floorplan for the house that tried to take these ideas into account.

At the end of the day, this plan is only conceptual to allow us to organize our thoughts and to convey to the architect the scope of the project we want to undertake. However, we are very much looking forward to seeing what ideas the architect comes back with.

Wednesday, December 9, 2009

Architect, Designer or Design-Build? Lot's of choices for renovating a home.

When the time comes to undertake the renovation, should we hire an Architect, a Designer, or a Design-build company?

When we first looked at this house, we knew it could not accommodate our needs without fairly substantial changes. But we liked the lot and the neighbourhood and we felt that we could work with the house. My first thought was to hire an architect, and in particular, one architect in Ottawa whose work I like. We also told the home inspector of our intentions and he reaffirmed the importance of hiring an architect. However, as we investigated our options further, we received a lot of conflicting advice about the merits of architects, designers and design-build companies.

I learned quite a bit in my investigations about these different professions, so I thought I'd share some of that information along with links to other good sources of information.

Architects: Architects not only provide conceptual ideas and drawings of what your house could look like. They are trained in engineering and site planning and they understand how structures work and what they should look like. They can create a design for your project, prepare construction drawings, make sure that the plans meet minimum code, help estimate costs, oversee the process of hiring a contractor and oversee the project during construction. In my discussions with architects it was made clear that the architect will not renovate the house for us. What we would be paying for are his/her professional services to design and oversee the renovation. The contractor or builder is also not hired by the architect. While the architect may oversee the process of hiring a contractor, ultimately the contractor is hired by us, the owner. Because there is no financial arrangement between the architect and the builder, the architect can offer us independent advice about the progress and quality of the construction and will deal directly with the builder when issues arise.

In Ontario, Architecture is regulated by the Ontario Association of Architects. Only individuals licensed by the OAA may legally use the title “Architect”. The Architects Act and the Ontario Building Code set out the types and sizes of buildings which must be designed by an architect. Chances are, if you are adding on to the square footage of a house or making any substantial changes inside, the plans must be approved by an architect before construction can commence.

I found that the OAA website offered a lot of information about Architects including the ability to search for an list of architects in Ottawa who specialized in residential work. The OAA publication, A client's Guide to Engaging and Architect in Ontario provided great guidance on how to hire an architect in Ontario and how much we should expect to pay. The Ottawa Regional Society of Architects website was also helpful for finding an architect in Ottawa who specializes in residential construction. Finally, the American Institute of Architects also has a great website with information about what value an architect can bring to a project. In a later post, I will provide more information about hiring an architect including a few good tidbits that I received from an Ottawa architect.

Designers: Interior designers are more than just decorators. While I believe that anyone can hang a shingle outside their door with the word "designer" on it, true Interior Designers are registered through a professional organization such as the Association of Registered Interior Designers of Ontario. they are qualified to make recommendations about interior layouts, with the exception of load-bearing walls. They often pick up where architects leave off, helping with room layouts, space planning or storage planning. They also help with cosmetic choices, such as helping you choose wall colours, moldings, cabinetry, sinks, faucets, handles, lights, furniture, appliances, etc. You can hire a designer to do minor or substantial interior work for you - such as changing rooms around or completely replacing a kitchen. Usually, you deal only with them during the work, and they hire any sub-trades needed for the job. If an architect or engineer is needed to approve the plans, they will contract one for the job.

Design-build companies: Design-build companies are contractors that offer design services along with their building services. They may have an architect, an engineer, and/or registered designers on their staff. In this way, they can offer a sort of one-stop-shop - greatly streamlining the process for the customer, and setting themselves apart from other contracting companies. You can hire a design-build company to do small jobs or build you a brand new house. Usually, when you hire a design-build company, you deal only with them during the job and they usually hire any sub-trades needed for the job. As with designers, if an architect or engineer is needed to approve the plans, and they don't have one on staff, they will contract one specifically for the job.

Renomark is a Canadian industry program designed to set minimum quality standards for renovation contractors. It can help you find a quality contractor. Design-build companies who are members of the Renomark standard must abide by a Code of Conduct, which, among other things, includes: abide by a code of ethics, provide detailed contracts, provide minimum 2-year warranty, and return all phone calls within 2 days. I found the Greater Ottawa Home Builders' Association website to be helpful in finding a design-build company in the Ottawa area who is a Renomark member.

At the end of the day, how do you know if you need an architect, a designer or a build-design company. Mike Holmes offers some advice on this in his book Make it Right. He says that neither cost nor size of the project can determine which type of professional should be used. Instead, if you enjoy the creative process, then you might enjoy working with an architect. Also, if you are particularly concerned about maintaining the style of the home or restoring the historical authenticity of the home, then an architect could be essential. Similarly, if there is an architect whose style you really like, hire him/her. On the other hand, Mike Holmes is clearly of the opinion that many good contractors have picked up a fair bit of design sense over their careers and can often be trusted to have good design ideas.

My personal experience was that I found there was a lot of, shall we say, sibling rivalry, among many of the professionals I talked to in Ottawa. I spoke with architects who told me that design-build companies were good only if you knew exactly what you wanted in the design (i.e. you don't need any creative input). I spoke with design-build companies who told me that architects will design you a great looking house that is often impossible to build for the stated budget. And I spoke with Interior Designers who told me that Architects could not design a room for function.

My advice is to talk to a lot of different people to find the professional that will work best for you. As Mike Holmes says, ask lots of questions and check lots of references. For us, we felt that an architect was the right choice. We knew we would be undertaking potentially significant structural changes to the house, so an interior designer was not the right fit. We also liked the idea of an architect providing independent advice to us on the progress and quality of the construction (I have neither the time nor inclination to go toe-to-toe with a contractor to argue about how they have done the work wrong). And finally, when we compared the cost of design-build companies to the cost of hiring an architect and a builder, we found that there really wasn't that much of a difference in price. In fact, one of the larger design-build companies in Ottawa would have been more expensive than hiring an architect and builder.

That said, I'd really like to hear your stories. Who did you choose to do your renovation work?

Monday, December 7, 2009

Getting zoning information and old air photos of your property

If you are thinking of purchasing a new house in Ottawa, the City's eMap service is a great information source to check before you go to see the house.

From eMap, you can find out where the property lines are, zoning, frontage, depth and area of the lot, the ward and councilor and even the garbage pickup day. Of particular interest to look up are the old air photos of the property you are interested in. Typically, high resolution air photos from 2002, 2005, 2007 and 2008 are available. If an addition has been added to the house in the last few years, you may be able to see it on the air photos (which may then prompt you to ask the seller if they had permits).

The map will also tell you the zoning of the property. This is good information to know before you purchase. You don't want to buy a nice detached house on a quiet street only to find out it is zoned for high density housing and that most of your neighbours' houses may be torn down to make way for semis or townhouses. It's also helpful to know who your neighbours might be. That open field behind the house might be nice now, but it could be zoned for commercial activity and the next thing you know, there is a strip mall there.

The city of Ottawa website offers information on interpreting the zoning. But generally, if you are buying a residence, the zoning will most likely be R1, R2, R3, R4, or R5. R1 is the lowest density (restricted to detached dwellings) and R5 is the highest density (including mid-rise apartments). Specific information on zones, such as the purpose of the zone, permitted uses, subzones, and provisions - such as required setbacks from the property line - can also be found on the City's website.

The provisions of the zoning are a great thing to check before you make an offer on the house, particularly if you are planning to renovate. Your great plans to add a big addition on the back of the house may be scuttled when you find out the minimum rear yard setback is 6 metres or the maximum lot coverage is 25%.

Friday, December 4, 2009

Cost update: December 2009

Home ownership, and in particular, purchasing a house can be expensive. Here is a summary of bills we have paid so far after one month of owning the house:

House Inspection - $414.75
Sewer Inspection - $322.41
Change Locks - $70.00
Legal fees to register mortgage, etc - $2005.10
Energy Audit - $149.50 (after $150.00 gov't rebate)

Total - $2961.76

Oh, and don't forget the land transfer tax, which varies based on the price of the home. At the time of writing, the published land transfer tax rates in Ontario were:
- 0.5% of the value of consideration for the transfer up to and including $55,000,
- 1% of the value of the consideration which exceeds $55,000 up to and including $250,000, and
- 1.5% of the value of the consideration which exceeds $250,000, and
- 2% of the amount by which the value of the consideration exceeds $400,000 for land that contains at least one and not more than two single family residences.

In addition, the buyer usually has to reimburse the seller for the portion of any property tax they have paid for the remainder of the year.

All in all, be ready to shell out up to $10,000 just to complete the purchase of a house in Ontario.

Wednesday, December 2, 2009

Architectural inspiration

While we are busy trying to figure out what our new house will look like, take a look at these architectural drawings.

Produced by MARK BENNETT, a Santa Monica, CA letter carrier. A compulsive television watcher in his youth, he makes careful observations of the sets inhabited by popular tv shows, transforming them into fully realized architectural drawings. Wicked fun.

How much does it cost to renovate a house in Ottawa anyway?

When we purchased the house we really did not have a good idea of how much it would cost to renovate. We figured it was cheaper than building a new house, but by how much was anyone's guess.

One of the first sources of information on renovations that we turned to was the book "Make It Right" by Mike Holmes. Besides providing good information about how a house is built, it was one of the only books we found that gave pricing guidelines for a home renovation in Canada. For example, Mike says that a kitchen reno can cost $10,000 to $40,000, bathrooms are between $10,000 and $20,000, basements cost $30,000 on average, while an addition is from $90 a square foot up to $360 a square foot. The average for an addition, he says, is $120 a square foot, which will give you the minimum code requirements - carpet, vinyl, possibly some ceramic in the bathroom, etc. Decks run about $5 a square foot while fences are about $12 per foot of fence.

Mike's estimates seem to be in line with information we got from architects and builders that we talked to in Ottawa. Most Architects we talked to said that renovating an existing space runs about $100 a square foot, while new construction (e.g. an addition or adding another floor) runs about $200 a square foot for decent quality construction. Oakwood, a design-build company with a long history in Ottawa, told us their new construction runs about $235 a square foot.

In the Fall/Winter edition of Ottawa Renovates magazine, a magazine produced in conjunction with the Greater Ottawa Home Builders Association, there is an article where several Ottawa area builders are asked about construction costs. Depending on the builder, cost estimates were anywhere from $100 to $450 per square foot. Engel Construction, for example, councils that when budgeting for a whole-house renovation, plan for $100 per square foot, and then add costs for kitchen and bathrooms. Starting with a gutted space, a new kitched will range from $10,000 to $15,000 excluding counters and cabinets. Cabinets cost from $7,000 to $50,000 or more. A new bathroom can run from $10,000 to $15,000, says Engel. Similarly, Lagois Drafting and Construction ballparked costs at around $200 to $400 per square foot, plus their design fee. Luxury Renovations says that their projects usually run between $250 and $450 per square foot.

Don't forget that these costs are just for the construction. You also need to add on costs for landscaping and for the architect (if you use one), who sometimes cost as much as 15% of the overall construction budget.

What's your experience with the cost of a renovation? Was it cheaper or more expensive than the figures given above?

Monday, November 30, 2009

A word about Mortgage Brokers

When it comes to securing a mortgage I prefer to use a mortgage broker. I know a lot of people just walk into their local bank branch and ask for a mortgage, but to me, that makes no sense. I'd never buy a car by walking into my local dealership and buying whatever car they offered me, so why would I buy a mortgage that way? I'd much rather shop around for the best deal.

Not all mortgage brokers are created equal. We had one crappy broker in the past who, although he got us a good rate, forgot to send us some paperwork and we almost lost the mortgage. So, I think hearing a testimonial from someone who had a good broker is helpful.

Our current broker is Rob McLister from I really can't say enough good things about him. We have used him for three mortgages now and he has always gotten us a great deal. He works harder than anyone I think I have ever met and his turn around time on requests is usually exceptionally fast. He is based in Vancouver, so I have never actually met him, but in today's Internet enabled world, that doesn't seem to matter. He used to have an office in Toronto, so he is familiar with any Ontario-specific rules or laws and he is great at recommending more sophisticated mortgage arrangements that can save you thousands in interest charges over the life of the mortgage. He has twice arranged mortgages for us to do a Smith Manoeuver. You will never get that service at your local bank. Rob and his wife Melanie also write a blog ( which is a great source of information on anything at all to do with mortgages.

I picked Rob because of his blog and because he is a regular contributor to several other financial blogs I follow. In particular, when we first started thinking about arranging a Smith Manoeuver mortgage, I needed to find someone who I felt had sufficient experience in the intricacies of this technique. Rob's frequent blog posts and comments on other blogs gave me that assurance.

Friday, November 27, 2009

The home inspection

Once we decided that we wanted to make an offer, we commissioned a home inspection. A home inspection costs about $400, but is essential, especially for older homes. By having an inspection done, you can be informed about potential additional expenses you will incur once you own the home. This in turn will affect your offer on the house. There is nothing wrong with buying a house that needs repairs. But it's essential to know what the cost of those repairs will be so that you can figure out how much you are willing to pay for the house.

In our case, the inspector said the home was in good shape except for a couple of expected problems. For one, the roof needs re-shingling and second, as might be expected with a house built in the '50s, the basement was not waterproof. You can see it in the picture below, which was taken after three days of constant rain. On one side of the house, the floor is damp and the foundation wall is discoloured. This discolouration is called efflorescence and it is an accumulation of crystalline salts on the masonary walls. This mineral residue is what's left after moisture, which seeped through the walls, has evaporated. There is moisture on this wall because the grading of the soil outside the wall slopes in toward the wall. Hence, water that falls on the ground drains toward the wall and then seeps down into the ground against the foundation. It would be easy to fix this problem by fixing the grading outside. However, to be sure the basement will stay dry, it really should be wrapped in a plastic membrane.

In modern homes, the basement is wrapped in a waffle-like plastic membrane, which allows water to flow down the wall to a perforated plastic drain tile that sits beside the footings of the basement. The drain tile (weeping tile) is usually covered with coarse gravel or crushed stone and, in urban areas, is connected to the city storm sewers to take water away. This keeps the basement of modern homes nice and dry. But in older homes, this type of treatment was not done. Before our basement can be properly finished, it should be waterproofed, otherwise water that may seep through the walls will cause mold to form inside the newly drywalled basement walls. Besides being smelly and unsightly, it is also a health hazard.

Waterproofing the basement requires digging out the dirt outside the basement walls and installing the plastic membrane and weeping tile. This will cost about $20,000. Re-shingling the roof will cost about $10,000.

In addition to this, the inspector told us that it would not be unusual for the sewer line from the house to city sewer to be in rough shape and may need replacing (it is 50 years old after all). For about $400, we had Mr. Rooter inspect the sewer with a camera, which confirmed that the sewer, while not blocked, was corroded in several places and had holes in it. While it is not really a problem right now, if we ever had a tree root grow into the sewer, the necessary cabling or pressure flush to clear the way would most likely cause irreparable damage to the sewer. The cost to replace the sewer line could be as high as $10,000.

So, we see that there are a fair number of expenses that we should plan on after we take ownership of the house. However, given that we are planning on renovating and may be adding an addition on to the house, the cost of the waterproofing and sewer repairs could be cheaper because the heavy equipment required for digging will already be on site.

As mentioned above, a home inspection is essential before you make an offer on a house. However, it also pays to educate yourself. A great book that I really liked was "The Holmes Inspection: Everything You Need To Know Before You Buy or Sell Your Home", by Mike Holmes. It is quite informative about what to look for in a house, but is also quite informative about the actual home inspection process as well.

Mike Holmes was on the radio recently talking about picking a home inspector. According to him, the biggest mistake people make when buying a new home is waiting until the last minute to pick a home inspector and they end up with someone who they know nothing about. As it turns out, not all inspectors are created equal. In fact, it takes only two weeks of training to become a licensed inspector. For all you know, that person may never have even picked up a hammer before. Mike suggests lining up your inspector as soon as you decide to start looking for a home. That way, you can check him/her out thoroughly before you need to call on him/her. As with all contractors, Mike suggests asking lots of questions and checking references. Mike says you should pick an inspector who has worked in the building trade for some time before becoming an inspector. If you live in Toronto, you can use Mike, who runs his own home inspection company. His inspections cost between $1000 and $1500 and take all day to complete. He brings a thermal camera and a snake camera with him so he can find all kinds of surprises behind walls that normal inspections could not find.. He is more expensive than any inspector I have ever heard about before, but you know with Mike that it is going to be extremely thorough.

Sunday, November 22, 2009

Negotiating the purchase

Once the offer has been made, negotiating with the seller and waiting for your conditions to be satisfied is likely one of the most stressful times in purchasing a house.

As I mentioned in the earlier post, our offer for the house contained one condition; 5 days to arrange appropriate financing on the house. Actually, our mortgage broker had already told us that to try and find financing for both the purchase of the house and the renovations up front would take 6 days. However, our agent advised us that any condition on an offer of longer than 5 days would likely be rejected outright. So, instead we put in a condition of 5 days to find appropriate financing, with the hope that if our offer was accepted that our broker could come through sooner than promised, or that by the time 5 days had elapsed, the seller would be so invested in the sale that asking for an amendment to the offer of an extra day to secure financing would be approved.

Unfortunately, when we made the offer, the seller countered with a new condition of 4 days to secure financing. We accepted this condition, aware that we would probably have to ask for more time to secure financing, but it was a risk we were willing to take. After all, we had nothing to loose by accepting the new condition. If we rejected the counter offer and insisted on 5 days, the seller could have picked the other buyer right there and then.

After 4 days, sure enough, our broker had not secured financing, and we asked for an 1 day extension, which the seller readily agreed to. On the fifth day, our broker had found a bank willing to give us the appropriate financing, and the bank sent an appraiser out to the property. However, the appraiser put the wrong address on his report back to the bank. As a result, the bank would not accept the report. Time ticked by with numerous back and forth phone calls, and by the end of the business day, the bank still had not approved our financing.

So we asked for another one-day extension, which was not so readily accepted. In fact, I felt some pressure from our own agent to remove the condition of appropriate financing from the offer if we wanted to secure the house. However, my common sense told me that would be a dumb idea. We asked our agent to ask for another extension. Initially she was very reluctant and told us that the seller's agent would not accept another extension, so I actually had to order her to ask anyway (this is where I began to wonder if the agent was working with our best interest in mind). I figured we had nothing to loose by asking. If the seller said no, then we would deal with that outcome, but if we didn't ask we would never know. So our agent asked. And the seller's agent came back and said that five days was plenty for arranging financing and we should have it by now. I guess they felt like they were being jerked along a bit. So, we explained the muck up with the bank's appraiser and offered to increase the the downpayment by $5000 to try and show that we were serious about purchasing the house. We would have also been willing to change the closing date, if requested. However, I was not willing to waive the condition that appropriate financing had to be secured. In the end, the seller was not happy about it, but they gave us another day to secure financing, which is all we needed. On the sixth business day, the bank approved our financing and we waived the last condition on the purchase.

Throughout this process, we tried not to become too emotionally attached to the house. We knew what the property was worth to us and we were always prepared to walk away from the deal if our most basic needs could not be met. For us, if the seller had come back and told us that we could not have a sixth day to secure financing, then we would have told them that they would need to find another buyer.

Friday, November 20, 2009

Making an offer on the house

One of the scenarios that I have seen a lot in the Ottawa real estate listings is to place the house on the market for a week or so before accepting any offers. In this case, a specific date and time will be given for when offers will be accepted. This gives potential buyers the time to look at the house, arrange financing and get an inspection done before making an offer. In that way, they can hopefully make an unconditional offer on the house. The other side to this, of course, is that if there is a lot of interest in the house, then a number of potential buyers may show up at the specified time to make offers. This is what happened to us.

Of course, you never are totally sure if another potential buyer is going to show up, so it pays to show up with two offers in hand. The first offer is the low offer that will be given if there are no other potential buyers standing on the curb. The second is the high offer, which will be given if competing buyers do show up. We had two such offers in hand, and sure enough, another potential buyer showed up, so we threw out the low offer and went with the higher one.

The way the process worked for us was that each agent individually went into the house to make their pitch on behalf of their client. The process takes about 10 minutes per agent. After hearing both pitches, the seller picked our offer,with one condition.

Our offer contained the condition that we wanted 5 days to arrange appropriate financing. We knew we wanted to renovate and it was going to take our mortgage broker a little longer to arrange the financing to both buy the house and renovate it. We had already completed a house inspection, so the offer was not conditional on an inspection. However, the seller wanted us to shorten the time to arrange financing down to 4 days. In the next post, I will get into the details of the negotiation.

Purchasing the house - finding an agent

When we purchased the house we did not have a real estate agent, so we asked the agent who showed us the house to be our agent. This agent worked for the brokerage that was selling the house, so the same brokerage was now representing both the seller and the buyer (us). This type of arrangement is called a "Dual Agency" We could do this because although the brokerage had an agreement with the seller to act as their agent, it was another realtor within the brokerage who was the seller's agent. Each agent is supposed to work with their client's (either the buyer's or the seller's) best interests in mind.

There are pros and cons to going Dual Agency rather than getting another agent from a different brokerage to represent you. The main Pro was the fact that the brokerage gave the seller a 1% discount on the fees when the buying agent was from the same brokerage. Thus, all other things being equal, our offer should seem more attractive. The down side is that you are never sure how much information is being shared between the agents and whether or not your best interests as a buyer are really being represented by the agent. In our case, the agent was representing us only on this one offer. If the offer fell through, they would cease to be our agent. Therefore, there was an incentive for the agent to get us to buy this house over another house. If we had used an independent agent from another brokerage, that incentive would not have existed because the agent would not care so much if we bought this house or another house.

In the end, going Dual Agency worked for us. But for it to work I think you have to have a clear view in your mind of what the value of the property is to you and be prepared to walk away from the deal.

The house

Before talking about the renovations, let's take a look at the house. It's a simple 1950's era bungalow on a 56' X 119' lot. The average size for a lot in this neighbourhood is 50' X 100'. The land slopes down at the back and is shaded by some lovely mature oak trees. Also, because of the configuration of the next road over, there is a large triangular area of public land behind the house, giving us another approximately 40' before the start of the neighbour's backyard. This public land has become common land for the surrounding four or five houses and is well kept, but nobody can build on it.

Thursday, November 19, 2009

The adventure begins

A couple of months ago we bought a house in a neighbourhood of Ottawa, Canada that we really like. While the neighbourhood is great, there are, unfortunately, not too many houses in the neighbourhood that we would consider moving into. Most of the neighbourhood consists of 1950's era victory houses, supplied to returning war vets or bungalows of similar vintage. It was clear that if we were going to move into this area that we would have to buy one of the older houses and either tear it down and build new or renovate the existing house up to our standards. So, when a house that we thought we could work with on a great lot came up for sale, we jumped in with both feet. This is our story.

We thought we would record our story here for a couple of reasons. First, this is our first foray into this kind of adventure, so we wanted to record it. There is so much we have learned already in just two months, that we didn't want to forget it should we decide to do this again in a few years. Second, when we started looking at houses in this neighbourhood and thinking about renovation options, we found it very useful to read other people's blogs about their renovation work. However, there are very few blogs from Ottawa, so we thought this blog would help others in Ottawa who are thinking of undertaking a major renovation project for the first time. We intend to record all of our activities and the costs, so that if you are contemplating a similar move you will have a good idea of what your in for.

Here we go!