Wednesday, April 24, 2013

Smoking Can Significantly Reduce A Home's Value

For many Canadians real estate represents a significant portion of their equity and net worth.  Whether it is their principal residence and or a recreational or secondary property, an investment in real estate is regarded as a safe nest egg to fund their future retirement.  As such, enhancing the value of that property through various improvements is viewed as a way of enhancing that investment and for those do-it-yourself types it is a past time they enjoy as well.
  There are also lots of things that will reduce the value of your property as well and I could write for days on that subject.  One notable example however is with respect to the habit of smoking.  A recent survey concluded that a home's value may be impacted by as much as 29% if the homeowner(s) is a smoker.  With the average home price in Canada standing at roughly $370,000, a 29% reduction would amount to a hit in excess of $100,000.
  Several years ago I had a home listed whose owners were both smokers.  In addition to the smell, there was extreme evidence of smoking throughout the home.  Yellow stains on the painted white trim work, black tar on the blades of the ceiling fans, a smoke film on the inside of the windows etc. etc.  Despite tactfully raising the issue with the sellers, my pleas to stop smoking inside the home, have the place thoroughly cleaned and painted among other initiatives fell on deaf ears.  Every party that viewed the property made the same remark after stepping through the front door, “…smokers live here.”  The question in their minds was can we get the smell out and at what cost?
  In the end long after I abandoned the listing, the home sold for 66% of the original $719,000 asking price.  What was equally as bad, the house was on the market for 1,719 days (4.7 years).  The buyers paid a price which reflected what they thought it would cost them to remedy the situation both in terms of smell as well as eliminating the potential health hazards associated with second hand smoke.
  I have never been a smoker and certainly I do not criticize those that do, it’s a matter of personal choice.  We are however in a world where smoking is becoming increasingly more regulated in public places.  We can’t regulate what goes on in a person’s home but the evidence is overwhelming that the health of humans and the value of homes is adversely affected by the practice of smoking.   

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Rick relocated to Collingwood from Toronto in 1985 through a transfer with Goodyear Canada. In 1987 Rick was recruited by a major client of Goodyear’s, managing their Canadian business based in Barrie before moving to Chicago in 1992 as Vice President of Sales & Marketing. Upon returning to Canada in 1996, Rick ran an industrial products manufacturing company in Stratford, Ontario. In 1998 Rick returned to Collingwood with his two children. Rick is a licensed real estate Broker with Royal LePAGE Locations North in Collingwood and holds his MVA designation (Market Value Appraiser-Residential). He is an active volunteer in the community serving several years on the Board of Directors with the Collingwood Chamber of Commerce as Treasurer, 6 years on the Board of Directors for the Southern Georgian Bay Association of REALTORS® of which he is the Past President (2008) and currently serves on a committee with the Ontario Real Estate Association. Rick is a diverse executive manager with extensive experience in strategic planning, manufacturing, finance, human resources and quality assurance management.