Do you currently own or are looking to buy a home which has aluminum wiring? What's the big deal? We'll talk about that next.
Unknown Speaker 0:10
You're listening to the bone nose real estate podcast tips and advice for home buyers, sellers and owners with award winning REMAX Agent Bo Kauffmann.
Bo Kauffmann 0:24
You've probably heard that insurance companies are paying special attention to homes which have aluminum wiring. Well, what's the problem? Really, there isn't any problem. Aluminum is still being used today in industrial and commercial application. So for example, large warehouses, office buildings, industrial complexes and everything. It's being used today by companies because it's about a third the price of copper, a ton of aluminum right now costs about 1500 dollars US while a ton of copper costs well over $5,000 us and so it was that back in the 1960s a residential home builders thought They might have a better cheaper product on their hands. So you're looking at the prices of copper in 1962, they were about 30 cents a pound. And by 1966, they had more than doubled. So homebuilders, even though for for a single home, it might only be 100 or $200 difference, but if a home builder builds 234 hundred homes a year, it can add up.
So they're looking for cheaper alternatives, and they settled on aluminum. Now like I said, What's the problem with aluminum? Well, there's no problem as long as it's treated correctly and upgraded correctly.
And here's what happens. Let's say you have a 1970 bungalow that was built by a builder using aluminum wiring, they would have used aluminum switches, aluminum plugs, aluminum rated light fixtures, all those things are called devices by electricians. So all the devices that would hook into that house would be rated for aluminum.
Now fast forward to 1995 as an example, the current owner of the home wanted to give it an update. So new paint, new floor. And of course, we're going to update the lights and why not update the switches and wall plugs to make them look more modern. So you go to Home Depot, and you find that a copper light switch is $1, whereas an aluminum rated light switch is $8. So what most people do well, they go with the cheaper stuff. And that's when the problem comes in.
You'll have aluminum wiring, hooked into copper light switch, aluminum and copper, very dissimilar metals, they will heat and cool and shrink and expand at different rates. And over the years as this happens, they'll start to work themselves loose, causing corrosion and eventual sparking and that's what causes fires. Until a few years ago, insurance companies had grandfathered these types of homes. So if you owned a home for the last 20 years, insurance companies weren't bothering you. If you went out and bought a home then a new buyer would be required by insurance companies to get an inspection, electrical inspection with a certificate to show that they All the wiring is safe and has been treated properly. The devices are the right ones. And if they're not that they're at least hooked up in a correct way.
That was until recently. However, now insurance companies are even sending letters out to owners of homes that are that are known to have aluminum, asking them to get an inspection before they get the annual insurance renewal. It's important to note that different insurance companies have different standards. With some of them, it's good enough that you have an inspection and that the property devices devices are installed that they are installed properly. The connections are tight, made with the correct marettes, and done in a proper way.
However, I've also heard recently of some insurance companies are recommending and even demanding that the house be rewired. Now, that's not a standard yet, but if your insurance company does demand that you can either get a different insurance company or fork out the money well what kind of money are we talking about? Well, I sold a side by side a couple of years ago that was about 903 square feet and Northcote Dornan and the buyer had to get all the devices that's plugs and switches replaced by aluminum rated ones. And there was about 40 of them in this house. So 40 light switches and, and plugs. And all the lights themselves had to be hooked up in a proper way. And that ended up costing 1500 dollars for an electrician to do that, that was just on the main floor, how to take that step further and rewire that whole house you're talking about probably 10 to $15,000. So it's significantly more but like I said, as far as I know, at this point, that's not a requirement for every insurance company and if yours does require you to do that, I would say shop around for four different insurance company to see if you can get away with just having an inspection and having it certified what kind of homes are likely to have aluminum wiring. In North Kildonan, Windsor Park, West St. James old St. Vital, homes that are built between the mid 1960s and up to about 1970- 76 are suspect in this. One home inspector tells me that aluminum wiring might have been used as late as 1980.
Although I personally have not come across this, so likely 1968 to 1976. If you're in one of those areas in town, you can you can check easily pop a cover of one of the light switches or a plug and if you see a shiny silver wire, and then your home will have aluminum wiring, no need to panic, but it is one of the questions that when you're selling your home, there's a 19 question questionnaire called the property disclosure statement.
And one of those questions Question number 15 asks whether you're aware that your home has aluminum wiring led plumbing or mold or radon gas etc. So if you are aware and you know that your home has aluminum wiring, you have to disclose it to the potential buyer. Now that's it for aluminum wiring. Like I said, it's not the end of the world. It is it is treatable, you can fix it and worst case scenario you have to replace the wiring but that's not the case. Yet there are there are mitigation steps you can take. In another episode I will talk about something that's a little more concerning and that is knob and tube wiring.
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Unknown Speaker 6:35
You've been listening to Bo Kauffmann of REMAX performance Realty. Are you thinking of buying or selling a house or condo in Winnipeg? Cobo at 204-333-2202 remember bone knows real estate