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| Realtor Alicia Lanier's Homeowners Guide |
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Articles and Advice |
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| Personally Speaking ... By Alicia Lanier, REALTOR Want to know what to look for in a true housing recovery for the Silicon Valley? Check out my article about key leading indicators of an eventual housing recovery which is important for the health of the entire American economy. It's all on my blog: www.HometownSiliconValley.com *** Wanting to buy or re-fi? Home loan interest rates - for purchase loans or for re-financing - have hit an all time low. The 4.58 percent average for a 30-year fixed-rate loan last week was the lowest on records that mortgage company Freddie Mac has kept since 1971. The last time rates were lower was in the 1950s, when most long-term home loans lasted just 20 or 25 years. These low rates add the gift of a LOT of purchasing power for home buyers! *** Did you receive an email recently saying “Did you know that a 3.8% real estate sales tax is part of the health care reform bill?” Is this true? Visit my blog at www.HometownSiliconValley.com for a fact check. *** The federal tax credits for first-time and move-up home buyers expired on April 30, but Governor Schwarzenegger has signed into law $200 million for California home buyer tax credits. The bill allocates $100 million for qualified first-time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. C.A.R. supported this important legislation since its inception. The tax credit is equal to the lesser of 5 percent of the purchase price or $10,000, taken in equal installments over three consecutive years. Purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state). The eligible taxpayer who closes escrow on a qualified principal residence between May 1, 2010 and December, 31, 2010, or who closes escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit. *** Check out my complimentary services to give you a fast start if you are planning to sell or buy now or in the near future. **Visit my blog at www.HometownSiliconValley.com to keep abreast of real estate and community news. **Browse all homes for sale in Northern California on my website at www.CaMoves.com/alicia.lanier **Browse all homes for sale in the North Texas area on my website at www.CBDFW.com/alicialanier To receive any of the following free services, call 408-491-1634 or email alicia.lanier@cbnorcal.com **Learn about all newly listed homes for sale that meet your criteria in any Silicon Valley community with my "Just Listed" alerts for buyers. The alerts include photos and details that you request about single family homes, townhome condos, multifamily, or residential land. **Everyone, not just buyers and sellers, seems to enjoy my newsletter, Service for Life, filled with both real estate information and lifestyle articles. This is now available via email delivery. **Sellers, Ask for my complimentary home valuation to make you aware of the potential value of your home in today's dynamic market. My exclusive marketing plan is included. **Free reports, like my "44 Money-Making Tips for Preparing Your Home To Sell for Top Dollar," for buyers, sellers and homeowners. **This Homeowners Guide e-mail newsletter offers timely tips for sellers, buyers, and homeowners. I invite you to forward it via email to your friends if you think they would be interested. *** By the way, if you know someone who is considering a move and needs competent, professional real estate representation - or who might like to receive this newsletter - please email me at Alicia.Lanier@cbnorcal.com Until next time ... |
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| Mixed Signals in June Housing Sales in Bay Area By DataQuick The number of Bay Area homes sold last month inched up from May but fell short of a year ago as the impact of the federal home buyer tax credits began to fade. The median sale price remained 16.5 percent higher than last year, thanks largely to fewer foreclosures re-selling and more high-end activity. Last month a total of 8,373 homes closed escrows in the nine-county Bay Area, up 1.3 percent from 8,264 in May but down 3.1 percent from 8,644 in June 2009, according to MDA DataQuick of San Diego. (Alicia's Note: In Santa Clara County in June, unit home sales dropped 7.70% when compared to the same month last year while the median sales price rose 18.5% from $445,000 to $527,500 for the same period.) On average, Bay Area sales have risen 3.9 percent between May and June since 1988, when DataQuick’s statistics begin. Last month’s sales were the third-lowest for a June – behind 2008 and 2007 – since June 1995, when 7,780 sold. Last month’s sales were 17.9 percent lower than the average June sales tally – 10,198 – since 1988. “The next few months should be very interesting: We’re about to see how well the housing market can fly on its own. The tax credits no doubt stole some demand from the rest of this year, and soon we’ll have a better sense of just how much,” said John Walsh, MDA DataQuick President. “The Bay Area market is getting a boost from super-low mortgage rates and a slightly friendlier lending environment for high-end borrowers,” he added. “But, barring new government stimulus, the housing market will be relying very heavily on improvements in the economy. A lot will depend on how many people find jobs, or stop worrying about losing the one they have.” Last month the median paid for all new and resale houses and condos combined was $410,000, the same as in May and up 16.5 percent from $352,000 in June 2009. The median has risen on a year-over-year basis for nine straight months, though in June it was still 38.3 percent below the $665,000 peak in June/July 2007. The post-boom low was $290,000 in March 2009. The median’s peak-to-trough plunge was caused by a decline in home values as well as a huge shift in sales toward lower-cost homes, especially inland foreclosures. Last month foreclosure resales – homes that had been foreclosed on in the prior 12 months – fell to 26.7 percent of the Bay Area’s resale market. That was the lowest since April 2008 and was down from 26.8 percent in May and 36.7 percent in June 2009. Foreclosure resales peaked at 52.0 percent in February 2009. The monthly average for foreclosure resales over the past 15 years is 7.9 percent. Last month 39.2 percent of all Bay Area home sales were over $500,000, down slightly from 40.2 percent in May but up from 34.5 percent last year. Sales over $800,000 rose to 17.2 percent of June sales, up from 15.4 percent in May and 13.9 percent a year ago. Viewed a different way, sales of existing single-family houses in zip codes representing the top one-third of the market, based on their historical prices, accounted for 35.5 percent of all sales in June, about the same as in May but up from 31.3 percent a year ago. The portion of sales occurring at the bottom of the price ladder also increased last month. Total sales under $300,000 were 34.2 percent of all transactions, up from 31.4 percent in May but down from 39.5 percent a year ago, when low-cost inland foreclosures were more plentiful. Some mid-priced markets slowed last month: Sales between $400,000 and $700,000 were 28.8 percent of all deals, down from 31.6 percent in May but up from 27.2 percent a year earlier. Sales in higher-cost areas could be stronger if jumbo and adjustable-rate mortgages (ARMs) were easier to obtain. Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 33.3 percent of last month’s purchase lending, down from 35.0 percent in May but up from 28.8 percent in June 2009 and a post-housing-boom low of 17.1 percent in January 2009. Before the August 2007 credit crunch, however, jumbos accounted for nearly 60 percent of the Bay Area purchase loan market. In June, 11.9 percent of all home purchase loans were ARMs, down from 13.2 percent in May but up from 4.9 percent a year ago. The average monthly ARM rate over the last decade is nearly 50 percent. ARMs hit a low of 3.0 percent in January 2009. Last month federally-insured FHA loans continued to fuel much of the first-time buyer activity and some move-up purchases. The low-down-payment loans made up 25.8 percent of Bay Area purchase lending last month, up from 24.4 percent in May and up from 23.9 percent a year ago, and 10.7 percent two years ago. Last month absentee buyers – mostly investors – purchased 16.3 percent of all Bay Area homes sold, paying a median $255,000, which is up from a median of $209,000 a year ago. Buyers who appeared to have paid all cash – meaning there was no corresponding purchase loan found in the public record – accounted for 21.5 percent of sales in June, paying a median $258,250, which is up from a median $208,250 a year ago. Home flipping has trended higher over the last year. Last month 2.2 percent of the homes that sold on the open market had been flipped, meaning bought and re-sold within a six-month period. That was up from a Bay Area flipping rate of 2.1 percent in May and up from 1.3 percent a year earlier. Last month’s flipping rates varied from 0.9 percent in San Francisco to 3.3 percent in Solano County. The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $1,709 last month, down from $1,739 the previous month, and up from $1,585 a year ago. Adjusted for inflation, last month’s payment was 35.9 percent below the typical payment in the spring of 1989, the peak of the prior real estate cycle. It was 52.6 percent below the current cycle's peak in July 2007. Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards but below peak levels reached over the last two years. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying remains above average, MDA DataQuick reported. Source: DataQuick Information Systems, www.DQNews.com |
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| Seven rules for room additions By Paul Bianchina If you're happy with your home and your neighborhood but are craving a little more space, maybe adding on is a better alternative to moving out. Room additions can be a terrific alternative for many homes, adding space for a growing family and adding resale value at the same time. But be forewarned. A good room addition involves a whole lot more than just slapping on some additional square footage. Here are some important rules to keep in mind as your planning gets under way: 1. Know why you're adding on: This is the first rule, and it happens before you lift a hammer. Why do you need to add on? And no fair cheating and saying, "I need more space!" Do you need another bathroom? Bedroom space? A laundry room or mud room? An improved kitchen flow? More space to entertain? Better accessibility due to health issues? More storage? A larger garage or hobby area? The only way the addition will meet your needs is to know what those needs are in the first place. 2. Good additions never look like additions: This is the other top rule of room-addition planning. When you're done, the addition -- no matter what its size or where it's located -- should never look like an addition. The architectural styles of new and existing need to blend. The exterior materials need to blend as well, or at least complement each other. To the extent possible, use the same type of windows, roofing, doors, siding and other materials. If the original home has wood windows, using new vinyl windows in the addition screams "add-on" and lowers the appeal and the value. Don't overlook the need to blend landscaping and hardscaping as well. 3. Out, up, down, or a combination: The how and the where of a room addition is always a fun and exciting challenge for everyone involved. Some homes are situated on larger lots and lend themselves very nicely to adding out. Others seem best suited to adding up by building on a second or even a partial third floor. Some houses are even laid out in such a way that it's possible to excavate under them and add new living space in the form of a daylight basement. Or it could be that a combination of two or even all three of these options makes the most sense for your particular home. Keep your mind open to the possibilities. Work with a good contractor and a good designer and you'll be amazed at what you can come up with. 4. Don't let the interior become an afterthought: I've seen a surprising number of additions that look great from the outside but seem to have no thought put into them on the inside. Flooring doesn't match. Trim doesn't match. Sometimes even the interior floor heights don't match. Remember that how the interior of your addition looks and flows on the inside is just as important as how it looks and flows on the outside. Use the same materials or the same style of materials. Match up ceiling, floor, and wall levels. Here again, no matter how you view the addition, inside or out, it should never look like an addition. 5. Create convenient access: This is another afterthought in a lot of additions. Let's say you have a three-bedroom, one-bathroom house, and you want to add a second bathroom. Typically, that's an addition that's going to have a good payback. But then you build the addition so that the only access to the second bathroom is through the kitchen. You now have a three-bedroom, two-bath house, but since the layout is lousy, you've actually gone backwards in terms of desirability and resale value. Are you going to create a beautiful second-floor master suite that can be accessed only by a tiny spiral staircase from the family room? Is the only way into your great new kitchen via a convoluted hallway that leads through the laundry room? When planning your addition, never lose sight of how you're going to access the new spaces, and make sure that access is both convenient and inviting. 6. Don't overwhelm your lot: Granted, room additions are expensive. So when you're doing one, and all those workers are onsite, there's a temptation to get as much square footage as you can. But don't cram your lot full of house. Remember that open space is important as well, both to you and your family, and, later on, to potential buyers. This is a good time to go back to Rule No. 1 and reconsider the "why" part of your room addition. Don't add space just to add it -- stay focused on your overall goals. 7. Understand the legalities: There are lots of rules and regulations that come into play regarding room additions. These include property line setbacks, zoning restrictions, and restrictions imposed by homeowner associations and architectural review committees. In some historic areas, your addition may have to comply with certain historic guidelines. In other areas, there may even be solar shading restrictions that limit the height or the orientation of your roof line. Be sure you check into all of this before you get too far along with your planning. |
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| Are you 30+ days behind on your mortgage? By Alicia Lanier Due to rising foreclosure rates, more and more homeowners are wondering about programs that can help them if they are ... 1. At least 30 days behind on their mortgage payment 2. Owe more than what their house is worth 3. Cannot afford to pay a Realtor commission to sell their house One option - a short sale of the affected property - allows qualified homeowners to sell their property and use a licensed real estate professional without paying any Realtor commissions or penalties to the mortgage company whatsoever. If you need help and want to hear more about a short sale, call me immediately at 408-491-1634. I would be happy to explain all your options as a homeowner in distress, including the short sale process. Time is of the essence. The longer you wait, the less likely that you can be helped. |
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| Good Faith Estimate contains some 'quirks' By Dian Hymer As of Jan. 1, 2010, the Department of Housing and Urban Development (HUD) required lenders to provide mortgage borrowers with a new three-page Good Faith Estimate (GFE) to protect consumers who are applying for a mortgage. The intent of the GFE is to educate consumers about the key terms and costs of a mortgage, both at origination and ongoing. A loan originator completes the form, giving the borrower a summary of the loan particulars and information necessary to shop rates and to be sure they're comparing like-type mortgages. Although there's grumbling, mostly from mortgage brokers, lenders and closing/escrow agents, the format and information included in the new GFE is a step in the right direction. There are, however, some quirks. For example, the GFE doesn't provide a complete and accurate account of the borrower's costs. Page two provides an itemization of loan origination and settlement costs. The origination charge is itemized as one lump sum; it's not broken down. So, you don't know how much you're paying the appraiser for the appraisal, the loan originator for the origination fee, or other miscellaneous fees. Another shortcoming is in the way transfer taxes are disclosed. The entire amount of any transfer taxes is entered on the GFE, even if the sellers pay part or all of it. This could inflate the buyer's estimated settlement costs. To get around having to generate a GFE for buyers before they have committed to a given loan originator, some mortgage originators have developed worksheet quotes for buyers to use if they want to shop rates. HUD is adamant that these worksheets can't be used instead of a GFE. Furthermore, they provide the borrower no protection. HOUSE HUNTING TIP: The new federally mandated GFE provides protection for borrowers against being charged extra fees at closing that weren't disclosed on the GFE. An informal worksheet provides no such protection. Origination and settlement fees are grouped into three different categories. The first category is fees that can't increase between the time the GFE is issued and closing. Included in this category are the lender or mortgage broker's origination fee, transfer taxes and adjustments to loan origination charges after the borrower locks in an interest rate. Loan originators who miscalculate, causing fees to run higher at closing, have to make up the difference out of pocket. To cover themselves, some loan originators pad the Category one figure. The second category of fees can increase up to 10 percent at closing and includes such things as government recording charges and title insurance -- if the title insurer is identified by the lender, not by the borrower. This is done to encourage lenders to shop for the most cost-effective coverage for the consumer. The third category of fees can change at settlement and includes homeowners insurance and title insurance coverage if the borrower, not the lender, identifies the title insurer. The new GFE also includes a tradeoff table that shows what the interest rate would be if you paid a higher origination fee vs. a lower origination fee: the higher the fee, the lower the rate; the lower the fee, the higher the rate. Finally, there's a loan-shopping chart to use the mortgage information provided by one lender to compare with other lenders. There is no obligation to use a loan originator who completes a GFE for you. A loan originator can't refuse to provide a GFE to a prospective borrower who asks for one. As soon as a prospective borrower provides essential application information, such as Social Security number, property address, etc., the originator is to provide a GFE. THE CLOSING: Lenders are required to provide a GFE within three days of receiving the borrower's application. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
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| Share your love of California at www.yourpieceofcalifornia.com There’s no doubt about it. California is a great place to live. Eternal sunshine, miles of gorgeous beaches, majestic mountains, and beautiful stretches of desert – this state has something for everyone. With so much to offer, it’s no wonder everyone would like to own their own piece of California. Tell the world how special your piece of California is! Leave a short comment at www.yourpieceofcalifornia.com via your Facebook or Twitter account and join others in sharing the love for California neighborhoods, beaches, and mountains. Looking for a home - the right home - is a big task. To help your property search become a little easier, visit www.yourpieceofcalifornia.com. Not only will you find many great tools – from homes for sale to neighborhood information – you’ll be able to share your thoughts about your piece of California, and see what others have said about our state. |
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| Sellers face new dilemma in timing the market By Dian Hymer Some sellers have been biding their time for three years and now wonder if they should continue to wait or bite the bullet and sell now. Karl Case, co-creator of the widely followed S&P/Case-Shiller Home Price index, thinks there's a 50-50 chance that we're at the bottom of the market and that we'll see improvements in the months ahead. Unemployment remains a concern. An increase in the number of new households is predicated on an increase in jobs. Even if we have seen the worst of the recession, most analysts believe the housing recovery could be rocky for years. A quick turnaround is probably not on the horizon. The home-sale market is generally better this year than it was last year at this time. Interest rates are lower by about 1 percent. Mortgages are much more readily available. Home prices have dropped significantly, making it possible for buyers to afford to buy a long-term home. An increasing number of fence-sitters have turned into motivated buyers. However, they are focused on value, condition and location; they aren't overpaying, as they did in 2006. It's still a buyer's market and could remain so for some time to come. Sellers who purchased within the last five years might need to sell for less than they paid. One couple bought a home in Crocker Highlands, a coveted Oakland, Calif., neighborhood. They paid just over $1.1 million in 2005 and made improvements to the property. They sold in 2009, after investing more to prepare the property for sale. They received multiple offers, over the list price. The home sold for $905,000. These sellers weren't happy about the loss. But, their goal was to own only one home. They bought a retirement home near Sacramento and were spending most of their time there. Holding onto the Oakland home was a financial drain, particularly since they were there only part time. They couldn't rent the property out for enough to cover the ownership costs. Another homeowner realized before the recent economic downturn that she couldn't afford to continue to make hefty mortgage payments due to a drop in her income. Emotionally attached to her home that she'd improved over time, she decided not to sell then, which would have resulted in a profit. Instead, she rented the property for a few years and moved in with a friend to lower her overhead. Although the rent reduced her monthly debt load, it didn't cover the carrying costs. When she finally sold in January 2010, prices had dropped to a point that the property sold for less than the amounts of the mortgages secured against the property. To get lender approval on a short sale, the seller had to contribute cash at closing. Clearly, she would have been better off financially if she had sold years earlier. HOUSE HUNTING TIP: Deciding whether to sell now and take advantage of an improved home-sale market or wait for a better time is complicated. First, you need to know the approximate selling price of your home in this market. How much work needs to be done to get the property ready to sell? Does the house have any defects or deferred maintenance that will impact the sale price or make the property harder to sell? If so, this would negatively impact the price. This information can be obtained through your real estate agent. THE CLOSING: Low inventories of good homes in some niche market gives sellers an edge. Even so, you'll be successful in today's market only if you are realistic about the current market value of your home. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
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| Top 10 Reasons To Choose Coldwell Banker To Represent You Coldwell Banker, now celebrating over 100 years in business, sells more homes nationwide than any other real estate company. Here are the "Top 10" reasons you should list your home for sale with us: 1. The Best Sales Associates in the Business. At Coldwell Banker we’ve always realized we are only as good as the individual talents that make up our fine organization. Our commitment to creating the ultimate setting for our superb professionals is the key factor that has made us the preeminent real estate leader. 2. The Dominant Market Leader. The NRT Coldwell Banker franchise is the single largest real estate firm in the country, and handles a significant number of real estate transactions in each of our markets. Our brand and market share gives the strongest endorsement of our professionalism, reputation and assurance behind each of our Sales Associates. 3. A Leader in Corporate Relocation. Each year we represent thousands of relocating buyers and sellers. Our connections mean we’ll show your home to corporate relocation prospects other real estate companies don’t have access to. 4. Superior Training. We stay on top of the latest changes in tax, disclosure and contract law to help protect you through the trans- action and beyond. So, while we’re also well trained at marketing and selling your home, rest assured, we know how to take care of business. 5. State-of-the-Art Lender Support. Our partnership with lender affiliates, like Princeton Capital and Coldwell Banker Home Loans, allows for fast approval and some of the lowest rates available. This will help you when moving to your new address. It’s just one more way Coldwell Banker exceeds your expectations. 6. Full-Time Management & Administrative Support. Coldwell Banker provides valuable managementsupport to tackle some of the more complicated issues. All of our Managers are non-selling so they spend time doing what they do best – supporting our agents and their clients. In addition, our offices are open for business seven days a week, ensuring that when we receive a call on a home like yours, trained personnel will be available to professionally service a potential buyer. 7. Superior Marketing Support. Coldwell Banker provides important exposure through a consistent, aggressive local and regional advertising presence. The power of global advertising connects your home to an ever-increasing number of local, national and international buyers. For the luxury homeowner, Coldwell Banker offers a sophisticated and distinct marketing system, Previews International. Through this remarkable program, Coldwell Banker has become a leader in sales of multi-million dollar properties. 8. Unparalleled Internet Exposure. A majority of homebuyers today begin their real estate search online. In order to maximize exposure for your home, Coldwell Banker offers multiple proven websites to match more buyers and sellers. Unlike many traditional real estate company websites that feature only one company’s listings, Coldwell Banker's websites include all listings posted on the Multiple Listing Services in its areas. 9. Instant and Experienced Legal Partnership. Our Sales Associates (through their Managers) have timely support for legal issues and seminars to prevent lawsuits and claims. Our Legal Department provides updated forms, specifically designed to help our Sales Associates avoid claims and lawsuits and to enable our agents to better serve their clients. 10. Largest Real Estate Brokerage in the World. With more than 120,000 Sales Associates in 3,700 offices worldwide, Coldwell Banker is the largest, most recognized name in real estate. We match more buyers and sellers than any real estate sales organization in the world. Coldwell Banker is a name you can trust. For a complimentary competitive market analysis to learn what your home could sell for in today's housing climate - and to receive my customized client service and eXclusive Fast Track Marketing System - email me at alicia.lanier@cbnorcal.com (California) or alicia.lanier@cbdfw.com (Texas) ... I look forward to hearing from you. |
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| The fight for condo transparency By Benny Kass DEAR BENNY: I live in a 35-unit condominium complex. The homeowners association is incorporated and is led by a board of directors elected by the homeowners. I am concerned about the way the board of directors conducts the overall operation of the association. Many practices are in opposition to the bylaws, and some of the needs of the community are being neglected. For example, we have not been given copies of the budget for the last three years, copies of the minutes of the last three quarterly meetings of the board of directors, a list of the names of the officers of the board who were elected last fall, and a list of the current owners/residents. Other information, which, according to the bylaws, should be available, has not been communicated to us. I have written a letter listing my concerns and requesting information, and have given it to each board member who was elected in 2009. I have received none of the requested information nor have I received a response stating that my letter was received. As a resident with a vested interest in my house and my community as a whole, what can I do to get the information and services from the board of directors? Is there an agency or board I can contact to communicate my concerns and thereby receive help in this matter? --Barbara DEAR BARBARA: Unfortunately, this is a common problem throughout the country. While most members of boards of directors are honest, competent, and concerned, the few who are not cast a negative image on all associations. First, and not by way of embarrassing you, let's set the record straight. You live in a condominium association and not a homeowners association. There is a major difference between these two legal entities, and you should not refer to your association as an HOA. Second, I don't know where you live. Many states (and some local jurisdictions) have created agencies to deal with such problems. For example, in Montgomery County, Md., unhappy owners can complain to the Commission on Common Ownership Communities; in Virginia, they recently established an ombudsman's office to handle issues such as yours. I welcome readers to tell me if there are other such organizations throughout the country. You certainly can complain to your state's attorney general. You also have the right to file suit against your association. Most state laws require that all books and records be made available to unit owners; this would include the names of the board members, as well as any minutes of their meetings. Some states have limited this access by requiring that the person seeking such information show that he/she has an interest in those documents. However, I firmly believe that any unit owner has such an interest. Litigation is, of course, expensive and time consuming. However, if you can round up a group of owners with similar concerns, the legal fee could be shared and you would not have to go it alone. And there is one more thing you can do. In your bylaws, there is a provision on how you can "throw the rascals" out of office. Read the requirements carefully, and muster sufficient support among your fellow owners. However, I always advise my association clients that if they are unhappy, they have three choices: (1) Get yourself elected to the board; (2) put up with the situation; or (3) move out. DEAR BENNY: In 2006, the assessed value of my house had climbed to $750,000 and then dropped down to $714,000. After much investigation, I filed an abatement based on the information I obtained from our local government. Their information was wrong and I successfully got the assessment down to $530,000. However, around the same time, I refinanced based on a bank appraisal of $670,000. Currently, the county's assessment is under $450,000. I think by filing for a tax abatement I shot myself in the foot. I really believe the house is currently worth more than $500,000, but know that potential buyers look at the assessed value. I want to sell my house. Can I realistically list it at the price I believe it is worth, and expect a real estate agent to explain the situation to potential buyers, or am I stuck with an asking price closer to the current assessed value? --Karen DEAR KAREN: I don't believe you shot yourself in the foot; for a couple of years at least, you have been paying the real estate tax at a lower rate. It is true that potential buyers look at the appraised value. Especially in today's economy, appraisers who do work for mortgage lenders will be extremely conservative. But in many jurisdictions throughout this country, it is a known fact that the appraisal has not caught up with the true market value of the property. Appraising real estate is not an exact science. The best test for market value is what a willing buyer is prepared to pay for the property. You have the absolute right to list your property for whatever you believe it is worth. That does not mean, however, that you will find a real estate agent willing to accept your listing. Brokers and agents spend a lot of time working for their clients; no one wants to waste time trying to market a house that is way overpriced. You could, of course, try to sell it on your own, and you may find a potential buyer. But, we still are in financial difficulties, and real estate sales -- although picking up in many parts of the country -- are still quite sluggish. DEAR BENNY: I recently purchased a condo, and I have a noise problem with the unit above me. I can hear the people walking back and forth, getting out of bed and performing normal, everyday activities. A new owner purchased that condo last week. I believe the previous owner installed a low-grade laminate directly on the plywood floor, with no padding or sound-dampening material. I talked to the condo association manager and he says there is nothing that can be done. Is there any legal action I can take? --Todd DEAR TODD: Noise is very subjective. I often have joked that my son's definition of music is my definition of noise. Some people are more sensitive to sound than others, so it will be your obligation to prove that the noise you hear is above normal standards. There are professionals, called acoustical engineers, who specialize in determining whether the noise in your unit is within acceptable decibel range. You should retain an engineer at your expense so that you will have the proof to demonstrate that the noise you hear is real and not imaginary. That engineer should also inspect the upstairs unit so that he can provide some suggestions as to how to resolve the problem. Once you have such a report, show it to your upstairs neighbor. Explain that you are very troubled by what you hear, and ask him to take appropriate steps to correct the situation. For example, carpets could be put on the floor throughout the unit; in some cases, floorboards could be tightened, and made more secure. Often, hammering down nails will solve the problem. You should also review your association documents, especially the rules and regulations. Many associations require that 80 or 90 percent of a unit must have adequate floor covering such as rugs. If that is the rule in your association, demand that the manager inspect the upstairs unit to determine if it is in compliance with the rules. If there is no such rule, you should discuss your concerns with the board of directors. It may be convinced to enact such a rule for the future. If all else fails, you certainly can take that owner to court, claiming a private nuisance. But litigation is time-consuming, expensive and always uncertain. Discuss your situation with an attorney to determine if it's worth the effort. Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. |
| New lead rules affect pre-1978 homes By Paul Bianchina Many houses, apartments and other buildings that were built prior to 1978 may have paint in them that contains lead. Lead-based paint can pose serious health hazards if not taken care of properly, especially for children and pregnant women. If you live in a home that was built prior to 1978, or if you're thinking of buying or renovating one, this is certainly an issue that you need to be aware of. On April 22, 2010, the Environmental Protection Agency (EPA) put a new rule into effect that's designed to help focus the efforts of consumers and contractors to protect against the potential health hazards of lead-based paint. Called the Lead Paint Renovation, Repair and Painting Rule (RRP), the new rule affects contractors and subcontractors who work on older homes. Under the RRP rule, all renovation and repair contractors working in pre-1978 homes, schools, and day care centers who disrupt more than six square feet of lead paint are required to become EPA-certified in lead-safe work practices. Contractors are required to take a one-day training course, and firms must send in an application to the EPA. If not, they could face tens of thousands of dollars in fines in the future. According to the EPA, many contractors think the issue of lead-paint poisoning went away years ago. But lead-paint poisoning isn't just about eating paint chips, and even contractors who think they're doing a good job may not be working in a lead-safe manner. In fact, new research shows that contractors such as plumbers, electricians, painters and window replacement experts can inadvertently expose children to harmful levels of lead from invisible dust disturbed during jobs they perform every day. Of particular concern to the EPA is the safety of young children who are living in the home during renovation work. The EPA quotes one study where it was found that children were 30 percent more likely to have unsafe levels of lead in their blood than those in homes where renovations were not occurring. Contractors who work on pre-1978 homes, apartments, schools, day care centers and other places where children spend time -- from large and small contractors to building services professionals -- will have to take the necessary steps to become lead-safe certified. EPA certification is good for five years. Where is lead a hazard? Typically, the older your home is, the more potential there is that lead paint will be present. It may be buried under several other layers of non-lead-based paint, and as long as those upper layers are not disturbed the health hazard remains relatively low. But as soon as the paint begins to chip or peel, or if any sanding, cutting, or other renovation or repair work is done, the lead-based paint can be released. Here are some of the potential hazard areas, based on suggestions from the EPA: • Lead from paint chips, which you can see, and lead dust, which you can't always see, can be serious hazards. • Peeling, chipping, chalking, or cracking lead-based paint is a hazard and needs immediate attention. • Lead-based paint may also be a hazard when found on surfaces that children can chew or that get a lot of wear and tear. These areas include windows and window sills; doors and door frames; stairs, railings, and banisters; and porches and fences. • Lead dust can form when lead-based paint is dry scraped, dry sanded or heated. Dust also forms when painted surfaces bump or rub together. Lead chips and dust can get on surfaces and objects that people touch. Settled lead dust can re-enter the air when people vacuum, sweep or walk through it. • Lead in soil can be a hazard when children play in bare soil or when people bring soil into the house on their shoes. To find out more about lead-paint hazards, lead-paint testing, and the new lead-safe certification program for contractors, visit the EPA's Web site at www.epa.gov/lead, or contact the National Lead Information Center (NLIC) at 1-800-424-LEAD (5323). |
| Add power to purchase offer By Dian Hymer Figuring out how much to offer on a home you'd like to make your own is never easy. A complicating factor is that although it appears that the housing market may be stabilizing, there is no guarantee that prices won't slip further. With this in mind, don't buy for the short term. Don't buy betting on future appreciation. Buy a home that will work for you long term, at the best price you can negotiate, using financing you can afford. To avoid paying too much, hook up with a real estate agent who will educate you about how much you'll have to pay for a home that works for you. The Internet is a great resource to help you learn about neighborhoods, current listings, and past sale prices. However, a diligent, knowledgeable real estate agent who has experience helping people buy and sell homes in the area where you want to live can get you up to speed on what's happening in that niche market now. HOUSE HUNTING TIP: Ask your agent to give you a summary of all listings that you might have been interested in that sold during the last three months to six months, including list price, sale price and how long they took to sell. It's also useful to have information about the change in average sale price over the past year. Have prices declined? Are they flat? Or are they rising? Also, ask for a list of properties currently available and pending sale. A pending sale is one where the sellers have accepted an offer, but the sale hasn't yet closed. Significantly more active listings than pending sales in an area suggests a high-inventory market where buyers have an advantage. Few active listings relative to pending sales is characteristic of a low-inventory market. During your house-hunting education, make sure your agent reports back to you about day-to-day changes in the market. If an overpriced listing has a price reduction and is now in your price range, make a point of looking at it as soon as possible. A new price can attract other buyers' interest. When listings you've seen sell, your agent should let you know the sale price. This will help you develop a sense for when a listing is priced too high, or priced at or under market value. How well a listing is priced for the market affects your offer strategy. A well-priced listing in a low-inventory market is likely to sell quickly. There could be more than one buyer making an offer. If so, you may need to make an aggressive offer near, at or over the asking price. However, multiple offers don't always result in a sale price higher than the list price. Becoming savvy about local market pricing enables you to know when to make a strong offer on a new listing, even though the overall market may be lagging. It's a different story in segments of the market where there are plenty of listings that take months to sell. In this case, you have choices, making it possible to offer less than the asking price and negotiate. If this one doesn't work out, you move on to the next. You should be prepared to walk away rather than pay too much. Buyers making offers that are contingent on the sale of another property usually have to pay more than all-cash buyers who can close quickly. If you've already sold your home and are waiting for the sale to close, you'll be in a better position to negotiate on price. THE CLOSING: The best bet is to have your home sold and closed. It removes uncertainty in the sellers' minds and may make them more receptive to a lower price. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
| A simple guide to home seller disclosure By Dian Hymer How would you like to find out after you've closed and moved into your new home that the basement is rat-infested? You call a local pest company and discover that the sellers hired the company to treat the house for rat intrusion. Pest infestation might not be a material fact to all buyers. A material fact is one that would affect whether or not buyers would buy a property or the price they'd be willing to pay. However, most buyers would be annoyed at the least that the sellers hadn't informed them in advance that the property had a condition that required routine maintenance. It could also make the buyers suspicious that the sellers may have withheld other information. Home-seller disclosure laws vary from state to state, although most states require disclosure of material facts. Check with your real estate broker or attorney for information about disclosure requirements before you put your home on the market. Sellers often fear that if they disclose too much, buyers won't buy their home. Generally, the opposite is the case. Buyers appreciate knowing as much about a property as possible before they close the sale. When buyers discover conditions affecting the property that they didn't know before closing -- ones that the sellers had to have known about -- they could use legal channels to remedy the situation. The goal in selling your home should be to sell for the highest price possible in the current market, and to keep as much of the proceeds as you can. Getting involved in a claim, mediation, arbitration or lawsuit over lack of disclosure or concealment can be time-consuming, stressful and very expensive. In today's environment of economic uncertainty, buyers who feel they were duped are more likely to pursue a claim against less-than-forthright sellers than they might have when home prices were appreciating at such a fast clip that it was often easier to fix the problem themselves than get into a legal battle with the sellers. HOUSE HUNTING TIP: Here's a guideline to help you decide what should be disclosed. If you're asking yourself whether something should be disclosed, it's probably material to someone, so disclose it. Keep in mind that it's often not clear whether a fact is material. There's a certain amount of subjectivity involved. For example, a woman was raped in a home in a trendy area of Oakland, Calif. This happened before the current owners bought the house. To err on the safe side, the current sellers disclosed this fact, figuring that it might be significant to someone interested in the property. It was also common knowledge in the neighborhood that the event had occurred. If the sellers hadn't disclosed it, the buyers would surely have found out about it later. A single woman who was interested in the house decided not to buy. The house had a detached garage, which gave her cause for concern even before she learned about the crime that occurred at the property. Another buyer had no concern at all about the past incident. The house sold. There was no discount in price due to the disclosure. It takes time to make complete and accurate disclosures. Some sellers take their disclosure obligations less than seriously. It's foolish to shortchange yourself, literally, by failing to make accurate and forthcoming disclosures about property defects. It could significantly affect your net proceeds. The burden of disclosure doesn't rest entirely on the sellers. Real estate agents are required to disclosure material facts. And buyers have a responsibility to protect themselves by thoroughly inspecting the property before deciding to proceed. THE CLOSING: A well-inspected property, complete with sellers' disclosures, protects all parties involved. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
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