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| Ulrich Real Estate Group Newsletter |
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Cute Starter / Investment Home Cute Starter Home As Well As A Great Investment Property.In Area Transitioning To Commercial Zoning. http://www.priorlakerealestate-4540Colorado.com |
Articles and Advice |
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| Right way to do stucco repair By Bill & Kevin Burnett Q: I have narrowed a leak in my stucco wall to the lower corners of a window. Below it, I had a small firewood pass-through door removed. I've watched various other stucco repairs on our house, and I'm pretty handy, so I have a pretty good idea of what I need to do, but I have a few questions: 1. Once I remove the stucco, what caulk, tar or sealer should I use to cover small holes or leaks? 2. Besides Stucco Patch, is there a bag mix of stucco cement with the right proportions of Portland Cement, sand and lime that I can simply purchase? 3. I know it's probably a good idea, but do I need to use cement adhesive on the prepared edge of the existing stucco for my scratch and brown coats? 4. Previous repairs were made up of three coats: scratch, brown and dashing. The brown coat contained the Mission-style trowel marks but otherwise had a relatively smooth finish. Once dried, the dashing was done with a hopper gun and contained the color. It left a rough, sort of large pimply finish. Was the material used in the dashing just more of the same stucco cement? A: First, we suggest you check out the top of the window. The small leak could be migrating from the top of the window to the lower corners. We assume the plan is to remove the stucco from the affected areas and attack the source of the leak. If that is the course of action, we recommend that you repair any damage you do to the building paper by inserting building paper patches in slits you cut above the damaged section, letting the patch come over the hole. Glue the patch down with roofing mastic so that it's watertight. Roofing mastic comes in tubes that fit a caulking gun to make application neat and easy. Wherever you open the area where the window meets the siding, run a bead of caulking along the edge of the window. If you don't remove the stucco down to the siding, at least run a bead of caulk at the top edge of the window to inhibit any leakage that might be occurring at this area. A silicon latex caulk is the ticket for this job. There is packaged stucco mix available at hardware stores and home centers. But a 50- to 100-pound sack of stucco is much more than you'll need. That's why we recommend "stucco patch" for small jobs. It's pretty much the same stuff, just packaged in smaller quantities. You don't absolutely have to add Portland Cement to the mix, but we recommend it. The additional cement helps the stucco stick to the trowel and to the wall. The dashing, as you call it, is what we know as splatter texture. Whatever the name, the finish is the same material as the other stucco coats -- thinned down to a slurry. For a job this small, a hopper gun is a waste of time and material. To get a similar finish, mix the slurry in a bucket to thick-soup consistency. Dip a stiff bristle brush in the slurry and, using a flick of the wrist, direct a spray of the slurry on the wall. Do this several times until the proper texture appears. To get the flat spots, wait a few minutes for the slurry to set up and lay it off with a trowel or wide-blade drywall knife. |
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| 10 Ways to Prepare for Home Ownership Here are 10 Ways to Prepare for Home Ownership... 1. Decide how much home you can afford. Generally, you can afford a home equal in value to between 2 and 3 times your gross income. 2. Develop a wish list of what you'd like your home to have. Then prioritize the features on your list. 3. Select three or four neighborhoods you'd like to live in. Consider items such as schools, recreational facilities, area expansion plans, and safety. Continued at... http://www.jonulrich.com/BuyTip-10WaysPrepareHomeownership.asp Cut and paste in your browser |
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| Why home purchases fall apart at last minute By Dian Hymer Most buyers and sellers feel relieved when the negotiations are done and the purchase agreement has been signed by all parties. It's a milestone. But, you might want to hold off celebrating until the transaction closes. Current market conditions have complicated the home sale industry. Lender requirements for mortgage qualification and the types of home loans available are changing daily. Before getting into contract to buy a home, make sure you double check with your lender or mortgage broker to confirm that the loan you were qualified for several weeks ago is still available. For example, a week before closing, buyers who were purchasing their first home -- and who had been assured that their financing was in order -- were informed that their lender was no longer providing the type of loan they needed to complete the transaction. These were well-qualified buyers who had enough cash for a 10 percent down payment and closing costs. They needed to borrow a first mortgage for 80 percent of the purchase price and a second mortgage for the remaining 10 percent. The lender who was providing the 10 percent second mortgage decided they would no longer provide 10 percent second loans to first-time buyers. In a similar situation, buyers who had been approved for 80-10-10 financing were told by their lender at the last minute that their underwriting guidelines had changed. The lender would no longer provide a second mortgage for 10 percent of the purchase unless they were also providing the first mortgage. A year ago, financing was readily available to just about anyone who wanted to buy a house. And, most of what sold appraised for the purchase price. It was rare to see a listing back on the market because the buyer couldn't get financing. If a deal fell apart, the most likely culprit was an irreconcilable difference over an inspection issue. HOUSE HUNTING TIP: Due to the change in the credit markets, buyers are wise to include financing and appraisal contingencies in the purchase contract in addition to an inspection contingency. A contingency should give the buyers a period of time to satisfy the condition in question. If they act in good faith and attempt to satisfy the condition, but are unable to, they may have the right to withdraw from the contract without penalty, depending on how the contact is written. When buyers find themselves in competition, it's tempting to waive contingencies. A year ago, many buyers felt comfortable waiving contingencies for financing and property appraisal. There was a loan product for everyone and appraisals weren't an issue. This is no longer the case. Most lenders have stopped doing easy-qualifier, no-cash loans and pay-option mortgages, to name a few. Lenders have also tightened up on appraisals, credit score and verifiable income requirements. Buyer's remorse is a more serious issue in a slow market where home prices are soft than it is in a market where prices are escalating. Sellers can help prevent buyer's remorse from sinking a deal by properly preparing their homes for sale. This includes pricing accurately for the current market so that the buyers don't feel they overpaid when they see the inspection reports. Obtaining pre-sale home inspections will also help keep buyers from having second thoughts. The more buyers know about the condition of the property before they make an offer, the less chance they will back out due to inspections. THE CLOSING: A soft market makes an offer that is made contingent on selling another property more risky. Even if your buyer has lined up a buyer for his house, if that deal falls apart so does yours. |
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| Buying to flip not smart in today's market By Dian Hymer There are deals to be made in the current real estate market. Home buyers in many areas finally have the upper hand. Ironically, buyers tend to pull back when the market is soft and buy when the market is high. Savvy investors attempt to buy when the market it low and sell when it's high. But, it's impossible to time the market, so there is always an element of risk involved. Here are some guidelines to keep in mind if you're considering buying a home in the current market. Short-term investing paid off for many investors a few years ago. In most cases, this strategy should be avoided today. Although the home-sale market is localized, generally the current housing market is soft and is expected to take a year or more to recover. You don't want to be caught having to sell in a year or two when the value of your house might be less than or equal to what you paid for it. After taking into account the costs of sale, you could find yourself selling at a loss. With this in mind, don't buy unless you're economic future is secure, and you're sure you won't be relocating during the next five years. Also, don't base your decision solely on price. You might be able to buy a small two-bedroom, one-bath home for a low price in this market. But, if this won't suit your long-term housing needs, don't buy it. Not too long ago when the market was racing upwards, many first-time buyers bought small starter homes. They stayed in these homes for two or three years and then sold for a profit. This helped fund the purchase of a larger long-term home. This strategy could get you into trouble today. You might be better off waiting to buy until you can afford a home that will provide a long-lasting solution to your housing needs. Avoid houses that could be hard to resell. These are usually houses that lack broad-based buyer appeal, like houses that are too small or that are located next to a freeway. If you do buy one of these houses, make sure you get it for a good price. Keep in mind that unless you sell in a hot market, you could have difficulty selling in the future. HOUSE HUNTING TIP: Some home buyers are so anxious to move that they will settle for less than they need. Or, they buy a home that doesn't quite work with a plan to remodel it to correct its deficiencies. This home-buying scheme is not for everyone. For example, some Oakland, Calif., homeowners purchased several years ago and subsequently completed costly renovations. They sold recently for more than they paid, but not for enough more to cover the renovation costs. The finance markets have been in turmoil. Many mortgage companies have had to shut their doors due to fallout from the subprime lending crisis. Some of these companies left buyers in the lurch when they failed to fund loans just before closing. It might be wise to submit applications to two lenders so that you have a fallback, if necessary. Don't skimp on inspections. Property condition has a big affect on property value. If you buy a property that has deferred maintenance, make sure you buy it for a good price. Plan to take care of correcting defects, many of which will worsen over time. THE CLOSING: Financial planning for a home purchase should include factoring in the cost of curing deferred maintenance, as well as the cost of ongoing maintenance. |
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| Pest repairs are turnoff for buyers By Dian Hymer In a perfect world, houses wouldn't deteriorate over time. In reality, the wear begins as soon as a house is built. Older houses tend to have more maintenance issues. But even new homes can develop problems within a few years if they were poorly constructed. Most homes are inspected for damage caused by wood pests -- such as dry rot, termites, fungus, decay and wood-boring beetles -- before they are sold. Who pays to correct the damage -- buyer or seller -- is often subject to negotiation. In a hot seller's market with a high percentage of multiple offers, buyers frequently buy "as is" regarding known defects to better their chances. This was common several years ago when home prices were rising rapidly. At that time, owning a home was more important than the condition of the property. One problem with buying "as is" with respect to pest work is that it's easy to overlook the fact that the work needs to be done. Many buyers who bought "as is" in recent years have not taken care of the pest repairs. These buyers who are trying to sell in today's market may find they have less equity than they thought they had. Not only have home prices declined in many areas recently, but today's home buyers are unlikely to buy "as is" regarding a large pest bill that was passed on from the previous owner. HOUSE HUNTING TIP: In soft markets, buyers are more prone to factor in the cost of curing deferred maintenance into their price. Ideally, sellers should have pest work done before they put their homes on the market. This removes the need for negotiation over pest repairs. Plus, the houses in the best condition that are priced right for the market are the ones that sell. It's not always possible for sellers to have pest work done before marketing their homes, either due to shortage of time or funds. In this case, make sure that you have presale inspection reports done before you market the property and price it to take into account the cost of the repair work. Also, you should make every effort to have the house looking as good as possible. In a soft market, sellers have a lot of competition from other sellers. Even if you can't replace a shower or a rotted mudsill before you market the property, at least have it showing at its best. This will get buyers interested in the property, particularly if the list price reflects the work that needs to be done. There is nothing wrong with buying a property in its "as is" condition as long as you have complete knowledge of the work that needs to be done. But, it is essential that you factor in the cost of the necessary work and ongoing maintenance. Many buyers overlook this and later discover that they can't afford to continue to own their home. It's rare that every item on a pest report needs to be done immediately. But, at some point the deferred maintenance needs to be corrected. Ask your inspector to prioritize the items on the report in terms of urgency level. A deck that's rotted to the point that it's unsafe should be replaced as soon as possible. However, if the bathroom floor needs replacing, but poses no danger, you might want to hold off having this work done until you remodel the entire bathroom, if that is in your game plan. THE CLOSING: In fact, in this case, replacing the floor would be a waste of money. |
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| Home seller quandary: Fix up house or offer credit? By Dian Hymer Sellers who anticipate losing money if they sell their home may wonder why they should spend a dime fixing the place up for sale. Isn't this throwing good money after bad? Even sellers with plenty of equity in their homes often figure the way to get the most out of the sale is to cut sale costs to a minimum. This attitude is directly contrary to the notion that the way to make the most money on the sale of a home is by pricing the property appropriately for the market, and by making cost-effective improvements that will result in a higher sale price in a shorter time. Job applicants don't show up for an important interview in tattered old clothes if they want to make a good impression, particularly if there were plenty of other qualified applicants. Likewise, if you wanted to get top dollar from the sale of a car you would have the car detailed so that it looked its best. The same principal applies to selling single-family homes. Today, many housing markets have plenty of homes for sale and far too few buyers. For years, buyers competed with one another in order to buy a house. Now, in general, sellers are being forced to compete with other sellers in order to get their home sold. Consider the competitive nature of the market when deciding if you're going to improve your home before selling it, and how much you'll invest. Keep in mind that the point of fixing up a home to sell is to maximize your return from the sale. Don't waste money on improvements that have little or no value to buyers. HOUSE HUNTING TIP: Ask your real estate agent or a staging decorator to walk through your home with you for the purpose of determining what fix-up projects you should ideally complete before marketing the property. For example, you might be inclined to replace worn-out carpet. Your agent, however, might advise otherwise. An agent who specializes in the sale of older homes in the area might recommend refinishing the hardwood floor that is hidden underneath the carpet instead. Buyers looking for charming older homes usually prefer hardwood floors to carpet. A common opinion expressed by sellers is that it's pointless to fix up a place for someone else whose decorating preferences might be quite different. For example, why not just offer a credit to the buyers so that they can either change the carpet or refinish the hardwood floors -- whichever they prefer? The problem with this approach is that most buyers have a difficult time imagining how a home will look fixed up. They remember what they see, not what the house could look like with this or that improvement. Imagine there are five homes listed for sale in an area, all similarly priced, but not all in the same condition. Three houses have old, worn carpet covering most of the floors; one has linoleum over the floor; and the fifth has pristine, recently refinished hardwood floors. Most buyers will gravitate to the home with the beautiful hardwood floors. The best houses in the best condition and offered for the best price usually sell quickly. A fast sale is important to some sellers in this market. The sooner your home is sold, the sooner you stop paying mortgage payments, property taxes and various maintenance costs. THE CLOSING: In areas where prices are declining, a quick sale can result in a higher price than might be attainable in a few months. |
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| Do new homes really need a home inspection? Some buyers claim warranty is enough By Barry Stone Dear Barry, You often recommend home inspections for brand-new homes, but in my case, this has proved to be unnecessary. Since buying my home about six months ago, I've had two problems, and the builder repaired them immediately. In another six months, my warranty will expire. What reasons, if any, can you give for having an inspection during that time? --Mark Dear Mark, Reliance on the builder's warranty is the most common reason why buyers of new homes forego home inspections. In many cases, this has proved to be a costly error. Buyers assume that all significant defects will become apparent during the warranty period. This, as we shall see, is a faulty assumption. All new homes have unapparent defects, regardless of the quality of construction or the integrity of the builder. Simply stated: No one can build something as large and complex as a house without committing a few errors at various stages of the process. To assume that all such errors will be readily apparent is a recipe for financial loss. Some problems may reside in the attic, in the electric service panel, or high atop the roof. They may involve safety violations with a chimney installation or the grounding of electrical outlets. There might be a defect in the roof framing, the gas connection to the heater, or the site drainage on the property. A home inspector who is able to discover such conditions will enable you to take full advantage of your builders' warranty. Professional inspection of a brand-new home is always beneficial, if performed by a truly qualified individual. Just be sure to find an inspector with many years of experience and a reputation for thoroughness. Dear Barry, We recently purchased a home and had it checked by our agent's home inspector. The inspector noticed some loose floor tiles in the kitchen and said they could be repaired for about $200. The sellers agreed to credit us $200, so we closed escrow on that basis. Since then, two contractors have told us the problem is more serious and requires relaying the entire kitchen floor, at a cost of nearly $2,500. How could our inspector have given such an inaccurate repair estimate, and why was his estimate verbal, rather than part of the inspection report. Is he liable for the excess costs? --Susan Dear Susan, Your home inspector should not have estimated the repair costs for your floor unless costs estimates were included in his written report. Since he did not provide written estimates, his recommendation should have simply been "further evaluation by a qualified flooring contractor prior to close of transaction." If that had been done, contractors could have submitted the $2,500 estimates, and negotiations with the sellers for the actual cost of repairs could have taken place. Your inspector's undocumented "guess-timate" was unprofessional and ill-advised. Whether you can base a claim of liability on a verbal statement is doubtful, but the matter could be easily tested in small claims court. At the very least, the inspector should be notified of your displeasure. |
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| What's causing my mold infestation? By Bill & Kevin Burnett Q: I have mold developing underneath a window in my bedroom. The window faces north-northwest and never has sun on it. I wonder if the mold could be caused simply by moisture accumulating in the room, or is it a more serious problem, such as a leaking window frame? I have no idea whom to consult. One inspector wrote in his report that the paint job was poor, but didn't say why. There's a contractor in my neighborhood, but how do I know he knows what he's talking about? I'd like to get someone who could determine what is causing the mold, and why the paint splits off my front window sills within months of being applied. The wood is not soft, and the tip of a knife does not penetrate. Any tips on what kind of expert I should be consulting and how to recognize a reliable person would be greatly appreciated. A: The mold on your window is either the result of too much moisture and too little ventilation or it could be symptomatic of a more serious problem. The peeling paint on the front window sills likewise could be a sign of excess moisture or it may simply be that the top coat of paint is incompatible with the undercoat. If there is a structural problem, it is possible that it's caused by termites, but we doubt it. More likely it's caused by a fungus infestation, also known as dry rot. Fungus flourishes in moist conditions. We recommend that you employ a licensed professional structural and pest control contractor to determine whether you have a problem and if so, its extent. The inspection you had done seems to have been deficient. A "bad paint job" tells us (and you) nothing. If, for example, exterior caulking was substandard, that may be the cause of water infiltration and the mold. If it's been going on awhile it could also cause rot. A general building contractor might be of help in identifying structural defects but generally does not have the specialized training necessary to ferret out and identify specific pest control problems, such as the cause of the mold under your window. As for finding a reliable structural and pest control inspector, we suggest you inquire with the people who use them the most: real estate brokers. A structural and pest control inspector is part of almost every home sale. Most brokers have a number of pest control operators they use regularly. Tell the broker up front that you're not thinking of selling (unless you are) but that you have a problem and are looking for some guidance. We think the broker will be happy to recommend a licensed pest control company. Once you have a name, schedule an inspection. Also ask to talk to the inspector and tell him your concerns. We recommend that you have the entire home inspected and that you be there during the inspection. It's possible that the inspector will suggest that he open a test hole or two in the exterior walls to determine if there is hidden damage. This is the case especially if the house siding is stucco. Our experience is that inspectors do not recommend this unless they suspect trouble. Allow him to do it, but ask him to patch the holes when he's done. After the inspection, ask the inspector to talk to you about his findings and ask questions. He'll probably be happy to take you around the house and show you any problems he uncovers. A week or so after the inspection you will receive a written report detailing the damage he's found and the cost to repair it. At this point you can choose what, if anything, to repair. You can also put any suggested repairs out to bid. The cost of the inspection should be no more than $200. We think this is a bargain for the knowledge you'll get. If what you have is merely mold, the cause is a lack of sunshine and inadequate ventilation on your north-by-northwest windows. This is especially true if you live in a foggy area. Mold needs three things to thrive -- moisture, food and a temperate environment. The moisture is provided by condensation; the food is the paint or plaster; and the temperate climate is provided by the warmth of your home's interior. If the mold is not too severe, clean it up by wiping the area with a 25 percent solution of chlorine bleach and rinsing with cold water. Keeping the curtains open and the promoting ventilation by opening the door and windows (weather permitting) will help keep the mold at bay. |
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| Despite foreclosure, pay rent on time By Benny Kass DEAR BENNY: I recently signed a one-year lease with a property management company for a house for my family. As I was opening junk mail the other day, I came across a letter addressed to the property owner notifying her of a pending notice of default and demanding mortgage payments for the last several months in the total amount of $21,000. I am reluctant to pay future rent to the property management company as the property owner will be (or already is) in default, and will cease to own the house long before my one-year lease is fulfilled. I realize that the property owner could still make up the past-due mortgage payments, but as I understand it, if I pay the rent to the property manager I may still be liable for those same rents to the bank/lender if the foreclosure is transacted, and at that time will not be able to collect any part of my deposit back. My rent is $1,895 per month, and the owner's mortgage payment is $3,000 per month. Am I right in not paying the rents? I plan to open an account and put the rent money in it instead. –Chris DEAR CHRIS: As laws vary from state to state, I only can provide you with general advice. I strongly urge you to consult both the property manager as well as your own attorney. First, be careful. You called this "junk mail" but actually it was addressed to the property owner. While I doubt that you will get in trouble, you have violated the U.S. postal regulations by opening someone else's mail. If you get any more mail addressed to anyone other than your family, either return it marked "addressee unknown" or send it to the property manager. In some states, if a lender forecloses on a property owner, that owner has no more rights to the house. However, if there is a tenant in the property, the party who buys the house at a foreclosure sale has a number of tenant rights -- including the right to remain in the property for the duration of the lease term. This is something that your attorney can advise you on. Often, where there are tenants residing in properties that have delinquent mortgages, the lender will go to court and ask that a receiver be appointed. This means that all future rent payments will go to a property manager selected by the judge, and the court will determine the terms and conditions as to how the rent payments will be distributed. It does not appear that this has happened in your case. The last thing you want to happen is to be in default on the terms of your lease. Thus, under no circumstances should you decide not to pay any rent. Your idea of putting the rent in escrow makes sense, but you (or preferably your lawyer) must immediately advise the property manager of your decision. In fact, it would make more sense to have the rent paid to the attorney who will deposit the moneys into an attorney escrow account. The bottom line: You really should let your attorney handle all of this for you. |
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