|
|
|
|
|
|
|
| Paul's Bay Area Real Estate Newsletter |
|
Articles and Advice |
|
 |
|
| Find Out What Your Home is Worth! By Paul Neal If you are planning on selling your home in the near future, you most likely want to know what the estimated value of your home is currently. After all, your home is very likely the largest investment you will make in your life. Recently, I have set up a FREE, no obligation web site that will help you get started to find out what your home in San Francisco or the Bay Area is worth. Just go to www.sfhousevalues.com and fill out a brief form to start the process to receive your FREE, no obligation home value estimate. |
|
| Transferring loan on inherited home By Benny Kass DEAR BENNY: I recently inherited my mom's home, valued at $136,000. Unfortunately, she had a home equity line of credit (HELOC) on it for $66,000. Apparently, a relative talked her into getting this loan to start a small business. Of course she was stuck paying the loan, and the payments are current. I would like to move into the home but have had no luck with the lender in transferring the loan to my name. What are my options? I really do not want to refinance because her interest rate was 3.25 percent, which is fantastic. I am at a loss. I am maintaining all the expenses of this home but receive no benefits. --Sheila DEAR SHEILA: First, have you probated your mother's estate? Depending on how she held title to the house, you may have to go to probate to make sure that the house is really in your name. If title was held in both your names as joint tenants with rights of survivorship, then you will automatically own the house. (Note: Not all states use the same terminology, so you should consult a local attorney for clarification of who currently owns the house.) But if the house was in your mother's name only, then title is in "legal limbo." In other words, until a probate court issues a final order, you cannot do anything with the house legally. You state that the current interest rate is 3.25 percent. Have you reviewed the legal documents relating to the HELOC? Although I have not seen those papers, I suspect that the interest rate is variable -- in other words, it may be readjusted periodically, possibly every year. Now to your specific question: Back in 1982, Congress enacted what is known as the Garn-St. Germain Depository Institution Act. Although this law deals with a lot of subjects, one of them relates to your situation. In most mortgages, there is a provision known as a "due on sale" clause. This means that if a house is sold or transferred, the new owner cannot automatically assume the old loan. However, the 1982 law imposed a number of restrictions on lenders who want to use that due-on-sale clause. Specifically, the language is as follows: "With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon ... a transfer to a relative resulting from the death of a borrower." You appear to fall under this exemption. You are a relative who inherited the house from your mother. I would talk to bank representatives and refer them to this law. If they continue to object, I suggest that you retain a lawyer to assist you. You can also file a formal complaint with the Office of the Comptroller, a federal agency that regulates national banks. Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. |
|
| Water audits prepare you for the future By Michelle D. Alderson Despite a very wet season this past winter, the increase in rainfall didn’t make up for many years of below-average water levels. In 2009 California Governor Arnold Schwarzenegger declared a state of emergency in an effort to manage the drought crisis. Since then, many water companies have put into place mandatory water rationing with financial penalties for homeowners who don't comply. Before you find yourself paying more for your water, be prepared for the future by conducting a water audit (don't worry, you don't have to find all your water bills from the past two years). A water audit analyzes a home's water use and identifies ways to make it more efficient. A water audit's primary focus is to check for leaks in plumbing fixtures, appliances, toilets, faucets, hoses, and sprinklers (as well as ponds, fountains, and pools, where applicable). A water audit also can determine if older appliances and faucets need to be replaced with newer energy-efficient products, which can save both water and money on your monthly utility bills; Simply installing a low-flow showerhead you can save 8,000 gallons of water a year per person. Beyond doing a physical check for water leaks, a water audit also looks at how much water you can save in daily tasks. Do you take long showers? Do you use the dishwasher and clothes washer only when they are full? Do you turn off the water when you are brushing your teeth? According to the American Water Works Association (AWWA), the average indoor water use per person is 94 gallons of water per day. Simply adjusting everyday habits can cut back on water usage by as much as 30 percent. That’s more than 30 gallons a day per person. With global warming and droughts plaguing the West, water rationing will become mandatory by most utility companies. California's state water department forecasts that the Sierras, which are one of California’s main water sources, will have 25 to 40 percent less snow by 2050. A water audit saves money, saves water, and prepares you for an inevitable future. To find out how your household's water use compares to the rest of the country, go to H2O Conserve's website (www.h2oconserve.org) or the Water Use It Wisely site (http://www.wateruseitwisely.com/100-ways-to-conserve/home-water-audit.phptry) for their user-friendly H2O calculators. They will show how much water you use and give tips on ways to conserve. For more information on water audits, visit the AWWA website (www.awwa.org). |
|
| Looking for a home in San Francisco? By Paul Neal Sometimes difficult problems may be solved by simple solutions. In that vein, I have created a web portal for people looking to buy a home in San Francisco or the Bay Area. This web portal accesses the San Francisco Multiple Listing Service directly as well as joint MLS to cover the rest of the Bay Area and much of California, for that matter. The address is www.sfhomes4sale.com and once there, you can search for homes, condominiums, apartment buildings, and other types of property using customized search parameters. This is a FREE, no obligation service. If you get stuck working with this system, just call me at 415-350-1946 for help. |
|
| How pros drill through masonry By Paul Bianchina When it comes to drilling holes in concrete, concrete blocks, stone and other masonry, using a standard drill can be a real exercise in futility. The rotary motion of the drill bit -- even a carbide-tipped masonry bit -- is simply not sufficient to power through tough masonry surfaces. Instead, you need a drill that combines rotation with an in-and-out hammering motion. This combined action helps to break down the masonry as the bit advances, making for much faster drilling without burning the bit. There are two basic types of drills that offer this rotational and hammering combination: The hammer drill and the rotary hammer. The two tools are often confused, but there is a definite difference between them. Hammer drills A hammer drill looks very much like a standard drill, and is available in both corded and cordless versions. Hammer drills have a heavy-duty keyed or keyless chuck, and will accept standard drill bits and screwdriver bits in addition to carbide-tipped masonry bits. They tend to be a little less powerful than a dedicated rotary hammer, but since they can be used for both hammer drilling and conventional drilling and driving, they are more versatile. Like everything else in the tool world, you get what you pay for. Some lower-end hammer drills, especially cordless ones, are frustratingly short on hammering power, and their inexpensive construction makes for a short life span. So if you're considering investing in a hammer-drill/drill/driver combination, look for one with the quality, durability, and features that will allow it to do all three tasks well. One example of a high-end cordless hammer drill/drill/driver is the DeWalt DC927KL ($349). DeWalt is well known for high-quality tools that are designed with the needs of professional contractors in mind, so this is definitely a drill that will meet and exceed everything that the home handyman is looking for. The DeWalt Hammer Drill uses their new 18-volt nanophosphate lithium ion batteries for more durability and longer life. To handle the stress of the hammering action it's a little heavier and more ruggedly built than a conventional cordless drill, but DeWalt has added a rubberized, non-slip grip for comfort. The DC927 also has an all-metal, three-speed transmission that lets you match the speed of the drill to the type of work you're doing. By turning a simple mode selector collar, you can choose the appropriate speed for hammer-drilling, conventional drilling or driving fasteners. The heavy-duty all-metal chuck is 1/2 inch, and when you combine that with the auxiliary side handle you have a tool that will easily handle larger wood-boring bits and hole saws in addition to hammer-drilling concrete. The drill's variable speed is controlled by the trigger, and there's an adjustable clutch as well. The complete kit includes a one-hour charger, two batteries, an adjustable and removable side handle, and a case. Rotary hammers Rotary hammers are more powerful than hammer drills, and while they'll also do some standard drilling, their real purpose is drilling in masonry. Rotary hammers deliver heavier hammering action than the typical hammer drill, and some models also have a hammer-only setting, which allows them to be used with a chisel bit for light- to medium-duty chipping. True rotary hammers also use a different type of chuck and drill bits, known as SDS (slotted drive shaft). This type of keyless chuck slides back and forth to install the bits, rather than rotating. SDS chucks provide a non-slip grip on the bits that better withstands the hammering motion, but they will not work with conventional drill bits. If you have or anticipate a fairly regular need for drilling in concrete and masonry surfaces, a rotary hammer is probably a better choice than a combination hammer drill. An excellent example of a professional-quality corded rotary hammer that would also be suitable for homeowners is the 11258VSR from Bosch ($159), another company that manufactures excellent tools. Faster than a conventional hammer drill, the Bosch Rotary Hammer is also very comfortable to use, and the SDS chuck is easy to operate and grabs the bits securely. Bosch has designed this drill to be quieter and produce less vibration than comparable rotary hammers, so you can use it for longer periods without fatigue. And because this tool is built specifically with hammer-drilling in mind, you can count on durability and long life. The drill can be operated in hammer-drill or drill-only modes, and is switched with a simple dial on the side of the tool. The handle is comfortably padded, and the variable speed is trigger-controlled and reversible. Bosch also offers an optional snap-in three-jaw chuck adapter, which allows you to use the tool with conventional drill bits. The 11258VSR comes with a comfortable and adjustable side handle, an adjustable depth gauge to help you drill holes to specific depths, a selection of three different SDS carbide-tipped masonry bits, and a carrying case. Note: All product reviews are based on the author's actual testing of free review samples provided by the manufacturers. |
|
| Fixing to sell: Don't go overboard By Dian Hymer Fixer-uppers with upside potential were in high demand when the market was appreciating at a fast pace. Once depreciation took over, speculators disappeared until 2009, when low-end foreclosure properties in some areas became hot properties -- particularly if they were selling at a 50 percent discount from the peak in summer 2006. In California, 70 percent of the homes bought by investors in 2009 were distressed-sale properties, according to the CALIFORNIA ASSOCIATION OF REALTORS®. Some were stripped of appliances and fixtures. But, at half price, there was profit potential for buyers who were up for a redo -- especially seasoned investors buying multiple homes to fix up and resell, or rent out. Fixers priced over $500,000 aren't as easy to sell today. Most buyers in higher price ranges are buying a home to live in. They want a home in move-in condition that will suit their long-term needs. There are exceptions. In high-demand market niches with few listings, there is occasionally a fixer-upper that draws a lot of attention. Usually, these fixers sell to buyers who will live in the property and fix it up themselves to save money. Often this is the only way they can afford to move into the neighborhood. Sellers of fixers in such neighborhoods should make their property as presentable as possible by cleaning out clutter, both inside and out. Many homebuyers can't visualize a property's potential. It's often worth a modest investment to show the house at its best advantage. Cosmetic improvements, such as painting, replacing outdated floor covering, or refinishing worn hardwood floors can pay off. Some fixers are staged, even though the property needs a lot of work, so that buyers can envision themselves living there. Presale inspections will help buyers make a decision about whether or not to tackle the project. Make reports available to buyers before they make an offer to avoid having to put the home back on the market if the deal falls apart because the buyer's inspectors discover defects not previously disclosed. HOUSE HUNTING TIP: How much you spend preparing a fixer for sale depends on several factors. How much did you pay for the property? How much do you owe against the property? Is there demand for fixer-uppers in your area? Finally, how much does your real estate agent think you can sell the home for given current market conditions? Sellers who have equity in their home and cash to invest in fix-up for-sale work should consider making cost-effective renovations, like a kitchen upgrade, but not an entire renovation. Ask your agent what the home would sell for with and without these improvements before doing anything to it. The investment may not yield a profit, but could recover the costs when the home sells. In areas where fixers aren't selling, sellers might need to enhance the property to sell at all. A good real estate agent should be able to provide references for reliable, reasonably priced professionals who can do the jobs for sellers who haven't the time or expertise to do the work themselves. Buyers who bought at the peak may not be able sell for even close to what they paid. One possibility would be to rent the property, if it makes sense financially. You may need to fix up the property somewhat to attract a good tenant. Consult with a certified public accountant about the tax consequences of converting a single-family residence to a rental. Another option, if you don't have to sell now, is to stay put for awhile and fix the property up gradually over time. Avoid investing a large amount of money in the hopes of getting a bigger return. THE CLOSING: The housing market in your area may be too uncertain for speculation. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
|
| 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. |
|
| Neighbors pry over condo sale etiquette By Benny Kass DEAR BENNY: My wife and I own a condo in a two-unit building. Our downstairs neighbor, who bought the property only two years ago, recently put her unit on the market. Her inability to cover her mortgage obligation is the reason she is forced to sell now, instead of waiting for the market to improve. During the last two months, the listing agent has had three open houses per week: two hours on Tuesdays, and three hours each on Saturdays and Sundays. This is creating quite a bit of interference in our lifestyles in terms of commotion, driveway blocking, etc. In addition, the asking price now has been significantly reduced, thus lowering our "comparable" value. Do we have the right to limit formal "open houses" to the more respectful one time per week? Do we have any rights in the agent's publication of the lowered price (i.e., "Price Reduced" on the for-sale sign on our building)? Do we have any rights of "approval" of the financial condition of a prospective buyer? --Mark DEAR MARK: If you lived in a condominium with more units, your board of directors could impose reasonable restrictions. Most condominium legal documents prohibit actions that create a nuisance. But, unfortunately, it's you against your neighbor. Have you talked with her and explained that her agents are disturbing your peace and quite, and that your driveway -- which I assume is a common element -- is constantly being blocked? Short of cooperation, I am afraid that your only remedy is to seek an injunction in court, although there is no guarantee that you will be successful. As for your other questions, there is nothing you can do about the low sales price. Property owners have the right to sell their property at any price they want; they can also give it away should they so desire. In a cooperative apartment, the board of directors generally has the right to reject a prospective purchaser based on inadequate financial situation. However, very few condominiums have this right. Your only hope is that a purchaser's lender will look very carefully at the financial situation -- not only of the purchaser but also of the association. In today's market, lenders are very conservative. DEAR BENNY: I would like to know what can be done to the president of our condo association, who spent approximately $4,000 on projects that the board didn't approve and weren't emergencies. At the time I was a board member. These two projects were never discussed with the board as required by our bylaws. --Sue DEAR SUE: You have a number of options. But first, I have to ask you a question: Have you talked with the other members of the board of directors? Are they on board with you or are they supporting the president? Assuming that all of your other board members are in agreement, the board has the right to remove the president from office. Board members are elected by the unit owners, and only the unit owners by a majority vote can remove a board member. (Note: This answer is general in nature; you have to review your own legal documents -- declaration and bylaws -- to determine the process for removing a board member.) However, in most condominiums the board elects its own officers, and the board can also remove an officer. In your case, assuming that (1) you have properly noticed the time and place for a board meeting, (2) you have a quorum present at the meeting, and (3) a majority of the board members are in agreement, the board can ask the president to step down and the board will elect a replacement. As noted above, however, that board member will still remain on the board. Next, the board can call a special meeting of the owners for the sole purpose of removing that board member off the board. Again, you have to look at your bylaws and strictly comply with its requirements. Every legal condominium document I have ever reviewed contains a provision as to how a board member can be removed, but you may want to ask your association attorney for assistance. Finally, the board should formally ask the association attorney for a legal opinion as to whether the expenditure was permitted under your legal documents. If the attorney confirms that it was not a valid expenditure, the board should formally confront the president. This can be in an executive session of the board. Give him an opportunity to respond, and if he wants he can retain his own attorney to assist him. Once the board has met with the president and remains satisfied that this was not a valid expenditure, the board can (1) ask him to return the money out of his own pocket, and (2) after a hearing (which is usually informal) fine the president. Again, your association attorney will have to guide you on this process. Finally, and only if you and the association attorney are satisfied that the president did not have the authority to authorize this expenditure, you can publicly censure the president by sending a memorandum outlining the facts to all unit owners. Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. |
|
| Design tips for updating 1950s tract home By Paul Bianchina Q: Our house is a nondescript 1950s ranch tract home with a light-gray composition shingle roof. It's currently a dated white with blue trim, and we'd like to update the paint job. We're also relandscaping with drought-tolerant tropical and contemporary plants, and not much grass -- mostly bark and flagstone walkways. Is there somewhere where I can see other updated tract homes? Do you have any color suggestions? A: I would begin in your own neighborhood, and just start driving. Wander different streets around where you live, and then slowly branch out from there. Keep a local map handy, and whenever you find an area of homes that looks interesting, highlight it on your map for future exploration. Ask your real estate agent, for exploration suggestions, as well as others you come into contact with, such as the landscaper. While it's nice to look at homes that are similar to your own, you don't need to be limited to just those either. I would suggest going through new housing tracts of starter-level homes, and see what is currently being done in the way of colors and exterior amenities. As to color choices, there are three simple things I can suggest. First of all, make a visit to your local paint store or home center and pick up some brochures on exterior paint colors. Many of these brochures offer suggestions of colors that work well together, and you might see some combinations that appeal to you that you wouldn't have otherwise thought of. Some paint stores have computers with paint-scheme programs that are free for customers to play with. You can browse through a library of common house styles until you find one that looks similar to yours, add a roof color that looks like yours, and then use the computer to add different body and trim color combinations to see what they look like. If your local paint store doesn't have one, you can also find places online that do the same thing -- there may be a small charge, but it's well worth it. My third suggestion is to take a digital photo of the outside of your home, then print it out on your computer in black and white, making several copies. Using colored pencils, color in the roof in a shade that's as close to yours as possible, then, referring to some of the color combinations you liked from the paint store brochures, color in the front of the house and see what you think. You can also do this more accurately with programs such as Photoshop, but that might be more time-consuming and involved than you would like to get. Final suggestion: Don't limit yourself to just paint. There are any number of ways that you can really dress up the outside of a plain tract house and set it apart from the others in the neighborhood, without spending a fortune. You can add some different trim treatments around the windows, change the front door, add some shutters, and add some door trim, just to name a few. Home shows, decorating shows on TV, magazines and your neighborhood wanderings should all be sources of inspiration. Q: I would like to use the cable railings (on my deck railing) except for the high price. Do you think it would be possible to substitute a thick, strong wire instead of the cable? These wires keep in huge farm animals ... so their strength is comparable to cable ... well over 1,000 pounds in breaking strength. I would appreciate your thoughts. A: You can actually construct a deck railing out of any materials that comply with the requirements of whatever building codes are in effect in your area. I have seen some very nice railings made from square-grid and rectangular-grid wire livestock fencing set into wood frames, as well as wood dowels, metal conduit and other materials. Whatever you choose needs to be strong enough and secured tightly enough to meet the building codes, and also has to be spaced closely enough together -- most codes require a spacing of no greater than four inches. You also want to avoid materials with sharp edges or ends, as well as materials that won't weather well. Finally, you want to select a material and an installation method that is safe, pleasing to your eye, coordinates well with your home's style, and maintains your resale value. |
|
| Find property problems before you buy By Dian Hymer To avoid a bad experience that could end up in a legal battle with the sellers over property problems, make sure your purchase agreement includes an inspection contingency. Your mission during the inspection contingency period is to find out as much as possible about the property and surrounding area, insurability of the property, permit history, zoning issues and cost to repair defects. Investigate any issues that could affect whether or not the property will suit your long-term needs at a price you can afford. Most states have home seller disclosure requirements. If you are buying in a state that doesn't require sellers to disclosure material facts, ask the sellers to disclose in writing any property defects or neighborhood issues they know about. Also, find out if there are systems that require routine maintenance, such as the furnace, drainage system, skylights and roof. After you clear the inspection hurdle, ask the seller to provide you with contact information for any people who have worked on the property that the sellers would recommend. Find out when major components were replaced and when the house was last painted. Find out how much the sellers pay for utilities. Ask for copies of proposals and paid invoices for any significant work done on the property. Basically, you want to know any problems the seller had with the property, what was done about it, by whom and when. If the roof was recently replaced, find out if it's covered by a warranty and if it's transferable to you. You may feel uncomfortable asking the sellers to provide additional information at the time you make the offer, particularly if there are multiple offers. In this case, ask the sellers for answers to your questions during the inspection contingency time frame. Questions will undoubtedly come up during your inspections. HOUSE HUNTING TIP: Even if the sellers have provided presale inspection reports and disclosures, have your own inspectors give the property a thorough exam. Some buyers hire the seller's home inspector to meet them at the property to explain the presale report and ask questions. This may save you money. But, saving money should not be the primary goal when having a property inspected. Buyers of newly built homes should ask the sellers for any construction-related documents like the geotechnical report, engineering calculations, and letters to the planning department confirming that the geotechnical engineer monitored the construction and confirmed that the house was built according to his recommendations. Ask the seller to leave the architectural plans, if they're available. Verifying livable square footage is a big issue in today's cautious mortgage environment. Many lenders won't count additions or renovations that add square footage in the appraised valuation of the property. If the sellers can't provide the supporting documentation, such as copies of approved permits, the property could appraise for less than you agreed to pay. This might jeopardize the transaction if the lender approved a lower mortgage amount than you requested. It's a good idea to check the permit history at the planning department yourself if the sellers can't provide copies of permits for work done. This should let you know if renovations were done with permits and if the permits received final approval. You should have this information before removing the inspection contingency. Many planning departments won't issue a new permit if there is a permit on record that never received final approval. The new owners might incur fees to clear up any outstanding permits before they can move forward with new improvements. THE CLOSING: With probate and REOs (bank-owned properties) you will receive minimal, if any, information about the property condition. Be extra careful with your due diligence investigations. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
|
| 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. |
|
| 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. |
|
| 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. |
|
| Presale inspections for smoother sales By Dian Hymer Homes are selling for less. Everyone's trying to cut back. Yet, many real estate agents think it's wise for sellers to provide presale inspections for buyers to review before they write offers. Is the cost, which could run from a few hundred to $1,000 or more, worth the expense? Last year, a home seller in the hills above Oakland, Calif., did a lot of work renovating a home before putting it on the market. Her agent recommended a home inspection, which involves a more comprehensive investigation of the property. A wood pest or termite report covers damage caused by wood-destroying organisms, and conditions that would be likely to lead to future infestation. A complete home inspection usually covers the roof to the foundation and everything in between, although this differs from one inspector to another. The seller in the above example was financially exhausted after taking care of the fix-up work and decided against providing a presale home inspection. The house was priced under market value and showed well. It brought in multiple offers and sold well over the asking price. However, the buyers' home inspection revealed that the foundation needed replacing. The deal stayed together, but only after a much lower price was negotiated. Changing the price in the middle of a transaction can be a red flag to the lender, particularly if it's a significant price reduction. The lender could require the work be done by closing, which could delay the closing by months. If the buyer's loan commitment expires, the transaction could collapse. HOUSE HUNTING TIP: One benefit of providing presale inspections on your home is that you have the opportunity to correct defects before marketing the property. This will make your home more salable and increase the odds of a smoother transaction. Another benefit is that by providing as much information about the property as possible upfront, you decrease the risk of a transaction falling apart when buyers discover information about the property they weren't aware of when they made their offer. One seller failed to provide a foundation report to the buyers before they made an offer. When the buyers were given the bad news, the transaction fell apart. If you have reports on your home, make sure that the buyers receive copies of them before they decide whether or not to buy your home, especially if the reports reveal conditions about the property that could influence the buyers' decision to buy or what they would pay. Sellers often see no good reason to pay for inspection reports upfront because the buyers will want to have their own inspectors investigate the property. Buyers should have the property inspected by their own inspectors. The purpose of getting presale inspections is not to preclude the buyers from having inspections -- it is to educate the sellers and buyers about the property condition before they enter into a contract. Sellers are in control of who inspects their home when they pay for presale inspections. Make sure to use inspectors who are well respected in the area. The buyers' comfort level with your presale reports will be higher if their agent can vouch for the inspectors. Even though the buyers will probably do their own inspections, having presale inspections can cut down on negotiations that can occur after the buyers do their inspections. However, don't be surprised if the buyers ask for something as a concession for removing their inspection contingency. Recently, buyers of a home in Oakland's Rockridge neighborhood asked the seller to have the garage roof replaced, even though they were given a roof report and replacement proposal before they made their offer. Their offer was based on taking the property in its present condition. THE CLOSING: The seller said no and the buyers removed their contingency. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
|
| Not all buyers are worth a counteroffer By Dian Hymer After mustering the emotional energy to make an offer on a listing, it can be devastating if you hear nothing back from the seller. In most cases, if the offer isn't what the sellers are looking for, they will issue a counteroffer detailing the price and terms they can live with. When a seller doesn't respond at all to your offer, it's usually because the offer is so low that the seller thinks it's a waste of everyone's time. Ask your agent to talk to the listing agent to find out why the seller didn't counter your offer. Then, make another offer if you think the house warrants a higher price. If the sellers want too much for their house, take a breather. Let the listing sit on the market awhile before you make another offer. The risk of this approach is that another buyer could come into the picture who is willing to pay the sellers' price. Nothing is lost if you wouldn't have paid that price. Your agent should keep in touch with the listing agent during your wait-and-see period. Ideally, you'd like to know if the sellers are going to reduce the price before it shows up on the multiple listing service. A price reduction to market value could elicit interest from multiple buyers. Risk-averse sellers can be skittish about working with buyers who have a low cash downpayment. It's wise to include a mortgage preapproval letter with your offer. Also, some sellers aren't in a position to accept an offer that's contingent on the sale of the buyers' home. Another reason buyers don't receive counteroffers is because there were multiple offers. The sellers can accept only one offer in primary position. If there were five offers and yours was the lowest, you're not likely to receive a counteroffer. Multiple offers are occurring in low-inventory, high-demand markets. Buyers were out early this year due to lower home prices, low interest rates and homebuyer tax credits. HOUSE HUNTING: A typical reaction from buyers who lose in a multiple-offer competition is that they would have paid more. When you're competing against other buyers, you need to make your first offer your best offer. This seems counterintuitive because you run the risk of paying more than you might need to. One way to ensure that you don't pay too much is to include an appraisal contingency in your purchase offer. Generally, an appraisal contingency allows the buyers to withdraw from the contract if the house doesn't appraise for the purchase price. In today's wary lending environment, lenders are requiring appraisers to be conservative on appraisals, particularly in declining markets. Be aware that some buyers in a competitive situation will not include an appraisal contingency in their contract. If they have a large enough cash downpayment and the appraisal value is less that the contract price, the lender may still approve a loan amount that will enable to the buyer to proceed with the sale. THE CLOSING: Buyers who want a house badly enough will often pay more than the appraised value if they have enough cash to make up the shortfall. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
|
| How does your garden grow? By Paula Hess If you’d like to have a garden, but think you don’t have the space, think again. Urban gardening techniques are allowing small-space gardening to take root in unlikely places, such as balconies, raised planters, roofs, windowsills, and postage stamp-sized backyards. Condominium dwellers and homeowners alike are getting their fingers dirty and growing their own produce, succulents, and flowers in these tiny slivers of dirt. According to Texas A&M horticulturalists, nearly every plant that grows in a spacious garden can grow in containers, such as hanging pots, windowsills, or even tubes--bags of potting soil with slits for the plants to protrude. Some plants are ideally suited for container growing, including tomatoes, peppers, eggplant, green onions, beans, lettuce, squash, radishes, and parsley. Texas A&M offers pointers on everything from soil preparation to container selection at http://aggie-horticulture.tamu.edu/extension/container/container.html. Topsy-turvy Turnips? One urban gardening option gaining popularity is germinating plants upside down from hanging containers. That is, the plants dangle upside down from homemade planters, such as five-gallon buckets, or commercially available planters. A recent New York Times article at http://www.nytimes.com/2010/05/20/garden/20tomato.html spotlighted this technique. These hanging options allow those without a yard to grow fresh produce, and those with a backyard garden to add a rack of hanging planters and boost their gardens’ yields. Condo dwellers can get in the act too with easy-to-make hanging window pots. For a step-by-step pictorial on making your own upside-down soda bottle container, see http://www.cheapvegetablegardener.com/2010/05/2-liter-bottle-upside-down-tomato-planter.html. Succulents If your interest in gardening is ornamental versus gastronomical, then succulents are an ideal match for you and California’s climate. Not only are these plants suitable for indoor and outdoor settings, these heat-tolerant and drought-resistant plants require little maintenance if you become an erstwhile gardener. According to Debra Lee Baldwin, author of Designing with Succulents and Succulent Container Gardens: Design Eye-Catching Displays with 350 Easy-Care Plants, “Succulents are carefree plants for small-space gardens.” She notes that succulents come in all shapes, sizes, colors, and varieties—from delicate sedums with rice-sized leaves to trees that are reminiscent of the vegetation in a Dr. Seuss book. Succulents can accent any setting—windowsills, sitting areas, walkways, and, of course, yards. The author’s Web site features how-to videos at http://www.debraleebaldwin.com/ and http://www.succulentchic.net/ and a beautiful array of examples of the design possibilities. In no time, you’ll be creating your own windowsill boxes of sansevierias (mother-in-law’s tongue). A Tree Grows in Brooklyn What started as an experiment to grow vegetables in a Brooklyn apartment window has evolved into a collaborative online community’s effort to empower inner-city residents to grow food in windows. This Internet-based collective shares ideas and techniques for building and using low-cost hydroponics to grow vegetables. Visit http://www.windowfarms.org/ to learn how to create your own 365-day garden of edibles using low-impact materials or recyclable materials in your outbound trash. You also can purchase starter garden kits from the site. Either way, these gardens will brighten any window. More Resources • Cactus and Succulent Society of America (www.cssainc.org/) • HGTV (http://www.hgtv.com/topics/container-gardening/index.html) • Container Gardening Guide (http://containergardeningtips.com/) • National Gardening Association (www.garden.org/home) |
|
| What is post-consumer content? By Michelle D. Alderson What is it? You've most likely heard of the common green jargon: energy-efficient, recycled material, reusable -- the list continues. However, the term post-consumer content might be new to you. You may even be using products that are made with post-consumer content already and you just don't know it. Earth911.org (http://www.earth911.org) defines post-consumer content as "a material that has served its intended use and instead of being disposed of it is being reused in a different product. If a product is labeled 'recycled content,' the material might have come from excess or damaged items generated during normal manufacturing processes-not collected through a local recycling program." Simply put, products made with post-consumer content are items you can buy that have been made with recycled material. Why is it important to buy it? Probably the most common post-consumer content product you will find is paper goods: toilet paper, paper towels, envelopes, napkins, etc (http://www.nrdc.org/land/forests/gtissue.asp). The following are just a few examples of other products that can be made with post-consumer content: paint, carpet, mulch, bathroom and office partitions, office furniture, printing ink, corrugated cardboard boxes, cleaners, and hardwood floors. You might ask why it is necessary to buy these products when regular toilet paper seems quite fine. It is important to know that recycling doesn't just end when you put a can in a blue bin. It truly is cyclical. Buying post-consumer content products keeps the country's growing recycling programs afloat. If consumers don't buy products made with recycled materials, companies won't waste their time making them. In essence, buying such products keeps the landfills lean, the recycling business running, and inevitably helps the environment. How much will it cost? In today's economy, some consumers might fret over purchasing post-consumer content products because of cost. Is it better to help keep the environment green or keep that green in your pocket? If you are buying a post-consumer content product like used office furniture, you will see a significant discount, but new post-consumer content products can cost a little more. According to greenguardian.org (http://www.greenguardian.org), some products, such as post-consumer content recycled paper can cost about 10 percent to 20 percent more than regular paper. The good news is that as the demand for post-consumer content products grows, the price for such goods continues to drop. In addition, supplier competition often can create bargains for the consumer. The key is to search for the best price. |
|
| 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). |
| Sizing up purchase deposits By Dian Hymer In most states, it's customary, or required by law, for the buyers to include a good faith deposit when they make an offer to purchase a home. The deposit should not be given directly to the seller, but held by a trustworthy third party that maintains a trust account specifically for home purchase deposits, such as an escrow company. The deposit can be in the form of a check made out to the third-party company or it can be wired into the appropriate account. The size of the deposit you make is usually determined by market conditions and local custom, except for specific types of sales, such as probate sales or sales of homes in a housing development where a minimum deposit is required. HOUSE HUNTING TIP: Your deposit will become part of your downpayment if the sale goes through. Depending on how your contract is written, your deposit should be refundable if you are unable to satisfy a contingency, after exercising due diligence to do so. Your contract should include contingencies for inspections, satisfactory condition of title to the property, your ability to line up financing, and the lender's approval of an appraisal of the property. For example, if your inspections reveal defects that can't be satisfactorily negotiated with the seller, your deposit should be returnable if your contract provides for this. However, the deposit won't be released by the holder to either the buyers or sellers without a release signed by both parties indicating how to disperse the funds. Be sure to check with a knowledgeable real estate attorney to determine who is entitled to the deposit if you back out for a reason that's not provided for in the contract. Real estate agents who aren't also attorneys cannot advise you on this issue. If you end up in a dispute, the deposit holder won't release the money to either party until the dispute is resolved. How large a good faith, or earnest money, deposit you make will depend on several factors. In any case, your deposit should indicate your intent to abide by the terms of the contract and close the sale. There is usually no set amount required by law. In California, where home purchase contracts can include a liquidated damages clause, deposits are often 3 percent of the purchase price. This clause puts a limit on damages that could be awarded to the sellers if the buyers don't close the sale. If buyers and sellers agree to include this clause in the contract, state law limits the amount that can be awarded to the seller to 3 percent of the purchase price. In many areas of California, deposits tend to be 3 percent of the offer price, even if the contract doesn't include a liquidated damages clause. Like most elements of a purchase contract, the amount of the deposit is negotiable. So, if you offer a $10,000 deposit on a $500,000 house, the seller might counter your offer and ask for a deposit of $15,000, which is 3 percent of the purchase price. The deposit can be made in two steps. You could offer $5,000 as an initial deposit, and increase that amount to a total of $15,000 upon removal of contingencies. In a hot seller's market, you might want to offer the full amount up front, or make a larger deposit than you would if you weren't potentially competing, to show your sincerity to the seller. THE CLOSING: If you're buying a short-sale listing that might take two or three months for lender approval, you might want to keep the deposit to a lower amount so that you don't tie up more money than necessary for a long time period. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
| 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. |
| Avoid home improvement gimmicks that hammer resale value By Paul Bianchina Q: We are considering listing our vacation home, and I have a question for you on whether it would be worth it to invest the money putting siding on it or selling it as is? The home is located on a golf course and has a magnificent view of the first hole and surrounding lakes and mountains. We had the house exterior coated about six years ago and it was supposed to offer lifetime protection from the elements (at a cost of $6,000). Unfortunately it did not. We had some bad spots patched and repainted but now they look bad again and we are not sure what would be best. We could do a better patch job and have the exterior primed and painted (hopefully the paint will "stick" to the exterior coating), or we could have vinyl siding put up, or we could sell the house "as is." The interior of the house is in good shape; we just had new Pella windows and doors installed within the past year. What do you think? A: In general, in a down real estate market such as we now have, I think the more a seller can do to make their home attractive the better their chances are of finding a buyer. It's also important that the house shows that it has been well maintained, which is another reason to make whatever repairs are necessary before listing. In my personal opinion, selling a house "as is" should always be the last option, unless personal finances make that the only option. That being said, it's difficult to advise you on whether to repair and paint the existing siding or have the house completely re-sided. This is where your own research and the assistance of an experienced real estate agent come into play. You need to take a walk or a drive around your immediate area, and see what comparable houses right on the golf course look like -- especially any that are up for sale. This will give you a good indication of what buyers will expect to see in the neighborhood. Your real estate agent can call up comparable listings and sales for the area, so you can better understand what a realistic sales price will be. If it costs a certain amount to have the house re-sided, and if you can realistically expect to recoup that investment in a higher sales price and a faster sale, then that's the way to go. If you can patch and paint for a lot less money, and that's what all the other homes in the area have done, then that might be the better option. All in all, I would probably lean toward painting, but be sure to verify that the exterior coating can be painted over. You also mention using vinyl siding, which appeals to some people and doesn't appeal to others. So before taking that route be sure that a vinyl-sided house is in keeping with what others in the area have done. Also, make sure that it's allowed by your homeowners association. One final thing, and this is directed at other readers, not at you (since I suspect you've already learned your lesson). Please don't fall for "miracle" products! Stick with reputable, proven products from reputable, proven suppliers and installers. Q: My bathroom is very small but does have one west-facing window that allows in natural light. Any ideas to make this room appear larger? A: There are a few tricks you can utilize to your advantage to make a small room seem larger: • First of all, stick with light colors on the walls and ceilings. That doesn't mean you need to be limited to just white, but stay light and neutral. • Paint the trim a lighter color than the walls. This is a visual trick that makes the walls appear to recede somewhat. • The use of mirrors is always a good idea to make a room look larger. If possible, position the mirror so that it reflects the light coming from the window. If you can't do that because of where the mirror needs to be positioned in relation to the sink, then instead of a mirror you might consider some sort of shallow wall hanging that is bright enough to reflect light. • Avoid window coverings that extend into the room. If you need a window covering for privacy, use a thin, light-colored blind or shade that mounts inside the window surround. • Add a light tube. This is an acrylic dome mounted on the roof, along with a tube that extends down to the ceiling. The dome lets in natural light, and the tube directs it to the room. |
| Why real estate price padding doesn't work in today's market By Dian Hymer Many sellers are in denial about the current value of their home, particularly if they bought within the past five to six years. The market peaked in the summer of 2006, and home prices dropped significantly in most areas from 2007 through 2009. Sellers often see no harm in asking a higher price -- one based on their needs or desires rather than what the market will bear. "We can always come down" is a common refrain. Letting your home sit on the market at a price that's too high can result in price reductions and a lower sale price, especially if the market is still declining. Today's homebuyers are nervous, pragmatic and well educated about the market. Not only are buyers cost-conscious, fewer buyers can qualify for a mortgage than was the case in 2006 due to recent credit tightening. Many who bought in 2006 couldn't qualify for the same mortgage today. There is a smaller pool of motivated, financially qualified buyers than there was several years ago. These buyers have an edge in most markets. Buyers want to know how long a listing has been on the market. If it has been on the market for some time, they wonder why it hasn't sold. Is there something wrong with it? A high price can signal that the seller isn't motivated. Buyers don't want to waste their time. Don't waste yours as a seller if you aren't serious about selling at current market price. No one knows for sure when the housing market will turn around. Many economists think we've hit bottom or are close to it. Analysts also forecast that home prices will bump along the bottom for some time. They don't expect a quick rebound. There isn't an urgency to buy before prices rise; buyers are taking their time to find the right long-term home. They are not overpaying. Even in low-inventory markets where multiple offers can occur, the price is usually not bid up radically, unless the listing was considerably underpriced. Interest rates are low. Buyers' nervousness about the housing market has thawed recently. The combination of lower home prices and interest rates has made housing more affordable than it has been in years. There is a risk that interest rates will increase to around 6 percent by year end. If so, this will affect the affordability equation and could have a downward influence on home prices, depending on the condition of the job market and the economy. HOUSE HUNTING TIP: To take advantage of this window of opportunity to sell, your home needs to be priced competitively. There was a time when sellers padded their list price so that they'd have room to negotiate. That strategy doesn't work in this market. Your house needs to look great and be priced competitively so that buyers realize they have to jump before someone else does. An analysis of data from the multiple listing service for Piedmont, Calif., properties listed in 2009 provides an insight into the importance of pricing right for the market. During 2009, the listings that didn't sell were listed on average 26 percent higher than the listings that sold. The market is constantly changing. If you find after your home is on the market that it's not receiving the interest you'd anticipated, ask your agent for feedback from agents who showed the property. Find out if similar listings in the area have sold recently. Did buyers who looked at your home buy other listings instead? The market will tell you quickly if your home is priced too high. THE CLOSING: Lower your price as soon as you discover it's too high so that you don't lose marketing momentum. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
| Hot Links |
| Frank Howard Allen Realtors http://www.fhallen.com National Association of Realtors http://www.realtor.com Find out what your home is worth! http://www.sfhousevalues.com Looking for a home to buy? http://www.sfhomes4sale.com Property Management Solutions http://www.sfpropmgt.com |
|
| Your Newsletter is Powered by: |
 |
|
 |
