Imagine taking possession of your newly purchased home and finding that every light bulb has been removed, the place is filthy, and the dining room light fixture that was to have been included in the sale is gone. Not only frustrating and disappointing, it's natural to wonder what else might be missing and what to do next.
First, call your real estate agent and report the general condition of the property. The purchase contract should specify what condition the property should be in when the sellers turn it over to you. The contract might specify that sellers' personal property that isn't specifically included in the sale and debris must be removed. If an item like a dining room chandelier that is permanently attached to the house is not included in the sale, this should be spelled out in the contract.
If you're unable to resolve the issue directly with the seller or with the help of the agents involved, check your purchase contract for the section that deals with dispute resolution. Then call a knowledgeable residential real estate attorney for advice.
Situations like this rarely occur. That is, unless you're buying a foreclosure property on the courthouse steps. These buyers rarely have a chance to preview the property before it's purchased. These properties are often stripped free of appliances, bath fixtures -- anything that has salvage value. This sort of purchase should be left to savvy investors and avoided by inexperienced home buyers.
In a conventional home sale, the buyers' contract should include a provision for the buyers to take a final walkthrough of the property within five days or so before closing. This is not a contract contingency. It gives the buyers an opportunity to confirm that the property is in substantially the same condition it was when they entered into contract to buy the home.
Also, if the sellers completed any repairs on the property between contract acceptance and closing, like fixing a leaking plumbing pipe, the buyers can confirm that this work has been done. Sellers should document in writing any such repairs, and the buyers should sign that they received this information.
HOUSE HUNTING TIP: Unless you've made numerous visits to the property to take measurements or figure out furniture arrangement and are confident the sellers will leave the property in good condition, you should not forgo your right to do a final walkthrough. Many sellers won't vacate until closing takes place. So, you may not be able to see the property vacant on your final walkthrough. But, you should have an indication if there are any red flags, like the sellers haven't even started packing.
You should not take possession of a tenant-occupied property unless you're buying the property as a rental and have made arrangements with the tenant to stay on. Otherwise, you could have difficulty evicting an obstinate tenant, which can be costly and time consuming.
Ideally, the sellers will plan to meet with you at some point during or after your walkthrough to point out anything about the house that you might have difficulty figuring out on your own: the location of a light switch that isn't obvious; how often certain systems -- furnace, water heater, roof gutters, drainage systems -- need maintenance; and how to operate the irrigation system, to name a few. This will save you time.
If the sellers moved out early, ask them to leave a list of items you should be aware of. This should not include new disclosure information, merely operating manuals for appliances and utilities and copies of all transferable warranties.
THE CLOSING: Ask for a list of contractors, and their contact information, who have worked at the property that the sellers recommend. This is invaluable information.
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author.
Thursday, December 2, 2010
Assemble your real estate A-team
It has always been important to assemble a top-notch team of real estate professionals to assist you with a home purchase. Today, it's more important than ever.
One of the key players on your team is the real estate agent who will represent you and guide you through the process to a successful closing. The other is the mortgage broker or loan agent who will arrange financing for you unless you are paying all cash.
The Internet is a great resource for getting started on your home search and gaining general information about the market, past sale prices, active listings, and local neighborhoods. However, the home-sale market is extremely localized. Neighborhoods within blocks of one another can have different pricing structures and demand levels.
HOUSE HUNTING TIP: Make sure you hook up with the best agent you can find who specializes in the neighborhoods where you want to live. Your agent should educate you about the idiosyncratic characters of various neighborhoods -- information that is difficult to glean from the Internet.
The NATIONAL ASSOCIATION OF REALTORS® reported in its 2009 NAR Profile of Home Buyers and Sellers that 90 percent of home buyers used the Internet for their home search, up from 2 percent in 1995. Seventy-nine percent who used the Internet used a real estate agent to assist them with their purchase.
Only 37 percent of these buyers thought an agent's technology skills were important in selecting an agent. More than four out of five buyers thought knowledge of the process, honesty, integrity, responsiveness, communication, and negotiation skills were very important.
You should not only work with an agent who embraces these characteristics, your agent should specialize in the kind of property you want to buy. If you're interested only in distressed sales (short sales or bank-owned foreclosure properties), work with an agent who has experience in this area.
These can be very difficult transactions. One-third of all short-sale transactions never close. Pick an agent who has experience working with this particular type of transaction and who knows how to navigate the process.
The mortgage business has changed dramatically in recent years. The approval process can be grueling and appraisals problematic. Find a good mortgage professional who has a good track record closing loans in the current lending environment.
Ask how many loans your prospective mortgage professional has closed within the last several months in loan amounts similar to the one you need. Your agent or acquaintances who bought recently can provide recommendations for the best person to work with.
A good mortgage professional will be able to look at your financial documentation and credit scores and determine in advance what a lender's underwriter will require from you in order to approve your loan -- perhaps additional documentation or paying down existing debt.
A good mortgage broker knows which lender to submit your loan package to in order to maximize approval. Underwriting requirements differ from one lender to the next. One buyer wanted to use a lender that offered the lowest rate. That lender, however, was a stickler about work done to the property without building permits.
Not only would unpermitted areas not be counted as livable square feet, thereby lowering the appraised value, the bank wouldn't loan on the property unless all power sources to these areas were ripped out so that the areas couldn't be used. The loan was submitted to another lender that didn't allow the unpermitted space to be used for appraisal purposes. But, nothing had to be demolished.
THE CLOSING: Remember that you are part of the team; in fact, you're the captain. You are the decision maker. Never turn over important decisions to your agent, attorney, or loan agent, even if you're busy and would rather have someone else take care of everything.
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author.
One of the key players on your team is the real estate agent who will represent you and guide you through the process to a successful closing. The other is the mortgage broker or loan agent who will arrange financing for you unless you are paying all cash.
The Internet is a great resource for getting started on your home search and gaining general information about the market, past sale prices, active listings, and local neighborhoods. However, the home-sale market is extremely localized. Neighborhoods within blocks of one another can have different pricing structures and demand levels.
HOUSE HUNTING TIP: Make sure you hook up with the best agent you can find who specializes in the neighborhoods where you want to live. Your agent should educate you about the idiosyncratic characters of various neighborhoods -- information that is difficult to glean from the Internet.
The NATIONAL ASSOCIATION OF REALTORS® reported in its 2009 NAR Profile of Home Buyers and Sellers that 90 percent of home buyers used the Internet for their home search, up from 2 percent in 1995. Seventy-nine percent who used the Internet used a real estate agent to assist them with their purchase.
Only 37 percent of these buyers thought an agent's technology skills were important in selecting an agent. More than four out of five buyers thought knowledge of the process, honesty, integrity, responsiveness, communication, and negotiation skills were very important.
You should not only work with an agent who embraces these characteristics, your agent should specialize in the kind of property you want to buy. If you're interested only in distressed sales (short sales or bank-owned foreclosure properties), work with an agent who has experience in this area.
These can be very difficult transactions. One-third of all short-sale transactions never close. Pick an agent who has experience working with this particular type of transaction and who knows how to navigate the process.
The mortgage business has changed dramatically in recent years. The approval process can be grueling and appraisals problematic. Find a good mortgage professional who has a good track record closing loans in the current lending environment.
Ask how many loans your prospective mortgage professional has closed within the last several months in loan amounts similar to the one you need. Your agent or acquaintances who bought recently can provide recommendations for the best person to work with.
A good mortgage professional will be able to look at your financial documentation and credit scores and determine in advance what a lender's underwriter will require from you in order to approve your loan -- perhaps additional documentation or paying down existing debt.
A good mortgage broker knows which lender to submit your loan package to in order to maximize approval. Underwriting requirements differ from one lender to the next. One buyer wanted to use a lender that offered the lowest rate. That lender, however, was a stickler about work done to the property without building permits.
Not only would unpermitted areas not be counted as livable square feet, thereby lowering the appraised value, the bank wouldn't loan on the property unless all power sources to these areas were ripped out so that the areas couldn't be used. The loan was submitted to another lender that didn't allow the unpermitted space to be used for appraisal purposes. But, nothing had to be demolished.
THE CLOSING: Remember that you are part of the team; in fact, you're the captain. You are the decision maker. Never turn over important decisions to your agent, attorney, or loan agent, even if you're busy and would rather have someone else take care of everything.
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author.
New incentive for home sellers
The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) is offering a new program that pays a home buyer’s mortgage if he or she is laid off. The Home Payment Protection Program (HPPP), a program similar to the successful C.A.R.H.A.F. Mortgage Protection Program, is offered by REALTORS® to sellers at the time of listing as an added incentive to prospective buyers. The program is paid for by the seller and is completely optional.
The program covers both first-time and repeat-buyers for 12 months from escrow closing and provides up to six mortgage payments up to $1,000 or $1,500, depending on the coverage level the seller chooses. A seller can choose to pay $200 for six mortgage payments up to $1,000 or $275 for six mortgage payments up to $1,500.
For more information about the Home Payment Protection Program, contact your REALTOR®.
The program covers both first-time and repeat-buyers for 12 months from escrow closing and provides up to six mortgage payments up to $1,000 or $1,500, depending on the coverage level the seller chooses. A seller can choose to pay $200 for six mortgage payments up to $1,000 or $275 for six mortgage payments up to $1,500.
For more information about the Home Payment Protection Program, contact your REALTOR®.
Tuesday, November 2, 2010
The 10-year rule for real estate
It may not be the best time to sell, but it might not be the worst either. Recent economic forecasts suggest that the housing recovery could take years. As a seller who has a strong motivation to sell, do you try to sell now or hold on for a better market? First consider where you want to be in 10 years. How do you envision your lifestyle? Is your current home too big, too small, or in the wrong location? Homeowners intent on moving from one house to another can take advantage of low interest rates, if they are able to sell their current home. You'll probably sell for less than you would have several years ago, but you may get a deal on the home you buy.
However, if you don't plan on living in your next home for the next eight to 10 years, this might not be a good time to make a move.
For sellers who purchased in recent years, selling requires a huge readjustment in their expectations. Many probably will sell for less than they paid; in some cases, a lot less. If they highly leveraged the purchase, or refinanced and pulled out equity, they may need to contribute cash to close the deal.
Sellers who have no cash reserves and need to sell for less than the amount of the loans secured against the property will need lender approval to complete a sale. This is called a short sale. In this case, or with a foreclosure, sellers don't have the option of buying another home until their credit is restored, which takes about two to three years for a short sale and five years for a foreclosure.
Some listings in prime, high-demand markets come on the market and sell quickly, leaving other sellers in the area perplexed. Why isn't their home selling? Why aren't they receiving bids from multiple buyers?
Listings that sell quickly are priced right for the market. They are homes that will work long term for the buyers, which means 10 or more years; they don't need updating; they're in move-in condition; and, they are usually located in high-demand, low-inventory neighborhoods. Buyers are waiting for these prime listings and will move quickly when they come along.
HOUSE HUNTING TIP: It's frustrating for sellers whose listings don't receive an overwhelmingly positive response, especially if they put time and money into fixing them up for sale, and they thought they priced right for the market. Motivated sellers will need to accept the probability of a longer marketing period and a lower price.
Expect low offers if your home has been on the market awhile. It's natural for buyers to try to buy a home as inexpensively as possible to cover for the possibility of a further downturn in the market. Don't take it personally; counter any offer from financially qualified buyers who make a clean offer that's not encumbered with complicated contingencies.
It may take several offers and failed attempts to find the right buyer. It isn't easy for most sellers to reach a successful closing in this market. But those who stick it out can reach their goal. Waiting to sell could net you more for your home, but it's impossible to know when that better time will arrive. The market will be volatile. Good economic news will trigger a pickup in the market. Bad news will cause buyers to pull back.
THE CLOSING: To take advantage of a pickup in the market, your home needs to be on the market or ready to go on a moment's notice.
By Dian Hymer
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author.
However, if you don't plan on living in your next home for the next eight to 10 years, this might not be a good time to make a move.
For sellers who purchased in recent years, selling requires a huge readjustment in their expectations. Many probably will sell for less than they paid; in some cases, a lot less. If they highly leveraged the purchase, or refinanced and pulled out equity, they may need to contribute cash to close the deal.
Sellers who have no cash reserves and need to sell for less than the amount of the loans secured against the property will need lender approval to complete a sale. This is called a short sale. In this case, or with a foreclosure, sellers don't have the option of buying another home until their credit is restored, which takes about two to three years for a short sale and five years for a foreclosure.
Some listings in prime, high-demand markets come on the market and sell quickly, leaving other sellers in the area perplexed. Why isn't their home selling? Why aren't they receiving bids from multiple buyers?
Listings that sell quickly are priced right for the market. They are homes that will work long term for the buyers, which means 10 or more years; they don't need updating; they're in move-in condition; and, they are usually located in high-demand, low-inventory neighborhoods. Buyers are waiting for these prime listings and will move quickly when they come along.
HOUSE HUNTING TIP: It's frustrating for sellers whose listings don't receive an overwhelmingly positive response, especially if they put time and money into fixing them up for sale, and they thought they priced right for the market. Motivated sellers will need to accept the probability of a longer marketing period and a lower price.
Expect low offers if your home has been on the market awhile. It's natural for buyers to try to buy a home as inexpensively as possible to cover for the possibility of a further downturn in the market. Don't take it personally; counter any offer from financially qualified buyers who make a clean offer that's not encumbered with complicated contingencies.
It may take several offers and failed attempts to find the right buyer. It isn't easy for most sellers to reach a successful closing in this market. But those who stick it out can reach their goal. Waiting to sell could net you more for your home, but it's impossible to know when that better time will arrive. The market will be volatile. Good economic news will trigger a pickup in the market. Bad news will cause buyers to pull back.
THE CLOSING: To take advantage of a pickup in the market, your home needs to be on the market or ready to go on a moment's notice.
By Dian Hymer
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author.
Resolving price vs. location debate
Location has been touted by housing experts as the most important factor to consider when buying a home. Does this adage still hold, or has price trumped location as the most important consideration?
Historically, home values were largely dependent on location. Homes near major metropolitan centers were more coveted, and more expensive, than similarly sized homes in outlying suburban areas.
The recent frenzy of distressed homebuying activity in places like Concord in the East San Francisco Bay Area and Riverside County in Southern California raises the question of whether a fire-sale mentality has permeated the residential housing market.
Most of the foreclosure-sale activity that occurred in the fourth quarter of 2009 was speculative. Investors bought at huge discounts from peak price levels in areas that are not, by traditional standards, thought to be prime locations.
The profitability of these investments will depend on the strength of the economic recovery. To fix up and flip a foreclosure for profit depends on demand from financially qualified buyers.
Foreclosures that are fixed up to rent require tenants with jobs who can afford to pay enough to cover the investor's expenses and hopefully generate cash flow. In a strained economy with high unemployment, this can be risky proposition.
HOUSE HUNTING TIP: Although buying cheap housing may be a good strategy for some investors, buyers searching for a home they'll occupy should not let price be the primary factor influencing which home they buy.
A home that won't work for the long term is not a good deal even though it's cheap if you'll have to move again in a few years. In fact, you could lose money using this approach, particularly if home prices haven't stabilized by then.
It's also not a good idea to buy a home that's not quite right for you just to take advantage of today's low interest rates. The winning strategy for today's home buyers is to buy and hold.
The homes with qualities that are in high demand are located near a major metropolitan center or have good public transportation to get there. They are close to shops, cultural venues, restaurants, parks, and have good public or private schools close by and good public services.
The location within a neighborhood, condominium complex, or cooperative can make a big difference in value. A home on a quiet cul-de-sac generally will sell for more than one in the same neighborhood that's on a busy street. Premiums are paid for homes with views, leveled-out private backyards and good natural light.
Be wary of listings that appear to be underpriced. They could be priced low to generate multiple offers, so they might sell for more than the list price and more than you can afford to pay. Or, there could be other reasons why they are listed at a lower price.
Often the lower-priced homes in an area don't sell for more because they have incurable defects. An incurable defect is something you can't change like a shared driveway, close proximity to a freeway or an entry to the home that's two flights of stairs up from the garage.
These homes may sell well in a hot sellers' market when buyers overlook defects because prices are rising rapidly. But, these homes can be hard to sell in a down market when buyers are less forgiving and are willing to wait for the right house.
THE CLOSING: Ideally, you want to buy a home that will be in demand in any market. If you can't afford to buy one that's in move-in condition, it's better to buy a home you can afford and that needs only minor improvements than one that looks great but has an incurable defect like an unworkable floor plan.
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author.
Historically, home values were largely dependent on location. Homes near major metropolitan centers were more coveted, and more expensive, than similarly sized homes in outlying suburban areas.
The recent frenzy of distressed homebuying activity in places like Concord in the East San Francisco Bay Area and Riverside County in Southern California raises the question of whether a fire-sale mentality has permeated the residential housing market.
Most of the foreclosure-sale activity that occurred in the fourth quarter of 2009 was speculative. Investors bought at huge discounts from peak price levels in areas that are not, by traditional standards, thought to be prime locations.
The profitability of these investments will depend on the strength of the economic recovery. To fix up and flip a foreclosure for profit depends on demand from financially qualified buyers.
Foreclosures that are fixed up to rent require tenants with jobs who can afford to pay enough to cover the investor's expenses and hopefully generate cash flow. In a strained economy with high unemployment, this can be risky proposition.
HOUSE HUNTING TIP: Although buying cheap housing may be a good strategy for some investors, buyers searching for a home they'll occupy should not let price be the primary factor influencing which home they buy.
A home that won't work for the long term is not a good deal even though it's cheap if you'll have to move again in a few years. In fact, you could lose money using this approach, particularly if home prices haven't stabilized by then.
It's also not a good idea to buy a home that's not quite right for you just to take advantage of today's low interest rates. The winning strategy for today's home buyers is to buy and hold.
The homes with qualities that are in high demand are located near a major metropolitan center or have good public transportation to get there. They are close to shops, cultural venues, restaurants, parks, and have good public or private schools close by and good public services.
The location within a neighborhood, condominium complex, or cooperative can make a big difference in value. A home on a quiet cul-de-sac generally will sell for more than one in the same neighborhood that's on a busy street. Premiums are paid for homes with views, leveled-out private backyards and good natural light.
Be wary of listings that appear to be underpriced. They could be priced low to generate multiple offers, so they might sell for more than the list price and more than you can afford to pay. Or, there could be other reasons why they are listed at a lower price.
Often the lower-priced homes in an area don't sell for more because they have incurable defects. An incurable defect is something you can't change like a shared driveway, close proximity to a freeway or an entry to the home that's two flights of stairs up from the garage.
These homes may sell well in a hot sellers' market when buyers overlook defects because prices are rising rapidly. But, these homes can be hard to sell in a down market when buyers are less forgiving and are willing to wait for the right house.
THE CLOSING: Ideally, you want to buy a home that will be in demand in any market. If you can't afford to buy one that's in move-in condition, it's better to buy a home you can afford and that needs only minor improvements than one that looks great but has an incurable defect like an unworkable floor plan.
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author.
Friday, October 1, 2010
Buyer beware when home lacks permit
It's an all too common situation. You find a perfect home for sale in an ideal neighborhood. It's been beautifully remodeled, and it has everything you've been searching for. Even the price is right. Something tells you it might be too good to be true, but you put in an offer anyway, and it's accepted.
You start doing all the paperwork, and sure enough you discover the catch that you always somehow suspected was there. The sellers did all of that remodeling work without any building permits.
So now you're faced with a dilemma. You really want this house. The sellers insist that all the work was done by licensed contractors, and that they have full documentation and photographs of all the work as it was being done.
The sellers also tell you that they're willing to allow any type of inspection on the home that you'd like -- except for one by the city.
They explain that they had a bad experience with a building inspector on a previous home, or that they have an ongoing feud with the city over their water bill, or they're protesting the fact that the city hasn't fixed the pothole on Main Street yet, or some other reason that they refuse to become involved with the local municipality.
Through all this, you still want the house. Red flags are waving, but you're trying to ignore them. After all, the remodeling really does look like it was done well, and you can certainly understand why the sellers would be protesting that big pothole, rather than trying to cover up bad workmanship on their own remodeling.
Perhaps you decide to go one step further and pay for inspections on the home, in the hope that someone is going to tell you that all is well, despite the lack of permits. You may even think that you can write some provisions into your sales contract that will offer some future protection for yourself.
Unfortunately, it's probably time to walk away from this "too good to be true deal."
A few hard realities
If the sellers are telling the truth about all of the work having been done by "licensed contractors," then they should be willing to provide you with a list of all of their names, so that's one of the first things you should ask for the sellers to provide. It's doubtful you'll get it, because in most states those contractors are risking hefty fines and even the loss of their licenses for doing remodeling work without a permit.
If the sellers are "open to any type of inspection," ask if they're willing to have all the walls opened up at their expense so your electrician and your plumber can thoroughly inspect the condition of the wiring and the pipes inside all of the concealed spaces.
This is what the city building inspectors that they were so anxious to avoid would have done. And this is what you, as the buyer, now have no access to. That's one of the big problems here: If you decide to buy this house, you have no idea what's hiding inside those walls.
If, at a later date, you have a fire or a water loss that's related to some defect that's been hidden somewhere by the seller or one of his contractors as part of this unpermitted work, your insurance company could deny all or part of your claim as a result.
I've personally been on jobs where that's happened. Can you even imagine having a loss in your home that runs into the tens or even the hundreds of thousands of dollars, and then finding out it's not covered because the previous owner didn't like city building inspectors?
Still can't live without that particular house? Then here's what you need to do to protect yourself:
• The sellers need to provide all necessary building permits for the remodeling work.
• If they can't do that, then they need to pay for a licensed structural engineer, a licensed electrician, a licensed plumber, and any other necessary professionals to inspect the work and issue letters stating that the structure currently meets or exceeds all current building codes. Using those letters, the sellers then need to contact the city building officials and obtain whatever the equivalent would be to a completed building permit.
• Once you have that paperwork, show it to your attorney and your homeowners insurance company to be certain it's sufficient protection, and be sure that a copy of it is recorded with the escrow company.
By Paul Bianchina
You start doing all the paperwork, and sure enough you discover the catch that you always somehow suspected was there. The sellers did all of that remodeling work without any building permits.
So now you're faced with a dilemma. You really want this house. The sellers insist that all the work was done by licensed contractors, and that they have full documentation and photographs of all the work as it was being done.
The sellers also tell you that they're willing to allow any type of inspection on the home that you'd like -- except for one by the city.
They explain that they had a bad experience with a building inspector on a previous home, or that they have an ongoing feud with the city over their water bill, or they're protesting the fact that the city hasn't fixed the pothole on Main Street yet, or some other reason that they refuse to become involved with the local municipality.
Through all this, you still want the house. Red flags are waving, but you're trying to ignore them. After all, the remodeling really does look like it was done well, and you can certainly understand why the sellers would be protesting that big pothole, rather than trying to cover up bad workmanship on their own remodeling.
Perhaps you decide to go one step further and pay for inspections on the home, in the hope that someone is going to tell you that all is well, despite the lack of permits. You may even think that you can write some provisions into your sales contract that will offer some future protection for yourself.
Unfortunately, it's probably time to walk away from this "too good to be true deal."
A few hard realities
If the sellers are telling the truth about all of the work having been done by "licensed contractors," then they should be willing to provide you with a list of all of their names, so that's one of the first things you should ask for the sellers to provide. It's doubtful you'll get it, because in most states those contractors are risking hefty fines and even the loss of their licenses for doing remodeling work without a permit.
If the sellers are "open to any type of inspection," ask if they're willing to have all the walls opened up at their expense so your electrician and your plumber can thoroughly inspect the condition of the wiring and the pipes inside all of the concealed spaces.
This is what the city building inspectors that they were so anxious to avoid would have done. And this is what you, as the buyer, now have no access to. That's one of the big problems here: If you decide to buy this house, you have no idea what's hiding inside those walls.
If, at a later date, you have a fire or a water loss that's related to some defect that's been hidden somewhere by the seller or one of his contractors as part of this unpermitted work, your insurance company could deny all or part of your claim as a result.
I've personally been on jobs where that's happened. Can you even imagine having a loss in your home that runs into the tens or even the hundreds of thousands of dollars, and then finding out it's not covered because the previous owner didn't like city building inspectors?
Still can't live without that particular house? Then here's what you need to do to protect yourself:
• The sellers need to provide all necessary building permits for the remodeling work.
• If they can't do that, then they need to pay for a licensed structural engineer, a licensed electrician, a licensed plumber, and any other necessary professionals to inspect the work and issue letters stating that the structure currently meets or exceeds all current building codes. Using those letters, the sellers then need to contact the city building officials and obtain whatever the equivalent would be to a completed building permit.
• Once you have that paperwork, show it to your attorney and your homeowners insurance company to be certain it's sufficient protection, and be sure that a copy of it is recorded with the escrow company.
By Paul Bianchina
Wednesday, September 1, 2010
Pricing to sell in today's market
Putting yourself in the right mindset to sell is essential. It's the most difficult aspect of selling for most sellers. Your home is worth what a buyer is willing to pay, which may not be what you think it is worth. Detaching yourself emotionally from your home is difficult. Clearing out years of clutter, depersonalizing your home by removing personal memorabilia, and staging your home for sale can help you step back and view the home as a commodity that needs to be sold rather than as your personal sanctuary. Putting your home on the market at a price that reflects what you want and not what the market will bear can cost you time and money as it sits on the market unsold.
The home-sale market is a localized phenomenon. The only way to get a clear picture of what your home is likely to sell for is to find out which listings are selling in your neighborhood and for how much.
The most recent sales -- those that closed within the last three months -- will be the most informative. Be sure to take a hard look at the list prices of homes that are new on the market.
If the list prices are lower than they were two or three months ago, this indicates that prices are declining. This needs to be taken into account when you select a list price.
HOUSE HUNTING TIP: Pay close attention to your competition. Don't fall into the trap of pricing your home higher than your neighbor's home because yours is better. If your neighbor's price is too high for the market, neither of your homes will sell.
Ask your listing agent to call the listing agents of properties similar to yours to find out what kind of showing activity they are receiving. Have they had offers? If so, why weren't they accepted? Were the offers too high? If so, you should set your sights lower.
Some listing agents recommend that you list considerably under market value in order to stimulate multiple offers. In some cases, this can be an effective strategy.
For example, in the low-end foreclosure market, this was common practice at the end of 2009. Some listings priced way below market value received more than a dozen offers.
However, it can be risky to price significantly lower than market value on a more expensive property for which the demand is lower. You could end up with more than one offer, but you could also receive under-market price offers.
Your home needs to be perceived as a good value to a buyer to sell in this market. However, you could shortchange yourself by discounting the price too much.
Your home is most marketable when it is new on the market. Buyers wait anxiously for the new crop of listings. Listings that don't sell relatively quickly often languish on the market.
Price reductions often follow as the sellers try to find market value. A listing that has been on the market for months is likely to receive a low offer -- if a buyer makes any offer.
A listing that receives a lot of showing activity when it first hits the market but gets no offers is probably overpriced for the market. In this case, it's best to lower the price to market value as soon as possible while the listing is still fresh in agents' and buyers' minds, even if this is within two to four weeks of the listing date.
THE CLOSING: Listings in neighborhoods where sales activity is slim require a longer marketing period. Even so, pricing right for the market is imperative.
By Dian Hymer
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author.
The home-sale market is a localized phenomenon. The only way to get a clear picture of what your home is likely to sell for is to find out which listings are selling in your neighborhood and for how much.
The most recent sales -- those that closed within the last three months -- will be the most informative. Be sure to take a hard look at the list prices of homes that are new on the market.
If the list prices are lower than they were two or three months ago, this indicates that prices are declining. This needs to be taken into account when you select a list price.
HOUSE HUNTING TIP: Pay close attention to your competition. Don't fall into the trap of pricing your home higher than your neighbor's home because yours is better. If your neighbor's price is too high for the market, neither of your homes will sell.
Ask your listing agent to call the listing agents of properties similar to yours to find out what kind of showing activity they are receiving. Have they had offers? If so, why weren't they accepted? Were the offers too high? If so, you should set your sights lower.
Some listing agents recommend that you list considerably under market value in order to stimulate multiple offers. In some cases, this can be an effective strategy.
For example, in the low-end foreclosure market, this was common practice at the end of 2009. Some listings priced way below market value received more than a dozen offers.
However, it can be risky to price significantly lower than market value on a more expensive property for which the demand is lower. You could end up with more than one offer, but you could also receive under-market price offers.
Your home needs to be perceived as a good value to a buyer to sell in this market. However, you could shortchange yourself by discounting the price too much.
Your home is most marketable when it is new on the market. Buyers wait anxiously for the new crop of listings. Listings that don't sell relatively quickly often languish on the market.
Price reductions often follow as the sellers try to find market value. A listing that has been on the market for months is likely to receive a low offer -- if a buyer makes any offer.
A listing that receives a lot of showing activity when it first hits the market but gets no offers is probably overpriced for the market. In this case, it's best to lower the price to market value as soon as possible while the listing is still fresh in agents' and buyers' minds, even if this is within two to four weeks of the listing date.
THE CLOSING: Listings in neighborhoods where sales activity is slim require a longer marketing period. Even so, pricing right for the market is imperative.
By Dian Hymer
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author.
Pay attention to home inspection
For just about anyone, a home is the single-most expensive and single-most complex thing that you'll ever own. So when making that purchase, you certainly want to do everything possible to be an informed buyer and to protect yourself and your investment.
One of the ways to do that is to have a home inspection prior to closing the deal on the purchase. A home inspection will give you a lot of information about the physical condition of the home you're considering buying, and should alert you to any potentially serious problems.
But as a potential home buyer, it's important that you understand what a home inspection includes and doesn’t include. There are certain things you legitimately can expect your inspection to provide for you, and certain things that it won't. And you also need to understand that the more you participate in the inspection process, the more you'll get out of it in return.
Finally, understand that just like there are good and bad contractors, there also are good and bad home inspectors. Expect to have to do a little homework to find one of the good ones.
What is a home inspection?
A home inspection is a visual inspection of the home you're thinking of purchasing, performed by an objective third-party inspector. The inspector will examine the physical structure of the home from top to bottom, as well as the home's operating systems. Typically, a home inspector will look at the following things:
• Outside: The exterior home site; general condition of the foundation and basement walls; condition of the exterior walls, including the siding, exterior trim, windows, exterior doors and exterior paint; type and condition of the roofing; condition of gutters, downspouts, flashings, and vents.
• Inside: The condition of the attic, roof support structure, attic insulation and attic moisture issues; condition of the basement and crawl space, including insulation and moisture issues; garage and carport; electrical system; visible plumbing system; heating, cooling and ventilation system; general interior condition of the home.
A short time after the end of the inspection you'll receive a written report detailing the inspector's findings. Any defects the inspector identified will be noted. Inspectors never should attempt to sell you anything, such as their services to come in and fix anything that was identified in the report. To do so would be a clear conflict of interest.
It's important to understand that inspectors do not do what is known as "destructive testing." In other words: they don't cut holes in walls or otherwise open up inaccessible areas to look inside. Everything is based on their visual inspection of whatever they can access. They're also not there to comment on anything that's readily apparent from a cosmetic standpoint, such as a sloppy paint job. What types of things does the inspection not cover?
It's equally important to understand what a home inspection doesn't cover, because this is where you need to be sure that you continue with your due diligence when you're buying your home.
For example, your home inspector will point out any obvious signs of visible mold or mildew in the home. However, he will not be performing any type of actual mold inspection. If you suspect a mold infestation in the home, you need to have testing done by a trained hygienist.
Home inspectors will point out structural problems that have been caused by insect damage. But they're not there to perform a complete termite inspection. They also don't do inspections for the condition of the well, septic tank, or any type of soil contaminants.
You also need to be very aware of the fact that a home inspection has nothing to do with code violations or zoning issues. You need to check those things out for yourself with the local building and planning offices. It's up to you to assure yourself that any prior work on the house was done with the necessary building permits.
It's also up to you to check that there are not any issues when it comes to how the house is currently zoned, or how the current zoning might affect your use of the property in the future.
What do you need to do?
You have a couple of other responsibilities in this process as well. First of all, know who your inspector is, and what's required of him. Different states have different regulations pertaining to how home inspectors are regulated, so find out what's required.
Interview the inspector before you hire him. Be sure he complies with all those requirements, including whatever license, insurance and bond is needed. Ask for and verify references. Ask for and read a sample report. Be sure it gives you the type of information you need, in a format you can understand. Find out if the inspector belongs to any professional trade organizations, and what their standards and codes of ethics are.
The other important thing is that you need to attend the inspection. Follow the inspector around, even up into the attic and into the crawlspace if you're physically able to do so. See what he's looking at. Understand the potential problems. Ask questions and take notes. When you get your report, read it over from cover to cover at least twice, and be sure you understand it.
You paid for it, and it's one of the most important documents you'll ever have. So if you don't understand any of it, be sure someone explains it to you.
By Paul Bianchina
One of the ways to do that is to have a home inspection prior to closing the deal on the purchase. A home inspection will give you a lot of information about the physical condition of the home you're considering buying, and should alert you to any potentially serious problems.
But as a potential home buyer, it's important that you understand what a home inspection includes and doesn’t include. There are certain things you legitimately can expect your inspection to provide for you, and certain things that it won't. And you also need to understand that the more you participate in the inspection process, the more you'll get out of it in return.
Finally, understand that just like there are good and bad contractors, there also are good and bad home inspectors. Expect to have to do a little homework to find one of the good ones.
What is a home inspection?
A home inspection is a visual inspection of the home you're thinking of purchasing, performed by an objective third-party inspector. The inspector will examine the physical structure of the home from top to bottom, as well as the home's operating systems. Typically, a home inspector will look at the following things:
• Outside: The exterior home site; general condition of the foundation and basement walls; condition of the exterior walls, including the siding, exterior trim, windows, exterior doors and exterior paint; type and condition of the roofing; condition of gutters, downspouts, flashings, and vents.
• Inside: The condition of the attic, roof support structure, attic insulation and attic moisture issues; condition of the basement and crawl space, including insulation and moisture issues; garage and carport; electrical system; visible plumbing system; heating, cooling and ventilation system; general interior condition of the home.
A short time after the end of the inspection you'll receive a written report detailing the inspector's findings. Any defects the inspector identified will be noted. Inspectors never should attempt to sell you anything, such as their services to come in and fix anything that was identified in the report. To do so would be a clear conflict of interest.
It's important to understand that inspectors do not do what is known as "destructive testing." In other words: they don't cut holes in walls or otherwise open up inaccessible areas to look inside. Everything is based on their visual inspection of whatever they can access. They're also not there to comment on anything that's readily apparent from a cosmetic standpoint, such as a sloppy paint job. What types of things does the inspection not cover?
It's equally important to understand what a home inspection doesn't cover, because this is where you need to be sure that you continue with your due diligence when you're buying your home.
For example, your home inspector will point out any obvious signs of visible mold or mildew in the home. However, he will not be performing any type of actual mold inspection. If you suspect a mold infestation in the home, you need to have testing done by a trained hygienist.
Home inspectors will point out structural problems that have been caused by insect damage. But they're not there to perform a complete termite inspection. They also don't do inspections for the condition of the well, septic tank, or any type of soil contaminants.
You also need to be very aware of the fact that a home inspection has nothing to do with code violations or zoning issues. You need to check those things out for yourself with the local building and planning offices. It's up to you to assure yourself that any prior work on the house was done with the necessary building permits.
It's also up to you to check that there are not any issues when it comes to how the house is currently zoned, or how the current zoning might affect your use of the property in the future.
What do you need to do?
You have a couple of other responsibilities in this process as well. First of all, know who your inspector is, and what's required of him. Different states have different regulations pertaining to how home inspectors are regulated, so find out what's required.
Interview the inspector before you hire him. Be sure he complies with all those requirements, including whatever license, insurance and bond is needed. Ask for and verify references. Ask for and read a sample report. Be sure it gives you the type of information you need, in a format you can understand. Find out if the inspector belongs to any professional trade organizations, and what their standards and codes of ethics are.
The other important thing is that you need to attend the inspection. Follow the inspector around, even up into the attic and into the crawlspace if you're physically able to do so. See what he's looking at. Understand the potential problems. Ask questions and take notes. When you get your report, read it over from cover to cover at least twice, and be sure you understand it.
You paid for it, and it's one of the most important documents you'll ever have. So if you don't understand any of it, be sure someone explains it to you.
By Paul Bianchina
Playing the Real Estate Waiting Game
| Buyers often are reluctant to make an offer to buy a home they find early on in their search. After looking for months and not finding anything comparable, some buyers regret not having moved quickly on a listing even though they saw it early on. In most cases, you should consider yourself lucky if you find the home you want to own for years relatively quickly. It's not uncommon in some low-inventory markets for buyers to look for a year or more before they are able to buy. For the last few years, sellers who haven't had a pressing need to sell have been waiting for a better market before putting their homes on the market. In one case, the inventory was so paltry that buyers who purchased in the Upper Rockridge area of Oakland, Calif., looked for four years before finding the house that would work for them in the long term. In high-demand niche markets, there can be a shortage of listings and a lot of buyers waiting for the same kind of home. A couple who purchased in the Oakland Hills looked for more than a year in an area where not much that suited their needs was available. They made two offers during that time and ended up losing in multiple-offer competitions before they were finally able to secure a new home. HOUSE HUNTING TIP: Buyers who find the right home soon after starting their search need to get a quick education about the local market in order to be able to keep from making a bad decision. You don't want to pass on a house and kick yourself later for doing so. You also don't want to buy a house that doesn't work out for you, particularly in the current market. You'd be unlikely to sell the home again soon and break even. Find out how often a listing like the one you're considering comes on the market. High-quality, well-located homes in coveted locations come on the market infrequently in some areas. Ask your real estate agent how many listings like the one you're interested in came on the market in the last six months or one year. How long did it take them to sell? Were there multiple offers? In other areas that have lots of homes for sale similar to the one you like, you have the luxury of shopping the market awhile. If someone else buys this home, you'll be able to find another in a reasonable period of time. There's no urgency, unless interest rates are rising and locking in a low rate is key to being able to afford the home you want. To ease your concern about buying a home before you've seen many, scour the Internet for other similar homes for sale in the area. Ask your agent to show you any other homes currently on the market that might work for you. This is how to determine the range of housing options in the area as well as understand local pricing. Buyers from out of the area are at a disadvantage if they are not familiar with the housing market in the new location. The Internet helps buyers gain information about what kinds of homes and how many are available in the new location. THE CLOSING: Although no one likes to make an interim move to a rental before buying, it does have the benefit of letting you live in the new community and decide which neighborhood will work best for you. By Dian Hymer Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist. |
Monday, August 2, 2010
Good Faith Estimate contains some 'quirks'
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.
by Dian Hymer
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author.
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.
by Dian Hymer
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author.
Water audits prepare you for the future
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).
By Michelle D. Alderson
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).
By Michelle D. Alderson
Seven rules for room additions
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.
By Paul Bianchina
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.
By Paul Bianchina
Thursday, July 1, 2010
Presale inspections for smoother sales
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.
By Dian Hymer
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.
By Dian Hymer
Not all buyers are worth a counteroffer
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.
By Dian Hymer
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.
By Dian Hymer
How does your garden grow?
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)
By Paula Hess
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)
By Paula Hess
How pros drill through masonry
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.
By Paul Bianchina
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.
By Paul Bianchina
Wednesday, June 2, 2010
Find property problems before you buy
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.
By Dian Hymer
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.
By Dian Hymer
Fixing to sell: Don't go overboard
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.
By Dian Hymer
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.
By Dian Hymer
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.
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.
Thursday, April 29, 2010
Tax Time Over but Many Credits Still Available
By Paula Hess
If you’re a homeowner, it’s a given that you claim the mortgage interest deduction on your tax returns. If you are a green-minded homeowner, you may be eligible for a federal tax credit if you purchase or have purchased (keep those receipts) an energy-efficient product or a renewable energy system for your home.
These credits apply to the following if purchased between Jan. 1, 2009, and Dec. 31, 2010: Biomass stoves; insulation; heating, ventilation, and air conditioning upgrades; windows and doors; roofs; and non-solar water heaters. The credit allows homeowners every two years to claim 30 percent of the cost of the system, for a maximum credit of $1,500. This credit expires Dec. 31, 2010. Please note that some of these tax credits do not apply to installation costs, and not all ENERGY STAR products qualify for the tax credits. Please consult http://www.energystar.gov/index.cfm?c=tax_credits.tx_index for specifics.
If you’ve decided to purchase small wind turbines, a geothermal heat pump, or a solar energy system for your principal residence or a new home construction, you have until Dec. 31, 2016, to make the purchase. You also can receive a tax credit of 30 percent of the cost (no upper limit).
Check out the following resources:
• Database of State and Federal Incentives for Renewables & Efficiency (http://www.dsireusa.org/): Provides a comprehensive list of all local, state, and federal rebates, tax credits, and property tax reductions for green enhancements to homes and new construction.
• Better Than a Credit: If you participated in the Cash for Clunkers program and purchased a more fuel-efficient car, remember, your $3,500 or $4,500 rebate is not considered taxable income. If you actually purchased a hybrid, you may qualify for an energy tax credit (http://www.fueleconomy.gov/Feg/tax_hybrid.shtml). Cars purchased after Dec. 31, 2010, are no longer eligible for the energy tax credit.
• ENERGY STAR Rebates and Partners: Type in your ZIP Code and find tax exemptions, rebates, or discounts on ENERGY STAR-rated products in your local area--everything from DVD players to water heaters at http://www.energystar.gov/index.cfm?fuseaction=rebate.rebate locator.
If you’re a homeowner, it’s a given that you claim the mortgage interest deduction on your tax returns. If you are a green-minded homeowner, you may be eligible for a federal tax credit if you purchase or have purchased (keep those receipts) an energy-efficient product or a renewable energy system for your home.
These credits apply to the following if purchased between Jan. 1, 2009, and Dec. 31, 2010: Biomass stoves; insulation; heating, ventilation, and air conditioning upgrades; windows and doors; roofs; and non-solar water heaters. The credit allows homeowners every two years to claim 30 percent of the cost of the system, for a maximum credit of $1,500. This credit expires Dec. 31, 2010. Please note that some of these tax credits do not apply to installation costs, and not all ENERGY STAR products qualify for the tax credits. Please consult http://www.energystar.gov/index.cfm?c=tax_credits.tx_index for specifics.
If you’ve decided to purchase small wind turbines, a geothermal heat pump, or a solar energy system for your principal residence or a new home construction, you have until Dec. 31, 2016, to make the purchase. You also can receive a tax credit of 30 percent of the cost (no upper limit).
Check out the following resources:
• Database of State and Federal Incentives for Renewables & Efficiency (http://www.dsireusa.org/): Provides a comprehensive list of all local, state, and federal rebates, tax credits, and property tax reductions for green enhancements to homes and new construction.
• Better Than a Credit: If you participated in the Cash for Clunkers program and purchased a more fuel-efficient car, remember, your $3,500 or $4,500 rebate is not considered taxable income. If you actually purchased a hybrid, you may qualify for an energy tax credit (http://www.fueleconomy.gov/Feg/tax_hybrid.shtml). Cars purchased after Dec. 31, 2010, are no longer eligible for the energy tax credit.
• ENERGY STAR Rebates and Partners: Type in your ZIP Code and find tax exemptions, rebates, or discounts on ENERGY STAR-rated products in your local area--everything from DVD players to water heaters at http://www.energystar.gov/index.cfm?fuseaction=rebate.rebate locator.
Closing Costs Vary by Location
By Dian Hymer
Closing costs, the costs associated with buying or selling a home, can add up. It's wise to get an estimate of how much you're likely to pay in closing costs before you make an offer to buy a home or accept an offer to sell.
Closing costs reduce the amount the seller nets from the sale. Buyers need to know in advance of entering into a home-purchase contract that they have enough cash to cover both the down payment and closing costs.
Closing costs vary with location. Often who pays what fees -- buyer or seller -- is dictated by local custom. For instance, in Northern California, buyers usually pay the title insurance premium, while sellers usually pay the premium in Southern California.
HOUSE HUNTING TIP: Some real estate agents use 1 percent of the expected selling price to estimate a seller's closing cost. This might be close to accurate in some cases. But, there are so many variables that can affect the closing costs in any given sale transaction that it's preferable to have your real estate agent give you an itemized list of the costs you are likely to pay.
Sellers' closing costs can include such things as the real estate broker's fee; transfer taxes, if there are any; costs associated with any mandated compliance requirements; title insurance, in some places; attorney fees, in some cases; closing or escrow agent fees; inspection fees, unless they were paid directly to the inspectors; a home warranty, if applicable; fees for drawing, notarizing, and couriering documents; recording fees; property taxes (if seller has overpaid, the buyer will credit the seller that amount); and homeowner association dues, if there are any.
In addition to the closing costs listed above, the sellers pay off the liens secured against the property and any outstanding interest owed at closing. When you make a mortgage payment, it pays interest owed for the previous month. So, if you were to close on March 1, you would owe the lender interest from Feb. 1 through the date the lender receives the funds, which may not be until a day or so after you close.
With short sales, where the sale price is insufficient to pay off the liens and closing costs, additional closing costs may apply, such as a short-sale process fee charged by the escrow or closing agent. If a third-party short-sale negotiation company is involved, there could be a fee as high as 1 percent of the sale price charged at closing.
Sellers who live in an area where a property survey is required and who customarily pay the cost might have significantly higher closing costs than would a seller in Oakland, Calif., for example, where there aren't any expensive point-of-sale compliance requirements.
Buyers' closing costs customarily cover such things as the fees associated with the buyers' new mortgage; transfer taxes, if there are any; title insurance, depending on the area; homeowner insurance premium for the first year (usually required by the lender); buyer's broker fee, if appropriate; attorney fees, in some cases; escrow or closing agent fees; miscellaneous fees for document preparation and notarizing signatures; and proration of property taxes and homeowner association dues, if there are any.
Buyers' closing costs can differ significantly depending on how many points their lender charges. "Points" is a term used for the loan origination fee; one point equals 1 percent of the loan amount. On a $600,000 mortgage, one point would add $6,000 to your closing costs. It would add only $1,500 if you paid 1/4 point, but your interest rate on the loan would likely be higher.
THE CLOSING: Even though local custom usually prevails, who pays a particular closing cost is negotiable.
Closing costs, the costs associated with buying or selling a home, can add up. It's wise to get an estimate of how much you're likely to pay in closing costs before you make an offer to buy a home or accept an offer to sell.
Closing costs reduce the amount the seller nets from the sale. Buyers need to know in advance of entering into a home-purchase contract that they have enough cash to cover both the down payment and closing costs.
Closing costs vary with location. Often who pays what fees -- buyer or seller -- is dictated by local custom. For instance, in Northern California, buyers usually pay the title insurance premium, while sellers usually pay the premium in Southern California.
HOUSE HUNTING TIP: Some real estate agents use 1 percent of the expected selling price to estimate a seller's closing cost. This might be close to accurate in some cases. But, there are so many variables that can affect the closing costs in any given sale transaction that it's preferable to have your real estate agent give you an itemized list of the costs you are likely to pay.
Sellers' closing costs can include such things as the real estate broker's fee; transfer taxes, if there are any; costs associated with any mandated compliance requirements; title insurance, in some places; attorney fees, in some cases; closing or escrow agent fees; inspection fees, unless they were paid directly to the inspectors; a home warranty, if applicable; fees for drawing, notarizing, and couriering documents; recording fees; property taxes (if seller has overpaid, the buyer will credit the seller that amount); and homeowner association dues, if there are any.
In addition to the closing costs listed above, the sellers pay off the liens secured against the property and any outstanding interest owed at closing. When you make a mortgage payment, it pays interest owed for the previous month. So, if you were to close on March 1, you would owe the lender interest from Feb. 1 through the date the lender receives the funds, which may not be until a day or so after you close.
With short sales, where the sale price is insufficient to pay off the liens and closing costs, additional closing costs may apply, such as a short-sale process fee charged by the escrow or closing agent. If a third-party short-sale negotiation company is involved, there could be a fee as high as 1 percent of the sale price charged at closing.
Sellers who live in an area where a property survey is required and who customarily pay the cost might have significantly higher closing costs than would a seller in Oakland, Calif., for example, where there aren't any expensive point-of-sale compliance requirements.
Buyers' closing costs customarily cover such things as the fees associated with the buyers' new mortgage; transfer taxes, if there are any; title insurance, depending on the area; homeowner insurance premium for the first year (usually required by the lender); buyer's broker fee, if appropriate; attorney fees, in some cases; escrow or closing agent fees; miscellaneous fees for document preparation and notarizing signatures; and proration of property taxes and homeowner association dues, if there are any.
Buyers' closing costs can differ significantly depending on how many points their lender charges. "Points" is a term used for the loan origination fee; one point equals 1 percent of the loan amount. On a $600,000 mortgage, one point would add $6,000 to your closing costs. It would add only $1,500 if you paid 1/4 point, but your interest rate on the loan would likely be higher.
THE CLOSING: Even though local custom usually prevails, who pays a particular closing cost is negotiable.
Six Ways to Boost Curb Appeal
By Paul Bianchina
If you're thinking of listing your home this spring, now is the time to be thinking about one of the most important elements of real estate marketing: Curb appeal. It's your one and only chance to make a first impression on a potential buyer, so make it a good one! Here are some suggestions to make your home stand out from the rest:
1. Get some new eyes: The thing about curb appeal is that you need to look at your house through a stranger's eyes, not through your own. You don't even notice the faded paint on the trim or the missing house numbers, but other people do. So if you can't be honest and objective about the overall condition of the exterior of your home, find someone who can.
If you have a friend, relative, or neighbor who you trust to be honest with you (and that you have a good enough relationship with that it will survive their bluntness, then ask them). Ask your real estate agent. If necessary, hire a landscaper or a contractor to act as a consultant.
The main thing is to get a comprehensive, written list put together of what needs to be done to the outside of your home to improve the first impression it makes. Concentrate on the front, but don't overlook the sides and back either.
2. Start with basic repairs: The very first thing on your curb appeal list should be basic repairs. Is there a broken window? A torn screen? A loose gutter or downspout? A sagging screen door? It doesn't matter what it is or how small it is, fix it. They may seem like little things, but making sure that everything is in proper working order can make a huge difference in how people perceive your house and the care you have taken with it as a homeowner. Make sure you have big, bright, easily visible house numbers. Oh yeah -- and don't forget to squirt a little oil on those squeaky door and gate hinges.
3. Next, do some cleaning: Break out the broom and clean the outside of your house better than it's ever been cleaned before. Rent a pressure washer, and clean the driveway, walkways and patio. Clean your decks and your siding (a scrub brush is a better choice in these areas than a pressure washer, to avoid damage to the wood). If your wood deck is badly weathered, consider a deck cleaner and brightener made specifically for that purpose -- available at paint stores. Wash all your windows, inside and out, including the window screens.
4. Declutter: Just as you would with the interior, you want to declutter the outside of your house as well. Pick up the kids' toys, and put away the garden tools and hoses (remember, you're going to have people visiting the house, so this is also a liability issue). Remove all that accumulated junk from the sides and back of the house, and haul it to the landfill. 5. Next, tackle the landscaping: As part of the decluttering and general cleaning, do the landscaping areas as well. Prune overgrown plants and trim back overhanging tree limbs. Pull out anything that's dead. Rake up leaves and needles, and pull weeds. If you have an underground sprinkler system, make sure everything is working properly. If you have a lawn, fertilize and water it regularly to green it up, and run an edger along sidewalks and driveway edges. In your planter areas, you can make a huge difference in how your house looks with the simple addition of some fresh bark and colorful flowers. And if you don't have any planter areas, create a few, or add some simple planter boxes to do the same thing. There's nothing like color to really catch the eye and give your home a bright, fresh appeal.
6. Consider a trip to the paint store: Few things help your home show better than a fresh coat of paint. If it's been awhile since the outside of your home's been painted, this might be a worthwhile investment, especially in a tough seller's market. If you're handy with a brush and an airless sprayer, you might just want to undertake the project yourself. A long weekend and a few hundred dollars in paint can make a world of difference in how well the home shows and how quickly it sells. Otherwise, talk with a licensed painting contractor for an estimate.
Maybe painting the entire house isn't really necessary. Sometimes just a fresh coat of paint or maybe a new color on the trim, exterior doors, garage door or window shutters can make a big difference as well. A word of caution about paint colors: When painting the house for resale, select colors that complement the house and the neighborhood and that will appeal to the greatest number of buyers, whether they happen to be your favorites or not. You may really have been itching to paint the house purple with black trim, but save that for another day.
If you're thinking of listing your home this spring, now is the time to be thinking about one of the most important elements of real estate marketing: Curb appeal. It's your one and only chance to make a first impression on a potential buyer, so make it a good one! Here are some suggestions to make your home stand out from the rest:
1. Get some new eyes: The thing about curb appeal is that you need to look at your house through a stranger's eyes, not through your own. You don't even notice the faded paint on the trim or the missing house numbers, but other people do. So if you can't be honest and objective about the overall condition of the exterior of your home, find someone who can.
If you have a friend, relative, or neighbor who you trust to be honest with you (and that you have a good enough relationship with that it will survive their bluntness, then ask them). Ask your real estate agent. If necessary, hire a landscaper or a contractor to act as a consultant.
The main thing is to get a comprehensive, written list put together of what needs to be done to the outside of your home to improve the first impression it makes. Concentrate on the front, but don't overlook the sides and back either.
2. Start with basic repairs: The very first thing on your curb appeal list should be basic repairs. Is there a broken window? A torn screen? A loose gutter or downspout? A sagging screen door? It doesn't matter what it is or how small it is, fix it. They may seem like little things, but making sure that everything is in proper working order can make a huge difference in how people perceive your house and the care you have taken with it as a homeowner. Make sure you have big, bright, easily visible house numbers. Oh yeah -- and don't forget to squirt a little oil on those squeaky door and gate hinges.
3. Next, do some cleaning: Break out the broom and clean the outside of your house better than it's ever been cleaned before. Rent a pressure washer, and clean the driveway, walkways and patio. Clean your decks and your siding (a scrub brush is a better choice in these areas than a pressure washer, to avoid damage to the wood). If your wood deck is badly weathered, consider a deck cleaner and brightener made specifically for that purpose -- available at paint stores. Wash all your windows, inside and out, including the window screens.
4. Declutter: Just as you would with the interior, you want to declutter the outside of your house as well. Pick up the kids' toys, and put away the garden tools and hoses (remember, you're going to have people visiting the house, so this is also a liability issue). Remove all that accumulated junk from the sides and back of the house, and haul it to the landfill. 5. Next, tackle the landscaping: As part of the decluttering and general cleaning, do the landscaping areas as well. Prune overgrown plants and trim back overhanging tree limbs. Pull out anything that's dead. Rake up leaves and needles, and pull weeds. If you have an underground sprinkler system, make sure everything is working properly. If you have a lawn, fertilize and water it regularly to green it up, and run an edger along sidewalks and driveway edges. In your planter areas, you can make a huge difference in how your house looks with the simple addition of some fresh bark and colorful flowers. And if you don't have any planter areas, create a few, or add some simple planter boxes to do the same thing. There's nothing like color to really catch the eye and give your home a bright, fresh appeal.
6. Consider a trip to the paint store: Few things help your home show better than a fresh coat of paint. If it's been awhile since the outside of your home's been painted, this might be a worthwhile investment, especially in a tough seller's market. If you're handy with a brush and an airless sprayer, you might just want to undertake the project yourself. A long weekend and a few hundred dollars in paint can make a world of difference in how well the home shows and how quickly it sells. Otherwise, talk with a licensed painting contractor for an estimate.
Maybe painting the entire house isn't really necessary. Sometimes just a fresh coat of paint or maybe a new color on the trim, exterior doors, garage door or window shutters can make a big difference as well. A word of caution about paint colors: When painting the house for resale, select colors that complement the house and the neighborhood and that will appeal to the greatest number of buyers, whether they happen to be your favorites or not. You may really have been itching to paint the house purple with black trim, but save that for another day.
It Still Pays to Remodel
By Dian Hymer
The home-sale market has taken a beating in the last few years, which begs the question: Does it makes sense financially to invest in home improvements?
Remodeling Magazine's annual “Remodeling Cost vs. Value Report for 2009-10,” published in agreement with the NATIONAL ASSOCIATION OF REALTORS®, indicates that remodeling still pays off, but more so on less expensive projects.
Most high-end remodeling projects don't return dollar for dollar on the investment even in a good market. That is, unless homes are appreciating at a fast clip. In this case, you might get your money back due to appreciation. But the profit on the sale might not be as much as it would have been if you hadn't done a high-end renovation.
Just as today's homebuyers are making pragmatic decisions, so are today's homeowners when it comes to making improvements. Most of the remodeling projects with the largest return were for such things as replacing exterior siding and windows. On average the cost involved was less than $14,000, according to Remodeling Magazine.
These projects returned from 71 to 83 percent nationally depending on the materials used. The project that paid back the highest return was a midrange front-door replacement that cost approximately $1,200 and returned an average 128.9 percent nationally.
Sellers may wonder why it would make sense to invest in an improvement just for the sake of selling if it won't repay the amount invested. In today's challenging home-sale market, these improvements may be warranted for the home sell at all if there is a lot of inventory in your neighborhood. Buyers expect more for their money and gravitate to listings that are in the best condition for the price.
HOUSE HUNTING TIP: Be judicious about how you spend your money fixing your home up for sale. For example, if your kitchen is a disaster, it makes more sense to do a midrange than an upscale renovation. According to the “Remodeling Cost vs. Value Report,” a midrange minor kitchen upgrade will return an average of 78.3 percent nationally. A major upscale kitchen remodel will pay back only 63.2 percent.
The national average returns on remodeling investments do not give an accurate picture of the renovation returns that might be typical in your neighborhood. For instance, the payback for Honolulu homeowners for most of the 18 remodel projects analyzed returned 100 percent of the investment. San Francisco was close behind with 10 projects paying back the full investment.
The cost versus value report recommends the following cost-effective improvements you might consider to prepare your home for the market: tidying up the kitchen cabinets using organizers will make your cabinets roomy; add an inexpensive tile backsplash to a tired kitchen, and use inexpensive tile to give an old bathroom a new look; add a breakfast bar by cutting an opening between the kitchen and family room; and install granite tile rather than slab.
Other suggestions include: Replacing outdated light fixtures; freshening up the basement; giving the kitchen cabinets a new look by reconditioning and adding new knobs or having cabinet doors and drawers replaced; updating a bathroom without replacing tile by changing the medicine cabinet, light fixtures, vanity, cleaning the grout or replacing it and adding glass shower doors.
The findings of this report were based on a survey sent to 150,000 appraisers and real estate agents in the summer of 2009. The survey included information about the cost and description of the remodel projects and median price data for the 80 metropolitan areas surveyed. Some 6,233 survey respondents estimated how much value the improvements would add to the house at resale in the current market.
THE CLOSING: Before starting any fix-up-for-sale projects, seek your real estate agent's advice so that you don't waste money on improvements that won't pay back much in your area.
Thursday, April 1, 2010
Buying an existing home that’s “green”
By Michelle D. Alderson
With rising energy costs and growing awareness – and availability – of environmentally friendly products, it's no wonder that interest in purchasing green homes is rising. Green remodels on existing homes both save the environment and save homeowners money on monthly bills. As green home remodeling becomes more abundant, so does the demand to purchase these homes. This increased interest in existing green homes has created a need to educate buyers on what is really considered "green."
Over the past several years, many organizations such as Build It Green, (http://www.builditgreen.org), an independent nonprofit organization, have been created to offer a third-party unbiased evaluation. Because of the growing desire to purchase existing green homes, states Bruce Mast, development director at Build it Green, "the Real Estate Council has been setting the stage to incorporate GreenPoint Rated results into MLS listings in several areas." What is GreenPoint Rated? Mast explains that, "GreenPoint Rated provides an independent assessment of a home across five categories: community design, energy efficiency, indoor air quality/health, resource conservation, and water conservation."
Other organizations that have similar rating systems for homebuyers include the U.S. Green Building Council (http://www.usgbc.org), a non-profit community; and Green Globes (http://www.greenglobes.com), an assessment and rating system. The USGBC has created the REGREEN (http://www.greenhomeguide.org/guide_for_green_renovation/index.html) program in partnership with the American Society of Interior Designers' Foundation. Working with LEEDs for Homes, a LEED (Leadership in Energy and Environmental Design) certification offers an unbiased green home inspection for possible buyers. In addition, Green Globes boasts a rating system that has an easy-to-use online questionnaire for a minimal cost. Once the questionnaire is completed, the user automatically receives a report. All three organizations have online tools to answer questions and guide interested parties through the certification process.
Part of this process includes understanding what different elements make a home green. The elements can range from simple re-landscaping to more complicated structure updates. But all share a common goal: to help preserve the planet and save on energy costs. The following are just a few examples of "greening" a home:
• Buying ENERGY STAR (http://www.energystar.gov) appliances is the most popular way to go green. These EPA- and Department of Energy- approved appliances use less energy than conventional appliances. • Another easy way to green a home is by replacing standard light bulbs with energy-saving CFLs (Compact Fluorescent Light Bulbs), (http://www.energystar.gov/index.cfm?c=cfls.pr_cfls) which can be found at most supermarkets and drugstores. • Using VOC (volatile organic compounds) (http://www.epa.gov/iaq/voc.html) also receives green certification recognition. VOC paint is just one example of how this compound is used. • Installing low-flush toilets, solar paneling, and low-emittance windows helps lower water and energy bills. • Planting native vegetation and drought-resistant landscaping can save on water usage as well.
When thinking about purchasing a green home, a buyer might wonder if it's really worth all the effort and cost. Aside from saving the planet, green remodels on existing homes have proven to be cost-efficient. Veronica Cortes, a homeowner in Northern California recently did an entire green remodel on her 1957 ranch-style home. Currently she pays $30 per month on average for her energy bill after installing solar paneling. In the winter months, her neighbors pay anywhere from $276 to $500. Cortes says all the heartaches of a remodel were worth it: "Our house nurtures us in ways that it never did before: … the place is flexible and its spaces can accommodate different uses depending on our needs, [and] it's cheap to run."
With rising energy costs and growing awareness – and availability – of environmentally friendly products, it's no wonder that interest in purchasing green homes is rising. Green remodels on existing homes both save the environment and save homeowners money on monthly bills. As green home remodeling becomes more abundant, so does the demand to purchase these homes. This increased interest in existing green homes has created a need to educate buyers on what is really considered "green."
Over the past several years, many organizations such as Build It Green, (http://www.builditgreen.org), an independent nonprofit organization, have been created to offer a third-party unbiased evaluation. Because of the growing desire to purchase existing green homes, states Bruce Mast, development director at Build it Green, "the Real Estate Council has been setting the stage to incorporate GreenPoint Rated results into MLS listings in several areas." What is GreenPoint Rated? Mast explains that, "GreenPoint Rated provides an independent assessment of a home across five categories: community design, energy efficiency, indoor air quality/health, resource conservation, and water conservation."
Other organizations that have similar rating systems for homebuyers include the U.S. Green Building Council (http://www.usgbc.org), a non-profit community; and Green Globes (http://www.greenglobes.com), an assessment and rating system. The USGBC has created the REGREEN (http://www.greenhomeguide.org/guide_for_green_renovation/index.html) program in partnership with the American Society of Interior Designers' Foundation. Working with LEEDs for Homes, a LEED (Leadership in Energy and Environmental Design) certification offers an unbiased green home inspection for possible buyers. In addition, Green Globes boasts a rating system that has an easy-to-use online questionnaire for a minimal cost. Once the questionnaire is completed, the user automatically receives a report. All three organizations have online tools to answer questions and guide interested parties through the certification process.
Part of this process includes understanding what different elements make a home green. The elements can range from simple re-landscaping to more complicated structure updates. But all share a common goal: to help preserve the planet and save on energy costs. The following are just a few examples of "greening" a home:
• Buying ENERGY STAR (http://www.energystar.gov) appliances is the most popular way to go green. These EPA- and Department of Energy- approved appliances use less energy than conventional appliances. • Another easy way to green a home is by replacing standard light bulbs with energy-saving CFLs (Compact Fluorescent Light Bulbs), (http://www.energystar.gov/index.cfm?c=cfls.pr_cfls) which can be found at most supermarkets and drugstores. • Using VOC (volatile organic compounds) (http://www.epa.gov/iaq/voc.html) also receives green certification recognition. VOC paint is just one example of how this compound is used. • Installing low-flush toilets, solar paneling, and low-emittance windows helps lower water and energy bills. • Planting native vegetation and drought-resistant landscaping can save on water usage as well.
When thinking about purchasing a green home, a buyer might wonder if it's really worth all the effort and cost. Aside from saving the planet, green remodels on existing homes have proven to be cost-efficient. Veronica Cortes, a homeowner in Northern California recently did an entire green remodel on her 1957 ranch-style home. Currently she pays $30 per month on average for her energy bill after installing solar paneling. In the winter months, her neighbors pay anywhere from $276 to $500. Cortes says all the heartaches of a remodel were worth it: "Our house nurtures us in ways that it never did before: … the place is flexible and its spaces can accommodate different uses depending on our needs, [and] it's cheap to run."
Window trim: from boring to bold
By Paul Bianchina
If you look closely at homes with beautiful windows, you'll typically find one thing in common: wood trim. No matter what the style of the window is or what material it's made out of, a painted or stained wood surround enhances the beauty of the window far more than the inexpensive "drywall wrap" that's common on a lot of today's homes.
Creating wooden surrounds for your windows is enjoyable, fairly inexpensive, and can be done by anyone with a few finish carpentry skills. And you can do one or two windows at a time, which is a lot less invasive to your home life than a lot of remodeling projects.
First, a couple of definitions
In the world of finish carpentry, there are a couple of terms that are helpful to know:
Window surround: A window surround consists of the four pieces that wrap the inside of the window frame, between the face of the window and the face of the wall.
Stool and apron: A window stool is the same as a window sill. It's the horizontal board at the bottom of the window surround. The trim board beneath the stool, which covers the joint between the bottom of the stool and the face of the wall, is the apron.
Drywall wrap: A type of surround in which all four sides of the surround are done with drywall instead of wood.
Three ways to trim the window:
There are basically three options for how you can trim out a window with wood. The simplest is to wrap the two sides and top of the window surround with drywall, and then install a stool and apron at the bottom. The drywall pieces are installed first and finished, prior to installation of the stool. If you already have drywall-wrapped windows, all you need to do is remove the bottom piece of drywall from the surround, to expose the rough framing underneath.
The stool is cut from finish-grade lumber. You can use oak, maple, fir, or other clear grades of wood if the wood is to be stained. If you'll be painting the stool, consider poplar or medium-density fiberboard (MDF), both of which paint out very nicely. The stool is typically ripped to a width that's one inch wider than the distance from the face of the window to the face of the wall, and onr inch longer than the distance between the two side pieces of the surround.
The stool is then simply notched on each end to fit into the opening in the window surround. It will overlap the wall face by an inch, and there will be two "ears" that extend past the edge of the surround by one-half inch on each side. The apron, which is a piece of trim of any desired size and style, is cut one-half inch shorter than the overall length of the stool, and is installed below the stool to finish things off.
Method No. 2 is to make a wooden surround with no stool, which is done by building a box. You need four pieces of lumber ripped to the same width as the distance from the face of the window to the face of the wall, then cut and assembled into a simple box that's slightly smaller than the inside dimensions of the window frame opening. Slip the box into the opening, shim it until it's centered, then nail it in place. The installation is completed by installing four pieces of matching trim on face of the wall, sized so as to cover most of the edge of the wooden box and mitered at the four corners.
The third method is a combination of the first two. In this case, you would construct a three-sided box -- two sides and a top -- then cut a stool as described above and use it as the fourth side (the bottom) of the wooden box.
Install the box in the opening and shim it into place. Now install three pieces of trim on the face of the wall -- a top piece and two sides. The trim is mitered at the two top corners, and extends down on the two sides to rest on top of the stool. An apron, installed below the stool as described above, completes the installation.
There are dozens upon dozens of variations on these three basic themes. Before you get started, take some time to peruse a few architectural and carpentry magazines and books and you're sure to find a look that's perfect for your home.
If you look closely at homes with beautiful windows, you'll typically find one thing in common: wood trim. No matter what the style of the window is or what material it's made out of, a painted or stained wood surround enhances the beauty of the window far more than the inexpensive "drywall wrap" that's common on a lot of today's homes.
Creating wooden surrounds for your windows is enjoyable, fairly inexpensive, and can be done by anyone with a few finish carpentry skills. And you can do one or two windows at a time, which is a lot less invasive to your home life than a lot of remodeling projects.
First, a couple of definitions
In the world of finish carpentry, there are a couple of terms that are helpful to know:
Window surround: A window surround consists of the four pieces that wrap the inside of the window frame, between the face of the window and the face of the wall.
Stool and apron: A window stool is the same as a window sill. It's the horizontal board at the bottom of the window surround. The trim board beneath the stool, which covers the joint between the bottom of the stool and the face of the wall, is the apron.
Drywall wrap: A type of surround in which all four sides of the surround are done with drywall instead of wood.
Three ways to trim the window:
There are basically three options for how you can trim out a window with wood. The simplest is to wrap the two sides and top of the window surround with drywall, and then install a stool and apron at the bottom. The drywall pieces are installed first and finished, prior to installation of the stool. If you already have drywall-wrapped windows, all you need to do is remove the bottom piece of drywall from the surround, to expose the rough framing underneath.
The stool is cut from finish-grade lumber. You can use oak, maple, fir, or other clear grades of wood if the wood is to be stained. If you'll be painting the stool, consider poplar or medium-density fiberboard (MDF), both of which paint out very nicely. The stool is typically ripped to a width that's one inch wider than the distance from the face of the window to the face of the wall, and onr inch longer than the distance between the two side pieces of the surround.
The stool is then simply notched on each end to fit into the opening in the window surround. It will overlap the wall face by an inch, and there will be two "ears" that extend past the edge of the surround by one-half inch on each side. The apron, which is a piece of trim of any desired size and style, is cut one-half inch shorter than the overall length of the stool, and is installed below the stool to finish things off.
Method No. 2 is to make a wooden surround with no stool, which is done by building a box. You need four pieces of lumber ripped to the same width as the distance from the face of the window to the face of the wall, then cut and assembled into a simple box that's slightly smaller than the inside dimensions of the window frame opening. Slip the box into the opening, shim it until it's centered, then nail it in place. The installation is completed by installing four pieces of matching trim on face of the wall, sized so as to cover most of the edge of the wooden box and mitered at the four corners.
The third method is a combination of the first two. In this case, you would construct a three-sided box -- two sides and a top -- then cut a stool as described above and use it as the fourth side (the bottom) of the wooden box.
Install the box in the opening and shim it into place. Now install three pieces of trim on the face of the wall -- a top piece and two sides. The trim is mitered at the two top corners, and extends down on the two sides to rest on top of the stool. An apron, installed below the stool as described above, completes the installation.
There are dozens upon dozens of variations on these three basic themes. Before you get started, take some time to peruse a few architectural and carpentry magazines and books and you're sure to find a look that's perfect for your home.
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 or title company, real estate firm, or real estate broker.
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 also are not 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.
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 or title company, real estate firm, or real estate broker.
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 also are not 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.
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