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
Thursday, July 1, 2010
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
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